MISC Inks Long-Term FSO Charter with HESS

Malaysian shipping group MISC Berhad has secured a long-term charter contract from Hess Exploration and Production Malaysia (HESS) for the lease of a floating, storage and offloading facility (FSO) on a bareboat basis.

Image Courtesy: MISC

The FSO Mekar Bergading will be chartered by HESS for a period of sixteen years with an estimated contract value of USD 441 million.

The long-term charter contract is pursuant to a sale and charter agreement between the duo in respect of the FSO, which also resulted in MISC acquiring ownership of the FSO, the shipping group said.

As explained, the investment is in line with the MISC2020 strategy. One of the targets of the company’s strategy is to achieve a sustainable level of secured profit by 2020. MISC has been exploring opportunities to diversify the profit stream contribution across all business segments, including the acquisition of assets.

“Under the MISC2020 strategy, the game plan for Offshore Business includes pursuing acquisition opportunities in the domestic and international market. The steady oil price recovery in recent months and renewed interest in growth opportunities have led to an increase of activities in the offshore segment. This makes good sense for us to take advantage of this by growing our portfolio of offshore assets through this acquisition which will support our ability to sustain profit in the long term,” Yee Yang Chien, President/Group CEO of MISC, remarked.

This FSO will join MISC’s fleet of offshore floating facilities, which now comprises seven FSOs, six floating production, storage and offloading (FPSO) facilities, two mobile offshore production units (MOPUs) and one semi-submersible floating production system, bringing the total to sixteen assets.