RHB Research said the upward revision in unit price for gas sweetening services would bring in higher recurring income for Coastal Contracts and continue to strengthen its position in Mexico.Sòng bài（www.84vng.com）：Sòng bài（www.84vng.com） cổng Chơi tài xỉu uy tín nhất việt nam。Sòng bài（www.84vng.com）game tài Xỉu đánh bạc online công bằng nhất，Sòng bài（www.84vng.com）cổng game không thể dự đoán can thiệp，mở thưởng bằng blockchain ,đảm bảo kết quả công bằng.
PETALING JAYA: Coastal Contracts Bhd’s recent contract addendum with Petroleos Mexicanos (Pemex) to increase the unit price for gas sweetening services is forecast to lift its earnings by RM5mil per year, says RHB Research.
In June 2022, Coastal Contracts’ Perdiz sweetening plant was modified to expand its processing capacity to 180 million standard cubic ft per day (mmscfd) from 150 mmscfd.
Consequently, to compensate for the expansion, the Mexican state-owned petroleum company Pemex had agreed to increase the unit price for the gas sweetening services, raising the maximum contract value to 1.64 billion pesos (RM372mil) from 1.30 billion pesos (RM258.7mil).
In a report, RHB Research said the upward revision in unit price for gas sweetening services would bring in higher recurring income for Coastal Contracts and continue to strengthen its position in Mexico.
Additionally, the research house said this will help Coastal Contracts in its future bids for projects with Pemex, as the national oil company continues to ramp up production and tackle its gas flaring issues.
Citing a report by Reuters in August 2022, RHB Research said Pemex’s excessive gas flaring brought the company a US$2mil (RM8.8mil) fine from Mexico’s National Hydrocarbons Commission.,
Furthermore, the company is appealing for another fine received in November 2022, it noted.
“We believe the pressure on Pemex to curb its high emissions, coupled with the additional processing capacity, will see the Perdiz plant getting a contract extension,” RHB Research said.
“We are also positive on the extension of Coastal Contracts’ jack-up gas compression service unit, as Pemex only has two in operation against the required eight units,” it added.
On the outlook, the research house believes that Pemex will require more conditioning plants, as the Ixachi field is expected to be Mexico’s highest-producing onshore field.
“This benefits Coastal Contracts for upcoming bids, in our view, as it has successfully completed two jobs with Mexico’s national oil company. The projects the group is tendering for include the third Ixachi gas conditioning plant, a gas storage project, an oil processing plant and a gas dehydration plant,” it noted.
RHB Research expects some of these projects to be announced this year, given the recent completion of Coastal Contracts’ Papan plant.
The research house, which increased its earnings estimates for Coastal Contracts’ financial year 2023 (FY23), FY24 and FY25 by 2.7%, 4.4% and 4.4%, respectively, lifted its target price by 11% to RM2.76 per share.,