KUALA LUMPUR: Muhibbah Engineering (M) Bhd clinched a US$32 million (RM113.92 million) construction subcontract for the Petroliam Nasional Bhd’s (Petronas) Refinery and Petrochemicals Integrated Development (Rapid) project in Pengerang, Johor.

In a filing with Bursa Malaysia yesterday, Muhibbah (fundamental: 1.15; valuation: 0.6) said it clinched the contract from Petronas contractor Tecnicas Reunidas SA Group.

Muhibbah said it was appointed by Tecnicas Reunidas to design and build “temporary construction facilities and accommodation camp”. The subcontract comes under package three of the Rapid project.

According to Muhibbah, Petronas has awarded Tecnicas Reunidas the Rapid package three contract which involves construction of oil and gas downstream facilities. The list includes kerosene, diesel, and naphtha hydrotreating units for Petronas.

Muhibbah’s subcontract package is expected to take one year to complete.

“The construction is scheduled to commence in the first quarter of 2015 and is expected to be completed by the  first quarter of 2016.

“The contract is expected to contribute positively to the earnings and net assets of Muhibbah group for the current and future financial years,” Muhibbah said.

Muhibbah shares rose eight sen or 4.21% to settle at RM1.98 yesterday, for a market capitalisation of RM854.81 million. The stock had risen 5% this year, outperforming the FBM KLCI’s 2% gain.

This article first appeared in The Edge Financial Daily, on February 5, 2015.