theedge,30 jun 2008...Dubai-based OSC to make PKFZ an O&G hub

KUALA LUMPUR: A Dubai-based company Oilfields Supply Centre Ltd (OSC) is developing part of Port Klang Free Zone (PKFZ) as an oil and gas (O&G) hub in the Southeast Asia region.

According to sources, OSC would bring in its joint-venture companies as well as other units into the free zone area to set up operations and make PKFZ a hub for upstream O&G manufacturing and supply services activities.

“The development plan will probably be completed in three to five years, bringing in some RM1 billion worth of investments,” a source said.

For a start, OSC’s joint-venture company Smith International Gulf Services (SIGS) is already in the midst of setting up its operations in PKFZ.

“Smith International will use PKFZ’s light industrial unit for the manufacturing of gaskets,” the source added.

SIGS currently operates within the Oilfields Supply Centre complex in Jebel Ali and has satellite locations in Abu Dhabi, Oman and Qatar. OSC provides onshore facilities, logistical support, and engineering to Persian Gulf area and South Asia.

OSC’s other JV companies include Christensen Gulf Services LLC, M I Gulf Services LLC, Sedco Dubai (LLC) and Sharjah Oilfields Supply Company LLC. The source said PKFZ is the first integrated commercial and industrial free zone in Malaysia that offers the first-of-its-kind integrated O&G offshore supply and manufacturing activities.

In contrast, Kemaman port operates a custom bonded area providing integrated base facilities and support services to oil majors and Petronas’ production sharing contractors.

As a free zone, PKFZ was modelled after the Jebel Ali Free Trade Zone in Dubai. Jafza International, the managers of Jebel Ali, was enlisted under a 15-year contract to market and manage PKFZ. But Jafza pulled out of a management pact with PKFZ in July 2007.

PKFZ was conceptualised as a vehicle for cargo generation for Port Klang with the objective of developing it into a manufacturing, trading and distribution hub in Asia.

To-date, the largest investor in PKFZ is Aker Kvaerner, a Norwegian O&G giant. Total investments committed by 51 companies in PKFZ amounted to over RM900 million.

Meanwhile, at a media briefing recently, PKA’s newly appointed general manager and chief executive officer Lim Thean Shiang, who is also executive chairman of PKFZ, said among the first tasks to be undertaken was to review the existing activities in PKFZ and restructure the company to make it more attractive.

On the payback period for the mega project, Lim said it would probably take between 17 and 18 years to recoup the investments but more importantly was the multiplier effect on the economy the free zone would bring into the country.