Saturday, 17 May 2014

THHE wins contract worth up to RM2.7bil

TH Heavy Engineering Bhd (THHE) has won a contract for the provision of engineering, procurement, construction, installation and commissioning (EPCIC) and leasing of its floating production storage and offloading (FPSO) vessel, a deal that could be worth up to RM2.67bil.

The company told Bursa Malaysia yesterday that it had received a letter of award (LoA) from JX Nippon Oil and Gas Exploration (M) Ltd.

The LoA entails the provision of EPCIC and subsequent leasing of its FPSO Deep Producer 1 until Nov 17, 2023 for the Layang Development Project at Block SK10, offshore Sarawak.

The award also provides for the option to extend the lease of the FPSO facilities for one year up to a maximum 10 years. It said the award was estimated to be worth about RM1.2bil for the primary period, with additional potential of up to about RM1.47bil should the full extension options be exercised.

“The award is expected to contribute positively towards the earnings and net assets per share of the company for the financial year ending Dec 31, 2014 and thereafter over the entire lease period,” THHE said.

The job win is a first for THHE for the vessel it acquired in 2011.

The FPSO Deep Producer 1 vessel is owned by Floatech (L) Ltd, an 80% subsidiary of THHE.

It was reported the FPSO would have a storage capacity of 400,000 barrels of oil with a lifespan of about 20 years.