Malaysian state oil firm Petroliam National Bhd (Petronas) has inked a more than 80 billion Malaysian ringgit ($26.4 billion) deal extending the supply of gas to Gas Malaysia Bhd for another 10 years.
The new supply agreement, which has the option to extend for another five years, is one of the requirements for Gas Malaysia to list on the local bourse this year, a source close to the deal told Reuters on Thursday.
"The value of the 10-year contract is worth more than 80 billion ringgit," the source said, declining to be named due to the sensitivity of the contract value.
"It helps to lock in the gas supply Gas Malaysia needs to provide its customers. This will ensure they have the recurring income stream to satisfy their proposed listing," the source added.
The deal will ensure supply of up to 534,143 gigajoules, which is equivalent to 492 million standard cubic feet per day (MMScfd) of natural gas, until the end of 2022, Gas Malaysia said in a statement on Thursday.
The new contract will replace the existing gas supply agreement due to expire on Dec. 31 of this year, which involved supply of 382 MMScfd, it said.
The additional 110 MMScfd will enable Gas Malaysia to expand its supply to new customers, the company added.
The proposed listing of Gas Malaysia was delayed to the second quarter of 2012 from an original plan for the fourth quarter of 2011, its major shareholder MMC Corp Bhd said in a stock exchange filing on Feb. 17.
Saturday, 25 February 2012
Tuesday, 21 February 2012
China-Malaysia firm rejects S.Sudan accusations in oil row
Chinese-Malaysian oil firm Petrodar, the main oil operator in South Sudan, denied on Sunday it had helped Sudan seize any southern oil, after Juba accused Chinese firms of cooperating with Khartoum in a row between the two countries.
Petrodar is a consortium of mainly Chinese state firms Sinpoec, Chinese National Petroleum Corp and Malaysia's Petronas. It runs oil fields in South Sudan and also an export pipeline through Sudan.
South Sudan is locked in a conflict with Sudan over oil payments.
The landlocked nation took three-quarters of Sudan's oil production when it became independent in July but needs to export crude through a northern pipeline and a Red Sea port.
Both states have failed to agree on a fee Juba needs to pay, prompting Khartoum last month to seize at least three southern oil shipments at the Red Sea terminal. South Sudan has shut down its entire output of 350,000 bpd.
In the past few days, several southern officials have accused unspecified Chinese oil firms of helping Sudan seize southern oil.
The government started an investigation last week and threatened to expel Chinese firms if they were found guilty in cooperating with Sudan.
Petrodar, which pumped 230,000 bpd in South Sudan's Upper Nile state until the shutdown, said on Sunday it had always complied with instructions from Juba and had no role in seizing southern oil at the Red Sea terminal.
It said it had given staff orders not to cooperate during the seizing of the three shipments which was overseen by Khartoum's security services.
"Petrodar does not know the destination nor the buyers of the three shipments confiscated by the Republic of Sudan," it said in a statement.
The firm also said it had always given daily updates for production and active wells after Oil Minister Stephen Dhieu Dau had questioned Petrodar's output figures.
"The daily number of active wells varies from day to day based on operations, well maintenance and work-over activities," Petrodar said.
Dau had said 40,000 bpd were missing at the key Palouge oil field but Petrodar blamed water separation during pumping for the difference.
Petrodar is a consortium of mainly Chinese state firms Sinpoec, Chinese National Petroleum Corp and Malaysia's Petronas.
It runs oil fields in South Sudan and also an export pipeline through Sudan.
South Sudan's accusations have puzzled Western diplomats since China is the biggest buyer of its oil which make up 98 percent of state revenues.
Petrodar also said it would take up 40 days to six months or even longer to restart oil production, putting doubts over government statements that oil output could be restarted anytime.
South Sudan are due to resume oil talks sponsored by the African Union in Addis Ababa on Thursday but diplomats see no breakthrough as positions are wide apart.
Sudan wants $1 billion in back payments plus $36 a barrel, while Juba has said it is willing to pay around $1 a barrel.
