Malaysia’s Gas Malaysia Bhd and Petronas Gas Bhd (PGB) signed a Joint Study and Cooperation Agreement (JSCA) on September 7, 2026, to assess a pipeline project connecting the planned LNG (Liquefied Natural Gas) regasification terminal in Yan, Kedah, to Malaysia’s Peninsular gas supply grid. The Yan LNG regasification terminal is a joint venture led by Gas Malaysia with a 70% stake, alongside Japan’s Tokyo Gas (15%) and the Netherlands’ VTTI BV (15%), with total project cost of up to RM3 billion (approximately USD 670 million). Under the agreement, PGB will lead the feasibility study for an onshore lateral pipeline connecting the terminal to the existing Peninsular Gas Utilisation (PGU) system.
The core of the agreement is an onshore lateral pipeline that would connect regasified natural gas from the Yan LNG terminal to the existing island-wide PGU gas supply network across Peninsular Malaysia. PGB will lead hydraulic steady-state and transient simulations, site and geotechnical surveys along the pipeline route, and FEED (Front-End Engineering Design) work. The Yan LNG regasification terminal itself is a joint venture led by Gas Malaysia, with Tokyo Gas and VTTI BV each holding 15% stakes. The pipeline technology and detailed specifications have not yet been disclosed, and the agreement marks the start of a pre-FEED feasibility study.
The Yan LNG regasification terminal carries a total project cost of up to RM3 billion (approximately USD 670 million). The joint study and cooperation agreement was signed on September 7, 2026, and the pipeline’s specific length, diameter, and other detailed scope will be determined once the feasibility study is complete.
The agreement forms part of Malaysia’s broader national strategy to expand natural gas supply infrastructure in the northern Kedah region and strengthen the link between LNG import infrastructure and the existing Peninsular gas grid to bolster energy security.
The agreement between Gas Malaysia and PGB shows Malaysia accelerating both the buildout of LNG import terminals and the downstream integration work connecting them to existing gas infrastructure. The participation of foreign partners Tokyo Gas and VTTI BV in the Yan LNG terminal itself reflects continued international investor interest in Malaysia’s energy market. PGB leading the pipeline study suggests a division of roles across infrastructure assets within Malaysia’s state-linked energy group. That said, this announcement marks only the joint study and feasibility assessment stage, with further procedural steps remaining before a Final Investment Decision (FID) on actual pipeline construction. Amid a wave of LNG import and pipeline expansion projects across Southeast Asia, this case stands out for its integrated approach of designing the terminal and connecting pipeline in tandem.
The completion timing of the feasibility study and whether it proceeds to FEED warrant close attention. How the FID timeline for the Yan LNG terminal itself is coordinated with the FID timeline for the pipeline project is also worth watching. In addition, the results of site and geotechnical surveys along the pipeline route and confirmation of the pipeline’s final scope (length and diameter) merit continued monitoring.