MTC Engineering seeks RM50 mil from Petron Malaysia for additional MIF2 project costs

KUALA LUMPUR (May 23): Petron M Refining & Marketing Bhd said it has received a notice of arbitration from MTC Engineering Sdn Bhd seeking RM50.5 million for alleged outstanding additional costs from a project.

The claims by MTC Engineering arose from the execution of Pipeline End Manifold (PLEM) Fabrication and Marine Equipment Installation for Marine Import Facilities 2 (MIF2) Project at Petron Port Dickson Refinery, Negeri Sembilan, Petron Malaysia said.

The relief sought by MTC Engineering comprised payment of RM50.5 million with 5% annual interest from date of award until final settlement, as well as costs and other reliefs.

“Petron Malaysia will defend its position and take necessary legal action as deemed appropriate,” Petron Malaysia said.

“Petron Malaysia vehemently denies the claim by MTC Engineering under the agreement and is of the opinion that the sum claimed is without basis or merit,” it added.

Petron Malaysia has 30 days from the receipt of the notice of arbitration on May 20, 2022 to file a response to MTC Engineering, it added.

According to Petron Malaysia’s annual report, the MIF2 project expanded its product storage capacity by half a million barrels. It was commissioned in mid-2021, and helped the refiner enhance its freight efficiency.

Shares of Petron Malaysia settled up 3 sen or 0.42% at RM7.23 on Monday (May 23), giving it a market capitalisation of RM1.95 billion.