Malaysia's oil/gas sector at 'overweight' on petroleum hub project

Malaysia's oil/gas sector at 'overweight' on petroleum hub project - AmResearch
06/07/2007 15:36:00
KUALA LUMPUR (Thomson Financial) - AmResearch has kept its 'overweight' rating
on the oil and gas (O&G) sector after the managers of the 1.4-billion-ringgit
Asia Petroleum Hub (APH) project in Tanjung Bin, Johor, said the hub will be
operational by mid-2009, having secured clients and financing for the massive
project.
"From our understanding, the new facility should address the lack of storage
space in Malaysia as well as lower bunkering cost,'' the research house said in
a note to investors Friday.
It noted that three key contracts have been awarded by the managing contractor
of the hub, ZAQ Construction Sdn Bhd.
The contracts involved procurement, construction and commissioning of the
petroleum hub and bunkering facilities and the recipients included Muhibbah
Engineering, which secured a 450 million ringgit contract, Nam Fatt
Construction, which won a 553 million ringgit contract, and Kencana Petroleum,
which received a 240 million ringgit contract.
"Macro newsflow momentum remains strong and will gain traction further out.
This project may possibly have positive spillover (effect) on KNM Group and
Dialog,'' AmResearch said, adding that it
has "buy'' calls on Coastal Contracts, Ramunia, Wah Seong, Alam Maritim and
Petronas Gas.
Asia Petroleum Hub Sdn Bhd executive chairman Abdul Rashid Mohamad Isa
Al-Qadiry said yesterday at the project's ground-breaking ceremony that APH has
secured three clients and expects to run at full capacity within six months of
starting operations.
It will fund about 1.1 billion ringgit of the 1.4 billion total cost via
project financing obtained from CIMB Bank.

Source: osk wirenews