Wah Seong gets pipe-coating job worth RM167.24 mil

by **Cals** Sat 05 Dec 2015, 00:07

Wah Seong gets pipe-coating job worth RM167.24 mil

By Tan Siew Mung / theedgemarkets.com | December 4, 2015 : 6:54 PM MYT

KUALA LUMPUR (Dec 4): [size=16]Wah Seong Corp Bhd ([You must be registered and logged in to see this image.] Valuation: 2.00, Fundamental: 0.65) has secured a contract valued at about US$39.5 million (equivalent to RM167.24 million; US$1=RM4.2338) from Statoil ASA Norway, for the entire coating work of the Johan Sverdrup Export Pipeline Project (JoSEPP).

In a filing with Bursa Malaysia today, Wah Seong said its pipe coating business unit has been awarded the above contract, and that the scope of works include anti-corrosion coating, internal flow coating and concrete weight Coating.

The job involves the coating of approximately 430km of pipes (18-inch and 36-inch), the filing read, which is expected to commence in the last quarter of 2016 and be completed by mid-2017.

"The contract is for provision of pipe coating services which is the core business of the Wah Seong Corp Group and the risks are the normal operational risks associated with provision of pipe coating services.

"The contract is expected to contribute positively to the earnings of Wah Seong Corp Group over the contract period. The contract is project specific and is not renewable," it further noted.

The JoSEPP is to provide transport solution for the oil and gas (O&G) sector from the Johan Sverdrup field to onshore O&G terminals (Mongstad and Kårstø), said Wah Seong.

The 36-inch OD oil export pipeline is approximately 283km long, which connects to Mongstad in the north. The 18-inch OD gas export pipeline is approximately 156km long and will go east to connect the Johan Sverdrup riser platform (JSRP) to a hot tap at Statpipe (S31), a rich gas pipeline at approximately 130m water depth.

Wah Seong closed 3 sen or 3% higher at RM1.03 today, for a market capitalisation of RM773.5 million.

(Notes: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)
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