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Lloyds List: Malaysia sees production drop

Published: Apr 18, 2007

One of the world’s largest producers, LNG Malaysia, saw a drop in production in 2006 and is looking to increase output by international companies, writes Marcus Hand.

Petronas, Malaysia’s state oil and gas company, and its subsidiary MISC are among the largest players in the global LNG market. MISC long has been, and is set to remain, at least for the coming two to three years, the largest owner and operator of LNG carriers.

In November MISC named one of its LNG carriers in Malaysia for the first time, the 145,000 cu m Seri Anggun , built at Samsung Heavy Industries.

The naming was part of a drive by MISC to drydock its LNG vessels at its own yard Malaysia Marine ‘ Heavy Industries in Johor. The yard is expanding in the field of LNG repairwork on the back of a joint venture with Samsung Heavy Industries, MMHE-SHI LNG.

The SHI newbuilding Seri Anggun was the first to complete its post-gas trial inspection and final docking works at the Malaysian yard.

The yard has also invested in cryogenic facilities for the repair of the onboard systems of LNG carriers. MMHE is not just looking, and has received work from third party owners other than MISC and Petronas.

On the supply side, though, Malaysia has found that supplies from existing gas wells are dwindling. Its LNG exports dropped 1.9% to 21.5m tonnes last year. Shell is digging more wells in east Malaysia to meet supplies in the coming years.

‘Malaysia’s deepwater areas have potential,’ said Wee Yiaw Hin, head of Shell’s exploration and production unit in Malaysia. ‘We will develop new fields to meet supplies to the LNG plant.’

Malaysia has the second biggest gas reserves in Southeast Asia. On the shipping front, MISC is looking well beyond Malaysia both with parent Petronas and with third parties.

With 29 newbuildings due to be delivered by 2009 MISC has been quiet of late on the LNG ordering front, with delayed projects meaning it has had to find shorter-term contracts for newbuildings coming into the fleet. Two vessels have been positioned to Total Yemen LNG with 20-year contracts from 2009.

The Malaysian company also has three more LNG ships for which it has found charters or is in the process of doing so.

Meanwhile older, smaller vessels are being redeployed on renewed contracts.

In March, Petronas signed a new sale and purchase agreement with Japan’s Saibu Gas to supply up to 390,000 tonnes of LNG annually for 15 years from October 2013.

This is to be transported via two 18,000 cu m LNG vessels, Aman Hakata and Aman Bintulu , which are owned and operated by Asia LNG Transport, a joint venture between Petronas subsidiary MISC and NYK Line.


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