JX Nippon Hires Deep Producer 1 FPSO for Layang Development Project

TH Heavy Engineering Berhad (THHE) has received a Letter of Award from JX Nippon Oil & Gas Exploration (Malaysia) Limited for the provision, installation and commissioning of the FPSO Deep Producer 1 in the Layang Development Project, located in Block SK10, offshore Sarawak, Malaysia.

Under the contract, THHE will undertake the EPC, fabrication, conversion, installation, hook-up and commissioning of the FPSO facilities.

The Company will lease the FPSO until 17 November 2023 with an extension option of one year up to a maximum period of 10 years from 18 November 2023.

The Award is estimated to have a contractual value of US$372 million (RM1.2 billion) for the primary period with the additional potential of up to US$457 million (RM1.47 billion) should the full extension options be exercised.

FPSO Deep Producer 1 is owned by Floatech (L) Ltd, a 80% subsidiary of the Company. Floatech (L) Ltd was incorporated in Labuan on 19 August 2011 and is principally engaged in owning and operating the FPSO vessel.

The Award is expected to contribute positively towards the earnings and net assets per share of the THHE for the financial year ending 31 December 2014 and thereafter over the entire lease period.

May 16, 2014; Image: Drydocks