Gas M’sia eyes overseas opportunities (5209)

Gas Malaysia Bhd
is craving for opportunities to share its expertise overseas, after
operating the 1,800-km Peninsular Gas Utilisation (PGU) pipeline
network for over 20 years.
Gas Malaysia managing director Datuk Muhammad Noor Hamid tells StarBizWeek that
the company is looking to export its expertise and experience to other
eager parties that are interested in setting up their pipeline network.
“We
are always looking at opportunities. The possibilities are definitely
there. We can't comment on anything right now, but rest assured it's in
our plans to capitalise on these opportunities,” he says.

[You must be registered and logged in to see this image.] Muhammad Noor: ‘The possibilities are definitely there.’ The
shale gas boom in the United States has sparked a race in constructing
plants that make chemicals, plastics, fertiliser, steel and other
products. And big oil and gas players are pumping in huge investments
to set up natural gas pipelines to feed the needs of these new
facilities.Just this past Thursday, Detroit-based DTE Energy, a utility
and diversified energy company, and two major pipeline corporations,
Calgary, Alberta-based Enbridge Inc.
and Houston-based Spectra Energy announced plans to invest between
US$1.2bil to US$1.5bil to establish the 400km natural gas pipeline that
starts from Northeast Ohio to Ontario, Canada.
Not only is this
happening in the West, many other countries are exploring avenues to
latch on to the consumption of natural gas, as it is the cleanest and
most efficient fuel among major fossil fuels.This works well for Gas
Malaysia, which has the resume and track record to go after
opportunities in the region or elsewhere. It boasts a 99.9%
availability rate for the supply of natural gas to its industry clients
locally.
To drive more customer demand for natural gas, the
company is also studying other ways to serve potential customers that
are not connected via its network.
“We have not covered the full
industrial areas of Malaysia yet. Places like Ipoh, Mentakab, Bentong,
Pekan and Batu Pahat are still quite far away from our network. We are
looking at various options to determine the best and most economical
way to supply the natural gas to these industrial customers,” says
Muhammad Noor.
He adds that there are a few ways to deliver gas, and Gas Malaysia is looking utilising tankers to develop a virtual pipeline.
“We
can emulate the concept undertaken by Petronas to ship natural gas from
one mother station to deliver to other smaller stations. We are looking
at the feasibility of the idea, and we are looking at the technology,
logistics and customer factor and make some decision by year end,” he
explains.
He says the company's objective is to supply as many industrial customers in Malaysia as possible.
Besides
that, the company still sees demand growth for natural gas consumption
in the country as it is widely used to fire up furnaces, boilers, power
generation, and to produce ammonia/fertiliser along with as a feedstock
to produce hydrogen.Consumption of natural gas in Malaysia has grown
from about 315 bcf (1 bcf equals to 1 trillion British thermal units)
in 1990 to an estimated 1,260 bcf in 2010, the ability to satisfy this
demand has been constrained since 2007 due to the shortage of supply.
This is expected to grow even more with supply coming on stream.
“I
do not see any more constraint in supply as far as supply for
industrial consumers are concerned. The completion of the liquefied
natural gas regasification facility in Malacca and another gas
receiving terminal in Pengerang, Johor, bodes well for us,” he says.
He
adds that the growth in volume should contribute to the company and
revenue should exceed the RM2bil mark the company hit in the previous
financial year.
Currently, the company sources its natural gas
supply from Petronas.Gas Malaysia is on its way to supplying 492
million standard cu per day (mmscfd) on a step-up basis by 2015, a 29%
increase from its previous level of 382 mmscfd, after signing a new
supply agreement with Petronas. But, it is still hungry for more
growth, and is seeking for more volume beyond 2015.
“In fact, we
are in talking process with Petronas to secure more volume as we have
only additional volume growth for a staggered three years.
“As
of today, we are optimistic of getting the additional volume from
Petronas. Now, Gas Malaysia is on its way to supply 492 million
standard cu per day (mmscfd) on a step-up basis by 2015, a 29% increase
from its previous supply of 382 mmscfd, after signing a new supply
agreement
Although Petronas is Gas Malaysia's main provider for
natural gas, the company could still diversify its sources of natural
supply from various parties if there is a constraint.
“Petronas
has been a reliable source for us, and we are supportive of the
liquefied natural gas facilities it is building or has built to support
our operations,” he says.