Malaysia contains 75 trillion cubic feet (Tcf) of proven natural gas reserves. Natural gas production has been rising steadily in recent years, reaching 1.9 Tcf in 2003. Natural gas consumption in 2003 was estimated at 1.0 Tcf, with LNG exports of around 0.9 Tcf (mostly to Japan, South Korea, and Taiwan).
One of the most active areas in Malaysia for gas exploration and development is the Malaysia-Thailand Joint Development Area (JDA), located in the lower part of the Gulf of Thailand and governed by the Malaysia-Thailand Joint Authority (MTJA). The MTJA was established by the two governments for joint exploration of the once-disputed JDA. The JDA covers blocks A-18 and B-17 to C-19. A 50:50 partnership between Petronas and Amerada Hess is developing block A-18, while the Petroleum Authority of Thailand (PTT) and Petronas also share equal interests in the remaining blocks.
PTT and Petronas announced an agreement in November 1999 to proceed with development of a gas pipeline from the JDA to a processing plant in Songkla, Thailand, and a pipeline linking the Thai and Malaysian gas grids. Malaysia and Thailand will eventually each take half of the gas produced, though initial production will go just to Malaysia. The project had been controversial in Thailand, facing opposition from local residents in Songkla along the pipeline route. In May 2002, the Thai government announced a final decision to commence construction on the project later that year, though the pipeline route was altered slightly to avoid some populated areas. Deliveries of natural gas into Malaysia began in the first quarter of 2005, with deliveries into Thailand scheduled to begin in 2006. A sales agreement for natural gas from the other jointly-held blocks was signed in June 2005, with deliveries to Thailand of 270 MMcf/d beginning in 2008.
ExxonMobil produces about 335 Mmcf/d at its offshore Bintang natural gas field in the South China Sea, which contains about 1 Tcf of proven reserves. Commercial production at Bintang began in February 2003.
Malaysia accounted for approximately 16% of total world LNG exports in 2004. After much delay, Malaysia is proceeding with a long-planned expansion of its Bintulu LNG complex in Sarawak. In February 2000, Petronas signed a contract with a consortium headed by Kellogg Brown and Root for construction of the MLNG Tiga facility, with two LNG liquefaction trains and a total capacity of 7.6 million metric tons (370 Bcf) per year, which was completed in April 2003. The Bintulu facility as a whole is now the largest LNG liquefaction center in the world, with a total capacity of 23 million metric tons (1.1 Tcf) per year. Most of the production from the new LNG trains will be sold under term contracts to utilities in Japan. Tokyo Electric Power (TEPCO), Tokyo Gas, and Chubu Electric all import LNG from the project. BG signed a contract in August 2004 for supplies over a 15-year period to the United Kingdom, to begin in 2007 or 2008. Shell brought two additional fields online in 2004, Jintan in March, and Serai in September, both of which feed into the Bintulu export terminal. The two fields added over 1 Mmcf/d to Malaysia gas production.
In addition to LNG, Malaysia exports 150 million cubic feet per day (Mmcf/d) to Singapore via pipeline. Surprisingly, Malaysia also is an importer of gas from Indonesia . Petronas signed an agreement in April 2001 with Indonesia state oil and gas company Pertamina for the import of gas from Conoco West Natuna offshore field in Indonesian waters. The move is being seen as part of a Malaysian strategy to become a hub for Southeast Asian natural gas integration. Deliveries from the pipeline commenced in mid-2003. The pipeline connects to an existing pipeline from the shore to Malaysia offshore Duyong field, helped to minimize construction costs.