Mining sector to pick up on gas production recovery

KUALA LUMPUR: The mining sector is expected to bounce back next year, partly due to the resumption of operation at the Kebabangan and Kinabalu gas fields in Sabah.

The sector is expected to decline 0.6 per cent this year due to the natural gas supply disruptions at the fields, said the Ministry of Finance in its Economic Outlook 2019 report.

However, a 0.7 per cent rebound is forecast for 2019, driven by recovery in production of natural gas as well as expected new production from the Bakong and Larak fields offshore Sarawak in the year’s second half.

In addition, stronger demand from domestic petrochemical industry and new contracts secured including from Japan for electricity generation are expected to support the growth of this sector.

Nevertheless, the crude oil and condensates subsector is forecast to decline due to production constraints at Sabah’s Gumusut Kakap and Malikai fields.

During the first half of 2018, the sector decreased one per cent year- on-year on lower output of liquefied natural gas following the unplanned supply outages.

However, the crude oil and condensates subsector is projected to grow this year in line with stable global demand.

‘’ Though the United States sanction has reduced Iran’s exports, the recovery in Libya’s production and anticipation of higher supply from Saudi Arabia are expected to stabilise crude oil prices in 2018,’’ the report said.