Petroliam Nasional Bhd (Petronas) generic photo. Petronas flag blowing in the wind next to the Malaysian and Federal Territories flags at a Petronas station in Kuala Lumpur, seen in July 2015. (Pic taken by Hafidz Mahpar for Star Online.)
KUALA LUMPUR: Petronas Gas Bhd
(PetGas) will partner with industrial gas manufacturer and distributor Linde (M) Sdn Bhd to develop an air separation unit (ASU) plant in Pengerang Integrated Complex (PIC), Johor, at a cost of US$172mil (RM689.7mil).
PetGas said in a statement to Bursa Malaysia that it would hold 51% equity interest in the joint-venture (JV) company so its portion of the cost would be about US$88mil (RM352.7mil).
The source of funding for the project was expected to be via a combination of equity and debt from the respective parties, it added.
Petroliam Nasional Bhd (Petronas), which owns 60.7% in PetGas, is developing an integrated Refinery and Petrochemical Complex (Rapid) located in PIC.
“The project involves the setting up of an ASU plant and associated facilities within the PIC to meet its demand requirement for gaseous oxygen and gaseous nitrogen. The revenue stream is expected to cover capital and operational expenditure for the construction and operations of the facilities,” PetGas explained.
Construction activities for the ASU plant is expected to start in the third quarter of 2016, with the aim of achieving commercial operation by the fourth quarter of of 2018.
PetGas said its involvement in the ASU project was an expansion to its existing business of providing industrial gases from the centralised utilities facilities in Kerteh (Terengganu) and Gebeng (Pahang) and it would eventually contribute to the growth of PetGas’ bottom line.
“The strategic partnership with Linde will provide PetGas 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,” it said.
Linde AG, founded in Germany in 1879, is believed to be the world’s largest industrial gas company by market share.
PetGas shares gained 2 sen to close at RM22.18 on Friday.
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