Malaysia’s TH Heavy Engineering, a company building offshore oil and gas facilities, has said it is still in talks over an FPSO construction project despite a local news outlet claiming otherwise.
Namely, in an article earlier this week titled „TH Heavy’s money woes getting worse,“ Focus Malaysia wrote that TH Heavy „may no longer proceed with the US$372 mil (RM1.6 bil) Layang FPSO project due to lack of funding.“
The Layang FPSO conversion project was awarded to TH Heavy in 2014 by JX Nippon Oil & Gas Exploration for the Layang oil and gas field located in Block SK10, offshore Sarawak.
Under the contract, THHE was to deliver and install the Deep Producer 1 FPSO at the project location, and lease the FPSO until November 2023.
The commercial production from the Layang field was expected to start in the second quarter of 2016 with the initial estimated incremental production of Helang/Layang gas to be about 100 MMscfd and Helang condensate/Layang oil/Layang condensate to be about 7 kbd.
Responding to a Bursa Malaysia query on the Focus Malaysia article TH Heavy on Thursday said it was still in talks over the FPSO contract.
Commenting on the article, the company said: “The company was not contacted at any time for this news story either through email or phone call. The views expressed by the writer are merely speculative.“
“The company is still in negotiation with JX Nippon Oil & Gas Exploration (Malaysia) Limited and nothing is finalised yet. The company is exploring various options to complete the FPSO Layang project including partnering with party/parties with a stronger Balance Sheet to finance the completion of the project. Although upgrading works have been suspended the Company is in advanced stage of negotiations for the deferment of delivery of the FPSO.
According to the contractor, despite the delayed delivery of the FPSO, “to date there are no liquidated ascertained damages charges.”
In addition to diversification strategies, the company is also exploring ways to unlock value from various projects/assets to finance the proposed yard upgrades, TH Heavy said.
Offshore Energy Today Staff