Assalamualaikum and good morning, everyone. Welcome to PETRONAS Gas Berhad analyst briefing for the third quarter ended 30th September 2025.

Thank you for joining today's session organized via the Microsoft Teams platform. I'd like to apologize for the late reschedule of the analyst briefing yesterday due to some unforeseen circumstances, but again, thank you for joining us today.

I'm Suri, Head of Investor Relations, PGB, and I have together with me here today Encik Abdul Aziz Othman, Managing Director and CEO of PETRONAS Gas Berhad; Encik Shahrul Azham Sukaiman, Chief Financial Officer. Unfortunately, Encik Wan Khairul Nizam, Head of Business Development and Commercial, is unable to join us today for an urgent meeting.

The PETRONAS Gas Berhad analyst briefing for the third quarter of financial year 2025 is divided into four segments. In the first segment, Encik Aziz will present the key highlights for PETRONAS Gas Berhad for nine month for the first nine months.

Next, in the second segment, the business updates and financial performance will be shared by Encik Shahrul Azham. This will be followed by the third segment where Encik Aziz will share PGB's focus moving forward.

Finally, in the fourth segment, we will open the session for question and answer. All participants are reminded to obey the session rule where everyone should be on mute throughout the presentation.

The presentation was also shared with you prior to the session through the Microsoft Teams channel and the PGB website. You are allowed to ask questions during Q&A.

Please be reminded to press the raise hand button and we will open the microphone for the selected participant. You may also post your question in the chat box, and we will select any question to be answered.

For reference, our financial results is now available at both Bursa Malaysia and PGB websites. To continue with the briefing, I call upon Encik Aziz to share his presentation.

Encik Aziz?

Thank you, Suri. Assalamualaikum and good morning, ladies and gentlemen.

Thank you once again for joining us for PETRONAS Gas Berhad Q3 2025 performance results. As always, before we go into the results, let's take a look at some of the key external development which has some impact to PGB business in the past quarter.

Firstly, as we have informed in last quarter analyst briefing, Suruhanjaya Tenaga has announced implementation of new electricity tariff structure for regulatory period four. That was effective on 1st July 2025 along with revised fuel cost adjustment as a new element.

This new structure replaced the previous tariff structure that has been in place since 2024 -- 2014. The new RP4 electricity tariff has resulted in unfavorable impact to the utility segment.

We are currently assessing, and always, we are developing mitigation strategies to manage cost implication and maintain the operational efficiency under the new tariff regime. Second, we have seen the ringgit strengthening against US dollar over the past three quarters.

In Q3, the ringgit was at an average of 4.22 per US dollar. Although the impact of forex fluctuation in our operations and project remained minimum, this will provide some buffer in managing our projects which has USD exposure.

There are other factors with more muted impact for now, such as geopolitics and trade policies. Apart from that, cost of doing business is still high, while the market is adjusting to revised subsidy, revised electricity tariff, as well as the SST new rate and broader coverage.

Amidst the challenges, this external environment, especially the elements that I have highlighted, PGB continued to maintain a healthy performance throughout the first nine months of financial year 2025. With operational challenges during the year, group continue to demonstrate resilience through disciplined operation, proactive asset management, and sustained cost optimization efforts.

Having said that, comparing to the first nine months of 2024, first, PGB group revenue stood at RM4.8 billion, a decrease of 2.4% or about RM119.7 million, mainly due to lower product price in the utilities segment, thus impacted by the external environment that I have mentioned, and lower gas transportation revenue following a downward tariff adjustment arising from sharing factor for prior years' lower internal gas consumption. Gross profit declined by 6.1%, RM109 million, primarily from lower margin in the gas transportation segment, and that is due to the reduced revenue, cost incurred for gas supply restoration work following the Putra Heights fire incident in April 2025.

Utility segment margins was also tighter in line with the lower revenue. PBT only decreased also by 3.8% or RM71.5 million, reflecting from the lower gross profit.

Nevertheless, this was partly cushioned by once-off income received from a customer settlement related to an electricity supply agreement dispute. Profit recorded of RM1.4393 billion, a decline of 4.3% or RM65.1 million, and again, primarily due to tighter margin in utility segment and lower gas transportation revenue.