Sudan's President Omar Hassan al-Bashir has warned the conflict could lead to war. North and south fought for decades in a civil war that killed 2 million people.
Petrodar is a consortium of mainly Chinese state firms Sinpoec, Chinese National Petroleum Corp and Malaysia's Petronas. It runs oil fields in South Sudan and also an export pipeline through Sudan.
South Sudan is locked in a conflict with Sudan over oil payments.
The landlocked nation took three-quarters of Sudan's oil production when it became independent in July but needs to export crude through a northern pipeline and a Red Sea port.
Both states have failed to agree on a fee Juba needs to pay, prompting Khartoum last month to seize at least three southern oil shipments at the Red Sea terminal. South Sudan has shut down its entire output of 350,000 bpd.
In the past few days, several southern officials have accused unspecified Chinese oil firms of helping Sudan seize southern oil.
The government started an investigation last week and threatened to expel Chinese firms if they were found guilty in cooperating with Sudan.
Petrodar, which pumped 230,000 bpd in South Sudan's Upper Nile state until the shutdown, said on Sunday it had always complied with instructions from Juba and had no role in seizing southern oil at the Red Sea terminal.
It said it had given staff orders not to cooperate during the seizing of the three shipments which was overseen by Khartoum's security services.
"Petrodar does not know the destination nor the buyers of the three shipments confiscated by the Republic of Sudan," it said in a statement.
The firm also said it had always given daily updates for production and active wells after Oil Minister Stephen Dhieu Dau had questioned Petrodar's output figures.
"The daily number of active wells varies from day to day based on operations, well maintenance and work-over activities," Petrodar said.
Dau had said 40,000 bpd were missing at the key Palouge oil field but Petrodar blamed water separation during pumping for the difference.
Petrodar is a consortium of mainly Chinese state firms Sinpoec, Chinese National Petroleum Corp and Malaysia's Petronas.
It runs oil fields in South Sudan and also an export pipeline through Sudan.
South Sudan's accusations have puzzled Western diplomats since China is the biggest buyer of its oil which make up 98 percent of state revenues.
Petrodar also said it would take up 40 days to six months or even longer to restart oil production, putting doubts over government statements that oil output could be restarted anytime.
South Sudan are due to resume oil talks sponsored by the African Union in Addis Ababa on Thursday but diplomats see no breakthrough as positions are wide apart.
Sudan wants $1 billion in back payments plus $36 a barrel, while Juba has said it is willing to pay around $1 a barrel.
Sudan's President Omar Hassan al-Bashir has warned the conflict could lead to war. North and south fought for decades in a civil war that killed 2 million people.
Sunday, 19 February 2012
Petronas Chemicals going big in urea manufacturing
Petronas Chemicals Group (PCG) is confident of emerging as the second largest producer urea producer in South-East Asia with the implementation of the RM4.5bil Sabah Ammonia Urea (Samur) project.
Chairman Datuk Wan Zulkiflee Wan Ariffin said the project would double Petronas Chemicals’ urea production capacity.
“The project will also contribute towards our effort to strengthen our operations and logistics marketing.
“It will make us the biggest producer of fertilisers in the Asia-Pacific region,” he said at the ground breaking ceremony for the project by Prime Minister Datuk Seri Najib Tun Razak.
Present were Sabah Chief Minister Datuk Seri Musa Aman and Petronas President and chief executive officer Datuk Shamsul Azhar Abbas.
Wan Zulkiflee said the bulk of the urea produced worldwide was used for agricultural purposes and it was concentrated in the Asia-Pacific region.
“The continued growth was spurred by rapid development in the agricultural sector which was buoyed by growing demand for agricultural products by increasing population,” he said.
Wan Zulkiflee, who is also Petronas Upstream executive vice-president, said this scenario was very encouraging for PCG to expand its fertiliser business in the region as it was geographically close to main markets in the Asean region.
“Realising the need, Petronas is implementing this project, which is scheduled to be ready in 2015, to grab the availing opportunities in the Asia-Pacific urea fertiliser business and to meet the growing domestic demand,” he said.
