Kuala Lumpur, 12 March 2021 – Designed to address local gas market concerns on the volatility of global LNG price in the past year, Malaysian Gas Association (MGA) organised a virtual Roundtable to share knowledge on the global LNG market dynamics and discuss how it is impacting the gas market liberalisation.  The regional LNG spot pricing volatility has seen both extreme ends where it crashed below USD2/MMBtu mid last year but soared above USD20/MMBtu early this year.  Vibrant LNG supply by third-party Shippers to consumers in Malaysia is important in ensuring the success of the third-party access (TPA),  a key component in the gas market liberalisation.

The Roundtable offered a platform to senior leaders from policymakers and key stakeholders such as Economic Planning Unit (EPU), Ministry of Energy & natural resources (KeTSA), PETRONAS, MISC Berhad and Federation of Malaysian Manufacturers (FMM) to discuss the LNG market and deliberate its impact to the local gas market. The Roundtable participants were joined by more than 100 observers from amongst the Malaysian gas players, including TPA Import & Shipping Licencees.

The Roundtable started with experts from Rystad Energy, an independent energy research and business intelligence company based in Norway, explaining the dynamics of the global LNG market, including supply, demand, pricing and contracting strategies.

In his opening remarks, Hazli Sham Kassim, President of MGA, highlighted the importance of understanding the gas market dynamics, especially LNG. He said that to transition towards a fully liberalised gas market, it is imperative that all parties, including policymakers, regulators, industry players and customers, understand the 101 of the LNG market and its dynamics, including the different factors influencing pricing and contracts.  It is also imperative for the market players to understand the policymakers’ perspective and aspirations on the gas market.

The gas market is expected to be fully liberalised in 2022, when the remaining regulated gas tariff ends on 31 December 2021. The Roundtable is seen as another step forward in preparing both the TPA participants and consumers to prepare themselves for a fully liberalised market.

“Representing the entire value chain of the natural gas industry, Malaysia Gas Association (MGA) plays an influential role as the lead advocate in promoting a sustainable future for the Malaysian gas industry.  Malaysia is on the course to transition towards a vibrant and sustainable gas market when it is finally fully liberalised.  MGA envisions a liberalised gas market environment where gas is traded on a willing-buyer and willing-seller market basis and on a level playing field.  To navigate in this unfamiliar environment, consumers should be aware of the different types of pricing, supply contracts and the risks associated”.  Hazli Sham Kassim ended his opening remarks.

Full implementation of gas market liberalisation sets the path towards a  vibrant and sustainable natural gas industry. The nation benefits from enhanced energy security and reliability. A vibrant market will encourage greater gas utilisation, thereby stimulating more business opportunities and investments throughout the gas industry value chain. The gas industry itself has played a major role in Malaysia’s socio-economic growth, bringing over RM 135 billion per annum of economic impact and creating over 80,000 jobs in the wider economy. Consumers will also benefit from having more options on competitive gas supply.

As the cleanest burning fuel, natural gas plays an important role in providing clean, secure, reliable and flexible energy to drive Malaysia’s low carbon energy transition towards a sustainable future.