This are driven by the reduced product price for utility segment and for the gas transportation, a downward tariff adjustment. Additionally, the group incurred cost related to gas supply restoration works following the Putra Heights fire incident.

This impact were partially mitigated again, as mentioned, by once-off settlement income received from a customer. EBITDA was lower by 1.7% or RM43.8 million in line with the lower PBT.

Subsequently, earning per share decreased by 4%, reflecting lower profit attributable to shareholders of the company. Nevertheless, the board of directors has approved a third interim dividend of 18 cents per ordinary share, and this amount to RM356.2 million in respect of the financial year ending 31st December 2025.

On the business update for Q3 2025, following the Putra Heights incident, we have safely resumed gas supply to the affected customer on 1st July 2025 as per our commitment to the government via a bypass pipeline. PGB, as mentioned earlier, is impacted by cost associated with the incident, particularly for the temporary bypass pipeline, and revenue adjustment due to availability of capacity during the incident.

Total impact for the year is expected to be within the RM60 million as announced to Bursa early this year. Meanwhile, on the third LNG storage tank, we have completed work on the floating storage unit at the RGT Pengerang.

On August 20th, we achieved commercial operation date for the projects. This milestone creates opportunities for incremental revenue growth and margin enhancement from LNG storage services.

PGB is disciplined in delivering our portfolio of growth projects, aligned with our long-term strategy to strengthen operational excellence and deliver sustainable value creation. With focused execution on projects that have achieved FID, such as the fiber optic infrastructure project, the 120-megawatt power plant in Labuan, and the cold energy separation unit, CSU, in Pengerang, we are progressing well with our mitigation measures for this projects.

Now, we have come to the detail of our business and financial performance. This section will be presented by Encik Shahrul.

Over to you, Shahrul.

Thank you, Encik Aziz. Good morning, everyone.

I will take you to the individual business segment and financial performance for Q3 and also year-to-date 9M 2025. Let's start with gas processing segment.

For gas processing segment, the gas processing plant Unit 3 and also Unit 6 have actually recently successfully completed their plant turnaround in compliance with statutory requirements. GP segment maintained their high reliability, consistently meeting sales gas demand and gas supply, and this resulted in achieving nearly 100% of the overall equipment effectiveness and maximize our performance-based incentive under this business segment.

In terms of financial performance, against the corresponding quarter, Q3 2024, revenue increased marginally by about 0.5%, contributed by higher IGC incentive following higher volume of IGC savings. Gross profit rose by 7.4% or RM14.8 million, driven by lower operating expenditure for the quarter.

Against the corresponding period, 9M 2024, gross profit increased by about 4.9% or RM30 million in line with the lower operating expenditure. Moving on to the next segment on gas transportation, our pipeline network have been reliable during the quarter, subsequent to the Putra Heights fire incident in Q2, signifying our commitment in ensuring uninterrupted gas supply.

We had worked continuously to restore the pipeline services in the affected areas and have achieved the gas-in for the temporary bypass line on the 1st of July 2025, while the permanent pipeline replacement works still ongoing and progressing as planned. Having said that, our financial performance against the corresponding quarter, Q3 2024, the revenue decreased by about 4.2% or RM12.5 million following downward tariff adjustment, as mentioned by Encik Aziz earlier, and this is mainly due to the sharing factor for the prior year's lower IGC, and this is in accordance with the incentive-based regulation framework by Suruhanjaya Tenaga.

Gross profit fell by 23% or RM35 million from higher operating expenses mainly due to depreciation, as well as increased utilities cost. Against corresponding period 9M 2024, gross profit fell by 19.5% or RM91.6 million, mainly attributable to the downward revenue adjustment, as I mentioned earlier, higher utilities cost, as well as cost that we have incurred for the gas supply restoration works following Putra Heights incident in April 2025.

Moving on to the regasification segment, our LNG regasification infrastructure in Sungai Udang, Melaka, and also Pengerang, Johor, sustained their strong reliability performance as a result of our effective maintenance program. During the quarter, LNG regasification in Sungai Udang completed the LNG berth maintenance, and this effective maintenance program will further enhance the operational safety and efficiency for our LNG activities, ensuring safe and reliable operations.

This is even more important as we have started commercial operations of the additional LNG storage services in Pengerang, as mentioned by Encik Aziz earlier. For the financial performance against the corresponding quarter, Q3 2024, revenue was higher slightly by 1.9%, contributed by revenue from providing additional LNG storage services in Pengerang, Johor, beginning August 2025.

