LNG

Sept 7 (LNG) - Petronas, the Malaysian oil and gas company and leading Asian LNG exporter, said that there would be no reduction in the number of employees, though the group would trim capital costs and may cut pay to strengthen its resiliency after big losses. Petronas posted a first-half loss of 16.5Bln Malaysian ringgit ($3.97Bln) and a 23 percent year-on-year reduction in revenue to 93.6Bln ringgit ($22.5 billion) on the back of lower average realised prices and a drop in sales volumes for processed gas and LNG.

   Petronas President and Chief Executive Muhammad Taufik Tengku Aziz, said the company was considering pay cuts for its more than 47,000 employees in the light of the continued challenging market conditions. “The final deliberations are ongoing. Any decision on the matter will be conveyed to our employees first,” he said.

Petronas, the Malaysian state-backed energy company with onshore and floating liquefied natural gas plants, reported a near 70 percent fall in first-quarter profits as almost 10 million tonnes of LNG were sold amid declining crude oil and LNG prices.

Petronas said that profit after tax for the period from January through March 2020 fell to 4.5 billion Malaysian ringgit ($1.03Bln) from 14.2Bln ringgit ($3.25Bln) in the same period last year, a drop of 68 percent.

Without the asset write-downs because of the market challenges of 4.67Bln ringgit ($1.07Bln), profits would have totalled 9.2Bln ringgit ($2.10Bln).

Petronas revenues for the quarter were 59.6Bln ringgit ($13.65Bln), a decline of 4 percent on the 61.99Bln ringgit ($14.20Bln) in the prior-year quarter.

The company’s LNG and gas earnings performances are part of the Gas and New Energy division report.

Petronas said quarterly pipeline natural gas sales were 13.4 percent lower at 2,566 million standard cubic feet per day compared with 2,962 mmscf per day in the 2019 first quarter.

“Malaysia average sales gas volume for the first quarter of 2020 was lower by 396 mmscf per day compared to the first quarter of 2019, mainly driven by lower offtake from power sector in Peninsular Malaysia,” said Petronas.

LNG sales rose 6.5 percent in the quarter to 9.99MT compared with 9.40MT in the same three months of 2019.

Petronas has produced LNG at its Bintulu onshore LNG complex since 2013 and its FLNG plant offshore Sabah, giving combined production of more than 26 million tonnes per annum, making the nation the largest Asian producer and the fourth-largest exporter in the world after Australia, Qatar and the US.

The Malaysian company also receives LNG offtake as a shareholder in the Gladstone LNG export plant in Queensland, Australia. Its overseas volumes will also increase in the next few years when LNG Canada comes on stream.

“The gross LNG sales volume for the first quarter was higher by 0.59 million tonnes compared to the first quarter, mainly attributable to higher trading activities as more opportunities arose due to increased liquidity,” explained Petronas.

Gas and New Energy revenue was 22.5Bln ringgit ($5.15Bln), down 8 percent from a year ago, mainly due to the impact of lower average LNG realised prices, partially offset by the effect of a weakening ringgit against US dollar.

Petronas President and Chief Executive, Wan Zulkiflee Wan Ariffin, said the company like others had suffered the ongoing effects of the Covid-19 pandemic and the collapse in oil prices.

“The oil and gas industry has been badly affected by the unprecedented twin shock of both supply and demand,” he added.

“For our operations, we ensured that we continue to optimally operate our total business value chain, as safely and efficiently as possible, to fulfil the energy needs of the nation and to our customers globally,” explained Wan Zulkiflee .

“For 2020, we are planning to reduce our Capex by 21 percent and lower our operating expenditure by 12 percent, compared to what we had budgeted for previously,” stated the CEO.

After the end of the first quarter, Petronas had signed a sales and purchase agreement in May for an LNG tank filling facility at Sarawak for onward shipment to China in ISO containers.

The Malaysians signed the SPA with Tiger Clean Energy Ltd via a video teleconference because of the Covid-19 travel restrictions.

Petronas will supply Tiger Clean Energy at Bintulu in Sarawak.

LNG supplied in the ISO containers would subsequently be distributed to remote locations in China out with the pipeline grid, which is a widespread service for Chinese gas users supplied by truck.

May 31 (LNGJ) - Malaysian energy company Petronas said total LNG sales volumes for the first quarter were 8.45 million tonnes, slightly higher than the 7.92MT recorded in the same three months of 2018 because of higher volume from the onshore Bintulu LNG plant in Sarawak and higher trading activities. The group recorded revenues of 62.0 billion Malaysian ringgit ($14.79Bln) for the first quarter, an increase of 7 percent from the 2018 quarter.

   First-quarter profit after tax came to 14.2Bln billion ringgit ($3.38Bln), a rise of 9 percent on the back of higher revenue. The Malaysian company said average gas volume sales were 2,962 million standard cubic feet per day, above the 2,806 million standard cubic feet per day reported in the same quarter last year, mainly due to higher demand from the power sector.