Offshore and marine (O&M) company Dyna-Mac Holdings and Kim Heng Marine & Oilfield, a wholly-owned subsidiary of shipyard operator Kim Heng, have signed a memorandum of understanding (MOU) to embark on larger floating production storage and offloading (FPSO) module fabrication projects.
The MOU has a term of two years and will automatically renew at the end of each term, giving Dyna-Mac the option to secure the use of Kim Heng’s yard facilities, and at agreed tariff rates for the entire term of the agreement.
According to the announcement dated Aug 15, this is a “win-win” partnership as it allows Dyna-Mac greater flexibility to address the spikes in FPSO vessel module fabrication demand. It will also allow the group to further entrench its strategic presence in the FPSO module fabrication business through inorganic growth of its production capacity.
Meanwhile, Kim Heng will access more complex and valuable projects tapping on Dyna-Mac’s know-how and client base in the FPSO module fabrication business.
The FPSO module fabrication sector refers to a specialised segment within the oil and gas industry that focuses on the construction, assembly, and integration of modules intended for use on FPSO vessels. FPSOs are offshore facilities that combine the functions of production, storage, and offloading of oil and gas.
“This mutually advantageous partnership between Dyna-Mac and Kim Heng aligns with the strategic vision of both companies, reflecting our shared commitment to providing enduring value for our respective shareholders,” says Lim Ah Cheng, executive chairman and CEO of Dyna-Mac.
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Thomas Tan, executive chairman and chief executive officer of Kim Heng, adds: “This partnership empowers us to engage in more substantial, intricate, and high-value projects, marking a significant step forward in Kim Heng’s pursuit of sustainable long term revenue growth in the industry.”
Shares in Dyna-Mac and Kim Heng closed 0.5 cents lower, or 1.22% down at 40 cents.
