Malaysia gas long-term outlook H2 2019 summary

Gas markets play different dynamics on Peninsular and East Malaysia. Overall gas demand in Peninsular Malaysia is flat over the forecast, with the growth in gas demand for industry being offset by a decrease in gas flowing to gas separation plants. Gas demand in East Malaysia is pushed by power in the short-term and later by the industrial sector. The Sabah-Sarawak Gas Pipeline was shutdown in January 2020 following an explosion. We believe the pipeline will not come back online during 2020. As such, Sarawak's gas will continue flowing to the LNG plants in Bintulu. Gas supply in Peninsular Malaysia is expected to drop more quickly after 2020, when LNG imports will be increasingly needed to fill this gap. Long-term supply growth potential lies in East Malaysia. In June 2019, PTTEP confirmed a large gas discovery via the Lang Lebah-1 RDR2 exploration well, offshore Sarawak. There is a high chance of commercialisation as feedgas to the MLNG complex.