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Company Update – PGas (REDUCE, maintain) - Valuations remain lofty, maintain REDUCE




Affin Hwang Investment Bank Bhd


05 Jun 2013





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Melaka RGT accounts for 7% and 12% of Group FY13 and 14 EBITDA We gather that the commissioning of the Melaka Regasification Terminal (RGT) is underway. Slated for commercial operation by next week, we understand that the final project cost is closer to RM3bn. A Regasification Service Agreement (RSA) has yet to be announced although we understand that the structure is quite similar to the current reservation charge structure for the Group’s 6 gas processing plants. We also understand Petronas is looking to sell the processed LNG at a 15% and 10% discount (to ex-Bintulu LNG shipment to Japan) to the power and industrial users – or RM38/mmbtu and RM41/mmbtu, respectively. All in, the Melaka RGT project is expected to contribute 7% and 12% to FY13 and FY14 EBITDA of RM2,776m and RM3,247m, respectively. Importantly, the Melaka RGT is fully underwritten by Petronas, thereby eliminating demand risks.

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