This article first appeared in The Edge Malaysia Weekly on October 23, 2023 - October 29, 2023
IT has been more than three years since Malaysia opened up the domestic natural gas industry to third-party access (TPA), from the regasification terminals all the way to the gas distribution pipelines.
Since then, only two shipments of liquefied natural gas (LNG) have been brought in by third parties.
There has been little excitement in the non-power sector — which accounted for more than 59% of total consumption in 2020 — despite gas prices for that segment having tracked international prices since 2020. What happened?
The current landscape of Malaysia’s gas market only reflects “a partial liberalisation”, Khairuddin Khalik, CEO of Peninsular Malaysia’s sole gas supplier PETRONAS Energy and Gas Trading Sdn Bhd (PEGT), tells The Edge in an interview.
He blames the subdued participation of the non-power sector on the recent spike in global LNG prices and the long-term nature of gas supply contracts, which inadvertently hinder new entrants to the domestic market.
In his view, the price cap on gas for the power sector, which accounts for 40% of total consumption, remains the key drag in the pursuit of a vibrant open market.
