Malaysia’s first LNG regasification terminal off the Sungai Udang port in Melaka is expected to commence operations this year. The terminal is managed by Regas Terminal (Sg Udang) Sdn Bhd, incorporated in December 2011 as a wholly owned subsidiary of PETRONAS Gas Berhad (PGB). The facilities at Sungai Udang have a maximum capacity of 3.8 million tonnes per annum. There will be two floating storage units (FSUs) to receive and store LNG. The FSUs are expected to remain permanently berthed at the jetty where each is estimated to have a lifespan of 20 years. Also included are an island jetty and regasification units. There will be subsea and offshore pipelines to transport the regasified LNG to the Peninsular Gas Utilisation (PGU) pipeline network, about 30 kilometers away from Sungai Udang. Since it is an offshore plant, PGB is able to save about two years on construction, compared to how long it would normally take to build a similar plant onshore. The terminal is critical because of depleting domestic gas resources and increasing domestic demand. Ideally, the way forward would be to import and trade gas at market prices.