KUALA LUMPUR: Liquefied natural gas (LNG) prices are likely to be more competitive in the local market by 2019, with the participation of more industry players following the introduction of a Third Party Access (TPA) mechanism last year, says the Malaysian Gas Association (MGA).
Secretary-general Rosman Hamzah said the TPA, introduced in January 2017, was aimed at opening the gas supply market to third parties including foreign companies, to sell gas to any consumer in Malaysia on a willing buyer-willing seller basis.
“With more market players involved, they will be able to increase competitiveness in the industry and hence, pull LNG prices lower,” he told Bernama.
However, Rosman explained that despite the anticipation of lower gas prices, its movement was very much tied to the movement of crude oil prices.
Currently, the country’s LNG is being supplied by Petronas Gas Bhd and Gas Malaysia Bhd and those interested to participate in the TPA can apply for a licence from the Energy Commission (EC).
“So far, we have seen a couple of multinational companies, which are also members of MGA, applying for the licence from the EC”, he said.
On the regulated natural gas price which is increased by RM1.50 per one million British Thermal Units (mmBtu) every six months, Rosman said the move was aimed at bringing the local price to be at par with the international level. At the same time, it will minimise dependency on government subsidy, he added.
“Looking at the current movement of gas and crude oil prices, we expect gas prices by 2019, to reach the market price level,” he said.
Meanwhile, the government is still providing a 30% gas subsidy to the power sector.
Source: The Sun Daily