TNB, Govt to discuss ‘extra RM1.6bil gas bill’ (5347)

KUALA LUMPUR: Tenaga Nasional Bhd (TNB),
which is getting imported gas in two months' time, is talking to the
Government on an extra RM1.6bil that will be charged under the market
pricing portion of the deal.
“By September, we will have supply of gas,'' TNB CEO Datuk Seri Che Khalib Mohd Noh told StarBiz. “The issue of insufficient volume of gas will be a thing of the past.''
The
regassification plant in Malacca, which will allow for the import of
liquefied natural gas (LNG), is slated for completion in August.
“They
told us that post September, they can deliver the volume we want,
except that any amount above 1,100 million standard cu ft per day
(mmscfd) will be at market price,'' he said.

[You must be registered and logged in to see this image.] Che Khalib: ‘By September, we will have supply of gas.’ Currently,
TNB gets supply of 1,100 mmcsfd of gas; this will be supplied at the
government-regulated price of RM13.70 per million metric British
thermal units (mmbtu).
Meanwhile, the market price per mmbtu is RM45.
“This is a fair deal,'' said Che Khalib. “Burning gas at market price is better than burning distillates for fuel.''
But the differential in price will be something for the Government to work out.
TNB consumes between 1,200 mmscfd and 1,250 mmscfd of gas the price difference will come up to RM1.6bil.
“We
are negotiating with the Government on this,'' he said. “TNB is not in
a financial position to pay and the Government will have to find a
solution.
“We are not sure if the Government will continue with the fuel-sharing mechanism or share the costs with the consumers.''
Under the fuel-sharing mechanism, three parties TNB, Petroliam Nasional Bhd and the Government had shared the costs of burning more expensive distillates due to shortage of gas supply.
“We
have alerted the Economic Planning Unit and the Performance Management
& Delivery Unit on how to overcome the extra cost,'' he said.
If
TNB runs all its gas plants, it would require 1,700 mmscfd of gas. At
80% capacity, it would need 1,350 mmscfd. This represents an extra 250
mmscfd (above the government-controlled portion of 1,100 mmscfd) which
would be at market price.
“Shortage of gas has always been an issue,'' said Che Khalib.
“The
question I have been raising over the last two years is what are we
doing to overcome the problem. Because of all these noises that TNB has
been making, the Government realised that the gas-supply issue had to
be addressed quickly and fast tracked the LNG terminal project in
Malacca for that.''