Fire incident likely to delay SOGT, SAMUR projects — Analysts

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KUCHING: The explosion of the underground Sabah-Sarawak gas pipeline (SSGP) in Lawas is likely to affect the commencement of the Sabah Oil and Gas Terminal (SOGT) in Kimanis and Petronas Chemicals Group Bhd’s (Petronas Chemicals) US$1.5 billion Sabah Ammonia and Urea (SAMUR) plant in Sipitang.

However, analysts opined the delay in the commencement of SAMUR will not likely to impact consensus’ earnings as it is expected to be operational in the financial year 2015 (FY15).

On Tuesday morning, an explosion occurred along the SSGP line about 135 kilometres from SOGT, Kimanis or 400 kilometres from Miri.

This led to a temporary shutdown of Petroliam Nasional Bhd’s (Petronas) RM4 billion project, which was under the management of India-based Punj Lloyd, Dialog Group Bhd (Dialog) and Petrosab Logistic, while Wah Seong Corporation Bhd’s (Wah Seong) 60 per cent-owned Petro-Pipe (Sabah) was involved in providing part of the pipes and pipe-coating services.

AmResearch Sdn Bhd (Am Research) estimated the pipeline’s construction cost to stand at RM1.6 billion at the time of award, with completion scheduled by March 2011 but has since been behind schedule.

“We are uncertain if any of the project’s service providers such as Dialog or Wah Seong may be liable for any damages pending completion of the probe,” it commented.

It added, “We understand that the supply of gas has not been affected for Petronas Gas’ 60 per cent-owned 300 megawatts Kimanis power plant, which is expected to be progressively completed in the second to third quarter of 2014 (2Q to 3Q2014).