Brunei produced around 400 billion cubic feet (Bcf) of natural gas in 2003. Around 90 percent of gas destined for the countrys one LNG terminal is produced by BSP and the rest by Total S.A. Discussions are underway now to determine whether sales of gas to new domestic industrial customers would be economically advantageous over the current policy of exporting almost all of Bruneis gas production.
Brunei became the first Asian liquefied natural gas (LNG) exporter in 1972. Today, Brunei is the fourth-largest producer of LNG in the world and the third-largest natural gas producer in Southeast Asia. Major customers for Bruneis LNG exports include Japan, which takes around 85 percent of Bruneis LNG exports under a 20-year contract renewed in 1993, and South Korea, which imports about 11 percent of Bruneis exports. The Brunei LNG (BLNG) joint venture between Mitsubishi (25 percent), Shell (25 percent), and the Brunei government (50 percent) produces Bruneis LNG at the companys Lumut plant. Lumut produces about 330 bcf of LNG annually. The vast majority of BLNG sales are on a long-term contract basis, although there have been a few spot sales to Spain and the United States.
Long-term prospects for natural gas and LNG development in Brunei are excellent. BLNG has a master plan to expand its capacity by adding another 194 Bcf-per-year train to its existing five trains by 2008. The plan also includes further modernization of the existing plant, similar to the rejuvenation program carried out by Shell Global Solutions and completed in 1994. As a result of the program, the Lumut plant now operates at 140 percent of its design capacity.
In 2004, BLNG undertook the replacement of the plants Main Cryogenic Heat Exchangers (MCHE) after 30 years of operation. The first of four new MCHEs was erected in February 2004. BLNG is in the process of replacing the remaining MCHEs. The MCHE replacement is expected to extend the life of the facility for another 30 years. Additionally, BSP contracted with Shell Global Solutions for a $400 million revitalization of gas extraction facilities in the Ampa and Fairley fields. Besides exports, Brunei would like to use its natural gas to develop domestic petrochemicals and energy-intensive industries. The government signed a memorandum of understanding with American aluminum producer, Alcoa, in September 2003 to study the feasibility of constructing a $1.5 billion gas-fired aluminum smelter in Seria. The Brunei Economic Development Board has reportedly offered discounted gas to the plant.