SKU: 134589
Author: Wood Mackenzie

Insight 06 January 2021

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Report summary

This report investigates the outlook for PETRONAS's MLNG plant and poses some possible avenues forward. Using Wood Mackenzie's proprietary data, we first look at feedgas supply for the next 17 years and, crucially, how much of the undeveloped feedgas contains high levels of carbon dioxide or hydrogen sulphide. We also explore the economics; first comparing project returns and then on a broader scale how Malaysia's fiscal terms will impact. The final section focuses on what could be done, with three possible scenarios imagined and discussed.

Executive summary
Uncertain supply outlook
The challenges
- Exploration (semi) success: big finds come with big challenges
- Taxing fiscal terms
- Other gas demand
So, what can be done?
- Fiscal stimulus to cater for dirty gas
- Centralised CO2 and H2S processing infrastructure and carbon sequestration
- Reduce MLNG capacity and convert trains to cater for dirty gas
In conclusion