KUCHING: Malaysia’s oil and gas (O&G) sector continues to see some upside with fabricators consolidating, new contracts being awarded and further joint ventures in the works.
INVITATION TO TENDER: A host of companies in Asia are understood to have responded to invitations to tender for module construction, and these proposals are being evaluated by Chevron and Bechtel, the main LNG contractor for Wheatstone, says Ching.
According to the head analyst of ECM Libra Capital Sdn Bhd (ECM Libra) Bernard Ching, one notable highlight was MMHE Sdn Bhd (MMHE) and Sime Darby Engineering Sdn Bhd (SDE) entering into a memorandum of understanding (MOU) for the sale of SDE’s Pasir Gudang yard.
The yard, which consists of 130 acres, would be sold to MMHE for RM399 million.Ching believed that the price was close to book value and would be positive for both companies should the transaction materialise.
“The acquisition would effectively double MMHE’s yard space, giving room for its major order book growth,” he noted in his online report.
For SDE, the disposal would see the group having more resources to focus on cash cows like plantations, industrial and motors divisions.
Apart from that, Petronas Carigali Sdn Bhd (Petronas Carigali) launched a tender for the country’s first Chemical Enhanced Oil Recovery (CEOR) project at the producing Angsi oil and gas complex off Terengganu.
There could be some RM500 million to RM1 billion in jobs coming out of the project. ECM Libra opined this project could also be a prelude to announcements on the Tapis Enhanced Oil Recovery (EOR) project.
“Also, Dialog (Dialog Group Bhd) appears to be next to venture into marginal fields. It was previously reported that the group was forming a joint venture with ROC Oil Co Ltd of Australia to develop the Balai and Bentara fields off Sarawak,” Ching elaborated.
“Dialog had already received a Letter of Intent (LOI) from Petronas. There was no conformation whether this deal was on or off yet however but the research house expected more development plans on marginal fields to emerge.”
SapuraCrest Petroleum Bhd’s TL Offshore Sdn Bhd was one of six international groups to submit a bid for a Petrobras tender aimed at contracting up to six flexible pipe laying vessels for its pre-salt development drive off Brazil.
Another highlight was Kebabangan Petroleum Operating Co Sdn Bhd (KPOC) making its final investment decision to develop the Kebabangan gas field which is located off the coast of Sabah.
KPOC, which is 40 per cent owned by Petronas Carigali, had already tendered out fabrication works to SDE and Kencana Petroleum Bhd (Kencana).
Contracts for installation of pipelines and facilities were expected soon.
Over in Australia, Chevron Corporation had taken another step forward in hiring companies to fabricate the onshore liquefied natural gas (LNG) modules for its Wheatstone project.
A host of companies in Asia were understood to have responded to invitations to tender for module construction, and these proposals were being evaluated by Chevron and Bechtel, the main LNG contractor for Wheatstone.
“Companies in China, Indonesia, Malaysia, South Korea and Thailand were said to have submitted offers, but not all could be identified with certainty at the time,” Ching affirmed.
In other news, Prime Minister Datuk Sri Najib Tun Razak announced that Petronas would spend US$20 billion in a 300,000 barrel-per-day refinery, naphtha cracker, petrochemicals and polymer complex in Johore. A second LNG re-gasification plant was also being considered.
From this, ECM Libra saw engineering, procurement, construction and commissioning (EPCC) jobs potential to benefit local players such as KNM Group Bhd, Muhibbah Engineering Bhd and Kencana.