Regional LNG: Malaysia can lift LNG capacity by 17%

Malaysia, the world's third biggest exporter of liquefied natural gas (LNG), has room to lift LNG capacity by 17%, but timing will depend on the development of both traditional and new markets, Petronas president and chief executive Tan Sri Mohd Hassan Marican said yesterday as reported by Malaysia's Business Times.

He said Malaysia could expand LNG capacity by up to four million tonnes a year at its 23 million tonnes a year facility in Bintulu, the world's biggest single-site production stream.

?With a little capex we could probably squeeze another four million tonnes from Bintulu but we're not going to do anything at the moment,? Hassan said in a speech in Singapore.

He said a plethora of LNG projects across the globe would put pressure on LNG prices as a surplus of supply competed fiercely to capture incremental demand from traditional buyers such as Japan and South Korea, and new markets such as China and the United States.

Hassan likened the potential US market, which has more than two dozen new LNG import terminals proposed, to India, where he said ?a garland? of LNG terminals planned several years ago along its coastline ?remain on the drawing board?.

?The US market is flavour of the month, everyone wants to play there...In the next one to two years we may see the reality of US terminals,? he said.

Hassan, who has headed Petroliam Nasional Bhd (Petronas) since 1995, said current global trade of about 120 million tonnes a year was projected to rise to 200 million by 2010 and 315 million by 2020.

Most supplies would remain under long-term contracts, but spot trade would grow from about 10% today, he said.

?I believe about 30% of global capacity will be spot or traded,? Hassan said.(*)