KUALA LUMPUR: In order to reduce its dependency on gas, Tenaga Nasional Bhd (TNB) is looking to rebalance its fuel mix between coal and gas to 50:50 in 2016 from 40:60 currently.
“An additional 2,000MW using coal will be introduced into the system by 2016. One will come from Janamanjung and the other from Tanjung Bin,” TNB president and CEO Datuk Seri Che Khalib Mohamad Noh told reporters after the company AGM yesterday.
The utility group recently signed a power purchase agreement with Malakoff Bhd’s wholly-owned Tanjung Bin Energy Sdn Bhd to design, construct, own, operate and maintain an additional 1,000MW plant to add to the existing 2,100MW plant in Tanjung Bin, Johor.
This is in addition to 1,000MW block of its coal-fired Janamanjung plant in Lumut that TNB plans to expand.
TNB has been incurring extra cost to burn oil and distillate due to gas supply shortages from Petroliam Nasional Bhd (Petronas). The gas shortage has cost TNB an additional RM3.069 billion. The government and Petronas recently agreed that each of them will bear one third of the additional fuel cost incurred between Jan 1, 2010 and Oct 31, 2011.
“We have even asked them if they can release part of the payment due to us... so we can ease our cash flow position,” said Che Khalib.
“Petronas wants to see how we derived the figure of RM3.069 billion. We are providing them with all the information so they can audit our figures. Once they complete the audit, they will pay us.”
TNB saw its net profit plunge 84% to RM499.5 million for FY11 ended Oct 31 from RM3.2 billion for FY10. The sharp fall in earnings was due to the substantial increase in operating expenses arising from the extra cost for burning oil and distillate during 3Q and 4QFY11.
Revenue rose 6.2% to RM32.2 billion in FY11 from RM30.3 billion the previous year, while earnings per share declined to 9.16 sen from 58.92 sen.
In order to mitigate the shortfall of gas supply in the medium term, Che Khalib said TNB is in talks with some foreign gas suppliers to source liquefied natural gas (LNG) at market price once Petronas’ new re-gassification terminal in Malacca comes online by August 2012.
“We have already started talks with Shell. A few private traders overseas such as those from Qatar have also approached us. We recently received interest from Total Group too,” he said.
“In the next four to five years, ... we are going to import at market price [an additional] 200 million cu ft [per day]. That is less than 20% of the gas that will ... be provided to the power sector via subsidy,” he said.
Che Khalib said the amount of LNG to be imported only represents 9% of TNB’s total power generation containing a mixture of coal and gas.
In addition, he said TNB plans to call an open tender for additional electricity capacity by the first quarter of next year.
The counter closed one sen or 0.18% lower to RM5.44 yesterday with 3.3 million shares changing hands. TNB shares have declined 18.7% year-to-date.
This article appeared in The Edge Financial Daily, December 16, 2011.
“An additional 2,000MW using coal will be introduced into the system by 2016. One will come from Janamanjung and the other from Tanjung Bin,” TNB president and CEO Datuk Seri Che Khalib Mohamad Noh told reporters after the company AGM yesterday.
The utility group recently signed a power purchase agreement with Malakoff Bhd’s wholly-owned Tanjung Bin Energy Sdn Bhd to design, construct, own, operate and maintain an additional 1,000MW plant to add to the existing 2,100MW plant in Tanjung Bin, Johor.
This is in addition to 1,000MW block of its coal-fired Janamanjung plant in Lumut that TNB plans to expand.
TNB has been incurring extra cost to burn oil and distillate due to gas supply shortages from Petroliam Nasional Bhd (Petronas). The gas shortage has cost TNB an additional RM3.069 billion. The government and Petronas recently agreed that each of them will bear one third of the additional fuel cost incurred between Jan 1, 2010 and Oct 31, 2011.
“We have even asked them if they can release part of the payment due to us... so we can ease our cash flow position,” said Che Khalib.
“Petronas wants to see how we derived the figure of RM3.069 billion. We are providing them with all the information so they can audit our figures. Once they complete the audit, they will pay us.”
TNB saw its net profit plunge 84% to RM499.5 million for FY11 ended Oct 31 from RM3.2 billion for FY10. The sharp fall in earnings was due to the substantial increase in operating expenses arising from the extra cost for burning oil and distillate during 3Q and 4QFY11.
Revenue rose 6.2% to RM32.2 billion in FY11 from RM30.3 billion the previous year, while earnings per share declined to 9.16 sen from 58.92 sen.
In order to mitigate the shortfall of gas supply in the medium term, Che Khalib said TNB is in talks with some foreign gas suppliers to source liquefied natural gas (LNG) at market price once Petronas’ new re-gassification terminal in Malacca comes online by August 2012.
“We have already started talks with Shell. A few private traders overseas such as those from Qatar have also approached us. We recently received interest from Total Group too,” he said.
“In the next four to five years, ... we are going to import at market price [an additional] 200 million cu ft [per day]. That is less than 20% of the gas that will ... be provided to the power sector via subsidy,” he said.
Che Khalib said the amount of LNG to be imported only represents 9% of TNB’s total power generation containing a mixture of coal and gas.
In addition, he said TNB plans to call an open tender for additional electricity capacity by the first quarter of next year.
The counter closed one sen or 0.18% lower to RM5.44 yesterday with 3.3 million shares changing hands. TNB shares have declined 18.7% year-to-date.
This article appeared in The Edge Financial Daily, December 16, 2011.
