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KUALA LUMPUR, April 20 -- Petronas Gas Bhd (PGB) is allocating a capital expenditure (capex) of between RM1.2 billion and RM1.3 billion for the financial year ending Dec 31, 2021 (FY21) from RM1.1 billion spent in the previous financial year.
Chief financial officer Shariza Sharis M. Yusof said the higher level of capex in FY21 was in line with all the planned activities in the current year that include a 42-kilometre (km) lateral gas pipeline, which will supply gas to the proposed Pulau Indah Power Plant in Selangor.
"Last year, some activities were affected slightly due to the movement restriction following the COVID-19 pandemic. This year, we anticipate there will be a slight pick-up (in capex) as we have new growth projects including the 42-km lateral gas pipeline," she told a virtual media conference after PGB's annual general meeting today.
Shariza Sharis said energy transition would not affect PGB as more than 90 per cent of its revenue is affixed under its long-term contract arrangements.
Managing director/chief executive officer Abdul Aziz Othman said the development of the gas pipeline project to supply gas to the proposed Pulau Indah plant is progressing as scheduled, including land acquisition as well engineering works. The pipeline would come on stream in early 2023.
"We have awarded the engineering, procurement, construction, and commissioning (EPCC) contract to the contractor in March this year," he said.
PGB had identified several projects which are now in the planning stage with its focus areas, including integrated utility solutions, in some industrial zones being developed in the Southern Economic Corridor and Northern Economic Corridor, said Abdul Aziz.
"Other focus areas are looking at increasing capacity for our existing power generation. Those are the projects that we are looking into and are still at the assessment stage," he added.
On its outlook, Abdul Aziz said PGB remains optimistic with the expected economic recovery backed by the rollout of the National COVID-19 Vaccination Programme as well as Bank Negara Malaysia’s prediction on gross domestic product growth.
"Demand for gas and utilities will increase in tandem with the expected economic recovery," he said.
While PGB continued to support the gas industry liberalisation through third party access, the group also strives to evolve in tandem with its pace in business growth with various opportunities being assessed, it added.