Regional LNG: Petronas likely to restart LNG Tiga plant in March: Report
Friday, October 3 2003 - 09:37 PM WIB
The Malaysian national oil corporation closed one of the two production lines at the Malaysia LNG Tiga Sdn Bhd plant after a fire broke out on August 16. The Malaysia LNG Tiga plant is one of three Petronas LNG plants in Bintulu.
An official with Kogas told Business Times that Petronas will restart its seventh liquefication train in March and will start operation of its eighth train soon.
?Kogas has to secure about 10 cargoes of LNG due to the fire at Malaysia LNG Tiga plant. As some of the cargoes have been secured, the supply of the LNG to Kogas will not be seriously affected by the fire,? the official said.
Petronas officials were in Seoul on Wednesday, updating Kogas on the Malaysia LNG Tiga plant in Bintulu.
Earlier reports said Petronas may restart the production line, which can produce 3.5 million tonnes of LNG a year, in April.
The fire disrupted deliveries of LNG cargoes to customers and Petronas is buying the fuel from other sellers to meet the shortage.
According to the official, Petronas officials had also told Kogas that it had confirmed four replacement cargoes for the Korean buyer.
Of the eight cargoes contracted with Kogas, Petronas said it had secured four and would try its best to deliver the rest.
LNG is natural gas that has been chilled into liquid form so that it can be transported on a ship to a destination not reachable via a pipeline. Buyers turn LNG back into gas so it can be piped to power stations, factories and households.
Malaysia LNG Tiga Sdn Bhd, a subsidiary of Petronas, sealed a US$3.2 billion (US$1 = RM3.80) deal to supply up to two million tonnes of LNG to Kogas in May.
Both companies signed a sale and purchase agreement (SPA) in Kuala Lumpur for the supply of the LNG for seven years to the South Korean LNG importer.
Under the SPA, Petronas is supposed to start delivering the LNG to Kogas effective May from the Malaysia LNG Tiga?s plant.
The LNG will be shipped by tankers owned by Malaysia International Shipping Corp Bhd, another subsidiary of Petronas, to Kogas? receiving terminals in Incheon, Pyeong Taek and Tong Young in South Korea.
Kogas, whose current customers include Korea Electric Power Corp and city gas companies, is already importing up to two million tonnes of LNG annually from Malaysia, supplied under a 20-year contract with Malaysia LNG. The LNG for this contract is sourced from Malaysia LNG Dua Sdn Bhd?s plant.
The SPA signed with Kogas in May is the fifth supply contract concluded by Malaysia LNG Tiga. With the contract, Malaysia LNG Tiga has now committed about six million tonnes of LNG annually to buyers from South Korea, Japan and Taiwan.
Malaysia LNG Tiga is a joint venture between Petronas (60 per cent), Shell Gas Holdings Malaysia Ltd (15 per cent), the Sarawak State Government (10 per cent), Nippon Oil Ltd (10 per cent) and Diamond Gas Netherlands BV (5 per cent).(*)