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LNG 2023 - Vancouver 

10-13 July 2023
Vancouver Convention Centre
B.C. Canada

Chevron and Qatar Energy

PETRONAS: Lessons from the global energy crisis and the push towards decarbonisation

LNG 2023

PETRONAS: Lessons from the global energy crisis and the push towards decarbonisation

Abang Yusuf bin Abang Puteh, Senior Vice President of LNG Assets at PETRONAS’ Gas Business, discusses with NGW what should be learnt from the global energy crisis, the outlook for LNG looking forward and the contributions that the company is making towards decarbonisation.

Abang Yusuf bin Abang Puteh, Senior Vice President of LNG Assets at PETRONAS’ Gas Business, discusses with NGW what should be learnt from the global energy crisis, the outlook for LNG looking forward and the contributions that the company is making towards decarbonisation.


Author: Joseph Murphy, Natural Gas World  |  23 June, 2023

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As one of the world’s leading LNG producers, what does PETRONAS believe are the most important lessons that should be learnt from the current global energy crisis?

The energy crisis affected economies and industries across the globe. As the world gradually recovers from the effects of the crisis, we observed the following trends:

  • Demand for gas is soaring as many coal-fired power stations have been decommissioned around the world.
  • The global energy supply chain is stretched almost to breaking point. This is partly the result of decarbonising the energy sector and highlights how important it is that the ongoing energy transition is handled well. As a progressive energy and solutions partner enriching lives for a sustainable future, PETRONAS is an avid supporter of the energy transition towards a lower-carbon future.

Nevertheless, we believe that transition must be just and cannot be at the cost of growth and well-being. There must be enough affordable energy for growing economies and for communities to thrive as we race towards a lower carbon future. We remain confident that hydrocarbons will continue to be an important component of the global energy mix, and natural gas, as the cleanest fossil fuel, will replace other fossil fuels.

In this regard, we are currently exploring multiple pathways to decarbonise our operations and lower our carbon footprint – from electrification of our LNG plants to establishing new entities to provide clean energy solutions such as renewables, hydrogen, and green mobility.


PETRONAS was notably the first Asian oil and gas company to set a net-zero carbon emissions target. Take us through the key goals in PETRONAS’ decarbonisation strategy. Specifically, how is PETRONAS decarbonising the LNG value chain from production to delivery?

At PETRONAS, we are striving towards a low carbon future and our Net Zero Carbon Emissions (NZCE) 2050 aspiration through multiple approaches.

One of the ways is by achieving Operational Excellence and ensuring that our assets and operations are not just well-organised, but also optimised, efficient and green. Our goal is to cap our Scope 1 and 2 GHG emissions from our assets, at 49.5mn metric tons of carbon dioxide (CO2) equivalent by 2024. This has become part of an overall phased approach to reach our 2050 net zero carbon emissions goal. We will continue to mitigate and reduce emissions based on the principles of Measure, Reduce and Offset.

Starting in 2024, our PETRONAS LNG Complex (PLC) in Bintulu will gradually be powered by electricity, allowing us to decommission old and inefficient gas turbines. Meanwhile, our Carbon Capture & Storage at offshore Sarawak Gas Field (Kasawari) is expected to come online by 2026 with a target to reduce carbon dioxide volume emitted via flaring by 3.3mn mt of CO2 equivalent annually, making it one of the largest offshore carbon capture and storage (CCS) projects in the world.

To cut bunker consumption, we have upgraded our LNG vessels with Hull Performance Solution Technology which leads us to a potential annual reduction of about 18,000 mt of CO2 emissions. We are decarbonising our marine transportation by utilising gas burning of LNG ships at both our Buyers’ and our own terminals, which include 18 terminals during loading and discharge.


What are PETRONAS’ ambitions in the field of carbon-neutral LNG. How quickly does the company see this nascent sector expanding to significant scale?

Our ambitions will always reflect on our support of the energy transition and in line with our Statement of Purpose. PETRONAS will continue diversifying our products and offerings to the market, while striving to be a cleaner and more sustainable energy provider. In the LNG industry, carbon neutral LNG is seen as a catalyst to spur greater carbon commitments, with a growing number of LNG consumers seeking ways to reduce their carbon footprint. PETRONAS actively seeks collaborations with buyers and end-users to achieve their sustainability goals.


What about the company’s work in the CCS and hydrogen segments?

