Wednesday, August 24, 2011

O&G stocks in focus on Petronas RM15b projects

KUALA LUMPUR: Oil and gas-related counters came in focus in early trade on Wednesday, Aug 24 on news that Petroliam Nasional Bhd and its production sharing partners were embarking on a RM15 billion project to extract gas from fields off Peninsular Malaysia which includes a new 200km pipeline.

At 9.07am, MMHE added 10 sen to RM6.65, SapuraCrest six sen to RM4.34, Wah Seong two sen to RM2.08 while Kencana and Alam Maritim added one sen each to RM2.78 and 79 sen.

Petronas said on Tuesday'' the project comprises nine discovered gas fields within Blocks PM301 and PM302 and in the Bergading contract area, about 300km off the coast of the peninsula.

RHB Research in a note Aug 24 said the whole domestic upstream segment was set to benefit from the roll-out of the project.

'However, we foresee main beneficiaries to be the likes of: 1) MMHE and Kencana for any fabrication of new platforms/offshore facilities; 2) Sapuracrest for pipelaying and installation works; 3) Wah Seong for pipe-coating works; 4) Alam Maritim and Bumi Armada for shallow water offshore marine vessel support; and 4) KNM for process equipment.

'We are positive of the project as it is a clear indication that Petronas will maintain its capex plans. We foresee no slowdown in contract awards going ahead and we maintain our Overweight call on the sector,' it said.

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