Assalamualaikum and good day, everyone. Welcome to PETRONAS Gas Berhad's annual briefing for Quarter Ended, 30th September 2024. Thank you for joining today's session organized via the Microsoft Teams platform. Before we start, can someone raise a hand or speak to the microphone just to test the system? Okay, thanks, Hadi Daniel. My name is Suriya, Head of Investor Relations, PETRONAS Gas Berhad, and as usual, I have together with me Encik Abdul Aziz Othman, Managing Director and CEO of PETRONAS Gas Berhad, Encik Shahrul Azham Sukaiman, Chief Financial Officer, as well as Encik Wan Khairul Nizam Wan Kasim, Head of Business Development and Commercial. The PETRONAS Gas Berhad's annual briefing for Quarter Ended, 30th September 2024 is divided into four segments. In the first segment, Encik Aziz will present the key highlights for PETRONAS Gas Berhad for the third quarter.
Next, in the second segment, the business updates and financial performance will be shared by Encik Shahrul Azham. This will then be followed by the third segment where Encik Aziz will share PGB's focus moving forward, and finally, in the fourth segment, we will open the session for Q&A. All participants are reminded to obey the session's rule where everyone should be on mute throughout the presentation. The presentation was also shared with you prior to the session through this Microsoft Teams channel for your reference. You are allowed to ask questions during Q&A. Please be reminded to press the raise hand button, and we will open the microphone for the selected participant. You may also post your question in the chat box, and we will select any question to be answered. For reference, our financial results are now available at both Bursa Malaysia and PGB websites.
To start off the first segment, I call upon Encik Aziz to share the key highlights.
Thank you, Suriya. Assalamualaikum and good day, everyone. Thank you for joining us. Always, I'm pleased to share with you the PETRONAS Gas Berhad Quarter 3, 2024 performance results this evening. Always, I like to start with factors affecting PGB business operating environment in the past quarter. As continuing from the second quarter of 2024, the cost of doing business again stood elevated in the third quarter. For the third quarter, the ringgit strengthened to an average of RM 4.46 against the US dollar, strongest being at RM 4.12 on 30th September. This has had some positive impact on PGB's remaining dollar commitments. However, it is important to note that such fluctuations are relatively uncommon and not necessarily indicative of a longer-term trend. In reference to that, the average Malaysia reference price, MRP for the gas price in Quarter 3, was at RM 42.44 per MMBTU.
Based on the lagging factor, MRP will potentially decrease in Quarter 4, 2024. We believe to be an average of RM 42.13 per MMBTU, slightly lower than Quarter 3 and again, MRP will continue to track the Brent price trend. We also like to bring your attention to the Services Producer Price Index, SPPI, which also increased to 115.8 points in the third quarter, which indicates the cost of doing business remains high. Slight uptick in the professional service sector may have some impact on our operating and project costs, as the cost of energy in Peninsular Malaysia continues to be significant, and this is reflected by the ICPT surcharge. As you are aware, ICPT is under the purview of Suruhanjaya Tenaga, as it has been set at RM 0.16 per kilowatt hour, effective from July 1, 2024, until the end of December 2024.
The government's periodic adjustment of ICPT does impact our financial performance, particularly for utility segments' earnings, both revenue and the profit margin. In light of the current operating environment, we anticipate that business costs will remain elevated throughout the year, and as always, we will closely monitor these conditions and take the necessary measures to mitigate their impact. Considering these factors, I'm pleased to announce that our company maintained strong performance in Quarter 3 and in the first nine months of 2024, sustaining a reliable dividend for our shareholders. Similar to previous quarters, our success in delivering strong numbers is anchored on our consistent operational excellence. Look at the levers nearing 100% across all business segments, as well as progress being made in our project execution.
On financial performance, PGB Group revenues stood at RM 4.923 billion, a slight increase of 1.2% or RM 60 million, mainly contributed by higher revenue from the gas processing. This is following the higher reservation charge income under the mid-term. However, this was offset by the lower revenue from the utility segment, and this is in line with the lower product prices. Nonetheless, the gross profit grew marginally by 0.8%, or RM 15 million to RM 1.795 billion. This is due to the higher operating costs, mainly from the higher level of maintenance activities in gas processing and the gas transportation segment, coupled with inflationary impacts. This, however, was cushioned by lower fuel gas costs and the internal gas consumption expenses in tandem with the lower fuel gas price. Profit for the period rose by 4.8%, or RM 69 million.
