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BUSINESS PLAN










Prepared by



MALAYSIAN NGV SDN BHD (682961-M)








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IMPORTANT NOTICE

This Business Plan (BP) on Malaysian NGV Sdn Bhd (MNGV) is being provided on a
confidential basis and is intended exclusively for the parties to whom it has been distributed. This
BP shall not be, in whole or in part, reproduced or used for any other purpose, or shown, given,
copied to or filed with any other person including, without limitation, any government authority
except with the prior written consent of MNGV or as required under Malaysian Laws, regulations
and guidelines.
This BP has not been and will not be made to comply with the laws on any foreign jurisdiction,
and has not been and will not be lodged, registered or approved pursuant to or under any
legislation of (or with or by any regulatory authorities or other relevant bodies of) any foreign
jurisdiction and it does not constitute an offer, or an invitation to apply for MNGV shares or any
other securities of any kind by any party in any foreign jurisdiction.
To the best knowledge and belief of the Directors of MNGV, this BP constitutes a full and true
disclosure of all material facts about MNGV. Nevertheless, whilst the Directors of MNGV have
taken responsible care and diligence in preparing this BP, neither MNGV, its Directors nor any of
its employees shall be liable in any manner whatsoever for any omission of material facts which
would make any statement herein misleading.
By accepting delivery of this BP, each recipient agrees and confirms that it will keep confidential
all of such information and data. Recipients must in due course rely on their own independent
evaluation of this BP to assess the merits and risks of any investment in MNGV based upon such
further investigations as are necessary or desirable. Events occurring subsequent to the date of
this BP may require this information gathered and/or conclusions drawn to be revised and
updated in light of changing circumstances.



CONTENTS

CORPORATE DIRECTORY

1. The Purpose

2. Corporate Information

3 Services

4 Terminal and LNG Storage

5 NGV Vehicles

6 Manufacturing NGV Plant

7 Products

8 Market Dynamics

9 Competitive Assessment

10 Competitive Strengths

11 Business Operations

12 Marketing Plan

13 Business Model

14 Financial Analysis and Overview

15 Milestones

16. Appendices















CORPORATE DIRECTORY

BOARD OF DIRECTORS
Name Designation Nationality/Profession
Ismail Ahmad Director Malaysian / Businessman
Siti Aishah Nawi Director Malaysian / Medical Doctor

COMPANY SECRETARY Nahzatul Ain binti Mohd Khalid
(BC/N/790)

REGISTERED OFFICE M3 C 13A
Jalan Pandan Indah 4/1A
Pandan Indah
55100 Kuala Lumpur
MALAYSIA

AUDITORS AND REPORTING
ACCOUNTANTS
Arifin Ahmad & Co.
Chartered Accontants
87B, Jalan Sg 3/10
Pusat Bandar Sri Gombak
68100 Batu Caves
Selangor Darul Ehsan
MALAYSIA

PRINCIPAL BANKERS RHB Islamic Bank Berhad
Plaza OSK
Jalan Ampang
50450 Kuala Lumpur
MALAYSIA











THE PURPOSE
1
a. Purposes of the Funds Raised
The purposes of the Fund Raised are as follows:-
(i) To purchase land;
(ii) To build, owned and operate
a. LNG Receiving Terminal, Storage and Regasification Plant
b. Floating Storage Unit (FSU)
c. NGV Fueling Station (Mother Daughter Station)
(iii) To purchase ISO Tank and CNG Tank Container
(iv) To import LNG; and
(v) To funds working capital and operational cost.
c. Proposed Amount
The purpose funds raised of this proposal is to seek investment./funds amount to US$5,686,769,780
(Approx RM17,060,309,341) to develop MNGV infrastructure, facilities, operational cost and working
capital for natural gas businesses in Malaysia.










c. The Utilization of Funds Raised
The gross funds raised of US$5,684,465,432 (RM17,053,396,297) accruing to MNGV will be utilized
as follows:-

Description US$ RM
LNG Terminal
LNG Receiving Terminal, Storage, Regasification Plant & FSU 3,334,502,845 10,003,508,535

Project Mother-Daughter Station
Fixed Assets - Land 696,960,000 2,090,880,000
Mother Daughter Station 560,808,290 1,682,424,870

Working Capital
Stock LNG 810,459,000 2,431,377,000

HQ Operating Expenditure
General and Administration Cost 3,365,070 10,095,209
Office Fitting & Renovation 500,000 1,500,000
Office Rental 810,000 2,430,000
Office Equipment 1,333,333 4,000,000
Vehicles 675,000 2,025,000
Utilities 720,000 720,000
Maintenance 720,000 720,000
Rental Deposits Prime Mover 2,450,000 7,350,000
Statutory & Secretarial Fee 833,333 2,500,000
Contingencies (5%) 271,288,561 813,863,683
TOTAL 5,684,465,432 17,053,396,297

The funds raised are expected to be fully utilized within TWENTY-FOUR (24) months from the date
of received funds.









CORPORATE INFORMATION
2
a. History and Background
Malaysian NGV Sdn Bhd (MNGV or the Company) was incorporated in Malaysia on 2nd March
2005 under the Malaysia Companies Act, 1965 as a private limited company. The company is
privately owned and is 100% Bumiputera Status Company. MNGVSB is now actively specializing in
the supply and installation of NGV kits and cylinders to private and corporate owned vehicles in
Malaysia.

The Company Corporate Vision is to be the leading natural gas supplier and natural gas solution
provider for industrial and vehicles in Malaysia and the Company Mission is to provide and supply
sustainable energy sources to users nationwide who need the environmentally Friendly,
Economical, Cleaner Emission, Safety and Ease of Use of the cleanest burning alternative fuel
without compromising Quality.

The Company goals are committing and aim ourselves; to be the preferred choice in our key
markets, to realize and exceed users expectations; and to maintain the momentum of business
diversification

The main objective of MNGV is to supply natural gas as an alternative energy source for industrial
and vehicles users nationwide. To accomplish its vision and mission, the Company has set the key
corporate objectives as follows:-

To build LNG Receiving Terminal, Storage, Regasification Plant and Floating Storage Unit
To setting up CNG/NGV fueling stations;
To purchase LNG ISO Tank and CNG Tank Containers

The company intention to become a vehicle company to spearhead the rationalization of nationwide
implementation of Natural Gas for Vehicle (NGV) by setting up 1,000 NGV refueling stations
nationwide under our own brand name 1GAS and targeted NGV vehicles to 1 million by 2020,
thus creating a green environment, reduce petrol consumption and assisting government in
reducing petroleum subsidy.

MNGV is planning to develop a natural gas distribution system through a mother-daughter station
concept nationwide. The MNGV natural gas will be distributed whereby MNGV will purchase and
import via fill the gas at terminal and LNG Storage plant distribute to industries and fueling station
nationwide. Upon the completion of the LNG receiving terminal, Storage and Regasification Plant; it
will be supplied and delivered to users using specialized LNG ISO Tank and CNG Tank Container.





b. Key Success factors
In the long run, the Company believes its objectives can be achieved through:-

Reliable and long term sustainable supply of product
Ability to maintain natural gas price at competitive and affordable prices
Efficient and timely deliveries to customers with minimal errors
Excellent infrastructure to serve customers needs and circumstances; and
Closely monitoring and financial management effectively and efficiently

c. Proposed New Board of Directors Members
Rahmat Ahmad - Director
Rahmat holds a Bachelor in Real Estate from Universiti Teknologi Malaysia. His previous
employment was with Malaysian Manufacturing Services Sdn Bhd as Chief Executive Officer
specializing in oil and gas valve and pipe fitting. He having knowledge in commissioning of oil
and gas production platform and onshore facilities and Specialist in oil and gas field health and
safety management.

Zaidi Mohammad Director
Zaidi a holder of Master of Business Administration (MBA) in Applied Finance and Investment
from National University of Malaysia (UKM) and Graduate Diploma in Actuarial Science from
MARA Institute of Technology (ITM). He has over 18 years of practitioner experience in the
areas of research, business evaluation, financial, consultancy, corporate services and
fund/investment management. He was formerly Assistant Vice President Investment of
Malaysian Technology Development Corporation Sdn Bhd, General Manager of BIMSEC
Asset Management Sdn Bhd.

d. Key Management Staff
Our key management staff members are highly dedicated professionals an amalgam of more 20
years of experience and expertise in Oil & gas, government policy to ensure that business operation
requirements are given a thorough input. The key management staffs are:-

Rahmat Ahmad - Chief Executive Officer (refer as above)

Ismail Ahmad Chief Operating Officer
Ismail holds Bachelor in Mechanical Engineering. He is a Professional Engineer registered with the
Board of Engineers Malaysia. He has worked in the Drilling department at Petronas Carigali Sdn
Bhd for more than 10 years He also Former founder of Tubex Sdn Bhd which he owned 70%
shares later sold to Ancom in 1998 and ExtroTech Sdn Bhd which have link with Extro Holding UK
provides services for oil and gas Carigali and Currently owned 85% shares in PSA Technology Sdn
Bhd provides ICT services.

Zaidi Mohammad Chief Financial Officer (refer as above)


e. Organization Chart


Board of
Directors
Executive Director/
Director of Business
Development &
Corporate Planning
(vacant)
Executive Director/
Director of Finance &
Accounting

Zaidi Mohammad
Executive Director/
Director of Sale and
Marketing

(Vacant)
Executive Director/
Director of Admin &
Human Resource

(Vacant)
Executive Director/
Director of
Operations

(Vacant)
Is
ma
il
Ah
ma
d
CEO

Rahmat Ahmad
Audit
Committee
Company
Secretary/Legal
Tender
Committee
Executive Director/ Chief
Operating Officer

Ismail Ahmad
Chairman


Vice President/
Accountant

(Vacant)
Vice President
Administration & HR


(Vacant)
Vice President
Operations


(Vacant)
Vice President
Sale & Marketing


(Vacant)
Vice President
Bus Dev & Corporate
Planning

(Vacant)
Research
Development
Vice President
R&D


(Vacant)
External
Audit


.
f. Approval Obtained
To date, MNGV has obtained the necessary approvals for its operations including, amongst other,
the licensed under Section 6 of the Petroleum Development Act 1974 which permitted the
Company to import, distribute, market and sale of natural gas in Malaysia.

g. Recent Development
Joint Venture
MNGV is in the process of forming a joint venture with Yayasan Sabah which one of the Sabah State
agencies involves in supply and distribution of natural gas in Sabah. Under the joint venture (JV),
the Yayasan Sabah via Sabah Energy will supply 60-70 mscf a day gas to MNGV. JV Company also
will lease Usukan Supply base for its storage and distribution channel. This JV will be a win-win
situation for both MNGV and Yayasan Sabah as the JV Company will be able to secure the gas
supply from Sabah Energy. JV Company will build and operate 20 units of NGV Fueling station and
supply to industries throughout Sabah. Based on current development and demand, JV Company
projected to received revenue from RM90 million annually.

