Petronas Gas, Linde form joint venture for US$172m Pengerang project

PETALING JAYA: Petronas Gas Bhd has executed a shareholders agreement with Linde (Malaysia) Sdn Bhd for a joint-venture company to undertake the development of an air separation unit plant in Pengerang, Johor, a project that is estimated to cost US$172 million (RM692 million).
Petronas Gas will hold a 51% stake in the joint-venture company, with its portion of the cost to be an estimated US$88 million. Linde will hold the remaining 49%.
The source of funding for the project is expected to be via a combination of equity and debt from the respective parties.
Construction on the project is to start by the third quarter of 2016 and the plant is expected to achieve commercial operation by the fourth quarter of 2018.
The principle activities of Linde are manufacturing and distribution of industrial gases, special gases, medical gases, welding equipment and consumables and related products and services. It is also involved in the installation of gas equipment and pipeline systems for the industrial, high tech and medical sectors.
Petronas Gas's involvement in the project is an expansion to its existing business of providing industrial gases from the centralised utility facilities in Kerteh, Terengganu, and Gebeng, Pahang, which will eventually contribute to the growth of Petronas Gas's bottom line.
"The strategic partnership with Linde will provide Petronas Gas with the opportunity to leverage on the technical capabilities of a world renowned industrial gases producer in the development of an industrial gases facility at a strategic location," Petronas Gas said in a stock exchange filing on Friday.

The execution of the agreement does not have any effect on the earnings per share, net assets per share, gearing, share capital and substantial shareholding of Petronas Gas for the financial year ending Dec 31, 2016. It is expected that the project, once operational, will contribute to Petronas Gas's earnings.