KUALA LUMPUR (March 15): ACE market-listed Techfast Holdings Bhd has bagged a contract worth an estimated RM2.2 billion to supply a range of marine fuel oils over a three-year period to Singapore-based integrated marine fuel logistics provider Wise Marine Pte Ltd.

Techfast’s unit Fast Energy Sdn Bhd (FESB) has inked a supply agreement with Wise Marine for the contract, which includes the supply of low sulphur fuel oil, low sulphur marine gasoil and high sulphur fuel oil, it said in a statement today.

Under the agreement, FESB shall supply 10,000 to 30,000 metric tonnes (MT) of marine fuel oil per month, bringing the full-year total supply to up to 360,000 MT.

It said the contract value was derived based on monthly delivery of 30,000 MT and using the current average selling price of low sulphur fuel oil of approximately US$500 (RM2,056) per MT as reported by S&P Global Platts in Singapore.

In a statement, Techfast executive director Vincent Tan Wye Chuan said the project will expand the group’s revenue streams and is expected to contribute positively to the group’s financial performance over the next three years.

“The group’s financial standing will also be enhanced with the completion of our recently announced proposed private placement exercise of 75.3 million new shares at an issue price of 37.5 sen, which will raise gross proceeds of RM28.2 million.

"This will enhance our financial capabilities to undertake this project,” Tan said.

He added that currently, there is port congestion at Port Klang as well as other major ports in Malaysia as a result of an increased number of vessels arriving at the ports.

"With this new contract, we are well positioned to ride the demand surge and post-pandemic recovery of the O&G (oil and gas) industry. O&G activities are expected to ramp up this year with increased demand for oil, driven by more economies opening up as governments implement mass Covid-19 vaccination programmes.

"We anticipate marine fuel prices to rise following the return of Brent crude oil prices to pre-pandemic levels, which are now trading at the US$60-US$70 per barrel range. This bodes well for the continued expansion of our new oil bunkering business.”

The contract is expected to commence in the second quarter of 2021.

Techfast was last traded at 51 sen, valuing it at RM127.99 million.