State-owned power producer Tenaga Nasional Bhd (TNB) is contemplating raising funds from the bond market soon.

NONEPresident and CEO Che Khalib Mohd Noh said: "If the gas shortage problem continues, we may have to go to the market in one or two months to raise the fund for our working capital.

"It could be RM1 billion," he told Bernama in an interview.

The shortage of gas compels TNB to spend an additional RM3 billion on alternative fuels for power generation this year.

“We are talking about a minimum of RM10 million a day extra due to the gas shortage," said Che Khalib, adding that TNB could not be shouldering this heavy burden alone.

He has presented the company's case to the Energy, Green Technology and Water Ministry and hopes to receive the outcome by end of September.

"We have to wait for recommendations by the Energy Commission to the Economic Council. Hopefully, we can get the decision by then," he said.

He said TNB would understand that the volume of gas would be reduced if there was maintenance for Petronas facilities, but "even on days when there's no maintenance for Petronas facilities, the volume also remains low".

"We are not getting what we are supposed to be getting from the power sector, which is 1,250 million standard cu ft per day (mmscfd) for this year. We can consider ourselves lucky if we can get 1,000 mmscfd or 1,050 mmscfd, but in many days we get below 1,000 mmscfd," he said.

Higher maintenance cost

Che Khalib said due to the shortage of gas, Tenaga had no option but to use distillate since the last four to five months for some of its gas-fired power plants, causing an increase of 30-40 percent in the maintenance cost of the plants.

"The number of breakdowns has also increased. The maintenance cycle has to be shortened as using distillate shortens the life of our machines particularly. The interval is getting shorter and shorter.

"Our worry is, if this prolongs, we’ll come to a point where all machines need to be maintained at the same time. Then, we’ll have a serious problem.

"To do a major overhaul of a gas plant will cost RM150-RM200 million and a normal overhaul will cost RM30-RM40 million," he said.

On the company’s financial performance, Che Khalib said the fourth quarter would be very bad after recording a loss of RM440 million for its third quarter.

"There will be a little profit for the full year as we have the advantage of the first two quarters. The loss for the third quarter and the fourth, which will be bad, will erode the profits registered for the first two quarters," he said.

Tenaga reported net profit of RM3.197 billion for its 2010 financial year.

"If you are talking about RM300-RM400 million a month (to buy distillate) of additional costs, no organisation can sustain," Che Khalib added.

- Bernama