Malaysia-based Coastal Contracts Bhd (Coastal or Company, and together with its subsidiaries Coastal Group or Group) announced Monday that its wholly-owned subsidiary, Thaumas Marine Ltd (TM) has secured a charter contract pertaining to provision of a self-elevated jackup with gas compression capabilities (Jackup) to Petroleos Mexicanos (Pemex). The Jackup charter contract worth approximately $371.6 million (MYR 1.24 billion) was awarded to TM from a group of Mexican upstream contractors comprises Tecnologías Relacionadas con Energia y Servicios Especializados, S.A. de C.V., Sistemas Integrales de Compresion, S.A. de C.V., Ardica Construcciones, S.A. de C.V. and Alher Oil & Gas, S.A. de C.V. who entered into a gas compression service contract with Pemex Exploracion y Produccion, the Exploration and Production arm of Pemex. The charter contract will commence in second half of 2015 for a period of eight years with extension option up to twelve years. TM will immediately commence construction of the Jackup. The Jackup is scheduled for delivery in first half of 2015 and will be used to handle sour gas production for Pemex in the Cantarell Oil Complex, Gulf of Mexico under the charter contract.
Pemex is ranked the second largest Latin America company by Latin Trade, second only to Petrobras, and is ranked eighth of Forbes The World’s 25 Biggest Oil Companies in 2013. Pemex’s production in 2013 stood at 3.6 million barrels of oil equivalents per day. As of to date, Mexico’s estimated hydrocarbon reserves are approximately 30 billion barrels of oil and 500 trillion cubic feet of natural gas.
The Jackup will have the ability to manage sour gas, for injection into the reservoir the high content of associated gas to oil, helping to maintain reservoir pressure and maximize the exploitation of hydrocarbons. The sour gas compression plant will be unique in its kind, and will operate with a capacity of 200 million cubic feet per day (MMcf/d) installed on the Jackup which interconnect to Pemex’s offshore production facilities, located in the probe Campeche, providing the flexibility to relocate in different offshore facilities under Pemex’s operational strategies. The Jackup will be a key component to Pemex’s plans to boost natural gas production and help supply the local market in Mexico.
The charter contract is expected to contribute positively to the future revenue and earnings of Coastal Group commencing second half of 2015, thereafter for the duration of the charter contract.
Ng Chin Heng, the executive chairman of Coastal, commented:
“It was a terrific thrill for us to kick-off 2014 with the winning of such a sizeable long term charter contract from the upstream segment in Gulf of Mexico. This long term contract will lay a solid foundation for the Group’s exploration of new profit driver and provide the Group with the greater mid to long term earnings visibility; meantime strongly enhance Coastal Group’s competitive edge in the offshore market.
Including the vessel sales order, the Group’s total order book has reached approximately $749.3 million (MYR 2.5 billion), breaking the Group’s record of order book value.
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