PETALING JAYA: TA Research expects no material impact on Coastal Contracts Bhd
’s earnings for financial year 2026 (FY26) and FY27 despite the extended trust account timeline on the group’s joint-venture (JV) contract in Mexico.
Coastal Contracts had announced that its Mexican JV, Coastoil Dynamic SA de CV (Cody), together with consortium partners and Petroleos Mexicanos (Pemex), executed an addendum to the engineering, procurement and construction contract for the gas sweetening plant, separation plant and related infrastructure at the Ixachi Field.
Under the contract structure, Pemex is required to establish a trust account funded by proceeds from hydrocarbon sales from Ixachi Field to facilitate payment for the works and gas sweetening services.
The effective date of the contract is defined as the first business day immediately following the establishment of this trust account.
Pursuant to the addendum, the timeframe for Pemex to establish the trust account has been revised from 30 business days to 55 business days from the signing date due on March 12. There are no changes to the scope of works, contract structure or payment mechanism.
TA Research, in a note to clients, said: “We view the trust account extension as procedural in nature rather than indicative of contract risk, with no changes to scope or commercial structure.”
While the effective date, and hence revenue recognition could be marginally deferred, the research house noted that this was not a structural setback.
Importantly, the timeline for the second Papan plant also in Mexico remains intact, with first gas still targeted in the fourth quarter of 2026.
This suggested that the execution momentum was preserved despite the timeline adjustment.
Ixachi Field continued to underpin Coastal’s overseas growth strategy and strengthened its long-term positioning with Pemex, TA Research added.
The research house kept its forecasts unchanged on Coastal Contracts as there are no revisions to the contract’s value, scope or tenure.
