Gas Shortages... What alternative do we have?

Are we ready? Our renewable energy still far behind from ability to support electricity shortages in near term. So what is Malaysia plan now??? Green gas effect policy or  energy crisis action plan? Yesterday I see, Today I don't, Tomorrow....??? TNB Nuclear game play.... errrr!!!

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Thestar: Tuesday November 1, 2011

Letter to the PM on gas shortage

By YAP LENG KUEN
lengkuen@thestar.com.my

TNB and IPPs have come together to highlight the urgency of gas shortage
PETALING JAYA: For the first time, Tenaga Nasional Bhd (TNB) and the independent power producers (IPPs) have joined forces to send a letter to Prime Minister Datuk Seri Najib Tun Razak on the urgency of the gas supply shortage issue.
StarBiz learnt that the letter, signed by TNB CEO Datuk Seri Che Khalib Mohd Noh and IPP association Penjanabebas president Dr Ong Peng Su, purportedly touched on the following:
TNB would likely sink deeper into the red based on current running losses;

Petroliam Nasional Bhd (Petronas) should supply based on the volume of gas of 1,250 million standard cubic feet per day (mmscfd) that was agreed upon in 2009;
Petronas should pay for the cost of the distillates equivalent to the cost of gas that has been withheld.
In the letter, TNB pointed out that the cost of distillates was five times that of gas and that TNB would not be able to sustain this anymore.
Of TNB's fuel mix, the bulk used to comprise of gas (60%), followed by coal (33%) and hydro (7%). Due to shortage of gas, coal now makes up almost half of the fuel mix.
TNB spends more than RM400mil per month on the difference between the cost of distillates and that of gas. Its recent financial results indicated a hefty net loss of RM453.9mil in its fourth quarter due to this problem.
The IPPs that are affected by the gas shortage included Segari, YTL Power, GB3, Genting Sanyen, Powertek, PB Power and Prai Power.
When contacted, Petronas said it had long made known its view that over-dependence on gas was not sustainable. Since 2005, it had been highlighting the issue to relevant stakeholders.

“Regular discussions and engagement sessions are also held so that customers could plan ahead their necessary measures and actions to mitigate potential impact to their operations and businesses.
“However, the convenience of cheap gas continues to drive demand,” said Petronas in a statement.
Petronas said the fire at the Bekok C offshore platform had taken out 160 mmscfd out of over 2,000 mmscfd of gas from the Peninsular Malaysia supply system.
Various initiatives are being undertaken to squeeze additional molecules from existing fields; development of small and marginal fields including Tangga Barat, Berantai and North Malay Basin will come onstream in phases from end of this year till 2015.
Petronas will begin importing liquefied natural gas (LNG) once the Malacca LNG terminal is ready for commercial operations; this first LNG receiving terminal is scheduled for completion in July 2012.
Petronas is also securing an additional 215 mmscfd from the Malaysia Thailand Joint Development Area, which is scheduled top come into the system in 2015.
In the short term, Petronas is implementing:
A mobile offshore platform unit to recover the volume loss from the Bekok C;
Sweating' the existing producing fields in Peninsular Malaysia through gas accelerated initiatives that focus on production acceleration, gas recovery improvement and removal of bottlenecks, and
An agreement with its Vietnamese partner for a short term swap deal involving 50 mmscfd for a month, from the Malaysia-Vietnam Commercial Arrangement Area.
“Petronas remains committed to help resolve the current situation and is taking all the necessary steps to expedite all mitigation measures to ensure the long term security of the nation,” it said, adding that it had been supplying natural gas to the power sector since 1984.
Up to 1997, the gas was supplied based on formulated prices; came the Asian financial crisis, the government regulated gas prices to help the industry cushion the impact from the crisis.
Up to August this year, Petronas absorbed RM143.4bil in price differential, out of which RM103.2bil was for for gas supplied to the power sector.
There is very little spare volume of gas; Petronas and upstream players are often requested to postpone maintenance schedules.
This, coupled with aging facilities, often resulted in unscheduled shutdowns.
“Petronas would curtail supply to its customers including those in Singapore, to ensure adequate pipeline system pressure so that each customer receives optimum volume of gas,” it said.
Production from existing fields is on a fast decline; from January to August this year, 37% of Peninsular Malaysia's gas needs were met by imports from Indonesia and gas developed from the overlapping Malaysia-Thai and Malaysia-Vietnam areas.
“However, this may soon become a challenge as production from these external sources is also decreasing,” Petronas said.