Strategic Alliance
MNGV intends to work closely with Tanjong Agas Supply Base & Marine Services Sdn Bhd
TASBMS to form a strategic alliance whereby MNGV desire to participate in the development
of oil and gas and the maritime industries especially on the sea frontage to develop terminal and
LNG Storage. This alliance will benefit both parties from LNG throughput sold to other
customers.

Potential Clients
MNGV has received a letter of intent to purchase gas from 3 potential customers (Merbok MDF, G.B
Kuari and Sungei Piah Quarry Development) which require a combined supply of a least 1.26 million
liter gas per month. Potential clients in the foreseeable future could also include Senai Hightech and
Felda Refinery.













LNG RECEIVING TERMINAL,
STORAGE AND REGASIFICATION
PLANT
3

a. Overview
The MNGV LNG Receiving Terminal, Storage and Regasification Plant Project are set to be one
of the most important resources of the Malaysian government's future energy strategy. The
project, which is expected launched in January 2010. The project located at Tanjong Langsat,
Johor consists of five (2) pre-stressed concrete above ground LNG storage tanks, two (2) unit
CNG Storage, regasification equipment docking platforms, and other unloading and operational
equipment.
b. Construction
Construction shall begin in early 2010 and will take two years completion. MNGV anticipates
that the first shipment of LNG to the facility could be delivered in early 2012. The Engineering,
Procurement and Construction (EPC) contract for the project will be constructing by world
international company. The facilities to be constructed will include marine export facilities and an
ocean breakwater and natural gas storage to transport feed gas from Tanjong Langsat, Johor to
east coast as well as nationwide.

The selection of the Tanjong Langsat site was based on its natural characteristics and a location
that is far from populated communities. Engineering improvements have been made to the plant


design based on the finalization of gas supply and LNG sales agreements and the selection of
an inland rock quarry site from which to build the breakwater.
The LNG plant will be a single train facility with a capacity of 2.2 million cubic meter a year. It
will be able to carry out the following functions: feed gas receiving, liquid separation, gas
metering and pressure reduction, removal of carbon dioxide and water from the feed gas. The
equipment and utilities will include gas dehydration and carbon absorption units, facilities for
refrigeration and liquefaction, LNG and refrigerant storage.
c. Site Selection
Selection of the site for the LNG project required the following criteria:
Oceanic conditions suitable for reliable tanker and berthing operations
Proximity to commercial centers that could provide raw materials and labor
Clear areas of land on the coast with a minimum distance from shore to at least 15m water
depth
Elevation of at least 20m to mitigate the effects of tsunami hazard
Minimal environmental sensitivity
No densely populated areas
Stable soils to prevent damage from high level of seismic activity
Initially there are 17 sites were evaluated and then a more detailed assessment was applied to
the selected few: port of Penang, West and North Port Klang, Hutan Melintang Perak, , Tanjong
Agas Pahang and Tumpat Kelantan. More extensive studies were conducted at these potential
sites, which included onshore and offshore engineering studies, environmental baseline studies,
and geo-technical, archaeological, and socio-economic assessments. The Tanjong Langsat,
Johor was chosen as the best option based on a number of environmental, technical and
economic considerations. The site has 150 acres of available land space and is located on a
tract of port. It showed positive results from technical studies and no significant archaeological
interest.
The LNG Receiving Terminal, Storage and Regasification Plant site at Tanjong Langsat, Johor
is located on a steep cliff with a 140m drop to the beach. It is located in what is defined as a
subtropical desert climate, characterized as extremely dry with very low levels of precipitation
year round. Vegetation is minimal along much of the coastal desert of central Tanjong Langsat,
but there are a few small pockets of hilly grasslands and woodlands along semi-dry creeks and
small rivers in areas near Tanjong Langsat, Johor.
d. Marine Facilities
Marine facilities will consist of various projects including a 1.35km-long trestle from the shore to
the loading platform. The trestle will consist of a steel superstructure supported by steel piles
and a concrete abutment. During construction, a 200m rock load-out jetty is planned to be
positioned along the trestle to aid in breakwater construction.
Since the Tanjong Langsat was coastline, it is exposed to long period Pacific swells during parts
of the year; a breakwater will provide for safe berthing and will allow the marine facilities to


remain accessible all year-round. The breakwater will be situated in a depth of approximately
14m of water and will be 800m long, and align parallel to the coastline and the sea bottom
contours. It will be built with rocks from a nearby quarry.
An LNG tanker navigational channel will be dredged to provide access in and out of the berth
area. The channel will have a water depth of 15m, a width of 250m and a total length of 3,600m.
Where the LNG carriers make turns outside the protection of the breakwater, the channel will be
18m deep. The LNG berth structures will consist of a 30m x 30m loading platform, four
breasting dolphins and six mooring dolphins. The steel berth structures will consist of open grid
decks on beams supported by piles driven through jackets.
LNG loading will be accomplished by using four 16in specialty pipe-and-swivel LNG loading
arms. Three arms will normally be used for LNG loading and one will be used to return vapor to
the plant's boil-off gas compressors. Permanent berth facilities will be provided to maintain three
full-time tugs on location. Tug berths will be located immediately adjacent to the northern
mooring dolphins. A small utility dock will be provided on the north side of the trestle
approximately 90m from the loading platform to berth tugs temporarily for refueling from the
plant's fuel tank. The utility dock will also have the facilities and equipment required for spill
containment.
e. The Operations
The tank is of an above-ground, nickel steel containment type with a pre-stressed concrete outer tank






f. LNG Receiving Terminal
The receiving terminal is one component of the LNG chain between the gas field and the consumer
or users. The receiving terminal receives LNG from special ships, stores the liquid in special storage
tanks, vaporizes the LNG, and then delivers the natural gas into a ISO Tanks container or distribution
pipeline. The terminal consists of:
LNG unloading system, including jetty and berth
LNG Storage tanks
LNG Vaporisers
In-tank and external LNG pumps
Vapour handling system
Supporting utilities, piping, valves, control systems, and safety systems required for the
terminals safe operation
Infrastructure (roads, fencing and buildings)

A simplified process flow diagram is shown below:



LNG is transferred to the onshore LNG tanks by the ship pumps. The unloading facility is often
designed to accommodate a wide range of tanker sizes from 87,000m
3
to 145,000m
3.
The liquid
unloading rate from the ship is usually 10-12,000m
3
/hr carried out by eight pumps with two pumps
located in each of four cargo tanks onboard a typical ship. It takes approximately 12-14 hours to
unload one 135,000m
3
ship.



g. LNG Storage Tank
MNGV will build two units in-ground /above-ground tanks for the receiving and storage LNG. To
reduce cost MNGV will minimizing the number of tanks and maximizing the amount of storage per
tank.


Full Containment LNG Storage























NGV FUELING STATION
4
a. Construction
MNGV plan is to build 15 unit of NGV Fueling Mother Station and 180 units of NGV Daughter
Station within twenty-four (24) months.


b. Location
The areas that identify by the management are all State City. The location and areas selected are
close to readily built industrial infrastructure (TNB sub-station) as well as nearby PLUS Highways.
Each site of the Integrated station is approximately 88,000 sq. feet of land areas and sufficient to
build station building, compressor room, tank storage, car parks, trailer bays, refueling dispenser and
other utilities and for future expansion.

c. CNG Equipment and Machinery
CNG fuelling infrastructure systems refers to the technology that supplies natural gas either
Compressed Natural Gas (CNG) or Natural Gas Vehicles (NGV) for industrial and vehicle users. A
CNG fuelling system facility consists of a basic station, a compressor, a storage tank and a dispenser
system. The composition of the CNG fuelling system and its equipment is explained below.

Basic Station
A CNG station is a site consisting of interconnected equipment, which is designed to compress
natural gas to a high pressure and either store the CNG cylinder or dispense it directly to vehicle
for refueling.

A general CNG station consists of one or more compressor packages to gas filtering, gas dryer,
priority panel, compressors, refueling dispenser and several additional systems, which can
include SCADA based controls system, Card system and POS System.


CNG Refueling System Technology Equipment

MNGV use to world-class natural gas and reliable technologies solution equipment for its Mother
daughter station. MNGV has the knowledge, experience and know-how in analysis and
deployment of equipment which gives it the edge over local players.

The core component technologies equipment of CNG fuelling system is:-





Gas Dryer

CNG gas dryer is a purification system that is completely self-contained, fully automated and
heat reactivated with closed-loop blower purge desiccant dryers. Located at the gas inlet of
the booster compressor, its function is to remove water vapor from CNG. Using molecular
sieve as the drying media, these systems will continuously dry CNG down to a pressure dew
point as low as -100F.

CNG Compressor

The CNG Compressor is a device used to increase the pressure of a gas by decreasing its
volume. The main purpose of the CNG Compressor is to process natural gas to store and
allow the gas to transport using trailer tube elsewhere.