This is mainly driven by a reduction in financing costs, again following the early settlement of USD lease liabilities for the floating storage unit at LNG Regasification Terminal in Sungai Udang, Melaka, in the corresponding period, along with favorable foreign exchange movement following the momentary strengthening of Malaysian Ringgit on USD lease liabilities for jetty usage at LNG Regasification Terminal in Pengerang, Johor. Similarly, EBITDA was correspondingly higher by 5.1%, about RM 126.5 million at RM 2.6 billion. EPS increased by 3%, reflecting a higher profit attributable to shareholders of the company. Dividend per share for the quarter was approved at RM 0.18, similar to the corresponding period last year, and again, this demonstrates the Group's commitment to ensure a sustained level of returns to the shareholders. We have delivered strong financial performance. At the same time, we are also making significant progress in our business for this quarter.
We have received an initial letter of notification in August 2023 to develop a 100-megawatt power plant project in Kimanis, Sabah. The project is progressing as with the recent groundbreaking ceremony on the 12th of November. The RM 700 million project is expected to start commercial operations by March 2026. For the power plant in Labuan, as we have mentioned previously, we have received an initial letter of notification in July 2024 to develop a 120-megawatt power plant in Labuan. We have also reaped the maximum third-term GPA incentive. This is despite more stringent operating requirements imposed by the shipper. Now, we have come to the details of our business and financial performance. This section, as always, will be presented by Shahrul. Over to you, Shahrul.
Thank you, Encik Aziz. Assalamualaikum and good day, everyone. I shall take you through the business and financial performance for Quarter 3, 2024. Operational excellence, as mentioned by Encik Aziz, is crucial to our business, ensuring safety and reliability across our four segments. We prioritize a low operational risk and infrastructure reliability to ensure our stable revenue. During this period, the gas processing segment, by leveraging digital tools, has improved its plant efficiencies. This led to our plants achieving nearly 100% of OEE, demonstrating world-class performance. Although our performance-based structured incentive was stretched under narrower operating parameters in the third-term GPA, we were still able to achieve maximum incentive throughout the nine-month period.
For segmented financial performance, against the preceding quarter, Quarter 2, 2024, the segment result was lower by 4.6% at RM 199 million due to lower revenue from IGC incentive, coupled with higher operating costs due to a higher level of maintenance activities as well as depreciation. Against the corresponding quarter, Quarter 3, 2023, the segment results increased by 2% or by RM 3.9 million in line with higher revenue, but this was partially offset by higher operating expenses from a higher level of maintenance activities carried out in Quarter 3. Against the corresponding period, nine months, 2023, the segment result decreased slightly by 1.1% due to a higher level of maintenance activities coupled with inflationary impact. Moving on to the next business segment, for gas transportation business performance, the Group's pipeline network achieved close to 100% reliability, similar to the corresponding period.
During the quarter, the gas transportation segment achieved the initial acceptance for the gas pipeline replacement project in Kerteh, which was completed in Quarter 4, 2023. For segmental financial performance, against the preceding quarter, Quarter 2, 2024, the segment result was at RM 152 million, lower against the preceding quarter, Quarter 2, 2024, on the back of higher operating expenses, mainly coming from the higher level of maintenance activities performed during the quarter. Against the corresponding quarter, Quarter 3, 2023, the segment result increased by 2.8% or RM 4.1 million, following higher revenue, but this was partly negated by higher operating expenses, mainly from a higher level of maintenance activities and depreciation during the quarter. Against the corresponding period, nine months, 2023, the segment result grew by 8% or by RM 35 million, in line with higher revenue and lower internal gas consumption expenses.
This was partly offset by higher maintenance and depreciation expenses, following the higher number of project completions during the period. Moving on to the regasification segment, our Group's LNG regasification terminals in Sungai Udang, Melaka, and Pengerang, Johor, boasting their strong reliability performance close to 100%. For segmental financial performance, against the preceding quarter, Quarter 2, 2024, the segment result was at RM 158 million, which is comparable, again, to the result in the previous quarter. Against the corresponding quarter, Quarter 3, 2023, the segment result was marginally lower by 1.8% due to higher operating expenses, mainly from a higher level of maintenance activities performed during the quarter.
