Regional LNG: Malaysia expects LNG prices will improve

Petroliam Nasional Bhd (Petronas), the world's largest exporter of Liquefied Natural Gas (LNG), hopes that the current LNG price scenario would improve following moves by some suppliers to resort to undercutting prices, Bernama News Agency reported Monday.

Asked to comment on a contract whereby Australia would supply LNG to China very much cheaper than prevailing market prices which in the process set a new benchmark in the pricing for LNG, Petronas' vice president for corporate planning division, Nasarudin Md Idris, said:

"As an LNG supplier, we hope the situation would improve, that's all I can comment."

He also declined to comment on whether Petronas would follow its competitors, namely Australia, to undercut LNG prices.

"I would not like to comment on that," he said.

Analysts are sceptical whether it would be cost-effective for Australia to be able to supply LNG to China at such low prices over the long-term.

Petronas produces about 16.9 million tonnes of LNG per annum.

Malaysia is currently the world's third largest LNG exportter, accounting for 13 percent or 15 million tonnes a year of global exports, after Indonesia and Algeria.

Last year, LNG exports accounted for three percent of Malaysia's total exports.

Malaysia's LNG market share in Japan is 25 percent, 49 percent in Taiwan and 21 percent in South Korea. (*)