Yinson, THEE in talks over Layang FPSO takeover

Malaysia’s Yinson is set to take over the Layang FPSO contract THHE has with Japan’s JX Nippon.

TH Heavy Engineering Berhad, which is building the FPSO, has applied to a Malaysian court to allow it novate the contract and deliver the vessel to Yinson.

Yinson has confirmed this in the Bursa Malaysia filing on Wednesday, saying it has no objection to the THHE application.

The original charter contract is for the engineering, procurement, construction, installation and commission and leasing of an FPSO to be deployed at the Layang field in Block SK10, offshore Miri, Sarawak and is to be novated by THHE to Yinson.

“The parties are currently in the midst of finalising the other terms of the proposed novation and the application by THEE has been fixed for case management,” Yinson said.

As previously reported, THHE’s Layang FPSO woes  have been caused by its liquidity issues.

The engineering and construction company was in June 2014 awarded a contract for the conversion and delivery of the Deep Producer 1 FPSO, to be used for oil production from JX Nippon’s Layang field in Block SK10, offshore Sarawak.

The delivery has been delayed amid THHE’s liquidity woes, and according to reports from Malaysia.

Yinson’s announcement on Wednesday follows reports earlier this month that Yinson might take over JX Nippon’s charter of the FPSO.

Earlier in November, THHE said: “The company has long been exploring various ways to partly crystallize its investment in the FPSO Layang project and as part of this initiative, the company is currently still in discussion with JX and Yinson relating to Yinson taking over the company’s FPSO vessel charter from JX Nippon. At the current juncture, the proposal remains in discussion stage.”

Yinson earlier statement reads: “The company is constantly exploring and evaluating business opportunities in its home market which are in line with the Group’s long-term objectives and growth to expand its floating, production, storage and offloading business, including exploring redeployment opportunities for its fleet.

“As part of such evaluation, the company is currently still in discussions with JX Nippon and TH Heavy Engineering in connection with the company taking over the FPSO vessel charter for JX Nippon by itself. This opportunity is one of the few Malaysian proposals which the company is currently evaluating. The proposal remains in discussion stage,” Yinson previously said.

While the Malaysian media have reported that the FPSO, once taken over by Yinson, might end up in Vietnam, neither of the two companies confirmed nor denied the redeployment option.

Offshore Energy Today Staff