A CNG Compressor performs the following functions:-
i. Pressurized and circulates gas through the process compressing
ii. Enhance conditions for chemicals reactions
iii. Renders inert gasses to facilitate various safety & control systems; and
iv. Help in maintaining the appropriate pressure levels by both adding and removing gas
from a process system.

o Priority Panel
The Priority panel is comprised of complex piping with several pressure switches, solenoid valve
and block valve. The priority Fill Panel compresses and distributes the natural gas to the
forecourt followed by the cascade high bank, to the cascade medium bank and finally to the
cascade low bank. The connections of high tube work valve arrangement included on this
panel design is part of the cascade to forecourt decant lines used to ensure that the panel can be
used for many users.



o Dispenser - It injects CNG into a tube or vehicle at the pressure point of 200Bar. With
Stainless Steel (SS) Tubing and Micro motions CNG-050 Mss Flow Meter installed, the dispenser
has a fuelling speed of 77kg/min (4,630m3/hr). The dispenser is operated by using a Printed
Electronic Circuit (PEC) electronic device and can be operated on a stand-alone mode. A
microprocessor communicates with the dispenser controller and records all transactions at the
time the dispenser starts and in fuelling mode.




o Storage cylinders comprise of 6 or more cylinders designed to meet the American Society of
Mechanical Engineers (ASME) specification with each cylinder having a capacity store of 650 m
3

compressed natural gas up to 250Bar.




o Supervisory Control & Data Acquisition (SCADA) System is a Programmable Logic
Controller (PLC) that automatically controls the valve. All the control and measuring devices at
the site are managed by the Input/Output module of the PLC system. The operation signals of
the compressor and various valves are input via the PLC Input Module for monitoring, and to
check the site operations at the station via the monitor. The information on any fault occurrence
and other situations are forwarded to the centralized monitoring administrator system for
immediate actions. The system also can function and perform either through Internet or Ethernet
where the system is integrated with the main system for data analysis and for corrective actions.






The Card Key System is designed to maintain the optimum security of the CNG fuelling
stations. The ID card driver technology of the Card Key System has been designed to
generate a unique radio frequency to minimize its usability and replication the ID Card
Reader device installed inside the explosion-proof Reader Case can detect and recognize
the ID card frequency and transmits it into the system for verification of authorization. The
Reader Case is designed to comply with the International and European safety standards
and meets the safety standards for the equipment of the CNG fuelling stations.

The Point of Sale (POS) Program system is designed to be compatible with the Windows
operating system which enables customized programming for special functions and partial
correction for refueling station. In addition it is embedded to allow data communication
between the station and head office via a dedicated line or network for efficiency managing
the refueling station. The PC based POS Terminal allows independent system operations at
the customers site and can interface with various supplementary equipments including a
printer to print receipts and to verify the fuelling details transaction.

The Process of CNG Fuelling System

At the fueling stations, the CNG Tank Container connected to NGV compressor and through priority
panel filled directly to storage cylinder before dispense to vehicles. When the pressure in the ISO
Tank drop or empty the trailer returned to the terminal for refueling NGV. The fueling station NGV
refueling flow diagram is shown below.






h. Mode of Delivery CNG Tank Container
MNGV also plans to purchase CNG Tank Container for delivery to NGV Fueling Station.











PRODUCTS
5
a. Products
The MNGVs product line is
i. Liquefied Natural Gas (LNG)
ii. Compress Natural Gas (CNG)/Natural Gas Vehicles (NGV)
a. Products Specifications
The MNGVs product line is natural gas a versatile source of energy that can be utilized in
industries, commercial, power generation, residential and transportation. The high degree of
awareness on protecting the environmental and comparative low cost may lead to a greater use
of natural gas. Today, natural gas demand as an energy source in Malaysia is high due to the
huge reserves which enable long-term supply and a perfect substitute petroleum or diesel as a
source of energy. It is a clean burning fuel that can reduce emissions and considered as an
alternative fuel for industrial and motor vehicles.
There are many cars and trucks already on the road in many countries worldwide. Furthermore,
many developed countries using industrial processes that require high temperatures are now turning
to natural gas instead of other fossil fuels to reduce air pollution. This includes companies involved in
manufacturing steel, glass, ceramics, cement, paper, chemicals, aluminum, and processed foods

Natural gas is a combustible, gaseous mixture of low-molecular-weight paraffin hydrocarbons,
usually found in deep underground reservoirs formed by porous rock or generated below the surface
of the earth. A contains mostly methane and ethane with small amounts of propane, butane, and
higher hydrocarbons, and sometimes nitrogen, carbon dioxide, hydrogen sulfide, and helium.

The typical component of natural gas consists of Methane (CH
4
) approximately 85%; Ethane (C
2
H
6
)
up to 10%; and propane (C
3
H
8
) up to 3% and remaining are Butane (C
4
H
10
); pentane (C
5
H
12
);
hexane; heptane; and octane.

Generally, natural gas is a fossil fuel composed almost entirely of methane, but does contain small
amounts of other gases, including ethane, propane, butane and pentane. During processing of
natural gas, many of these components may be removed. Somesuch as ethane, propane, butane,
hydrogen sulphide, and heliummay be partially or completely removed to be processed as
separate commodities. Other componentssuch as water vapor, carbon dioxide, and nitrogenmay
be removed to improve the quality of the natural gas or to make it easier to move the gas over great
distances through pipelines. While processing NGV, methane (CH
4
) gas, composed of a molecule of
one carbon atom and four hydrogen atoms will be compressed with a mixture of hydrocarbons to
produce 130 octane, which is considerably higher than 93 octane for petrol and this, make the NGV
more energy efficient.


Advantages and Features
o Natural gas is a combustible, gaseous mixture of low-molecular-weight paraffin hydrocarbons,
usually found is a safe fuel and more energy-efficient relative to petrol and diesel, lighter than air
and disperses easily into the atmosphere and does not need a sufficiently rich mixture for
combustion to take place.

o Higher octane rating allows for higher compression ratios and improved thermal efficiency thus
reducing carbon dioxide emissions. It allows the use of catalyst converter more efficiently than
diesel. NGV powered vehicles emit 40% less nitrous oxide (a toxic gas that create smog), 90%
less hydrocarbons (which carry carcinogens), 80% less carbon monoxide (a poisonous pollutant),
and 25% less carbon dioxide (major greenhouse gas).

o Since the gas contains higher octane and lower cetane, it a superior fuel to petrol for spark
ignited engines. Pollution is eliminated as it is lead and benzene free. Being a gaseous fuel,
natural gas easily mixes with the air and disperses evenly.

o Natural gas has a high ignition temperature of about 640 degrees Celsius, compared with a
range of 230-280 degrees Celsius in the case of petrol. It also has a narrow range of flammability
i.e. natural gas will not burn with concentrations of below 5% and above 15% of air. The high
ignition temperature and limited flammability range of natural gas renders accidental ignition or
combustion unlikely.



















MARKET DYNAMICS
6
a. World Natural Gas Outlook
Natural gas demand is on the increase and this trend is projected to continue until 2030. The key
driver for the demand growth is from the power generation sector.

At present a huge opportunity and challenges exist with the principle gas markets of North America
and Europe facing a dramatic increase in import dependency and, at the same time, Asian
economies stepping up their gas demand. This will translate into increased demand for long-
distance pipelined gas, particularly for LNG. The growth in natural gas trade flows will itself lead to a
change in the dynamics of gas trade, from independent local or national markets into an increasingly
interconnected global gas market.

Consumption of natural gas worldwide is expected increases from 95 trillion cubic feet in 2003 to 182
trillion cubic feet in 2030. It is expected to be an important fuel source in the electric power and
industrial sectors. Higher world oil prices increase the demand for and price of natural gas, making it
a more economical fuel source.

Gas Consumption by Region 1990 2030

Source: History: Energy Information Administration (EIA), International Energy Annual 2003 (May-July 2005)
Projections: EIA, System for the Analysis of Global Energy Markets (2006)

Natural gas consumption worldwide is expected to increase at an average rate of 2.4% annually from
2003 to 2030, as compared with 1.4% per year for crude oil. Nevertheless, it remains a more
environmentally attractive energy source and burns more efficiently and it still is expected to be the
fuel of choice in many regions of the world. As a result, the natural gas share of total world energy
consumption is expected to grow from 24% in 2003 to 26% in 2030.



In 2003, Organization for Economic Co-operation and Development (OECD) member countries
accounted for just over one-half of the worlds total natural gas use, non-OECD Europe and Eurasia
accounted for one-quarter, and the other non-OECD countries accounted for the remainder. The
OECD countries are, by and large, mature consumers of natural gas with well-established
infrastructure and consuming patterns. In contrast, natural gas infrastructure in the non-OECD
countries, outside of non-OECD Europe and Eurasia is largely in its infancy, and natural gas demand
is fairly small. The projected fast-paced growth in demand for natural gas among those non-OECD
countries is also driven by their expanding infrastructure to cater to natural gas.

The consumption by the non-OECD countries is projected to grow at twice the rate of OECD
countries, i.e. at 3.3% versus 1.50%. The demand in the non-OECD countries accounts for 73% of
the total world increment in natural gas consumption over the projected horizon. In the non-OECD
countries (excluding non-OECD Europe and Eurasia), the use of natural gas is projected to increase
from less than 25% of the world total in 2003 to 38% by 2030.

Natural Gas Reserves and Resources

The worlds natural gas reserves have, for the most part, trended upward as shown in the graph
below. As of January 1, 2006, the world natural gas reserves were estimated at 6,112 trillion cubic
feet.

Natural Gas Reserve by Region 1980-2006

Source: 1980-1993: Worldwide Oil & Gas at Glance, International petroleum Encyclopaedia (Tulsa, ok: PennWll Publishing,
Various Issues
1994-2006: Oil and Gas Journal (Various issues)

Almost three-quarters of the worlds natural gas reserves are located in the Middle East and Eurasia.
Russia, Iran, and Qatar combined accounted for about 58% of the worlds natural gas reserves as of
January 1, 2006. Reserves in the rest of the world are fairly evenly distributed on a regional basis.







Natural Gas Reserve by Geographic region
as at January 1, 2006.


Source: Worldwide Look at Reserve and Production, Oil & Gas Journal, Vol.103, No.47 (December 19, 2005). Pp.24-25

Despite high rates of increase in natural gas consumption, particularly over the past decade, most
regional reserves-to-production ratios have remained high. Worldwide, the reserves-to-production
ratio is estimated at 66.7 years. Central and South America has a reserves-to-production ratio of 55.0
years, Russia 81.5 years, and Africa 96.9 years. The Middle Easts reserves-to-production ratio
exceeds 100 years.

