Tanjong Agas Oil and Gas & Logistics Industrial Park

It’ll be the first of its kind in Asia-Pacific

KUALA LUMPUR: Norway-based oil & gas (O&G) firm Aker Solutions will invest US$60mil (RM184mil) to set up an umbilical manufacturing plant in Pekan, Pahang.

The facility is expected to begin operations in the fourth quarter of 2013, said Aker Solutions Asia-Pacific umbilicals president Crawford Tennant. “It will be the first steel tube umbilical plant in Asia-Pacific,” he toldStarBiz in an interview yesterday.

An umbilical is a cable which supplies required consumables to an apparatus. The umbilicals from Aker Solutions will be deployed on the seabed to supply necessary controls and chemicals to subsea O&G gas wells, subsea manifolds and any subsea system requiring a remote control.

Tennant: ‘We’re now seeing an increase in tender activity for umbilicals globally

The plant, which will complement the group's two existing plants in Norway and the United States, will be located on a site measuring 80,000 sq m and is expected to employ between 120 and 150 people initially.

Aker Solution's plants in Norway have an annual cable output of between 300km and 500km. Tennant said he expected the Malaysian facility to have a similar output eventually.

“The plant will primarily serve clients within the region. But we will also cater to global demand as well, if necessary. We hope to get the first umbilical out either by the end of next year or by the first quarter of 2014,” Tennant said.

He said the setting up of the plant in Malaysia would expand Aker Solution's manufacturing capacity and strengthen its position as a leading producer of steel tube umbilicals. Tennant also said ground works on the site had already begun, with construction expected to commence by the end of the year.

“Setting up a plant here also makes it more cost-efficient to deliver our products to clients within the region than by sending them from either Norway or the United States,” said Tennant.

Tennant said he was optimistic about the outlook for steel tube umbilicals in the region.

“We see the demand for umbilicals growing in the next few years. Some of our bigger projects currently are in the region.

“On the global front, some projects slowed down following the global economic crisis but it's picking up again. We're now seeing an increase in tender activity (for umbilicals) globally,” he said.

Aker Solutions’ umbilical plant in Norway has an annual cable output of 500km. The proposed Malaysian facility will have similar capacity

Aker Solutions has been present in Malaysia since 1981. Being in the country for over 30 years, Tennant said it was a natural decision to build the facility here. “It was part of our strategy to build the facility in Malaysia.”

Aker Solution's Malaysian headquarters and engineering office is based in Kuala Lumpur. It also has a manufacturing centre in Port Klang, which is the first of its kind in the world that can produce a complete subsea production system in one location.

Aker Solutions employs 1,500 employees in Malaysia. Globally, it is the worldwide leader in steel tube and power umbilicals, with a market share of about 40%.