Yinson FPSO explains reason for contract extension with Addax petroleum

Malaysia’s Yinson Holdings Berhad, a floating, production, storage, and offloading (FPSO) service provider has received a short contract extension for its Floating Production, Storage and Offloading Vessel (FPSO) between Addax Petroleum Development (Nigeria) Limited and Adoon Pte. Ltd stationed at the Antan field off Nigeria.

Yinson’s 100 percent owned Knock Adoon has a capacity to process 60,000 barrels of oil per day with a storage capacity of 1.7 million barrels.

Although negotiations still ongoing, Yinson had extended the current contract via an addendum, extending the contract by one months as it discusses a longer term deals with Addax.

“In view that negotiation are still ongoing as to a substantive extension of the tenure of the Contract, Addax has via an Addendum with effective date of 17 May 2019 further extended the Contract on an interim basis from 17 May 2019 to 16 June 2019 upon the existing terms and conditions,” Yinson Holdings said.

The announcement noted that the extension of the Contract on an interim basis is expected to contribute positively to the revenue and earnings of Yinson Group for the financial year ending 31 January 2020.

“The Company will make appropriate announcement(s) to Bursa Malaysia Securities Berhad in relation to any material developments concerning the aforesaid extension,” Yinson Holdings said.

The 1985-built vessel, moored at the Antan field offshore Nigeria, won its first contract with Addax in October 2006.

After the original contract expired on October 16, 2014, it was extended for another year.

After that, the contract was extended for another three years to October 16, 2018. Upon the October 2018 expiration, Addax extended the charter until January 2019, and then until April 16.

The contract extension kept the vessel busy in Nigeria until May 16, which necessitated the reason for another contract negotiations set to expire June 16 2019.

The two companies have been in talks over a potential longer-term contract, with information on Yinson’s website showing Addax has options to extend the contract until 2022. The FPSO has a storage capacity of 1.7 million barrels.