Finding a gas solution

By
Nelson Moura

The government is hopeful gas will flow freely to Macau again, as a possible solution for the cityÂ’s exclusive natural gas supplierÂ’s operation blockage could be in sight, according to local broadcaster TDM.
The Co-ordinator of the Energy Sector Development Office (GDSE), Hoi Chi Leong, told the broadcaster that the shareholders from Sinosky Energy Holdings, the cityÂ’s exclusive natural gas importer, have decided to change the companyÂ’s ownership, which could provide a breakthrough in the recent gas halt.
Sinosky, a joint venture between Macau Natural Gas Co and Mainland ChinaÂ’s oil giant Sinopec, was awarded a 15-year concession contract by the government in 2006. Since January the energy company suspended its supply to the city, claiming it couldnÂ’t cope with the huge losses, as it was selling gas cheaper in Macau than the buying price in China, TDM reported.
Sinosky has posted accumulated losses of MOP213 million (US$26.6 million) in the last 10 years, with an accumulated MOP35.6 million loss in 2015. The company claims that import prices per cubic metre of natural gas amounted to MOP4.59 in 2015 on average, whilst it was selling at only MOP2.74 per cubic metre – as approved by the government – in 2008, Business Daily reported previously.
Now the government is hopeful a direction change will put an end to the gas stalemate.
“The shareholders have reached an agreement on transferring the shares, but until now, we have not received any official document, so we have to wait until the final document reaches the government before we can publicly announce this,” Hoi Chi Leong told TDM, adding he believed they would receive a response soon.
Cost and effect
Hoi Chi Leong also indicated the government is currently assessing what impact the possible construction of a new natural gas processing plant for electricity production in Coloane, could have on MacauÂ’s electricity prices. The GDSE Co-ordinator stated that construction of the energy plant, which could cost around MOP3 billion, is under evaluation in order to determine the stability of the natural gas supply and ensure that the project exploration reaches its full potential.
In April, due to low international fuel prices, local power generating costs registered a decrease, with the sole local power distributor CEM – Companhia de Electricidade de Macau lowering the second quarter Tariff Clause Adjustment (TCA) to MOP0.36 cents per kWh, Business Daily reported.
CEMÂ’s power generation capacity consists of three power stations, one located in Macau and two in Coloane, with CEM having a total installed capacity of 472 MW, according to the companyÂ’s data. CEM data also showed that in 2015, the gross energy demand was 4966 GWh, of which 753 GWh was produced by CEM and 4213 GWh was acquired from external suppliers.