KUALA LUMPUR: Petronas Gas Bhd has set aside RM1.2 billion-RM1.3 billion in capital expenditure (capex) this year.
This was more than the RM1.1 billion allocated in 2020 as Petronas Gas resumed several activities and undertake new projects, managing director and chief executive officer Abdul Aziz Othman said.
He said it had identified several projects which were now in the planning stage with its focus areas.
This included integrated utility solutions, in some industrial zones being developed in the southern and nortthern economic corridors, Abdul Aziz said at a virtual press conference after Petronas Gas' annual general meeting today.
Chief financial officer Shariza Sharis Mohd Yusof said Petronas Gas expected a slight pick up in capex supported by additional new growth projects.
She said its 42km lateral gas pipeline project for the gas turbine power plant in Pulau Indah, Selangor, would account for the slightly higher capex spending this year.
"Some activities were slightly affected last year due to the pandemic which resulted in the Movement Control Order (MCO).
"The higher level is in line with all the planned activities, should there will be new projects being announced, that figure may rise," she said.
Shariza said its capex allocation would not be deterred by parent Petroliam Nasional Bhd's aspiration of achieving a net zero carbon emission by 2050.
Last November, Petronas announced its commitment towards a net zero carbon emissions by 2050 to continue creating value by providing cleaner energies as part of a holistic approach to sustainability.
The oil and gas upstream sector saw significant cuts in capex following energy transition with an increased focus on clean and sustainable sources of energy due to concerns about climate change.
"As far as the energy transition is concerned, it will not affect Petronas Gas because more than 90 per cent of the company's revenue is fixed under our long-term contract arrangements. Hence, there is no variability in there, and it is by the booked capacity," she added.
Abdul Aziz is hopeful that demand for gas and Petronas Gas' utility products would increase, following the government's ongoing vaccination programme, which would expedite economic recovery.
"We have a long-term contract, underpinning our revenue for both gas processing and transmission business segments. We do not expect a lot of variations to revenue, while on the utility side, we expect some improvement on the electricity demand compared to last year.
"However, we do not expect the contribution to be a lot compared to 2020," he said.
Petronas Gas will also focus on some projects in areas toward integrated utility solution for some of the industrial parks that are being developed in the southern and northern economic corridors.
"The focus is to look at potentially increasing our power generation capacity. However, it is still at the assessment stage," he said.