The Samur complex, close to the Brunei border and less than 100km from Sarawak, will be made up of an ammonia plant, a urea plant and a granulation plant, as well as integrated utility units and jetty facilities.
The urea plant will produce 1.2 million tonnes per annum (mtpa) of granulated urea while the ammonia plant will produce 740,000 mtpa of liquid ammonia.
Currently, PCG operates a 750,000 mtpa urea plant in Bintulu, Sarawak, and a 683,000 mtpa urea plant in Gurun, Kedah.
Chairman Datuk Wan Zulkiflee Wan Ariffin said the project would double Petronas Chemicals’ urea production capacity.
“The project will also contribute towards our effort to strengthen our operations and logistics marketing.
“It will make us the biggest producer of fertilisers in the Asia-Pacific region,” he said at the ground breaking ceremony for the project by Prime Minister Datuk Seri Najib Tun Razak.
Present were Sabah Chief Minister Datuk Seri Musa Aman and Petronas President and chief executive officer Datuk Shamsul Azhar Abbas.
Wan Zulkiflee said the bulk of the urea produced worldwide was used for agricultural purposes and it was concentrated in the Asia-Pacific region.
“The continued growth was spurred by rapid development in the agricultural sector which was buoyed by growing demand for agricultural products by increasing population,” he said.
Wan Zulkiflee, who is also Petronas Upstream executive vice-president, said this scenario was very encouraging for PCG to expand its fertiliser business in the region as it was geographically close to main markets in the Asean region.
“Realising the need, Petronas is implementing this project, which is scheduled to be ready in 2015, to grab the availing opportunities in the Asia-Pacific urea fertiliser business and to meet the growing domestic demand,” he said.
The Samur complex, close to the Brunei border and less than 100km from Sarawak, will be made up of an ammonia plant, a urea plant and a granulation plant, as well as integrated utility units and jetty facilities.
The urea plant will produce 1.2 million tonnes per annum (mtpa) of granulated urea while the ammonia plant will produce 740,000 mtpa of liquid ammonia.
Currently, PCG operates a 750,000 mtpa urea plant in Bintulu, Sarawak, and a 683,000 mtpa urea plant in Gurun, Kedah.
Saturday, 18 February 2012
Gas Malaysia’s IPO delays to Q2
The proposed listing of Gas Malaysia Bhd in Malaysia has been delayed to the second quarter of 2012, its major shareholder MMC Corp Bhd said in a stock exchange filing yesterday.
The planned listing of Gas Malaysia, the country’s sole supplier of natural gas to the non-power sector, was originally scheduled to list by fourth quarter of 2011, but has been delayed to the first quarter of this year due to non-compliance with Malaysia’s Securities Commission (SC)’s rules.
“Gas Malaysia is still in the midst of complying with the conditions imposed by the SC for the proposed listing as stated in their approval letter dated Oct 7, 2011 which was announced by MMC Corp on October 10, 2011,” Malaysian Builder MMC Corp, which owns some 41.8 per cent of GasMalaysia, said in the filing.
“Barring any unforeseen circumstances, the proposed listing which was earlier expected to be completed by the first quarter of 2012, is now envisaged to be completed by the second quarter of 2012,” it added.
One of the SC’s conditions was for Gas Malaysia to ensure that its petrol stations were not built on land that was not designated for that purpose, according to a previous announcement by MMC Corp in October last year.
A source with direct knowledge of the deal told Reuters in August last year that MMC Corp could raise up to some RM750 million, or about RM2.25 a share, from the listing of Gas Malaysia on Bursa Malaysia
The planned listing of Gas Malaysia, the country’s sole supplier of natural gas to the non-power sector, was originally scheduled to list by fourth quarter of 2011, but has been delayed to the first quarter of this year due to non-compliance with Malaysia’s Securities Commission (SC)’s rules.
“Gas Malaysia is still in the midst of complying with the conditions imposed by the SC for the proposed listing as stated in their approval letter dated Oct 7, 2011 which was announced by MMC Corp on October 10, 2011,” Malaysian Builder MMC Corp, which owns some 41.8 per cent of GasMalaysia, said in the filing.
