2026-10-09
- Air Products announced on October 8, 2026, in Kuala Lumpur that it finalized a definitive agreement with PG Cold Energy 1 Sdn. Bhd. (PGCE1), a joint venture led by PETRONAS Gas Berhad and DIALOG Group Berhad.
- The company will design, build and operate Malaysia’s first LNG-based ASU (Air Separation Unit) at the Pengerang LNG (Liquefied Natural Gas) regasification terminal in Johor.
- The plant is expected to produce more than 600 tonnes per day of liquid oxygen, nitrogen and argon, with start-up expected in early 2027.
- It is Air Products’ fifth LNG-based ASU in Asia and will serve the merchant market in Southern and Central Malaysia.
Air Products said on October 8, 2026, that it has finalized a definitive agreement to supply Malaysia’s first LNG-based ASU (Air Separation Unit) to a joint venture led by PETRONAS Gas Berhad. The unit will be located at the Pengerang LNG regasification terminal in Johor and will use the cold energy released when LNG is returned to a gaseous state to liquefy air. The company said it expects to produce more than 600 tonnes per day of liquid oxygen, nitrogen and argon for customers in electrical and electronics, petrochemicals, aerospace and manufacturing, with start-up targeted for early 2027.
The counterparty is PG Cold Energy 1 Sdn. Bhd. (PGCE1), a joint venture led by PETRONAS Gas Berhad through its unit PG Energia Sdn. Bhd., together with DIALOG Group Berhad through DIALOG Equity (Three) Sdn. Bhd. Under the agreement, Air Products will design, build and operate the ASU, a long-term supply-and-operate role that is common in the industrial gas business.
The site is the Pengerang LNG regasification terminal in the Malaysian state of Johor. LNG is generally received at cryogenic temperatures of around minus 160 degrees Celsius, and a significant amount of cold energy is released when it is regasified. In an LNG-based ASU, that cold energy is used to liquefy air, which reduces the electricity otherwise needed for refrigeration and compression. Air Products said the approach improves energy efficiency and reduces production-related emissions, helping customers lower their carbon footprint.
The products are liquid oxygen, liquid nitrogen and liquid argon, sold into the merchant market, meaning liquefied gases delivered to many customers rather than piped to a single user. The stated target market is Southern and Central Malaysia, and the sectors named are electrical and electronics, petrochemicals, aerospace and manufacturing.
A document exchange ceremony was held at the PETRONAS Twin Towers in Kuala Lumpur. Attendees included Abdul Aziz Othman, Managing Director and CEO of PETRONAS Gas Berhad, Chan Yew Kai, Executive Deputy Chairman of DIALOG, and Kurt Lefevere, President of Air Products Asia. Ramani Velu, President of Air Products Southeast Asia, said the company’s relationship with PETRONAS Gas Berhad spans more than four decades and described the investment as a sign of long-term commitment to Malaysia.
- Capacity: more than 600 tonnes per day of liquid oxygen, nitrogen and argon combined
- Start-up target: early 2027
- Location: Pengerang LNG regasification terminal, Johor, Malaysia
- Counterparty: PGCE1, a joint venture involving PETRONAS Gas Berhad (via PG Energia) and DIALOG Group Berhad (via DIALOG Equity (Three))
- Significance: Malaysia’s first LNG-based ASU and Air Products’ fifth LNG-based ASU in Asia
- Air Products in Malaysia: operating since 1974, with ASUs in the Prai Industrial Area and a pipeline network serving Batu Kawan and Bayan Lepas Industrial Park in Penang
- Air Products group: fiscal 2025 sales of US$12.0 billion, operations in about 50 countries
The contract value, total investment and equity split of the joint venture were not disclosed in the announcement.
Timeline
- 1974 — Air Products begins operating in Malaysia
- 2026-10-08 — Definitive agreement announced in Kuala Lumpur, followed by a document exchange ceremony at the PETRONAS Twin Towers
- Early 2027 — Planned ASU start-up, according to the company
Note
The merchant market refers to the sale of liquefied gases by tanker to many customers, as opposed to on-site supply by pipeline to a single customer. An LNG-based ASU produces liquid oxygen, nitrogen and argon by using the cold energy released during LNG regasification to liquefy air.