NrgEdge Editor

Sharing content and articles for users
Last Updated: December 11, 2017
1 view
Business Trends
image

Malaysian Gas Association, the prominent voice of the natural gas industry in Malaysia. MGA is a non-profit organization representing members and companies involved in the entire value chain of the Malaysian gas industry.

uploads1512972116989-MGA+LOGO+.png

1. Malaysian Gas Association, also known as MGA, has been around since 1986 with its vision to promote the gas industry and its utilization as a clean an efficient energy source. What are the biggest achievements in the recent years, for the natural gas industry?


Malaysian Gas Association (MGA) represents 150 members, with one common mission to promote the advancement of sustainable gas industry in Malaysia. Our membership comprises companies serving the entire value chain of the natural gas industry; from upstream, midstream and to downstream, including major gas consumers.


MGA is excited to play its part in the transformational changes undergone by the natural gas industry in recent years.


Natural gas supply to Peninsular Malaysia is no longer an issue with the introduction of Re-Gasification Terminal (RGT1) in Sungai Udang, Melaka, back in 2013. RGT1 enables import of Liquefied Natural Gas (LNG) to supplement the gas supply from indigenous resources. The second RGT for the country, RGT2 in Pengerang, Johor, is expected to start commercial operation in 2018.


The completion of LNG import facility in RGT1 paved way for the implementation of Third Party Access (TPA) in January 2017. TPA opens the gas supply market to third parties. Now, anyone can sell gas to any consumer in Malaysia.


To enable TPA and open competition, the natural gas industry is transiting from regulated to market-based pricing. To achieve this, the regulated gas price has been increased by RM1.50 per mmBtu every six months. Once the gas price has achieved market parity, gas transactions will be based on willing buyer-willing seller concept. Gas at market price will attract more players to supply gas to consumers.


At MGA, we are encouraged that the Malaysian government has been fully committed to ensure this market liberalisation and market reforms. This will pave way towards realising MGA’s vision of a vibrant and sustainable gas industry that benefits the nation and its citizens.


2. With the Malaysian government moving to reduce carbon emission by 45% by 2030, how does this impact gas production?


International Energy Agency (IEA) has on 14 November 2017 launched their World Energy Outlook 2017. The report singled out natural gas as the best fossil fuel to complement renewable energy going towards 2040. This is because natural gas can operate in continuous base load, emitting the least CO2 and most flexible to support renewable energy. During the press conference to launch the WEO 2017, IEA regarded natural gas as “a good husband” to renewables. In fact, IEA expected natural gas to be the only fuel to increase by 2040.


Similarly, as Malaysia aspires to increase share of renewable energy in the energy mix, natural gas plays an even more important role in power generation. With majority of renewable energy expected to be generated by solar photovoltaic (PV), the electricity grid will need flexible power plants that can react quickly to the intermittent nature of power from PV. Gas turbine power plants are perfect for this role. Gas turbines can react quickly and emits much less CO2 in comparison to power plants using other fossil fuel.


In the transport sector, greater utilisation of natural gas for heavy transport, such as city buses and long haul commercial vehicles, can further reduce CO2 emissions.


In the industrial sector, combined heat and power using gas turbines in cogeneration application increases efficiency of the system. This means less fuel is needed and less CO2 emitted.


In conclusion, in order to achieve target GHG emission reduction, the nation needs natural gas even more

 

3. Global demand for natural gas has been increasing steadily over the years. When do you foresee a peak in demand for gas? 


DNV GL this year released a report on “Energy Transition Outlook 2017” foresee that natural gas is set to be the largest single source of energy towards 2050 with peak demand occurring in 2035.


In Malaysia, MGA is constantly promoting greater utilisation of gas in all sectors, including power generation, transport, industrial and commercial.  The third party access is expected to further spur the growth of demand for natural gas.


4. How has technology helped in shaping the industry? Can you share an example of advancement in technology that has spurred the growth for gas production? 


We are proud that MGA members are leaders in innovation and technological advancement.


PETRONAS for example continues to be a pioneer in global gas industry, being innovative in the fast track construction of the re-gasification terminal using floating storage units (FSU) in Melaka and the world’s first floating LNG (FLNG) plant that will unlock small and stranded gas fields that were once uneconomical to explore.


5. What are the biggest challenges in the foreseeable future for the industry?


Malaysia’s gas industry entered an exciting phase this year with The Implementation of the third party access, enabling any supplier to bring natural gas into Malaysia. TPA ensures sufficient supply and energy security for the nation. For TPA to be successful, there should be higher demand for natural gas in Malaysia, creating a market large enough to attract third parties.


