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Kuala Lumpur


Kuala Lumpur: A vibrant energy city

Located in the heart of Southeast Asia, Malaysia’s capital city, the Federal Territory of Kuala Lumpur (widely known as Kuala Lumpur), is fast emerging as the leading energy city of the Asia-Pacific region.

Greater Kuala Lumpur, covering an area of 2793 km2, has a combined population of over 6 million people and houses about 20% of the country’s population. Kuala Lumpur, meaning “the muddy confluence of two rivers” in the local Malay language, has grown from a backwater town upon its inception to hosting the offices of numerous multi-national corporations.

The city’s remarkable growth is buoyed by the existence of world-class infrastructure and a talented, largely English-speaking workforce. Two international airports located on the outskirts of the city serve over 30 million travelers annually, with flights operating daily to all the capitals and major cities of East and Southeast Asia. In the city, an integrated light-rail and commuter train system as well as a network of expressways serve millions of local commuters every day. Two lines of a new mass rapid transit system (MRT) costing USD 15 billion are being constructed to boost public transport usage to over 50% by 2020. Broadband penetration rate is also high with speedy internet access provided by local telecommunication companies.

As the regional energy hub, Kuala Lumpur is home to a number of major industry-related companies. PETRONAS, the national oil and gas giant, is headquartered at the iconic PETRONAS Twin Towers while international oil companies such as Shell, ExxonMobil, Murphy Oil and Talisman also have presence in the city. In addition, the city has also hosted major oil and gas conferences such as the World Gas Conference in 2012, as well as Subsea Asia and the inaugural Offshore Technology Conference (OTC) Asia in 2014. Conferences have attracted thousands of local and international participants and helped to bolster Kuala Lumpur’s key position in the region as a centre for industry experts to converge.

The Energy Sector in Malaysia

The energy sector continues to be an important contributor to Malaysia’s development over the pat 40 years and today it constitutes approximately 15.6% of the country’s gross domestic product in 2013. Malaysia produces an average of 669,000 barrels of oil per day and is a net petroleum exporter. It is the second largest oil producer in southeast Asia. Malaysia’s refinery capacity currently stands at 539,000 barrels per day and it has 4 billion barrels of proven oil reserves. Malaysia is also the second largest exporter of liquefied natural gas (LNG) in the world. In 2013, the country produced around 2.2 trillion cubic feet of proven natural gas reserves.

Although 75% of Malaysia’s current electricity generation is dependent on natural gas and oil, continuous efforts are being made to diversify the country’s energy portfolio to include renewable sources such as solar and hydroelectricity. The national Renewable Energy Policy and Action Plan was formulated in 2009 to increase the contribution of renewable resources in the country’s power generation mix, as well as to facilitate the domestic renewable energy industry’s growth. A feed-in tariff system for individuals and companies was gazetted into law in 2011 and has helped to incentivize the generation of energy from renewables such as biomass and photovoltaic cells. Launched in 2009, the Green Building Index of Malaysia has also resulted in the development of more than 200 certified energy efficient buildings both in Kuala Lumpur and around the country as of 2013.

Malaysia as a regional base

Malaysia is strategically located in the middle of Southeast Asia, a vibrant region of over 600 million people with a current combined GDP of over USD 2.4 trillion. As a founding member of the Association of Southeast Asian Nations (ASEAN), Malaysia has played a key role in fostering strong regional economic cooperation. The realization of the ASEAN Economic Community in 2015 will see the creation of a single duty free market with substantial liberalization of services sub-sectors. As such, many foreign companies such as the Royal Dutch Shell, Murphy Oil Corporation, Schlumberger, Halliburton, Petrofac, Aker Solutions, and Technip have chosen Kuala Lumpur as base for their regional headquarters.

The future for Kuala Lumpur as the regional hub city for the energy industry is both bright and promising as manifested by the city’s dynamic growth in recent years. The World Bank ranks Malaysia 18th in its ease of doing business index, while the Global Competitiveness Report ranks Malaysia the 20th most competitive economy in the world. With supportive pro-business policies and concerted efforts between the public and private sectors, the energy industry will continue to play an integral role in the city’s future.