#Malaysia uses #LNG and domestic gas to lead way for Asian liberalization

LNG producer Malaysia is leading the way for Asian emerging countries interested in liberalizing natural gas markets to match those in Europe, the United States and Japan as the Malaysians are also expanding their LNG and domestic gas facilities.

Malaysia recently held a conference to reflect that interest. The Malaysian energy market, where state-run companies are dominant under government regulations and control, contrasts with the deregulated and competitive markets in the West and Japan.

However, Malaysia has already been implementing electricity and gas market reform initiatives, including the introduction of third-party access to key gas market infrastructure such as LNG terminals.

The nation’s second regasification facility, the Pengerang terminal (photo), was completed in 2017 at Johor for Petronas Gas and will have around 400,000 cubic metres of storage.

The Asian LNG producer is taking measures to bring prices closer to international rates, though one main issue remains the provision of subsidies to the local power sector.

The Malaysian Gas Association has said it expected a more competitive local market by 2019 once the Third-Party Access (TPA) mechanisms introduced during 2017 have more time to take effect.

The Pengerang regasification facility entered full operations near a new petrochemicals complex at Johor in the southern portion of Peninsular Malaysia.

The Johor terminal is designed to handle 5 million tonnes per annum of LNG and has completed jetty and storage facilities.

State energy company Petronas already operates a regasification facility at Sungai Udang Island in Malacca with capacity to handle around 3.8 MTPA of LNG. This facility was started up in 2012.

The country's LNG is supplied by national energy company and producer Petronas as well as its subsidiary Petronas Gas and foreign companies can apply to benefit from the TPA offering for terminals and pipelines by applying for a licence to the state Energy Commission.

Petronas supplies other Asian nations with LNG volumes from its recently expanded Bintulu LNG plant in Sarawak, where a ninth processing Train is now in operation.

The company is also producing LNG from the world’s first floating LNG hull deployed offshore Sarawak over the Kanowit gas field.

It additionally has a stake in the Australia Gladstone coal-seam-gas-to-LNG plant in the eastern state of Queensland.

Malaysian natural gas prices are being increased every six months by a small margin with the aim of reaching parity with international prices on the basis of an average 30 Malaysian ringgits per million British thermal units, the equivalent of US$7.40 per MMBtu.

“These initiatives have just started and indicate that Malaysians are exploring how to liberalize energy markets in consideration of the unique Malaysian conditions (including energy subsidies for low-income families) and are willing to learn lessons from developments in the world,” said Ken Koyama, Chief Economist of the Institute for Energy Economics in Japan who recently attended an event in Malaysia on liberalizing gas and energy markets.

The conference named, “Market Liberalization and Its Implications for the Malaysian Economy”, has held in Putrajaya, south of the capital Kuala Lumpur.

It was sponsored by Universiti Tenaga Nasional (UNITEN) and its Institute of Energy Policy and Research with support from the Malaysian Energy Commission.

Koyama served as international adviser to the Energy Commission at UNITEN and cooperated with the Malaysian sponsors in making programme arrangements.

“As indicated by the title, the conference focused on electricity and gas market liberalization and reform in the changing global energy situation and dealt with how to interpret relevant moves in the world, what implications these moves have for Malaysia and how Malaysia should respond to them,” he explained.

It was pointed out that for Malaysia and other Asian nations who follow their example, it could take up to 10 years to establish a mature energy market.

“Participants noted that political or policy commitments would be required to maintain such a long reform process and that market participants would play key roles in producing bottom-up changes,” said Koyama.

“Market liberalization is naturally expected to push down electricity and gas sales prices through competition pressure.

“Liberalization could create new business opportunities and lead to economic and social vitalization,” he added.

Participants in the Malaysian conference spoke optimistically of new energy technologies expanding at a remarkably high speed, including those for electricity storage and renewable energy, and these could be combined with artificial intelligence to explore new business horizons.

Also this week:

• Korea Gas Corp. increases LNG shipments as volumes from Australia offset Yemen cargoes
• ExxonMobil plans more LNG investments in Qatar and elsewhere to meet Asian demand
• LNG shipping remains robust with top carriers fetching $65,000 per day entering March
• Singapore LNG terminal to open fourth storage tank soon to expand services and hub trading
• Hoegh LNG of Norway notes annual increase in FSRU use for imports and 13 tenders pending
• Australian APA Group signs pipeline deal for Queensland-to-south markets amid LNG plans
• Canadian Atlantic Coast LNG project hires US and French banks to raise US$10 billion
• Texas LNG project moves forward after the suitability of Brownsville Ship Channel approved
• Gladstone LNG project partners to make major investment in upstream CSG resources
• Papua New Guinea LNG plant remains closed as precaution after earthquake and tremors
• Sempra Energy still plans to transform Mexican terminal for exports like US Cameron LNG
• Shell warns of potential for LNG shortages in mid-2020s as demand defies expectations
• Marubeni and Jera of Japan join with Australian group to plan floating LNG facility near Sydney
• Magnolia LNG in Louisiana will move straight to construction once bankable offtake is sold
• US Commonwealth LNG venture proposed for Calcasieu Channel makes regulatory advance
• Pluto LNG plant used to improve fuel processing method in Australia

www.lngjournal.com

Request a two weeks trial account HERE to read the full articles