MGA organized first IGU Diplomatic Gas Forum in the Region

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Malaysian Gas Association (MGA), in collaboration with the International Gas Union (IGU), on 6 February 2018 held the IGU Diplomatic Gas Forum at Impiana KLCC Hotel, Kuala Lumpur. The Diplomatic Gas Forum is a series of forums organized by IGU in several major cities in the world, including Washington, Stockholm, Madrid and is designed to create awareness on the gas market and benefits of natural gas amongst the diplomatic corps and international communities in the respective countries. The forum was attended by more than 100 participants including several heads of mission to Malaysia and embassy officers.

The forum hosted by MGA, as a charter member of IGU, was the first IGU Diplomatic Gas Forum to be held in South East Asia and focused on focused on the latest developments of the gas market in Malaysia, namely the market and regulatory reforms that were implemented when the Gas Supply (Amendment) Act 2016 took effect early last year. The Act enhances competition in the gas market by enabling the participation of third parties in the gas supply industry via the Third Party Access (TPA) system. Under the TPA, new gas suppliers can bring natural gas in liquefied form (LNG) into the country via any of the two Regasification Terminals (RGT) and deliver their gas to their buyers using the existing transmission and distribution pipelines. The TPA would also allow large gas users to purchase their own supply of natural gas in LNG form from any source and utilize the regasification terminals and pipeline facilities to bring the fuel their premises. In that manner, market liberalization will promote competition, efficiency and supply security, as well as ensure the long term security of gas supply to the country.

Gas market reforms are critical to Malaysia’s long-term energy and economic security needs. In his welcoming remarks, the President of Malaysian Gas Association, Hazli Sham Kassim, emphasized the critical role of natural gas towards the development of the Malaysian economy when he said, “Natural gas has always played a fundamental role in supporting Malaysia’s economic development. In the last 30 years, energy consumption has increased by six-folds, with half of that demand being powered by natural gas.”

The credentials of natural gas as a cleaner, efficient and cost effective fuel are indisputable. Abundant supply, competitively priced and being the cleanest fossil fuel make natural gas as best option to fuel the economy, whilst at the same time enabling countries to meet their carbon emission commitments. This is consistent with the theme of this year’s World Gas Conference (WGC2018) in Washington DC, USA. WGC2018, organized by IGU in June 2018, is the world’s largest gas conference and will showcase the vital role of natural gas in “Fueling the Future”.

In his keynote address, the Vice President of International Gas Union (IGU), Dr. Joo-Myung Kang, said, “The energy transformation is already underway with natural gas complementing renewables. In next coming years, climate change and poor air quality are not the problem of the next generation. This is now, present, and imminent dilemma we have to tackle. It is time for law makers, policy makers, central and provincial governments to provide better direction, enact enlightened policies and lead markets to respond for a sustainable future powered by gas.”

The session continued with the following speakers;
• Luis Bertrán, Secretary General, International Gas Union. IGU is the global voice for gas with has members from 91 countries, representing 97% of the world’s gas market. Luis spoke on “Global Trends on Gas Market Reforms”.
• Rumaizi A. Halim , Head of Gas Market Development and Operation, Energy Commission of Malaysia. Energy Commission is the regulator responsible for gas supply industry in Peninsular Malaysa and spoker. Speaking on “Industry Reform & Third Party Access”, Rumaizi also provided status of the Third Party System and the related documents.
• Kamal Bahrin Ahmad, Chief Executive Officer, Petronas Gas Berhad. PGB is the owner and operator of the Peninsular Gas Utilisation (PGU) pipelines (the main transmission pipeline traversing the length of Peninsular Malaysia and the Regasification Terminals (RGT). Kamal spoke about “Gas Delivery Infrastructure in Malaysia” and the readiness of PGB’s infrastructure to serve Third Party players.
• Ahmad Hashimi Abdul Manap, Chief Executive Officer, Gas Malaysia Berhad. GMB sells gas to the industrial, commercial and residential customers in Peninsula Malaysia. Hashimi spoke on “Gas Market for Non-Power Sector in Malaysia”.

The forum ended with a panel session moderated by MGA President. Luis, Rumaizi, Kamal and Hashimi joined Hazli on stage to answer the following thought provoking questions that were posed by the participants;

• Q: In last year’s Asia & Oil & Gas Conference, one of the item discussed was using the UK gas market as an example. It took UK 30 years to reach full market liberation. Based on the recent data, how long do you think the time required for the countries to reach full market liberation?
• Q: Gas market demand in Europe is more to industrial, heating, power, residential. Inexperience in Europe gas liberalisation in Europe, is independently with power liberalisation? In tandem and parallel or independently?
• Q: A lot of investment made by oil and gas in term of renewable energy, as well as by other companies. We always talked about EV cars, i.e. Volkswagen in term of billions of USD investment. From your opinion, probably something you can share with us on the changing environment in term of gas demand and competition of EV cars.
• Q: What is your view and challenges in managing the virtual pipeline in Peninsular.
• Q: Direction on the energy mix in 5-10 years at least with the gas liberation to use more gas. But based on the report, utilisation Coal also quite heavy moving forward. Moving forward what should be the energy mix?
• Q: In one of the slides, it was mentioned that the industry growth for gas consumption was relatively low in terms of comparison with residential and commercial. What are the challenges to further increase the % of utilization?

MGA is proud to be given this opportunity by IGU to hold its Diplomatic Gas Forum. MGA hopes that the forum has increase awareness of natural gas in Malaysia, in particular on gas market reforms and Third Party Access (TPA). In addition to creating awareness, as the lead advocate of natural gas in Malaysia, MGA is committed to facilitate growth of Malaysia’s natural gas sector by driving demand for natural gas and increasing industry participation. MGA is constantly engaging key stakeholders, such as policy makers and industry players, to promote greater utilization of natural gas in the power generation, manufacturing industries and transportation sector.