Sumatec gets RM480m CEP job in Kazakhstan

PETALING JAYA: Sumatec Resources Bhd has been given the right by Markmore Energy (Labuan) Ltd (MELL) to construct a condensate extractions plant (CEP) in Kazakhstan for US$120 million (RM480 million).

Sumatec told Bursa Malaysia that it intends to fund the cost through a rights issue to raise a minimum proceeds of US$40 million: US$60 million of bank borrowings/internal cash flow and the balance US$20 million via intercompany offset.

The plant facilities consist of a gas and liquid separator, contaminant removal unit, methane and ethane separation unit, CEP fractionation unit and propane and butane treater. It will be completed within 18 months from the date of signing of the gas supply agreement.

Sumatec’s major shareholder Tan Sri Halim Saad is the director and 99.9% shareholder of MELL, which holds the entire interest in CaspiOilGas LLP (COG). COG is the concession owner and operator of the Rakushechnoye oil and gas field located in Kazakhstan.

Meanwhile, Sumatec also has to pay US$155 million as entry cost to MELL in consideration for the gas feedstock.

The cost, however, is subject to negotiation and adjustment, and will be payable via a combination of cash as well as the issuance of redeemable convertible preference shares and new Sumatec shares for the sum of up to US$25 million and RM100 million, respectively.

Sumatec said its share of final products from the plant will be 332 metric tonnes of liquefied petroleum gas and 5,000 barrels of condensate per day. The detailed terms will be determined in the gas supply agreement subject to the plant achieving a minimum internal return rate of 20% per annum.

Sumatec’s share price closed unchanged at 6.5 sen last Friday, with some 9.5 million shares changing hands.