KUALA LUMPUR: EA Technique (M) Bhd, a subsidiary of Johor Corp Bhd (JCorp), is looking to expand its presence in Indonesia in the downstream oil and gas segment.
Managing director Datuk Ir Abdul Hak Md Amin said the company had penetrated the market by offering services to PT Pertamina International Shipping.
He said demand for shipping was high as Indonesia is a net importer of crude oil.
“We see Indonesia as a growth market especially in the downstream segment. We hope the Indonesian government will buy more refined products from Malaysia," he said in an interview here recently.
When asked on the potential development plans in Indonesia be made via a merger or acquisition, Abdul Hak said at present there are several companies interested in forming strategic partnerships with EA Technique.
He, however said, at this time, there are no plans for EA Technique to sell.
“We have been offering services in Indonesia for a long time. However, the six month contract is for the short term. We're seeking long-term contracts,” he said.
EA Technique is currently building four new vessels worth RM225.24 million to meet the requirements of its new contract, further strengthening its future earnings.
Abdul Hak said EA Technique has just clinched a RM802.89 million job with another RM545.37 million advanced contract. This would place the company in good stead.
The construction of the two tankers costing RM135.77 million is underway at the Ningbo Zhenhe Shipyard, China and should complete by December 2020.
The RM19 million tugboats and the tankers (RM70.47 million) are under construction at the Johor Shipyard Engineering Sdn Bhd and should complete by 2020 and 2021, respectively.
“The three tankers have a 5-year contract to transport more than RM239.12 million worth of oil with PETCO Trading Labuan Co Ltd (PTLCL) while the RM13.54 million contract involves the use of a tugboat.
“EA Technique has also secured a temporary oil storage contract for the Sep C, from Petronas Carigali for RM84 million. The contract will contribute positively to revenue and assets from 2021 and the year after, ”he said.
Abdul Hak said the four new vessels would expand the company's fleet to 45, further strengthening the EA Technique's lead in Malaysia's tanker and tugboat rental sector in Malaysia and the region.
EA Technique's 29 tugboats operate from Northport, Kertih Port, Shrimp Port and Bintulu Port. The company's fleet include four crew haulers offshore, six oil tankers as well as two floating production storage and offloading (FPSO) units.
He said his boat usage is up to 80 per cent compared to the average of 40-50 per cent by other operators. He foresees EA Technique's tanker business contributing 36 per cent to the group's revenue over the next five years.
"In a nutshell, EA Technique leads the tugboat service segment and also dominates the market for tankers segment of 15,000 tonnes (DWT) and below. We're also an important player for the FPSO market," he said.
Abdul Hak said the EA Technique is currently involved in three business segments, namely marine transportation and offshore oil and gas storage; the provision of port marine services (towing, diverting and docking of vessels and ferry service); and marine engineering (ship repair and repair) services.
He said EA Technique is set to benefit from the rapid expansion of oil and gas hubs of Pengerang Deepwater Petroleum Terminal, Tanjung Langsat Petroleum Terminal, Tanjung Bin Petroleum Terminal, Pengerang Intregrated Petroleum Complex and Tanjung Langsat Petroleum Support Services.
He praised China's Belt and Road Initiative (BRI) leading infrastructure improvements in the region as ugrading reliable supply chain that benefits the maritime industry.