Malaysia's Petronas finds offshore gas as home demand grows

Malaysia's national energy company Petronas has made two significant gas discoveries in the shallow waters off the coast of Borneo island, potentially shoring up

future supply to meet growing domestic demand.
Malaysia was the world's No.2 LNG exporter behind Qatar in 2009 but fell to third place behind Indonesia last year, as declining output from ageing fields and rising demand from its power plants eroded exports, though it has been working to boost output from domestic fields and stakes in projects abroad.
The news of the discoveries follows the signing of a preliminary deal by Qatargas this week to supply Petronas with 1.5 million tonnes of liquefied natural gas (LNG) annually over 20 years, with Malaysia having turned to imports to meet power plant gas demand, which is seen expanding at 6 percent a year.
Petronas said on Thursday its first discovery off the Malaysian state of Sabah on Borneo was at the Zuhal East-1 well, located in the Samarang Asam Paya Block.
The current estimate of gas-initially-in-place is about 550 billion standard cubic feet (bscf).
The second find, at the Menggatal-1 well, is in Block SB312. The company estimates the gas-initially-in-place at about 650 bscf, it said in a statement.
The Block SB312 PSC is a joint venture with exploration subsidiary Petronas Carigali holding 60 percent equity. KUFPEC Malaysia (SB 312) Ltd, a unit of Kuwait Foreign Petroleum Exploration Co (KUFPEC), holds the rest.
SOME HEADWAY
"Petronas appears to be making some headway with gas discoveries, especially as it has long-term contracts with customers in Korea, Japan and China to fulfill," said an analyst with an investment bank in Malaysia.
"These discoveries give Petronas and Malaysia some breathing space for also meeting some of the domestic demand," said the analyst who declined to be named as she is not authorised to speak to the media.
Petronas recently signed two separate agreements to distribute natural gas extracted from the Kebabangan cluster located in the Malaysian state of Sabah on Borneo.
The Southeast Asian country has proven natural gas reserves of 84.6 trillion cubic feet (tcf), or 2.4 trillion cubic metres, behind regional countries Indonesia, Australia and China, according to the BP Statistical Review. Qatar's proven reserves are around 894 tcf.
Malaysia's share of natural gas consumption last year was estimated at 6.3 percent of Asia's total of around 511.5 billion cubic metres (bcm), Business Monitor International (BMI) said in it latest report on the country's oil and gas sector.
By 2015, its share of gas consumption is forecast to be 6.6 percent of the region's projected demand of 653.9 bcm, BMI said in its third-quarter report.
Malaysia's gas production is forecast to rise from around 61 bcm last year to an estimated 87 bcm by 2019/20, with demand growth expected to see export capability peaking at 34.6 bcm in 2019, largely in the form of LNG, versus 30 bcm last year and a projected 50 bcm in 2015, BMI said.
Source: Reuters