KUALA LUMPUR (March 25): Petroliam Nasional Bhd (Petronas) has forgone more than RM200 billion in revenue from selling natural gas in Malaysia at rates lower than global prices since the country regulated prices of the fuel after the 1997/1998 Asian financial crisis.

The Edge Malaysia business and investment weekly (Edge Weekly) in its latest March 27 to April 2 issue, quoted Petronas president and group chief executive officer Datuk Wan Zulkiflee Wan Ariffin as saying despite Malaysia revising the price of natural gas upward every six months, the local rate was still below the international price.

“I think the forgone revenue since we started is more than RM200 billion because we have not been able to sell natural gas at market value. In the past, we made investments just to ensure security of supply. But moving forward, there is this perennial issue of non-market pricing.

“Now we have a RM1.50 increase every six months. The last increase was in January but the next increase has not been confirmed yet.

We really hope the six-month increase will continue because that will lead us to market pricing in the end," Wan Zulkiflee said.

Natural gas prices are based on one million British Thermal Units (MMBTU) terms. Bernama reported that the government raised the price of natural gas in Peninsular Malaysia by RM1.50/MMBTU to RM18.20 for the January-July 2016 period from RM16.70 in July to December 2015.

For the January-July 2016 period, it was reported that Tenaga Nasional Bhd paid RM15.20/MMBTU for the first one billion of standard cubic foot (Bscf) per day versus Petronas' liquefied natural gas market price at RM46.041 for October to December 2014.

The latest Edge Weekly issue quoted Wan Zulkiflee as saying Petronas was talking to the Malaysian Government, Energy Commission and Tenaga to continue the natural gas price adjustments and set a minimum gas demand at 800 million of standard cubic feet (MMscf) per day.

Wan Zulkiflee said Petronas needed to be "assured of minimum offtake so that we can invest further to ensure security of supply." "We can’t be investing if the offtake falls to, say, 300 MMscf per day when we are supplying 1.2 billion Bscf per day." he said.

For a better understanding on Petronas under Wan Zulkiflee's leadership, kindly pick up and read the latest Edge Weekly issue.

Save by subscribing to us for your print and/or digital copy.

P/S: The Edge is also available on Apple's AppStore and Androids' Google Play.