Technics Oil & Gas is diversifying its system integration business to include equipment and facility leasing. Above: Executive Chairman Robin Ting. NextInsight file photoMAINBOARD LISTED Technics Oil and Gas has secured a letter of award for a potential contract of significant value (S$166 million) to set up a gas processing facility in a country in South Asia.
If sealed, the contract win would be about 8 to 10 times the size of its other contracts, and includes a two-year retainer for operations and maintenance.
However, it is not expected to have positive material impact on Technics' FY2014 earnings (year-end September).
70% of the project is attributable to Technics while another 30% goes to its Middle Eastern partner.
Deren Ting (above), 38, succeeded his father Robin Ting as Group Managing Director on 28 January 2014. The elder Mr Ting remains Group Executive Chairman. Company photoTechnics is a leading full service integrator of compression systems and process modules in the ASEAN offshore oil and gas sector, which contributed 74% of Group revenue in FY2013.
The ASEAN region is now dominated by marginal oilfields, which have relatively short production life spans of no more than 10 years.
Oil majors now prefer to lease equipment rather than invest in gas compression systems and other process modules as these are typically built to last up to 20 years.
This has affected demand for Technics' products and the Group posted a net loss of S$228,000 for 2QFY2014.
To address the changing trends in the ASEAN offshore oil and gas sector, the Group has been diversifying into equipment leasing.
On 12 Nov 2013, the Group was awarded its second leasing contract and outright sales contract for 9 Reciprocating Gas Compressor Engine Driven packages from Indonesia and Malaysia (worth S$10.1 million).
Other recent contract wins include the following:
>> On 4 Nov 2013, the Group's 40.2% associate company, Norr Offshore Group, was awarded its first Micro LNG plant project for the supply of process equipment and accessories for Indonesia (worth S$21 million).
>> On 27 May 2013, the Group was awarded contracts for the supply of Air Spread Systems from Singapore (worth S$10.6 million).
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