Chairman Adnan Zainol Abidin said high gas prices precipitated by ongoing conflicts in Eastern Europe and West Asia were key factors in elevating internal gas consumption costs across the company’s business segments, most notably in its utilities segment where energy consumption is the primary expense.
“Our regasification and transportation segments were especially exposed to currency fluctuations due to some of our US dollar-denominated long-term contractual obligations and the higher costs of imported materials,” he said in PGB’s integrated report 2023.
Furthermore, he said industry players are facing increasingly stringent regulations and stakeholder expectations surrounding sustainability and climate action, with many of its major institutional shareholders closely analysing the sustainability initiatives to ensure they meet their sustainable investing parameters.
“Faced with these challenges, we have turned them into opportunities for progress.
“By resolutely focussing on driving cost optimisation and operational efficiency, supported by the targeted introduction of digital solutions, we successfully mitigated the year’s high-cost environment, delivering a resilient financial performance that stands us in strong stead for the future,” Adnan said in the report released today.
At the same time, Adnan said, the gas processing and transportation company navigated the evolving sustainability environment adeptly towards net zero carbon emission.
“This will pivot its position as a key driver of the nation’s energy transition through the government’s National Energy Transition Roadmap launched in August 2023,” he said.
Adnan said as a contributor to the roadmap’s catalyst projects, PGB now has the opportunity to capture new value propositions in the renewable energy and carbon abatement spaces, greenifying its portfolio for long-term value creation.
“Drawing upon our infrastructure and competitive advantages in the energy sector, we are participating in some of the catalyst projects to enhance our economic sustainability while contributing to the nation’s climate and energy objectives,” he said.
Looking beyond the near term, and notwithstanding its existing renewable energy investments, the company believes that natural gas has a critical role to play in the Asean region’s energy transition.
He said with high reliability, a low levelised cost of energy, and about 40% lower carbon emissions compared to coal, it will be a vital transitional fuel for the coming decades as countries gradually invest in building the infrastructure required to deploy renewable energy at scale.
“On this note, the liberalisation of the regional energy market presents a prime opportunity for PGB to play a better role as a natural gas infrastructure service provider across Asean, while Malaysia positions itself as the region’s gas hub.
“We remain hopeful that Malaysia will continue to move towards a conducive ecosystem to support this aspiration,” Adnan added.