Malaysia’s national energy giant Petronas aims to restart a gas pipeline currently under force majeure by the first quarter of 2024, a senior company executive told Reuters.
“Our plan is to complete the work by Q1 2024,” said Shamsairi Ibrahim, Petronas vice president of LNG marketing and trading.
Last September, Petronas declared force majeure on gas supply to MLNG Dua — one of four liquefaction projects that comprise the Petronas LNG Complex at Bintulu, Sarawak — following subsidence issues on a section of the Sabah-Sarawak Gas Pipeline (SSGP) denominated as KP201.
In tandem with the repair work, Petronas is undertaking an investigation into the supply disruption to MLNG Dua that has nameplate liquefaction capacity of 9.6 million tonnes per annum, which it aims to complete by the middle of this year.
“Petronas is mindful that this incident has impacted its delivery commitments to some of its contracted liquefied natural gas buyers and it is in discussions to identify suitable mitigation efforts,” the company earlier said.
MLNG Dua has term contracts with customers including Japanese companies Mitsubishi, which is also a partner, and Tohoku Electric.
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“We have strongly requested Petronas to minimise the impact of the supply outage through early restoration and providing alternative supply for Japan,” Yasutoshi Nishimura, Japan’s Minister of Economy, Trade and Industry, was earlier quoted by Reuters.
“Japan will continue to hold close discussions with the Malaysian government and Petronas to ensure the stable supply of LNG in Japan.”
Shamsairi also reiterated Petronas’ wish to extend its long-term contracts with its Japanese customers, adding that discussions are ongoing. Some of its deals with Japanese buyers including Osaka Gas and Tokyo Gas are due to expire before end-2024.
Some future volumes from Japan could be sourced from the under-development LNG Canada, in which Petronas has an interest, and potentially from the grassroots liquefaction project in Argentina that the Malaysian company is proposing with state-owned YPF. The final investment decision on phase one of this project is envisaged in the second half of 2024.
Initial cargoes from phase one that would have capacity of up to 5 million tpa could come later this decade if the project is sanctioned next year.