KUALA LUMPUR (Nov 24): Coastal Contracts Bhd (KL:COASTAL) said its 50%-owned joint venture company has secured a two-year contract extension worth 1.44 billion pesos (RM323.81 million) for the provision of gas sweetening services in Mexico.
This came after the JV unit, Coastoil Dynamic SA De CV, inked an addendum to the contract with Mexico's state-owned oil company Petroleos Mexicanos (Pemex), according to the group’s bourse filing on Monday (Nov 24).
Under the addendum, the gas sweetening services have been extended up to Dec 31, 2027. The JV was awarded the contract back in January 2021 for a tenure of 32 months and it has since been extended.
Coastal Contacts said the contract is expected to contribute positively to the group’s earnings and net assets for the financial years ending Dec 31, 2026 and 2027.
Its annual report showed that the group’s first project of its JV company in Mexico is the Perdiz plant, an onshore gas conditioning plant with a gas sweetening capacity of 180 million standard cu ft per day (mmscfd) of wet sour gas a day.
The second project, the Papan plant, which commenced commercial operations in February 2023, is capable of providing gas sweetening up to 345 mmscfd with extraction of liquefied petroleum gas and naphtha.
Both the Perdiz and Papan plants are responsible for processing associated gas extracted from the Ixachi Field, one of the largest onshore oil fields discovered in Mexico. The Ixachi field is located 26km northeast of Tierra Blanca, Veracruz state.
Coastal Contracts is a global integrated energy infrastructure and marine service provider. It has three business divisions, namely gas processing, vessel chartering and shipbuilding and ship repair.
On Monday, shares in Coastal Contracts closed one sen or 0.86% at RM1.15, valuing the group at RM643 million. Year-to-date, the stock has fallen 24%.