KUCHING: KKB Engineering Bhd’s oil and gas (O&G) subsidiary OceanMight Sdn Bhd is eyeing fabrication jobs for offshore structures in the Asean region while actively bidding for more contracts in Malaysia.
OceanMight is currently in continuous talks with two foreign companies having operation bases in Malaysia to explore and identify any specific projects in the region that it could participate either as a contractor or sub-contractor, according to KKB group executive director William Kho Pok Tong.
He said one of the two companies is UK-based, and OceanMight has worked with both of them on other collaborations.
“We are looking at something concrete or at least one project to come up from the discussions by the second half-year of 2022,” Kho told StarBiz.
OceanMight’s first completed contract in the O&G industry outside Malaysia involved a minor fabrication and supply project in the Philippines.
Under Petronas Activity Outlook 2021-2023, Kho said OceanMight targets to bid up to seven out of the 10 to 14 projects in different categories in store under the “Design 1 Build Many” exercise.
An Ocean might project
The seven projects that OceanMight is eyeing are worth some RM800mil. These projects are mainly for light weight structures not exceeding 1,000 tonnes each.
He expects OceanMight to also be invited to tender for fabrication jobs for medium weight offshore structures between 1,000 and 7,500 tonnes.
He said KKB group has invested some RM147mil in capex to develop and expand its new fabrication yard in Bako here in the past few years to gear itself to handle up to 30,000 tonnes per year.
“With the expanded capacity, we can bid for two or three projects at one time as we can carry out fabrication work for multiple projects simultaneously.”
Kho said since 2014, OceanMight has been awarded 11 fabrication contracts for offshore structures worth some RM915mil by oil majors.
Eight of the contracts have been completed and delivered to the clients while two of the three on-going projects are expected to be completed by end-2021 and the third in first half of 2022.
He said OceanMight is awaiting the outcome of its three tenders for fabrication jobs expected to be known in the first quarter of 2022. As at June 30, 2021, KKB group had a tender book of RM360mil, 60% of which was for O&G related projects and the remaining 40% for engineering and manufacturing projects that include water supply and steel water pipes.
Kho said the group has an order book of RM590mil that will keep it busy up to early 2023. The on-going projects include six water-related projects, three O&G projects and one Pan-Borneo Highway project work package.
“For 2022, KKB group expects to bid up to RM1.3bil worth of contracts in the best case scenario. This include RM800mil worth of contracts in the O&G industry and RM500mil by its engineering and manufacturing segments. Our (past) success rate in the tenders is between 30% and 40%,” he added.
Kho said the group’s main focus is projects under the billion-ringgit Sarawak Water Grid Supply Programme, which is expected to roll out its Phase Two in 2022, and other infrastructure-related projects.
The Sarawak government has increased the funding for this ambitious infrastructure project to RM4bil from an initial RM1.2bil.
Under the water supply grid programme, KKB group has secured eight projects worth a combined RM250mil.
One of the projects has been completed, four more to be completed by this year and three others in 2022. Besides, the group has also secured RM190mil worth of contracts in the supply of water pipes under the grid programme.
“KKB will remain a main player in the water supply grid programme and steel pipe supplier in Sarawak and Sabah where we have manufacturing plants. We also supply pipes to other contractors who have been awarded water supply contracts,” said Kho.
Despite the movement control orders and other restrictions imposed to curb the spread of Covid-19, Kho is positive about KKB’s performance for the financial year of 2021. In first half year to June 30, 2021, the group recorded after-tax profit of RM15.2mil, as compared to RM21.7mil in the corresponding period in 2020.