Ensuring Energy Sustainability-cimb
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Transcript of Ensuring Energy Sustainability-cimb
Ensuring Energy SustainabilityMalaysia’s 4th National Energy Forum (Sep 2012)
Malaysia: Power and Gas, p.1
Ensuring Energy SustainabilityNational Energy Forum (Sep 2012)
BACKGROUND: WHAT’S WRONG WITH THIS PICTURE?
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70
Jan
-06
Apr
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Oct
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Apr
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Jul-
07
Oct
-07
Jan
-08
Apr
-08
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08
Oct
-08
Jan
-09
Apr
-09
Spot gas price
Gas prices have remained low for far too long.
Source: Bloomberg, Tenaga
Malaysia: Power and Gas, p.2
BACKGROUND: WHAT’S WRONG WITH THIS PICTURE?
Apr
-09
Jul-
09
Oct
-09
Jan
-10
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Oct
-10
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-11
Apr
-11
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Spot gas price
Gas price sold to IPPs and Tenaga
RM49/mmbtu
RM13.7/mmbtu
1. WHAT’S NOT SEEN WHEN THE LIGHTS TURN ON
Source: Energy Commission up to 13 Sep 2012
0% 10% 20% 30%
Gas
Coal
YTD 2012 actual
Current consumption rates cannot be sustained for much longer.
Malaysia: Power and Gas, p.3
1. WHAT’S NOT SEEN WHEN THE LIGHTS TURN ON
40% 50% 60% 70%
YTD 2012 actual EC's target
Too much coal…
…Too little gas
Current consumption rates cannot be sustained for much longer.
2. ALL GOOD THINGS COME TO AN END
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08Fe
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b-09
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9Ja
n-10
Feb-
10
Asian gas price (Japan LNG, FOB)
How will the shale gas revolution in North America impact Asian gas prices?
Source: Bloomberg, Tenaga
Malaysia: Power and Gas, p.4
2. ALL GOOD THINGS COME TO AN END
Feb-
10M
ar-1
0M
ar-1
0A
pr-1
0M
ay-…
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n-10
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1A
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1Ja
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12M
ar-1
2M
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2A
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2M
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2
6.4x
US gas price (Henry Hub)
Asian gas price (Japan LNG, FOB)
US$18/mmbtu
US$2.8/mmbtu
How will the shale gas revolution in North America impact Asian gas prices?
3. INDUSTRIAL DEMAND IS INELASTIC
Source: Gas Malaysia, Financial Daily (27Jul for glovemakers), Star Biz (4 Sep for Gas Malaysia)
Officially secured 80% of the
and is the most efficient fuel.
Officially secured 80% of theadditional gas volume coming
on stream in 2013. Though soldat higher prices, it remainscheaper than alternatives
and is the most efficient fuel.
Gas Malaysia
Businesses are showing a willingness to pay market prices for energy.
Malaysia: Power and Gas, p.5
3. INDUSTRIAL DEMAND IS INELASTIC
Gas Malaysia, Financial Daily (27Jul for glovemakers), Star Biz (4 Sep for Gas Malaysia)
Bracing that gas subsidies will be removed, glovemakersare diversifying energy needs.They also intend to pass on the
incremental cost to buyers.
Glovemakers
Businesses are showing a willingness to pay market prices for energy.
