Yinson still in talks over FPSO vessel charter
PETALING JAYA: Yinson Holdings Bhd has clarified that it is still currently in talks with Japan’s JX Nippon Oil & Gas Exploration (Malaysia) Ltd and TH Heavy Engineering Bhd (THHE), in regards to Yinson taking over the floating production, storage, and offloading (FPSO) vessel charter for JX Nippon.
In a Bursa Malaysia filing yesterday, Yinson said it has not engaged in any discussions regarding the purchase of any assets in Sabah.
The announcement was made in response to a local business daily article entitled “Yinson May Offer Lifeline to TH Heavy”.
“Yinson is constantly exploring and evaluating business opportunities in its home market, which are in line with the group’s long term objectives and growth to expand its FPSO business, including exploring redeployment opportunities for its fleet.
“The opportunity (of taking over the FPSO vessel charter for JX Nippon) is one of the few Malaysian proposals which the company is currently evaluating.
“The proposal remains in discussion stage,” it said.
Shares of loss-making THHE had attracted trading interest over talk that Yinson may offer a lifeline for some of the former’s assets, including the Layang oil and gas field.
The 30%-owned Lembaga Tabung Haji company had secured the Layang field contract from JX Nippon back in 2014.
THHE closed 22.2% higher at 11 sen yesterday, traded on a volume of 128.22 million shares.
Industry sources believed that Yinson is not keen to purchase any of its smaller rival’s assets.
“Yinson is in talks with JX Nippon but there is nothing concrete on the Layang project at present as it is still too preliminary,” an industry source close to the company told StarBiz.
The bidding process of FPSO contracts generally take six months to two years, he said.
“In the event that Yinson does bid for the Layang project, it is likely that the company will look for alternative solutions, instead of buying over THHE’s FPSO asset that is to be leased for the Layang field,” said the source.
The company converted the Laurita, bought in 2011 for US$82.5mil, into the Deep Producer 1 FPSO at an estimated US$230mil (RM875mil), which was to be leased to JX Nippon for deployment at the Layang field.
But since last year, THHE had been served with several winding-up petitions, plus claims amounting to over RM45mil, mostly in relation to work for the Layang FPSO project.
Last month, THHE was given eight more months to submit its regularisation plan to address the company’s PN17 status and pay its creditors.