However, this increase was partly negated by the lower revenue following downward tariff adjustment for regasification business. However, gross profit declined slightly by 1.6%, mainly due to higher operating expenses related to maintenance activities which aim at maintaining facility reliability.

Against the corresponding period 9M 2024, gross profit reduced by 4.1% or RM19.4 million with higher operating expenditure related to maintenance activities for the regasification infrastructure. Moving on to the next segment, utilities, our group's utilities plant registered a close to 100% product delivery reliability for all our products to all the customers during the quarter.

As mentioned by our CEO earlier, Suruhanjaya Tenaga has announced the implementation of RP4 electricity tariff effective 1st July, and the revised tariff has resulted in unfavorable impact to this segment following a lower average price for electricity product. Despite the higher steam volume following higher demand, segment revenue declined for both quarter, year-to-date, mainly due to the lower electricity revenue following the downward revision of tariff, and this is coupled with lower product prices for steam and industrial gases in line with lower fuel gas price under the Malaysian Reference Price, MRP.

Against the corresponding quarter, Q3 2024, gross profit declined by 37.9% in line with lower electricity revenue, coupled with higher operating costs from depreciation and maintenance activities. Similarly, against preceding quarter, Q2 this year, gross profit was lower mainly due to electricity tariff adjustment, which was effective on the 1st of July.

Against corresponding period 9M 2024, gross profit fell by 11.8% or RM28 million from lower revenue, but this was partly negated by favorable impact of lower fuel gas cost following downward movement of average MRP. For PGB Group of Companies, our quarter group performance was underpinned by our strong operational reliability, where gas processing achieved nearly 100% overall equipment effectiveness, our gas transportation remained reliable with swift response restoration after the Putra Heights incident, and both of our regasification terminals sustained high reliability through preventive maintenance activities, while utilities delivered close to 100% product delivery reliability despite the lower tariff and also product prices.

Reason that, our PGB Group performance against the corresponding quarter, Q3 2024, group revenue for the quarter was at RM1.618 billion, a decrease of about 2.3%, mainly from utilities segment in line with the lower product prices, as well as the lower revenue from gas transportation segment following downward tariff adjustment because of the sharing of prior year lower IGC. Gross profit declined by 9.3% or RM55.8 million due to lower margins recorded at both utilities and gas transportation segment.

This decline reflects the reduced revenue and increased operating cost, mainly from higher depreciation expenditure. Profit for the quarter decreased by about 13.6%, mainly due to lower margin from lower utilities and also gas transportation segment.

This was further compounded by the increased cost, mainly from depreciation, along with the lower favorable forex movement in the current quarter, but this was partly cushioned by the once-off settlement income from customer during the quarter. Against the corresponding period 9M 2024, group revenue stood at RM4.8 billion, a slight decrease of 2.4%, mainly due to lower product prices in the utilities segment and the lower gas transportation tariff.

Gross profit declined by 6.1% or RM109 million, primarily from the lower margin in the GT and also utility segment, as well as the cost that we incurred following gas supply restoration works in utility segment. The group recorded profit of RM1.439 billion, a decline of 4.3% or RM65.1 million, due to the tighter margins in the utilities segment and gas transportation, and we also incurred costs related to gas supply restoration works following the Putra Heights incident, and the impact was actually mitigated by a once-off settlement income received from a customer in utilities segment.

Moving on to our balance sheet, group total assets at RM19.7 billion was higher by 5%, driven by higher property, plant, and equipment from higher capex expenditure, as well as we recognized a new right-of-use of asset following the completion of additional LNG storage in Pengerang, Johor. Consequently, total liabilities increased by 11.6% or RM523 million, mainly due to recognition of new lease liability on the floating storage unit in Pengerang, Johor.

We sustained a strong dividend leveraging on our robust earnings and efficient capital management. The board has approved, as mentioned by Encik Aziz earlier, the interim dividend of 18 cents per ordinary share, payable on 23rd December 2025.

We're still able to provide healthy level of payout, more than what we are committed under our dividend policy. That is all from me.

I will now pass the floor over to Encik Aziz to share on our company outlook.

