Malaysia gas market outlook Report

Commodity Market Report 25 October 2023

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Report summary

Gas markets play different dynamics on Peninsular and East Malaysia. Peninsular Malaysia is the main demand hub in the country, but the region’s legacy gas fields will enter terminal decline, LNG imports will be increasingly needed to fill this gap. East Malaysia is the main export region with abundant gas reserves. However, the future supply to Bintulu faces some challenges as many of the undeveloped fields in Sarawak are high in CO2 and H2S. The Sabah-Sarawak Gas Pipeline was partially shut down in Aug 2023, affecting the gas that used to be transported via the pipeline to the Bintulu LNG complex for export. PFLNG plants has become the outlets for Sabah gas exports. Gas market liberalisation continues as regulated prices cease and MRP (Malaysia Reference Price) takes hold. Third-party access framework is already in place. However, no new players to date due to high global LNG spot prices, weak domestic demand growth and limited space in the market for new contracts.

The country’s economy recovered strongly, but global economic headwinds pose a near-term challenge for all Southeast Asian countries, including Malaysia
Gas market liberalisation continues as regulated prices cease and MRP (Malaysia Reference Price) takes hold, but there are no new players yet
The Sabah-Sarawak Gas Pipeline (SSGP) continues to struggle with operational issues, rerouting the Sabah region’s LNG exports