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Malaysia LNG exports hit four year low on pipeline issues

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LNG Industry,

Reuters are reporting that Malaysia’s exports of LNG fell to a four-year low in July as domestic gas pipeline issues plaguing the country since January took their toll.

Natural gas supply from the Sabah Oil and Gas terminal to the Petronas LNG Complex in Bintulu was cut in January following a gas leak in the 500 km pipeline which transports gas from Kimanis in Sabah to the Bintulu plant in Sarawak for processing.

While the pipeline has been repaired, Petronas is still awaiting the necessary approval from authorities to resume operations at the pipeline.

Petronas said that there is no disruption to cargo deliveries from the Petronas LNG complex in Bintulu and that operations at the complex are being carried out as scheduled.

The Petronas LNG Complex, which has a capacity of 24 million tpy, comprises three LNG plants owned and operated by Petronas and joint venture companies.

It is supplied with gas from several facilities off Sarawak.

Malaysia’s LNG exports fell to about 1.5 million t in July, the data showed, the lowest since July 2014 when it was about 1.43 million t.

Petronas has purchased replacement cargoes to meet some of its contractual obligations to term customers, which would reduce spot exports as a result.

The drop in export volumes comes at a time when demand from Japan, the world’s biggest importer of LNG, has been robust amid sweltering heat.

“Overall, the market is quite tight in terms of supply but new supply from Australia should help going forward,” a Singapore-based trader said.

Revenue from LNG, which accounted for 3.5% of Malaysia’s total exports, decreased to 2.7 billion ringgit (US$663 million) in June, down 1.2 billion ringgit or about 31% from a year ago as export volumes fell, official statistics show.

Petronas also operates the 1.2 million tpy Petronas FLNG facility off the coast of Sarawak.

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