Coastal has secured a charter contract pertaining to provision of a self-elevated jackup with gas compression capabilities (Jackup) to Petroleos Mexicanos (Pemex). The Jackup charter contract worth approximately 371.6 million (MYR 1.24 billion) was awarded to TM from a group of Mexican upstream contractors comprises Tecnologías Relacionadas con Energia y Servicios Especializados, S.A. de C.V., Sistemas Integrales de Compresion, S.A. de C.V., Ardica Construcciones, S.A. de C.V. and Alher Oil & Gas, S.A. de C.V. who entered into a gas compression service contract with Pemex Exploracion y Produccion, the Exploration and Production arm of Pemex. 

The charter contract will commence in second half of 2015 for a period of eight years with extension option up to twelve years. TM will immediately commence construction of the Jackup. The Jackup is scheduled for delivery in first half of 2015 and will be used to handle sour gas production for Pemex in the Cantarell Oil Complex, Gulf of Mexico under the charter contract.

Pemex is ranked the second largest Latin America company by Latin Trade, second only to Petrobras, and is ranked eighth of Forbes The World’s 25 Biggest Oil Companies in 2013. Pemex’s production in 2013 stood at 3.6 million barrels of oil equivalents per day. As of to date, Mexico’s estimated hydrocarbon reserves are approximately 30 billion barrels of oil and 500 trillion cubic feet of natural gas.

The Jackup will have the ability to manage sour gas, for injection into the reservoir the high content of associated gas to oil, helping to maintain reservoir pressure and maximize the exploitation of hydrocarbons. The sour gas compression plant will be unique in its kind, and will operate with a capacity of 200 million cubic feet per day (MMcf/d) installed on the Jackup which interconnect to Pemex’s offshore production facilities, located in the probe Campeche, providing the flexibility to relocate in different offshore facilities under Pemex’s operational strategies. The Jackup will be a key component to Pemex’s plans to boost natural gas production and help supply the local market in Mexico.

The charter contract is expected to contribute positively to the future revenue and earnings of Coastal Group commencing second half of 2015, thereafter for the duration of the charter contract.

Ng Chin Heng, the executive chairman of Coastal, commented:

“It was a terrific thrill for us to kick-off 2014 with the winning of such a sizeable long term charter contract from the upstream segment in Gulf of Mexico. This long term contract will lay a solid foundation for the Group’s exploration of new profit driver and provide the Group with the greater mid to long term earnings visibility; meantime strongly enhance Coastal Group’s competitive edge in the offshore market.

Including the vessel sales order, the Group’s total order book has reached approximately $749.3 million (MYR 2.5 billion), breaking the Group’s record of order book value.

We believe the Jackup will be a key component to Pemex’s strategy for Enhanced Oil Recovery (EOR), especially for diligent reservoir management. We are optimistic with the prospect of this market given that offshore production solutions will create significant benefits to oil company by virtue of its key strategic advantages: cost effective, fast track delivery and re-locatable. We believe Pemex will need more units under its long term strategic plan for gas management.


This project not only enables the Group to tap into the offshore production solutions market, but also provides the Group with a cross-selling opportunity to secure market share in the Gulf for its shipbuilding arm. With the recent Energy Reform Legislatures approved in Mexico that will allow foreign companies to develop its oil and gas reserve, we are optimistic with the prospect of offshore market in the Gulf, which is now in the early stages of an extended growth cycle and is poised to remain one of the strongest offshore markets in the world.


We are also optimistic with the offshore production solutions market in South East Asia. In Malaysia, fourteen oil fields (five of the fields are located offshore Sabah and Sarawak) were identified under EOR initiative. Recently, The Star reported that Petronas had identified these oil fields to implement EOR progressively in the future. With the Group’s strategically located fabrication yard in Sabah, our competitive edge in the offshore production solutions market will be further enhanced.”

Ng further added:

“Currently, Coastal Group is executing its expansion plan via a two-pronged approach, which is extending its  participation in lucrative oil and gas upstream sector and scaling up its Offshore Supply Vessel shipbuilding value chain.

Moving forward, Coastal Group will work harder to materialize more opportunities from oil and gas upstream value chain. We believe we are well prepared in propelling our way towards a sunrise sector.”