This article first appeared in The Edge Financial Daily on October 3, 2019

KUALA LUMPUR: Tenaga Nasional Bhd (TNB) will be making its maiden delivery of liquefied natural gas (LNG) trial cargo this month. The utility group said the move has resulted in real cost savings in terms of delivered gas price.

TNB unit, TNB Fuel Services Sdn Bhd (TNBF), yesterday signed an agreement with TNB and TNB Connaught Bridge Sdn Bhd for the delivery.

A total of 3.5 trillion British thermal units of gas will be delivered to TNB’s Tuanku Jaafar Power Station in Port Dickson, Negeri Sembilan, and TNB’s Connaught Bridge Power Station in Klang.

The gas from this LNG trial cargo is expected to be consumed fully by these two power plants within 14 days with a daily average quantity of 270,000 gigajoules.

In a statement, TNB said the main objective of the company bringing in its maiden LNG trial cargo is to test the third-party access (TPA) arrangement via the regasification terminal in Sungai Udang, Melaka and the Peninsular Gas Utilisation gas pipeline network owned by Petronas Gas Bhd.

“At present, no other entity has ever brought in LNG cargo or delivered gas to the power generation sector except for Petronas, as the sole supplier,” it said.

In conjunction with the signing of the agreement, TNBF also signed a master sales agreement for the delivery of gas via its maiden LNG trial cargo with Shell Malaysia Trading Sdn Bhd (SMTSB).

TNB said the collaboration between TNBF and SMTSB is to experience and manage the challenges together in testing the TPA system for the first time in Malaysia.

It added that the partnership between TNBF and SMTSB has also resulted in real cost savings in terms of delivered gas price which is below the regulated gas price.

“This pioneering transaction also serves as a knowledge-sharing platform for all parties to gain experience for capacity building, and to provide feedback to all parties involved, especially the Ministry of Energy, Science, Technology, Environment and Climate Change and the Energy Commission, on the robustness and governance of the TPA system,” said TNB president and chief executive officer Amir Hamzah Azizan.