Techfast bags RM2.22bil contract to supply oil & gas products
By Sharen Kaur - March 15, 2021 @ 11:01am
KUALA LUMPUR: Components manufacturing firm Techfast Holdings Bhd has secured a contract worth as much as RM2.22 billion to supply oil and gas (O&G) related products to Wise Marine Pte Ltd (WMPL).
This confirms a report by the New Straits Times last week that Techfast was close to winning contracts worth more than RM1.2 billion related to O&G in Malaysia.
Techfast was suspended from trading at 9am today pending the announcement.
In a filing with Bursa Malaysia today, Techfast said its wholly-owned Fast Energy Sdn Bhd had on March 12 inked a Supply Agreement (SA) with WMPL to supply low sulphur fuel oil (LSFO), low sulphur marine gasoil (LSMGO), and high sulphur fuel oil (HSFO) to the latter.
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Techfast said Fast Energy would supply every month 10,000 metric tonnes to 30,000 tonnes of the products to WMPL, on the average price per tonne as reported by S&P Global Platts in Singapore (Mean of Platts Singapore), plus an agreed premium throughout the contract period.
The duration of the SA is three years, effective from the date of the signing of the contract, and is conditional upon WMPL having procured a mortgage in favour of Fast Energy on a vessel.
"The total contract value for the supply is estimated at RM2.22 billion at a present market price reported on Mean of Platts Singapore," it said.
The Singapore-incorporated WMPL is principally engaged in the ship-to-ship marine fuel supply and trading business, and is one of the leading integrated marine fuel logistic providers with a presence in Malaysia and Singapore.
The Wise Marine Group is currently a leading marine fuel supplier in Port Klang and manages its own fleet of five vessels.
It has also acquired a new suitable vessel for the purpose of the SA.
Techfast said the SA was also in line with the group's objectives to diversify its business into the large volume and potentially lucrative O&G sector.
"The O&G sector is expected to expand with surges of demand post-pandemic. The current recovery trend of crude oil prices paints a bright prospect.
"The group will benefit from the current port congestion at Port Klang and other major ports in Malaysia and Singapore," it said.
Techfast said it was also well-positioned to gain from the demand expansion and recovery post the Covid-19 pandemic.
The stock resumed trading at 10am following the announcement and rose to as high as 63 sen.