Thursday, June 9, 2011

TNB buys power from Singapore to ensure supply security

PETALING JAYA: Tenaga Nasional Bhd (TNB) is buying power from Singapore-based PowerSeraya Ltd, a unit of YTL Power International Bhd, as a shutdown of Petroliam Nasional Bhd-owned gas production platforms for maintenance work made worse a dwindling gas supply situation.

Chief executive officer Datuk Seri Che Khalib Mohd Noh said in a reply to a StarBiz query that the purchase was made to ensure supply security.

“We're buying 180MW only, which represents 1.5% of total demand,” Che Khalib said.

According to a Singapore Business Times report, the utility firm's purchase, which was extended to June 15, marked the first ever cross-border commercial sale of power between the two countries.

The report said the purchase was made following an approach by TNB in April to Singapore's Energy Market Authority and the generating companies for electricity supply needed to tide over capacity shortages “for a few months”.

This was caused by natural gas feedstock shortages faced by TNB's power stations due to the maintenance shutdowns, which could further reduce by 30% in the May to June period.

Singapore Business Times said TNB initially looked to buy electricity for just a month but persistent gas supply issues had forced the utility firm to extend the purchase.

Analysts believe that the purchase was made in case the coal-fired plants, which together with the gas-fired plants made up the bulk of electricity generating capacity, tripped.

OSK Research Sdn Bhd research head Chris Eng said if this happened, there would be the purchase from SerayaPower to rely on.

He added that gas supply had been tight since April but supply issues would likely ease up this month.

PowerSeraya chief executive officer John Ng was quoted by the report as saying that the amount of electricity exported to TNB was “small” and would come from a designated oil-firing steam plant at a 3,800MW facility.

He declined to go into commercial details of the deal but expressed the view that “we hope it opens the doors for future exports and imports of electricity between the two countries on a longer term basis”.

Previous instances of cross-border electricity exports between the two were only made during emergency outages, although Singapore has sounded out the possibility of the island-republic's generating companies importing electricity in the medium term, as one way to diversify energy options.

Operationally, some 200MW of electricity could be transmitted through two 230kV submarine cables linking Malaysia's national power grid with Singapore's transmission network at Senoko.

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