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Tuesday, August 5, 2014

Four shortlisted for water pipe contract in PIC (Edge)

Four parties have been shortlisted by Petroliam Nasional Bhd (Petronas) for the supply of water pipes to its Pengerang Integrated Complex (PIC) in Pengerang, southern Johor, according to sources.

It is learnt that the four candidates are Puncak Niaga Holdings Bhd, Ho Hup Construction Co Bhd, a joint venture between Salcon Bhd and George Kent (M) Bhd (GKent) and Loh & Loh Corp Bhd, which was taken private some years ago.

Sources revealed that the supply contract is estimated to be worth about RM300 million.

“The winner of the contract should be announced soon,” said one source.

An executive familiar with the matter, however, noted that the bid could be for engineering, procurement, construction and commissioning (EPCC) services for a water treatment plant.

“The bid is for EPCC kind of work for a water treatment plant,” he said.

The RM89 billion PIC project in southeast Johor is expected to spin off a slew of construction and engineering contracts to local as well as foreign companies.

Apart from the petrochemical complexes, the massive project also involves the building of a power plant, a reclassification terminal and pipes to channel huge amounts of water and fuel to site.

Among the contracts that have been awarded are the earthworks job to Gadang Bhd and an RM341.88 million contract for construction of roads to WCT Holdings Bhd.

The entire project covers 20,600 acres (8,336ha), which is almost twice the size of Putrajaya.

The construction of the entire project is estimated to require 150 billion tonnes of structural steel and one million cu m of concrete.

The PIC, the core of the refinery and petrochemical integrated development project, is reported to be able to produce up to 7.7 million tonnes per annum of various grades of petrochemical products, which currently surpasses the company’s combined production capacity of complexes in Kertih, Terengganu, and Gebeng in Pahang.

According to Petronas group chief executive officer and president Tan Sri Shamsul Azhar Abbas, construction and engineering works on the site are expected to begin between next year and 2016 and the project has to be ready by early 2019 to be able to catch up with the cycle of the petrochemical industry.

In terms of share price performance, GKent is the best performer. The stock has leapt 87.8% year-to-date to close at RM2.16 yesterday. The company had recently revealed its intention venture into the oil and gas sector.

Salcon, which has sold off its water treatment business in China, has gained 37% so far this year to 90.5 sen yesterday. Ho Hup is up 10% this year to RM1.33, while Puncak Niaga has risen 4.6% to RM3.40.

This article first appeared in The Edge Financial Daily, on August 5, 2014.

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