July 8, 2019 / 9:54 AM / 14 days ago

Petronas keeps UK LNG regasification capacity after terminal stake sale

LONDON (Reuters) - Malaysia’s state energy company Petronas has sold its stake in Britain’s Dragon liquefied natural gas (LNG) terminal but will retain its 2.2 million tonne a year (mtpa) regasification capacity, the company said.

Petronas said it had agreed to sell its 50% stake in Dragon, an import facility at the Milford Haven port in Wales, to British infrastructure investor manager Ancala last week.

“Petronas continues to hold the regas capacity in Dragon LNG,” the company said in an emailed comments on Friday.

Regasification capacity gives the Malaysian company a European delivery point for its LNG and is particularly valuable because Asian demand has been sluggish for most of the year as production, especially in the Atlantic Basin, has increased.

Petronas, which sells the LNG Malaysia produces, has an LNG offtake agreement with Qatar, the world’s top LNG producer. It also has LNG trading operations.

Malaysia is the world’s third largest LNG producer, although with 25 mtpa, it is far behind Qatar’s 77 mtpa and Australia’s 67 mtpa, according to 2018 production statistics produced by industry group GIIGNL.

The United States, which had negligible LNG exports a few years ago, was placed fourth with 20 mtpa. Petronas has an offtake agreement with U.S. firm Cheniere that will kick in once the Sabine Pass 6 terminal begins operations around 2025.

Reporting by Sabina Zawadzki; Editing by Edmund Blair

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