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Tuesday, May 6, 2008

Oil and gas spin-offs for YNH township

PETALING JAYA: The US$5bil oil and gas (O&G) complex to be built in Manjung, Perak, by Qatar's Gulf Petroleum Ltd will create a new level of demand for housing in the area.

The company said recently it had received approval from the International Trade and Industry Ministry for its project, and that the Perak government had offered it a 405ha site in Manjung.

The economic spin-offs from this project will be felt by a wide range of businesses in Manjung, including Bandar Sri Manjung being developed by YNH Property Bhd.

“When Tenaga (Nasional Bhd) started building its Janamanjung power station in the late 1990s, there were about 2,000 construction workers in the area for several years.

“At the peak, there were about 5,000 workers,” YNH head of corporate finance Daniel Chan said.

The power station is located on an island near Lumut Port.

When a big project was being built, a lot of construction workers would come here to work, and they would be renting houses, Chan told StarBiz in a telephone interview from his office in Sri Manjung.

Chan said he had heard that Gulf Petroleum had started to hire construction workers to get earthworks moving.

When the project is completed several years later, the permanent employees at the complex would also require housing.

Bandar Sri Manjung will occupy a total of 809ha, of which about 365ha are yet to be developed. Demand for houses in the township was consistent, so about 20ha were developed every year, Chan said.

There is stable demand for housing from the naval base at Lumut Port.

In recent years, the flurry of activities at Kencana Petroleum Bhd's fabrication yard in Lumut had also brought numerous workers, including expatriates, Chan added.

Hence, contrary to concerns about a slowdown in the property sector, YNH is experiencing an increase in volume sales and prices at Bandar Sri Manjung.

Sales volume and house prices have increased by 10% to 20% in the first quarter. A single-storey house there cost RM120,000 this year compared with about RM105,000 last year, Chan said.

YNH shares are actively traded, with about three million shares changing hands daily.

At the price of RM2.33 a share, the stock sees a turnover of about RM35mil a week, indicative of buying by institutions.

By The Star (by C.S.Tan)

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