The U.S. Geological Survey (USGS) periodically assesses the long-term production potential of
worldwide petroleum resources (oil, natural gas, and natural gas liquids). According to the most
recent USGS estimates, released in the World Petroleum Assessment 2000 and adjusted to reflect
current proved reserves, a significant volume of natural gas remains to be discovered. Worldwide
undiscovered natural gas is estimated at 4,221 trillion cubic feet, slightly higher than the projection for
cumulative worldwide natural gas consumption from 2003 to 2030.

Natural Gas Reserve by Geographic Region



Source: U.S. Geological Survey, World Petroleum Assessment 2000, web site
http://greenwood.cr.usgs.gov/ebergy/worldEnergy/DDS-60; Worldwide Look at Reserve and
Production, Oil & Gas Journal, Vol.103, No.47 (December 19, 2005). Pp.24-25

World Supply

Non-OECD Europe and Eurasia and the Middle East account for almost three-quarters of the worlds
natural gas reserves, but in 2003 they accounted for only 39% of world production. Together, these
two regions account for 47% of the projected increase in global natural gas production from 2003 to
2030 (as per Table below), much of it for export to OECD countries.

Country Reserves
(Trillion
Cubic
Feet)
Percentage
of World
Total
World 6,112 100.0
Top 20 Countries
Russia
Iran
Qatar
Saudi Arabia
United Arab Emirates
United State of America
Nigeria
Algeria
Venezuela
Iraq
Indonesia
Norway
Malaysia
Turkmenistan
Uzbekistan
Kazakhstan
Netherlands
Egypt
Canada
Kuwait
5,510
1,680
971
911
241
214
193
185
161
151
112
98
84
75
71
66
65
62
59
57
56
90.2
27.5
15.9
14.9
3.9
3.5
3.1
3.0
2.6
2.5
1.8
1.6
1.4
1.2
1.2
1.1
1.1
1.0
1.0
0.9
0.9
Rest of World 602 9.8
Source: World Natural gas Production by Region and Country, 2003 2030 (Trillion Cubic Feet)

Russia is already the worlds single largest exporter of natural gas, with net exports of 6.3 trillion cubic
feet in 2003, all of it transported by pipeline. There are also some plans to export natural gas from the
Middle East, but much of the regions increase in production is projected to be used domestically
particularly in the power sector, where shifts from petroleum to natural gas allow the producing
countries to monetize more of their oil assets through export.

Other non-OECD regions are also expected to increase their natural gas production. Africa, with its
rich and underdeveloped natural gas resources, has the fastest growth rate in natural gas production
worldwide, with supply rising by 4.9% per year from 2003 to 2030. A considerable amount of the
increase in production in Africafrom Algeria, Nigeria, Libya, and Egyptis slated for export, both by
pipeline and in the form of liquefied natural gas (LNG).

Natural gas production in non-OECD Asia is also expected to grow substantially over the projected
period, but all the growth in supply is required for consumption within the region, and imports are
needed to fill in the shortfall. In Central and South America, natural gas production outpaces regional


demand. As a result, Trinidad and Tobago continues to export LNG outside the region. Peru, and
possibly Venezuela, may also begin to export outside the region.

World Demand

North Americas natural gas consumption is projected to increase at an average annual rate of 1.1%
between 2003 and 2030. The regional growth rate for natural gas demand is somewhat slower than
in past, largely because of the impact of higher prices and supply concerns in natural gas markets of
the United States, North Americas largest consumer. The United States accounted for more than
80% of the 27.4 trillion cubic feet of natural gas consumed in the region in 2003, and its share of the
total in 2030 is 73%, despite robust growth in demand for natural gas in Canada and Mexico,
averaging 1.9% per year and 3.4% per year, respectively.

Natural Gas Consumption in North America
by Country, 2003-2030

Source: 2003: Energy Information Administration (EIA), International Energy Annual 2003 (May-July 2005), web
site www.eis.doe.gov/iea/, Projections: EIA, System for the Analysis of Global Markets (2006)

The current high levels of natural gas prices in the United States are expected to discourage the
construction of new natural-gas-fired electricity generation plants in the medium term. As a result,
only 130 gigawatts of new natural-gas-fired capacity are added from 2003 through 2030 as
compared with 154 gigawatts of new coal-fired capacity. U.S. natural gas consumption for electricity
generation is expected to peak in 2020 at 7.5 trillion cubic feet, followed by a decline to 6.4 trillion
cubic feet by 2030.

Natural gas prices in the United States remain relatively high; and as a result, consumption of natural
gas in the U.S. industrial sector grows slowly, from 8.3 trillion cubic feet in 2003 to 10.0 trillion cubic
feet in 2030. Natural gas consumption increases in all the major industrial sectors, with the exception
of the refining industry. High prices also limit consumption increases in the U.S. buildings sector
(residential and commercial), where natural gas uses grows from 8.3 trillion cubic feet in 2003 to 9.6
trillion cubic feet in 2030. The net result of changes in energy use in the electric power, industrial, and
other end-use sectors is that U.S. natural gas consumption is essentially flat between 2020 and
2030.



Canada, currently the source of almost 90% of U.S. net natural gas imports, remains the primary
source of natural gas imported into the United States until 2010. After 2010, LNG imports replace
Canadian imports as the primary source. The decline of Canadas largest producing basin, the
Western Sedimentary Basin, coupled with 1.9% projected average annual growth in Canadas
domestic consumption, leaves less Canadian natural gas available for export to the United States.

In EIAs Annual Energy Outlook 2006, rising natural gas prices make it economical for two major
North American pipelines that have long been in the planning stages to come online. The first, a
Canadian pipeline to transport natural gas from the MacKenzie Delta, is expected to become
operational in 2011. The second, an Alaska pipeline, is expected to begin transporting natural gas
from Alaska to the lower 48 States in 2015, contributing significantly to U.S. domestic supply. From
2003 to 2030, Alaskas natural gas production accounts for most of the growth in domestic U.S.
conventional natural gas production, with flows on the pipeline exceeding 2 trillion cubic feet in 2030.

Currently, the United States has five LNG import facilities in operation, with a combined peak annual
capacity of 1.6 trillion cubic feet. Three additional terminals under construction in the Gulf of Mexico
will add a combined peak annual regasification capacity of 2.0 trillion cubic feet, more than doubling
the U.S. LNG import capacity. It is projected that the peak annual U.S. LNG import capacity in 2030
at 5.9 trillion cubic feet, with actual imports of 4.4 trillion cubic feet. The growth of U.S. LNG import
capacity is expected to be strong through 2015 and then to slow as high natural gas prices begin to
slow the growth of domestic consumption. LNG imports into Canada are also expected to contribute
to the supply of Canadian natural gas available for export to the United States. LNG is expected to be
a significant contributor to supply in the United States, indicative of the countrys growing
dependence on imports and the increasing globalization of natural gas markets.

United State of America Natural Gas Supply by Source

Source: History: Energy Information Administration (EIA) Annual Energy Review 2004,
DOE/EIA-0384(2004)(Washington, DC, August 2005), web site
www.eis.doe.gov/emeu/aer/.
Projections: EIA, Annual Energy Outlook 2006, DOE/EIS-0383(2006) (Washington,
DC, February 2006), web site www.eia.doe.gov/oiaf/aeo/.



In Canada, most of the projected increase in natural gas consumption is for industrial uses and
electricity generation, with only moderate growth in the other consuming sectors. Although natural
gas use in Canadas electric power sector more than doubles from 2003 to 2030, the largest absolute
increase is projected for the industrial sector, largely because significant amounts of natural gas are
expected to be used in the mining of Canadas expansive oil sands deposits. Canada produced more
than twice as much natural gas as it consumed in 2003, and the balance was exported to the United
States. In 2030, Canada is projected to consume 85% of its own production, leaving only 15%
available for export.

In Mexico, strong growth in natural gas consumption for industry and for electricity generation is
expected, with industrial consumption doubling and consumption for electricity generation more than
tripling between 2003 and 2030. Growth in Mexicos natural gas consumption is expected to far
outpace growth in its production. Although Mexico has a significant untapped natural gas reserves,
the Mexican government does not have the resources needed to develop them and to date has been
relatively unsuccessful in attracting foreign capital. Currently, only the state oil and natural gas
company, Petroleos Mexicanos (PEMEX), is allowed to have any ownership interest in Mexicos oil
and natural gas reserves. Mexico is thus expected to be dependent on pipeline imports from the
United States and LNG imports to meet its growing supply deficit. In the reference case, imports grow
from 17%of Mexicos total natural gas consumption in 2003 to 33% in 2030. Throughout the
projections, Mexico remains a net importer of natural gas from the United States.

OECD Europe
Natural gas is expected to be among the fastest growing fuel source in OECD Europe, with demand
increasing at an annual average rate of 2%, from 17.8 trillion cubic feet in 2003 to 23.9 trillion cubic
feet in 2015 and 30.8 trillion cubic feet in 2030. Almost 60% of incremental natural gas consumption
in OECD Europe between 2003 and 2030 is expected to be used for electric power generation.
Natural-gas-fired generation is less carbon-intensive than oil- or coal-fired generation and is expected
to remain more cost-competitive than renewable energy, making natural gas the fuel of choice for
new generating capacity in OECD Europe.

Natural Gas Consumption in OECD Europe

Source: 2003: Derived from Energy Information Adminstration (EIA), International Energy Annual
2003 (May-July 2005), web site www.eia.doe.gov/iea/.
Projections: EIA, System for the Analysis of Global Energy Markets (2006)



Natural gas consumption for electricity generation in OECD Europe increases on average by 3.9%
per year from 2003 to 2030, surpassing the use of renewable for electricity generation by 2015 and
the use of coal or nuclear power by 2020. The share of total electricity sector energy demand meet
by natural gas increases from 14% in 2003 to 24% in 2015 and 32% in 2030.

OECD Europe received net imports of around 7 trillion cubic feet of natural gas in 2003, accounting
for more than one-third of the regions total natural gas consumption. With domestic production
declining in most of the countries of OECD Europe, the regions reliance on imported natural gas
grows to more than one-half of demand in 2015 and almost two-thirds in 2030. Russia, alone,
currently provides around two-thirds of Europes imports.

