The group along with project partner Sabah Energy Corporation have mutually decided to terminate the RGT project following “prolonged uncertainties concerning the project.”
KUCHING: AmResearch Sdn Bhd (AmResearch) kepts its valuations and forecasts unchanged for Petronas Gas Bhd (Petronas Gas) following its decision to terminate the proposed regasification terminal (RGT) at Lahad Datu, Sabah.
The group along with project partner Sabah Energy Corporation have mutually decided to terminate the RGT project following “prolonged uncertainties concerning the project.”
Yesterday, its shares dropped four sen to close at RM22.28 with 1.42 million shares traded.
On September 2013, Petronas Gas had offered Sabah Energy to acquire up to a 20 per cent equity stake in the project, which was expected to be smaller than the 530 million mmscfd Melaka RGT.
Local media reported that the facility, which would have a send-out capacity of 0.76 million tonnes per annum versus the Melaka RGT’s 3.8 million tonnes, we earlier scheduled for completion in 2015.
“However, the Lahad Datu insurgency in February 2013 led to an indefinite suspension of the project,” AmResearch said. “Hence, security concerns and the current low crude oil prices environment are likely to be main reasons for the project abortion.
“Our fair value and forecasts are unchanged as we had not incorporated any contributions from the proposed Lahad Datu regasification terminal, given that management had not given any guidance of when the project would have commenced,” it added.
The group’s next phase of growth will be contributed by the group’s second LNG regasification plant in Pengerang, recently announced and targeted to be operational by 4QFY17.
“As the Pengerang RGTP’s capacity is similar to the existing Malacca regasification facility’s 530 million mmscfd, we expect the Pengerang RGTP to contribute approximately RM300 million per annum to the group’s EBIT upon commencement of operations,” added AmResearch.
Petronas Gas will also be involved in the development of an air separation unit in a JV with Linde, which is expected to be used for the production of oxygen and nitrogen. A final investment decision is expected to be reached by 3QFY15 and it is targeted to be completed by 4QFY18.