1. INTRODUCTION
DIALOG Group Berhad (“DIALOG”) is pleased to announce that its wholly owned subsidiary, Dialog E & C Sdn. Bhd. (“DECSB”), has on 14 December 2021 accepted a Letter of Award for an EPCC Contract with Petronas Gas Berhad (“PGB”) with an estimated value of up to RM360 million, for the Provision of Engineering, Procurement, Construction and Commissioning (“EPCC”) for Southern Transmission Improvement & Readiness Project (“STAR”) at Kluang, Johor Darul Ta’zim (“the Project”).
2. SALIENT TERMS OF THE LETTER OF AWARD (“LOA”)
2.1 SCOPE OF WORK
The scope of work of the Project involves the engineering, procurement, construction and commissioning of a new booster compressor station with associated equipment and facilities at Mengkibol, Kluang, Johor Darul Ta’zim. The scope includes some modification scope for the existing compressors at Segamat Compressor Station and modification to the existing facilities.
2.2 THE PROJECT PERIOD
The Project is expected to commence in December 2021 and completion by First Quarter 2024.
2.3 CONTRACT PRICE AND PAYMENT
The estimated value of the EPCC Contract is up to RM360 million, payable to DECSB progressively throughout the EPCC period. The LOA was obtained through competitive bidding and the value of the EPCC Contract was based on the scope of work specified by PGB.
3. INFORMATION ON PGB
PGB was incorporated in 1983 as a wholly owned subsidiary of PETRONAS and listed on the Main Market of Bursa Malaysia on 4 September 1995. PGB is about 61% owned by PETRONAS, while the remaining shares are held by other institutional investors and retail shareholders.
It is Malaysia's leading gas infrastructure and utilities company with core businesses in gas processing, gas transmission and regasification. PGB processes natural gas piped from offshore fields and transports the processed gas via the Peninsular Gas Utilisation ("PGU") pipeline network to PETRONAS' customers in Malaysia and Singapore.
In addition, the Group also supplies steam, power and industrial gases for its customers at Kertih Integrated Petrochemical Complex in Terengganu and Gebeng Industrial Area in Pahang.
4. FINANCIAL EFFECTS
The Project is not expected to have any effects on the share capital and substantial shareholders’ shareholding of DIALOG. The Project, however, is expected to contribute positively to the earnings and net assets of DIALOG for the financial years ending 30 June 2022 onwards until the completion of the Project.
5. RISKS
Risk factors affecting the Project include but are not limited to execution risks such as availability of skilled manpower and materials, changes in prices of materials, and changes in political, economic, financial market and regulatory conditions. DIALOG will undertake all the necessary efforts to mitigate the various risk factors identified.
6. DIRECTORS’ AND MAJOR SHAREHOLDERS’ INTERESTS
None of the directors of DIALOG, major shareholders of DIALOG and/or persons connected with them have any interest, whether direct or indirect, in the LOA.
This announcement is dated 15 December 2021.
