Armed with new larger capacity drydock, MHB hopes to increase its international ship repair business in 2021, underpinned by several LNG carrier awards
With its new higher capacity drydock commissioned in December, Malaysia Marine and Heavy Engineering Holdings Berhad (MHB) is anticipating a rebound in ship repair activity, with awards to dock several LNG carriers already in hand for 2021.
Internationally owned LNG and gas carriers are key market service sectors for MHB, but Covid-19 restrictions impacted ship repair activity in 2020. On an annual basis, MHB averages around 85 to 100 vessels, depending on the scope of work, according to a spokesperson for the Malaysian ship repairer. “In view of the travel restrictions imposed on foreigners by our government, we recorded a number of projects that were withdrawn by clients in 2020,” said corporate communications executive Farah Nabilah Binti Mohd Azman.
“We are proactively pursuing more projects from our regular and new clients. Most of these LNG carriers will undergo special/intermediate survey works,” she said, adding some will be ballast water treatment system (BWTS) refits.
As a result of the government travel restrictions, MHB undertook 65 repair and maintenance projects in 2020, covering bulk carriers, container vessels, LNG carriers, gas carriers, tankers, and other types of vessels, with conversion work on the floating storage and offloading vessel FSO Golden Star. Converted from YASA Golden Horn, FSO Golden Star sailed from MHB in September to offshore Vietnam. With capacity for 700,000 bbls of condensate, FSO Golden Star is now operating at the Sao Vang and Dai Nguyet Project, as part of the Malaysia Vietnam Offshore Terminal – a joint venture of MISC Bhd and PetroVietnam Technical Services. FSO Golden Star is designed to remain in continuous service at the field for a minimum of seven years without dry docking.
In a presentation to investors describing financial results for the first nine months of 2020, Bursa-listed MHB reported completing repairs on 38 vessels – five of which were LNG carriers – generating Myr261.5M (US$64.7M) in revenue. This was down year-on-year from Myr303.8M (US$75.1M), due in large part to the yard shutdown during the Movement Control Order and the Malaysian Government’s border restriction ruling, which prohibited international clients from coming to the yard.
“Despite the Covid-19 pandemic, we are still optimistic this investment will allow us to bring in more clients”
By comparison, in 2019 the publicly traded Malaysian ship repairer generated Myr430.9M (US$106.6M) in revenue for the year from its marine business segment, completing repairs on 77 vessels, 20 of which were LNG carriers. Among the most notable in the gas carrier sector were: a third special survey, BWTS installation and helium test and cargo tank repair on Madrid Spain, owned by Teekay Corp; first special survey and exhaust gas cleaning system installation on Gas Summit, owned by KSS Line Ltd; first special survey, dual-fuel, diesel-electric (DFDE) engine overhaul and helium test on the cargo tank of Velikiy Novgorod, owned by SCF Management Service Cyprus; and second special survey, BWTS installation, DFDE engine overhaul and modification of the heavy fuel oil (HFO) tank to handle low-sulphur marine gas oil on BW Brussels, owned by the BW Group.
New drydock commissioned
In December, MHB commissioned its new Dry Dock No. 3 by drydocking long-time customer Zodiac Maritime’s 8,600-TEU, 2013-built container ship CSAV Toconao.
Zodiac Maritime has been repairing and maintaining vessels at the shipyard for 20 years, completing 25 drydockings dating back to 2001.
In 2019, Zodiac Maritime signed one of four en bloc agreements secured by MHB during the year for multiple ship repairs. The Malaysian shipyard’s other en bloc clients were PT Gemilang Bina Lintas Tirta, Icon Ship Management and Eaglestar Shipmanagement (I).
Located at its MMHE West Yard in Pasir Gudong, Johor, the new drydock increases MHB’s capacity to handle ships of 400,000 dwt, addressing the new generation of LNG carriers, very large crude carriers, floating production storage and offloading (FPSO) units, FSO units and oil rigs, ultra-large container ships and dry bulk carriers.
Commenting on the addition of Dry Dock No. 3, MHB managing director and chief executive Encik Pandai Othman said the additional dock space would keep MHB “a step ahead in competing with other players in the marine repair industry in this region.” He added: “Despite 2021 expected to be a global recovery period from the Covid-19 pandemic, we are still optimistic this investment will allow us to bring in more clients and cater to more vessels in the coming years.”
Dry Dock No. 3 joins MHB’s existing two drydocks and one floating dock to conduct repair and refurbishment services on vessels and other marine and oil and gas facilities.
At 350 m long, 80 m wide and 14 m deep, the new drydock can simultaneously handle smaller vessels when not servicing LNG carriers, FPSO or FSO units. It is fully equipped with supporting facilities such as cranes, workshops, special equipment, offices and substation docks.
Completed over a three-year period, the construction of Dry Dock No 3 involved more than 500 people, with more than 2.7M man hours recorded upon completion of the dock.
“Since MHB’s incorporation, we have successfully completed more than 3,800 marine repair works, including several life extension and upgrading solutions for various vessels owned and operated by local and international clients,” said Mr Othman. “With a comprehensive track record of more than 34 FPSO/FSO/FSU conversions, 200 LNG carrier drydockings – including 10 projects for major upgrading and life extension services – MHB is committed to delivering a high quality, value-added and cost-efficient service to our clients.”