MONTREAL (Oil Monster): Gas Malaysia Berhad is targeting a final investment decision in the second half of 2027 for a major liquefied natural gas receiving and regasification terminal in Kedah, as Malaysia prepares for rising domestic gas demand and a more liberalized gas market.
The proposed RGT Yan project is being jointly developed by Gas Malaysia, Tokyo Gas Co., Ltd. and VTTI B.V. near Pulau Bunting in the Yan district of northern Peninsular Malaysia.
The offshore facility is expected to use a Floating Storage and Regasification Unit, or FSRU, with capacity of up to 6 million tonnes per annum. Development costs are currently estimated at between RM2 billion and RM3 billion.
Gas Malaysia President and Group CEO Azli Mohamed said the company expects to reach a final investment decision on the terminal during the second half of 2027.
If development proceeds as planned, the terminal is expected to enter operation by the end of 2030.
The project would create a new LNG import point in northern Peninsular Malaysia and allow imported LNG to be received, stored and regasified before entering the domestic gas network.
RGT Yan would mark a notable change in Malaysia's LNG import infrastructure.
Petronas currently operates the existing regasification terminals in southern Peninsular Malaysia and is involved in development of another terminal in Perak.
If completed, RGT Yan would become the first LNG import facility in Peninsular Malaysia not developed by the state energy company.
Gas Malaysia signed a Joint Development Agreement with Tokyo Gas and VTTI on May 15, 2026 following receipt of a Letter to Proceed from Malaysia's Energy Commission in March.
Gas Malaysia is leading the development, while Tokyo Gas brings LNG procurement and regasification expertise and VTTI contributes experience in energy terminal development and operations.
The partners said in June that the facility would be designed as an offshore FSRU located west of Pulau Bunting, with regasification capacity of up to 6 mtpa.
The project is currently progressing through technical, commercial and regulatory work ahead of a potential final investment decision.
Development work now extends beyond the terminal itself.
Gas Malaysia and PETRONAS Gas entered into a joint study and collaboration agreement in September to evaluate an onshore lateral pipeline connecting RGT Yan with Malaysia's Peninsular Gas Utilisation network.
The study covers engineering, operational and commercial requirements, as well as land and infrastructure needs for the proposed connection.
A pipeline link would allow regasified LNG received at Yan to move into the wider Peninsular gas system.
The terminal is being considered as Malaysia prepares for higher natural gas demand from power generation, industrial growth and rapidly expanding data-center development.
Gas Malaysia expects gas-fired generation to remain an important part of the country's power system as coal-fired generation is gradually phased out.
The company has pointed to plans for approximately 9 gigawatts of new gas-fired generation capacity by 2032 as evidence that additional imported gas infrastructure could be required.
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The commercial outlook for RGT Yan will also depend heavily on changes to Malaysia's domestic gas market.
The existing arrangement governing gas supply and pricing between Petronas and the country's power-generation sector is due to expire at the end of 2027.
Future arrangements could introduce greater market liberalization and give buyers more flexibility to procure LNG and natural gas from alternative suppliers.
Gas Malaysia currently obtains its gas from Petronas. A market-based LNG import terminal would give the company the option to source cargoes from other international suppliers.
Malaysia remains one of the world's major LNG exporters, but rising domestic consumption could gradually change the country's supply balance.
Malaysia exported 27.03 million tonnes of LNG in 2025 while importing 2.42 million tonnes, according to government data cited by Reuters.
Azli said greater gas-market liberalization could eventually turn Malaysia into a net LNG importer within 10 to 15 years, or potentially sooner.
That shift would represent a significant change for a country historically associated with large-scale LNG exports.
Despite the expected increase in gas consumption, the developers still need greater visibility on future terminal utilization before making a final investment decision.
Several proposed power-generation projects have not yet reached their own investment decisions, meaning announced generation capacity does not automatically translate into contracted LNG demand.
Gas-market pricing after 2028 will also be important to the project's competitiveness.
Malaysia currently subsidizes gas supplied to the power sector, while many industrial users pay market-based prices.
Future government policy will therefore influence the economics of importing LNG through RGT Yan.
RGT Yan is part of a broader expansion of Malaysian LNG import infrastructure.
Petronas is developing another regasification terminal in Perak, while Sarawak-owned Petros has announced plans for an LNG import facility in Sarawak with Höegh Evi.
The multiple projects reflect expectations that Malaysia will need more flexible sources of gas even as it remains an important LNG exporter.
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Gas Malaysia, Tokyo Gas and VTTI will continue engineering, commercial and regulatory work as they move toward the targeted final investment decision in the second half of 2027.
The developers will also need greater clarity on Malaysia's post-2027 gas-market framework, future power-sector demand and the infrastructure required to connect the terminal to the national gas network.
If the project reaches FID on schedule, operations are targeted to begin by the end of 2030.
Sources: Gas Malaysia Berhad; Tokyo Gas; Reuters.
