KUALA LUMPUR (Jan 26): Coastal Contracts Bhd (KL:COASTAL) said a consortium led by its Mexican joint venture has secured an emergency job from Mexico’s national oil and gas firm Petróleos Mexicanos to immediately design and build a gas sweetening plant at the Ixachi Field to curb excessive gas flaring.

In a bourse filing on Monday (Jan 26), the group said the consortium has already commenced full-scale work following the receipt of an “emergency work instruction” (EWI) from Pemex on Jan 23. Gas flaring at the Ixachi Field had escalated into an emergency situation, requiring immediate action and prompting the company to bypass the standard open tender process.

The consortium comprises its 50%-owned JV Coastoil Dynamic SA de CV, Sistemas Integrales de Compresión SA de CV and Nuvoil SA de CV.

“In view of the emergency situation, it was not feasible to conduct the timely standard open tender procedure and the consortium was instructed to immediately proceed, on an exceptional basis, with the design, supply, construction, installation and commissioning of a gas sweetening plant with a capacity of up to 200 mmscfd for the processing of wet sour gas near to the existing Perdiz Plant,” said the group.

Coastal said the commercial terms, including the contract value and period, are still being negotiated and are expected to be finalised by March 2026.

The project will not affect the group’s issued and paid-up capital but is expected to contribute positively to earnings and net assets for the financial year ending Dec 31, 2026, and thereafter for the duration of the work.

Last month, the consortium clinched a RM4.64 billion gas processing contract from Pemex, sending its shares up nearly 20%.

On Monday, shares of Coastal slipped one sen or 0.75% at RM1.32, giving the group a market capitalisation of RM740.11 million.