Analysis: Bintulu Port’s tariff hike to be longer than expected

KUCHING (Sept 19): AmInvestment Bank Bhd (AmInvestment Bank) believes that a tariff hike might take longer-than-expected to materialise for Bintulu Port Holdings Bhd (Bintulu Port) due to the lengthy process of streamlining all Sarawak ports under one authority.

“We do not discount the possibility of another interim concession as Sarawak may prioritise efforts to consolidate ports into a central port authority to oversee all ports in the state,” it said in its analysis.

“We anticipate the tariff hike might only come after the establishment of a centralised port authority, which may take one to two years.”

Following Sarawak’s takeover by end-2024, Bintulu Port will come under the purview of Bintulu Port Authority Sarawak (BPAS).

The establishment of a central port authority aims to harmonise port/vessel dues and other fees for users to benefit from consistent services and charges within Sarawak.

Nevertheless, for the second half of financial year 2024 (2HFY24), AmInvestment Bank expects demand for liquefied natural gas (LNG) to be strong, driven by deliveries of deferred cargoes and seasonal factors as the northern hemisphere enters the winter season.

Also, Bintulu Port will commence handling marine services for Petronas Chemicals Bhd’s methanol plant in 2HFY24.

The port is expected to receive an additional 400,000 metric tonnes (MT).

Annually, Petronas Chemicals’ methanol plant is expected to contribute 1.58 million MT starting from FY25.

“For FY24, we believe that LNG will remain the main contributor with a 55 per cent revenue share,” the research firm said.

“However, we think the share will decline by three percentage points in FY25 due to non-LNG segment growth.

“Non-LNG is expected to make up 48 per cent of revenue share in FY25, bolstered by higher throughput from Wenan Steel and Ocikumho.”

Ocikumho is envisaged to commence production in 2QFY25 and Wenan Steel in 3QFY25.

Based on channel checks, both will contribute a combined 1.6 million MT to Samalaju’s FY25F throughput.

This will increase Samalaju’s port utilisation rate to 45 per cent in FY25.

Furthermore, Wenan steel is estimated to contribute an additional 475,000 tonnes in FY27.

Exports of LNG from Bintulu Port are expected to plateau at 25 to 27 million MT, as there are no plans for plant expansions.

This translates to a utilisation rate of 85-90 per cent of the nominal MLNG capacity of 29.3 million MT per annum.

Despite this, LNG exports are still healthy following an increase in exploration activities.

Petronas and its petroleum arrangement contractors recorded a total of 10 hydrocarbon discoveries in Malaysia in 2022, eight of which were discoveries made off the coast of Sarawak.