Security and diversity of natural gas supply are major concerns for OECD Europe now and going
forward. Europe is aggressively expanding LNG receiving capacity, and several new pipelines have
been proposed that would link Europe to supplies in Egypt, the Middle East, and the Caspian Basin,
and would increase capacity from North Africa and add capacity from Russia via routes that bypass
traditional transit states.

OECD Asia

Japan has the lowest growth rate for natural gas consumption among the OECD countries outside
North America, mainly because its population declines and its economic growth are relatively slow.
Notwithstanding an average annual growth rate in consumption of only 0.8%, natural gas still is the
second fastest growing primary energy source in Japan, behind nuclear power.

Natural Gas Consumption in OECD Asia

Source: 2003: Derived from Energy Information Adminstration (EIA), International Energy
Annual 2003 (May-July 2005), web site www.eia.doe.gov/iea/.
Projections: EIA, System for the Analysis of Global Energy Markets (2006)

Total natural gas consumption in South Korea is expected to grow at an average annual rate of 1.7%
from 2003 to 2030. In 2003, the residential sector was the countrys predominant consumer of natural
gas, accounting for 39% of the total, with the electric power sector a close second at 33% of total
natural gas use. In the projection, natural gas use in South Koreas industrial sector increases on
average by 4.9% per year from 2003 to 2030, compared with average annual growth of 0.7% in the
residential sector. By 2020, natural gas consumption in the countrys industrial sector surpasses that


in its residential sector; and in 2030, industrial natural gas use accounts for more than 45% of all the
natural gas consumed in South Korea.

Non-OECD Europe and Eurasia

The non-OECD Europe and Eurasia region is more reliant on natural gas than any other region in the
world. Russia is second only to the United States in total natural gas consumption, and it is the only
country in the world where natural gas accounts for more than one-half of total primary energy
consumption. In 2003, Russia consumed 15.3 trillion cubic feet of natural gas. The other countries of
non-OECD Europe and Eurasia met 44% of their combined total energy needs with natural gas in
2003.

Growth in natural gas demand in non-OECD Europe and Eurasia remain strong throughout the
projection period, with an average annual growth rate of 2.0% from 2003 to 2030. Natural gas
consumption in both the electric power and industrial sectors is expected to increase around 8 trillion
cubic feet from 2003 to 2030. Natural gas use in the electric power sector grows slightly faster, at
2.4% per year, from 8.4 trillion cubic feet in 2003 to 16.1 trillion cubic feet in 2030. Industrial natural
gas consumption in the region grows by an average of 2.1% per year, from 11.0 trillion cubic feet in
2003 to 19.1 trillion cubic feet in 2030.

Natural Gas Consumption in Non-OECD Europe and Eurasia

Source: 2003: Derived from Energy Information Adminstration (EIA), International Energy Annual
2003 (May-July 2005), web site www.eia.doe.gov/iea/.
Projections: EIA, System for the Analysis of Global Energy Markets (2006)

Other Non-OECD

In the rest of the non-OECD countries, significant growth in natural gas use is projected from 2003 to
2030, as strong economic growth and available resources encourage the development of natural gas
infrastructure to support demand. In the other non-OECD countries (excluding non-OECD Europe
and Eurasia), natural gas demand triples, from 21.7 trillion cubic feet in 2003 to 67.3 trillion cubic feet
in 2030.

Non-OECD Asia accounts for much of the growth in natural gas demand projected for the non-OECD
region. Led by demand in China and India, natural gas consumption in non-OECD Asia expands by
5.1% per year on average from 2003 to 2030. In both China and India, natural gas is currently a


minor fuel in the overall energy mix, representing only 3% and 7%, respectively, of total primary
energy consumption in 2003; however, both countries are rapidly expanding infrastructure to facilitate
natural gas consumption, as well as natural gas imports. In the reference case, natural gas
consumption grows at an average annual rate of 6.8% in China and 5.9% in India.

Both China and India have limited natural gas reserves and are projected to rely on imports to meet
more than 40% of natural gas demand in 2030. Both countries have been discussing possible import
pipelines, but none is imminent. China and India have also been pursuing LNG imports. China has
two regasification terminals under construction and has two terminals operating and several more
proposed. The supply contracts for Chinas Guandong and Fujian terminals, as well as Indias Dahej
terminal, were signed several years ago at historically favorable terms and prices; however, both
countries are finding it difficult to secure additional long-term LNG supplies for any of their proposed
regasification terminals at prices that local natural gas consumers would find acceptable.


Natural Gas Supply in China and India

Source: 2003: Energy Information Adminstration (EIA), International Energy Annual 2003 (May-July
2005), web site www.eia.doe.gov/iea/.
Projections: EIA, System for the Analysis of Global Energy Markets (2006)

Natural gas used in the Middle East is expected to more than double between 2003 and 2030. Oil-
exporting countries in the region have deliberately sought to expand domestic natural gas use in
order to make more oil available for export. In addition, natural-gas-rich countries in the region are
developing projects to monetize their natural gas resources, in particular through LNG and, more
recently, gas-to-liquids (GTL) projects, which have become an active area of interest As a result, the
importance of natural gas as a source of supply for domestic energy demand in the Middle East
grows over the projection period, with its share of regional energy use increasing from 42% in 2003
to 54% in 2030 while oil is projected to decline from 55% to 42% over the same period.






Natural Gas Consumption in Africa and the Middle East

Source: 2003: Energy Information Adminstration (EIA), International Energy Annual 2003 (May-
July 2005), web site www.eia.doe.gov/iea/.
Projections: EIA, System for the Analysis of Global Energy Markets (2006)

In Africa, natural gas consumption is expected to increase by an average of 4.4%per year over the
projection period, making it the most rapidly growing primary energy source in the region. In
comparison, Africas oil demand increases by only 2.3% per year and its coal demand by only 1.7%.
per year. The incremental growth in Africas natural gas demand occurs mostly in the industrial and
electric power sectors. Despite continuing instability in some countries of the region, the investment
climate in Africa remains fairly attractive, with massive investments planned, mostly in West Africa. In
Central and South America, natural gas is the fastest growing fuel source, with demand increasing on
average by 3.9% per year, from 3.8 trillion cubic feet in 2003 to 10.8 trillion cubic feet in 2030. By
2010, natural gas overtakes oil as the second most prevalent fuel for electricity generation in the
region, with renewableparticularly, hydropowerretaining their dominant share in the sector.

Natural Gas Consumption in Brazil and Other Central and South America

Source: 2003: Energy Information Adminstration (EIA), International Energy Annual 2003 (May-
July 2005), web site www.eia.doe.gov/iea/.
Projections: EIA, System for the Analysis of Global Energy Markets (2006)



South Americas southern cone area is already crisscrossed by pipelines linking Bolivia, Brazil,
Argentina, Chile, and Uruguay. In addition, a number of new pipelines are under discussion, which
would link Peru with Ecuador and Chile, Venezuela with Colombia and Brazil, and Colombia with
Panama. The new lines could later be linked with each other and with existing pipelines to create a
South American natural gas gridan idea that is being promoted by Venezuela. Even some of the
more modest proposed pipelines, however, face substantial political hurdles.
b. Malaysia Natural Gas Outlook
Malaysias gas reserves stands at approximately 75 trillion standard cubic feet as at January 1, 2006
and is the worlds 13
th
largest gas reserves. Natural gas production has been rising steadily in recent
years, reaching 1.9 trillion standard cubic feet in 2003. Natural gas consumption in 2003 was
estimated at 1.0 trillion standard cubic feet, with LNG exports of around 0.9 trillion standard cubic
feet.


Courtesy: Gas Malaysia Bhd

One of the most active areas in Malaysia for gas exploration and development is the Malaysia-
Thailand Joint Development Area (JDA), located in the lower part of the Gulf of Thailand and
governed by the Malaysia-Thailand Joint Authority (MTJA). The MTJA was established by the two
governments for joint exploration of the once-disputed JDA. The JDA covers blocks A-18 and B-17 to
C-19. A 50:50 partnership between Petronas and Amerada Hess is developing block A-18, while the
Petroleum Authority of Thailand (PTT) and Petronas also share equal interests in the remaining
blocks.

PTT and Petronas announced an agreement in November 1999 to proceed with development of a
gas pipeline from the JDA to a processing plant in Songkla, Thailand, and a pipeline linking the Thai
and Malaysian gas grids. Malaysia and Thailand will eventually each take half of the gas produced,
though initial production will go just to Malaysia. The project had been controversial in Thailand,
facing opposition from local residents in Songkla along the pipeline route. In May 2002, the Thai
government announced a final decision to commence construction on the project later that year,
though the pipeline route was altered slightly to avoid some populated areas. Deliveries of natural


gas into Malaysia began in the first quarter of 2005, with deliveries into Thailand in 2006. A sales
agreement for natural gas from the other jointly-held blocks was signed in June 2005, with deliveries
to Thailand of 270 MMcf/d beginning in 2008.

Gas Infrastructure Development

Since 1984 PETRONAS Gas Bhd has been implementing the three-phase Peninsular Gas
Utilisation (PGU) project, an infrastructure development project to process and transmit natural gas
fed from the fields offshore Terengganu to end-users in the power, industrial and commercial sectors.
The entire PGU system now spans over 1,700km, comprising main gas transmission pipelines,
supply pipelines and laterals.

Phase 1
Phase 1 of the project, known as PGU I (red line), was completed in 1984. It comprises a Gas
Processing Plant (GPP 1) with a capacity of 250 million standard cubic feet per day (mmscfd) of gas
at Kertih; an export terminal and a 32km main pipeline from the GPP to the export terminal, power
and industrial end-users in the East Coast of Peninsular Malaysia and a gas reticulation system for
the Kertih township in Terengganu.



Courtesy: Petronas Gas







Phase 2
Phase 2 or PGU II (blue line), completed in 1992, comprises three additional GPPs - GPP 2, GPP 3
and GPP 4 - each with a capacity to process 250 mmscfd of gas, a 714km trans-peninsular main
pipeline connecting the western and southern parts of Peninsular Malaysia as well as Singapore, and
related supporting facilities.


