Thursday 28 Mar 2024
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This article first appeared in The Edge Financial Daily on January 23, 2018

KUALA LUMPUR: Sumatec Resources Bhd’s business partner CaspiOilGas LLP has 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 the market gas price.

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

“Sumatec is excited with the presale gas agreement and the benefits that it will bring to both CaspiOilGas and Sumatec,” it added.

It said the proposed capital expenditure (capex) for the gas utilisation plan, which is tied to the gas development production agreement between Sumatec and CaspiOilGas, will start at US$60 million (about RM235.8 million), with the total capex over the period to bring the plant to full capacity at US$360 million.

“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 CaspiOilGas or Sumatec to take up [a] participating equity in the GTL plant at a later date if either party chooses to opt in,” said Sumatec.

CaspiOilGas is a unit of Markmore Energy (Labuan) Ltd (MELL) and is the concession owner of the Rakushechnoye oil and gas field in West Kazakhstan. Under a joint investment agreement signed in March 2012, Sumatec is entitled to 100% of the profit for the first two million barrels and, subsequently, profit is shared on a 50:50 basis between Sumatec and CaspiOilGas.

“In addition to the sharing of the oil produced under the joint investment agreement executed between Sumatec and CaspiOilGas, Sumatec 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 added.

Sumatec shares yesterday closed up one sen or 9.52 % at 11.5 sen, with a market value of RM467.8 million, with 565.96 million shares traded, making it the most active stock on Bursa Malaysia for the day.
 

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