The history of natural gas utilisation in Peninsular Malaysia started with the commencement of the Peninsular Malaysia Gas Utilisation (PGU) project in 1984. The project was developed in three phases over a period of less than two decades covering almost the entire area of Peninsular Malaysia.

While the power sector will continue to drive the future growth of PGU gas demand, the demand from the gas based industries is also expected to increase rapidly in tandem with the growth of the national economy. In recent years, the role of natural gas is becoming more important as the existing and upcoming petrochemical industries rely heavily on the natural gas for the feed stocks to generate high value added products. Indeed, the PGU project acts as a catalyst to the power generation sector and other gas based industries providing significant contribution to the national economy.

Malaysia is endowed with abundant natural gas resources to support the long term development of the PGU project. In addition to the commitment to develop the discovered gas resources, PETRONAS through its Production Sharing Contractors (PSCs) is also committed to intensify exploration efforts to discover new gas resources. Prudent planning is therefore vital for ensuring a sustainable natural gas supply to the gas projects.

This paper will review the historical and future outlook of the gas industry in Peninsular Malaysia. Among others, the paper will cover topics on an overview of the PGU project and challenges in gas supply planning to meet demand. Prudent gas supply planning will result in an optimum gas supply and demand matching, sufficient excess capacity margin and optimisation in gas development and evacuation which in turn will improve companies' bottom line as well as other benefits to all parties.

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