Thursday, December 25, 2014

Project Sumarry

PROPOSED DESIGN, BUILD AND OPERATE A INTEGRATED DOCKYARD FOR SHIP MAINTENANCE, SHIP REPAIR, HEAVY MARINE ENGINEERING AND FABRICATION WORKS AT GEBENG, KUANTAN PORT, PAHANG DARUL MAKMUR


ZULAZ Engineering Sdn Bhd the company incorporated in Malaysia (“The Concessioner”) has secured an approval in principle from the State Government of Pahang to develop a Shipyard on an area of about 80 acres to be reclaimed from the sea in Sg. Karang, Kuantan Port, Kuantan, Pahang.

The proposed Shipyard will provide Integrated ship maintenance, ship repair and marine engineering services, dry docking, fabrication works and oil bunkering. The project is located near the existing Kuantan Port in Gebeng, Kuantan in the state of Pahang. Also located near the site is a naval base for the Royal Malaysian Navy. The Gebeng Industrial Estate, which is a host to several major industries including petro-chemical industries.

It has locational advantage as it is sited nearer to two related economic zones i.e., the offshore oil and gas related activities off the coast State of Kelantan, Terengganu and Pahang as well as the Thailand/Malaysia border (“ECOA”) where a lot of offshore support vessels (“OSVs”) are deployed and the Kuantan Port when compared to other providers, particularly those located 24 hours away in Johor/Singapore/Batam, and in the west coast states that take 4 days to arrived. The Project’s business is largely driven by merchant Kuantan Port, the offshore oil and gas activities. In Malaysia, there are two distinct areas where such activities are carried out, i.e., the East Coast Offshore Area (“ECOA”) and the Sabah/Sarawak Offshore Area (“SSOA”). The main player in ECOA is oil and gas Company such as PETRONAS, SHELL, EXXONMOBIL, and its production sharing contractors.


PETRONAS has already announced development plan involving upstream activities of about RM183 Billion in the next five (5) years which will drive the demand for OSVs and consequently demand for repair, marine engineering and rigs fabrication. Apart from that, the Petrochemical Integrated Development (RAPID) project in Pengerang, Johor, RAPID by PETRONAS with development cost up to RM60 billion will boost up the ship activities and RAPID’s proposed refinery will have a capacity of 300,000 barrels per standard day and will supply feedstock for RAPID’s petrochemical complex as well as produce gasoline and diesel that meet European specifications. The RAPID project aims to capitalise on the growing need for specialty chemicals and to meet the demand for petroleum and commodity petrochemical products in the Asia Pacific region by 2016. The government initiative under the enhance oil recovery program on marginal oil field will also see new capital expenditure that will drive the ship repair and marine engineering sector, other initiatives that will contribute positively to the Project will be the initiative under the Ship Building and Ship Repair 2020 (“SBSR 2020”) that aims to capture higher percentage of ship building and ship repair business in the region by Malaysian service providers.

Another driver that will contribute to the Project’s potential is the activities relating to the Port of Kuantan. This port has shown impressive growth in terms of numbers of vessel port call since it began operation in 1984. Its contribution to the Project will be further felt with future plans to expand the port into a mega port that expected to be completed in 2016, encompassing 12,667 hectares, the completed project will see a throughput of 24 million tonnes, create 44,785 jobs, with new port facilities, it will enable the port to receive vessels above 40,000 tonnes or the next generation of container ships.

South East Asian region is reported to host about 400 anchor handling tugs (“AHTs”) and platform support vessels (“PSVs”) and about 800 in other types of vessels. Offshore Support Vessel Owners Association of Malaysia (“OSV Malaysia”) which has a total 1200 vessel trough out the region and 480 vessels in east coast. As for Kuantan Port, the number of vessels port calls reached 2440 in 2011 made up of coastal services and international services, by the time mega port is ready number of vessels calls to Kuantan port will be increase.

The needs for ship repair and maintenance services arise from both regulatory and unscheduled non-regulatory requirement. Regulatory-wise, vessels/ships are required to undergo mandatory inspection once every 2.5 years and every 5 years for sea-worthy certification. On average it takes five (5) days for each vessel below 20000 dwt to docking on and to complete the first type of mandatory inspection.


The second type of inspection requires the use of dry dock are vessel below 250000 dwt to docking on and to takes longer time (10 days) to complete. Similar to scheduled maintenance for a vehicle, vessels/ships are sent for inspection after 15,000 hours of engine running which calculates to about 2.8 years under an average engine running of 18 hours a day. This almost equates to the mandatory inspection once in every 2.5 years. Apart from the above compliance requirement, vessels/ships are sent to shipyards for repair works for emergency reasons such as damages due to collisions. These are unscheduled repairs. Other than that, repair and maintenance works can be done while they are a float in-situ thus avoiding costly docking charges and charter downtime.

Initially, the cost of the Project excluding provision and interest during construction (“IDC”) was estimated at RM975 million. With provision of RM48.9 million and IDC of RM125.5 million, the total cost of the project reached RM1.150 billion. The project IRR based on the financial projection by ZESB is at 30% with a payback period of about 3.67 years. In terms of implementation arrangement, ZESB has incorporate a special purpose vehicle (“SPV”), known as Kuantan Shipyard Engineering Sdn Bhd (“KSE”), as operator of the shipyard to be owned 90% by ZESB and 10% Perbadanan Setiausaha Kerajaan Negeri Pahang (“PSK”).






5 comments:

  1. Dear zulaz engineering
    How can i contact you? Can you forward me one contact no?tq

    ReplyDelete
    Replies
    1. Pls ctc me for more information
      amirurrofiq1986@gmail.com

      Delete
  2. This comment has been removed by the author.

    ReplyDelete
  3. are this company takes internship students?

    ReplyDelete
  4. Allow me to introduce the LE-MERIDIAN FINANCING SERVICES. the loan company that grant me loan of 5,000,000.00 USD When other loan investors has neglect my offer but Le_Meridian Funding Service grant me success loan.they are into directly in loan financing and project  in terms of investment. they provide financing solutions to companies and individuals seeking access to capital markets funds, they can helped you fund your project or expand your business.. Email Contact:::: lfdsloans@lemeridianfds.com Also  lfdsloans@outlook.com or Write on whatsapp Number  on    1-(989-394-3740)Good Intend,

    ReplyDelete