PETALING JAYA: Coastal Contracts Bhd’s wholly-owned subsidiary Coastal Drilling Pte Ltd and its business partner JUB Pacific Pte Ltd has acquired an 80% and 20% stake in Elite Point Pte Ltd (EPPL) respectively.
EPPL is principally engaged in the liftboat chartering business. Under the acquisition, EPPL would be acquiring a liftboat, Teras Conquest 7 (TC7). TC7 was built in the year 2015 at a renowned yard in South East Asia. TC7 was engaged in well servicing and production enhancement related activities since its first operation in the Middle East. For the first five years since operations, TC7 has been consistently operating at a high utilisation rate. The vessel is multi-capable for various projects such as offshore construction services, field maintenance services, equipment installation services, accommodation services in oil and gas industry.
TC7 with its robust safety track records, has called on more than 200 work sites and 120 different platforms across one of the biggest oil field in the world near Saudi Arabia. TC7 had just completed its first dry docking and Special Periodical Survey, and is gearing up in preparation to continue with the current charter project. TC7 is expected to commence its charter immediately upon completion of the acquisition,serving one of the famous National Oil Company in the Middle East. This extended charter has a remaining contract tenure of 20 months, with a contract value of RM67.3 million.
The acquisition marks Coastal group’s first venture into liftboat charter market. Liftboat is a self-propelled, multi-functional, self-elevating platform-based vessel with a large open deck suitable for carrying equipment, materials, supplies mainly to support various offshore construction and maintenance projects. It provides a safe and stable work platform at an elevated position for a wide array of offshore services ranging from oil and gas field construction to maintenance and decommissioning works.
Apart from its service capabilities related to the offshore oil and gas industry activities, liftboats are also an alternative solution in the support of offshore wind farm installation and maintenance works. Governments and energy companies across the globe, especially Asia Pacific are looking into the huge business and investment opportunities in the offshore wind sector.
With strong year to year growth prospects expected in the years to come, offshore wind farm is one of the world’s fastest growing energy sources which has the opportunity to replace traditional energy sources. With the added advantage of being self-propelled, it offers greater flexibility allowing the liftboat to move from one location to the other within a specific zone. As such, no tugs will be required. Hence, with such flexible and cost effective options available, liftboat has increasingly became popular and sort after in the market.
With this new venture, Coastal group will have more opportunities to pursue business expansion and growth in the oil and gas upstream sector as well as venturing into renewable energy sector.
JUB is a seasoned liftboat operator that provides a wide range of marine support services with operations and vessel management. Currently, JUB group of companies manages 16 units of liftboats and accommodation rig with offices in Middle East, West Africa and Asia.
The acquisition is expected to further boost the group’s sustainable and recurring income streams
commencing first quarter of 2021.
Coastal group executive chairman Ng Chin Heng said during these challenging times, Coastal is pleased to announce this acquisition and expand its chartering division into liftboat, which will immediately contribute to the group’s earnings and strengthen the order book of the chartering division.
“We believe that there are great future growth prospects in the wind farm renewable energy sector as liftboats are the most preferred and cost effective options for installation and maintenance of offshore wind farm, which shall continue to be a big part of the world’s renewable energy transition. With our current strong balance sheet, we are looking forward to capitalise more acquisition opportunities with quicker paybacks, we believe that the value of some offshore assets has emerged,“ Ng said in a statement today.
Trading in Coastal’s shares was halted from 9am to 10am this morning prior to the announcement.
Source: The Sun Daily
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