KUALA LUMPUR (Sept 30): Shares of YTL Power International Bhd were up marginally by as high as 2 sen or 1.26% at RM1.61 in morning trades following news of its power purchase agreements (PPAs) for its two power plants.

At 10.14am, the stock was 1 sen or 1.26% higher at RM1.60 with 465,200 shares changing hands giving it a market capitalisation of RM11.23 billion.

In a report published in The Edge Financial Daily today, the Energy Commission (EC) chairman Datuk Abdul Razak Abdul Majid said the commission had yet to renew YTL Power's PPAs as it needs to fulfil certain conditions before the renewal is given.

"We have given them (YTL Power) a conditional offer. They have to come back to EC first and say they have met the conditional offer," he said.

According to Abdul Razak, one of the conditions is for YTL Power to resolve the land issues with Tenaga Nasional Bhd (TNB) as the independent power producer (IPP) plants are built on the latter's land.

The PPAs are for the two power plants in Paka, Terengganu, and Pasir Gudang, Johor.

YTL Power needs to iron out several issues in order to seal a PPA with the EC. But the renewal is unlikely to be left in limbo.

The digitaledge WEEKLY reported that the IPP is having difficulty in securing gas supply from Petroliam Nasional Bhd (Petronas) — one condition that YTL has to meet. It is learnt that YTL Power has yet to sign the gas supply agreement with Petronas.

To recap, the two companies are in dispute over an estimated RM700 million that YTL Power is claiming for overpayment of gas supplies for its power plant concessions. YTL Power has won the London arbitration for the lump sum, but the national oil firm is said to have filed an application with the High Court to review the arbitration.

(Note: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)