KUALA LUMPUR (Jan 9): Petronas Chemicals Group Bhd (PetChem) has inked a heads of agreement to sell a 25% stake in its wholly owned Petronas Chemicals Fertiliser Sabah Sdn Bhd (PCFSB) to SMJ Sdn Bhd, a wholly owned Sabah state government company.

The divestment is part of the group's strategic efforts to position itself as a preferred partner in shaping and implementing efforts by PetChem to sustain and grow the petrochemicals business in Sabah, it said in a stock exchange release.

PCFSB was established in 2011 to construct, own, and operate an integrated ammonia and urea production complex in the Sipitang Oil and Gas Industrial Park in the municipal district of Sipitang, Sabah. It is the largest single train ammonia and urea plant in Southeast Asia, and is designed to produce 1.9 million metric tons per annum of ammonia and urea.

The completion of the divestment is expected to be in 2023, subject to conditions precedent in the agreement being met, noted PetChem.

“We value the opportunity to further contribute to the development of Sabah. We welcome SMJ as our strategic partner, where they will be playing a key role in PCFSB's growth, while providing added value to the state’s gas resources,” PetChem managing director and chief executive officer Mohd Yusri Mohamed Yusof commented in a separate statement.

SMJ CEO Dr Dionysia Aloysius Kibat said the stake acquisition will give Sabah greater revenue-sharing in the oil and gas industry in the state.

“This is in addition to the recent acquisition of selected downstream gas pipeline assets and supply of natural gas contracts by Sabah Energy Corp Sdn Bhd (SEC), which makes SEC the largest domestic supplier and transporter of natural gas in Sabah. These acquisitions signify the increased participation of Sabah state GLCs (government-linked companies) in the oil and gas industry,” she added.

At Monday (Jan 9)’s close, PetChem shares settled five sen or 0.6% lower at RM8.35 each, with some 5.74 million shares traded. At this price, the group had a market capitalisation of RM66.8 billion.