Malaysia's state oil company Petronas has signed a deal with its subsidiary Petronas Gas to develop a liquefied natural gas terminal on the country’s west coast.
According to NewYork-based Platts, two floating storage units will receive and store the LNG before it is regasified at the LNG terminal near Sungai Udang Port in Malacca. The gas will then be transported to other parts of Malaysia.
The regasification facilities will have a maximum capacity of 3.8mtonnes per year and the development project is expected to be completed by July 31, 2012.
The LNG terminal is eventually likely to receive LNG from Petronas’ share of Australia’s Gladstone LNG project in Queensland, which is targeting first cargoes in 2014.
However, the earlier start-up date of the Malacca project implies Petronas will initially have to look for alternative LNG imports to go to Malaysia’s new regasification terminal in Malacca.
A surge in Asian demand for LNG, which is transported to markets on LNG carriers, has bolstered the market over the third quarter.
Malaysia, along with Singapore and Vietnam, is ramping up demand as LNG is the cheapest way to meet carbon reduction targets.