Thank you, Shahrul. Ladies and gentlemen, as we look ahead, PGB, as always, is steadfast in pursuing market opportunities aligned with our long-term growth strategy while reinforcing operational resilience and stakeholders' trust.

Safety and disciplined project delivery continue to be our top priority. We enhance protocol in line with emerging risks to safeguard reliability and integrity.

Our company continue to demonstrate resilience through disciplined operation, proactive asset management, and sustained cost optimization efforts. This is despite operational challenges during the year.

In supporting Malaysia energy transition, we are progressing on infrastructure expansion, and this is to meet rising national demand and exploring opportunities under RMK13 and NETR. This include adding more capacity for regasification terminal, as well as both modernization and upgrading of both gas processing and pipeline.

Beyond gas infrastructure, we are unlocking value from existing assets through targeted diversification to broaden revenue stream and deliver sustainable returns. While market conditions offer promising opportunities, we remain mindful of potential risks.

You have heard a lot about carbon tax implementation, regulatory changes, and of course, global geopolitical developments. We will approach each initiative with prudence and discipline to ensure sustainable outcome.

That is all from me. I shall now pass it over to Suri for the next segment.

Thank you.

Thank you, Encik Aziz and Encik Shahrul. Now we have come to the question and answer session.

Please be reminded to continue to obey the session rule where everyone should be on mute to ask a question. Please press the raise hand button and we will open the microphone for the selected participant.

You may also type your question in the chat box, and we will read it out loud for you. Can start now.

We have one raised hand there, Daniel from Maybank. Hi, Daniel.

Daniel, can you hear us?

Hello, Daniel. Unmute.

Can you unmute?

Hello, morning. Can you guys hear me?

Yes. Yes.

Oh,

hi. Thanks for briefing.

I have a couple of questions here. First thing, I would like to know about your other income, about RM83.5 million.

What are the other incomes inside here?

Hi, Daniel. Shahrul here.

The other income that you saw recorded during the quarter primarily related to the once-off settlement with our customer due to some commercial dispute, and that has been actually recorded during the quarter.

How much is this amount? Around RM40 million, RM50 million?

Around that. I think if you look at our utility PAT, I think more than about 2% of that.

Oh, I would be thinking this RM40 million, RM50 million would be accounted --

Around that, yes, yeah. About that amount.

--

under other utility side, right?

Yes, correct.

I see. This under utility, under segmental part, it's called other income under the P&L.

Correct.

Correct. You are right.

Yep.

I see. Got it.

Second questions, can you provide us some more updates on this third LNG terminal that's supposed to be come in soon? Any further details on this?

Any updates on this third LNG terminal?

This is still under assessment. Of course, we need to get alignment with the authorities on the timing and what not.

We'll make the necessary announcement when it comes.

Is this a project in a fast-forward track kind of thing or by when is supposed this project to come in? COD, is it by 2030 kind of thing or when are we looking at?

How urgent is this project?

This is depending on the government. We can't say specifically what is the timing, subject to government alignment with the government,

yeah? I see.

Okay. Maybe I change the questions another way around.

For Sungai Udang and also for Pengerang today, what is the utilization right now for both of these plants? Actual utilization, not the committed utilization.

Between 30% to 50%, that's for Sungai Udang. For Pengerang.

Okay.

Sorry, 30% to 50% for both Pengerang and Sungai Udang?

No. Sungai Udang is about 20% to 30%, and then Pengerang is about

50% to 60%. 20% to -- 50% to 60%.

That's relatively low.

Yep, but I think the planning for the new capacity, as you all are aware, the government is looking for more power generation capacity to meet the demand by data center. That's why the expected utilization of our asset in the next few years could go up higher very soon, and as per your question, would necessitate more regas capacity.

Yep. This Pengerang and Sungai Udang.

Sorry?

Okay. For your gas processing plant, all right, we do know that there's long-term concern on the gas product exploration or productions coming from Kelantan and Terengganu side.

How long do you think this utilization of this gas processing plant in Kerteh going to last?

We have a long-term what we call gas processing agreement in place which pay us what we call a reservation capacity, reservation charge based on the booking capacity. I think we have met the announcement, the capacity of 1750, so that capacity is booked on long-term basis until after 2030s.

Until after 2030s.

Yep.

2030s. Have you guys actually done a research or studies on how long will the gas field outside of Kerteh going to last?