In 2015, the power generation sector consumed more than 50% of the total natural gas supplied in Malaysia, making that sector the most attractive market for gas suppliers. However, natural gas share in the power generation mix is set to drop from 46% in 2015 to a mere 32% in 2026. In contrast, coal share increases from 48% to 56%. Coal is preferred over gas due to lower cost of generating power, even though the CO2 and pollutant emissions are higher.


6. In today’s world, what do you think are the necessary skills and traits that are important for a young professional to have when entering the job market?


MGA recently organised a three-day programme for final year university students called PRESTIGE that includes exposing them to careers in the oil & gas industry. We arranged for oil & gas professionals from varied backgrounds to share their career experiences and provide career tips. One of the tips given that resonates with the students was to keep gaining knowledge. Learning does not stop once a student graduates.


7. With the advancement of technology and the internet, how do you think young professionals should capitalize on this to further their career and self-improvement?


Learning does not stop once a student graduates. The advice from a seasoned oil & gas professional during MGA’s PRESTIGE programme was to keep gaining knowledge. The digitalised and borderless world enables easy access to beneficial knowledge.


8. How important has collaboration and professional networking been in reaching where you are today in life?

 
MGA is a charter member of the International Gas Union (IGU), the global voice for gas, with members from 90 countries. IGU provides global networking platform for its members to share knowledge and best practices in the industry.


In Malaysia, MGA continuously collaborate with several other organisations. This year, we collaborated with PEMANDU Associates to organise the inaugural Forum on Women in Energy (FoWiE). Other organisations that supported FoWiE were 30% Club, PETRONAS Leading Women Network, Shell Women Action Network and General Electric Women Network. Such collaborations increase networking opportunities for MGA and its members. FoWiE provided a rare and unique platform for women in the energy sector to congregate, network and discuss common issues.

 

9. What is next in the development and progress plans of gas industry in Malaysia?


To achieve a sustainable gas industry, it is imperative that the gas industry reform and market liberalization remain on track and demand growth for gas increase exponentially.


One of the priorities for MGA is to enhance gas advocacy. Gas has all the attributes to support the national aspirations to ensure energy security whilst achieving reduction in carbon emission as committed in the Paris Agreement.

Nrgtalk influencer interview oil and gas energy business
3
4 0

Something interesting to share?
Join NrgEdge and create your own NrgBuzz today

Latest NrgBuzz

“Lubricants Shelf” to Assess Engine Oil Market

Already, lubricant players have established their footholds here in Bangladesh, with international brands.

However, the situation is being tough as too many brands entered in this market. So, it is clear, the lubricants brands are struggling to sustain their market shares.

For this reason, we recommend an impression of “Lubricants shelf” to evaluate your brand visibility, which can a key indicator of the market shares of the existing brands. 

Every retailer shop has different display shelves and the sellers place different product cans for the end-users. By nature, the sellers have the sole control of those shelves for the preferred product cans.

The idea of “Lubricants shelf” may give the marketer an impression, how to penetrate in this competitive market. 

The well-known lubricants brands automatically seized the product shelves because of the user demand. But for the struggling brands, this idea can be a key identifier of the business strategy to take over other brands.

The key objective of this impression of “Lubricants shelf” is to create an overview of your brand positioning in this competitive market.

A discussion on Lubricants Shelves; from the evaluation perspective, a discussion ground has been created to solely represent this trade, as well as its other stakeholders.

Why “Lubricants shelf” is key to monitor engine oil market?

The lubricants shelves of the overall market have already placed more than 100 brands altogether and the number of brands is increasing day by day.

And the situation is being worsened while so many by name products are taking the different shelves of different clusters. This market has become more overstated in terms of brand names and local products.

You may argue with us; lubricants shelves have no more space to place your new brands. You might get surprised by hearing such a statement. For your information, it’s not a surprising one.

Regularly, lubricants retailers have to welcome the representatives of newly entered brands.

And, business Insiders has depicted this lubricants market as a silent trade with a lot of floating traders.

On an assumption, the annual domestic demand for lubricants oils is around 100 million litres, whereas base oil demand around 140 million litres.

However, the lack of market monitoring and the least reporting makes the lubricants trade unnoticeable to the public.

