Petronas calls for further collaboration to ensure sustainable LNG market

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KUALA LUMPUR (Sept 20): Petroliam Nasional Bhd (Petronas) has called for further collaboration between producers and consumers of liquefied natural gas (LNG) to encourage growth and sustainability of the industry.  

The collaboration is to ensure mutually-favourable market conditions to spur investments for business longevity and long-term supply stability, Petronas president and group chief executive officer Tan Sri Wan Zulkiflee Wan Ariffin stressed. 

"While current market dynamics are not encouraging conversations about sustainable gas pricing, it is in our interest both as sellers and as buyers, to bring this up. 

“Although buyers’ considerations remain in our best interests, the current market volatility necessitates the security of demand. This is imperative for the producers to continue investing to support the upstream and LNG value chain in a timely manner,” he said in a speech at the LNG Producer-Consumer Conference 2017 in Tokyo, Japan yesterday, LNG Industry magazine reported.  

While demand for LNG has grown, Wan Zulkiflee, warned there is a possibility of industry stagnation if LNG prices do not encourage necessary investments to sustain the business.  

"Today, players are cancelling and delaying projects in tandem with LNG prices. Without sufficient investments, both buyers and sellers face an uncertain future in terms of business sustainability and energy security." 

Petronas too was forced to not proceed with its proposed LNG project in Canada, due to prolonged depressed prices and unfavourable market conditions, he noted. 

However, he conceded current market dynamics have stimulated internal efficiency improvements that have provided Petronas with better agility as an integrated end-to-end LNG player that can accelerate growth, once the industry is on an upturn. 

“With deeper resource pools, we are able to invest in people, technology and innovation to provide energy solutions that go beyond just selling and delivering LNG. Through these investments, we aspire to help create a more sustainable LNG market that is able to fuel the world’s economies,” Wan Zulkiflee said.