TPA system to benefit TNB over long term

TNB, with its annual gas costs amounting to over RM8bil, has the scale to meaningfully benefit from the TPA.

PETALING JAYA: The Third Party Access (TPA) system, which is now operationally in place, is expected to see Tenaga Nasional Bhd (TNB) as the potential longer-term beneficiary.

The utility giant, Maybank Investment Bank (IB) Research said, will benefit from some fuel savings when fuel procurement reforms are implemented.

It said the TPA, however, would be broadly negative to gas utilities Petronas Gas Bhd and Gas Malaysia Bhd.

This is with Petronas Gas’ transportation tariff on a downtrend to 2026, and Gas Malaysia potentially facing some form of volume risk from new retailers.

“In addition, the gas utilities are plagued by poor regulatory disclosures, ” the research house noted in a report.

It said TNB, with its annual gas costs amounting to over RM8bil, has the scale to meaningfully benefit from the TPA.

TNB has already announced its intention to venture further into gas procurement, having successfully conducted a trial cargo of LNG supplied by Shell Malaysia under the TPA in October last year.

While there is currently no mechanism to incentivise TNB or IPPs to lower fuel costs, the research house noted that this could change going forward, with fuel procurement being a potential area of reform by the regulator.

“We believe some form of a sharing mechanism (of potential fuel savings) could be introduced in the near future, ” it said.

Maybank IB Research It has a “buy” call on TNB and a “hold” call on both Gas Malaysia and Petronas Gas.