Petronas expects LNG market balance in 2023

KUALA LUMPUR: Malaysian state energy company Petroliam Nasional Berhad expects the global liquefied natural gas (LNG) market to remain oversupplied until as late as 2023, its chief executive said on Tuesday.

Rising LNG production over the last two years, mainly from Australia and the United States, has exceeded demand and depressed prices. Asian spot LNG prices are now down by around 70 percent from early 2014.Petronas, as the company is better known, only last month scrapped a proposed $29 billion LNG terminal project in western Canada, saying market conditions made the project "economically unviable".

"Things are volatile, but at the moment we see 2023 (for LNG market balance)," Chief Executive Officer Wan Zulkiflee Wan Ariffin told Reuters in an interview. The market will tighten when "demand centres in developing economies start growing as current low prices mean more take up" of LNG supplies, he said.

Petronas is the sole manager of Malaysia´s oil and gas reserves, making it the world´s third-biggest LNG exporter after Qatar and Australia. The company is now looking for new buyers for its LNG output, beyond its long-time customers in Japan and South Korea, the CEO said.

"The Far East, that is our traditional market, but we are also looking at markets in the subcontinent in India, Bangladesh and Pakistan," Wan Zulkiflee said. South Asia is emerging as the new hot spot for LNG, with Pakistan and Bangladesh set to join India as major consumers, helping to eat away some of the global oversupply. "For both China and India, LNG makes up less than 10 percent of their energy mix. We see growth potential here," he said.