Against the corresponding period, nine months, 2023, similarly, the segment result against this nine-month period was lower by 3.1% due to higher operating expenses, mainly from depreciation, maintenance activities, as well as the yearly contractual increment of our floating storage units operating lease in Sungai Udang, Melaka. Combining these three segments, the gas processing, gas transportation, and regasification segment, these three segments contributed 87% to our bottom line, while the following is contributed by the utility segment. Moving on to the utility segment, throughout the period, utilities plants achieved 100% product delivery reliability for electricity, while close to 100% for steam and industrial gases. For electricity, for the nine-month period, year to date, 2024, the volume was higher than the same period last year due to higher power offtake from customers, as well as due to higher TNB export recorded during the period.
This is due to the favorable system marginal price, or SMP. For steam, customer offtake as at year to date, nine months, 2024, is comparable, again, to the same period last year. For industrial gases, higher product sales volume recorded in year to date, nine months, 2024, due to higher consumption from customers in line with the higher demand. For segmental financial performance, utilities performance against the preceding quarter, Quarter 2, 2024, the segment result improved by 16.5% or by RM 12.3 million to RM 86.9 million, following higher revenue in line with higher demand, coupled with lower utilities costs and maintenance activities. Against the corresponding quarter, Quarter 3, 2023, the segment result increased by 13.4% or RM 10.3 million, in tandem with the improved revenue following higher customer offtake, and this partially offset by higher depreciation and fuel gas costs.
Against the corresponding period, nine months, 2023, the segment result marginally rose by 0.9% or RM 2.1 million, on the back of favorable impact of lower fuel gas costs, in line with the downward movement of average Malaysia Reference Price, or MRP, and this was partially offset by higher depreciation. So that's the performance update for the utility segment. Let's now move on to PGB Group's financial performance. As mentioned by Encik Aziz earlier, the Group sustained its strong performance across all of its plants and facilities. Against the preceding quarter, Quarter 2, 2024, Group revenue slightly increased by 0.5% against the preceding quarter, mainly contributed by regasification and gas transportation segments. Despite its higher revenue, gross profit was comparable to the preceding quarter, following higher level of maintenance activities performed in Quarter 3.
However, profit for the quarter increased by 10.2% or RM 50.3 million, mainly contributed by the favorable foreign exchange movement, following the momentary strengthening of Malaysian Ringgit on USD lease liabilities in relation to Jetty usage at LNG Regasification Terminal in Pengerang, and this is coupled with the higher share of profit contribution from our joint venture companies. Against the corresponding quarter, Quarter 3, 2023, Group revenue increased by 6.8% or RM 105.6 million, mainly contributed by three main reasons. The first one, the utility segment with higher customer offtake. The second one, because of the higher gas processing revenue, following higher reservation charges income under the new term, and thirdly, because of the higher revenue from gas transportation following a tariff adjustment.
Gross profit increased marginally by 2.6% or RM 15.4 million, as the higher revenue was partly negated by the higher operating expenses on the back of higher fuel gas costs from utility segment, coupled with inflationary impact for other cost elements, especially for our operation and maintenance activities. Profit for the quarter was correspondingly higher by 10.2% or RM 50 million, at RM 541.2 million. Comparing against the corresponding year to date, nine months, Group revenue increased slightly by 1.2%, mainly contributed by higher revenue from gas processing, following higher reservation charges under the new term. And this was offset by lower revenue from utility segment in line with lower product prices. Gross profit marginally increased by 0.8% or RM 15 million due to higher operating costs, mainly from higher level of maintenance activities in gas processing and transportation segments, coupled with inflationary impact.
This was partly cushioned by lower fuel gas costs and internal gas consumption expenses, in line with lower fuel gas prices. Profit for the period rose by 4.8% or RM 69 million, at RM 1.5 billion, mainly driven by reduction in financing costs following early settlement of dollar lease liabilities for our FSU storage in LNG Regasification Terminal in Sungai Udang in the corresponding period, together with the favorable impact of the favorable exchange rate movement following the momentary strengthening of the USD lease liabilities for Jetty usage at LNG Regasification Terminal in Pengerang, Johor.
