PETALING JAYA: Petronas Gas Bhd
(PetGas)’s third regasification terminal (RGT-3) in Lumut, Perak, will further enhance its earnings visibility with a new recurring income stream.
While details have yet to be disclosed, CGS International (CGSI) Research estimates RGT-3 can contribute around RM120mil in annual profit after tax and minority interest (Patmi) to PetGas from 2030 based on an assumed 65% stake, in line with PetGas’ stake in RGT-2.
This is about 7% of its 2025 Patmi, the research house said in a note to clients.
On Monday, PetGas received the long-awaited approval for RGT-3 – which is to be Malaysia’s first floating storage and regasification unit (FSRU) based terminal – with the commercial date of operation slated for the second quarter of 2029.
PetGas is exploring potential joint development with a partner.
It was reported previously that Tenaga Nasional Bhd was in early-stage discussions to participate in the project, although this remains unconfirmed.
Other assumptions made by CGSI Research to derive the RM120mil annual Patmi include a total project capital expenditure (capex) of approximately US$750mil.
This comprises the FSRU, to be owned by MISC Bhd and leased to PetGas at an assumed daily rate of US$125,000, and supporting infrastructure – such as mooring and berthing facilities and pipelines – to be borne by PetGas.
CGSI Research also assumes a weighted average cost of capital of around 7.1%, in line with Incentive-Based Regulation returns.
This translates into an estimated valuation uplift of approximately RM0.70 per share based on its discounted cash flow analysis.
However, analysts said the earnings and valuation impact ultimately hinges on PetGas’ eventual stake in RGT-3.
CGSI Research has raised the stock’s target price to RM18.60 from RM17.70, but kept its “hold” rating.
The research house said key project details have yet to be disclosed, limiting the potential for a meaningful near-term re-rating. Shares of PetGas were trading at RM18 at the time of writing.
A quick look showed other research houses keeping their “buy” call on the stock, which is 51%-owned by national oil company Petroliam Nasional Bhd (PETRONAS).
They view the development positively as it anchors the group’s long-term outlook, while the FSRU-based structure would help reduce upfront capex requirements.
BIMB Research said it expects the final investment decision to be made within the next six to 12 months, followed by a typical construction timeline of two to three years, supporting targeted commissioning in 2029 to 2030.
The research house is maintaining its earnings forecasts pending greater clarity on the project structure and equity participation.
Recently, Gas Malaysia Bhd also received regulatory approval for an RGT in Yan, Kedah.
The terminal will be modelled on the FSRU concept as well, with capex at RM2bil to RM3bil for roughly 840 million standard cubic feet per day.
An analyst said the approval for both projects marks a key step forward in Malaysia’s gas infrastructure expansion plans.
Stronger regasification capacity is expected to support growing downstream demand, particularly from gas-fired power plants, which remain a key source of baseload electricity generation in the country, he added.
