Sapcrest ...Oct09

Its JV with Norway’s Acergy, via 50%-owned SapuraAcergy, has paid off over the years. The joint-venture company had recently secured a deal worth US$100mil to install pipelines at Apache Energy’s greenfield in Western Australia.

Engineering and project preparations would commence immediately in Kuala Lumpur and Perth, Australia with offshore installation scheduled to commence in late 2010, using SapuraAcergy's heavy lift and pipelaying vessel, Sapura 3000.

This contract is significant as it establishes SapuraAcergy's presence in the promising Australian oil and gas (O&G) market.

Assuming a two-year contract of US$100mil, SapuraCrest’s order book will get a 5% boost to RM7.5bil. SapuraCrest had this year (2009) added RM3bil, or 42%, to its current order book of RM7.1bil.

The project would see SapuraAcergy undertaking the transportation and installation of some 91 km of 16-inch rigid pipeline.

Potential re-rating catalysts could occur due to the new contract secured, success in new markets and a growing fleet of strategic assets. The award of the new contract would also be in line with SapuraCrest’s plan to reduce its dependence on local contracts and carve a bigger international presence.

In FY09, overseas markets contributed 25% to SapuraCrest’s revenue but the contribution is expected to hit 40% to 50% in three years.

SapuraAcergy was earlier awarded an RM3bil installation contract for the Gemusut-Kakap, offshore Sabah, oilfield. The joint venture also clinched two contracts in India and Japan worth a total of RM396mil.

SapuraCrest’s has the ability to penetrate the deepwater pipe-laying market, sizeable oil and gas asset ownership, and substantial seadrill equity participation of 24% currently.

Currently, the company was bidding for both local and overseas O&G projects worth over RM5 billion.