KUB to spend US$80 mln on joint LPG terminal project

KUALA LUMPUR: KUB Malaysia Bhd plans to spend up to US$80 million (US$1=RM4.295) under the memorandum of understanding (MoU) it entered into with Mabanaft Pte Ltd for the joint development of a refrigerated liquefied petroleum gas (LPG) terminal at Westport, Klang, Selangor.

Its President/Group Managing Director, Datuk Abdul Rahim Mohd Zin said the investment would entitle the group to have the majority shareholding of at least 51 per cent under the MoU, which was signed on Monday.

“We need at least six months or until end of the year to undertake a feasibility study, and once we have determine that, we will make the financial investment decision,” he told reporters after the group’s annual and extraordinary general meeting here, yesterday.

Abdul Rahim said the purpose of the MoU was to construct, own and operate an LPG refrigerated terminal with the capacity of two times 25,000 tonnes of LPG, as well as to procure, supply and trade LPG in the regional markets.

Mabanaft is a subsidiary of Marquad & Bahls which specialises in the wholesale procurement, shipping, supply and trading of LPG worldwide.

For the financial year ending Dec 31, 2017, Abdul Rahim said the group had allocated RM2.5 million capital expenditure (Capex) to construct another LPG pipeline and an additional RM8 million for the LPG supply and dealer network expansion.

On the agro segment, he said the group had allocated Capex of RM100 million to acquire a brownfield oil palm plantation land in Kinabantangan, Sabah, which was expected to be completed by the fourth quarter of this year.

For the financial year ended Dec 31, 2016, the group’’s revenue rose 15 per cent to RM495.8 million compared with the previous financial year, with a 66 per cent contribution coming from the energy sector.