Sime Darby Offshore Engineering Sdn Bhd Signs Joint Venture Agreement with Gas Malaysia Berhad

Kuala Lumpur, 28 April 2015 – Sime Darby Offshore Engineering Sdn Bhd (“SDOE”) and Gas Malaysia Berhad (“Gas Malaysia”) have teamed up to pursue business opportunities in the Bio-Compressed Natural Gas (“Bio-CNG”) value chain with the setting up of a joint venture company known as Sime Darby Gas Malaysia Bio-CNG Sdn Bhd (“JVCo”).

SDOE will hold a 51% stake in the JVCo while the balance of 49% will be held by Gas Malaysia. 

SDOE, through its Technical Services division is principally involved in supplying, installing, commissioning and providing support services for the Bio-CNG business, namely Bio-CNG systems, distribution trailers, tanks and after-sales services. It is a wholly-owned indirect subsidiary of Sime Darby Berhad. 

Incorporated in Malaysia since 1992, Gas Malaysia is a leading company involved in the distribution of natural gas and liquefied petroleum gas to industrial, commercial and residential customers in Peninsular Malaysia via its Natural Gas Distribution System. Gas Malaysia is on track to further grow its existing core business whilst venturing into new areas of business, namely the Combined Heat and Power, and Virtual Pipeline, to catapult future growth. 

Bio-CNG is a sustainable and eco-friendly alternative energy source to fossil fuels. It is generated from residues and waste materials which reduce greenhouse emissions which would otherwise be released if not captured and treated. 

As a carbon neutral fuel alternative, Bio-CNG can be efficiently stored and transported in CNG cylinders, providing customers with a more cost-efficient means of gas distribution and in the long-term advance the nation’s bio-economy footprint by reducing imports of coal and gas. 

“This partnership is a much anticipated development as it is in line with one of Sime Darby’s strategic growth initiatives, which is to position SDOE as an integrated engineering service player in the Bio-CNG business,” said Encik Alan Hamzah Sendut, Executive Vice President of Sime Darby’s Energy & Utilities (Non-China Operations) division.

“With the respective areas of expertise and competencies being brought to the table through this Joint Venture, we foresee vast economic potential and development of niche technical skill sets from the synergies between SDOE and Gas Malaysia.” 

SDOE first ventured into the Bio-CNG business in 2010. Since then, the company has installed and successfully commissioned its first full scale Bio-CNG plant to Felda Global Ventures Holdings Berhad (FGV) in February 2015. The project features the first plant in Malaysia to produce Bio-CNG, with a production capacity of 80,000 MMBtu per annum.

Commenting on the JV Agreement, Chief Executive Officer of Gas Malaysia Berhad, Encik Ahmad Hashimi bin Abdul Manap said, “With over 20 years of experience in selling, marketing and distributing natural gas to industrial, commercial and residential sectors in Peninsular Malaysia, we remain confident on our potential network and infrastructure to facilitate the proposed business activities for this joint venture.”

“With this strategic alliance and the combined strength of each partner in their respective fields, we remain optimistic that this joint venture will deliver sustainable growth in the near future,” he concluded. 

The signing of the JV Agreement marks the first step towards greater synergies of expertise between Sime Darby and Gas Malaysia to capture opportunities within the Bio-CNG business.  

About Sime Darby
Sime Darby is a Malaysia-based diversified multinational involved in key growth sectors, namely, plantation, industrial equipment, motors, property and energy & utilities. Founded in 1910, its business divisions seek to create positive benefits in the economy, environment and society where it has a presence.

With a workforce of over 120,000 employees in over 25 countries, Sime Darby is committed to building a sustainable future for all its stakeholders. It is one of the largest companies on Bursa Malaysia with a market capitalisation of RM55.76bn (USD15.63bn) as of 24 April 2015.

About Sime Darby Energy & Utilities
Sime Darby Energy & Utilities is the engineering and utility arm of Sime Darby with core businesses in Trading, Engineering & Technical Services, Ports & Logistics and Water Management. The Division is supported by over 1,800 personnel with strong and diverse operational backgrounds across Malaysia, Singapore, Thailand and China. 

With the rise of demand for sustainable energy and infrastructure in tandem with the growth of economies, Sime Darby Energy & Utilities aims to engineer real solutions to meet these needs. In striving for excellence and growth, it sets its aspirations and goals towards making a sustainable future a reality for everyone.

About Gas Malaysia Berhad
Gas Malaysia was established on 16 May 1992 to sell, market and distribute natural gas as well as to construct, operate and maintain the Natural Gas Distribution System within Peninsular Malaysia. Gas Malaysia is licensed under the Gas Supply Act, 1993 by the Suruhanjaya Tenaga, with the approval of the Minister, to supply and sell reticulated natural gas in Peninsular Malaysia. On 15 December 2000, Gas Malaysia was granted the license to supply and sell reticulated Liquefied Petroleum Gas (“LPG”). With this licence, we expand the business to include the supply of reticulated LPG to the commercial and residential sectors within Peninsular Malaysia. 

Gas Malaysia currently operates and maintains 2,065 kilometres of pipeline across Peninsular Malaysia, supplying natural gas and LPG to 771 industrial customers, approximately 1,994 commercial customers and 35,553 residential customers. In line with the vision to be an innovative value-added energy solutions provider and the mission to provide the cleanest, safest, cost effective and reliable energy solutions,  Gas Malaysia continues to explore other solutions to improve energy efficiency for its customers and ultimately, for the nation. For instance, it has introduced and promoted the Combined Heat and Power system. Gas Malaysia also explores other avenue to create new demand for gas by introducing “Virtual Pipeline”; that is to supply compressed natural gas via land transportation to areas beyond the reach of its gas pipelines. 

For more information, please visit: www.gasmalaysia.com.