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    CHAPTER 6 GAS UTILIZATION

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    GAS RESERVES STATUS

    Malaysia has the 16th largest gas reserves and the 30th  largest crude oil reserves in the

    world as at end 2003. Also Malaysia’s gas reserves stood at 84.9 trillion cubic feet (tcf)

    and this translates to about 66.8 years of reserves per production ratio.

    Source: www.gasmalaysia.com

    Natural Gas reserves under the Malaysia-Thailand Joint Development Area (JDA) are

    estimated to be around ten trillion cubic feet. The gas wills tie-in with the Peninsular Gas

    Utilisation (PGU) system at Changlun, Kedah. Initial volume is 290 million standard cubic

    feet per day (mmscfd) rising to 550 mmscfd by year 2005 / 2006.

    Apart from the Malaysia-Thailand JDA, a new source of gas supply to Peninsular

    Malaysia will be from the West Natuna Field in Indonesia. PETRONAS signed an

    agreement on 28 March 2001 with PERTAMINA (The Indonesian state oil and gas

    company), for the import of 1.5 trillion scf of gas over a period of 20 years.

    Another agreement involving the supply of 300 mmscfd to Malaysia for 20 years is

    expected to be concluded by the end of 2002. The delivery of gas from south Sumatra to

    Malaysia is scheduled for early 2005.

    Figure 6-1: Malaysian Natural Gas Reserves

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    Fig. 6-2 and Fig. 6-3 from BP Review of World Gas 2003 shows Asian and world gas

    reserved status as at end 2003.

    Figure 6-2: Asian proved gas reserves status

    ASEAN TOTAL: ~224 TSCF

    BRUNEI, 5%

    MYANMAR, 6%

    THAILAND, 7% VIETNAM, 4%

    MALAYSIA, 38% INDONESIA, 40%

     

    Figure 6-3: World Proved Gas Reserves Status

    WORLD TOTAL: ~ 6205 TSCF

    NORTH AMERICA

    4%AFRICA

    8%

    ASIA PACIFIC

    8% SOUTH AMERICA

    4%

    MIDDLE EAST

    41% EUROPE &

    EURASIA

    35%

     

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    MALAYSIA ENERGY DEMAND

    Energy demand is set to outpace the growth of GDP and natural gas is poised to face a

    higher growth rate. The contribution of natural gas as a main source of primary

    commercial energy supply is expected to increase from 29.9 percent in year 2000 to 37.1 percent in year 2005.

    Natural gas will continue to remain the fuel of choice for power generation as compared

    to oil, coal and hydro, accounting for 61 percent of the fuel generation mix.

    Source: www.gasmalaysia.com

    By year 2005, 1,687 mmscfd of gas is expected to be used for electricity generation.

    COMPONENT OF NATURAL GAS

    The organic origin of Natural Gas explains why it is made of hydrocarbons (compounds

    of hydrogen and carbon). The principle ingredient of Natural Gas is the hydrocarbon

    compound called methane. In many Natural Gas deposits, methane makes up 80 to 90

    percent of the gas.

    Figure 6-4: Fuel for Power Generation

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    Source: www.gasmalaysia.com

    Natural Gas may contain other small hydrocarbon molecules such as ethane, propane,

    butane, pentane, and hexane. Besides these hydrocarbons, it may also comprise such

    inorganic compounds as nitrogen, helium, carbon dioxide and hydrogen sulphide.

    Constituent of Natural Gas

    Figure 6-5: Natural Gas Composition

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    Gas Malaysia Sdn. Bhd.

    Gas Malaysia  is joint venture company established by MMC-Shapadu Holdings (55%),

    Tokyo Gas-Mitsui & Co. Holdings (25%) and PETRONAS (20%).

    Gas Malaysia was incorporated in May 1992 to promote, construct and operate Natural

    Gas Distribution System in Peninsular Malaysia. Their mission is to provide the cleanest,

    safest, cost effective and reliable energy solutions to the nation.

    Gas Malaysia supplies Natural Gas to a wide range of industries namely chemical, glass,

    basic metal, rubber, non metallic material and others. As at June 2004, it has a network

    of over 900 kilometers in pipelines, which leads to over 32 communities and enables

    supply to key industrial areas. Gas Malaysia pipes gas to industrial, commercial and

    residential sectors and derives about 98% of its revenue from the industrial sector

    comprising mainly manufacturing plants.

