KUALA LUMPUR: National oil firm, Petroliam Nasional Bhd (Petronas), has warned that the liquefied natural gas (LNG) industry could stagnate if industry players do not make an effort to collaborate more.
“Today, players are cancelling and delaying projects in tandem with the LNG prices. Without sufficient investments, both buyers and sellers face an uncertain future in terms of business sustainability and energy security,” said president and group chief executive officer Tan Sri Wan Zulkiflee Wan Ariffin.
Speaking at the LNG Producer-Consumer Conference 2017 in Tokyo, Japan, he urged all parties to engage in early collaboration to work towards mutually-favourable market conditions to encourage investments for business longevity and long-term supply stability.
“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,” he said in a statement.
“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.”
Wan Zulkiflee said that the reason Petronas, currently the world’s third-largest LNG producer, did not proceed with its proposed LNG project in Canada was due to the prolonged depressed prices and unfavourable market conditions.
Nevertheless, he acknowledged that the current market dynamics have stimulated internal efficiency improvements that have provided Petronas with better agility as an integrated end-to-end LNG player to 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,” he said.
Petronas recently celebrated its 10,000th cargo from its Bintulu LNG Complex in Malaysia, delivered to Japan on October 4.