Yinson to finalise Layang field novotion agreement soon

KUALA LUMPUR: Yinson Holdings Bhd is expecting to finalise the novation agreement of the Layang field in Block SK10 of Sarawak by mid-February.

Yinson group chief executive officer Lim Chern Yuan said the proposed JX Nippon contract novation is being presented at the Court of Appeal.

“The novation agreement first went through the High Court, which was approved, but later, there was an appeal from one of the creditors.

“The verdict is expected to be out in mid-February.”

JX Nippon Oil & Gas Exploration

Lim Chern Yuan

(M) Ltd originally awarded the Layang development field project to TH Heavy Engineering Bhd (THHE) back in 2014, but THHE had to give it up because of a lack of funding.

Subsequently, the project was opened to bidders and Yinson was one of them. Since then, Yinson has been in discussions with JX Nippon and THHE to take over the charter for the floating production, storage and offloading vessel (FPSO), expected to cost less than US$400mil and to be deployed in the Layang field in Block SK10 off Sarawak.

“The novation of the contract does not include THHE’s FPSO asset,” said Lim.

He added that upon the successful novation of the contract, Yinson intends to deploy its FPSO, the Four Rainbow.

Yinson recently purchased the remaining 49% it did not own in FPSO Four Rainbow for US$9mil (RM35.39mil).

In addition, Yinson is bidding for a total of four to five FPSO charter contracts this year.

Lim said these projects would be located in West Africa, the Americas and one in Malaysia, which is the Layang gas-production field.

“With our cash pile, we now have capital to invest in new bids.

“We will just stick to what we do best – our core business, FPSOs,” he said, adding that the group would only add new FPSOs to its fleet after securing new contracts.

The verdict is expected to be out in mid-February.