Sapura Energy JV secures RM3b EPCIC contract

Kenanga Research said while the outlook is expected to improve from financial year 2020 (FY20) onwards, it has maintained its

KUALA LUMPUR: Sapura Energy Bhd and a consortium partner have received a RM3bil engineering, procurement, construction, installation and commissioning (EPCIC) contract from India's Oil and Natural Gas Corp.

Sapura Energy's wholly owned Sapura Fabrication Sdn Bhd is entitled to about RM1.47bil of the contract value as it has a 48.3% stake in the partnership with Afcons Infrastructure Ltd.

The consortium is currently undertaking the EPCIC works at the central processing platform (CPP) and living quarters for the KG-DWN 98/2 NELP block.

"The block, located offshore the Godavari Delta on the east coast of India, covers an area of approximately 7,295km of the Krishna-Godavari basin with water depth ranging between 300m to 3,200m," said the group in a statement.

"The new contract win enhances the company’s presence in the growing market and Sapura Energy is pleased to continue its contribution to India’s oil and gas industry and in helping to meet the country’s increasing energy demand.

"The project is an opportunity for Sapura Energy to participate in a key development for ONGC, leveraging on the company’s established deepwater knowledge and capabilities."

Consortium partner Afcons is the construction arm of Shapoorji Pallonji Group, India's leading engineering and construction conglomerate.

Trading in Sapura Energy shares has been halted from 2.30pm to 3.30pm on Thursday. The counter ended the morning session up 0.5 sen at 34 sen a share on the back of 14.06 million shares traded