Petronas Gas sets higher capex of RM1.4b for 2022
Increase stems from expectations of rise in maintenance activities and progress in growth projects
PETALING JAYA: Petronas Gas Bhd (PetGas) has allocated a larger capital expenditure (capex) of RM1.4 billion for 2022 compared with RM1.2 billion spent in the previous year.
“We’re spending slightly higher because as the country enters an endemic phase, we are expecting to have more maintenance activities and further progress in the growth projects announced last year,” its managing director and CEO Abdul Aziz Othman explained to the media during a virtual briefing after the group’s AGM yesterday.
“Moving forward in 2022, PetGas will continue to seize opportunities to deliver gas solutions in a responsible and sustainable manner, while progressing and realising our identified growth projects.”
Aziz stated that these include pursuing integrated solutions for power and utilities at new industrial zones in Malaysia, growing power generation and regasification capacities in Malaysia and regional, as well as step out opportunities brought about by the energy transition
When asked about the impact of gas demand recovery, the managing director and CEO clarified that the return of demand since mid-2021 has not made much impact to the group’s performance.
He said its business revolves round service capacity which has been fully booked by shippers on a long-term basis and, subsequently, it managed to sustain its
revenue levels even during the pandemic due to this.
With regard to the expression of interest for a gas storage tank in Pengerang it issued last year, Aziz believes there is a need for more storage capacity given the current condition of the liquefied natural gas (LNG) market.
“At the moment, the process of getting a client to book capacity with us is still ongoing and if everything goes well, we’ll be able to announce if we are going to proceed with the third storage tank by the end of the year.”
On the subject of its capital structure, PetGas CFO Shariza Sharis Mohd Yusof stated that it is looking at further optimising
its gearing.
She explained that the exercise is not just about raising gearing for gearing’s sake. The decision to do so will be aligned with all the growth opportunities the group is pursuing.
“This capital review exercise is ongoing, we started one and a half years ago, raised some sukuk at our regasification terminal in Pengerang and last year we also raised some external financing facility for our gas transportation business.
“Moving forward we’ll be looking at other parts of the business. Should things align in terms of our internal requirement for funding against the external market conditions, we’ll look at optimising our capital structure or gearing levels,” said Shariza.