Malaysia Moving Towards Liberalization of Natural Gas Market

Jul 2019

Malaysia is moving towards liberalizing its natural gas market with just one price review away to achieve market-based gas pricing this year. This was shared by Adif Zulkifli, Petronas Executive Vice President & CEO, Gas and New Energy in his speech during the Malaysian Gas Symposium (MyGas) 2019 in Kuala Lumpur.

Market liberalization is expected to promote healthier competition and help reduce inefficiency. Malaysia has been looking to deregulate its domestic gas markets, opening up the sector to non-state players. The process was started with the Gas Supply (Amendment) Act in September 2016, and the implementation of third party access or TPA in January 2017, allowing companies other than Petronas and its affiliates to import gas and access Petronas’ distribution Infrastructure. Petronas has opened up its LNG receiving terminal in Melaka and facilitated the provision of Third Party Access (TPA) for gas pipeline and LNG regasification terminals. But no non-state players have entered the sector yet. 

As the main gas Infrastructure and centralized utilities company, Petronas is in view that pricing determined by the market which reflects the fundamental supply and demand principals would encourage efficient use of gas resources and attract competitively-priced imported gas to append domestic gas supply, ensuring sustainable gas industry in Malaysia. In what is viewed as key imperatives to bolster participation of third party suppliers and import gas which provide consumers with more options and better service, Petronas has earlier open up its LNG receiving terminal in Melaka and facilitated in the provision of Third Party Access (TPA) for gas pipeline and LNG regasification terminals.

Malaysia is the world’s fourth largest exporter of liquefied natural gas (LNG), which made up 4.9% of the country’s total export valued at USD 3.84 billion. Malaysia is targeting to increase its gas production by 12.5% by 2025, bringing in an additional 1 billion standard cubic meter per day from the current 8 billion. Gas contributes approximately 40% of the country’s primary Energy supply mix.

 (Sources: The Star)

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