TNB ready to buy gas at market prices, says Che Khalib

Tenaga Nasional Bhd (TNB) is ready to purchase gas for power generation at open market prices upon completion of the liquefied natural gas (LNG) regassification terminal in Melaka by 2012.

President/Chief Executive Officer Che Khalib Mohamad Noh said the company had been talking to several gas suppliers including ExxonMobil and Royal Dutch Shell for a secured supply.

“We’ve appointed professional consultants to deal with the major suppliers as we are still new in the matter,” he told reporters at Universiti Tenaga Nasional today.

The market price for gas presently hovers around RM30 to RM50 mmBTU. The government, through Petroliam Nasional Bhd, spends around RM20 billion a year to provide subsidised gas to TNB at RM13.70 mmBTU.

Che Khalib said the open market price would not necessarily mean a hike in tariff rates for domestic and industrial consumers.

TNB would suggest several options to the government to either absorb the cost or pass it on to consumers, he said.

Natural gas accounts for 60 per cent of TNB’s eletricity generation while coal and hydro contribute 35 per cent and five per cent respectively.

The company aims to have a balance between gas generated and coal generated power by 2015. Meanwhile, Che Khalib said power demand was expected to increase three to four per cent next year.

– Bernama