KUALA LUMPUR: Petronas LNG Ltd’s 15-year supply agreement with Woodside Energy Trading Singapore Pte Ltd signals rising global demand for liquefied natural gas (LNG) and underscores its role in the energy transition.
MBSB Investment Bank Bhd (MBSB IB) highlighted that Woodside has also secured LNG deals with major oil and gas players in Germany, China and Japan, reflecting broad market growth potential.
“This may signal a demand growth for LNG across global markets in the near future, in tandem with the rising support for energy transition with LNG as a long-term hybrid solution for balance and sustainability,” it said in a note.
MBSB IB maintained a neutral call on Petronas Gas Bhd with an unchanged target price of RM19.25, noting that the agreement’s financial impact will materialise only in the longer term.
Under the deal, Woodside will deliver one million tonnes of LNG annually to Malaysia from 2028, sourced from its global portfolio, which could include volumes from the newly approved Louisiana LNG project in the United States.
MBSB IB is positive on this development, as it reflects Petroliam Nasional Bhd’s (Petronas) commitment to ensure the national energy security agenda is protected.
Furthermore, it also conveys a positive message on the development and progress of the data centre, which is one of the main drivers for the country’s growth, the firm said.
“On the impact to our company under our coverage, we believe the impact is limited with only Petronas Gas a potential beneficiary, as Petronas’s arm in gas transportation and distribution, as well as regasification.
“Nevertheless, we noted that the downside risks to the project include market volatility, hurdles in regulations, logistics and infrastructure, and rising competition with renewables and green fuels,” it said.
© New Straits Times Press (M) Bhd