That's the responsibility of the shipper. As again, you must understand PETRONAS Gas is an infrastructure company.

We only provide services on the capacity, the capacity is booked until well into 2030s.

Okay. That's all from me.

Thank you.

Thank you.

Thank you, Daniel. I think next on the line is Fong.

Hey, morning management team. Two questions from me, both related to the Putra Heights fire incident.

Firstly, can I get some clarity on whether there's any costs incurred or impairment for the Putra Heights fire incident in the third quarter? If so, how much was that?

Then on the second question, noted that you have received a writ of summons from some plaintiffs. It was mentioned in the announcement that the quantum of special damages is RM68 million.

I wanted to understand whether this is largely the potential size of the liability, or does the other categories of damages and relief also pose risks of substantial liabilities? Any guidance on the timeline for resolution on this case?

Those are my two questions. Thank you.

I think I take the second question first. We have made the announcement to Bursa in regard to that summons, quite detailed.

I suggest you refer to that. That's to understand better on this issue, yeah?

The timeline, in court case, we have to follow the court proceeding and how this case typically progress. Very hard for us to say on the timeline for now.

Take the first one? I'll take the first question.

This is in relation to any impairment in relation to the Putra Heights incident. The answer is yes.

We made impairment in relation to the damaged pipeline as well as some of the line pack or gas that we use as a line pack because of the incident, and the magnitude is slightly less than RM10 million.

Fong? Mr.

Fong?

Wait, can I just follow up on that? The RM10 million impairment, right?

You said less than RM10 million impairment. Was that booked in the third quarter itself?

Second quarter.

Second quarter. Okay.

Regards your initial guidance, right, that total RM60 million will be in terms of cost, right, will be incurred for this financial year related to the incident, so far, how much have you booked in?

I think close to 40 because the impairment, as well as the repair cost itself, close to that RM40 million. Encik Aziz mentioned this earlier, because of the unavailable capacity during the incident, we are now finalizing with the shipper on the revenue adjustment.

We should be finalizing it soon, and I think it will be captured in Quarter 4.

Quarter 4, yeah.

Yeah.

I see. That would be something like a remaining RM20 million impact in Quarter 4.

We're finalizing it with the shipper, yeah. Yep.

Understood. Encik Aziz, I just want to ask you, right, I've read the announcement on the writ of summons.

As you rightly mentioned, it's quite detailed. I'm just trying to understand whether that RM68 million, because you only mentioned for the special damages, the other damages, there was no sort of quantification on the amount.

I'm just wondering whether is it because that's all we know or we know that actually the 68 the special damages of RM68 million would largely comprise the majority of the liability?

We are guided by what has been stated in the summons, and that is what being stated in the summons. Other than that, it's very hard for us to say otherwise.

Or even to forecast?

Noted. Thank you so much, management team.

Thank you.

Thank you,

Fong. We have next, Hern.

Apex.

Hi, good morning, Hern here from Apex Securities. Thanks for having me, PetGas and the team.

Actually, I have quite a few questions, I think I will go through one by one, lah. First one is regarding the gas pipeline incident, right?

Can I know is there any insurance claim already recorded in the third quarter and also any timeline that most likely is going to register if it's not yet?

You're talking about our cost for us for the repair, whatever on the damage, right?

Yeah.

It it it covered by insurance.

We've submitted the claim, but it's still in progress.

It's still being under process by insurance. We

have not recorded any insurance recovery as of today.

Yep.

The work still in progress. Okay.

Next question is on the settlement for the dispute, right? If we follow, it should be the BASF dispute, electricity dispute, which is, according to the announcement, RM53 million.

Can I know if this is the amount which is registered in the third quarter and also whether this amount is tax

deductible? Is Taxable.

Taxable. Taxable.

Taxable.

Yeah.

Taxable. Sorry.

It's taxable.

I would love to have tax deductible, but

Taxable.

What

you say is correct, lah, the counterparty.

It's RM53 million, right, the amount?

About 52.

52.

Don't add one more million, eh?

Okay. My mistake over there.

Next question is basically both are on the margins, right? Basically, for the gas transportation, right, the margin was down 10 percentage point year-on-year, which mostly is, I believe, due to the bypass pipeline, which has increased the operating cost.

