CGS-CIMB REITERATES ADD CALL ON YINSON AS IT BUILDS ESG CREDENTIALS

KUALA LUMPUR, Sept 7  -- Yinson Holdings Bhd, which is expected to release its detailed roadmap toward achieving its Carbon Neutral 2030 and Net Zero 2050 targets this month, can generate valuable carbon credits through its renewable energy (RE) projects, said CGS-CIMB.

CGS-CIMB reiterated its “add” call on the oil and gas service provider with an unchanged target price of RM6.55, saying the carbon credits from both its RE and green technologies (GT) investments may be used internally to offset carbon emissions from its floating, production, storage, offloading (FPSO) operations, or be sold externally.

“Yinson believes that it can create more than five million RE certificates (REC) per annum by 2030 and 20 million RECs by 2050, from its planned RE project pipeline, which is valued in the voluntary carbon markets from a few US cents up to US$1 per tonne of carbon dioxide (CO2),” it said in a note today. (US$1=RM4.14)

On Yinson’s blueprint to achieve its climate goals, CGS-CIMB said the measures included measuring and verifying the company’s greenhouse gas (GHG) emissions from its FPSO fleet, removing regular flaring from two-thirds of its FPSOs, evaluating and utilising carbon capture and storage solutions on the existing FPSOs, and using high-quality carbon offsets for the residual carbon emissions.

It said Yinson would also evaluate new projects based on carbon intensity and whether flaring is required for the associated gas.

"We expect these steps will reduce its FPSO CO2 intensity by 30 per cent per barrel of oil equivalent, and by 50 per cent per MWh of power generation by 2030, which will go a long way to building Yinson’s ESG (environmental, social and governance) credentials.

"Yinson will explore technology-based solutions in order to achieve its Net Zero 2050 target, including focusing on zero, or low carbon solutions such as zero-emission FPSO technologies that may include partial or full electrification of its FPSOs, co-generation power, closed-flare systems and CCS technologies," the brokerage said.

While its target price for Yinson remained at RM6.55 for now, CGS-CIMB said it might be raised to RM7.61 after the company secured the final contact award for the FPSO Atlanta, which it said would be worth RM1.05 per share.

The counter gained eight sen to RM4.98 at midday break, with 148,300 shares changing hands.

-- BERNAMA