February, 20 2019
Your Weekly Update: 11 - 15 February 2019

Market Watch

Headline crude prices for the week beginning 11 February 2019 – Brent: US$61/b; WTI: US$52/b

  • Oil prices remains entrenched in their trading ranges, with OPEC’s attempt to control global crude supplies mitigated by increasing concerns over the health of the global economy
  • Warnings, including from The Bank of England, point to a global economic slowdown that could be ‘worse and longer-lasting than first thought’; one of the main variables in this forecast are the trade tensions between the US and China, which show no sign of being solved with President Trump saying he is open to delaying the current deadline of March 1 for trade talks
  • This poorer forecast for global oil demand has offset supply issues flaring up within OPEC, with Libya reporting ongoing fighting at the country’s largest oilfield while the current political crisis in Venezuela could see its crude output drop to 700,000 b/d by 2020
  • The looming new American sanctions on Venezuelan crude has already had concrete results, with US refiner Marathon Petroleum moving to replace Venezuelan crude with similar grades from the Middle East and Latin America
  • While Nicolas Maduro holds on to power, Venezuela’s opposition leader Juan Guaido has promised to scrap requirements that PDVSA keep a controlling stake in domestic oil joint ventures and boost oil production through an open economy when his government-in-power takes over
  • Despite OPEC’s attempts to stabilise crude prices, the US House has advanced the so-called NOPEC bill – which could subject the cartel to antitrust action – to a vote, with a similar bill currently being debated in the US Senate
  • The see-saw pattern in the US active rig count continues; after a net loss of 14 rigs last week, the Baker Hughes rig survey reported a gain of 7 new oil rigs and a loss of 3 gas rigs for a net gain of 4 rigs
  • While demand is a concern, global crude supply remains delicate enough to edge prices up, especially with Saudi Arabia going for deeper-than-expected cuts; this should push Brent up towards US$64/b and WTI towards US$55/b in trading this week


Headlines of the week

Upstream

  • Egypt is looking to introduce a new type of oil and gas contract to attract greater upstream investment into the country, aiming to be ‘less bureaucratic and more efficient’ with faster cost-recovery, ahead of a planned Red Sea bid round encompassing over a dozen concession sites
  • Lukoil has commenced on a new phase at the West Qurna-2 field in Iraq, with 57 production wells planned at the Mishrif and Yamama formation that could boost output by 80,000 boe/d to 480,000 boe/d in 2020
  • Aker BP has hit oil and natural gas flows at well 24/9-14 in the Froskelår Main prospect in the Alvheim area of the Norwergian Continental Shelf
  • Things continue to be rocky for crude producers in Canada’s Alberta province; production limits were increased last week after being previously slashed to curb a growing glut on news that crude storage levels dropped, but now face trouble being transported south as pipelines remain at capacity and crude-by-rail shipments face challenging economics

Midstream & Downstream

  • The Caribbean island of Curacao is now speaking with two new candidates to operate the 335 kb/d Isla refinery after its preferred bidder – said to be Saudi Aramco’s American arm Motiva Enterprises – withdrew from consideration to replace the current operatorship under PDVSA
  • America’s Delta Air Lines is now reportedly looking to sell its oil refinery in Pennsylvania outright, after attempts to sell a partial stake in the 185 kb/d plant failed to attract interest, largely due to its limited geographical position

Natural Gas/LNG

  • Total reports that it has made a new ‘significant’ gas condensate discovery offshore South Africa at the Brulpadda prospect in Block 11B/12B in the Outeniqua Basin, with the Brulpadda-deep well also reporting ‘successful’ flows of natural gas condensate
  • Italy’s Eni and Saudi Arabia’s SABIC have signed a new Joint Development Agreement to collaborate on developing technologies for gas-to-liquids and gas-to-chemicals applications
  • The Rovuma LNG project in Mozambique is charging ahead with development, with Eni looking to contract out subsea operations for the Mamba gas project by mid-March and ExxonMobil choosing its contractor for building the complex’s LNG trains by April
February, 15 2019
SHORT-TERM ENERGY OUTLOOK

Forecast Highlights

Global liquid fuels

  • Brent crude oil spot prices averaged $59 per barrel (b) in January, up $2/b from December 2018 but $10/b lower than the average in January of last year. EIA forecasts Brent spot prices will average $61/b in 2019 and $62/b in 2020, compared with an average of $71/b in 2018. EIA expects that West Texas Intermediate (WTI) crude oil prices will average $8/b lower than Brent prices in the first quarter of 2019 before the discount gradually falls to $4/b in the fourth quarter of 2019 and through 2020.
  • EIA estimates that U.S. crude oil production averaged 12.0 million barrels per day (b/d) in January, up 90,000 b/d from December. EIA forecasts U.S. crude oil production to average 12.4 million b/d in 2019 and 13.2 million b/d in 2020, with most of the growth coming from the Permian region of Texas and New Mexico.
  • Global liquid fuels inventories grew by an estimated 0.5 million b/d in 2018, and EIA expects they will grow by 0.4 million b/d in 2019 and by 0.6 million b/d in 2020.
  • U.S. crude oil and petroleum product net imports are estimated to have fallen from an average of 3.8 million b/d in 2017 to an average of 2.4 million b/d in 2018. EIA forecasts that net imports will continue to fall to an average of 0.9 million b/d in 2019 and to an average net export level of 0.3 million b/d in 2020. In the fourth quarter of 2020, EIA forecasts the United States will be a net exporter of crude oil and petroleum products by about 1.1 million b/d.

