Year-end cheer for COASTAL (5071) COASTAL CONTRACTS BHD

Year-end cheer for COASTAL (5071)  COASTAL CONTRACTS BHD

PETALING JAYA: Shares in Coastal Contracts Bhd surged almost 10% after announcing its consortium had secured a contract valued at RM4.5bil yesterday.

The stock closed 12 sen, or 9.9%, higher at RM1.33 yesterday, off an intra-day high of RM1.44.

In a statement, Coastal said a consortium, led by its joint-venture (JV) company Coastoil Dynamic SA De CV, had entered into a service agreement with Pemex Exploracion and Produccion to undertake an onshore gas conditioning plant project worth RM4.5bil.

“The scope of work for this contract comprises engineering, procurement, construction, operation and maintenance for the gas conditioning plant and its related infrastructure.

“The firm period for this contract shall be 3,902 days, including the construction period of 250 days and the operations and maintenance period of 10 years,” Coastal said yesterday.

Pemex is a subsidiary of Petroleos Mexicanos, a Mexican state-owned petroleum company.

Coastal said the onshore gas conditioning plant project, named the EMC Papan Plant, had a capacity of 300 million standard cubic feet per day (mmscfd) at Ixachi field, Tierra Balanca in Veracruz, Mexico.

Pemex logo on oil refinery in MexicoPemex logo on oil refinery in Mexico

According to the statement, the EMC Papan Plant is part of the Mexican government’s plan to make gas accessible to every person in the country.

“For Pemex, this project is attractive due to its proximity to existing gas collection, separation and measuring infrastructure, as well as two major pipelines that will allow gas to flow to central, northern and eventually, south eastern of Mexico.

“Ixachi, in comparison with Mexico’s super-giant shallow-water Cantarell field, is expected to be the most productive onshore field in Mexico once it hits its peak production.”

In the same statement, Coastal Group executive chairman Ng Chin Heng said he was delighted to have secured the second onshore gas conditioning contract at the Ixachi Field in Mexico.

“Coastal has been in Mexico since 2013 when it first signed the bareboat charter agreement for Agosto-12, the jack-up gas compression service unit for Pemex.”

Ng said Agosto-12 was currently in its sixth year working for Pemex at the Cantarell Field. “Over the years, our mutual trust and working relationship with Nuvoil has created synergies for both parties to venture into onshore gas plant projects in Mexico.

“Winning this contract would mean that Pemex recognises our capability to provide quality service to Pemex.”

Going forward, Ng said Coastal was very optimistic on pursuing more projects related to Pemex’s production value chain, amid a steady recovery of the industry.

Coastal Contracts shipyard in SandakanCoastal Contracts shipyard in Sandakan

“With the oil price hovering around US$70 (RM293) per barrel and the underinvestment in the industry during the past few years, oil majors are expected to increase capital expenditure in 2022.

“We believe that Coastal and our JV company will be able to capitalise on these opportunities.”

Earlier this year, Coastal had embarked on its venture of an onshore gas conditioning plant project in Mexico, together with its long-term business partner Nuvoil, via its JV company, Coastoil Dynamic.

“Nuvoil is a well-established Mexican company with a robust track record by virtue of its 23 years of experience in the engineering, procurement, construction and the operation and maintenance of onshore gas plants in Mexico,” Coastal said.

Coastoil Dynamic’s first gas conditioning plant, Perdiz Plant, has a capacity of 180 mmscfd and commenced operations in July 2021.

https://www.thestar.com.my/business/business-news/2021/12/28/year-end-cheer-for-coastal-contracts