“Barring any unforeseen circumstances, the proposed listing which was earlier expected to be completed by the first quarter of 2012, is now envisaged to be completed by the second quarter of 2012,” it added.
One of the SC’s conditions was for Gas Malaysia to ensure that its petrol stations were not built on land that was not designated for that purpose, according to a previous announcement by MMC Corp in October last year.
A source with direct knowledge of the deal told Reuters in August last year that MMC Corp could raise up to some RM750 million, or about RM2.25 a share, from the listing of Gas Malaysia on Bursa Malaysia
Thursday, 16 February 2012
Ex-Petronas chief to helm Singapore power giant
Ex-Petronas CEO Tan Sri Hassan Marican is set to become chairman of Singapore Power Limited (SP) in June succeeding Ng Kee Choe who will retire on June 12, according to Energy Asia.
The news portal that focuses on the energy industry reported this yesterday, citing the island republic’s utility giant.
Marican, who left the national oil company at the beginning of 2010 allegedly due to friction with the Najib administration, has been accepting directorships with several foreign firms in the energy sector.
Among them are Singapore government-linked companies including SembCorp Industries Limited, SembCorp Marine Limited and Singapore Power, which he joined on February 15, 2011. He is also a director at Sarawak Energy Berhad and US oil and gas giant ConocoPhillips.
Marican, 58, was part of the board that had appeared to have clashed with Prime Minister Datuk Seri Najib Razak back in late 2009 over the appointment of a former senior aide as a Petronas director despite the prime minister having absolute powers in board appointments.
It was reported then that the former aide, Omar Mustapaha, was rejected twice and later appointed only after Najib had put his foot down.
Petronas had also decided not to sponsor the Malaysian-backed Lotus F1 Racing team, going instead with the Mercedes Formula One team.
Marican was widely credited with turning Petronas into the only other state-run major international player in the oil and gas space apart from Norway’s Statoil.
The former Petronas chief, who stepped down on February 2010 after 15 years with the company, was appointed a director with Singapore’s Sembcorp Industries in June of the year.
Marican’s flurry of overseas appointments also comes at a time when Malaysia is grappling with a chronic brain drain that threatens to derail its ambitions to become a developed country.
The news portal that focuses on the energy industry reported this yesterday, citing the island republic’s utility giant.
Marican, who left the national oil company at the beginning of 2010 allegedly due to friction with the Najib administration, has been accepting directorships with several foreign firms in the energy sector.
Among them are Singapore government-linked companies including SembCorp Industries Limited, SembCorp Marine Limited and Singapore Power, which he joined on February 15, 2011. He is also a director at Sarawak Energy Berhad and US oil and gas giant ConocoPhillips.
Marican, 58, was part of the board that had appeared to have clashed with Prime Minister Datuk Seri Najib Razak back in late 2009 over the appointment of a former senior aide as a Petronas director despite the prime minister having absolute powers in board appointments.
It was reported then that the former aide, Omar Mustapaha, was rejected twice and later appointed only after Najib had put his foot down.
Petronas had also decided not to sponsor the Malaysian-backed Lotus F1 Racing team, going instead with the Mercedes Formula One team.
Marican was widely credited with turning Petronas into the only other state-run major international player in the oil and gas space apart from Norway’s Statoil.
The former Petronas chief, who stepped down on February 2010 after 15 years with the company, was appointed a director with Singapore’s Sembcorp Industries in June of the year.
Marican’s flurry of overseas appointments also comes at a time when Malaysia is grappling with a chronic brain drain that threatens to derail its ambitions to become a developed country.
Tuesday, 14 February 2012
Petronas finds two gas fields off Borneo island
Malaysian state energy firm Petronas announced Monday that it had made two gas discoveries off Borneo island as it pursues an aggressive strategy to drill locally.
The two gas discoveries are in Kasawari and NC8SW fields off the coast of Sarawak, a Malaysian state on Borneo island, Petronas said in a statement.
Petronas said initial assessments showed that gas-in-place for the Kasawari field was over five trillion standard cubic feet while NC8SW had estimated recoverable resources of more than 450 billion standard cubic feet of gas.
