Page 8 - AsianOil Week 44 2022

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Tokyo asks Malaysia to ease

LNG supply woes

PIPELINES & THE Japanese government has reached out to between October and December alone that year.
TRANSPORT Malaysia’s Petroliam Nasional Berhad (Petro- Late last week, Japan’s Minister of Economy,
nas) to request the firm's help with alleviating Trade and Industry (METI), Yasutoshi Nishi-
Malaysia's LNG any LNG supply issues to customers in Japan mura, addressed Petronas’ president Tengku
capacity has been following the Sabah-Sarawak Pipeline leak in Muhammad Taufik directly in a choreographed
impaired by a pipeline late September. bid to reduce the knock-on effects to Japanese
leak, however. Already facing pressure to guarantee ample customers.
LNG deliveries as Russia threatens to cut off sup- Nishimura said: “We understand that Petro-
plies, and with temperatures across the country nas has already taken sincere responses, includ-
already starting to drop, Japanese buyers are ing providing alternative supplies.”
clambering to source cargoes to replace those The Japanese minister continued: “We would
delayed by the leak. like to ask you to continue to make your utmost
The problems started on September 21 when efforts to minimise the impact on Japanese
a soil slippage later put down to localised lique- companies.”
faction caused a break in one of Malaysia’s main In response, the head of Petronas expressed a
pipelines. predictable intent to keep working to satisfy his
Heavy rains from the seasonal south-west Japanese customer base by offering: “I wish to
monsoon passing across the region at the time assure all parties that Petronas is committed to
have been blamed for the soil movement, with a working closely with customers to mitigate and
subsequent force majeure declaration made by manage the present situation.”
Petronas in the ensuing days. He went on to add: “As a long-term partner of
No public announcements followed from the Japan, we will strive to provide a safe and reliable
government-owned firm in the days or weeks supply of LNG.”
after the leak. In the private sector, meanwhile, Japan’s lead-
As such, no information on the volume of ing LNG buyer, JERA, has gone on the record as
LNG lost or affected in the six weeks since the saying they do not expect any significant issues
leak took place has been released. to follow the leak and that supplies are predicted
It is known, however, that an annual output of to be adequate as Malaysia repairs the broken
25.7mn tonnes makes the Malaysia LNG project pipeline and returns to previous shipping levels.
to which the pipeline is linked one of the largest A similarly upbeat outlook was issued by
single-site LNG projects in the world. Japan’s largest supplier of gas, Tokyo Gas.
Japanese government agencies and clients of The firm which supplies the vast majority of
Petronas have remained just as tight-lipped as gas to millions of Japanese in the capital and sur-
their Malaysian counterparts in what is being rounding areas also went on the record as saying
seen as an exercise in not rocking the boat for that it saw no major problems looming in the
the greater good by some analysts in the region. weeks ahead as a result of the break.
Customers served by Malaysian LNG sup- Speaking to local media, chief financial officer
plies are found throughout Asia, but primarily in at Tokyo Gas Hirofumi Sato said: “Our basic
Japan and South Korea. To a lesser extent Taiwan approach, as in previous years, is to maintain
and China also receive cargoes. relatively high inventories during the winter”,
Throughout 2021, Malaysia was Japan’s sec- before adding: “We will adjust our vessel alloca-
ond ranked supplier of LNG, with Petronas ship- tion plans as much as possible while keeping a
ping around 10mn tonnes to ports in Japan, so close eye on whether this winter will be a harsh
much so that 50 cargoes made their way to Japan or mild one.” ™

P8 www. NEWSBASE .com Week 44 08•November•2022