Consultation Paper on Gas Supply to the Power Sector Post-GFA

Tomorrow is the final day for stakeholders to submit feedback to Suruhanjaya Tenaga on the future gas supply arrangement to the power sector post-Gas Framework Agreement. That is why I thought it is timely to share this reflection.

More than ten years ago, I was involved in the negotiation of the Gas Framework Agreement between PETRONAS and TNB. It was one of the most intense negotiations of my professional career.

The GFA was not an ordinary contract. It was created to manage complex legacy issues in Malaysia's gas-to-power sector, where gas supply, power generation, system dispatch, regulated pricing, LNG importation and national interest were all connected.

At that time, PETRONAS carried gas supply obligations, while TNB, through the Single Buyer and Grid System Operator, played the central role in planning, nomination and dispatch. In simple terms, the party supplying the gas was not always the party controlling the actual power dispatch.

That was why the GFA mattered. It became an umbrella framework to bring clarity and discipline to the system. It helped manage nomination, allocated quantities, take-or-pay, shortfall, excess gas, LNG-linked pricing and billing arrangements.

The Landscape Has Changed

Now, the landscape has changed. Domestic gas is declining. LNG dependence is rising. Electricity demand is evolving. Data centres and energy-intensive industries are changing the load profile. The market is also moving towards more competition, licensed shippers and third-party access.

The old mechanism served its time. The next mechanism must serve the future.

In my view, the post-GFA framework must not rush into fragmentation in the name of liberalisation. Gas supply to power is not an ordinary commodity market. It is part of national energy security.

The new framework must answer key questions: Who carries system-wide gas balancing risk? How should LNG volatility be managed? How do we ensure supply security if a shipper fails? How do we align gas procurement with power dispatch?

Where New Tools Can Help

This is where new thinking and new tools matter. And perhaps this is also where new tools can help.

With today's advancement in AI and agentic systems, future gas-to-power arrangements can be designed with far greater intelligence. AI can support demand forecasting, fuel optimisation, infrastructure capacity modelling, real-time risk monitoring, scenario simulation and early-warning mechanisms.

An agentic system could continuously assess electricity demand, generator availability, nominations, send-out capacity, constraints, market prices and contractual exposure, then recommend the most efficient and secure supply response.

That kind of capability was not available to us in the same way ten years ago. These tools can support better decisions, but the principle remains the same.

The contract must serve the system. The system must serve the country. Energy security is not built by chance. It is negotiated, structured, tested and continuously improved.

Reference: Suruhanjaya Tenaga Consultation Paper — "Gas Supply to the Power Sector Post Gas Framework Agreement (GFA): Consultation on Future Market Arrangements for Uncontracted Gas Volumes in Peninsular Malaysia."