Borneo is a vast island shared by Malaysia, Indonesia and Brunei.
"For 2012, Petronas and its production sharing contractors are planning to drill 30 exploration wells to further enhance the prospect of Malaysias basins," it said.
Petronas had previously announced it would scale back foreign drilling and focus its development and extraction efforts closer to home.
The move came as Malaysia seeks ways to turn around an export slump. Petronas -- Malaysia's only Fortune 500 company -- contributes almost half the country's budget revenues.
Prime Minister Najib Razak is also pushing for the development of more reserves to address future energy demand.
The two gas discoveries are in Kasawari and NC8SW fields off the coast of Sarawak, a Malaysian state on Borneo island, Petronas said in a statement.
Petronas said initial assessments showed that gas-in-place for the Kasawari field was over five trillion standard cubic feet while NC8SW had estimated recoverable resources of more than 450 billion standard cubic feet of gas.
Borneo is a vast island shared by Malaysia, Indonesia and Brunei.
"For 2012, Petronas and its production sharing contractors are planning to drill 30 exploration wells to further enhance the prospect of Malaysias basins," it said.
Petronas had previously announced it would scale back foreign drilling and focus its development and extraction efforts closer to home.
The move came as Malaysia seeks ways to turn around an export slump. Petronas -- Malaysia's only Fortune 500 company -- contributes almost half the country's budget revenues.
Prime Minister Najib Razak is also pushing for the development of more reserves to address future energy demand.
Sunday, 5 February 2012
'Lampu hijau' bagi Lynas cetuskan bantahan baru
Kira-kira 2,000 penduduk sekitar Kuantan semalam berhimpun di pantai Teluk Cempedak sebagai membantah tindakan Lembaga Pelesenan Tenaga Atom (AELB) yang meluluskan lesen kendalian sementara (TOL) untuk projek kontroversi Syarikat Lynas Advanced di Gebeng.
Bermula sejak 5 petang semalam, penunjuk perasaan yang berpakaian kemeja-T anti-Lynas hitam dan kuning membawa bersama kira-kira 1,000 belon dalam warna yang sama.
Mereka diminta untuk menulis hasrat mereka pada cebisan kertas sebelum dilekatkan pada belon-belon berkenaan sebelum dilepaskan.
Antara mesej itu berbunyi: "Hentikan Lynas, Radiasi Lynas? Tidak, terima kasih saja!". Satu lagi sepanduk panjang dalam bentuk kaligrafi Cina berbunyi: "hapuskan racun, jadikan negara kita gembira dan sihat,"
Dalam usaha mewujudkan kesedaran kepada orang ramai, para penunjuk perasaan juga memberi belon kepada orang ramai.
Pengerusi Selamatkan Malysia, Hentikan Lynas (SMSL) Tan Bun Teet, ketika dihubungi malam tadi, berkata keputusan AELB meluluskan lesen TOL telah mengabaikan sentimen tempatan yang mencetuskan kemarahan rakyat yang berhimpun itu.
"Malam ini, ramai yang datang, pantai penuh sesak dengan orang," katanya.
Menurut beliau juga, jumlah belon yang dibawa juga tidak mencukupi kerana pihaknya tidak menjangkakan sebegitu ramai orang akan akan datang.
Tan juga berkata demonstrasi yang diadakan malam semalam berjalan lancar tanpa sebarang kejadian yang tidak diingini.
Tiada sebarang kehadiran polis atau pegawai penguatkuasa Majlis Bandaraya Kuantan yang dikesan, berbanding perhimpunan lalu, di mana khemah penganjur digeledah dan orang ramai diarahkan bersurai.
Beliau juga memberitahu pada Rabu ini, kumpulannya akan mengutus surat kepada Menteri Sains, Teknologi dan Inovasi Datuk Seri Maximus Johnity Ongkili, bagi menuntut AELB, yang terletak di bawah bidang kuasa kementeriannya supaya menarik balik lesen TOL itu.
