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Malaysia Oil and Gas Midstream Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

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  • 95 Pages
  • February 2022
  • Region: Malaysia
  • Mordor Intelligence
  • ID: 5552616

The Malaysian oil and gas midstream market is expected to register a CAGR of more than 1.08% during the forecast period of 2022–2027. The outbreak of COVID-19 in Q1 of 2020 has had negatively impacted the country's oil and gas midstream market as the Malaysian government imposed a Movement Control Order (MCO) to stop the spread of COVID-19 in the country. Additionally, the pandemic has caused disruption in oil and gas operations in the country. For instance, giant oil and gas company PETRONAS, Malaysian state energy, has reported the risks of delays to numerous projects due to extended coronavirus-related lockdowns locally and around the world. Factors such as increasing demand for oil and rising investment in the pipeline and storage sectors are expected to boost the demand for the Malaysian oil and gas midstream market during the forecast period. However, decreasing oil and gas production levels, coupled with a lack of policies on oil stockpiling, has impeded growth in the oil and gas midstream sector.

Key Highlights

  • The LNG terminals segment is expected to dominate the market over the forecast period with the expansion and construction of new LNG terminals. New LNG terminals are expected to decrease the cost of transportation.
  • Malaysia is expanding its oil terminal and storage capacity as the need for more oil storage and trading grows within Asia. Like its neighbor, Singapore lacks the space to continue increasing its storage capacity. As Singapore runs out for space for oil and gas storage, companies in Malaysia can use it as an opportunity for further growth.
  • The gas and oil production in the country has been decreasing gradually over the years. This has become a cause of concern for the companies in the sector about future growth prospects. Therefore, falling production acts as a restraint for the market.

Key Market Trends

LNG Terminals Segment is Expected to Dominate the Market.

  • In Terms of Type, LNG terminals sub-segment is expected to dominate the market during the forecast period of 2022-2027. The major factors supporting the growth of the market are increasing consumption of oil along with increase in investments in the mid-stream oil and gas industry in the country.
  • In February 2021, Petronas commissioned Dua FLNG floating LNG terminal in Sabah, Malaysia. The company's 1.5 million metric tons per year (mmty) floating liquefied natural gas (FLNG) facility is capable of reaching gas fields in depths of up to 1.5 kilometers (.93 miles).
  • As of 2020, Natural gas LNG imports increased to 3.6 billion cubic meters per day, up from 3.3 billion cubic metres in 2019. Thus, to decrease the share of LNG imports, the need for new LNG terminals is required, which will drive the growth of the segment in the country.
  • Satu Malaysia Terminal is an LNG terminal in Sarawak, Malaysia. It constitutes 3 LNG trains and has a capacity of 8.1 million metric ton per annum (MTPA). It is a part of the Malaysia LNG Complex, also known as the Petronas Bintulu LNG Complex.
  • The Pengerang oil storage terminal in Johor completed phase 2 of its construction and increased its crude oil storage capacity to 20.8 million barrels for crude oil and petroleum product storage. Additionally, it has now completed phase 3 of construction, which expects to add about 2.7 million barrels of storage for clean petroleum products.
  • Additionally, in 2021, Indian Oil Corporation (IOC) announced that they are expanding its joint venture with Malaysia's state-run Petronas to include building liquefied natural gas (LNG) terminals, fuel retailing, and gas distribution, driving the growth of the segment.
  • Hence, LNG terminals are expected to increase slightly during the forecast period due to an increase in the consumption of oil and an increase in investments into the midstream sector.

Decreasing Production of Gas to Restraint the Market

  • Natural gas consumption decreased to 38.2 Billion cubic meters in 2020, down from 46.8 Billion cubic meters in 2019. The gas production also reduced to 73.2 Billion cubic meters in 2020, before reaching an all-time high of 79.3 Billion cubic meters in 2019.
  • Malaysia’s declining production comes as a result of maturing fields, particularly its larger fields in the shallow waters offshore of Peninsular Malaysia, which in turn act as a restrain for the midstream market in the country.
  • To offset the decline in production, PETRONAS wants to attract new investment for smaller, marginal fields and reverse production declines by using enhanced oil recovery (EOR) techniques.
  • Also, in Malaysia, the oil pipeline network is relatively limited. The country mainly relies on tankers and trucks to distribute midstream petroleum products onshore. The oil product pipeline runs from the Dumai oil refinery in Indonesia to the Melaka oil refinery in Melaka City, Malaysia.
  • Thus, the Malaysian oil and gas midstream industry is restrained due to decreased natural gas consumption and production along with a limited pipeline network. However, over the forecast period increase in the consumption of oil and gas, along with growth in the investment in the sector, will drive the market.

Competitive Landscape

The Malaysian oil and gas midstream market is moderately consolidated. Some of the major companies include Fluor Corporation, Petroliam Nasional Berhad (PETRONAS), Dialog Group Berhad, Vitol Group, and Royal Vopak N.V.

Additional Benefits:

  • The market estimate (ME) sheet in Excel format
  • 3 months of analyst support

Table of Contents

1.1 Scope of the Study
1.2 Market Definition
1.3 Study Assumptions
4.1 Introduction
4.2 Market Size and Demand Forecast in USD million, till 2027
4.3 Recent Trends and Developments
4.4 Government Policies and Regulations
4.5 Market Dynamics
4.5.1 Drivers
4.5.2 Restraints
4.6 Supply Chain Analysis
5.1 Type
5.1.1 Transportation Overview Existing Infrastructure Projects in Pipeline Upcoming Projects
5.1.2 Storage Overview Existing Infrastructure Projects in Pipeline Upcoming Projects
5.1.3 LNG Terminals Overview Existing Infrastructure Projects in Pipeline Upcoming Projects
6.1 Mergers and Acquisitions, Joint Ventures, Collaborations, and Agreements
6.2 Strategies Adopted by Leading Players
6.3 Company Profiles
6.3.1 Petroliam Nasional Berhad (PETRONAS)
6.3.2 Dialog Group Berhad
6.3.3 Vitol Group
6.3.4 Royal Vopak NV
6.3.5 Fluor Corporation Petro-Excel Sdn Bhd (PESB)

Companies Mentioned

A selection of companies mentioned in this report includes:

  • Petroliam Nasional Berhad (PETRONAS)
  • Dialog Group Berhad
  • Vitol Group
  • Royal Vopak NV
  • Fluor Corporation