Gas Supply Scenario

Challenges and Opportunities

By

Abdul Razak Saim

Senior Manager, Malaysia Gas Management

Gas Business Unit, PETRONAS

Energy Forum

Sheraton Imperial Hotel, Kuala Lumpur

9th August 2010

Presentation Outline

Peninsular Gas Utilisation System

Gas supply chain

Gas supply demand outlook

Challenges in meeting growing gas demand

Mitigation options

Roles of stakeholders

Moving forward

PGU ProjectsPhase 1 - 1984Phase 2 - 1992Phase 3 - 1997JDA - 2005

Upstream Capacities

Major Facilities

Fields developed 11

Major pipelines 923 km

Production capacity 2,500 mmscfd

Major Facilities

Pipelines 2,505 km

City Gates 27

Slugcatchers 3

Kertih GPPs 6 (2,060 mmscfd)

TTM GSP 1 (316 mmscfd)

Compressor stations 3

Melaka

Kuantan

Segamat

Jerneh

(1992)

Kuala Lumpur

Lawit (1997)

Bekok

THAILAND

JDA

(2005)

PM-3

(2003)

Angsi (2002)

SONGKHLA

Bintang

(2003)

Resak(2000)

KERTIH

Downstream Capacities

Duyong (1984)

Kangar

West Natuna ‘B’

(Indonesia - 2002)

Extensive infrastructure has been developed to spur the

development of gas industry in Malaysia

Peninsular Malaysia Gas Supply Chain

PM3 CAA

(with Vietnam)

• Gas is a finite resources

• Production from domestic gas reserves declining.

More gas fields are developed to sustain the gas

production at current level

• Future domestic gas development will be more costly

due to :

High CO2

Deep water

Smaller size, scattered and remotely located

Challenges In Meeting Growing Gas Demand

• Gas supply from other sources - West Natuna B

(Indonesia), Joint Development Area (with Vietnam)

and Joint Development Area (with Thailand)

• More future gas import but it is challenging:

High import cost

• Demand side management

• Energy efficiency in gas utilisation

Mitigation Options

Gas industry transformation?

• Focus to achieve economic efficiency in order to secure

sustainable energy future

• Two important elements for consideration:

• The need to rationalise the cost of economic

intervention

• Remove market distortion by improving competition

How do we move towards gas open market?

• LNG regasification facility to facilitate LNG imports into

Peninsular Malaysia

• PGU system is open for third party access

• Gas market liberalisation to encourage competition

from other suppliers

• Market parity gas pricing

• In a market-based environment, price plays a vital role

to provide the right signals:

to reflect market-based pricing

right policies, rules and regulations

sustainability of gas industry

• The Nation need to decide on type of industries to be

encouraged in view of depletion of finite oil and gas

resources

Roles Of All Stakeholders

• Malaysia has done well to develop its oil and gas

resources

• The challenge is to ensure that the production and

utilisation of natural gas is managed responsibly for the

benefits of the nation, for the present and future

generations

• Going forward, as a nation, we need to encourage

greater energy efficiency and conservation of a

resource that is finite, yet highly valuable

Moving Forward

THANK YOU