KUALA LUMPUR (Feb 22): Gas Malaysia Bhd has entered into a pipeline development agreement with the Perak state government to provide gas infrastructure development for the supply of natural gas to its customers in Kinta Valley there, at a cost of RM180 million.

In a Bursa Malaysia filing today, the group said it will develop, operate and own the natural gas distribution system pipeline with a capacity of 50,000 standard cubic meter per hour and measuring approximately 140km in length from the take-off point located at Ayer Tawar, to supply natural gas to areas identified by the parties.

It added that the Perak state government has agreed to contribute towards the development cost in the form of capital contribution of RM10 million, which is fixed and not subject to any variation.

Other than this, Gas Malaysia will fund the project through a combination of internally generated funds and borrowings.

"The Perak state government is desirous to promote clean energy in the State of Perak whilst the company is desirous to provide gas infrastructure development for the supply of natural gas to its customers in Kinta Valley, in line with Gas Malaysia's overall strategy of maintaining its key position to be an innovative value added energy solution provider," the group said.

The project is expected to contribute positively to the revenue and earnings of the group upon completion, it added.

At the noon market close, Gas Malaysia shares closed down six sen or 2.01% to RM2.93, bringing a market capitalisation of RM3.84 billion.