9th October 2019, Kuala Lumpur – Malaysian Gas Association (MGA), as the nation’s lead advocate for the Malaysian Gas industry, welcomes the delivery of the first Third Party Liquefied Natural Gas (LNG) cargo as testament that the natural gas market reforms in Malaysia remains on track to ensure sustainability of the industry. The regasification terminal at Sungai Udang received the cargo on 7 October 2019 – the first since the Third Party Access (TPA) came into force.

Malaysia is blessed with its own indigenous gas off her own shores and the regasification terminals in Peninsular Malaysia plays an important role in supplementing this supply with LNG. LNG in turn offers the flexibility and security in supply where third parties can access LNG sourced from more than 19 countries globally. The growing global trade in LNG today stands at 316.5 million tonnes per annum (MTPA) enough to fuel one and half times of China’s annual gas consumption.

More third party LNG cargoes will gradually transform Malaysia into a dynamic competitive gas marketplace with multiple sellers offering more options to the consumers. For this happen, it is important to ensure that the gas market reforms, especially transitioning from regulated to market pricing stays the course to provide a competitive and fair playing field for all gas sellers.

In this regards, MGA would like to commend the Ministry of Economic Affairs (MEA), Ministry of Energy, Science, Technology, Environment and Climate Change (MESTECC) and Energy Commission (ST) for keeping the gas market reforms on course.

The first third party LNG cargo proves that Malaysia is on course to transition towards a vibrant and sustainable gas market. MGA would also like to congratulate its members, Shell and PETRONAS, including its subsidiary PETRONAS Gas Berhad, for making this momentous occasion a reality.

Efforts must also be focused on increasing demand for gas within the country. Higher demand will create more opportunities for third party to enter the market and spur investment to develop upstream indigenous gas that will further strengthen the long term security of supply. Higher demand will also increase utilisation of the existing gas infrastructure and encourage expansion and connectivity into under-served areas.

According to MGA President Hazli Sham Kassim, “the right pricing for natural gas will encourage more third parties to participate in our gas market and at the same time encourages greater upstream investments. Maintaining the right production volume of upstream indigenous gas from offshore Kerteh is important in ensuring the sustainability of the natural gas industry along its entire value chain where many of MGA members are involved.  This includes the vibrant petrochemical industry in the east coast of Peninsula Malaysia that significantly contributes towards the Malaysian economy”.

A comprehensive national Natural Gas Roadmap will chart the path of the industry in ensuring a sustainable and vibrant market that is large enough for all incumbent and new players, whilst at the same time offering greater options to consumers. MGA urges all stakeholders from across the industry to work together in formulating the Natural Gas Roadmap.

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