Brunei expects bright future for LNG sector

BRUNEI is looking forward to a bright future for its natural gas industry with investment being focused on rejuvenating its liquefied natural gas (LNG) plant to ensure stable and continuous supply, deputy permanent secretary (Energy) at the Prime Minister's Office said yesterday.

"We are investing on rejuvenation works at our BLNG plant in Lumut including four out of the five trains (complex equipment used in the liquefaction process) and in new and larger LNG vessels. These will ensure that the Brunei LNG project shall continue to provide stable and uninterrupted supply of LNG to our customers beyond the life of the current LNG contracts," said Hj Ismail POKPS DP Hj Hashim at the opening of the Sixth Asean Plus Three Natural Gas Forum at The Rizqun International Hotel.

He also highlighted that the methanol plant in Lumut would also commence full operations and export "very shortly".

According to the deputy permanent secretary, two years of economic slowdown has made an impact on BLNG's production and shipping operations as well as the country's upstream production. He said that the natural gas market in the region had been affected by the global economic recession for the past two years.

"We have seen for example demand for LNG dropping partly due to a decrease in demand for electricity from the industrial and manufacturing sectors in importing countries," he said.

"For Brunei Darussalam, the lowering of demand for LNG has an impact not only on our LNG production and shipping operations but also in our upstream production especially where the allocated gas for LNG is extracted from associated gas."

In this context, he emphasised that a stable supply of LNG from an exporting country could only be assured if there was stability in demand from the importing country.

According to statistics released by the Department of Economic Planning and Development Board, Brunei's total exports increased to $14.9 billion in 2008 from $11.56 billion in 2007. LNG accounted for 44.6 per cent of 2008 exports.

This constituted as a rise of 91.3 per cent in LNG exports in 2008, which Brunei LNG (BLNG) has recorded it as its highest LNG production.

Recently, it was disclosed that BLNG produced 195 LNG cargoes in 2009, which was delivered by the fleet from Brunei Shell Tankers and was dubbed as a "successful year" for BLNG.

Brunei exports LNG to customers mainly in Japan and Korea.

Hj Ismail also spoke on the importance of inter-regional dialogue through venues like this forum, giving an opportunity for both consumers and producers to exchange information and opinion on the state of natural gas production and utilisation in member states.

He said that Brunei continues to support this initiative, which is under the AMEM Plus Three (Asean Ministers of Energy Meeting) through the Energy Policy Governing Group.

"It is undeniable that some of our points do differ for example in terms of prices for liquefied natural gas (LNG) and so on. Yet, there are definitely no differences in our understanding of how important natural gas is as part and parcel of the overall energy security in our respective countries," Hj Ismail said.

"It is on this common understanding and respect for each other that we are able to strengthen our relationship both at the professional and personal levels," he added.

On a regional note, Christopher Zamora of the Asean Centre of Energy, who spoke on behalf of the centre's executive director, touched on the Asean Vision 2020 which emphasises the establishment of the Trans-Asean Energy Network comprising a Trans-Asean Gas Pipeline (TAGP) and the Asean Power Grid (APG).

"TAGP aims to interconnect the gas pipeline infrastructure of Asean member states and to enable gas to be transported across the borders of the member states. APG ensures that gas for power is also being optimised with other potential sources of energy," he said.

"Better energy security depends on daily efforts by all countries," said Masatoshi Shinagawa, senior policy advisor of Japan's Ministry of Economy, Trade and Industry.

"I hope today's active discussion will contribute in the natural gas industry and a sustainable future," he added.

The two-day forum will discuss the outlook for natural gas supply and demand in Asia, an update on the TAGP, as well as country reports by member countries except for Indonesia, Myanmar, Lao PDR and Vietnam, whose delegates were unable to attend due to prior commitments.

The participants will also be visiting Seria where they will be briefed on Brunei's progress in this sector at the Oil and Gas Discovery Centre.

The Brunei Times