OSK Research has warned that Petronas Gas Bhd's profits for the second half of its financial year ending March 31, 2011 (FY11) were unlikely to match its stellar first-half performance as a result of the Bekok C gas platform fire, offshore Terengganu, in December.
Due to the loss of some 5% of gas supply from Bekok which would affect its gas processing and transmission revenue as well as revenue from extracting propane and butane, OSK Research cut its net profit forecast for Petronas Gas by 0.4% for FY11, 3% for FY12 and 1.4% for FY13, which in turn reduced its target price slightly to RM13.54 from RM13.65.
The Bekok C gas platform, located some 200km off Terengganu, caught fire during a scheduled shutdown on Dec 14, 2010, disrupting some 150mmscfd of gas supply for a period of 12 months or more.
"While Petronas Gas will try to source gas from the Malaysia-Thai Joint Development Area (JDA) and the Malaysia-Vietnam Commercial Agreement Area (CAA) as well as Indonesia’s Natuna field, we do not expect the entire 150mmscfd to be recovered that easily," OSK Research said in a report today.
"Assuming that even with gas from other sources, some 125mmscfd is taken off the Peninsular Gas Utilisation (PGU) pipeline network, this will reduce gas processed by Petronas Gas by 5.7% from the 2,178mmscfd for FY09," it added.
However, Tenaga Nasional Bhd has requested for 200mmscfd out of the 400-500mmscfd, which would be imported from 2012 onwards via the liquefied natural gas importation terminal in Malacca. This supply is expected to be available from end-2012 onwards and would boost FY14 profits and beyond.
OSK Research maintained a buy call on Petronas Gas, with some 20% upside.
