Coastal Contracts’ Mexican JV unit gets RM113m hike in gas sweetening contract after capacity expansion

KUALA LUMPUR (Jan 4): Coastal Contracts Bhd’s joint venture unit has secured a price hike for the provision of gas sweetening services in Mexico by state-owned oil company Petroleos Mexicanos (Pemex), bumping up the contract value of RM258.7 million by RM113.1 million to the maximum contract value of RM371.8 million.

The JV unit, Coastoil Dynamic SA De CV, is equally owned by Coastal Contracts’ wholly-owned subsidiary Coastal Marine Pte Ltd and Grupo Empresarial Alfair SAPI de CV, which is part of Mexican oil fields’ operation expert Nuvoil Group.

Coastal Contracts announced on Wednesday (Jan 4) that Pemex has agreed to increase the unit price for the gas sweetening services to compensate Coastoil Dynamic for expanding the plant capacity from 150 million standard cubic feet per day (mmscfd) to 180 mmscfd since November 2021.

Coastoil Dynamic secured the job to undertake an onshore gas sweetening plant in Mexico for Pemex in February 2021, with the scope of work comprising engineering, procurement, construction, operation and maintenance of the plant.

The gas sweetening plant at Ixachi field, Veracruz, Mexico, is capable of processing up to 180 mmscfd of wet sour gas a day.

Ixachi field is located 26km northeast from Tierra Blanca, Veracruz state.

The firm period for this contract is 32 months with chances of further extension by Pemex, Coastal Contracts said in February 2021.

Shares of Coastal Contract, which gained 73% last year, closed seven sen or 2.9% higher at RM2.48 on Wednesday, giving it a market capitalisation of RM1.34 billion.