Can we expect moving forward the operating margin to maintain at around 40% or can we expect it to go back to 50% like it used to be?

No, I have to correct you. As we are under regulation, right?

The margin is determined with whatever in the regulated regime that has been approved by ST. Then, year by year, there's always adjustment, what we call annual revenue adjustment.

This year, we are impacted by the ARA, annual revenue adjustment, thereby affecting our margin. What happened in the future is depending on what will be the landing with the authority with regard to each RP, yeah?

Then the gas transport margin was 50% in first quarter, then second quarter, it came down because of the restoration cost, then third quarter is still at 40. I'm just wondering moving forward, would it still be more or less around 40 or can we expect it to bounce back to first quarter level?

I think

to clarify, to explain, basically, what Encik Aziz mentioned earlier under revenue adjustment, what has happened, under the incentive-based regulation, the tariff is fixed throughout the RP period, but year-on-year basis, there's adjustment being made on a couple of items, but in relation to the internal gas consumption, like the fuel gas that we use to run the operation, the savings that we made on the volume used last year, there's a sharing factor. We keep 75, we share with the shipper 25%.

The 25% sharing has a lagging impact which being adjusted in this year, in the current year.

That

is the first one. On the margin variation year-on-year quarter-by-quarter, I think, first, there's the true-into margin if we compare against corresponding period, but if you look during the year, there's also impact of the cost relation to Putra Heights repair works, and towards the third quarter, the cost also increased in line with higher level of maintenance activities.

This maintenance activities is expected to continue into the fourth quarter or it will reduce,

because

we understand that seasonally, usually PetGas does most of the ramp-up in maintenance activities towards the year-end, can we expect for this to happen?

For this year, yes, but it's not the case for every year.

It depends on our

maintenance plan program and when we have the window to do the activities. It's not like that.

Yep.

That's how things rework, lah, for us, yeah.

This is not regarding just transportation, for all the segments, right, would there be increase in maintenance activities towards the year-end or it will be more or less the same as third quarter?

For this year, we anticipate

For this year, yeah.

Slightly higher than Quarter 3.

Okay. Last two question.

First is utilities side, because the margin also contracted, which is mainly due to the lower tariff and probably a bit of operating expense, right? Can I know if the utilities and also product prices maintain around more or less the same level, can we expect the margin to be around also this level, 10% in upcoming quarters?

Yeah.

I think we have explained quite a few times there are suite of product in utilities. Other than electricity, which is pegged to TNB tariff, which will be impacted by the automatic price mechanism adjustment, the rest is pegged to the gas price.

It will move with that, yeah? The margin as well as revenue, what not, will move with that.

In general, if the gas price goes up, will it be better or worse off for utilities segment?

It depends.

It depends how high is the gas price.

It depends.

Because

you can pass through the gas only just slightly half of the cost. The rest, if the AFA doesn't move or drop, then your margin will be impacted.

If the AFA move into a surcharge, then you got a better margin.

Oh, okay.

It's very dynamic.

I think it works similar to the previous team based on ICPT.

Yeah.

If it's a rebate, then not good for us because our revenue will be lower, while the cost, the fuel gas cost probably remain the same, but if it's a surcharge, then it's an upside for us,

correct?

Yeah.

Last question, what's the average MRP forecast for fourth quarter?

Sorry,

normally, we share this, but

yeah.

Last round,

you shared, that's why I asked. Maybe I go back to the floor and you just answer a bit later.

About

40.

About RM40. RM40.

40. Yep.

Okay. It was 39.

About. Quarter 4, right?

Yep.

Minimal movement, lah.

Okay?

Okay. Thank you, Encik Aziz, Encik Shahrul.

That's all from me. I'll go back to the floor.

Thank you.

Thank you, Hern. Next, we have Dharmini.

Thanks, Suri. I've got four questions, if I may.

Hopefully, I'll make them very quick. My first question is on the utility segment.

The segment reported a RM54 million gross profit during the quarter, but you mentioned earlier there was that dispute settlement that was RM53 million. If we remove it, does it mean that the utility segment was actually break-even during the quarter?

No. I think for utility segment, what's recorded under gross profit is not including the one-off settlement.

The one-off settlement is part of PGB Group because it appears under other income line items.

I see. It wasn't part of that segmental profit.

Right.

Yep.

Yeah.