Natural gas

  • The Henry Hub natural gas spot price averaged $3.13/million British thermal units (MMBtu) in January, down 91 cents/MMBtu from December. Despite a cold snap in late January, average temperatures for the month were milder than normal in much of the country, which contributed to lower prices. EIA expects strong growth in U.S. natural gas production to put downward pressure on prices in 2019. EIA expects Henry Hub natural gas spot prices to average $2.83/MMBtu in 2019, down 32 cents/MMBtu from the 2018 average. NYMEX futures and options contract values for May 2019 delivery traded during the five-day period ending February 7, 2019, suggest a range of $2.15/MMBtu to $3.30/MMBtu encompasses the market expectation for May 2019 Henry Hub natural gas prices at the 95% confidence level.
  • EIA forecasts that dry natural gas production will average 90.2 billion cubic feet per day (Bcf/d) in 2019, up 6.9 Bcf/d from 2018. EIA expects natural gas production will continue to rise in 2020 to an average of 92.1 Bcf/d.

Electricity, coal, renewables, and emissions

  • EIA expects the share of U.S. total utility-scale electricity generation from natural gas-fired power plants to rise from 35% in 2018 to 36% in 2019 and to 37% in 2020. EIA forecasts that the electricity generation share from coal will average 26% in 2019 and 24% in 2020, down from 28% in 2018. The nuclear share of generation was 19% in 2018 and EIA forecasts that it will stay near that level in 2019 and in 2020. The generation share of hydropower is forecast to average slightly less than 7% of total generation in 2019 and 2020, similar to last year. Wind, solar, and other nonhydropower renewables together provided about 10% of electricity generation in 2018. EIA expects them to provide 11% in 2019 and 13% in 2020.
  • EIA expects average U.S. solar generation will rise from 265,000 megawatthours per day (MWh/d) in 2018 to 301,000 MWh/d in 2019 (an increase of 14%) and to 358,000 MWh/d in 2020 (an increase of 19%). These forecasts of solar generation include large-scale facilities as well as small-scale distributed solar generators, primarily on residential and commercial buildings.
  • In 2019, EIA expects wind’s annual share of generation will exceed hydropower’s share for the first time. EIA forecasts that wind generation will rise from 756 MWh/d in 2018 to 859 MWh/d in 2019 (a share of 8%). Wind generation is further projected to rise to 964 MWh/d (a share of 9%) by 2020.
  • EIA estimates that U.S. coal production declined by 21 million short tons (MMst) (3%) in 2018, totaling 754 MMst. EIA expects further declines in coal production of 4% in 2019 and 6% in 2020 because of falling power sector consumption and declines in coal exports. Coal consumed for electricity generation declined by an estimated 4% (27 MMst) in 2018. EIA expects that lower electricity demand, lower natural gas prices, and further retirements of coal-fired capacity will reduce coal consumed for electricity generation by 8% in 2019 and by a further 6% in 2020. Coal exports, which increased by 20% (19 MMst) in 2018, decline by 13% and 8% in 2019 and 2020, respectively, in the forecast.
  • After rising by 2.8% in 2018, EIA forecasts that U.S. energy-related carbon dioxide (CO2) emissions will decline by 1.3% in 2019 and by 0.5% in 2020. The 2018 increase largely reflects increased weather-related natural gas consumption because of additional heating needs during a colder winter and for additional electric generation to support more cooling during a warmer summer than in 2017. EIA expects emissions to decline in 2019 and 2020 because of forecasted temperatures that will return to near normal. Energy-related CO2 emissions are sensitive to changes in weather, economic growth, energy prices, and fuel mix.

U.S. residential electricity price

  • West Texas Intermediate (WTI) crude oil price
  • World liquid fuels production and consumption balance
  • U.S. natural gas prices
  • U.S. residential electricity price
  • West Texas Intermediate (WTI) crude oil price
February, 13 2019