Malaysia's Coastal Contracts Bhd reported Monday that the firm has entered into a Memorandum of Understanding (MOU) with PT Jaya Samudra Karunia Internasional (JSK) to acquire 49 percent interest in Indonesia-corporated PT Jaya Samudra Karunia Gas (JSK Gas) for $6.6 million as it ventures into the liquefied natural gas (LNG) supply chain.
JSK, a coal transportation player in Indonesia, ventured into the LNG supply chain after being recently awarded LNG regasification and LNG storage contracts to support a 200 megwatts (MWh) gas-fired power plant in Bali by an Indonesian state-owned company.
Coastal Contracts said its involvement in JSK Gas will focus on the floating storage regasification unit (FSRU) solution. The acquisition will enable it to establish a presence in the LNG supply chain and to develop expertise in the FSRU solution. In addition, Coastal Contract will be able to build a new portfolio of LNG related products and services, enhances its capabilities by venturing into the LNG supply chain and moving up the value chain in terms of technology, technical knowledge and expertise in the downstream sector as well as diversify its revenue stream.
"In Indonesia, the population is scattered across thousands of islands with varying levels of gas demand and in certain parts of Indonesia where the water depth is too shallow for a conventional FSRU to operate, small scale FSRU is the most suitable and efficient way for gas distribution, this implies that small scale FSRU has very good prospect too, not only in Indonesia, but in other Southeast Asia countries, including Malaysia," Ng Chin Heng, executive chairman of Coastal Group, said in the press release.
"This strategic acquisition marks the first step towards our long term and mutually beneficial business relationship with JSK. There will be more upcoming projects of similar kind following the successful delivery of the first small-scale FRU and FSU in the world. As Indonesia’s power-generation plans are positioning the country to become one of the fastest-growing markets for LNG and a regional first-mover in small-scale LNG receiving terminal in Asia, we foresee exciting opportunities for growth in this new sector," he added.
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