This article first appeared in The Edge Financial Daily, on November 26, 2015.

KUALA LUMPUR: Barakah Offshore Petroleum Bhd has bagged a RM12.3 million contract from Petronas Gas Bhd (PetGas) to build a new export terminal scraper station in Kemaman, Terengganu.

In a filing with Bursa Malaysia yesterday, Barakah said its wholly-owned subsidiary PBJV Group Sdn Bhd has received the letter of award from PetGas (valuation: 1.7; fundamental: 3) for the engineering, procurement, construction and commissioning (EPCC) contract.

Under the deal, PBJV will build a new scraper station for propane and butane pipelines at Teluk Kalong, Kemaman, to replace the Tanjung Sulong Export Terminal Scraper Station, as well as other facilities there, and eventually, the commissioning and introduction of natural gas, propane and butane into the facilities. 

“The contract duration is for one year from Nov 6, 2015, to Dec 6, 2016,” said Barakah.

It added that the contract is expected to contribute positively to the group’s earnings and net assets per share for the duration of the contract.

However, Barakah (valuation: 1.5; fundamental: 2.4) warned that risk factors affecting the contract include execution risks such as availability of skilled manpower and materials and changes in prices of materials.

“[Nevertheless,] Barakah Group has, throughout the years, established its track record and expertise to undertake such projects. As such, the management believes that the group is able to mitigate the risk factors,” it said.

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