Least earnings impact for Bintulu Port from SSGP fire
ANALYSTS expect Bintulu Port Holdings Bhd (Bintulu Port) to see minimal impact to its earnings following the fire incident that took place at the Sabah-Sarawak Gas Pipeline (SSGP) near KP132, close to Long Ugui, Lawas on November 16, 2022.
According to a statement from Petronas, the incident was believed to have involved a thirdparty contractor performing work unrelated to the SSGP operations nearby the pipeline’s right-of-way area.
The explosion has killed one person and injured two others.
Recall that on September 21, 2022, there was a pipeline leak caused by soil movement at the vicinity of KP201 near Pa Berunut, Lawas that led to Petronas declaring force majeure on LNG supplies to its customers.
“The leak affected only the MLNG Dua production facility with a nominal capacity of 9.6 million tonnes per annum – or 33 per cent of Petronas LNG Complex’s total nominal capacity,” commented AmInvestment Bank Bhd (AmInvestment Bank),
“Other LNG production facility within the complex had continued to operate as planned.”
The research house noted that LNG exports make up 49 per cent of total throughput of Bintulu Port, all of which are sourced from Petronas-operated Malaysia LNG complex which has a production capacity of 29.3 million tonnes per annum.
“Nonetheless, we believe the impact from the leakage is minimal to Bintulu Port, as most of the natural gas in its liquefaction plant are sourced from Sarawak instead of Sabah,” it said.
Daily natural gas production from Sabah is only 15,200 tonnes a day, or 18 per cent of Sarawak’s 83,900 tonnes a day, of which production capacity of MLNG 2 amounts to 9.6 million tonnes per annum, or 263,000 tonnes a day.
The pipeline has a design capacity of 750 million cubic feet a day, and based on one tonne: 48,700 cubic feet, daily disruption amounts to 15,400 tonnes of LNG. Assuming 90 days of disruption (from end of September 2022 to end of December 2022), AmInvestment Bank said there will be a shortfall of up to 1.4 million tonnes of LNG in FY22, which will only reduce Bintulu Port’s earnings by 4.6 per cent.
“Another mitigating factor is that Petronas can chose to increase production in Sarawak to make up for the shortfall in supply from Sabah,” AmInvestment Bank opined.
“Additionally, a gas pipeline leak disruption had occurred in January 2018, and Bintulu Port’s profit after tax only fell three per cent in FY18 from FY17.”
The leak affected only the MLNG Dua production facility with a nominal capacity of 9.6 million tonnes per annum – or 33 per cent of Petronas LNG Complex’s total nominal capacity.
AmInvestment Bank