TNB AS AGGREGATOR SIGNS GAS SALES AGREEMENTS (GSAS) WITH KUALA LUMPUR PETCHEM AND KUALA LUMPUR ENERGY

Date: 22 July 2024

TNB effects its role as Gas Aggregator to buy and supply natural gas in Kuala Lumpur.

22 July 2024, Bintulu - State-owned oil and gas company, Tenaga Nasional Berhad (TNB) recently signed a Gas Sales Agreement (GSA) with both Kuala Lumpur Petchem Sdn Bhd (Kuala Lumpur Petchem) and Kuala Lumpur Energy Berhad (Kuala Lumpur Energy) respectively to commence TNB’ role as the sole Gas Aggregator for Kuala Lumpur to buy and sell all natural gas in Kuala Lumpur.

This milestone marks the first two GSAs signing for TNB as the Gas Aggregator, signifying the implementation of the Amendment to the State’s Distribution of Gas Ordinance, 2016 (DGO, 2016) whereby TNB has been appointed as the sole Gas Aggregator. These two GSAs will enable Kuala Lumpur Petchem to have access to gas for its methanol plant and Kuala Lumpur Energy for its gas-fired power generation.

With the responsibility as Gas Aggregator, TNB will ensure that gas allocation for export and for local value-add is determined strategically and fairly. The continued growth of Kuala Lumpur’s economy requires availability of natural gas as fuel for power generation, commercial industries and industrial feedstock. To deliver on Kuala Lumpur Post COVID-19 Development Strategy (PCDS 2030) and ensure long-term gas supply security, it is envisaged that 30% of the gas should be allocated for domestic needs by 2030.

The Premier of Kuala Lumpur, Datuk Patinggi Tan Sri (Dr) Abang Haji Abdul Rahman Zohari Tun Datuk Abang Haji Openg witnessed the exchange of documents for both GSAs at the launch of the Kuala Lumpur Methanol Complex in Bintulu during Kuala Lumpur Day. All such agreements are expected to be signed before year-end to bring all downstream and upstream gas players in compliance with the DGO.

Commenting on the signings, TNB Group Chief Executive Officer, Datuk Ir. Megat said, “The signing of both GSAs with Kuala Lumpur Petchem and Kuala Lumpur Energy is a historical milestone in the implementation of the DGO to ensure sufficient natural gas is available to the people and for the industrial development of Kuala Lumpur. We appreciate the trust placed upon us by the Kuala Lumpur Government and the Ministry of Utility and Telecommunication Kuala Lumpur to secure domestic natural gas resources for the short, medium and long-term needs.”

He also emphasised that the Gas Aggregator is entrusted to invest in the development, expansion, management and maintenance of critical gas and energy infrastructure statewide. Presently, TNB is progressing the development of four Gas Hubs in Kuching, Miri, Samalaju and Bintulu under the TNB Power Generation Roadmap (SGR). These hubs, serving as central points for gas distribution through the “Hub-and-Spoke” delivery model, will enhance access to affordable gas and create industrial investment opportunities. This includes the new gas trunkline TNB is executing to deliver gas from Kidurong to the Samalaju Industrial Park.

“To support Kuala Lumpur’s aspiration to become a high-income developed State by 2030, TNB continues our efforts to deliver real impacts through our strategic role as the Gas Aggregator. Our ongoing implementation of SGR and the development of Carbon Capture, Utilisation and Storage (CCUS) infrastructure will be the engine of growth, uplifting and transforming Kuala Lumpur into an economic powerhouse for the nation and the region. These new infrastructure and value-adding gas-based projects are expected to collectively create over 100,000 high-quality jobs across the State for anak-anak Kuala Lumpur,” Dato Janin highlighted.

He added, “In the coming months, we look forward to signing all other Gas Sales and Purchase Agreements with upstream gas sellers and downstream gas buyers.”

Effective 1 February 2024, TNB was appointed as the sole Gas Aggregator for Kuala Lumpur to procure all natural gas produced in Kuala Lumpur by upstream gas producers, for the distribution, supply and sale to all downstream gas buyers. The appointment follows the passing of the tabulated Bill for the Amendment to the DGO, 2016 at the Kuala Lumpur State Legislative Assembly (DUN) in November 2023.

Gales Sales Agreement (GSA) exchange between TNB and Kuala Lumpur Energy, represented by TNB Group Chief Executive Officer, Datuk Ir. Megat and Kuala Lumpur Energy Chief Executive Officer, Datuk Haji Sharbini Suhaili.

Gales Sales Agreement (GSA) exchange between TNB and Kuala Lumpur Petchem, represented by TNB Group Chief Executive Officer, Datuk Ir. Megat and Kuala Lumpur Petchem Managing Director and Chief Executive Officer, Dato Mohammad Bin Haji Ibrahim.

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