This article first appeared in The Edge Financial Daily on February 23, 2018 - March 1, 2018

KUALA LUMPUR: Gas Malaysia Bhd has bagged a contract from the Perak state government to build a natural gas pipeline in Kinta Valley, Perak at a cost of RM180 million.

In a filing with Bursa Malaysia yesterday, Gas Malaysia said it has entered into an agreement with the Perak government to undertake the pipeline development, which will have the capacity of 50,000 standard cubic metre per hour.

Measuring 140km in length, the natural gas pipeline will run from the take-off point located at Ayer Tawar, Perak to the areas identified by both the Perak government and Gas Malaysia.

“The Perak government has agreed to contribute towards the development cost in the form of capital contribution of RM10 million, which is fixed and not subject to any variation,” said Gas Malaysia.

The pipeline development agreement will be effective on the commencement date and will expire on the date of issuance of the approval to operate by the Energy Commission to Gas Malaysia, it added.

“The Perak government is desirous to promote clean energy in the state, while the company is desirous to provide gas infrastructure development for the supply of natural gas to its customers in Kinta Valley, in line with Gas Malaysia’s overall strategy of maintaining its key position to be an innovative value added energy solution provider,” said Gas Malaysia.

Gas Malaysia added that it will fund the project through a combination of internal funds and borrowings.

“The project is expected to contribute positively to the revenue and earnings of the group upon completion,” it said.