Phase 3
Phase 3 or PGU III (green line), operational in 1998, extends the pipeline northwards along the West
Coast of the peninsular to the Malaysia-Thai border with the construction of a 450km main pipeline,
two new GPPs (GPP 5 and GPP 6) with a processing capacity of 500 mmscfd each, a Dew Point
Control Unit (DPCU) and related facilities. The DPCU has a capacity to produce 500 mmscfd of gas
and serves as a standby facility for the GPPs 5 and 6.

The PGU system is further reinforced by the PGU Loop 1 (purple dotted line) and PGU Loop 2
(orange dotted line) projects which will ensure security of gas supply to the Klang Valley by
enhancing transmission capacity. Laid parallel to the existing PGU pipelines, PGU Loop 1 is a new
265km natural gas pipeline from Kertih to Segamat and was completed in 1999, while another
227km of pipelines under PGU Loop 2 will be constructed from Segamat to Meru, completed in 2001.
Plans are underway to link the PGU pipeline to the Trans-Thailand-Malaysia Gas Pipeline System at
Changlun, Kedah, and providing additional security of supply to Malaysia.

Natural Gas Supply in Malaysia

Gas production has grown into a huge industry with gas utilized for export, feedstock and as an
energy source. It is an indigenous fuel and it offers a significant opportunity to reduce Malaysias
dependence on imported oil-based products and to reduce subsidy of petroleum at RM17 billion a
year. Malaysia accounted for approximately 16% of total world LNG exports. Malaysia is proceeding
with a long-planned expansion of its Bintulu LNG complex in Sarawak. In February 2000, Petronas
signed a contract with a consortium headed by Kellogg Brown and Root for construction of the MLNG
Tiga facility, with two LNG liquefaction trains and a total capacity of 7.6 million metric tons (370 Bcf)
per year, which was completed in April 2003.

The Bintulu facility as a whole is now the worlds largest LNG liquefaction centre, with a total capacity
of 23 million metric tons (1.1 trillion cubic feet) per year. Most of the production from the new LNG
trains will be sold under term contracts to utilities in Japan. Tokyo Electric Power (TEPCO), Tokyo
Gas, and Chubu Electric are the main consumers of LNG from the project. BG signed a contract in
August 2004 for supplies over a 15-year period to the United Kingdom, to begin in either 2007 or
2008. Shell brought two additional fields online in 2004, Jintan in March, and Serai in September,
both of which feed into the Bintulu export terminal. The two fields added over 1 Mmcf/d to Malaysias
gas production.

In addition to LNG, Malaysia exports 150 million cubic feet per day (Mmcf/d) to Singapore via
pipeline. Malaysia also is an importer of gas from Indonesia. Petronas signed an agreement in April
2001 with Indonesia state oil and gas company Pertamina for the import of gas from Conoco's West
Natuna offshore field in Indonesian waters. The move is being seen as part of a Malaysian strategy
to become a hub for Southeast Asian natural gas integration. Deliveries from the pipeline
commenced in mid-2003. The pipeline connects to an existing pipeline from the shore to Malaysia's
offshore Duyong field, helped to minimize construction costs



Energy Demand in Malaysia

A wise decision in 1980 to move away from a huge dependency on oil to other alternative resources
of energy has allowed Malaysia to develop its natural gas resources. Malaysia has drastically tipped
the balance in the fuel consumption from a high 87.8% dependence on oil in 1980 to 49.2% in 2000,
natural gas and coal in 2000, accounted for 42.4% and 5.2% respectively of the total energy mix.
While, in 2000, the fuel mix for electricity generation was 74.9% natural gas, 5.0% petroleum
products, 9.7% coal and 10.4% hydro.

In parallel with Malaysias rapid economic development, energy consumption grew at a fast rate of
5.6% between 2000 and 2005 to reach 38.9 million ton of oil equivalent (Mtoe). A substantial portion
of energy consumed was from oil while the remaining in the form of natural gas which was mainly
utilized in the industrial and transportation. In the industrial sector, natural gas is often used as a raw
material for products such as paints, fertilizers and plastics. It is also commonly used as an energy
source for food processing, glass making, steel fabrication and produce electricity via gas-powered
stations.

Natural gas consumption also increased significantly to fuel electricity demand. The share of natural
gas in total installed electricity generation capacity remained high at 70% in 2005. Over the forecast
period, energy demand is projected to grow at 3.9% per year, reaching 98.7 Mteo in 2030, nearly
three times that of 2002 level. The industrial sector is forecast to register the highest growth rate at
4.3%, followed by transportation at 3.9%, residential at 3.1% and commercial at 2.7%











Development of NGV in the Transportation Sector

The motivation for NGV in Malaysia is primarily driven by concern for the environment; Malaysia with
its substantial domestic reserves of natural gas is well positioned to meet this rising concern. On top
of that, the need arises for the country to increase and diversify gas utilization in the country. With
these mandates, PETRONAS moved forward in championing the development of Natural Gas for
Vehicles in the country. Protecting the environment is as important as providing energy to improve
the quality of life. The NGV journey is however, one that is not without its challenges, but the
challenges were faced with clear policies and strategies.

In 1984, PETRONAS commissioned the study to assess the viability of utilizing natural gas in the
transportation sector. The study identified several benefits to the country and consumers. The main
reasons are being the secured supply and its environmental friendly characteristics.

During 1986-1988, a pilot programmed to understand the technology and to lay the framework for a
commercial programmed was implemented at the Gas Processing Plant in Kertih, Trengganu. It
involved the construction of one NGV refueling outlet (50 m3/hr compressor) and the conversion of
21 PETRONAS owned vehicles to bi-fuel operation. The result of the pilot programmed proved that
the use of Natural Gas for Vehicles (NGV) under the Malaysian condition was viable and favorable.

Recognizing the great potential for this new industry, the Government granted the approval for
PETRONAS to embark on an initial Commercial Programmed. The Commercial Programmed
commenced in 1991 in Klang Valley with the objective of identifying and resolving issues to pave the
way for a wider implementation of NGV in the country. Natural gas then has already been made
available in certain areas in the Klang Valley through the Natural Gas Distribution System (NGDS).
The main supply of NGV was from the Peninsular Gas Utilization (PGU) Project which supplies
natural gas to the West Coast of Malaysia.

Six (6) stations under the Mother-daughter concept were also established in the Klang Valley. The
Mother-daughter concept is necessary due to limited gas network distribution where the nearest
natural gas pipeline was 40 km away from the city while the targeted vehicles were heavily
concentrated within the city. At the same time, a conventional station was also established in Miri to
leverage on the extensive natural gas distribution network. All the seven (7) stations were operational
by mid-1992 and a total of 930 vehicles were converted to bi-fuel operation.

This programmed was implemented with the support of a Government NGV Task chaired by the
Economic Planning Unit of the Prime Ministers Department and with members from relevant
government departments. A wide range of issues, from approval of facilities and equipment to the
certification of NGV technicians were identified through the NGV Government Task Force. The
standard MS 1204 for the construction of NGV stations and MS 1096 for vehicle conversion were
developed. Certification programmed for NGV installers was also established.

The Government of Malaysia introduced various incentives to promote the use of gas for the
industries. These incentives include: (1) the retail price of gas is at least 50% cheaper than petrol
premium grade; (2) exempted import duty and sales tax for the import of conversion kits; and (3) road
tax reduction of 25% for bi-fuel and dual fuel natural gas vehicles, and 50% for mono-fuel natural gas
vehicles.

Furthermore, Malaysia has been playing a supportive role in encouraging the development of the
local natural gas vehicle Industry through research and development of NGV technology. In October
1996, the Enviro 2000 taxi was launched during the International Natural Gas Vehicles Expo. This


effort represented a national initiative to provide transportation that is environmentally friendly,
efficient and economical. The Enviro 2000, which is a state-of-the-art, factory-designed, multi-point
sequential injection NGV mono-gas taxis with composite tanks onboard was developed by
PETRONAS and subsequently 1,000 units of Enviro 2000 was manufactured and in October 1998
put into operation around Kuala Lumpur. The engine and the CNG equipments including the
composite cylinder have proven that it can withstand the hot and humid climate and the traffic
conditions in Malaysia.

To-date, these Enviro 2000 taxis have successfully clocked millions of kilometers without any major
technical problems. The Enviro 2000 taxis are operated by taxi companies in Kuala Lumpur and also
by the Kuala Lumpur International Airport taxi operator.

Currently, Malaysia has about 14,564 natural gas vehicles and 40 stations located in three parts of
the country namely Kuala Lumpur (including Klang, Seremban and KLIA), Johor Bahru and Prai.
PETRONAS which markets and promotes NGV plans to have another 94 NGV stations to serve
estimated 54,000 vehicles by year 2010.

There are over 7.4 million vehicles (excluding motorcycles) in Malaysia, thus there is a large market
for natural gas vehicles waiting to be tapped. Nevertheless, many more NGV refueling stations needs
to be built, covering more parts of the country.



















COMPETITIVE ASSESSMENT
12
a. Industry Player
Petronas Gas Bhd A subsidiary or Petronas, incorporated in 23 May 1983. Its principal activity
involves in processing of natural gas produce from the gas fields offshore Terengganu (GPP in
Kertih, Terengganu), and the transmission of the processed gas to end-users throughout Peninsular
Malaysia and Singapore.
Petronas NGV Sdn Bhd (PNGV) A subsidiary of Petronas, incorporated in 14 February 1995. Its
principal activity is to Facilitate and promote the use of natural gas for vehicles as a commercially
viable and clean fuel in the transportation sector. PNGV was established undertake he development
and commercialization of NGV in Malaysia. PNGVs major task is the construction of CNG refueling
outlets in targeted urban areas. These refueling outlets are mainly constructed where piped natural
gas is available and where the air quality is deteriorating due to vehicle exhaust emissions.
Currently, there are 40 Petronas service stations in Malaysia providing CNG refueling facilities to a
population of amount 14,564 natural gas vehicles. Of the total, 33 stations are located in Kuala
Lumpur, 4 in Johore, 1 in Penang and 2 stations were in Seremban. PNGV is in the most of setting
up more CNG refueling facilities, as part of its on-going expansion programmed. CNG is supplied to
these stations via natural gas distribution pipelines.
Gas Malaysia Sdn Bhd Gas Malaysia incorporated in 16 May 1992. The company established by
a consortium of between PETRONAS, MMC, Shahpadu and Tokyo Gas, a company formed to
distribute natural gas to industrial, commercial and residential pipelines under National Grid
Distribution System. Currently the companys pipeline of 1,365 km covers central 16 locations,
southern 7 locations, eastern 3 locations and northern 11 locations.











b. Competitor Analysis
The major competitors in the market place are:-

Company
Market
Share
%
FY2007
Revenue
RM million

Analysis

Petronas NGV




1.8

70.0
A subsidiary of Petronas, mandate by
Government to develop natural gas for vehicles.
Currently the company has 40 refuelling stations
in throughout Malaysia supply of NGV to
vehicles thru pipeline.

