MISC to Spend $4B Capex in 5 Years
MISC Bhd, the shipping arm of Petroliam Nasional Bhd or Petronas, which is optimistic of delivering better earnings in its financial year 2018, is setting aside a bigger capital expenditure (capex) totalling RM15.68 billion (US$4 billion) over the next five years to grow its four core businesses, reports Bernama.
The core segments are liquefied natural gas (LNG) shipping; petroleum and product shipping; offshore business; and marine and heavy engineering.
President and Chief Executive Officer Yee Yang Chien said US$500 million would be set aside for potential FPSO and shuttle tanker contracts yet to be secured this year. “However, that amount (US$500 million) can be increased if we bag more contracts this year.
The LNG segment contributed the majority of the company’s earnings followed by the offshore business.
Concerning its fleet, Yee said all 27 LNG vessels were chartered out.
“Out of our 14 offshore facilities, two will be coming off charters this year and another two will see its charter expiring in two to three years.
Of the total US$4 billion capex, Yee said the company expects to raise funding via equity (30 per cent) and bank borrowings (70 per cent).
He said the oversupply situation for both LNG and petroleum tankers will continue to deter the industry’s growth this year, following excess supply of vessels and the production cuts by the Organisation of the Petroleum Exporting Countries (OPEC).
