1. INTRODUCTION
DIALOG Group Berhad (“DIALOG”) is pleased to announce that its wholly owned subsidiary, Dialog E & C Sdn. Bhd. (“DECSB”) in consortium with Technip Energies (M) Sdn. Bhd. ("TEM") (formerly known as Technip Geoproduction (M) Sdn. Bhd.), has accepted a Letter of Award for an EPCC Contract with PETRONAS Chemicals Fertiliser Kedah Sdn. Bhd. (“PCFKSB”) with an estimated value up to RM724 million, for the Provision of Engineering, Procurement, Construction and Commissioning (“EPCC”) Services for Melamine Plant for PETRONAS Chemicals Fertiliser Kedah Sdn. Bhd. (“the Project”).
DECSB’s interest in the said consortium is expected to be 30% with TEM holding the balance 70% interest.
The consortium of DECSB and TEM will construct a new single-train Melamine plant, including of modification of existing plant and utilities to meet the Project requirements.
2. SALIENT TERMS OF THE LETTER OF AWARD (“LOA”)
2.1 SCOPE OF WORK
The scope of work of the Project involves the engineering, procurement, construction and commissioning of a new Melamine plant and bagging facilities. The engineering, procurement and commissioning scope will be executed by TEM while the construction and pre-commissioning scope will be undertaken by DECSB.
2.2 THE PROJECT PERIOD
The Project is expected to commence in February 2022 and completion by second half of 2024.
2.3 CONTRACT PRICE AND PAYMENT
The estimated value of the EPCC Contract is up to RM724 million, payable to the consortium of DECSB and TEM progressively throughout the EPCC period. The LOA was obtained through competitive bidding and the value of the EPCC Contract was based on the scope of work specified by PCFKSB.
3. INFORMATION ON PCFKSB AND TEM
PCFKSB is a wholly owned subsidiary company of PETRONAS Chemicals Group Berhad (“PCG”) involved in petrochemical manufacturing, mainly producing granular urea for use in local and foreign agricultural industries.
Technip Energies (M) Sdn. Bhd. (“TEM”) (formerly known as Technip Geoproduction (M) Sdn. Bhd.) is a subsidiary of Technip Energies. Technip Energies is a leading engineering & technology company for the energy transition, with leadership positions in Liquefied Natural Gas (“LNG”), hydrogen and ethylene as well as growing market positions in blue and green hydrogen, sustainable chemistry and CO2 management. The company benefits from its robust project delivery model supported by extensive technology, products and services offering.
4. FINANCIAL EFFECTS
The Project is not expected to have any effects on the share capital and substantial shareholders’ shareholding of DIALOG. The Project, however, is expected to contribute positively to the earnings and net assets of DIALOG for the financial years ending 30 June 2022 onwards until the completion of the Project.
5. RISKS
Risk factors affecting the Project include but are not limited to execution risks such as availability of skilled manpower and materials, changes in prices of materials, and changes in political, economic, financial market and regulatory conditions. DIALOG will undertake all the necessary efforts to mitigate the various risk factors identified.
6. DIRECTORS’ AND MAJOR SHAREHOLDERS’ INTERESTS
None of the directors of DIALOG, major shareholders of DIALOG and/or persons connected with them have any interest, whether direct or indirect, in the LOA.
This announcement is dated 11 February 2022.
