Yinson secures RM2bil contract from JX Nippon

PETALING JAYA: Yinson Holdings Bhd has bagged a RM2.36bil operation and maintenance (O&M) services contract from JX Nippon.

The scope of the contract is to undertake O&M works for the Nippon floating production, storage and offloading (FPSO) facility.

The group said Yinson Energy Sdn Bhd, as the exclusive agent of Yinson Production AS, an indirect unit of the group, had accepted the letter of award on Feb 12, 2019.

In a filing with th stock exchange, the group said the tenure of the contract was effective from Feb 12.

It added that the contract would remain in force until its termination for the provision of engineering, procurement, construction, installation and commissioning, and leasing for the Layang FPSO facilities (charter contract).

“The tenure of the charter contract is for a firm period of eight years, with options for 10 extension periods of one year each,” it said in the filing.

Assuming the extension options are fully-exercised, it said, the estimated value of the contract was

RM2.36bil.

The Nippon FPSO facility is expected to commence operations at the Layang field by the fourth quarter of 2019.

The group said the O&M contract would not have any effect on the share capital and shareholding structure of the company.

It is, however, expected to contribute positively to the earnings and net assets per share of the group for the financial year ending Jan 31, 2020 onwards until the termination of the charter contract.

“The group foresees, among others, that the risk factors affecting the O&M contract would be the execution capability of the group to carry out proper services of O&M of the Nippon FPSO facilities.

“Such risk is expected to be mitigated by the group’s in-depth experience and expertise in carrying out the necessary works, as well as internal business controls to ensure delivery of services as required under the O&M contract,” the group said.