Subsidy leads to gas issue

May 16, 2012

Yes, it does.

Dateline 2012-05-04:

Subsidised gas and the inflated demand it encouraged are some of the factors that led to the severe gas shortage faced by Tenaga Nasional Bhd (TNB), said International Gas Union (IGU) president Datuk Abdul Rahim Hashim.

“We started the subsidies after the Asian financial crisis, and we should not have continued doing that. We should have weaned ourselves off it and gone back to market prices after the economy picked up again.

“We have a system whereby one end is fixed (electricity tariffs), and generators are looking for the cheapest source of fuel. Gas is the cheapest of the lot, and since generators tend to use the cheapest resource available, that has pushed the system to the limit,” he told StarBiz in an interview.

Solving oil and gas subsidy problem

May 12, 2012

Ah, near election time.

Dateline 2012-05-05:

THE argument against subsidising the country’s oil and gas has been made time and again, yet the decision to do away with it remains one that no government would be glad to make in a hurry.

One need only point to the recent examples of mass riots in Nigeria and Indonesia, where thousands took to the streets after their governments removed subsidies for fuel, as evidence that no matter the logic, this is hugely unpopular.

Nonetheless, it is a situation the Government has to resolve, and soon, as demand for gas heats up in the region.

Concern over profitability of utilities following gas shortage

March 9, 2012

Dateline 2012-02-18:

As the authorities finalise their recommendations for the price of gas, analysts are concerned over the profitability of utility companies while Tenaga Nasional Bhd (TNB) is tackling its gas supply shortage.

In a report, OSK Research head of research Chris Eng said that previously, any gas price hike had been accompanied by a corresponding increase in electricity prices to compensate for the higher fuel costs.

“Do note that in Malaysia currently, all fuel costs are borne by TNB and the utility will only be able to maintain its profit margin by passing on any fuel cost increases to consumers via higher electricity prices,” he said.

PETRONAS Tackles Malaysia’s Gas Problems as Net Rises

December 14, 2011

Dateline 2011-12-01:

Petroliam Nasional Bhd., Malaysia’s state oil company, announced plans to tackle the Southeast Asian nation’s gas supply shortage as it reported a 48 percent jump in quarterly profit.

The Kuala Lumpur-based group, which manages all the country’s energy reserves, will build a fourth gas import terminal and a second floating liquefied natural gas plant, Chief Executive Officer Shamsul Azhar Abbas told reporters today. It also agreed to partially absorb extra costs incurred by power producer Tenaga Nasional Bhd. due to supply disruptions, he said.

From Bernama – Restaurant Gas Blast Believed Due To Shoddy Maintenance – Fire Department

December 10, 2011

I like it that an opinion for a Maju Junction blast is out, but not for the Subang Empire blast.

Dateline 2011-11-29:

The gas explosion two days ago at a restaurant at the Maju Junction shopping centre is believed to have been due to shoddy maintenance, said Malaysian Fire and Rescue Department director-general Datuk Wan Mohd Nor Ibrahim.

He said restaurant operators or building owners who opted to use piped gas need to regularly maintain the system to prevent gas leaks that might cause explosions.

“Such a process is necessary for safety; piped gas is different from a normal gas tank as the pipe can leak without continuous maintenance,” he told reporters after the launch of a seminar on fire safety engineering design here Tuesday.

From The Star – Late gas disruption notice upsets firms

April 10, 2011

Can anyone explain why there was a “late notice” to PETRONAS’s customers?

Dateline 2011-03-25:

The Federation of Malaysian Manufacturers (FMM) says Petronas’ natural gas upstream facilities shutdown will lead to several manufacturing companies having to reduce their gas consumption significantly from March 30 to April 12 and April 29 to May 10.

While FMM said the significant reduction of gas supply to both the power sector and manufacturers was unavoidable due to the necessity in carrying out major maintenance work at the upstream facilities, the late notification has caused anxiety among manufacturers and uncertainty for companies that have orders to meet.

You can subscribe to an online version of the paper at the e-browse site.

From Bernama: MITI And EPU Working On Gas Supply Issues

July 22, 2010

I think allowing market forces to determine the price of gas would go a long way to addressing the issue. ‘Course, that would me we would want to sell all our gas to Singapore or Thailand, but what’s a powerless, air conditionless dark night between citizens?

From Bernama, dateline 2010-07-14:

The Ministry of International Trade and Industry (MITI) together with the Economic Planning Unit (EPU) will be putting up a joint paper to address the gas supply issue, its minister Datuk Seri Mustapa Mohamed said Tuesday.

“We are engaging with the EPU on the gas issue. We know that many industries are dependent on gas. We understand the problems, they want some certainty and transparency in terms of supply,” he told reporters after a dialogue session with players from the chemicals and petrochemicals industry here.

Mustapa said MITI was working with EPU to come up with a proposal that would update the Cabinet on two issues, namely the current gas supply situation in Malaysia and to resolve the short-term problems.