SINGAPORE (ICIS) -- As LNG importing countries, Malaysia and Indonesia are unique because most, if not all, of their LNG supply is domestically produced. The lack of pipeline infrastructure and geographical constraints in these southeast Asian countries have made LNG the only viable option to transport gas from the east – where most reserves are located – to the west, where the demand centres are found.
ICIS forecasts annual LNG demand to grow between 28% to 68% respectively, for both countries in the next two years. Malaysian LNG imports will grow by more than 1 million tonnes annually, to reach 4.8 million tonnes in 2022. Indonesian imports, meanwhile, are forecast to reach 6 million tonnes in 2022, depending on the progress of the Java-1 FSRU project.
Demand growth in both countries will inevitably absorb a proportion of supply from the portfolios of Malaysia’s PETRONAS and Indonesia’s Pertamina – volumes that would otherwise be sold into international market. In an oversupplied market this will assist with the global rebalancing of supply and demand.
For both countries, power sector gas demand is projected to grow at a healthy rate of above 5% annually, as more gas-fired generation is being added. Malaysia has the added boost from its industrial gas demand as the Pengerang Integrated Petroleum Complex starts-up its various plants in phases.
As a reactive forecast, ICIS also monitors the Indonesia Java-1 FSRU LNG-to-power project, which is estimated to start-up by Dec 2021. If it proceeds, ICIS forecasts it will add another 150,000 to 190,000 tonnes of LNG monthly to the base case.
Domestic gas supply offshore Peninsular Malaysia, the Malaysia-Thailand Joint Development Area, North Sumatra and West Java is mature and will continue its annual decline of 3% to 9% in the coming years. There are ongoing projects to slow its decline, but none can reverse the trend. LNG imports will therefore become increasingly important in the coming years to match the rising consumption.
ICIS LNG demand forecasts for Indonesia, Malaysia and Pakistan are now live in LNG Edge. The LNG Edge Demand Forecast is a rolling 24-month forecast which reacts to new market developments as they happen.
As well as the new demand forecasts for Malaysia, Indonesia and Pakistan, ICIS already forecasts LNG demand for Japan, China, South Korea, India and Taiwan. We will be looking to roll-out Bangladesh, Bahrain, Kuwait, UAE, Singapore, Thailand, Vietnam, Myanmar and Philippines in the coming months.