    With the announcement of the new gas tariff made in March 2003, it has positioned

    Natural Gas as the most affordable and attractive energy solution. The fixed gas price

    system has eliminated the volatility of energy pricing. Natural Gas is currently in between

    38% to 63% cheaper than other alternative fuel. With the potential savings in sight, Gas

    Malaysia is expecting a sharp increase in the demand for Natural Gas. 

    GAS UTILIZATION

    Factors which influence the pattern of gas utilization as follow;

    -  Sources of gas (locally produced vs. import)

    -  Infrastructure (existing pipeline vs. newly built)

    -  Weather

    -  Energy Intensive vs. Non energy intensive industries

    -  Population density

    -  Alternative fuel (price)

    -  Government policy

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    Pattern of Gas Utilization

    Table 6-1: Breakdown of pattern of gas utilization for various countries

    M’SIA (%) EUROPE (%) USA (%) JAPAN (%)

    Petrochemical 9 6 4 2

    Power generation 79 13 14 67

    Industrial/Commercial 10 27 29 7

    Domestic 1 48 40 22

    Others 1 6 13 2

    NATURAL GAS FOR POWER GENERATION

    Sources of primary energy for electricity generation

    a) Hydropower (water)

    b) Nuclear power (uranium, thorium converted to plutonium)

    c) Solar power (sun)

    d) Fossil fuels (coal, fuel oil, NG)

    e) Renewable (wind, tidal waves, geothermal, wood agro-waste, municipal waste)

    Figure 6-6: Electricity Generation by Fuel 1970-2020 (106 kWh)

    Source: EIA Annual Energy Outlook 2002 with Projections to 2020 

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    Capital cost of power plants

    1. Hydropower most expensive

    2. Nuclear power

    3. Steam turbine (oil, coal)

    4. Combined Cycle Power Plant (gas)

    5. Gas turbine (gas) least expensive

    Typical Power Plant Efficiency

    a) Combined Cycle 40-55%

    b) Diesel Engine 40-45%

    c) Steam Turbine 26-42%

    d) Nuclear Plant 30-35%

    e) Gas Turbine 25-30%

    Advantages

    -  Reliant supply – large and growing gas reserve

    -  Lower green house emission – environmental-friendly

    -   Site is clean and compact

    -  NOx emission control technology available

    -  Negligible sulfur and ash emission

    -  Development of high efficiency and low cost CCPP

    -  CCPP can be built in much more shorter time than other technologies

    Disadvantages 

    -   Possible leakage problem from pipeline

    -  Not a sustainable fuel

    -  Extraction of natural gas and the construction of natural gas power plants can

    destroy natural habitat for animals and plants.

    -  Possible land resource impacts include erosion, loss of soil productivity, and

    landslides.

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    Table 6-3: Fuel% for power generation in Malaysia

    FUEL/YEAR 1980 1984 1986 1988 1993 1998 2000

    Hydropower 14 25 25 28 20 8 12

    Oil 85 73 58 49 25 18 13

    Natural gas 1 2 17 21 45 67 70

    Coal 0 0 0 2 10 7 5

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    Electricity Generation 

    Power plants use several methods in converting natural gas to electricity. One process is

    to burn up the gas in a boiler to produce steam, which is then used by a steam turbine to

    generate electricity. A more common approach is to burn the gas in a combustion turbine to generate electricity.

    Another technology that attracts many power plants company is to burn the natural gas

    in a combustion turbine and use the hot combustion turbine exhaust to make steam to

    drive a steam turbine. This technology is called "combined cycle" and said that it can

    achieves a higher efficiency by using the same fuel source twice. Combined-cycle plants

    offer extremely high efficiency, clean operation, low capital costs and shorter

    construction lead times.

    Figure 6-7 shows the increasing thermal efficiency from the use of thermal brown coal to

    cogeneration and an inverse relationship to carbon dioxide emissions.

    Figure 6-7: Thermal efficiency of several methods in electricity generation

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    Environmental benefit of natural gas 

    Coal contains more carbon and less hydrogen than other fossil fuels such as oil and

    natural gas, and as such it gives off more CO2 per unit of electricity produced than any

    other fuel. As shown in Table 6-8 coal combust

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