PetGas raises capex for FY21 to RM1.3bil

KUALA LUMPUR: Petronas Gas Bhd (PetGas) has raised its capital expenditure (capex) to up to RM1.3bil for the financial year ending Dec 31,2021 (FY21) from RM1.1bil last year on the back of new growth projects and pick-up in activities.

Chief financial officer Shariza Sharis Mohd Yusof (pic) said the allocation of the capex would be RM1.2bil to RM1.3bil due to new projects including the 42km lateral gas pipeline for the Pulau Indah power plant as well as increase in activities this year in line with the country’s economic recovery.

“The higher level of capex is in line with all planned activities this year. Last year, some activities were affected due to the movement control order restrictions. This year, we anticipate there will be a slight pick-up in activities as we have new growth projects.

“Should there be other new projects announced, the figure of the capex may rise, ” she said at a virtual press conference.

The construction of the RM541mil gas pipeline, which will primarily supply gas for the 1,200MW Pulau Indah power plant, is slated to be completed by early 2023.

Meanwhile, managing director and chief executive officer Abdul Aziz Othman disclosed that engineering works for the gas pipeline is in progress, aside from other activities including land acquisition.

Petronas Gas terminal in Malacca (file pic)Petronas Gas terminal in Malacca (file pic)

However, should there be more demand along the pipeline, he said the group would be able to add spur lines towards Klang for its shippers to sell more gas, as the pipeline is designed for a bigger capacity than required by the power plant.

For this year, Abdul Aziz said the group would be focusing on increasing the power generation capacity, which is still in the assessment stage.

In addition, he said the group is eyeing opportunities in the area of integrated utility solutions for industrial parks being developed in the Northern Corridor Economic Region (NCER) and Southern Economic Corridor.

The NCER includes Kedah Science and Technology Park, Sidam Logistics, Aerospace and Manufacturing Hub, and Kedah Rubber City. In the south, there is the most recently launched Pagoh Special Economic Zone and Iskandar Malaysia Economic Corridor.

Moving forward, Abdul Aziz is optimistic given the expected economic recovery, supported by the rollout of the Covid-19 Vaccination Programme nationwide and Bank Negara’s estimation on gross domestic product growth.

“In addition to sustaining our core business, we will be focusing on three key growth areas: Firstly, to position PetGas in providing integrated solutions for power and utilities in the new industrial zones in Malaysia.

“Secondly, to explore opportunities to grow in Malaysia and regional power generation and regasification capacities including operation and maintenance services, leveraging on our experience and expertise.

“Finally, PetGas is also identifying step-out opportunities, assessing businesses that are adjacent to our existing operations and relevant to energy transition, ” he said.

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