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Natural gas fuelling a sustainable future for Malaysian gas industry

Natural gas fuelling a sustainable future for Malaysian gas industry

30 Dec 2021

Natural gas, the cleanest hydrocarbon, has an important role to play in carbon emission reduction, especially in Malaysia.

The government has outlined several initiatives to boost the energy industry for future sustainable energy in the 12th Malaysia Plan (12MP) which include natural gas such as the proposed comprehensive National Energy Policy that will provide long-term strategic direction to support the aspiration of carbon neutrality.

As important as it was in the past, natural gas will continue to be significantly needed for power generation and as a partner to renewable energy in Malaysia’s sustainable future energy system.

Natural gas is anticipated to play a long-term role in providing energy access and security to the nation, and at the same time helping the country to meet its improved greenhouse carbon emissions reduction target of 45 per cent by 2030.

Malaysian Gas Symposium 2021

In recognition of the growing importance of natural gas in Malaysia’s clean energy transition, Malaysian the Gas Association (MGA) once again had successfully organised the Malaysian Gas Symposium (MyGAS) 2021 from Nov 22 to 25, 2021. 

Throughout the four days of panel discussions, MyGAS serves as a platform of discourse for speakers from Malaysia and overseas to deliberate the important role of gas in the energy transition.

Developing countries in our region, Malaysia included, are continuously challenged to balance the energy trilemma, where energy security and affordability remains high in their priorities.

About 152 million people in the region lack access to electricity, while an additional 900 million lack access to clean cooking. 

A hasty move to energy transition would lead to unintended consequences in jeopardising not only our energy security but also the economic growth. For example, in the UK, the installed capacity for a wind turbine is 24GW. 

However, for a few months this year, wind drought resulted in a major drop in the generation capability of the wind turbines. Fortunately, natural gas was available to ensure an uninterrupted power supply.

In his statement at the MyGAS opening session, MGA president Abdul Aziz Othman highlighted that in accelerating the energy transition, Malaysia must balance its priorities that are important to the nation.

He noted that energy policies are among the key elements to achieve pragmatic and just energy transition, and natural gas, together with renewable and other low gasses, will remain relevant in providing future energy access and security in Malaysia.

Malaysia’s Liberalisation Goals

Natural gas, combined with low carbon and renewable gases, will continue to play an important role in the National Energy Policy and Malaysia’s pathway to achieving carbon neutrality

MyGAS captured several important industry’s views throughout its panel sessions.

Federation of Malaysian Manufacturers chairman of the Energy Management Committee Steven Aroki, who moderated MyGAS panel session three, concluded that it was a new trend for market liberalisation and with that comes the challenges when the price changes.

“Full synergy by all parties across the gas value chain is important in achieving our liberalisation goals. We look forward to more improvements towards a transparent Malaysian gas market,” he pointed out. 

On another note, Nano Malaysia Bhd chief executive officer Dr Rezal Khairi Ahmad highlighted in the MyGAS panel session four that hydrogen and natural gas were both partners and can live in harmony.

“These two can benefit one another, hydrogen and natural gas can create a good symbiosis in achieving the green and decarbonising agenda for a sustainable future of the Malaysian energy sector,” he noted.

A report by the International Energy Agency published in May 2021 forecast that about 40 per cent of hydrogen in 2050 will be produced from natural gas.

Natural Gas to remain as Core Fuel in Energy Mix

Natural gas is expected to remain as a core fuel in the energy mix even in 2050. 

According to DNV’s Energy Transition Outlook 2021, natural gas supply in 2050 is expected to remain close to the 2019 level and is expected to form approximately 25 per cent of the global total primary energy supply in 2050. 

Similarly, demand for natural gas in the power sector in 2050 is expected to remain at the same level as in 2019.

Themed “Role of Gas in the pathway Towards Carbon Neutral Malaysian by 2050”, MyGAS is indeed held in a timely manner with Malaysia’s commitment to achieving carbon neutrality as early as 2050.

Malaysia has put forward a bolder commitment — to no longer build coal-fired power plants moving forward. This means that natural gas is the most logical and best option to take over on a full role of providing base-load power. 

The market price of gas presently will not only provide incentive to attract more players into the market but will also ensure the success of market liberalisation.

Furthermore, a vibrant market will encourage greater utilisation of gas, thereby stimulating more business opportunities and investments continuity across the gas industry value chain.

Renewables alone is not the silver bullet. Natural gas as the cleanest fossil fuel will play an important role to complement the growth of emerging gasses such as hydrogen, bio-methane and ammonia in accelerating Malaysia’s carbon neutral commitment.

Source: Bernama