"Kami akan beri tujuh hari kepadanya untuk jawab. Jika surat kami tidak dibalas dalam tempoh berkenaan, kami akan memfailkan semakan kehakiman dengan mahkamah," katanya.
Hadir bersama pada acara malam semalam adalah Ahli Parlimen Kuantan, Fuziah Salleh bersama keluarganya.
Bermula sejak 5 petang semalam, penunjuk perasaan yang berpakaian kemeja-T anti-Lynas hitam dan kuning membawa bersama kira-kira 1,000 belon dalam warna yang sama.
Mereka diminta untuk menulis hasrat mereka pada cebisan kertas sebelum dilekatkan pada belon-belon berkenaan sebelum dilepaskan.
Antara mesej itu berbunyi: "Hentikan Lynas, Radiasi Lynas? Tidak, terima kasih saja!". Satu lagi sepanduk panjang dalam bentuk kaligrafi Cina berbunyi: "hapuskan racun, jadikan negara kita gembira dan sihat,"
Dalam usaha mewujudkan kesedaran kepada orang ramai, para penunjuk perasaan juga memberi belon kepada orang ramai.
Pengerusi Selamatkan Malysia, Hentikan Lynas (SMSL) Tan Bun Teet, ketika dihubungi malam tadi, berkata keputusan AELB meluluskan lesen TOL telah mengabaikan sentimen tempatan yang mencetuskan kemarahan rakyat yang berhimpun itu.
"Malam ini, ramai yang datang, pantai penuh sesak dengan orang," katanya.
Menurut beliau juga, jumlah belon yang dibawa juga tidak mencukupi kerana pihaknya tidak menjangkakan sebegitu ramai orang akan akan datang.
Tan juga berkata demonstrasi yang diadakan malam semalam berjalan lancar tanpa sebarang kejadian yang tidak diingini.
Tiada sebarang kehadiran polis atau pegawai penguatkuasa Majlis Bandaraya Kuantan yang dikesan, berbanding perhimpunan lalu, di mana khemah penganjur digeledah dan orang ramai diarahkan bersurai.
Beliau juga memberitahu pada Rabu ini, kumpulannya akan mengutus surat kepada Menteri Sains, Teknologi dan Inovasi Datuk Seri Maximus Johnity Ongkili, bagi menuntut AELB, yang terletak di bawah bidang kuasa kementeriannya supaya menarik balik lesen TOL itu.
"Kami akan beri tujuh hari kepadanya untuk jawab. Jika surat kami tidak dibalas dalam tempoh berkenaan, kami akan memfailkan semakan kehakiman dengan mahkamah," katanya.
Hadir bersama pada acara malam semalam adalah Ahli Parlimen Kuantan, Fuziah Salleh bersama keluarganya.
Friday, 3 February 2012
TNB, Petronas to invest RM2bil in gas plant and LNG terminal
Tenaga Nasional Bhd (TNB) and Petroliam Nasional Bhd (Petronas) are investing RM2bil in a 300 MW gas plant and liquefied natural gas (LNG) terminal in Sabah.
The two projects the gas plant to be majority owned by TNB with Petronas taking the lead to set up the LNG terminal are targeted for completion in 2015.
Che Khalib: ‘The core issue is the need to improve the distribution system.’
“Before this, it was just approval in principle,'' TNB CEO Datuk Seri Che Khalib Mohd Noh told StarBiz. “We are now starting the environmental impact assessment (EIA) and coming up with the engineering design for the plant soon.''
Consultants have been appointed for the new gas plant and LNG terminal in Lahad Datu which will be using LNG from Sabah.
There were challenges faced last year in Sabah in terms of breakdowns (which were higher than in Peninsular Malaysia), but the situation has improved.
“The target initially was about 700 million SAIDI (System Average Duration Interruption Index that measures the minutes of outage experienced by the average customer in a one-year period) per year but we managed to reduce that to less than 500. We managed to reduce the frequency and duration of breakdowns in Sabah,'' he said. “The core issue is the need to improve the distribution system.''
About five years ago, TNB wanted to build a coal plant in the east coast of Sabah.
