PETALING JAYA: Gas Malaysia Bhd has entered into a joint study and collaboration agreement (JSCA) with Petronas Gas Bhd to develop an onshore lateral pipeline to facilitate the proposed regasification terminal (RGT) Yan project in Kedah.
Gas Malaysia said the agreement, entered into on Monday, provides a framework for a feasibility study and related activities for the proposed pipeline connecting the RGT Yan project to the Peninsular Gas Utilisation (PGU) system.
The study forms part of the requirements under the Energy Commission of Malaysia’s Letter to Proceed (LTP) for the RGT Yan project, which Gas Malaysia received on March 18.
Under the JSCA, Petronas Gas will lead the feasibility study, including hydraulic steady-state and transient simulations, site surveys, engineering surveys, soil investigations and front-end engineering design, to determine whether the proposed lateral pipeline is technically feasible.
Gas Malaysia will provide information on volumetric flow rates and gas demand from relevant demand centres to support the feasibility assessment.
The two parties will contribute to development costs and funding commitments in proportion to their respective participating interests, subject to agreed budgets and approval mechanisms.
Gas Malaysia said the outcome of the study will provide information required to progress the RGT Yan project and facilitate the relevant submission to the Energy Commission.
The company’s total potential financial commitment under the JSCA, arising from phased bank guarantee obligations, is up to RM7 million, representing a highest applicable percentage ratio of 0.45%.
The JSCA is not expected to have a material effect on Gas Malaysia’s earnings per share, net assets per share or gearing for the financial year ending Dec 31, 2026.
“Subject to the achievement of final investment decision and the requisite regulatory and corporate approvals, the project may contribute positively to the future earnings of the company,” Gas Malaysia said.
Petronas Gas is a related party of Gas Malaysia by virtue of its 14.8% direct shareholding in the latter. Petronas Gas nominee director Datuk Md Shah Mahmood abstained from deliberating and voting on the relevant resolution.
The JSCA does not require approval from Gas Malaysia’s shareholders or any government authorities.
