PETALING JAYA: MISC Bhd
’s second long-term charter contract with Northern Lights JV DA (NLJV) to operate a specialised liquid carbon dioxide carrier (LCO2C) will support its strategic evolution from a fossil fuel transporter to a green energy logistics provider.
MBSB Research noted that the contract will help position MISC as an early leader in the emerging carbon capture and storage market globally.
It, however, expects the financial impact on total earnings relative to MISC’s existing RM12.3bil order book to be minimal.
“Given MISC’s co-ownership of the vessel, we estimate revenue for one LCO2C at roughly RM35mil to RM50mil (annually) once operational. We expect core earnings to add an upside of less than 1.5%,” the research house said in a report.
While MBSB Research acknowledged technical and regulatory risks, it emphasised that the contract is backed by major global energy firms – Shell, TotalEnergies and Equinor – providing significant financial security.
It added that NLJV is expected to cover all voyage-related costs, including fuel and port fees, while MISC will be responsible for vessel maintenance and manpower.
The LCO2C will have an estimated capacity of 12,000 cu m and is considered a mid-sized vessel.
Based on historical costs, MBSB Research noted that a liquified natural gas or liquified petroleum gas vessel of similar size, adjusted for LCO2 transport, would typically command a charter rate of US$40,000 to US$50,000 per day.
MBSB Research did not make any changes to its earnings estimates for MISC at this juncture, given that capital expenditure will only be deployed over the next two to three years during the construction phase, while earnings contributions will only commence after delivery.
It maintained its “buy” call on MISC with an unchanged target price of RM9.22 per share.
