PETALING JAYA: Petronas Gas Bhd
(PetGas) is positioning new gas-fired power generation and regasification projects as key growth engines over the coming years, according to Hong Leong Investment Bank (HLIB) Research.
Among the projects expected to strengthen its earnings base is the new Lumut regasification terminal, which Kenanga Research estimates could generate about RM300mil in recurring annual income once fully operational.
The terminal is targeted to commence operations in the second quarter of financial year 2029 (2Q29).
On power generation, TA Research said the operations of the 100 megawatt (MW) Kimanis II Power Plant could provide earnings support for PetGas.
The power plant is a 60:40 joint venture (JV) between PetGas, via wholly owned PG Energia Sdn Bhd, and NRG Consortium (Sabah) Sdn Bhd, a state-linked entity wholly owned by Yayasan Sabah Group.
“Besides Kimanis II, PetGas is currently developing a 120MW combined cycle gas turbine power plant in Labuan via a 60:40 JV with two Sabah government-linked companies.
“The plant, which involves close to RM1bil in capital expenditure, is targeted to start operations by January 2028,” added TA Research.
Looking ahead, Kenanga Research said regulated assets will continue to underpin PetGas’ resilient earnings visibility under the Incentive-Based Regulation (IBR) framework, supporting a decent dividend yield of about 4%.
“With over 90% of its earnings safeguarded by Regulatory Period 3 under the IBR framework, PetGas’ earnings are expected to remain resilient over the financial years of 2026 to 2028 (FY26 to FY28).
“FY26 is expected to be a better year as PetGas recovers from the Putra Heights fire that dragged down FY25 earnings.”
In a separate note, BIMB Research said it expects better second half of FY26 (2H26) earnings from the impact of higher Maximum Regulated Price.
It foresees the lagged pass-through effect of elevated global crude oil prices to be more noticeable in the third quarter of FY26, estimated at around RM40.68/MMBtu.
This is expected to place upward pressure on fuel costs across the broader energy value chain, particularly within the utilities segment, where margins are more sensitive to fuel gas pricing dynamics.
“The impact on the group’s regulated gas transportation and regasification businesses should remain relatively contained, as earnings from these segments are governed under the IBR framework with regulated tariffs and allowed returns,” BIMB Research noted.
Commenting on the recently announced results for 2Q26, the research house said the earnings were in line with expectations.
PetGas’ 2Q26 core net profit increased marginally by 1.6% quarter-on-quarter (q-o-q) but is down 2% year-on-year (y-o-y), to RM449.9mil.
This brings its core net profit for the 1H26 to RM892.6mil, down by 3.5% y-o-y.
2Q26 revenue fell 5.3% q-o-q and 5.6% y-o-y, driven by a decline in utilities revenue due to planned regulatory turnaround activities, which resulted in lower sales volumes during the quarter.
“Nevertheless, the impact of lower revenue was cushioned by lower fuel gas and lower maintenance activities versus the first quarter and continued improvement in share of profit from JV companies,” said BIMB Research.