Gas Malaysia




24.6

948.9
A consortium between MMC, Shahpadu and
Tokyo Gas, and was formed to distribute natural
gas to industrial, commercial and residential
pipelines under National Grid Distribution System.
Currently the companys pipeline of 1,365 km
covers 16 locations in the central, 7 locations in
the south, 3 locations in the east and 11 locations
in the north. The company supply natural gas to
apartments and factories via its pipeline.

Petronas Gas

73.6

2,838.3
A subsidiary or Petronas, principally involve in gas
processing (GPP in Kertih, Terengganu), and
distribution of gas to large industrial customers
and power plants (IPP) and major industries in
Singapore and Thailand.

TOTAL


100.0

3,857.2


The significant competitor to MNGV shall be Gas Malaysia, a market leader supplying natural gas to
industries in Malaysia. Gas Malaysia has been in the market for a relatively long period of time with
strong shareholders, technological and human resource acumen. Gas Malaysia has a wide and
pipeline distribution network covering 37 locations nationwide.
MNGVs key advantage in this business is its accessibility to remote areas through is mobile CNG
Trailer. Under Gas Supply Act and Gas Supply regulations permit, Gas Malaysia is permitted to
distribute gas by means through pipeline. While in transportation sector, the main competition is from
Petronas NGV which has 40 refueling stations in throughout Malaysia supply of NGV to vehicles thru
connected Gas Malaysia pipeline.
In terms of market share, Petronas Gas is the largest natural gas distributor in the country with 73.6%
market share. Gas Malaysia commands about 24.6% market share while Petronas NGV at 1.8%.



c. Market Size
It is estimated that 12,000 industrial factories in Malaysia are located far from the Petronas gas
pipeline with an estimated 1.5 million litres a day of natural gas demand to replace diesel for industrial
consumption.

Malaysias transportation sector especially converted NGV taxi in Kuala Lumpur, Selangor, Penang
and Johor Bahru has grown at a steady rate of 2.3% per annum with a total population of more than
18,500 in 2006. Based on the Ministry of Transportation statistic shows that there were over 7.4
million vehicles were registered excluding motorcycles in Malaysia potential market for NGV user.

d. Market Segmentation
MNGV will focus on the industrial and transportation sectors. Remote area is a large untapped
market and not fully serviced by the competitors. In the remote areas, there is an estimated 55,660
industries currently utilizing diesel in their factory and there is an estimated 2,500 industries which are
using approximately 5,000 liters of diesel a day. Among the industries are pulp paper, metals,
chemicals, stone, clay, glass, steel, rubber and food processing. In the steel industry, natural gas
mainly used for secondary melting, casting of molten steel, cutting and refining of billet and slabs.
The glass industry utilizes gas for processes such as melting, refining, fabricating, annealing, fib
rising, baking and floating bath. Assuming the 10% of these industries convert to gas and use 5,000
liter of gas a day, the revenue for gas is estimated RM6.9 billion per annum

In the transportation sector, the vehicle population is estimated at 7.4 million vehicles Assuming
10% of these vehicles convert to NGV and use 50 liter of gas a day, the revenue of NGV is estimated
RM9.2billion per annum.

e. Competitive Positioning
The companys competitive edge will be its potential dominance of access to remote areas that
currently are unable to have access to natural gas to run their plants. Although Gas Malaysia
dominates the local market, they do not penetrate the remote areas due high cost to build and
connect the gas pipeline to these areas. The MNGV Mother-daughter concept allows for stations at
strategic areas where there are no access to the pipeline. The proposed stations in the northern
state provide closer access to a large untapped market such industrial areas which not serve by Gas
Malaysia






f. Target Market
Presently, power generator, industrial, bi-fuel vehicles dominate the natural gas vehicle is a
Company target market which is a main user in Malaysia energy market and may consist
of various users as highlighted in following diagrams.



The Company will also target to serve the industrial customers with over 55,660 potential
industrial factories operating nationwide. Currently 90% of these factories uses diesel to
operate their plant. The potential industrial customers are as below.


Factory

State
Estimated usage of
natural gas Litre/day
Osaka Corporation Sdn Bhd Ipoh 10,000
Oka Concrete Industries Ipoh 10,000
Suka Chemical (M) Sd Bhd Seberang Jaya 15,000
Family Products Sdn Bhd Ipoh 10,000
Aalborg White Asia Sdn Bhd Ipoh 20,000
Acidchem International Sdn Bhd Seberang Jaya 20,000
ACME Ferrite Products Sdn Bhd Ipoh 15,000
Agriculture Chemicals (M) Sdn Bhd Seberag Prai 20,000
Agro-Industrial Suppliers (M) Sdn Bhd Jitra 10,000
Bio-ACETIC Products Sdn Bhd Ipoh 10,000
Century Chemicals Works Sdn Bhd Seberang Prai 10,000
Chee Wah Corporation Bhd Butterworth 5,000
Cradotex (M) Sdn Bhd Seberang Prai 10,000
CSH-Prime Packing Sdn Bhd Seberang Prai 15,000
Filrex (M) Sdn Bhd Ipoh 15,000
Gula Padang Terap Bhd Kuala Nerang 25,000
TOTAL 220,000



In the transportation sector, the targets potential Customer used the natural gas are:-


Company

Total Unit of Lorry
(Unit)

Estimated usage of natural
gas Litre/day
Tiong Nam Trading & Transport
Plot 1, Jalan Firma 2/1, Tebrau Industrial Estate,
81100 Johor Bahru, Johor

600

132,000
Yinson Holding Berhad
No. 25, Jalan Firma 2, Kawasan Perindustrian
Tebrau IV, 81100 Johor Bahru, Johor

200

44,000
Bintang Bulk Mover Sdn Bhd
No. 1, Jalan Indah 1, Rawang Bintang Mover
Centre, 4800 Rawang, Selangor

300

66,000
Integrated Logistic Berhad
No. 1B, Persiaran Klang Seksyen 27,
40400 Shah Alam, Selangor

100

22,000
Kontena Nasional Bhd
9
th
Miles, Old Klang Road, Seri Setia
47307 Petaling Jaya, Selanagor

600

132,000
Seagull Logistic Sdn Bhd
Lot 6, Lingkaran Sultan Muhammed 2
Bandar Sultan Sulaiman
4200 Pelabuhan Klang, Selangor

100

22,000
Nitsu Transpor Services (M) Sdn Bhd
10
th
Floor, West Tower, Wisma Consplant 1, No. 2
Jalan SS 16/4, 47500 Subang Jaya, Selangor

100

22,000
Sanjungan Logistics (M) Sdn Bhd
No. 11A, Jalan CJ 1 / 2 , Kawasan Perusahaan
Cheras Jaya Balakong 43200 Cheras, Selangor

100

22,000
Bifort (M) Sdn Bhd
No. B1-1-50A, Jalan Pinggiran 1/3, Taman
Pinggiran Putra, 43000 Seri Kembangan Selangor

100

22,000
Permu Jati Sdn Bhd
Lot 810, Jalan Subang 5, Off Persiaran Subang
47500 Subang Jaya, Selangor

50

11,000

TOTAL

495,000















COMPATITIVE STRENGTH
13

a. SWOT Analysis
To assess the position of MNGV in the natural gas industry, a SWOT analysis has been carried out
and the results have been summarized as follows:-

Strengths
o Potentially diversified market segments to ensure the lack of dependency on single
customer based
o Gas is relatively 50% cheaper than petrol.
o Reliable technical expertise with good high technology knowledge
o Management has industry knowledge with good understanding of market needs
o Good business contacts and relations with local and international partners

Weakness

o Limited operating business history
o A limited financial base
o Relatively high cost of capital investment especially in high technology equipment
o Relatively small market size using natural gas in Malaysia
o Dependence of supply from Gas Malaysia which also supplies gas to users via
pipeline.

Opportunities
o Specific niche with high demand for cheaper energy source as compared to other fuel
fossils
o Rising oil prices can potentially shift consumers to gas. Environmentally friendly.
o Government incentive and support for gas consumption via lower tax and other
incentives.
o Potential Government allocation of grant of RM500,000 to companies developing the
gas sector.
o Opportunity of venturing into other related businesses such as manufacture and sales
of conversion kits, vehicle services and maintenance workshop

Threats
o Competition, especially from Petronas NGV and Gas Malaysia.
o Price control by the Governments
o Shortage of NGV stations throughout Malaysia
o Rising cost of installation and conversion kits
o Limited source of supply of natural gas
o Gas supply agreement may not be renewed
o Merger and consolidation




MARKETING PLAN
15
a. Objectives
The objectives of the marketing plan for the MNGV are to:-
create product awareness among the potential customers
carry out product introduction to potential customers interested in MNGV natural gas products
encourage sign-up long term contract by potential customers and
maintain a healthy relationship with customers with the aim to promote references and
sustainable business arrangements

MNGV will position itself as the leading and preferred natural gas supplier and distribution
management solution provider. MNGVs marketing plan approaches are as follows:-

b. Promotional
Activities such as promotional, products launch and making appropriate news release will be parts of
the public relations strategy. The promotional strategy will be based on primarily on informing
potential customers of the existence of the company and making right information available to target
customers.

Since there is different target segments, the promotional tools and messages may vary in each of the
intended market. However, in all cases the marketing will convey the sense of economical, clean,
safe and ease of use in every picture and publication.

