By ALIFAH ZAINUDDIN / Pic By TMR File

TENAGA Nasional Bhd’s (TNB) wholly owned unit TNB Fuel Services Sdn Bhd has signed a master sales agreement with Shell Malaysia Trading Sdn Bhd to supply 3.5 trillion British thermal units of gas to TNB’s Tuanku Jaafar Power Station in Port Dickson and Connaught Bridge Power Station in Klang.

The gas from the liquefied natural gas (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.

TNB president and CEO Amir Hamzah Azizan said the agreement underlines TNB’s pledge and commitment in promoting and supporting the natural gas market liberalisation in Malaysia.

“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 in the third party access (TPA) system,” Amir Hamzah said in a statement yesterday.

Third parties can now access gas facilities that they do not own or operate after an amendment to the Gas Supply Act 1993 was made in 2016 and came into effect on Jan 16, 2017.

This provided the legal framework in Malaysia for the TPA system, which aims to promote competition within the natural gas market.

Prior to the deal, Petroliam Nasional Bhd was the sole supplier for LNG cargo or gas delivered to the power generation sector.

Amir Hamzah said the deal will result in cost savings in terms of delivered gas price which is below the regulated gas price.

TNB’s maiden LNG trial cargo is to test the TPA arrangement through the regasification terminal in Sungei Udang, Melaka and the Peninsular Gas Utilisation pipeline network owned by Petronas Gas Bhd.

TNB Fuel had also signed a gas sales agreement with TNB and TNB Connaught Bridge Sdn Bhd for the delivery of gas via its maiden LNG trial cargo.

Present at the signing ceremony were Ministry of Economic Affairs deputy director (upstream) Mohammad Zakhir Yusof, Shell Energy Asia VP Ajay Shah, TNB Fuel MD Zainal Abidin Shah Mahamood, Ministry of Energy, Science, Technology, Environment and Climate Change deputy secretary general of the energy sector Noor Afifah Abdul Razak, Energy Commission chairman Datuk Ahmad Fauzi Hasan, TNB chairman Tan Sri Leo Moggie, Shell Malaysia Trading MD Shavai Huzani Husain and TNB Connaught Bridge MD Muhammad Uzir Aspar.