Race on for RM1bil oil and gas job
- Dialog, Kencana, KNM, Sumatec, Sime Darby, Muhibbah and Ranhill have pre-qualified for the RM1bil Sabah Oil and Gas Terminal (SOGT)
- All of them have foreign joint-venture partners
- The SOGT in Kimanis is one of the mega O&G infrastructure projects under the 9th Malaysian Plan
- The terminal is designed to receive 180,000 barrels/day of dehydrated crude production from Gumusut, Kakap and Malikai
- It will also receive 500mil standard cubic feet per day (mmscfd) and 700 mmscfd gas from the Kinabalu and Kebabangan fields
- Early this month, Dialog has bagged the Sabah-Sarawak Gas Pipeline (SSGP) project worth RM1.6bil together with Punj Lloyd and Sabah's government Petrosab Logistik
- The other beneficiary of the SSGP project is believed to be Wah Seong, to provide pipe coating works worth RM400mil
- EDGE says it is still early to tell who the front-runner for the SOGT project is; will Dialog win it again, as it is believed to be teaming up with Punj Lloyd and Petrosab?
Snag in Ramunia's India contract
- Some of the contracts entered into by Ramunia, especially the recent RM2.2bil contract with ONGC of India, could face thinning margins as Ramunia did not hedge its steel requirements
- The steel component of the Indian project (B-193 oilfield development) makes up about 70% of the raw materials for the fabrication works
- Ramunia boasts 90-acre fabrication yard, which is Malaysia's largest
- Its failure to hedge its steel requirements given the soaring steel prices could deal the company a blow as many analysts expected earnings to soar after securing the ONGC project
- To recap, MISC had proposed a reverse takeover plan of Ramunia in January this year, the results of a due diligence conducted by MISC is believed to be ready by the end of the month
CPO bull loses steam
- In the past weeks, CPO prices have dropped to as much as 26% after rising to a record high of RM4,486
- So EDGE asked, is this an indication that the bull run for CPO has ended?
- The recent CPO price correction has led to HLG Research and Aseambankers reducing their ratings on plantations sector to negative and underweight respectively
- Some of the factors that contribute to the price fall include the fear that global demand for vegetable oil may weaken due to the economic slowdown
- China may also turn to its domestic reserves and reduce its imports of vegetable oils to curb inflationary food prices
- There are reported concerns that a Chinese buyer is defaulting on the purchase of US soy and this could potentially spread to palm oil
- ING Funds' Wu Yah Ning said that the recent slide in CPO price is merely a period of profit taking to cover for investors' losses in the equities market
- He went on to say that the underlying fundamentals remain bullish
- KLK's chairman Datuk Lee said that falling CPO prices would kick off demand for biodiesel, which in turn will provide a support mechanism to CPO prices and maintain upward pressure on the price
- Meanwhile India has cut import duties on edible oils to curb inflation
- The other factor supporting CPO price could well be the adverse weather conditions, dry spells are expected in South America which may affect production
- At the close on Friday, May CPO delivery rose RM4 to RM3,349 - so is this bearish trend short-term in nature?
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