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 Business

Gas Malaysia expects volume to reach 213 mln mmbtu

Gas

7th February, 2018

KUALA LUMPUR: Natural gas distributor, Gas Malaysia Bhd, expects an increase in gas usage by 16 per cent to 213 million mmbtu (one million British thermal units) by 2020 from 183.6 million mmbtu last year, driven by higher industries consumption.

Among the significant gas usage growth would come from the rubber products industry at 22 per cent by 2020, said Chief Executive Officer, Ahmad Hashimi Abdul Manap, adding that the chemical products and glass products industries followed suit with a growth of 21 per cent and 20 per cent, respectively.

To support the growth, he said the company would be building over 500 kilometres of pipeline from this year to 2020 with capital expenditure allocations of over RM500 million.

“This is to ensure that we have proactive measures taken to supply gas to all customers in Peninsular Malaysia,” he told Bernama on the sidelines of the International Gas Union (IGU) Diplomatic Gas Forum here on Tuesday.

Currently, he said, the rubber products industry accounts for 32 per cent of Gas Malaysia’s volume usage, followed by food, beverage and tobacco industries (25 per cent), fabricated and basic metal industries (nine per cent), glass products (eight per cent), chemicals products (eight per cent) and others (18 per cent).

Meanwhile, on the third party access (TPA) which came into effect on Jan 16, Ahmad Hashimi said the system was expected to increase imported liquefied natural gas (LNG) supply into Malaysia to 47 per cent by 2020 from 32 per cent last year.

He said the company had applied for distribution and shipping licences under the TPA which are currently under evaluation by the Energy Commission (EC).

Apart from that, he said Gas Malaysia was also in talks to bring in gas supply from other parties.

“Under the TPA, we can buy gas from other than Petronas, but it (talk) is still at the preliminary stage,” he said.

Under the TPA, new gas suppliers can bring LNG into the country via any of the two regasification terminals—Sungai Udang in Melaka and Pengerang in Johor, and deliver their gas to their buyers using the existing transmission and distribution pipelines.

Regassification and gas pipeline operator, Petronas Gas Bhd (PGB) expects the implementation will drive the volume of gas usage in the country.

Its Vice President and Chief Executive Officer, Kamal Bahrin Ahmad, said the TPA would encourage more participation from the players into the gas industry which would result in more competitive pricing and higher volume.

However, he said the downside risk to PGB would be if the EC were to revise downward the tariff for pipeline operators.

Nevertheless, he is optimistic that the higher volume will cushion the impact if the EC decides to lower the tariff.

Currently, PGB is charging RM1.24 per gigajoule of gas transported through its pipeline.

Meanwhile, the half-day forum discussed the latest developments in the gas market in Malaysia, namely the market and regulatory reforms that were implemented when the Gas Supply (Amendment) Act 2016 took effect early last year.

   
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