Growing data centre demand for electricity an opportunity for Petronas – Johari

KUALA LUMPUR: Petroliam Nasional Bhd (Petronas) could tap new opportunities in the domestic natural gas market as Malaysia's growing data centre industry drives demand for electricity, said Investment, Trade and Industry Minister Datuk Seri Johari Abdul Ghani.

He said the rising electricity requirements of data centres could create another commercially attractive market for natural gas, provided it is supplied at market prices without subsidies.

"In the past, Petronas signed long-term contracts with countries such as Japan to export gas. However, with the growth of data centres, there is an opportunity to supply gas for power generation and sell electricity at retail prices.

"Under long-term export agreements, gas is sold at wholesale prices. But by supplying power to data centres, there is an opportunity to obtain commercial market prices.

"Petronas can embark on this, and still export, sell to the data centres. And data centres will pay you the price," he said in his keynote address at the Bursa Malaysia Sectoral Series: Powering the AI Era.

Johari said the growing electricity demand from data centres could also create opportunities to expand and diversify Malaysia's energy supply, particularly through the integration of solar power with battery energy storage systems (BESS).

He said BESS could play a complementary role in the country's energy distribution system by improving efficiency and managing fluctuations in electricity supply.

"For example, batteries can store electricity when generation exceeds immediate demand and release it when needed," he said.

Johari said meeting the rising demand for electricity presents both challenges and opportunities, particularly in attracting new investments in power generation, energy storage, grid technologies, engineering and domestic supply chains.

He said priority should be given to mobilising capital towards solutions that can support Malaysia's long-term energy requirements.

"Ultimately, Malaysia's ambition is not merely to attract more data-centre investments, but to build the infrastructure necessary for a competitive digital economy.

"This must be achieved without compromising the reliability and affordability of electricity for households and existing industries, or the sustainable management of the country's natural resources," he added.