Malaysia's state-owned Petronas has declared force majeure at its Yetagun field offshore Myanmar (Burma) because of falling gas production.
The force majeure was declared by Petronas' upstream unit PC Myanmar (PCML) at the field's blocks M12, M13 and M14 on 1 April, halting production until further notice.
The firm decided to declare FM after output rates dropped below the technical threshold of the offshore gas processing plant and because of challenges in the ability of the gas wells to deliver gas. It observed that output levels had seen a "drastic decline" since January and that this has "further deteriorated recently".
PCML has a plan to mitigate the situation, without providing any details, adding that it has informed key stakeholders including the Myanmar authorities, its partners and gas buyers of its decision for a force majeure. PCML is taking all necessary measures to resume production as soon as possible.
PCML has operated the Yetagun gas project since 2003, in which it holds a 40.9pc stake. Myanma Oil and Gas Enterprise holds 20.5pc, Nippon Oil Exploration (Myanmar) holds 19.3pc and PTTEP, the upstream unit of Thailand's state-controlled energy firm PTT, has the remaining 19.3pc.
PTT receives piped gas from the Yetagun field and is widely expected to increase imports of LNG on a spot basis if production at Yetagun remains suspended. PTT has yet to respond to Argus' queries on the impact of the Yetagun FM.
PTT issued a tender today to buy one LNG cargo for delivery on 7-15 May to the 11.5mn t/yr Mab Ta Phut LNG receiving facility in Thailand's southern Rayong province, which market participants suggest is to compensate for lost output at Yetagun. The tender closes on 7 April.
The firm has already bought four spot cargoes this year for delivery between second-half March and second-May, of which three cargoes were bought in March. Its new requirement is poised to lift its purchases of May deliveries to three cargoes. The firm has previously bought no more than two spot cargoes in any given month. It bought five spot cargoes in the first-half of last year through tenders. Thailand's combined LNG imports in January and February stood at 764,625t, down from 869,670t a year earlier. It imported 5.12mn t of LNG last year, slightly below the 5.2mn t/yr of annual LNG term commitments it has with Qatargas, BP, Shell and Petronas.