Beyond LNG, we have established an entity focused on clean energy solutions known as GENTARI. GENTARI is designed to advance the utilisation and commercialisation of renewable energy such as solar and wind, hydrogen, electric vehicle (EV) infrastructure and green mobility. By 2030, GENTARI aspires to:

  • Build a renewable energy capacity of up to 30 GW, specifically in solar with added opportunities in wind and battery storage.
  • Supply up to 1.2mn mt/year of hydrogen by leveraging on competencies in developing large projects to achieve scale as a low carbon hydrogen producer beginning with projects in Malaysia.
  • Become a preferred green mobility solutions provider, supporting the EV ecosystem by capturing 10% market share (circa 25,000 charging points based on current estimates) across key markets in Asia Pacific with an anchored presence in Malaysia and India.

Meanwhile, PETRONAS is advancing efforts in CCS, with the aim of establishing Malaysia’s position as a leading CCS hub in Asia. We have established a Carbon Management Division (CMD) in 2022 to manage carbon emissions produced from its operations. Its mission is to pursue key low-carbon initiatives, prioritising CO2 management and the development of CCS business, with a target to reduce 11.6mn mt of CO2 equivalent of emissions from existing facilities by 2025, achieve zero venting by 2024 and zero routine flaring, in line with PETRONAS’ endorsement of the World Bank’s Zero Routing by 2030 Flaring Initiative.

The CMD will focus on two areas:

  • Decarbonise existing facilities through operational efficiency improvements which will lead to the reduction of venting and flaring thus minimising methane emissions.
  • Manage storage readiness and offerings for high CO2 fields by offering CCS as a pathway of decarbonisation for industries in the region.

Partnerships are also a key strategy under CMD, whereby PETRONAS has teamed up with other global players to explore CCS opportunities.


Focusing on one of PETRONAS’ key projects, make the economic and environmental case for LNG Canada. What gives the project a commercial edge, and what steps are being taken to minimise its emissions footprint?

The low greenhouse gas (GHG) footprint from LNG Canada will be achieved via a combination of factors:

  • Raw feed gas from Montney which has a lower CO2 composition.
  • Use of widespread electrification of upstream operations such as drilling and processing
  • Use of renewable power from British Columbia’s hydro-driven electrical grid.
  • Use of highly efficient gas turbines at the liquefaction plant.

These factors combined are expected to enable LNG Canada to be one of the greenest LNG plants in the world. In fact, LNG Canada is designed for 0.15 mt of CO2 equivalent/mt of LNG, well lower than the global emissions average of 0.26 to 0.35 mt of CO2 equivalent per tonne of LNG produced.

PETRONAS’ capacity at LNG Canada is planned to come on stream by the middle of this decade and enables us to expand and diversify the reach of our global supply portfolio. We will be leveraging the capacity from LNG Canada primarily to fulfil our term obligations while also remaining active in the spot market.


Can you provide a similar update for the third FLNG project in Malaysia?

PETRONAS reached a Final Investment Decision (FID) in November 2022, for a nearshore LNG facility in Sabah. The engineering procurement, construction, and commissioning (EPCC) contract for the project was awarded to the winner of front-end engineering design (FEED) competition (JGC Corporation and Samsung Heavy Industries). The nearshore LNG facility, located at Sipitang Oil and Gas Industrial Park (SOGIP), Sabah, is planned for completion by 2027. This project is expected to grow our production portfolio by another 2mn mt/year of LNG.


What about the long-term LNG outlook? Prices are starting to subside now but are still relatively stable. How long will the market remain tight, and with the rising number of supply FIDs being taken, could the world find itself in an LNG glut once more within the next 5-10 years?

The volatility in LNG prices is a sign of the supply and demand mismatch that the industry is currently facing.

For example, high gas and LNG spot prices have dampened short-term demand growth, especially in more price-sensitive emerging markets. This has resulted in scaled-back production from industries that rely on natural gas as feedstock. Naturally, businesses may be “compelled” to return to coal and heavy fuels which does not bode well with the global commitments made in the Paris Agreement.

Responsibility now lies with policymakers who need to take a rational and middle-ground view of the energy transition with natural gas co-existing alongside renewables to power a low carbon future. This is the cost of foregoing natural gas development over the past few years.

We hope that after a few years of operating in a volatile environment, industry players will start to realise the importance of security and stability of LNG supply.

We believe that a stable long-term pricing mechanism will not only be able to address the pricing volatility faced by the industry; but also encourage more long-term contracts and sustainable gas demand from buyers.

Such long-term arrangements are also critical for producers who are developing LNG exporting projects that require huge investments and a long gestation period. And this is our strength and aim - PETRONAS is working with many partners to not only to co-create low carbon solutions for a sustainable future but also to continue maintaining our record as a reliable supplier.