Malaysia Petroleum Management
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Gas Pricing in Malaysia
Gas pricing in Malaysia will be based on the Malaysia Reference Price (MRP). MRP refers to the weighted average price (WAP) of liquefied natural gas (LNG) on a free-on-board basis (FOB Basis) that is exported out of Malaysia. This is derived by dividing the total export value of LNG by the total export volume of LNG.
*Conversion: 52 MMBtu equals to 1 MT of LNG
The Department of Statistic Malaysia (“DOSM”) publishes the LNG Export free-on-board Value and LNG Export Volume on a monthly basis.
Monthly MRP Trend
MRP RM 43.68/MMBtu ▲ 8.70% from previous month
as of August 2024
Source: Department of Statistics Malaysia (DOSM) for MRP, Petroleum Association of Japan (PAJ) for JCC and PLATTS for Brent.
Why MRP?
Contribution / leadership role
×Declining relevance of HSFO
Declining use of HSFO due to regulatory changes & transition to cleaner fuels, particularly in marine fuels, where limits on amount of sulfur is imposed.
Contribution / leadership role
×Price Marker Standardisation
MRP has been used as a marker to price downstream gas in Malaysia. It is now being adopted gradually in the upstream sector. Standardising MRP as a price marker across the value chain minimises price reference exposure.
Contribution / leadership role
×Relevance to Malaysia Gas Market
MRP reflects the value of gas exported out of Malaysia, where prices are driven by global market dynamic.
Contribution / leadership role
×Liquid & Sustainable Price Marker
MRP liquidity is demonstrated in the large volumes and number of buyers of Malaysian LNG. MRP’s sustainability lies in the longevity of supplies available from Malaysia to support its LNG export demand.
MRP Application in Upstream & Downstream
Upstream
α × MRP
*α is negotiated between Petroleum Arrangement Contractors (PACs) & PETRONAS, which is determined by the project Return On Investment (ROI) & balanced risk and reward.
Downstream
MRP × (1 + α) + T
*α is a negotiated parameter between Buyer & Seller and T is Peninsular Gas Utilisation (PGU) transportation tariff as approved and published by Suruhanjaya Tenaga (ST).
MRP Application in Downstream
MRP FAQ & Historical MRP Data
Know more about MPM
