Petronas Gas: RM4.5b capex for next 5 years

KUALA LUMPUR: Petronas Gas Bhd (PGB) has allocated RM4.5 billion in capital expenditure (capex) for the next five years, said its chairman Tan Sri Shamsul Azhar Abbas.
“We are continuously looking for growth projects...we will continue to maintain our capex kind of expense to the tune of about RM300 million a year and for the next five years, our capex is going to be in the region of RM4.5 billion, mainly to cater for the growth projects,” he told reporters after its AGM yesterday.
Shamsul said the two major growth projects that it is involved in are the LNG Regasification Terminal (RGT) and the Air Separation Unit (ASU) project, both of which are located in Pengerang.
He said the RGT project is now at 25% progress on ground and the first storage tank should be commissioned before the end of 2017 while the second tank, which will complete the whole project, will be commissioned by the first quarter of 2018.
The group also aims to enter into its final investment decision for the ASU project by the second quarter of this year. The ASU is being built to cater for the requirements of the Petronas Refinery and Petrochemical Integrated Development (Rapid) project.
“Those are the two major projects as far as growth is concerned. You may notice that in terms of capex requirement, we have undertaken a loan of US$500 million (RM1.95 billion) from Mizuho Bank earlier this year. The bulk of that loan is going to cater for these growth projects and the rest will be reserved for maintenance capex.
“Other than those two major projects, we will continue to look at opportunities for growth and when the time comes, we will make the necessary statements,” said Shamsul.
Its Pengerang Gas Pipeline Project is also on track and expected to be completed this year, which will enable the initial supply of gas from the existing Peninsular Gas Utilisation (PGU) pipeline network to Pengerang and vice versa.
Commenting on the prospects for 2016, Shamsul said the industry is in challenging times but the group expects a steady revenue stream, steady income and predictable profit margins backed by the three agreements, namely the processing, transportation and regasification sales agreements, it signed with Petronas in April 2014.
He said the group’s capacities are already underwritten by Petronas via those agreements and it does not foresee any reduction in the amount of gas that is required. He added that PGB is fully geared to handle any increase in demand for gas within Malaysia as the RGT in Pengerang would cater for future requirement for gas.
Earlier at the AGM, shareholders approved a dividend of 60 sen per ordinary share for the financial year ended Dec 31, 2015, which is the highest that PGB has paid. The approved dividend represents a normalised dividend payout ratio of 77%.