Malaysia – Cost of Natural Gas Price Increase


What’s been obvious to consumers in Malaysia is the ‘release’ of petrol (bahan bakar motor as they say in Indonesia), causing the pump cost to rise to RM2.70/l from RM1.92/l.

What I haven’t seen so much of is comments on the rise of gas prices. Here’s a summary:

  • Power producers – RM14.31/MMBTU from RM6.40/MMBTU (120% increase)
  • Industrial users, low consumers – RM24.54 from 9.40 (160%)
  • Industrial users, high consumers – RM32.56 from 11.32 (190%)

Natural gas is used as a raw material for many modern products. So, we can be sure that all chemical industries will hit the rakyat with a price increase which is independent for rising fuel costs.

I wonder how this will effect the Kawasan Industri Petroliam PETRONAS (KIPP) out there in Kerteh? Most of the plants there depend on gas feedstock, for example Petlin, Optimal,  Ethylene Malaysia, and the various companies listed below (I would link to the PETRONAS page, but it’s one of those funky frame pages). I guess a round of repricing, efficiency, retreating to core businesses, and mergers is in order.

 

Plant: Ethylene
Capacity: 400,000 TPA
Company: Ethylene Malaysia Sdn Bhd
Partners: PETRONAS, Idemitsu Petrochemicals Co Ltd, BP Chemicals
Onstream: September 1995
.
Plant: Polyethylene
Capacity: 200,000 TPA HDPE/LLDPE, 50,000 TPA Pipe compounding
Company: Polyethylene Malaysia Sdn Bhd
Partners: PETRONAS, BP Chemicals
Onstream: May 1995
.
Plant: Vinyl Chloride Monomer
Capacity: 400,000 TPA
Company: Vinyl Chloride (M) Sdn Bhd
Partners: PETRONAS
Onstream: November 2000
.
Plant: Polyvinyl Chloride (PVC)
Capacity: 150,000 TPA
Company: Vinyl Chloride (M) Sdn Bhd
Partners: PETRONAS
Onstream: September 2000
.
Plant: Ammonia / Syngas
Capacity: 450,000 TPA Ammonia, 325,000 TPA Syngas
Company: PETRONAS Ammonia Sdn Bhd
Partners: PETRONAS
Onstream: December 2000
.
Plant: Acetid Acid
Capacity: 400,000 TPA
Company: BP PETRONAS Acetyls Sdn Bhd
Partners: BP Amoco, PETRONAS
Onstream: November 2000
.
Plant: Aromatics
Capacity: 420,000 TPA Paraxylene, 145,000 TPA Benzene
Company: Aromatics Malaysia Sdn Bhd
Partners: PETRONAS, MJPX Co Ltd
Onstream: July 2000
.
Plant: Olefins (Second Cracker )
Capacity: 600,000 TPA Ethylene, 95,000 TPA Propylene
Company: Optimal Olefins (M) Sdn Bhd
Partners: PETRONAS, The Dow Chemical Company, Sasol Polymers Investments (Pty) Ltd
Onstream: January 2002
.
Plant: Ethylene Oxide, Ethylene Glycol
Capacity: 140,000 TPA Ethylene Oxide, 385,000 TPA Ethylene Glycols
Company: Optimal Glycols (M) Sdn Bhd
Partners: PETRONAS, The Dow Chemical Company
Onstream: February 2002
.
Plant: Ethylene Derivatives
Capacity: 30,000 TPA Ethoxylates, 75,000 TPA Ethanolamines, 60,000 TPA Glycol Ethers,140,000 TPA Butanol, 50,000 Butyl Acetate
Company: Optimal Chemicals (M) Sdn Bhd
Partners: PETRONAS, The Dow Chemical Company
Onstream: April 2002
.
Plant: Low Density Polyethylene
Capacity: 255,000 TPA LDPE
Company: Petlin (M) Sdn Bhd
Partners: PETRONAS, Sasol Polymers of South Africa, Sabic Polyethylenes B.V.
Onstream: February 2002
.

18 Responses to Malaysia – Cost of Natural Gas Price Increase

  1. sohas says:

    Very good observation. Now, on why petrol rise is an issue is because everyone is directly affected. Whereas for gas, we as consumers pay a higher price for the end product. Since petrol price increase was so apparent, people don’t notice other increases; hence they will link all future rise in prices to petrol. Just out of curiosity, do you know how much of Malaysia’s elecricity production(%) uses gas?

  2. Wata says:

    To sohas: I can find out how much of current electric production uses gas. On another note, I know that the amount of gas supplied to Peninsular Malaysia from Malaysian gas fields is insufficient. We are importing gas from Thailand and the Joint Development Area (JDA). There is an excess gas supply in East Malaysia, but how do you get it across?

  3. sohas says:

    Well, depends on the supply from the East – if we do a cost benefit analysis of building a pipe, we can see whether its feasible. On the other hand, we can transport via LNG-shipping it across the South China Sea. What’s the Joint Development Area?

  4. Wata says:

    The JDA is the zone between Thailand and Malaysia in the South China Sea. It’s mineral rights are not wholly owned by M or T, but have to be negoitated between the countries. Carigali-Hess Operating Company operates the Chakerawala gas platform out there.

  5. sohas says:

    thanks for the info! that company is msian/thai/jointly owned?

  6. Wata says:

    CHOC is a commercial entity. I guess that the royalties and taxes are split between the two companies.

  7. anton says:

    Dear Wata,

    1. when do you think Gas Malaysia will impose The above rate of Gas increase ?
    ( I understand now still being discussed/evaluated?)

    2.Is it correct Petronas already increase gas selling price to Gas Malaysia at the rate of 100 % increase?( per July 1,2008)

    3. How much now gas Malaysia charge to Industrial User per m3? ( RM 0.49)?

    4. In Malaysia 1 m3 gas = 26.8mmbtu?

  8. Wata says:

    Anton,

    I think Gas Malaysia is meant to implement the new prices on July 1, 2008.

    I don’t know of the arrangement between PETRONAS and Gas Malaysia.
    You can get the current cost of gas here

    Don’t know.

  9. anton says:

    Dear Wata,

    Good morning, and thanks for feedback.

    Still waiting for today’s announcement, hear that the rate increase will be decided by Prime Minister(?).

  10. anton says:

    Dear Wata,

    Looks that the Gas will not get price adjustment anymore?

  11. Wata says:

    To anton: Yup, gas price has not increased.

  12. sohas says:

    1m3 gas = 26.8 ??? isnt it 29.31??

  13. Wata says:

    Sohas: I don’t know of the conversion rate, maybe it’s linked to a reference mixture agreed to between buyer and seller. What mix are you using?

  14. sohas says:

    That’s true. Well, that figure I used is based on the one in the UK(given by Carbon Trust). Well, I suppose it depends on the mixture as you said(it concerns the calorific content). My question is, is this figure fixed and is it regulated to be a certain amount?

  15. anton says:

    no news yet on malaysia gas price increase confirmation ?

  16. anton says:

    I hear last week LPG price have gone up 111 % ; is it correct ?

  17. Wata says:

    Anton: Gas prices have gone up. You can read about it here. Not sure about LPG prices, though. Maybe someone else can enlighten us.

  18. […] during the last gas price review, when the price of gas went supposed to go up, nothing happened. Must be that laissez faire […]

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