Moving on to the balance sheet, as of 30 September 2024, Group's total assets was at RM 18.5 billion, slightly lower by 4.1%, mainly due to the repayment of Islamic financing facility that was made in March this year, amounting to RM 1.2 billion, but this was partly cushioned by the cash generated from our operation during the period. Correspondingly, subsequent to the repayment of Islamic financing facility, our total liabilities decreased by 21% to RM 1.15 billion as a result of this repayment. Even though there was a reduction in cash and cash equivalent to RM 2.7 billion during the period, the cash balance remained healthy, with some credit room for our existing and upcoming growth activities. As for the dividend, as mentioned by Encik Azham, the Board has approved the third interim dividend of RM 0.18 per share, which is payable on 24 December 2024.
This demonstrates our commitment to ensure a sustainable return to shareholders despite the challenging business operating conditions. We are still able to provide healthy level payout, and I think it is higher than what we committed in our dividend policy. This is all from me. I will now pass the line over to Encik Aziz to share on the company outlook. Thank you, Shahrul. Ladies and gentlemen, again, our results demonstrate our continued delivery of operational excellence. Insya-Allah, we are poised to continue the strong performance throughout the remainder of 2024. Our focus remains steadfast along the four lenses of our sustainability blueprint. Along the sustainable value creation lens, we remain committed to ensure safe, reliable, and efficient world-class operations to sustain our profit and value to the shareholders.
While we endeavor to ensure flawless project delivery in terms of safe and timely execution within budget and quality, we have met strikes in our growth and value creation pursuits, where, as I mentioned in the introduction, very recently we had the 15th anniversary celebration of our Kimanis Power Plant, as well as the groundbreaking ceremony for the second 100-megawatt power plant alongside the existing Kimanis Power Plant. This new 100-megawatt is a collaboration between PGB through our subsidiary, PGB Energy Sdn Bhd, and NRG Consortium (Sabah) Sdn Bhd, a subsidiary of Yayasan Sabah Group. As mentioned by Sabah Chief Minister, Datuk Seri Panglima Hajiji Noor, the RM 700 million KPSB2 power plant is expected to achieve commercial operations by March 2026. That's the first power plant in Kimanis. We are also working on the second power plant, which is the Patau-Patau Power Plant in Labuan.
As we have mentioned, the initial letter of notification, which is part of the process towards the letter of notification to facilitate for the negotiation on PPA, is there for us, and we are moving forward with our potential partners to the next step of the development of this power plant. In the lens of safeguarding the environment, we have managed to limit our GHG emission within expectation to achieve the NZCE 2050 targets, as we have shown in our sustainability blueprint, and this, so far, our achievement was through our carbon abatement strategies and also, very important, the energy efficient operations. As mentioned in the previous analyst briefing, we have to date surpassed our 4R deliverables. Most of the recovery for the waste has been done in the first half of the year, and this was done during the scheduled maintenance activities.
Through the positive social impact lens, we contributed actively to our operational areas, particularly focusing on education, community well-being, and the environment. Aligning to that, we have recently launched our flagship program, a collaboration with Yayasan Hijau Malaysia, which involves installing solar panels in selected areas in Melaka as the first step to enhance community well-being, as well as to promote solar energy use, and of course, to reduce greenhouse gas emissions. On responsible governance lens, we are pleased to announce that PGB recently won the Gold Award for utilities at the The Edge ESG Awards in October. We secured the highest ratings among peers by ensuring maximum disclosure and meeting sustainability requirements. Our dedication to responsible business practices and the effective data use has positioned us as leaders in sustainability within our industry. Moving forward, our focus will be on completion of growth projects and sustained operational excellence.
Among the projects to look forward to are the completion of our LNG storage in Pengerang, sometime middle of next year. The completion of the Kluang compressor station project is expected to complete by the end of this year, and the completion of Jeram compressor station is expected to be by the end of 2026. While these projects are on track, we are looking at other growth prospects, and the recent announcement on Budget 2025 presents several opportunities for PGB. The government announced the introduction of carbon tax in 2026, alongside tax incentives for companies that are developing CCUS technology to reduce GHG emissions, and this promotes a strong incentive for PGB to explore the viability as well as the feasibility of CCUS. This would give us significant value and growth opportunities in the future. Additionally, we foresee ample opportunity in the domestic energy landscape, particularly in gas demand-driven prospects.
The retirement of coal plants, coupled with the growing energy demands of data centers, will definitely increase the reliance on natural gas as a cleaner and more reliable energy source. The planned retirement of coal plants by TNB will phase out 7 gigawatts of power capacity by 2023. We anticipate a 30% surge in gas demand to fill in the energy gap and maintain grid reliability. On top of this, the rapid growth of data centers in the country, which are highly energy intensive, is projected to further amplify gas demand to an estimated 70% surge. Being the only biggest gas infrastructure company in the country, this presents a substantial opportunity for capacity expansion of our pipeline, as well as regasification infrastructure, and of course, the potential development of new regasification terminals.