“We received a lot of objections; a lot of people thought that it was not environment friendly. So we had to scrap the proposal to put up a coal plant in Sabah.
“If we had been allowed to continue with that power plant, we would have the plant up by 2011. As it is now, we have yet to put up a single plant.
“We have sufficient capacity in the west coast of Sabah but we are still not comfortable with the capacity available, of about 200MW, in the east coast (which requires about 250MW),'' he said.
Frequent breakdowns occur in Sabah because it does not have enough generation. When that happens, it has to start load shedding to curtail the supply to customers.
“We have lost a lot of time,'' said Che Khalib.
Even though the east coast has a capacity of 200MW, it is supplied entirely by diesel plants that are not as reliable as gas or coal plants. On bad days, only half of the capacity can be operational.
This situation also applies to the plant belonging to an independent power producer (IPP), which has ceased operations.
Besides obtaining power from diesel plants, some supply also flows in from the west coast.
“This is not a good way as any failure or fault may impact the supply,'' he said. “The transmission involves a very long distance which is easily over 300 km. There can be a problem with lightning or trees falling. If we totally rely on this line, we may get blackouts in the whole of the east coast.''
Because of the critical supply situation in Sabah, TNB is transferring one of its standby dual fired gas/distillate plants from Langkawi to Tawau.
Dismantling works have already started on the 70MW plant which will probably take about six months to be set up. “It will be ready by August but we are trying to bring it forward to July,'' he said.
The west coast, which has a capacity of about 500MW, is experiencing steady power supply.
The two projects the gas plant to be majority owned by TNB with Petronas taking the lead to set up the LNG terminal are targeted for completion in 2015.
Che Khalib: ‘The core issue is the need to improve the distribution system.’
“Before this, it was just approval in principle,'' TNB CEO Datuk Seri Che Khalib Mohd Noh told StarBiz. “We are now starting the environmental impact assessment (EIA) and coming up with the engineering design for the plant soon.''
Consultants have been appointed for the new gas plant and LNG terminal in Lahad Datu which will be using LNG from Sabah.
There were challenges faced last year in Sabah in terms of breakdowns (which were higher than in Peninsular Malaysia), but the situation has improved.
“The target initially was about 700 million SAIDI (System Average Duration Interruption Index that measures the minutes of outage experienced by the average customer in a one-year period) per year but we managed to reduce that to less than 500. We managed to reduce the frequency and duration of breakdowns in Sabah,'' he said. “The core issue is the need to improve the distribution system.''
About five years ago, TNB wanted to build a coal plant in the east coast of Sabah.
“We received a lot of objections; a lot of people thought that it was not environment friendly. So we had to scrap the proposal to put up a coal plant in Sabah.
“If we had been allowed to continue with that power plant, we would have the plant up by 2011. As it is now, we have yet to put up a single plant.
“We have sufficient capacity in the west coast of Sabah but we are still not comfortable with the capacity available, of about 200MW, in the east coast (which requires about 250MW),'' he said.
Frequent breakdowns occur in Sabah because it does not have enough generation. When that happens, it has to start load shedding to curtail the supply to customers.
“We have lost a lot of time,'' said Che Khalib.
Even though the east coast has a capacity of 200MW, it is supplied entirely by diesel plants that are not as reliable as gas or coal plants. On bad days, only half of the capacity can be operational.
This situation also applies to the plant belonging to an independent power producer (IPP), which has ceased operations.
Besides obtaining power from diesel plants, some supply also flows in from the west coast.
“This is not a good way as any failure or fault may impact the supply,'' he said. “The transmission involves a very long distance which is easily over 300 km. There can be a problem with lightning or trees falling. If we totally rely on this line, we may get blackouts in the whole of the east coast.''
Because of the critical supply situation in Sabah, TNB is transferring one of its standby dual fired gas/distillate plants from Langkawi to Tawau.
Dismantling works have already started on the 70MW plant which will probably take about six months to be set up. “It will be ready by August but we are trying to bring it forward to July,'' he said.
The west coast, which has a capacity of about 500MW, is experiencing steady power supply.