KUALA LUMPUR (May 11): Genting Bhd (KL:GENTING) is partnering with Indonesian company PT Rukun Raharja for its Kasuri gas project in West Papua by selling a 5% stake in both the gas production area and liquefied natural gas (LNG) facility. This move helps reduce risk and involve more local participation in the multi-billion-ringgit LNG venture.
In a statement on Monday, Genting said its 95%-owned indirect subsidiaries, Genting Oil Kasuri Pte Ltd and Genting LNG Pte Ltd, had entered into agreements with PT Rukun Raharja and subsidiary PT Raharja Energi Cepu Tbk for the divestments.
The transaction involves the sale of a 5% participating interest in the Kasuri production sharing contract (PSC) with Indonesia’s upstream oil and gas regulator SKK Migas, as well as a 5% equity interest in PT Layar Nusantara Gas (PTLNG), the entity developing Indonesia’s inaugural floating liquefied natural gas (FLNG) vessel.
Although no transaction price was disclosed, the downstream divestment is expected to be completed by end-July 2026, subject to the execution of a shareholders’ agreement and other conditions precedent. The upstream divestment is targeted for completion by February 2027, pending approvals from SKK Migas and the Indonesian government, among others.
Genting Oil Kasuri currently owns the entire participating interest in the Kasuri PSC and has secured approval from the Indonesian government for the first plan of development covering the Asap, Kido and Merah (AKM) fields within the concession area. The approved development allows the supply of 230 million standard cu ft per day (mmscfd) of natural gas to the FLNG vessel over an 18-year period.
The group’s 95%-owned indirect unit Genting Oil Kasuri first signed the PSC with Indonesia’s then oil and gas regulator BP Migas in May 2008. BP Migas has since been succeeded by SKK Migas.
The Indonesian government approved the revised first phase plan of development for the AKM structures on Feb 9, 2023. Besides supplying gas to the FLNG facility, the development plan also includes the supply of 101 mmscfd of natural gas to a planned ammonia and urea plant in West Papua for 17 years.
Under the integrated LNG development model, raw gas from the AKM fields will first be processed at an onshore gas processing plant and related midstream facilities before being liquefied at the FLNG vessel.
"The participation by Rukun Raharja Group, a well-established energy market player in Indonesia, is anticipated to bring valuable local expertise and facilitate smoother project delivery,” Genting said.
"It serves as a first meaningful step towards a deeper strategic partnership with an established local industry player in Indonesia.”
Rukun Raharja Group is an integrated Indonesian energy company involved across the upstream and downstream segments, including gas trading, transportation and energy infrastructure management. Its subsidiary, PT Raharja Energi Cepu, holds participating interests in several oil and gas blocks in Indonesia.
Genting has, to date, invested more than RM5.5 billion into the integrated Kasuri LNG development.
Genting and its LNG project company PTLNG have awarded several major contracts since 2024 to build the Kasuri gas and LNG facilities.
In 2024, PTLNG awarded US$182.87 million (RM793.22 million) worth of contracts to China National Machinery Import & Export Corporation and Shandong Kerui Energy Development Co Ltd for the design, engineering and procurement of the onshore gas processing plant, pipelines and supporting facilities.
It also separately appointed PT China Construction Yangtze River Indonesia to undertake the construction, installation and commissioning of the midstream infrastructure under a fixed lump-sum contract valued at IDR2.05 trillion (RM566.79 million).
While the engineering, procurement, construction and commissioning of the FLNG vessel, which will produce up to 1.2 million tonnes of LNG a year, was awarded to Wison New Energies for about US$962.8 million, with completion targeted for 2026.
By Monday’s midday break, shares in Genting were up one sen or 0.4% at RM2.53, valuing the group at RM9.81 billion. Over the past one year, the stock has declined 22.9%.