KUALA LUMPUR: Genting Bhd today announced more than RM4.7 billion worth of investments into the group's power and oil and gas segment by comissioning a floating liquefied natural gas (FLNG) facility for use in Indonesia and taking a substantial stake in a gas-powered plant in China.
The first deal involves the commissioning of a 1.2 million tonnes per annum (MTPA) FLNG facility, valued at US$962.8 million (RM4.5 billion).
Genting entered into an engineering, procurement, construction, installation, and commissioning (EPCIC) contract with Wison New Energies Co Ltd for the FLNG facility.
This agreement was facilitated through the group's subsidiary Genting Oil & Gas Sdn Bhd, and another 95 per cent-owned indirect subsidiary, PT Layar Nusantara Gas (PTLNG).
Wison will construct the FLNG facility at their shipyards located at Nantong and ZhouShan in China.
After passing the yard performance test, the FLNG facility shall be towed to its final destination located at Teluk Bintuni, West Papua, Indonesia, where the final commissioning test will be carried out.
The project duration is estimated to be 27 months from the execution of EPCIC contract followed by a 18 month warranty period.
Genting said hat the target sail away date from ZhouShan shipyard will be in the second quarter of 2026 (2Q26), and first drop of LNG in 3Q26,
The feed gas for the FLNG facility shall be supplied from the Asap, Merah and Kido structures within the concession area of the Kasuri Block in West Papua, Indonesia, awarded to Genting Oil Kasuri Pte Ltd, another 95 per cent indirect subsidiary of the group pursuant to a production sharing contract signed in May 2008 between Genting Oil Kasuri and BP MIGAS, the Indonesian oil and gas regulator.
"The government of Indonesia approved the Revised First Phase Plan of Development for the Asap, Merah and Kido structures on Feb 9, 2023, which allows the supply of 230 million standard cubic feet per day (mmscfd) of natural gas to the FLNG facility for 18 years, as well as another supply of 101 mmscfd of natural gas to an Ammonia and Urea plant to be built in West Papua, Indonesia for 17 years," it said in a statement filed with Bursa Malaysia Securities.
To ensure the project is completed in accordance with the planned schedule of achieving first drop of LNG in 3Q26, PTLNG entered into a limited notice to proceed (LNTP) agreement for the purchase of long lead items worth US$43.04 million on Sept 8, 2023.
According to Genting, the LNTP agreement has been extended further to cover the progress of the engineering work up to the date of signing of this EPCIC contract including hull steel cutting on June 7, 2024 to enable first drop of LNG to be achieved in accordance with schedule in 3Q26.
To date, PTLNG has committed to a total sum of US$188 million under the LNTP agreement and this amount forms part of the EPCIC contract price of US$962.8 million.
Genting said the project will be funded by internally generated funds and project financing.
The group is in advanced stage of securing project financing from a group of Chinese and international lenders.
The second deal is a proposal to take up a 49 per cent interest in China-based SDIC Jineng (Zhoushan) Gas Power Generation Co Ltd for 100 million yuan (RM64.87 million).
SDIC Jineng will own and develop a 2 x 745MW gas-fired power plant in Greater Shanghai Area, Zhejiang Province, China, which is expected to achieve commercial operation in the fourth quarter of 2025.
SDIC Power Holdings Co Ltd will hold a majority interest in SDIC Jineng.
According to Genting, the project is one of the three key H class projects listed in the 14th 5-Year Plan of Zhejiang Province.
It said the project is expected to be the first H class unit to operate within Zhejiang Province when it achieves commercial operation in 4Q25.
The construction works started in 4Q23, and has achieved 10 per cent overall progress.
Additionally, Genting has also signed an agreement with SDIC Power to jointly operate the project company once the acquisition is completed.
The group estimates that a further pro rata equity investment of approximately 328 million yuan (US$46 million) will be required up to target commercial operation in 2025.
"The purchase price and equity investment totaling 428 million yuan (US$60 million) will be fully funded by internally generated funds," it noted.
Trading in Genting's shares were halted at 4.20pm today after the announcements.
It last traded 0.2 per cent lower to RM4.69 a share, giving it a market capitalisation of RM18.2 billion.