MIDF Amanah Investment Bank Bhd (MIDF Research) has maintained its BUY call on Petronas Gas Berhad (PetGas), with a target price of RM19.23, citing the positive outlook of the company’s involvement in Malaysia’s first LNG-driven air separation unit (ASU) in Pengerang, Johor. The research house noted that the project aligns with the group’s ESG goals while providing long-term revenue stability.
The LNG-driven ASU project, executed through PetGas’s wholly owned subsidiary, Regas Terminal Pengerang Sungai Udang Sdn Bhd (RGTP), and Dialog Group Bhd’s subsidiary, Dialog Equity Three, is set to commence commercial operations in November 2026. The development increases RGTP’s issued and paid-up capital to RM 36.8M, with PetGas holding a 72% stake. Dialog, which has been awarded the RM 368M engineering, procurement, construction, and commissioning contract, will finance the project through internal funds and external borrowings, including sukuk proceeds.
According to the research house, the ASU will operate on a design, build, and lease model, ensuring a steady revenue stream for RGTP over 25 years through fixed monthly facility charges paid by an industrial gas market operator. The LNG-driven ASU aligns with energy transition advocacy, offering a cost-effective and sustainable alternative to traditional ASU plants. By utilising LNG as a cleaner fuel source, the facility is projected to reduce electricity consumption by 25% and lower carbon emissions by 15,000 tonnes annually.
