Brunei exports most of its natural gas production. According to OGJ, Brunei held 13.8 trillion cubic feet (Tcf) of proven natural gas reserves as of January 2007. Most of Brunei’s natural gas reserves are from associated fields, occurring alongside the country’s crude oil deposits. In 2004, Brunei produced 406 billion cubic feet (Bcf) of natural gas while consuming 71 Bcf. During 2004, Brunei exported 357 Bcf of liquefied natural gas (LNG), of which 88 percent went to Japan and the remainder went to South Korea.

Brunei Shell Petroleum dominates production of natural gas. LNG activities are carried out by Brunei LNG (BLNG), a joint venture between the government of Brunei (50 percent), Mitsubishi (25 percent), and Shell (25 percent). BLNG receives most of its natural gas supplies from BSP, although beginning in 1999 it began receiving small amounts of natural gas from Total’s offshore production facilities.

E&P activities in the natural gas sector face the same limitations as the oil sector. Much of Brunei’s most promising exploration sites are located in the country’s two deepwater blocks, Blocks J and K, the rights to which are contested by neighboring Malaysia. However, whereas the government has intentionally limited oil production to preserve the country’s reserves, Brunei’s natural gas reserves are considered sufficient to meet domestic consumption requirements and LNG supply contracts for the foreseeable future.

Brunei became the first Asian exporter of LNG in 1972. Brunei is an important regional producer of LNG, with 2005 exports totaling 333 Bcf, or 6.8 million metric tons (MMt). In 2005, 92 percent of Brunei’s LNG exports were sent to Japan, with the rest going to South Korea. BLNG operates the country’s sole natural gas liquefaction plant and LNG export terminal, located at Lumut. The facility has a total capacity of 7.2 MMt/y (350 Bcf/y), and BLNG has announced plans to add a new production train with 4.0 MMt/y (195 Bcf/y) of additional capacity. While the planned expansion has been discussed at length, there are no firm agreements in place that guarantee the production train will be built.