Fair pricing for gas and framework for import of LNG being worked out, says Minister

KUALA LUMPUR: The much-awaited framework for the import of
liquefied natural gas (LNG), which will determine the price of gas, is
still being worked out.
Energy, Green Technology and Water Minister Datuk Seri Peter Chin Fah Kui (pic) said the additional gas supply from Petroliam Nasional Bhd's (Petronas) LNG regassification terminal in Malacca would be made available at a different cost.
“The
facility in Malacca will be ready by September according to Petronas.
We will have to see when the first shipment is and by then the pricing
will be announced,” Chin said on the sidelines of the Federation of
Malaysian Manufacturers conference on energy efficiency and
conservation 2012.

[You must be registered and logged in to see this image.] Energy, Green Technology and Water Minister Datuk Seri Peter Chin Fah Kui Chin said the Government would consider all options, aspects and indicators in establishing fair pricing and review mechanism.
“Gas
for the power and non-power sector would be gradually revised to
reflect market prices. With this, the electricity tariff would be
revised accordingly,” he said, adding that the Government hoped achieve
full market price by 2015.
Chin said with the availability of
LNG imports beginning September, the gas supply shortage issue for the
power and industrial sectors would be addressed.
Analysts
believed the framework would provide for gas import at market price.
The current market price per million metric British thermal unit is
about RM45.
Meanwhile, the Gas Supply Act is currently being
reviewed to incorporate the necessary amendments and address third
party access mechanism.
Chin said the revision was in line with
the underlying objective of liberalising the gas supply industry and
facilitate the entry of new suppliers.
“The regulatory framework
of the electricity supply industry is also being improved to raise the
transparency and efficiency level,” he said.
The Regulatory
Implementation Guidelines and Incentive-based Regulation would be put
in place to establish an economic regulatory framework to regulate Tenaga Nasional Bhd.
The regulations aimed to establish a tariff setting framework and
principles for tariff design; incentive mechanisms to promote
efficiency and service standards; process of tariff reviews; and the
format of regulatory accounts and annual review.
Separately,
Chin said the ministry was fine-tuning the National Energy Efficiency
Master Plan before tabling it to the Government. The ministry is
accepting comments and suggestions before finalising the Master Plan.
The
proposed plan has an implementation horizon of 10 years to achieve
energy savings from three main sectors namely industrial, commercial
and buildings. The total cumulative energy savings potential in these
sectors are estimated at 79 terawatt hours, with a consequential
reduction of 59 million tonne of carbon dioxide emission.