Malaysia's Coastal Contracts Enters Indonesia LNG Supply Chain
Malaysia listed Coastal Contracts Bhd has decide to enter the Indonesian LNG supply chain with the purchase of a 49% stake in T Jaya Samudra Karunia (JSK) for $6.55mil (RM27mil).
Established in October 2004, JSK has a core business in coal transportation sector in Indonesia. JSK’s key business segments include drybulk shipping, transshipment, gas, mining, and valves manufacturing. In recent years, given the huge potential in Indonesia LNG market, JSK has ventured into the LNG supply chain. Recently, it was awarded the LNG Regasification and LNG Storage contracts to support 200 MWh gas-fired power plant in Bali, Indonesia by Indonesian state-owned company.
Coastal Contracts has entered into a binding Memorandum of Understanding with JSK, JSK Gas and Yudha Kurniawan Tanos. As per the MoU, Coastal Contracts will acquire 215 JSK Gas shares from JSK and Yudha for $6.55mil or $30,476 per share. When completed, JSK Gas will issue 1,500 new shares at $14.19mil or $9,465 per share to Coastal Contracts, the company said in a stock exchange filing on Monday.
JSK Gas is a 99% owned subsidiary of PT JSK Internasional and its principal activity is investment holding. JSK Gas owns 99% of PT Benoa Gas Terminal (BGT) with LNG regasification service provider as its principal activity. BGT owns a FRU with a maximum production capacity of 50 mmscfd which has commenced its operations in second quarter of 2016. The FRU is a crucial part of the infrastructure which is built to supply natural gas to the 200MWh power plant operated by PT Indonesia Power in Bali, Indonesia.
BGT has been awarded a 5-year Build, Operate and Transfer Agreement (BOT) by PT Pelindo Energy Logistik (PEL). Under the contract, the FRU will produce regasified natural gas for PEL, for the delivery to the gas-fired power plant.
Coastal Contracts believes major opportunities are foreseen in Indonesia’s small-scale LNG ambitions as there is requirement for flexible and cost-efficient LNG distribution solutions as well as request for cryogenic competence and technologies given its archipelagic nature.