Leveraging on our capability and experience with Kimanis Power Plant, we are also in a strategic position to explore the viability of developing a gas-based combined cycle power plant to address the increase in the demand for the power sector, particularly in Peninsular Malaysia. While the current demand from data centers is for electrical power, there is also potential for an integrated energy solution by utilizing cold energy from our regasification terminal to provide sustainable cooling solutions for data centers. This approach not only maximizes the use of our own existing infrastructure but also aligns with efforts to reduce reliance on traditional electricity-driven cooling methods. By capitalizing on this larger national development, PGB can solidify its role in enabling a cleaner and more sustainable energy future and to be the catalyst in catalyzing the government energy transition efforts and achieving NETR aspirations. Thank you.
And over to you, Suriya, for the Q&A.
Thank you, Encik Aziz and Encik Shahrul. We have now come to the Q&A session. Please be reminded to continue to obey the session rule where everyone will be on mute to ask a question. Please press the raise hand button, and we will open the microphone for the selected participant. You may also type your question in the chat box, and we will read it out loud for you. Let's start, ladies and gentlemen. The first question comes from Daniel.
Good morning, guys. Can you hear me? Yes, yes. Okay, good. Thanks for the briefing. My first question is on overall the group activities for the fourth quarter. Are we expecting to continue a higher maintenance cost of depreciation in the upcoming quarters, in the upcoming fourth quarter, for all the segments?
Because I noticed that throughout your presentation slide, you have been continuing to highlight higher depreciation, higher maintenance activities over the last three quarters or this for all the segments.
Okay, that's the only question, right, Daniel? Okay, as far as maintenance, yes, we expect the number to be higher, particularly, as you know, beginning of the year, it was the planning time. Now, as you move deeper into the year, it's the execution. And we always pick up the pace towards the later part of the year. So we expect to see a higher maintenance activities as well as spending in the fourth quarter. And depreciation, because we've been spending on those maintenance as well as on growth projects, so you would expect we will capitalize a bigger number, then you'll see a higher depreciation accordingly.
Thank you, Daniel. We have the next question.
We have a question in the chat box from Ong Tze Hern. Can I know how much is the PBS for gas processing in the latest quarter? Did you get the full amount?
Thank you, Daniel. Ong, can you get Shahrul to answer the question?
Yeah, thank you for the question. Up to September 2024, we were able to maximize the PBS incentive. I think for year to date, we have actually collected about RM 17 million for the PBS. I think if they can continue, we can actually collect the maximum PBS throughout the year. The PBS is dependent on the operational performance. So you see from the operational performance, we have sustained world-class operation. We expect to sustain and realize that amount accordingly. But as I mentioned, it depends on the sustenance of that operational excellence.
A follow-up question on that.
The maximum PBS is RM 120 million per year, right? Hold on. I will get back. We'll get back to you, Ong. Okay, we'll go back to the queue here. Daniel again. It's a second question or?
Hi, second question. Okay.
If you look at the RAB for this transportation and regasification plants, so is the year-to-date volume in line with the assumed volume, or is it lower or higher? Because in your RAB, you have assumed a certain volume. That's how you get the rate of the tariff for transportation and regas. So the question is, until year to date, is the volume intact in line with the assumption, or is it lower or higher than the assumption?
I don't have the exact number, but I think it's about there in the budget. But just to provide you with better clarity, the business of regasification is on capacity payment.
The shipper has booked the full payment irrespective of utilization. If we make the capacity available, we will collect full revenue, full capacity reservation payment. How much the flow of the gas is not going to impact the regasification financials significantly. Is that okay, Daniel?
Sorry. We mean for regasification, the large part of the business is dependent on the capacity payment. The rate that is provided by the RAB, by the Energy Commission on the rate, it doesn't really affect much in terms of your overall revenue, is it?
Yes. As I mentioned, as long as how much the gas flow depending on the shipper's nomination. If the shipper nominates the full capacity, if we make the capacity available, then we collect the reservation. If the shipper nominates 50%, we are able to deliver that 50%. We still collect the full capacity reservation.
