MARC Ratings has affirmed its AAAIS rating on Pengerang LNG (Two) Sdn Bhd’s (PLNG2) Islamic Medium-Term Notes (IMTN) Programme of up to RM3.0 billion, with a stable outlook.
PLNG2 is 65%-owned by PETRONAS Gas Berhad, which is in turn 51%-owned by Petroliam Nasional Berhad (PETRONAS). PLNG2 owns a regasification terminal in Pengerang, Johor, with a capacity of 3.5 million tonnes per annum, which has served as a key natural gas entry point for the Pengerang Integrated Complex since November 2017.
The rating reflects PLNG2’s sizeable and predictable regasification revenue under the Incentive-Based Regulation framework, with demand risk mitigated by a long-term usage agreement with a PETRONAS-related entity. The rating also considers PLNG2’s strong operating margins. A two-notch uplift is incorporated to reflect strong support from the PETRONAS group, underpinned by significant financial and operational linkages within the group.
For Regulatory Period 3 (RP3; 2026–2028), which commenced on 1 January 2026, the tariff was reduced to RM3.103/GJ/day from RM3.149/GJ/day in 2025. The reduction reflects a lower regulated asset base following depreciation, a lower approved return for RP3 and the sharing of 2025 cost savings with the customer. Consequently, regasification revenue declined modestly to RM305.2 million in 1H2026 (1H2025: RM309.7 million). Nevertheless, total revenue increased to RM353.0 million (1H2025: RM317.3 million), supported by ancillary services following the commencement of LNG floating storage unit (FSU) operations in August 2025. The FSU contributed RM42.9 million, or 12% of total revenue, more than offsetting the decline in regulated revenue. Based on the capacity reserved by its sole customer, PETRONAS Energy & Gas Trading Sdn Bhd, PLNG2 remains on track to achieve its full-year regasification revenue forecast of RM615.5 million.
In March 2026, PLNG2 drew down an additional RM800.0 million under its sukuk programme, of which RM732.4 million was used to prepay its US dollar-denominated jetty lease liability, with the balance used for general corporate purposes. The refinancing significantly reduced PLNG2’s exposure to foreign exchange volatility.
Operating profitability remained strong, with an operating margin of 50.7% in 1H2026. Operating cash flow of RM256.8 million supported strong interest and debt coverage ratios of 9.01x and 0.20x, respectively. As at end-June 2026, total borrowings increased to RM2.3 billion (end-2025: RM1.5 billion), mainly due to an additional sukuk drawdown. Nevertheless, liquidity remained strong, with cash balances of RM296.5 million as at end-June 2026 subsequently supporting the RM100.0 million sukuk repayment in October 2026.