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TH Heavy Engineering aims high with new McDermott JV

TH Heavy Engineering aims high with new McDermott JV
Malaysia's TH Heavy Engineering (THHE) is stepping up into the big leagues to bid for a risk service contract (RSC) valued at $500m with a partner, which they declined to name and for which the partnership structure has not been finalised.

THHE has been boosted by the approval of shareholders of its proposed joint venture with McDermott International Inc. Units of both companies signed a joint-venture agreement to provide a range of marine construction services, including full engineering, procurement, construction, installation, commissioning (EPCIC) solutions, to the offshore oil and gas industry.

Under the agreement, THHE will purchase 30% stake in McDermott's local unit, Berlian McDermott Sdn Bhd, while McDermott will acquire 30% in THHE's unit, THHE Fabricators Sdn Bhd. Both stakes are worth $25.5m.

THHE will leverage on the strength of partnering with McDermott to bid for more complex jobs now, the company said. This will be especially timely with Petronas changing its contracting model to one where they award full EPCIC projects.

With McDermott's expertise THHE can now provide full EPCIC works. There is competition however from MISC Bhd and its partner Technip, and SapuraKencana Petroleum Bhd, which are the only other Malaysian companies that can provide full EPCIC works.

THHE managing director and CEO Nor Badli Mohd Alias was quoted as saying that the company currently has a floating production storage and offloading (FPSO) vessel, which could also be used as one of the solutions for the RSC if the bid was successful.

The vessel has come off-hire and will either be recontracted, sold or used for the RSC contract if it comes in.

TAGS: Offshore