Natural gas accounts for 70% of Petronas' product portfolio. The company is the world's third largest natural gas producer and exporter and the third largest supplier of imported liquefied natural gas to China.

The Paper reporter Yang Yang

"One of the situations caused by the situation between Russia and Ukraine is that European countries have turned to seeking natural gas resources in other regions. This will lead to a sharp increase in (European) liquefied natural gas import demand, and the competition will become increasingly fierce, resulting in The supply of liquefied natural gas in Asia has decreased. "Shen Shanrui, vice president of LNG marketing and trading of Petronas (hereinafter referred to as Petronas), recently said in an interview with The Paper and other media that the situation between Russia and Ukraine has intensified the competition for power in Europe and Asia. , LNG prices will continue to be high. As the closest LNG supply node to China, Petronas's commitment to China's LNG remains unchanged and will continue to provide stable and uninterrupted supply in accordance with the agreement.

Natural gas accounts for 70% of Petronas' product portfolio. The company is the world's third largest natural gas producer and exporter, and is also China's third largest supplier of imported liquefied natural gas. Liquefied natural gas is liquefied by compressing natural gas and cooling it to minus 162 degrees Celsius. Compared with pipeline natural gas, liquefied natural gas trade relies on shipping, and its destination is more flexible. Therefore, its proportion in international natural gas trade is increasing.

Affected by geopolitical tensions and other factors, Europe is looking for natural gas alternatives around the world. The long-standing "Asian premium" in LNG spot prices has been replaced by a "European premium".

When talking about the impact of geopolitical conflicts on trade flows in the LNG market, Shen Shanrui told The Paper that LNG shipments from other parts of the world to Europe have surged since 2022. From a longer-term perspective, the demand side is more inclined to sign long-term purchase agreements to lock in supply. "Today, buyers have begun to reconsider their short- and medium-term spot purchasing strategies and have begun to return to long-term agreements to ensure the energy security and stable supply of their respective countries. We expect that the market trend of signing long-term agreements for natural gas will continue throughout 2022."

In the European market, countries are expected to deploy more natural gas storage and LNG regasification terminals, he added.

Petronas Floating LNG One (PFLNG SATU)

China is the world's largest importer of LNG. Petronas has been deeply involved in the Chinese market for many years, supplying LNG resources to Chinese state-owned oil companies, local energy companies and urban fuel companies.

Among them, in 2006, PETRONAS LNG signed the first long-term LNG agreement in China with Shanghai Gas, a subsidiary of Shenergy Group . The agreement lasted for 25 years and agreed to provide 3 million tons of liquefied natural gas to China every year. , and successfully delivered the first ship of LNG in 2009. In 2020, PETRONAS LNG and Shenergy Group signed a new medium- and long-term LNG purchase and sale framework agreement (HOA), supplying 1.5 million tons of LNG annually. In July 2021, Petronas and CNOOC signed a 10-year long-term agreement to supply 2.2 million tons of liquefied natural gas annually.

Shen Shanrui said that China is a very important market for Petronas. Petronas' natural gas production comes from multiple sources, ensuring reliable supply of energy. In the future, Petronas will continue to invest in new natural gas projects to further strengthen supply reliability, including the third floating LNG project, the Canadian LNG project and the purchase of some LNG from the United States by 2024, hoping to bring more new Increased air volume is brought to the Chinese market.

There is broad consensus in the industry that in addition to tensions, underinvestment has led to a supercycle in oil and gas, with soaring gas prices destroying demand.

"Current natural gas prices indicate that the world will need more natural gas, and the industry may not be able to meet the full supply. In addition, high natural gas and LNG spot prices inhibit short-term demand growth, especially in price-sensitive emerging markets. market. This leads to industries that rely on natural gas as raw materials to reduce production. "The above scenario may cause companies to be forced to return to coal and heavy fuels, which is contrary to the global commitments made in the " Paris Agreement.""This requires policymakers to take a relatively neutral stance on the energy transition process. At this stage, let natural gas coexist with renewable energy to provide power for a low-carbon future. This is also the purpose of developing natural gas in the past few years."

Editor in charge: Li Yuequn

Proofreading: Zhang Liangliang