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KUALA LUMPUR: Bumi Armada Bhd's signing of a non-binding agreement to develop floating liquefied natural gas (LNG) and carriers in Indonesia, could potentially expand its presence in Indonesia and generate a new source of income for the company.

Bumi Armada announced the signing of a non-binding agreement with PT Pertamina International Shipping (PIS), a shipping and marine logistics subholding of Pertamina, Indonesia's stateowned energy company, and PT Davenergy Mulia Perkasa (DMP), an Indonesian natural gas trading company, to develop and commercialise LNG from the Madura Gas Field and its surrounding fields, yesterday.

Bumi Armada and PIS will design, engineer, construct, install, commission, hook up and operate a floating natural gas liquefaction and storage facility, together with an LNG carrier to transport LNG. Preliminary discussions have been initiated with several potential off-taker clients and the first shipment of LNG is anticipated to take place three years after making the final investment decision.

Bumi Armada is also engineering a carbon capture injection system for a gas field in Indonesia.

"We believe such a project could be rather capex intensive but Bumi Armada, in our view, is likely to own less than 50 per cent equity stake in the floating LNG unit. "Pending further details, we maintain our earnings estimates. We keep Buy on the stock with target price of 73 sen," it added

Source: NST​