Malaysia is important to world energy markets because of its 81.7 trillion cubic feet of natural gas reserves and its net oil exports of over 300,000 barrels per day.
Note: All information contained in this report is the best available as of May 2000 and is subject to change.
Natural Gas:
Malaysia contains 81.7 trillion cubic feet (Tcf) of proven natural gas reserves. Natural gas production has been rising steadily in recent years, reaching 1.44 Tcf in 1998, up from 1.36 Tcf in 1997. Natural gas consumption in 1998 was estimated at 0.70 Tcf, with LNG exports of 0.72 Tcf (mostly to Japan, South Korea, and Taiwan).
Exports dipped slightly in 1998 as a result of the Asian financial crisis, but began to climb again in 1999.
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 Triton Energy Ltd. 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 each take half of the gas produced.
The agreement had been delayed two years by uncertainty over demand growth related to the Asian financial crisis. Production from the JDA is to begin in 2002.
Block A-18 is operated by the Carigali-Triton Operating Company (CTOC), a joint venture project between Triton and Petronas. In December 1997, the MTJA approved a development plan for CTOC's Cakerawala gas field, which will be the first JDA field to come on line.
In November 1999, CTOC signed a gas sale agreement with Petronas and PTT, which will allow it to proceed with development. Gas production of 390 Mmcf/d will begin in mid-2002.
Malaysia accounted for approximately 18 percent of total world LNG exports in 1998. After a brief downturn related to the Asian financial crisis, demand for LNG is rising again. 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.
The Bintulu facility as a whole will then be the largest LNG liquefaction center in the world, with a total capacity of 23 million metric tons per year (1.1 Tcf).
Apart from its existing customers, Petronas will be selling some of the gas from MLNG Tiga to Enron's Metgas project in India. Malaysia also has sold some spot LNG cargoes to Coral Energy of the United States.
Electricity:
Malaysia currently has approximately 14 gigawatts (GW) of electric generation capacity. In 1998, Malaysia generated around 57.4 billion kilowatthours of electricity. In addition, the following power projects are scheduled to be commissioned after 2000: Yan Power Plant (1,200 MW), Lumut Power Plant (2,100 MW), Perlis Power Plant (650 MW), and Kulim Power Plant (450 MW).
In 1994, the government granted approval for the massive 2.4-GW Bakun hydroelectric project in Sarawak.
Scheduled for completion in 2002, the Bakun Dam had been slated to send 70 percent of its generated power from Sarawak to Kuala Lumpur through the construction of 415 miles of overhead lines in eastern Malaysia, 400 miles of submarine cables, and 285 miles of distribution infrastructure in Peninsular Malaysia.
In addition, expansion plans included a high voltage line south to Johor Baharu and north to Perlis, near the western Thai border. A local company, Ekran, was awarded a turnkey contract to manage the project in January 1995.
In 1996, the construction contract went to Sweden's Asea Brown Boveri (ABB). However, in early September 1997, the Malaysian government announced that it was delaying the project indefinitely, citing an unexpected rise in the dam's cost due to the country's economic difficulties.
In mid-1999 work resumed on the river diversion tunnels, a major component of the project, which will be completed by the end of 2000. The Malaysian government has taken control of the project and negotiated financial settlements with the firms involved.
The subsea transmission line concept has been abandoned, and the Malaysian government is exploring the possibility of sales of electricity to Brunei and Indonesia. It is certain that the project will be scaled down from its original 2.4-GW capacity, but to what extent is still unclear.
Malaysia is considering reforms to its power sector to make it more competitive and lower costs. Currently, three state-owned utilities dominate power generation and distribution in Malaysia.
The market was opened to independent power producers (IPPs) in 1994, and 15 IPPs were licensed. While initial rates of return on capital were good for the IPPs, the Asian financial crisis came as a major blow to IPPs profits.
In recent developments, Tenaga Nasional Bhd, one of the state utilities, began in 1999 to divest some some of its power generation units. Eventually, Malaysia expects to achieve a fully competitive power market, with generation, transmission, and distribution decoupled, but reform is still at an early stage and the exact process of the transition to a competitive market has not been decided.
Energy Overview:
Minister of Energy, Telecommunications, and Posts: Dato' Leo Moggie Anak Irok
Proven Oil Reserves (1/1/00E): 3.9 billion barrels
Oil Production (1999E): 810,000 barrels per day (bbl/d), of which 720,000 bbl/d is crude oil
Oil Consumption (1999E): 460,000 bbl/d
Net Oil Exports (1999E): 350,000 bbl/d
Crude Oil Refining Capacity (1/1/00E): 524,400 bbl/d
Natural Gas Reserves (1/1/00E): 81.7 trillion cubic feet (Tcf)
Natural Gas Production (1998E): 1.44 Tcf
Natural Gas Consumption (1998E): 0.70 Tcf
LNG Exports (1998E): 0.72 Tcf
Recoverable Coal Reserves (12/31/96): 4 million short tons
Coal Production (1998E): 0.12 million short tons
Coal Consumption (1998E): 2.3 million short tons
Net Coal Imports (1998E): 2.2 million short tons
Electricity Generation Capacity (1/1/98): 14.0 gigawatts (84 percent thermal, 16 percent hydroelectric)
Electricity Generation (1998E): 57.4 billion kilowatthours
Oil & Gas industries:
Organization: Malaysia's national petroleum corporation, Petroliam Nasional Berhad (Petronas), was formed in 1974. Petronas controls oil production through partnerships with Exxon (Esso Production Malaysia) and Shell (Sabah Shell Petroleum, Sarawak Shell Berhad, and Sarawak Shell/Petronas Carigali)
Major Foreign Oil Company Involvement: BP Amoco, Conoco, Enron, ExxonMobil, Murphy Oil, Nippon Mitsubishi Oil, Occidental, Shell, Statoil, Texaco, Triton
Major Oil Fields: Bekok, Bokor, Erb West, Bunga Kekwa, Guntong, Kepong, Kinabalu Pulai, Samarang, Seligi, Semangkok, Tapis, Temana, Tiong
Major Natural Gas Fields: Bedong, Bintang, Damar, Jerneh, Laho, Lawit, Noring, Pilong, Resak, Telok, Tujoh
Major Oil Refineries (capacity - bbl/d): Port Dickson-Shell (155,000), Melaka I (100,000), Melaka II (100,000), Kerteh-Petronas (40,000), Port Dickson-Esso (84,400), Lutong-Shell (45,000)
Major Oil Pipelines: Malaysia-Singapore pipeline, planned Malaysia - Songkhla (Thailand) product pipeline
Major Oil Terminals: Bintulu, Johor Baharu, Kerteh, Kuching, Melaka, Penang, Port Dickson, Port Kelang
Source: United States Energy Information Administration
© 2000 Mena Report (www.menareport.com)
