Wednesday, September 14, 2011

TNB: Gas shortage may force us to borrow

Kuala Lumpur: For the first time ever, Tenaga Nasional Bhd (TNB) may have to go to the banks to seek money for its operational expenditure if the gas supply shortage persists next year.

TNB president and chief executive officer Datuk Seri Che Khalib Mohamad Noh said the company had spent close to RM2.1 billion from January 2010 to August this year to substitute gas with distillates (diesel) as a temporary measure.
Distillates cost five times more than gas.

"We have never asked for opex (operational expenditure) before. This would be our first time ever. All this while we kept going to the banks for capex (capital expenditure)," he told reporters after TNB's Hari Raya Open House yesterday.

We cannot go on like this. Right now, the additional cost is being incurred by us through our reserves. We used to have RM5 billion (in reserves) which have depleted and we cannot finance that kind of money for next year all by ourselves anymore," Che Khalib added.

TNB has proposed to the government that the extra fuel costs be shared between the utility, Petronas and IPPs (independent power producers).

"This is bleeding the company now. If that proposal comes through, then we won't go to the banks for opex, but if it doesn't, then we have no choice, but to head to the banks," he added.

TNB expects the cost for distillates to reach an estimated RM3 billion by the end of this year.

"This is why we don't think we can do well this year. Don't expect our fourth quarter results to be good, it will be bad or possibly the worst ever result," Che Khalib added.

However, he said consumers will not have to worry because any additional cost will not be passed on to them.

The gas problem would only end after Malaysia's first liquefied natural gas import terminal in Malacca is up by next July.

"We really hope it comes up on time," he added.

Read more: TNB: Gas shortage may force us to borrow http://www.btimes.com.my/Current_News/BTIMES/articles/jrtnb/Article/index_html#ixzz1Xt8nLv8w

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