Petronas Dagangan Bhd (PDB), the marketing and retail arm of Malaysian oil and gas giant Petronas and whose deal to sell its Vietnam-based unit Thang Long LPG Company Ltd to Totalgaz Vietnam LLC fell through in January this year, has sold the liquefied petroleum gas (LPG) bottler and jetty owner to another local party, the Noi Thuong Bac JSC.

In a stock exchange filing, PDB said the divestment was in line with its portfolio rationalization but did not disclose the value of the sale.

According to a person familiar with the matter, the contribution from Vietnam must be quite minimal considering that when it comes to retail, LPG has low profitability compared to lubricants and aviation fuel.

Founded in 1999, Noi Thuong Bac’s operations range from cargo logistics to transporting LPG bottles. It officially became a distributor for Shell Gas in early 2011, according to information on its website.

Petronas teamed up with the Vietnam Gas Co., a subsidiary of the State-run oil company PetroVietnam, to form Thang Long LPG at the end of 1995.

Thang Long was one of six downstream companies bought by PDB from its parent Petronas in 2012 for about $46.2 million as part of its plan to expand in the region.

PDB has since sold one of its Vietnam-based units, LPG processor and distributor Petronas Vietnam Co. Ltd (PVL), to Totalgaz Vietnam, a subsidiary of France’s integrated oil and gas giant the Total Group.

Totalgaz cancelled the proposed purchase of Thang Long LPG in January this year without elaborating on the reasons.

Both parties had twice extended the period for transferring 100 per cent equity interest in the Vietnam-based LPG storage and bottling firm. The agreement to divest to Totalgaz Vietnam was reached on November 11, 2015.

That was also the date of the agreement to sell 100 per cent of Petronas Vietnam Co. Ltd to Totalgaz Vietnam. This transaction was completed on May 24, 2016.

PDB said the divestment was “in the best interests of the company”. Meanwhile, in the January 31 notice, the Malaysian company disclosed that the termination of the Thang Long LPG deal will not have any material effect on PDB’s financial situation.

The two acquisitions, if concluded, would fortify Totalgaz’s position in the Vietnam market as the second largest LPG player. It previously purchased Saigon Gas in 2008 and Vinagas in 2012.

VN Economic Times