PETALING JAYA: Petronas Gas Bhd
’s (PetGas) efforts to strengthen its authority over right-of-way for pipelines are further justified following last Saturday’s gas leak incident in Kertih, Terengganu, analysts say.
The incident in Kertih comes after a gas explosion along a pipeline in Putra Heights, Selangor, in April.
CGS International Research said the company is pursuing a regulatory push, together with the Economy Ministry, for enhancements to the Gas Supply Act 1993 and related laws to grant the company greater oversight of developments near its pipelines.
Another measure is via state-level engagement, with PetGas in discussions with state governments to consider allowing the company to have a seat in their planning committees to ensure better coordination and oversight.
The research house has a “hold” call with a target price of RM17.50 on PetGas, premised on its defensive regulated earnings profile underpinned by its ownership of gas infrastructure in Malaysia, despite the lack of tangible near-term earnings growth for the company.
