Che Khalib: Petronas must finalise charges for gas plant

Date:

06 Mar 2012

KUALA LUMPUR: Tenaga Nasional Bhd (TNB) is hopeful that the charges to use Petroliam Nasional Bhd’s regassification plant in Malacca would be finalised by June in order to bring in liquefied natural gas (LNG) into the country.

Gas imports are expected to commence in Malaysia once the regassification terminal is up in August or September, and currently the cost to import is about RM40 per mmbtu (million metric British thermal units) in the open market before reaching the terminal.

TNB will be utilising the Petronas regassification terminal to buy processed LNG.

President and chief executive officer Datuk Seri Che Khalib Mohd Noh said the charges would determine the final price for importing LNG as it would enable TNB to know the additional cost that would be incurred for the regassification terminal and the pipeline cost.

“We understand that Petronas has already issued the code for using the infrastructure as we will be pumping gas using the same pipeline that Petronas is using.

“Next, it has to finalise the charges for using the terminal. It is working on that number now and we have to know it as well because it will ultimately determine the landed price for the power plant.

“We hope all this will be finalised before June. If not, we won’t be able to bring in the gas but the terminal would be already up,” he said after the Persatuan Usahawan Tenaga Malaysia’s AGM here yesterday.

He said Petronas would likely be the first supplier for LNG as it has made arrangements to import into Malaysia.

This would pave way for others to bring in LNG into the country, he added.

TNB had to burn distillates to generate electricity due to the shortage of gas supply from Petronas, and thus the three major stakeholders namely TNB, Petronas and the Government had agreed to share the RM3bil incurred between January and October 2011.

On the compensation of the additional cost of burning distillates from November 2011 until August 2012, Che Khalib said it was still under discussion.

He was confident a solution would be reached to cater to the industry need.

“The gas supply since January has improved tremendously as we are getting 1,100 million cu ft of gas per day, thus spending has reduced drastically to half and even less now.

“We are thankful to Petronas and are mindful of the additional money Petronas has to spend to bring in additional volume,” he added.

Currently, TNB is able to manage the industry demand as the country has yet to be hit by the hot weather due in May, June and July which would be the prime time for the power sector, he said.

“We have been asking Petronas to try to secure additional gas in order for TNB to ride through that difficult times when the hot spell hits the country,” he added. – Bernama