When The CEO Magazine last spoke to PETRONAS Gas Berhad (PGB) CEO Abdul Aziz Othman in July 2021, the COVID-19 pandemic was running rampant across the globe and having innumerable effects on all businesses in various ways.
Now, in a post-pandemic world, a new set of challenges for the energy sector has presented itself, making it more important than ever to be adaptable and agile.
“It’s a different environment,” Othman says.
We will be actively looking at growing our power generation capacity to supply to the grid in Peninsula Malaysia.
“Today the world has opened back up. Of course, the demand for energy is higher, and the traction on green energy is getting bigger and bigger. Those are the two big things that have evolved. But at the same time, while the demand for cleaner energy continues to be there, the price of gas has also gone up significantly.”
This is both a blessing and a curse, Othman explains, given that gas is also used in order to produce salesgas and other products for its customers.
“In order to move gas, I also have to use gas,” he says. “And when you move gas you have to compress the gas, using gas to run your compressor and gas turbine. So, we are impacted too even though we are just an infrastructure company.”
The necessary and significant shift toward a more sustainable energy sector provides an opportunity for PGB to truly differentiate itself as the leading supplier in this domain.
“Malaysia, as part of the transition toward net zero by 2050, is looking to phase out the coal-based power plants, and switch to either renewable or a cleaner energy,” Othman explains.
“So gas will play prominently in that energy mix. We will be actively looking at growing our power generation capacity to supply to the grid in Peninsula Malaysia. We also have a lot of cold energy that currently is not fully monetized, so we are exploring or framing projects where we want to convert and use that cold energy to produce industrial gases as another business area that we will pursue.”
Creating enduring partnerships
For an organization like PGB, a reliance on stable and enduring partnerships is an essential and non-negotiable component of the business.
“PGB’s primary responsibility is to ensure availability and reliability of our assets – all for the nation’s energy security, be it for the power sector or industries,” he explains. “Our reliable assets are currently underpinned by long-term contracts with our shippers to fulfill their commitments.
“Another of our key stakeholders for us, because we are regulated, are regulatory bodies. So engagement and relationship building with them is another thing we are focusing on, to make sure that what we do is within what the customers or the regulators want.”
Othman explains that through framework agreements over multiple years, long-term supplier relationships are formed that ultimately benefit both parties.
We track the transformation agenda progress diligently, continuously communicating and rallying the organization to ensure everybody is aligned.
“Instead of having standalone contractors, where every time I have a turnaround I go out and find suitable contractors, I look ahead at the next five years and work with a panel of contractors to achieve it,” he says.
“It is a good win–win proposition for us, through full costs. These contractors are assured of jobs, they can maintain a workforce. And this is one the key things as far as partnerships are concerned. Similarly, with vendors, mostly we work on long-term service agreements to make sure that the partnership is about going together into the future, instead of once off works.”
Power of people
Othman is a firm believer in the idea that if you support staff, they are better placed to support the business.
“People are our most important asset,” he says. “So despite the constraints because of the pandemic, we still have active engagement across the organization. Of course, we leverage on digital to do all that. We never fail to have this engagement to make sure that people are aligned.
“When I arrived, PGB was in the midst of its transformation agenda with our Game Plan, called PGB 301Q99 Pushing Forward PLUS, which was aimed to strengthen and build up the foundation of our operational excellence while exploring areas of business growth.
“We track the transformation agenda progress diligently, continuously communicating and rallying the organization to ensure everybody is aligned,” he says.
The transformation successfully came to a close in December 2022, with continuous improvements and optimization are now embedded in PGB’s new way of working toward a high performing organization and operational excellence.
Moving forward, PGB’s focus is on business growth, leveraging on the increasing gas demand and energy transition.
We are not going to rest on our laurels, because the environment is growing, challenges are growing and we know where we want to grow too.
Looking to the next chapter, PGB is clear in its intentions and is steadily working toward these goals, utilizing the benefits of being a publicly listed company and drawing on the strength and quality of its employees.
“Our share price has been very consistent, and that’s because of our track record. We know what drives our business – long-term contracts – but the key factor in achieving value from these long-term contracts is operational excellence,” Othman says.
“And as far as operational excellence is concerned, people and digital are the focus areas that we are embarking on. But we are not going to rest on our laurels, because the environment is growing, challenges are growing and we know where we want to grow too. We are quite clear on how we are going to move this ship forward.”