Malaysia:Foreign firms defer investments over gas concerns

NEWS UPDATES

13 Jan 2009

Concerns over gas supply have forced eight foreign companies to defer investments worth up to 8 billion ringgit ($2.24 billion) in Malaysia.

Companies who have deferred investments include Samsung and Nippon Electric Glass (5214.T), Reuters quoted the Star newspaper as reporting.

The paper quoted International Trade and Industry Minister Muhyiddin Yassin as saying that the companies were concerned with the supply of gas to their plants rather than the pricing.

Malaysia is a producer and exporter of natural gas, and while there is no gas shortage, concerns of over supply to industries remain due to the distribution infrastructure.

"This had affected investments ranging from 5 billion ringgit to 8 billion ringgit," the newspaper quoted him as saying.

State-controlled gas supplier Petronas Gas has stated it was unable to redistribute the gas supply before 2014, said Muhyiddin.

"We are pushing it to be earlier as the industry needs gas," he said.

The companies affected were involved in steel manufacturing and electronics, and were from the US, Europe, Japan and South Korea, he said.

Petronas Gas operates six Gas Processing Plants (GPP), which have a combined gas production capacity of more than 2,000 million standard cubic feet (mmscfd) in addition to producing by-products such as ethane, propane, butane and condensates.

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