KUALA LUMPUR (Jan 22): Sumatec Resources Bhd's business partner CaspiOilGas LLP signed a presale gas agreement with Kazakhstan-based NIPIneftegas Consortium (NIPI). The deal includes the sale of 6.2 billion cubic metres of gas to NIPI over 15 years at market gas price.

In a statement to Bursa Malaysia today, Sumatec said the NIPI-led consortium will convert the gas into petroleum products through a proprietary gas-to-liquid (GTL) technology.

"The proposed capital expenditure (capex) for the gas utilisation plan which is tied to the gas development production agreement between SRB (Sumatec) and COG (CaspiOilGas) will start at US$60 million (about RM236.46 million) and the total capex of the plant over the period to bring it to full capacity will be US$360 million (about RM1.42 billion). The first phase of the plant operation is expected to start in 2019.

"The GTL plant will be funded and operated by the NIPI-led consortium. The presale gas agreement allows for COG or SRB to take up participating equity in the GTL plant at a later date if either party chooses to opt in. In addition to the sharing of the oil produced under the joint investment agreement executed between SRB and COG, SRB will receive share of the oil/condensates produced, as well as the fee for processing the raw gas prior to the sale/supply to NIPI," Sumatec said.

At Bursa Malaysia, Sumatec shares settled at 10 sen at 12:30pm for a market value of RM425.27 million. Sumatec saw some 213 million shares traded, making the stock Bursa Malaysia's most active.