LNG traders seek to increase supply to Malaysia and Indonesia

Liquefied natural gas (LNG) traders are looking to supply more fuel to Southeast Asian exporters, many of which are forced to import LNG to meet growing energy demand.

Countries in the region, including Malaysia and Indonesia, are planning to increase their LNG import capacity. This may cause changes in market dynamics, says Takuya Tanabe from JERA Global Markets.

According to Bloomberg, the rapid economic growth of these countries is leading to a swift depletion of their domestic fuel reserves. In this regard, South Asian governments are reconsidering export strategies. Malaysia, the world's fifth-largest LNG supplier last year, said it needs to build more terminals and import facilities in remote regions of the country where infrastructure is limited. Sixth-ranked Indonesia had previously asked its overseas buyers to wait on delayed shipments in order to meet domestic demand.

Tanabe said most of the future growth in global LNG consumption is expected to come from Asia. China and India will take the lead in this area.