Thank you. Second is on the gas transportation side.

I think you mentioned in the commentary that it was also dragged by higher utilities cost. Does that mean RP4 has resulted in higher electricity bills for yourselves?

The higher utilities mainly related to volume because we do actually flow more gas during the current period.

Because

we've got additional infrastructure, initial compressor in Segamat, running to support the gas supply. Higher gas flow.

This is essentially purely because of the Putra Heights incident, you've had to incur additional costs. Is that correct?

Not really. It depend on the demand.

We have Sector 3, Klang Valley, Northern Sector. Sometime, if the demand shifted, then we have to incur more, but generally, if you push more gas into the PGU, you will have to use more utilities.

More. This is a structurally higher utilities cost base for the transportation segment.

Yes.

Yep.

Okay. Maybe just an extension to that, the last two quarters has seen the gross gas transportation segment profits come off quite notably, partially due, I guess, to Putra Heights.

Is it safe to say that once we're done with this year, going into 2026, this average quarterly RM20 million sort of impact to your gas transportation segment will go away and profits will probably resume to the RM140 million sort of level, quarterly profit levels for gas transportation?

On the cost, you're right, because there's a lot of cost because of Putra Heights and what not, but going into the future, if nothing change, we expect the margin to remain, but as you're aware, we have submitted the package for RP 3, and that is still under assessment by the government.

Understood.

Yeah.

Thanks. Just two more very quick questions.

You mentioned the FSU has started in August. What sort of incremental earnings can we expect from that?

Additional energy storage in Pengerang, you mean, Dharmini?

Yes, that's right.

I think it is more of sweating the asset because we have that space and capacity to do that. We don't incur that much investment for that project.

The impact to PAT between 3% to 4%, I think yeah, around that. That we will see it into next year because it will start full operation,

full year.

We'll probably have better clarity during 2026.

Full year. Understand.

Thanks. Just one final question.

I think you mentioned earlier carbon taxes is a challenge moving forward. Does PETRONAS Gas's operations fall under the jurisdiction of this carbon tax that's going to be imposed or does that lie with, I guess, PETRONAS holding company or your shippers?

We do have provision in the contract because, as you're aware, the molecule is not owned by PETRONAS Gas,

and

that is something that we need to sit down with the shippers with regard to the carbon tax exposure.

Got it. It's still unclear at this juncture.

Yep.

Thank you very much. That's it for me.

Thank you, Dharmini. Thank you, Dharmini.

We'll take one last one from Anshu.

Hi. Good morning.

Can you hear me?

Yes. Yep.

Yeah. I just had a couple of questions.

To start with, for the utility segment, you mentioned that you're looking at certain mitigation measures to assess and reduce the impact from the new tariff. If you could share what are some of the likely levers that you could pull to reduce the impact?

Also just on this, the latest AFA release have announced some recent rebates, are we expected to see further decline in utility, specifically the electricity margins in 4Q as well?

As we have always been focusing on operational efficiency irrespective of whatever challenges that we have. The renewal of the contracts sometime in 2023 with the customer do mitigate some of the peculiarities of the markets, the external environment, but efficiency of the whole utilities is something that we've been focusing on, some through machine upgrading, et cetera, yeah?

Those are part of margin protection that we have embarked on, yeah?

For 4Q, do you see further hit considering the latest AFA releases, the rebates?

The rebate AFA in November is 8 cents. It's all published.

You can look at the rebate. Today is rebate.

Of course, we don't know change into surcharge or even go back to zero, but now it's a month-to-month

Yes.

number that is being announced by the government, similar to the ICPT. Not ICPT.

ICPT is 6 month, similar to the gasoline APM, yeah? Yes.

Yes.

Yeah.

Margins are worse off in 4Q effectively because I think the rebates are close to RM0.08 and

Of course, because it's rebate. Higher rebate.

Higher rebate, and

I think you are now very familiar during the ICPT regime also. When Yeah.

When it move, you can see the movement to our margin accordingly.

Yes. My next question is regarding the RP3, any updates, any discussions?

Where are you seeing the allowed returns, capex, and any other thing that you have discussed, if you could share? Just a precursor.

The discussion is ongoing. The government is yet to decide, but as what we have practiced before, once the decision is made, we'll have an session, lah, to explain accordingly.

