Applications for licences under TPA being processed

04 Feb 2018 / 13:54 H.

KUALA LUMPUR: The Energy Commission (EC) has processed two liquefied natural gas (LNG) import licences and three shipping licences under the third party access (TPA) system which comes into effect on Jan 16, 2018.
Director of Gas Development and Regulation Roslee Esman said another firmed application for both LNG import and shipping licences was expected to be submitted in the third quarter.
Meanwhile, the TPA for natural gas is a system that makes it possible for third parties to access gas facilities that they do not own or operate.
Roslee said the Gas Supply Act (Amendment) 2016 and the introduction of the TPA provided more opportunities for industry players to participate.
"The EC encourages more suppliers (LNG import and shipping licensees) to apply for the licence but the market can be considered as being competitive once two or more shipping licensees participate in the market," he told Bernama.
He said the EC has done a number of engagements with industry players and gas users through workshops, forums, tea-talks, and seminars which received very positive and encouraging response.
"In general, industry players and gas users expect the liberalisation of the gas market would benefit them in terms of sustainable supply of gas, reasonable gas market price and better services from the gas supplier," he said.
Roslee said four more guidelines, which were expected to be issued by the EC this year, included a business plan, standards and tariff determination, in addition to the two that were already issued, namely, licence and anti-competition.
He said several requirements were set by the EC for companies to participate in the TPA.
Among others, the applicant must be incorporated locally or in any other countries approved by the EC and applicants must fulfil a certain minimum paid-up capital requirement as it may prescribe.
"All directors sitting on the board of directors of the applicant may not hold any directorship on the board of directors of any other applicant or any other holder of a licence issued under the Gas Supply Act 1993," he said.
He said applicants must also have sufficient financial capability, sufficient relevant technical capability and complied with such other additional requirements as may be set by the commission from time to time.
Furthermore, he said there were specific additional requirements imposed by the EC for each type of licence pertaining to distribution, pipeline and regasification under the TPA.
"For example, for the import into regasification terminal licence, the applicant must be a company which is either incorporated under the Companies Act 1965 or registered pursuant to Section 332 of the Companies Act 1965," he said.
He said applicants must also have an issued and paid-up capital of at least RM1 million and they must submit other information or documents as may be requested by the EC.
In Petronas Gas Bhd's (PGB) filing to Bursa Malaysia last month, it was announced that the TPA would be effective on Jan 16, allowing third parties access to PGB gas facilities for the transportation of gas to customers.
Currently, LNG is supplied by Petronas through the Regasification Terminal Sungai Udang in Melaka and Regasification Terminal Pengerang in Johor, which is then regassified and transported by PGB to Petronas' clients, including Gas Malaysia, through its extensive pipeline throughout Peninsular Malaysia.
According to industry sources, the TPA is expected to lessen the burden of Petronas as the supplier of gas to Malaysia, as well as opening up opportunities for other parties to participate.
For end users, he said they would have the options to purchase from either existing suppliers or new suppliers which in turn would create competitive price offerings.
Nevertheless, he said suppliers that intended to participate in the TPA must first find their own customers or attract existing customers to buy from them before they can pump their LNG into the regasification terminal.
He added that Petronas Gas, as the transporter of the gas, would build the necessary pipeline to connect new customers to the existing pipeline. — Bernama

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