Petronas asks for lower charges at Bintulu Port
Petronas, the national petroleum company, is only paying between one and two sen for every ringgit it earns from liquefied natural gas (LNG) sales on port charges at Bintulu Port.
According to information made available to malaysiakini from various sources connected with the port and gas industry, about 20 sen out of every revenue ringgit goes to transportation, including port charges.
Even though Petronas is just paying a fraction of its revenue on port charges in Bintulu, it is still pursuing its request to have the charges revised downwards.
Petronas, the national petroleum company, is only paying between one and two sen for every ringgit it earns from liquefied natural gas (LNG) sales on port charges at Bintulu Port.
According to information made available to malaysiakini from various sources connected with the port and gas industry, about 20 sen out of every revenue ringgit goes to transportation, including port charges.
Negligible charges
A major portion of the transportation cost is chartering charges for LNG tankers which are owned and operated by a Petronas subsidiary.
"The charges that Petronas' LNG tankers pay to the LNG port in Bintulu are quite negligible," the sources said, adding that the larger transportation-related costs are related to chartering of LNG tankers.
The question of Petronas asking Bintulu Port to revise the port charges downwards first cropped up in 1997, when the national oil company put in a paper arguing its case to the Ministry of Finance.
The Ministry of Finance Incorporated owns a major stake in Bintulu Port Holdings Sdn Bhd.
Recently, the issue cropped up again with Petronas officials repeating its request.
However, at a press conference in Bintulu on Thursday after opening the RM16.6 billion third LNG production facility, Prime Minister Dr Mahathir Mohamad said: "It (the charges) may be high to Petronas, (but) it is relatively cheap to the government."
He said the Federal Government is still studying the proposal to review the port charges for LNG tankers calling at Bintulu Port.
Foreign urging
According to reliable sources, Petronas' repeated requests for a downward adjustment to Bintulu port charges would appear to be more at the urging of its foreign equity partners who would want to see greater profit dividends.
With the opening of the third LNG facility, boosting Bintulu's annual production capacity to 23 million tonnes and making it the world's largest, revenue is expected to soar.
Buyers are gas utility companies in Japan, Korea and Taiwan. It has a total of 12 customers in these countries.
Since production first started in 1983, LNG sales up to March this year netted a total of RM136 billion.
Last year's LNG exports brought in sales of RM12.8 billion or 3.6 per cent of Malaysia's total exports.
Total investment on the Bintulu LNG facility to date is RM37 billion.
There are a total of 300 LNG shipments out of Bintulu Port per year, with port charges for each tanker handling between RM700,000 and RM800,000, contributing about RM300 million in port revenue each year.
LNG shipments account for more than 80 per cent of Bintulu Port's total revenue.
The port is situated on the northern coast of Borneo about 25 km outside Bintulu town and is also becoming an increasingly important regional hub for container shipping.
