Why supplying LNG to Shangai Gas terminal ?

DAP demands a full explanation from Petronas on the Reuters news reports of supplying 3.03 million tones of LNG a year to the Shangai Gas Terminal for 25 years from 2009 when there is not enough gas supplies for domestic demand resulting in loss of tens of billions of ringgit in foreign direct investments to Malaysia. Malaysians have a right to know why Petronas continues to export gas when we have to import 19% of our gas needs from Indonesia.

According to Malaysia’s Energy Commission, Malaysia’s total supply of 2,180 mmscfd comprise of local production of 1,770 mmscfd and 410 mmscfd imported (MMSCFD stands for Million Standard Cubic Feet per Day of gas). The consumers comprise 26% to TNB, 35% to Independent Power Producers(IPP), 21% to Petronas customers, 12% to domestic consumers and 7% exported to Singapore.

Deputy Prime Minister Tan Sri Muhyiddin Yassin had conceded that tens of billions of ringgit of foreign investments, including at least RM 6 billion in Penang from solar-related investors, has been lost due to the gas shortage. Despite Tan Sri Muhyiddin correctly tracing the lack of gas supply to Petronas committing all its gas production till 2014, nothing has been done to resolve this gas shortage. What is most shocking is that despite the gas shortage, Petronas is still exporting critically needed gas and now to Shanghai.

Such decisions are highly irresponsible and against the national interest. It is a terrible waste of money of Petronas to spend RM 11.5 billion to build the Peninsular Gas Utility System (PGU System) pipeline to supply gas throughout the country when there is no gas flowing through the PGU pipeline. There is an urgent need to redirect supply, especially from the independent power producers (IPPs), to manufacturing and domestic use.

The National Gas Policy was supposed to reduce gas supplies to the power sector that consumes 61% of gas supplies to 40%. However no effort has been made to reduce dependence by IPP which consume 35% of much needed gas supplies. The Federal Government must have the will to restructure completely gas utilization to ensure that it serves the needs of 27 million Malaysians and not the few IPPs to allow them to generate and enjoy billions of ringgit of profits at the expense of Malaysians.

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