Gas Malaysia Bhd has entered into a joint study and collaboration agreement (JSCA) with Petronas Gas Bhd (PGB) to assess the development of an onshore lateral pipeline connecting its proposed liquefied natural gas (LNG) regasification terminal in Yan, Kedah, to Peninsular Malaysia’s gas transmission network.
The company said the agreement establishes a framework for both parties to conduct a feasibility study and related activities for the pipeline connecting the proposed RGT Yan project to PGB’s Peninsular Gas Utilisation (PGU) system.
The agreement follows Gas Malaysia’s receipt of a Letter to Proceed from the Energy Commission (EC) on March 18, 2026 for the proposed LNG regasification terminal.
The feasibility study forms part of the requirements under the EC’s letter and is intended to determine the technical, operational and commercial viability of the proposed pipeline interconnection.
It will cover engineering design, land acquisition requirements and other technical assessments necessary for PGB to determine whether the proposed connection is technically feasible.
Both parties will contribute to development costs and funding commitments according to their respective participating interests, subject to agreed budgets and approval mechanisms.
The JSCA also establishes their respective responsibilities, cost-sharing arrangements and reimbursement mechanisms, alongside provisions covering confidentiality, intellectual property, dispute resolution and termination rights.
PGB operates and maintains the PGU pipeline network, which transports processed natural gas to power generators, petrochemical facilities and industrial customers across Peninsular Malaysia.
The transaction is considered a related-party arrangement under Bursa Malaysia’s Main Market Listing Requirements as PGB holds a direct 14.8% stake in Gas Malaysia.
The proposed pipeline represents an important supporting component of the RGT Yan project, as it would provide the physical connection between the proposed LNG import and regasification facility and the existing PGU gas transmission system.
However, the agreement announced on Monday relates to the feasibility study and collaboration framework for the proposed lateral pipeline and does not by itself constitute a final decision to construct the pipeline.
Gas Malaysia said the JSCA will have no impact on its share capital or the shareholdings of its substantial shareholders.
It is also not expected to have any material effect on the group’s consolidated net assets per share or gearing for the financial year ending Dec 31, 2026.
