Malaysian TNB to Supply Gas Via Maiden LNG Cargo

Malaysia's TNB Fuel Services (TNBF), a wholly-owned subsidiary of Tenaga Nasional (TNB), October 2 signed an agreement with TNB and TNB Connaught Bridge for the delivery of gas via its maiden LNG trial cargo.

According to the company, the main objective of TNB bringing in its maiden LNG trial cargo is to test the third-party access arrangement via the regasification terminal in Sungai Udang, Melaka and Peninsular Gas Utilisation (PGU) gas pipeline network owned by Petronas Gas. At present, no other entity has ever brought in LNG cargo or delivered gas to the power generation sector except for Petronas, as the sole supplier, TNB said.

A total of 3.5 trillion Btu of gas will be delivered to TNB’s Tuanku Jaafar power station in Port Dickson and TNB Connaught Bridge Power Station in Klang. The gas from this LNG trial cargo is expected to be used fully by these two power plants within 14 days, TNB said in a statement filed on Bursa Malaysia.

In conjunction with signing of the gas supply agreement, TNBF also signed October 2 a master sales agreement for the delivery of gas via its maiden LNG trial cargo with Shell Malaysia Trading. The collaboration between TNBF and Shell Malaysia is to experience and manage the challenges together in testing the third party access system for the first time in Malaysia, TNB said.

The partnership between TNBF and Shell Marketing has resulted in a real cost saving in the delivered gas price, below the regulated gas price, the company said. TNB CEO Amir Hamzah Azizan said the agreements underlines TNB’s commitment in promoting and supporting the natural gas market liberalisation in Malaysia.

Azizan said the partnership with Shell Malaysia signals to other global LNG or gas suppliers that TNB will be a regular gas buyer.