MISC Annual Report 2017

101 Strategy & Performance MHB's facilities include one of the Southeast Asia’s largest dry dock in terms of tonnage capacity, skid tracks and bulkheads for fabrication and loading of structures up to 55,000 MT and two goliath gantry cranes with 600 tonne lifting capacity each. The two yards in Pasir Gudang are well-positioned along one of the busiest shipping lanes of Southeast Asia and are strategically located close to Johor Port. MARKET REVIEW Oil Majors continue to take a cautious stance on offshore development projects investment in an environment of high oil price volatility. The offshore fabrication segment had to contend with fewer projects and intense competition as players compete for the same opportunities in a shrinking market. A depressed tanker market in 2017 posed a challenge to the profitability and affordability of vessel owners and operators. This has led to the scaled back of dry docking activities in the marine repair segment. KEY DEVELOPMENTS In 2017, MHB has successfully sailed away several offshore projects, amongst which include Wellhead Platforms (WHP) and turret projects. Both the F12 WHP topside and jacket and the Besar AWHP for PCSB and the Baronia-B Central Processing Platform (CPP) jacket, bridge and piles for Hyundai Heavy Industries Co., Ltd. (HHI) were safely delivered to the customers. MHB also completed two turret projects, PETRONAS FLNG 2 external turret and FSO Benchamas 2 external turret, both of which were for SOFEC Inc. For the offshore services sector, the segment has completed 48 modification and rejuvenation work orders under the Facilities Improvement Project (FIP) for PCSB. As for the onshore sector, MHB has successfully completed two packages for Refinery and Petrochemical Integrated Development (RAPID) projects – Package 3 Area 3 for Petrovietnam Engineering Consultancy JSC and RAPID Package 22 for Punj Lloyd Sdn. Bhd. MANAGEMENT DISCUSSION & ANALYSIS MARINE & HEAVY ENGINEERING Despite the challenging environment, MHB has successfully secured contracts worth RM1.145 billion, of which the most notable projects are the Engineering, Procurement, Construction, Installation and Commissioning (EPCIC) for the Bokor Phase 3 CPP Re-Development Project and for Sepat-AWHP topside and substructure as well as Sepat-A Topside Module Support Frame (MSF). In addition, two ‘call-out’ basis offshore services contracts were secured, namely Hook-up and Commissioning (HUC) services from CARIGALI-PTTEPI Operating Company Sdn. Bhd. and provision of facilities improvement, rejuvenation and modification from Vestigo Petroleum Sdn. Bhd. For its Marine segment, MHB has completed the repair and maintenance of 75 vessels of various categories during the year under review. There are also two ongoing conversion projects – the Nautica Bergading FSO for E.A. Technique (M) Berhad and the FSO Benchamas 2 for MISC Berhad. In 2017, MHB has also secured ‘en-bloc’ contracts for the dry docking repairs of up to six LNG carriers fromMISC Berhad. Over 40 YEARS track record of delivering integrated and complex solutions, including deepwater support services to international Oil & Gas clients One of the LARGEST MARINE AND HEAVY ENGINEERING FACILITIES in the region with an annual fabrication capacity of 129,700 MT One of the largest dry dock in SOUTHEAST ASIA in terms of cubic capacity Further details on Marine & Heavy Engineering www.misc.com.my/solutions/marine- and-heavy-engineering