Utilities Winds of Change

The changes across the Utilities sector

Stepping on the gas. The biggest change affecting the sector is that more gas would soon be available in Peninsular Malaysia from the Liquefied Natural Gas (LNG) importation and regasification terminal in Melaka. This terminal will allow:

1. Petronas to import gas at market prices from international exporters.
2. Petronas to sell the gas bought at market price to Tenaga Nasional (TNB) for use in gas fired power plants.
3. TNB to be able to dispatch gas plants and also to agree to an extension of the 1st generation Independent Power Producer (IPP) Power Purchase Agreements (PPAs).
4. With the extension, the IPPs should be more willing to reduce their capacity payments now.
5. With the savings from the capacity payments, TNB should be able to afford gas at market price.
6. With TNB paying market price, Petronas will be willing to import more gas.
7. More gas will also be made available for Gas Malaysia, which can then sell the market priced gas to its customers, including those in the Rubber Glove industry.