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Scomi expands in energy logistics segment

Scomi expands in energy logistics segment
Malaysian oil and gas (O&G) services player Scomi Energy Services looks set to be expanding into the energy logistics segment, having been awarded a contract of affreightment (COA) for carriage of bulk coal by TNB Fuel Services.

Scomi said in an announcement that the contract was for two years from May 1, 2015, with an option for TNB Fuel Services to extend it for another year. If the entire three-year option is exercised, the deal is worth MYR175.4m ($49.1m). Under the contract, Scomi Energy is expected to transport about 1.2m tonnes of coal a year.

Scomi Energy ceo Shah Hakim Zain said that this win – the second COA contract after an award in July 2013 – would further strengthen the company’s presence in marine logistics in Malaysia and the region, especially in the bulk carrier sector.“

The growth in the bulk carrier segment of Scomi Energy Services’ business will provide the company with recurring revenue that will help us weather the current challenging landscape in the oil and gas business,” he said.

“The combination of growing contribution from the marine logistics business and our active bidding for oil and gas contracts would provide us with strong footing to meet the challenging business environment.

“Our strategy to adopt an asset-light business model also helps us mitigate the impact of sliding oil prices,” he added.