Filr pic shows Coastal Contracts' shipyard in Sandakan
PETALING JAYA: Coastal Contracts Bhd
is eyeing various gas projects for its Nuvoil joint venture (JV) in Mexico and its future prospects appear exciting.
The contracts include the Ixachi gas conditioning plant (large), gas storage project (large), oil processing plant (medium) and a gas dehydration plant (small).
These will complement the JV’s existing gas plants at Ixachi (located onshore Mexico), namely Perdiz and Papan, said TA Research.
These new tenders will be anchored by the Mexican government’s state-owned company Pemex, which has aggressive capital expenditure (capex) spending plans. Permex is targeting to deploy capex of US$11.5bil or RM50.58bil (+41% year-on year) for financial year 2022.
Additionally, Pemex requires eight jack-up gas compression service units (JUGCSU) over the next 20 years to work at Cantarell field in Mexico. There are only two working units currently, including Agosto 12 and a Spanish-owned unit.
TA Research said Coastal is hopeful to secure more JUGCSU contracts and the group remains confident that ongoing negotiations for Agosto’s contract extension for bareboat charter will be successful.
Coastal is an integrated marine oil and gas services and solutions provider. Recently, Mexican regulators said they wanted Ixachi to stop gas flaring and its energy regulator is preparing to fine Pemex for “excessively flaring a valuable and irreplaceable resource”, namely natural gas at the Ixachi field.
Under Mexican regulation, oil and gas (O&G) companies are not allowed to flare gas they have committed to produce.
Coastal jointly owns two gas plants (including one under construction) at Ixachi. The group’s 50% JV partner for the plants is Nuvoil Group, which is an established Mexico-based O&G player.
There is urgency to develop additional gas conditioning plants at Ixachi to arrest the flaring activities to prevent further environmental damage.
Coastal’s role in assisting Pemex to reduce flaring at Ixachi may likely be viewed favourably by the investment community, TA Research said.
It said Coastal’s management remains sanguine that new gas plant tenders for Ixachi will accelerate. Coastal expects new plants will likely be tendered by end-2022 or early-2023.
