Shin Yang building on OSV momentum

KUCHING: Shin Yang Group Bhd (SYG) is expected to complete and deliver three more new offshore support vessels (OSVs) for the oil and gas industry this year, says chief operating officer Richard Ling.

With a combined contract value of about RM134mil, one of the OSVs is for Malaysian client and two others for Saudi Arabia-based customers.

Ling told StarBiz that SYG’s subsidiary Shin Yang Shipyard Sdn Bhd had received numerous enquiries on the construction of new OSVs and recycling of ageing OSVs in line with the increasing demand for such vessels to support offshore operations of oil majors and contractors.

“We continue to bid for contracts for new-build OSVs from both potential Malaysian and international investors,” he added.

Given the current gap in new building orders for different types of OSVs over the last few years and recycling of ageing OSVs, Ling said SYG is taking advantage of the steady increase in new shipbuilding offers and replenishments of ageing OSVs to secure more contracts.

He also expects a healthy increase in orders for vessels flowing in over the next few years.

SYG has moved into the construction of value-added OSVs with innovative designs. One such vessel it is now constructing is a 42m fast crew boat for offshore operation tailored for petroleum arrangement contractors.

The shipyard is also building a shallow water diesel electric anchor handling tug and support vessel that meets American Bureau of Shipping’s Enviro notation, a type of classification for vessels.

According to Jamaludin Obeng, managing director of Sarawak-based OSV charterer Perdana Petroleum, there is now a tight supply of OSVs in Malaysia that prompts the company to seriously consider renewal and rejuvenation of its fleet in a strategic and timely manner.

He noted Petroliam Nasional Bhd has raised concerns about the high number of ageing vessels in the OSV industry, emphasing the potential risks if there is a shortage of new vessels entering the market over the next few years.

Perdana Petroleum, a subsidiary of Dayang Enterprise Holdings Bhd, owned and operated a fleet of 15 OSVs, including eight anchor handling tug vessels, five accommodation work barges and two accommodation workboats as 2023.

The vessels are chartered to oil majors and Dayang. Sealink International Bhd, also a Miri-based vessel charterer and shipbuilder, had said that the supply of OSVs has continued to decline, creating a demand-supply imbalance, and it expects the gradual reduction in OSVs to persist.

The company expects this trend to drive rising demand for OSVs to support exploration, drilling and development operations of the local oil and gas industry over the medium to long term.

The tight supply of OSVs in Malaysia has driven up their daily charter rates and significantly boosted the bottomlines of Perdana Petroleum and Sealink.

Besides shipbuilding, Shin Yang Shipyard has a robust ship repair business that completed major and minor repairs for 556 vessels in 2023.

Last week, Shin Yang Shipyard delivered KM Banggi to Malaysian Martime Enforcement Agency (MMEA) in Sabah after completing the repair and repowering of the coastal patrol boat for a contract value of about RM60mil.

Shin Yang Shipyard executive director Vincent Ling Lu Yew said the repair and repowering of KM Banggi was completed on time and within budget to exacting standards amid a challenging fiscal environment.

KM Banggi, the biggest repair and repowering job ever undertaken by Shin Yang, was first moved to the shipyard’s floating dock in March 2023, and the exercise involved engine and propeller installations.

The harbour acceptance trial and sea acceptance trial was carried out respectively in February and March this year.

“We are deeply honoured by the trust placed in us by MMEA. The successful delivery of KM Banggi reflects not just technical achievement but the power of collaboration, resilience and national pride.

“The vessel will enhance MMEA’s operational readiness and martime security efforts. The shipyard is thankful to MMEA’s logistic and technical team for their close cooperation throughout the project,” added Ling as he handed over KM Banggi to MMEA deputy director general (logistics) vice-admiral Datuk Saiful Lizan Ibrahim.

The ceremony was also witnessed by director-general, admiral Datuk Mohd Rosli Abdullah.