As always, we expect sometime in December because the whole thing need to start on 1st January next year. Let's see.

Like before, we have the session to explain the new regime, lah.

Just maybe if I could ask this. I remember previously during the last RP, your main requirement was the adjustment for IGC frequency to change, which was then changed from 3 years to every year.

Similarly, the impact of FX. Is there any wish list that you have given to the regulator in terms of what will ease the volatility?

Because volatility is very low in earnings, but still, what will ease your operational impact?

Sorry, Anshu. You're asking under RP3, is there further adjustment to the framework that we ask, is it?

Yes. That as well.

Okay. I think if we were to compare because during RP2, the framework also being adjusted during the RP itself.

I think what we have seen the latest framework given by ST based on our operational requirement, I think all is there. We will need to see, lah, from time to time, what else.

First, we want to minimize exposure to market movement because we are just the infra owner. For now, what we have in the framework seems to be able to address our key concerns regarding the volatility of expenditure, especially year-on-year basis.

You recall, we submitted RP2, there were a few requests from us. Some were incorporated, for example, forex, et cetera, IGC regime.

Then, during the RP2 period, there were further adjustment, and then subsequent to that, we took all that and put up under RP3 and submit as a package incorporating all those. As Shahrul mentioned, if there are other things that we think is fairer for us and them, then we will adjust during RP3.

We will request for adjustment during RP3.

Understood. Those are all my questions.

Thank you so much.

Thank you.

Thank you,

Anshu.

I think we'll take one last question, coming back to Daniel. No hand.

Haiya, Daniel. Oh,

yeah. He's there.

Can you guys hear me?

Go ahead.

Just a latest update on last I remember previous quarter management has guided on the exploration of this battery energy storage venture or so-called outlook or so under CCUS. Any updates on these two business exploration?

Government has yet to decide on the BESS storage.

Has yet to decide? I thought they already come up with the tender kind of thing, no?

Yeah. We have submitted our bid.

I don't know whether we'll be successful or not, but it depend on government decision. Let's see.

Then the CCS still under engineering and commercial construct stage.

Engineering and construction? Constructive?

Commercial construct.

Commercial construction.

Commercial construct, meaning because as I think one of you asked just now, we don't own the molecule. We are talking to the owner of the molecule how all this will be dealt with in as far as charges and what not.

That's what I mean by commercial construct.

Oh, commercial construct.

Not construction. Don't go out and say we are constructing, eh?

Just a check on the CCUS. Last time it was mentioned that you guys want to use existing infrastructure of the gas pipeline to transport or to move the molecules to reduce the carbon emission.

Is this correct or you guys are supposed to build new structure to the existing

No. It's I think I think overall the the CCS is you are store capturing the CO2, then you send it to a storage reservoir offshore.

Our responsibility is just to capture, and then if there is a treatment, some treatment, and then send it back to the offshore reservoir. If any old pipeline to be used, it will be the off- offshore pipeline, not our pipeline, yeah?

Offshore pipeline, not yours. Means you guys may have to incur additional capacity to capture and send

Yep.

the molecule. I see.

The BESS submitted bid when when is I mean this is under EC, right, this submitted bid?

Is when

when are we expected to know the to know the what to know the to know the outcome?

I don't know. This is with the government.

Oh, there's no timeline to say that when are they supposed to announce it?

I suppose they said they want to announce before today, but so far, no decision.

Oh, okay, supposed to announce. The results are supposed to be out before today already, but so far no news.

A lot earlier. A lot earlier, but we don't know.

Okay. This is for 100 megawatt, is it?

400 megawatt and then 400 megawatt-hour.

I think from the RFP, they said they want to install 400 in four location, 100 at each location. That's the RFP.

I see. Or you guys are interested in the northern part or the southern part or east or west?

Trying to find the best sunshine area. Sorry?

The place with the highest sunlight.

Highest sunlight.

Yeah. Oh, okay.

It's not the northern side. It's more to the eastern side.

You should read the meteorological report.

I should read, but doesn't mean I would know everything. That's all from me.

Thank you.

Thank you, Daniel.

Thank you, Daniel.

Thank you, Daniel. That is all the time we have today.

Thank you for your active participation and engagement. We hope to see you again in the next quarter in February, insha'Allah.

Thank you, everyone. Bye-bye.

Thank you. Thank you.