Malaysia: Petronas Gas to gain from new leasing deals

Malaysia: Petronas Gas to gain from new leasing deals

MALAYSIA'S Petronas Gas Bhd (PetGas) hopes to gain from leasing agreements
once the contracts under the new Gas Supply (amendment) Act 2016 come into
effect.

The Act, which was gazetted in September last year, provides for third party
access to Petronas' regasification and transmission infrastructure in an
effort to liberalise the country's gas supply segment.

Speaking to reporters after the company's AGM here, PetGas chairman Datuk
Mohd Anuar Taib said the company's infrastructure was in place for third
party access, but details on the implementation, including the new tariff
rates were still being ironed out with the Energy Commission.

He added that there was a one-year grace period for preparation and
discussions before the Act was enforced.

The company, he said, was in support of the move to liberalise the segment
and was in compliance with most of the requirements of the new Act.

PetGas managing director and CEO Yusa' Hassan said the company hoped the new
Act would benefit the company.

"In terms of impact, we are hoping that it will benefit us. We do see
opportunity for PetGas from the liberalisation, because we still have
unutilised capacity.

"With third parties coming in, we are ready to provide the infrastructure,
and hopefully we can benefit from the higher utilisation," he said.

In its annual report, the company stated that the enforcement of the Gas
Supply (amendment) Act was among the major risks for the year ahead.

"We need to ensure compliance with the Act, as well as be able to face
increased competition and regulated tariffs.

"At the same time we are looking into ways to ensure the continued stability
of our revenue while embarking on various cost-reduction initiatives to
streamline our operations," it said.

On the company's capital expenditure for the year, Mohd Anuar said it would
be slightly over RM500mil, and the bulk of this would be spent on the
ongoing projects in Pengerang.

On another matter, Yusa' said the company's three projects supporting the
development of the Pengerang Integrated Complex in Johor were on track.

The projects are the LNG Regasification Terminal in Pengerang (RGTP), the
Pengerang Gas Pipeline Project and the Air Separation Unit (ASU).

Upon commissioning, he said the projects would bring in additional revenue
to the company.

The second RGTP is at 86 per cent completion and on track to commission its
first storage tank by the end of the year, while the ASU project is
scheduled for commissioning by end-2018.

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com