PETALING JAYA: Tenaga Nasional Bhd (TNB) is buying power from Singapore-based PowerSeraya Ltd, a unit of YTL Power International Bhd, as a shutdown of Petroliam Nasional Bhd-owned gas production platforms for maintenance work made worse a dwindling gas supply situation.

Chief executive officer Datuk Seri Che Khalib Mohd Noh said in a reply to a StarBiz query that the purchase was made to ensure supply security.

“We're buying 180MW only, which represents 1.5% of total demand,” Che Khalib said.

According to a Singapore Business Times report, the utility firm's purchase, which was extended to June 15, marked the first ever cross-border commercial sale of power between the two countries.

The report said the purchase was made following an approach by TNB in April to Singapore's Energy Market Authority and the generating companies for electricity supply needed to tide over capacity shortages “for a few months”.

This was caused by natural gas feedstock shortages faced by TNB's power stations due to the maintenance shutdowns, which could further reduce by 30% in the May to June period.

Singapore Business Times said TNB initially looked to buy electricity for just a month but persistent gas supply issues had forced the utility firm to extend the purchase.

Analysts believe that the purchase was made in case the coal-fired plants, which together with the gas-fired plants made up the bulk of electricity generating capacity, tripped.

OSK Research Sdn Bhd research head Chris Eng said if this happened, there would be the purchase from SerayaPower to rely on.

He added that gas supply had been tight since April but supply issues would likely ease up this month.

PowerSeraya chief executive officer John Ng was quoted by the report as saying that the amount of electricity exported to TNB was “small” and would come from a designated oil-firing steam plant at a 3,800MW facility.

He declined to go into commercial details of the deal but expressed the view that “we hope it opens the doors for future exports and imports of electricity between the two countries on a longer term basis”.

Previous instances of cross-border electricity exports between the two were only made during emergency outages, although Singapore has sounded out the possibility of the island-republic's generating companies importing electricity in the medium term, as one way to diversify energy options.

Operationally, some 200MW of electricity could be transmitted through two 230kV submarine cables linking Malaysia's national power grid with Singapore's transmission network at Senoko.

KUALA LUMPUR: The Employees Provident Fund (EPF), the second largest shareholder of YTL POWER INTERNATIONAL BHD [], disposed of 30.13 million shares from June 30 up to Aug 4.

Filings with Bursa Malaysia showed the EPF’s stake was reduced to 729.17 million shares or 10.09% from 759.31 million units or 10.51%. The 30.13 million shares accounted for 0.42%. The share price was trading from RM2.20 to RM1.97 as at Aug 4.

The largest shareholder is YTL Corp with 44.98% or 3.275 billion shares.

Maybank Investment Research said YTL Power was likely to record better than expected 4QFY11 results on reduced fuel cost at PowerSeraya.

“But, with dividends curtailed by its Indonesian expansion plans, widening losses at YES and potential reduction in tariffs at the Paka & Pasir Gudang IPP, its appeal as a high dividend yielding stock is waning. Downgrade to Hold with a reduced TP of RM2.10,” it said in a report on Aug 4.

The research house said it came to understand that the RM681 million cash raised from the 15% stake sale in PT Jawa Power will likely go towards bidding for a 1,000MW coal fired IPP in Indonesia.

“Also, YES is recording average revenue per user (ARPUs) of only RM30, the minimum monthly charge (versus our FY12 assumption of RM49) despite up-selling efforts. With a RM500 million cost base for YES, YTL Power is likely to conserve cash,” it said.

Maybank Research said the government’s recently set-up MyPower Corp to review existing power purchase agreements (PPA) is evidence that it is serious about reducing IPP tariffs albeit in exchange for concession extensions.

“We estimate that Paka and Pasir Gudang IPP generate some RM400m in free cash flows (FCF) per annum and easily contributes half of YTLP’s dividends. With this FCF source under threat, YTLP is again likely to conserve cash,” it said.

The research house said it maintained its earnings estimates pending 4QFY11 results but slashed its yearly dividend per share forecast from 13.1 sen to 9.4 sen.

YTL - NOTICE OF SHARES BUY BACK - IMMEDIATE ANNOUNCEMENT

Announcement Type: Notice of Shares Buy Back - Immediate Announcement
Company Name: YTL CORPORATION BERHAD
Stock Name: YTL
Date Announced: 05/10/2011

Announcement Detail:
Date of buy back: 05/10/2011

Description of shares purchased: Ordinary shares of RM0.10 each

Currency: Malaysian Ringgit (MYR)

Total number of shares purchased (units): 2,000,000

Minimum price paid for each share purchased ($$): 1.350

Maximum price paid for each share purchased ($$): 1.350

Total consideration paid ($$): 2,709,110.00

Number of shares purchased retained in treasury (units): 2,000,000

Cumulative net outstanding treasury shares as at to-date (units): 579,538,345

Total number of shares purchased and/or held as treasury shares against the total number of outstanding shares of the listed issuer (%): 6.08