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What was once an export-driven industry now faces a structural turning point.
Malaysia, traditionally one of the world’s major liquefied natural gas (LNG) exporters, is preparing for a future in which domestic gas production may no longer be sufficient to meet rising demand, potentially positioning the country as a net importer of natural gas in the coming years.
Industry experts say the structural shift is being driven by declining output from mature gas fields, alongside growing demand from power generation, industrial users and broader economic expansion, a trend expected to intensify over the next decade.
Despite retaining its status as the world’s fifth-largest LNG exporter, analysts note that domestic natural gas production particularly from offshore fields in Peninsular Malaysia has come under increasing pressure. This has resulted in higher LNG import volumes to support local consumption.
According to Trade.gov, Malaysia’s LNG imports rose from 2.1 million tonnes in 2021 to 3.3 million tonnes in 2024, with projections indicating the country could become a net gas importer within the next one to two decades.
Energy industry leaders stress that Malaysia must take a strategic and forward-looking approach to manage this transition.
“Malaysia’s upstream production is unable to catch up with demand growth. It has no choice but to increasingly rely on imports,” said Abdul Aziz Othman, President of the Malaysian Gas Association (MGA)
He emphasised that strengthening market-driven pricing mechanisms, improving commercial attractiveness, and enhancing gas infrastructure readiness will be critical to securing long-term supply, according to The Edge Malaysia.
Abdul Aziz also warned that delays or cost overruns in infrastructure development could constrain supply availability and undermine the role of gas as a transition fuel in Malaysia’s energy mix.
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Despite the anticipated increase in imports, Malaysia’s role as a major LNG exporter remains firmly intact, underpinned by its established export infrastructure particularly the LNG complex in Bintulu, Sarawak, which continues to play a central role in global LNG markets.
These export facilities generate significant economic value while reinforcing Malaysia’s strategic position in international energy trade.
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At the same time, domestic demand for natural gas is expected to continue rising, especially as Malaysia gradually transitions away from coal-fired power generation and expands its industrial base. Energy officials have described gas as a “stabilising fuel”, supporting grid reliability while renewable energy capacity scales up.
Policymakers have highlighted the importance of market liberalisation and regulatory clarity to attract both domestic and international investment into gas supply chains and infrastructure.
Industry advocates argue that transparent pricing frameworks and commercially viable contracts are essential to securing LNG imports and maintaining long-term energy security.
Strategic planning is also progressing through national roadmaps and the expansion of regasification infrastructure, which would provide Malaysia with greater flexibility to source LNG globally when domestic supply tightens, according to S&P Global.
As Malaysia navigates this evolving energy landscape, experts say the priority must be to balance energy security, affordability and sustainability.
“With demand continuing to rise and global markets evolving rapidly, Malaysia must prepare for a future that is already taking shape,” Abdul Aziz said, as quoted by The Edge Malaysia.
The potential shift toward becoming a net gas importer reflects broader changes in regional and global energy dynamics, underscoring the need for adaptive policy frameworks and resilient market mechanisms to support Malaysia’s long-term energy and decarbonisation goals.
The views expressed are those of the author(s) or contributor(s) and do not necessarily reflect the views of Sdgmalaysia.com.