I see. So then how was the role of this EC in determining the regasification tariff?
I think we have given this briefing at the beginning of RP2. Roughly, the RIB, which is the opening value of the asset plus the CapEx that we're going to invest on that asset, either maintenance or growth, and the OpEx. Typically, OpEx are pass-through, and then whatever that amount will be divided by the capacity reservation, and you get the tariff.
Thank you.
Okay, and Daniel, I think next.
Maybe I just have a question on the maximum PBS. As I mentioned just now, year to date, we have actually realized about RM 70 million of the PBS incentive. And for the full year, the maximum PBS incentive is slightly lower than RM 100 million for the full year.
That is the answer to Hern's question just now. Next in line is Anshul. Yes, Anshul.
Hi, good evening. Can you hear me?
Yes.
Yes. I just had a couple of questions. To start with, the performance for the utility segment, I believe given the lower ICPT surcharge for this quarter, we would have assumed that we could have seen utilities' contribution declining, but that did not happen. If you could elaborate on what were the key drivers for the better utility business performance?
If I can explain that for utility segment performance, despite the lower ICPT, I think the corresponding quarter and utility performance were better mainly because of two things. First, the higher volume obtained by customers because we saw lower unplanned shutdown on the customer side during this period. Secondly, because there's slightly lower MRP on the gas price compared to the corresponding period. So those two factors actually negate the impact of lower ICPT.
Was there any volume sold under the NEDA scheme again?
Yes, there are.
Was that the full? I believe around 20 megawatts is what is eligible. Did you reach that threshold?
We have a threshold of 29 or 30 per site. We have two sites. But I think we did not reach 30 for each site because we only inject into the grid if the system marginal price is actually higher than our unit cost. So we did inject, but not up to that capacity that I mentioned.
Yeah, I just have a couple of follow-up questions. The first one is the associate contribution. I believe you touched upon it during your explanation, but was it due to the Pengerang Jetty contribution, or was that related to just the FX?
Sorry, can you repeat the question, Anshul?
Anshul, can you repeat the question, please? Sorry.
Yeah, just trying to get an understanding of the better associate performance this quarter. Q on Q.
I think on Q on Q performance, the better contribution from associates and venture actually coming from our Kimanis Power because of the unrealized and also realized forex gain. Because I heard they had this long-term cash flow hedge, and they gained from that hedging because it was hedged as part of the Sukuk requirement for the Kimanis Power when they started their operation back in 2014. Mainly coming from Kimanis Power, Anshul.
Understood. My last question is in your slide regarding the potential opportunities for PGB given the surge in data centers in Malaysia.
If you could provide further analysis of what could be what you mentioned in the slide, by 2033, there could be an additional 70% gas demand, what could be the regasification requirement corresponding to that increase in gas demand? And what does it compare to the capacity we have right now?
We are looking at almost the gas demand, mainly for power sector, probably as high as 50%-70% higher. So if you look at that, you probably require a new regasification terminal of similar size to each of the units that we have or slightly bigger than that, depending on that 50%-70% power sector demand on the gas by the power sector.
Understood. Thank you.
Thank you.
Thank you, Anshul. Next in queue is Darmini.
Thanks, Suriya. Okay, so one of my questions was already answered.
Maybe I'll just move on to the other one on your growth projects, which are already in the pipeline, i.e., your two power plants in Sabah as well as Labuan. For the Sabah facility, can I just reconfirm that you mentioned that the CapEx is RM 700 million?
Yeah.
Okay. And what are the expected project IRRs for this or perhaps the PPA tariff that has been agreed?
As you know, we cannot inform you the exact IRR, but what I can tell is within the industry benchmark for a typical IPP in Malaysia. Yeah. And as you know, IPP is based on capacity payment also with fuel gas, normally on pass-through basis. So you can expect on that return, on that CapEx, you can calculate what will be the return accordingly.
Okay. Yeah. Fair enough. Noted. Second question is on the Labuan planned facility, 120 megawatts.
What's the timeline like for perhaps finalizing this project, and what is the expected CAPEX?
Okay. As I mentioned, the step is ILON and then LON. We hope to get the LON before year-end. With the LON, we should be able to appoint the contractor, working towards the finalization of PPA sometime in quarter one next year. And CAPEX, because it's not a brownfield like Kimanis, it's a greenfield. We expect to be slightly under RM 1 billion total CAPEX.
