KUALA LUMPUR (Oct 5): Yinson Holdings Bhd (KL:YINSON) said it has secured about US$600 million (RM2.5 billion) in additional firm contract backlog following an amendment to its contract for the FPSO John Agyekum Kufuor offshore of Ghana.
The amendment, signed with Eni Ghana Exploration and Production Ltd on Oct 2, covers a major upgrade to the floating production, storage and offloading (FPSO) vessel’s gas handling and processing capacity and extends its firm contract by four years to 2036, said Yinson.
The incremental day rates for the modification works and contract extension are valued at about US$810 million in total, of which about US$600 million is attributable to the Yinson group, according to its Bursa Malaysia filing on Monday.
FPSO John Agyekum Kufuor is owned by a joint venture led by Yinson Production, which holds a 74% controlling stake, while the remaining 26% is held by a Japanese consortium comprising Sumitomo Corp, Kawasaki Kisen Kaisha Ltd, JGC Holdings Corp and Development Bank of Japan Inc.
The project will install new gas compression facilities to raise the vessel’s gas export capacity to 355 million standard cubic feet per day (MMscf/d), from about 210 million to 220 million MMscf/d currently, according to Yinson Production Pte Ltd, the offshore energy business of Yinson that is headquartered in Singapore.
The modification works, which are expected to be completed by the first quarter of 2028, will involve the fabrication and integration of two topside modules comprising gas compression and auxiliary gas treatment facilities.
Yinson Production CEO Flemming Guiducci Grønnegaard said the project would increase gas export capacity while extending the economic life of the field.
“By increasing gas export capacity, we are strengthening reliable offshore energy infrastructure, supporting Ghana’s domestic energy needs, and helping extend the field’s economic life,” he said in a statement.
Eni Ghana initially awarded the contract to Yinson in 2015 for the chartering, operation and maintenance of an FPSO at the Offshore Cape Three Points block in the Tano Basin, about 60km off Ghana.
The original contract was for a firm charter period of 15 years, valued at US$2.53 billion, with an option for a further five-year extension that raised its total value to US$3.25 billion.
The contract, Yinson’s first project in West Africa at the time, was awarded through a consortium comprising Yinson Production (West Africa) Pte Ltd and Yinson Production West Africa Ltd, in which Yinson holds 74% and 49% respectively.
The FPSO subsequently commenced operations in Ghana in 2017 and was named FPSO John Agyekum Kufuor offshore Ghana.
Yinson Production currently has a fleet of 11 vessels and an order book of about US$19 billion extending to 2050.
Meanwhile, Yinson is currently in discussions over a potential privatisation of the group, although no firm decision has been reached.
Yinson group CEO Lim Chern Yuan told The Edge last week that talks remained ongoing, after major shareholder Yinson Legacy Sdn Bhd — the investment vehicle of executive chairman Lim Han Weng and his family — confirmed in August that it was in preliminary discussions with MISC Bhd (KL:MISC), the Employees Provident Fund and other parties.
The indicative offer price remains at RM2.35 per share. The proposed privatisation is envisaged through a court-sanctioned scheme of arrangement, although the parties have stressed that there is no assurance the discussions will result in a deal.
Yinson shares closed at RM2.07 on Monday, down four sen or 1.9%, valuing the group at RM6.66 billion.