AmInvestment Bank Research said the contract is expected to be awarded in 2025.
PETALING JAYA: MISC Group is believed to be well-positioned to win the charter contract for the Kelidang ultra-deep water gas project, offshore Brunei, due to Petroliam Nasional Bhd’s (PETRONAS) 51% equity stake in the group.
AmInvestment Bank Research stated that PETRONAS had recently issued tender documents to selected floating production, storage and offloading (FPSO) suppliers for the contract.
It was noted that the aim of the project was to supply backfill for Brunei’s largest domestic liquified natural gas plant in Lumut.
The project’s field development plan is said to involve an FPSO vessel with a gas handling capacity of up to 450 million standard cubic ft per day.
It will then be installed in a water depth of 150 metres with a network of flowlines linking it to six submerged trees that are situated in 2,000 metres of water.
Kelidang North East, Keratau and Keratau South West are the three finds that make up the Kelidang cluster, which is situated on Block CA-2 around 125 kms off the coast of Brunei.
The collective reserves of the said discoveries are estimated to be several trillion standard cubic ft of gas.
The research house stated that the projected floater will be leased on a 12-year charter contract with a three-year option, citing industry sources.
It was also mentioned that PETRONAS was amenable to both options for conversion and redeployment.
However, the former was highly favoured due to the dearth of suitable spare vessels available for use in the area.
According to AmInvestment Bank Research, the tender is anticipated to be received by May 2024, whilst the award is expected to be given out in 2025 after the final investment decision is taken into account. A pre-bid meeting will take place in January 2024.
Among other companies that are said to be up for the job include Yinson Holdings Bhd
, Bumi Armada Bhd, MTC Group, Bluewater and Shapoorji Pallonji Energy Pte Ltd.
The project is carried out through a joint venture between Shell and the Brunei National Petroleum Co, with PETRONAS serving as the operator.
AmInvestment Bank Research has maintained a “hold” call on MISC. This is assuming an 8.4-fold financial year 2024 (FY24) enterprise value (EV)/earnings before interest, taxes, depreciation and amortisation (Ebitda) ratio based on an unaltered sum-of-parts-based fair value of RM7.81 per share.
MISC currently trades at a fair FY24 EV/Ebitda of 8.9 times, close to its three-year average of nine times.