Okay. Thank you very much. And just a final question. For these two plants, would you be owning 100%?
No. I think similar arrangement that we have had in Sabah, 60/40. The partner will be Sabah GLCs.
Okay. So for both, it will be 60/40, yeah?
Yes.
Okay. Great. Thank you so much. Thank you.
Thank you, Darmini. Next in line is Max Koh. Hi, Max. Hi. Hello.
Thanks for this call. Maybe just a question. I noticed that your minority interest or NCI has kind of taken up a bit in third quarter. Can I just check if there are any reasons for this or that I might miss?
Is there any more questions, Max? We'll just get back to you on that one.
Oh, okay. Then the other one is that, of course, I think you mentioned in third quarter that basically you benefited from a stronger ringgit. Now that we have seen, I think, ringgit's weakened in the fourth quarter as well. Do you expect an impact or a reversal impact in the fourth quarter as well? Yeah, I think these are just my two questions. Thanks. Okay.
On Forex, I think you are right because what we saw exactly on the final day of the third quarter, which is on the 30th of September, was a momentary strengthening of Ringgit. So we anticipate some of the unrealized gain would be reversed depending on where we end the year as of the 31st of December later on.
Okay. Thank you.
Okay. Maybe I can answer the first question on the minority interest. I think it's related to the second question, Max, because of that momentary strengthening of Ringgit, one of the subsidiaries which has a component of minority interest, which is the RGTP, actually gained on the momentary strengthening of Ringgit. So that's why we saw higher MI composition as of today, nine months 2024 compared to the same period last year.
Okay. That's really clear. All right. Thank you so much. Okay.
I'm going to the questions in the chat from Aung Sihan. Just wondering, for the gas transportation segment, supply of high-pressure gas to Singapore has a tariff of RM 1.701 per gigajoule per day. Can I know how much is the volume of gas supplied to Singapore? Is there any capacity reservation, and is the supply to Singapore under regulated business? Does the gas transportation segment also have capacity reservation regardless of volume delivered?
Thank you for the question. The question on whether the gas transportation segment has capacity reservation regardless of volume delivered, yes, similar to the regasification that I have explained just now. The supply to Singapore is using the pipeline. The price that we sell to Singapore has included the tariff of the pipeline, including Tariff C, because they actually require the gas at higher pressure.
Similar to other capacity that we have, Tariff C comes with a certain capacity, and that capacity has been fully reserved by the existing shipper.
Okay. Thanks for the answer. Next question is from Sean Lim. What is the CapEx guidance for next year, and is it still a 60/40 ratio between non-regulated and regulated CapEx?
Okay. On CapEx guidance for next year, I think as we are finalizing some of the growth projects as mentioned by Suriya earlier, we are anticipating slightly higher CapEx for next year, subject to the progress completion of the growth projects. In terms of the split between regulated and non-regulated, as we anticipate higher spending on the growth CapEx, we are anticipating a higher portion of non-regulated CapEx for next year. So yeah, I think it's higher contribution on non-regulated compared to regulated for next year.
Okay. Thank you, Shahrul.
Another follow-up question on the power plants in Sabah. How do you plan to finance the Sabah power plant projects?
We will definitely go for project financing. We don't know yet what will be the DE on this, but we believe we should be able to get similar to other IPPs when it comes to project financing for NIPP projects.
Okay. We have one more question from Daniel. Is there another question, or it was from just now? Okay. No. Okay. Next one is from Chi Wei.
All right. Thanks, Suriya. Yeah, just one question for me. Essentially, NCR, as you mentioned just now about exploring new power plants in Peninsular Malaysia, how advanced are these plants? And I suppose, is there a size that you're looking at, and do you already have a site in mind? Thanks.
Thank you. Thank you for the question.
If a power plant is to be secured, I believe the size will be similar to a typical power plant in Peninsular Malaysia. You will know an IPP in Peninsular Malaysia typically will be sized 1,200 to 1,400. So that will be the size for a typical IPP in Peninsular Malaysia. The government intends to work on an open bidding basis for the new power plant. So that is, we are positioning for that. We are looking at several sites, but it depends on how successful we are when it comes to bidding for those new power plants.
I see. Got it. Thanks.
Thank you, and I think that would be our last question for the day. On behalf of PGB, we thank all of you for your questions and active participation. We look forward to meeting all of you again in the next analyst briefing in quarter four. Thank you, everyone.
Thank you.