MNGV intend to leverage its presence in market by using quality brochures and other sales literature,
including promotional material such as pens, complimentary slips and stickers. Since the products
are in the introductory phase in the market, therefore promotional expenses are expected to be high
especially to generate customer awareness, attention and knowledge of the existence of MNGV.

The MNGV promotional strategy will also take place via advertising. MNGV undertakes extensive
advertising of its services and products brand name i.e. @GAS to instill awareness and knowledge.
MNGV will advertise its products in local newspaper, listings in the Yellow Pages, and business
contact.

Participation in the events such as trade show and exhibition are also important to MNGV. As a
promotion medium to MNGV, events can introduce publicly on its establishment business throughout
in country. The main aim of events is to provide a conclusive business operational and its services in
the natural gas businesses.






c. Distribution Strategy

The proposed mother station will be located within a 150km reach to target customers. Since
product distributions are nearer to destination, the cost of delivery would be minimal and easily
delivered to the customers on time.


d. Sales Strategy

The main sales goal strategy of MNGV is as follows:-.
o To accommodate the existing customers and to make sure that the order, supply and delivery
consistent and well maintained.
o To expanded the mother station facilities to facilitate the new customers orders and contract
o To hire high-quality sales persons to implement marketing programs and begin to sell product
lines


e. Collaboration Initiative

From time to time, MNGV will constantly search and source for international leading vehicles and
industrial companies. These will provide the research and development to develop advance industrial
equipment and CNG/NGV vehicles engines technologies. Amongst other potential collaboration on
vehicle models are Mercedes-Benz, Fiat, Opel, Volvo, Citroen, Renault and etc.

f. Strategic Alliance

MNGV will maintain strategic alliances with various corporations for mutual benefits. Among the
strategic alliance for MNGVs development and future growth are with:-

Government (Federal, State Government, Government Agencies to promote gas uses,
legislation, incentives, Research and Development, infrastructure development, energy
replacement strategy
Petronas as gas producer for price and supply stability
Potential customers by conversion technology, price competitiveness, cost benefit, privatization
and industry promotion across selling
Gas Malaysia as gas transmission and distribution agent to establish infrastructure nationwide,
joint industry promotion, research and development
Producer technology development, training, after sale service, service centre
Training Centre provide training for vehicle mechanical, conversion kits technology and
servicing
Regional Association promote common standards and practices




BUSINESS MODEL
16
a. Value Proposition
MNGV is a solution developed to resolve the current challenges in the natural gas and distribution
of natural gas besides bringing value-add to the entire chain of industry player. The key issues and
challenges in natural gas are (1) efficiency both operational and financial of the current models in
the industry, (2) to coverage distribution and (3) costs of managing the mother-daughter station and
distribution channels.

MNGV plans to bring value add to its users through:-
(1) credibility of distribution system
(2) reliability and consistency of supplied and support, and
(3) strong relationship with other industry player besides other demand partners to expand
distribution network for natural gas suppliers.

Some of the key benefits and value proposition of MNGV are:

Environmental benefits: CNG/NGV is cleanest burning alternative fuels making it an inherently
safe fuel.

Economic benefits: Cost of CNG/NGV is 50% less than cost of Petrol in terms of calorific value
resulting in substantial saving in fuel cost.

Government Incentives: The government provided incentive such as exemption on import and
sales taxes keeping conversion kits, 25% -50% road tax deduction on NGVs grant of RM50,000
per bus for the purchase of new locally assembled monogas NGV buses until the end of 2008
and grant of RM25,000 per bus for the conversion of existing buses to NGV until the end of 2008.

Customer satisfaction: Access to remote areas provides high-quality of products and service, its
latest high technology ability to deliver quickly and timely and customer oriented service after
sales.

Long term relationship: Communication policies will establish long term relationship with
customers through providing benefits informative.













b. Revenue Model
The revenue model for MNGV is both attractive and affordable to the user and yet profitable and
viable for MNGV. With the aims of creating market awareness of the products and penetrating the
industrial market, the pricing of MNGV has been structured to vary in accordance to the markets
requirements and ability.
The revenue from MNGV customers generally comprise of two segments, i.e. supply to daughter
station and the other segment is sale to public transportation with recurring revenue daily. The
following table shows the sales to customers of MNGV.
Liquefied Natural Gas (LNG)
No. Charges Description/basis of charge Sale Price
(RM m
3
)
1. Sale to Industrial

Calculated based on the m
3
330.00

Compress Natural Gas (CNG)/(Natural Gas vehicles (NGV)
No. Charges Description/basis of charge Sale Price
(RM m
3
)
1. Public user

Calculated based on the m
3
1.10
2. Sale to Industrial

Calculated based on the m
3
1.10
3. Sale to Fleet Calculated based on the m
3


1.10












FINANCIAL INFORMATION
17
a. Overview of Projection Assumptions
In preparing the preceding financial statement projections, various assumptions have been made
with respect to expected future revenues, expenses, assets, liabilities and equity. The projection
assumptions have been made after gathering and analyzing data that affects the future economic
outlook of the Company. The report provides a broad overview of the Projection Assumptions and
has been prepared to emphasize items considered significant to the overall understanding of the
projections.

A detailed listing of projection assumptions for income statement, balance sheet and cash flow is as
follows:-

Revenue & Expense Assumptions
Sales are projected to grow at an estimated, compounded annual average rate of 15%
Total Cost of sales including transportation cost
Total General & Administrative Expenses are projected to grow at an estimated,
compounded average annual rate of 10%.

Corporate Taxation is projected at 26% the total profit before taxation.

Fixed Asset Purchase Assumptions
o Leases Land would be utilized from fund raised.
o Build NGV Fueling Station would be utilized from fund raised.
o Build Port and LNG receiving Terminal, processing and regasification plant and LNG Storage
and its facilities would be utilized from fund raised.
o Purchase and rental of ISO Tank would be utilized from fund raised

Fixed Asset Depreciation Assumptions
o Depreciation Expense and Accumulated Depreciation on fixed assets have been estimated
over the term of the projected financial statements. Projected depreciation on existing fixed
assets and any fixed asset purchases is based on the terms presented in the following table.
o
Original Depreciation
Fixed Asset Life (years) Method
Port LNG Receiving Terminal and processing Plant 30 Amortization
LNG Storage 30 Amortization
Building and NGV Fueling Station equipment 30 Amortization
ISO Tank LNG and CNG 20 Straight line



b. Projection Summary
A summary listing of projection assumptions for income statement, balance sheet and cash flow is
as follows:

Summary Income Statements projections

FY1 FY2 FY3 FY4 FY5
Revenue - 0 7,876,596,918 8,982,121,878 10,219,244,886
Less: Cost of Goods Sold - 0 3,920,443,200 4,163,580,900 4,406,718,600
Gross Profit - 0 3,956,153,718 4,818,540,978 5,812,526,286

General & Administrative Expenses 5,057,244 5,037,966 18,083,043 26,068,324 35,830,822
Operating & Other Expenses 1,379,944,023 1,379,944,023 141,123,043 149,108,324 158,870,822
PBIT/(LBIT) (1,385,001,266) (1,384,981,988) 3,796,947,631 4,643,364,330 5,617,824,642
Depreciation & Amortization - 73,435,845 385,921,628 385,921,648 385,921,648
Interest - - 764,155,225 674,990,193 590,616,419
Profit/(Loss) Before Taxation (1,385,001,266) (1,458,417,834) 2,646,870,779 3,582,452,490 4,641,286,576
Taxation - - - 931,437,647 1,206,734,510
Net Profit/(Loss) (1,385,001,266) (1,458,417,834) 2,646,870,779 2,651,014,842 3,434,552,066

Summary Balance Sheet Projections

FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

ASSETS
Fixed Assets 8,272,535,793 14,297,536,103 14,168,019,452 14,038,502,801 13,908,986,150
Net Current Assets 8,095,839 901,038 4,662,971,429 8,527,123,485 12,880,541,327
Total Assets 8,280,63,632 14,298,437,141 18,830,990,881 22,565,626,286 26,789,527,477
LIABILITIES & EQUITY
Current Liabilities 1,195,632,898 88,459,944 3,111,035,992 4,537,005,080 6,256,396,973
Total Long-Term Debt 3,470,000,000 12,053,396,297 10,916,503,211 9,642,717,038 8,437,377,408
Total Other Liabilities - - - - -
Provision for Taxation - - - 931,437,647 1,206,734,51
Total Liabilities 4,665,632,898 12,141,856,241 14,027,539,203 15,111,159,765 15,900,508,891
Stockholders' Equity:
Ordinary Share 5,000,000,000 5,000,000,000 5,000,000,000 5,000,000,000 5,000,000,000
Retained Earnings/(Loses) - (1,385,001,266) (2,843,419,100) (196,548,321) 2,454,466,521
Current Year Earnings/(Loses) (1,385,001,266) (1,458,417,834) 2,646,870,779 2,651,014,842 3,434,552,066
Total Stockholders' Equity 3,614,998,734 2,156,580,900 4,803,451,679 7,454,466,521 10,889,018,587
Total Liabilities & Stockholders' Equity 8,280,63,632 14,298,437,141 18,830,990,881 22,565,626,286 26,789,527,477




APENDICES
19
APPENDIX I: DETAILS PROJECT COSTING
APPENDIX II: PROJECTION FINANCIAL STATEMENT
APPENDIX IV: PROJECTION CASH FLOW
APPENDIX V: PROJECTION REVENUE GAS SALES
APPENDIX VI: PROJECTION REVENUE RENTAL
APPENDIX V: PROJECTION GENERAL AND ADMINISTRATION EXPENSES
APPENDIX VI: CONCEPTUAL PAPER












APPENDIX I: DETAILS PROJECT COSTING




APPENDIX II: PROJECTION FINANCIAL STATEMENT







APPENDIX III: PROJECTION CASH FLOW

























































APPENDIX IV: PROJECTION REVENUE GAS SALES

























APPENDIX VI: PROJECTION REVENUE RENTAL



APPENDIX V: PROJECTION GENERAL AND ADMINISTRATION EXPENSES

































APPENDIX VI: CONCEPTUAL PAPER