Malaysia has the 12th largest gas reserves and the 27th largest crude oil reserves in the world as at January 2001.

As at January 2001, Malaysia's gas reserves stood at 97.6 trillion cubic feet (tcf). This translates to about 66.8 years of natural gas availability.

The Natural Gas reserves under the Malaysia-Thailand Joint Development Area (JDA) are estimated to be around ten trillion cubic feet. The gas will tie-in with the Peninsular Gas Utilisation (PGU) system at Changlun, Kedah. Initial volume is 290 million standard cubic feet per day (mmscfd) rising to 550 mmscfd by year 2005 / 2006.

Apart from the Malaysia-Thailand JDA, a new source of gas supply to Peninsular Malaysia will be from the West Natuna Field in Indonesia. PETRONAS signed an agreement on 28 March 2001 with PERTAMINA (The Indonesian state oil and gas company), for the import of 1.5 trillion scf of gas over a period of 20 years.

The gas will be supplied via a pipeline to Petronas' Duyong Gas Field facilities located offshore Peninsular Malaysia. Upon commissioning (circa August 2002), this pipeline system will be connected to Malaysia's existing 2000 mmscfd gas processing and transmission network under the PGU project.

Another agreement involving the supply of 300 mmscfd to Malaysia for 20 years is expected to be concluded by the end of 2002. The delivery of gas from south Sumatra to Malaysia is scheduled for early 2005.

Over the long term, gas supply is not expected to be an issue due to the establishment of the Trans-Asean Gas Pipeline (TAGP) network. The TAGP will provide Asean opportunity to utilise its rich natural gas resources for premier energy solutions.