A NEW revenue stream is about to open up for Technics Oil & Gas -- and what a strong gush of cash it promises to grow into.
Imagine a stream of offshore support vessels such as AHTS and PSVs coming to berth at Technics' new jetty, off Loyang Way, for a range of routine services.
The revenue and profit potentially could run into millions of dollars a year, adding to Technics' core business of being a full service integrator of compression systems and process modules in the oil and gas industry.
Its jetty and related infrastructure, as well as deep-water dredging for a draft (minimum depth of water a vessel can safely navigate) of 6.6 metres, have been completed after 3 years and at a cost totalling nearly S$20 million.
There is only one other similar, but bigger, jetty operations in this part of Singapore where demand for services is high, especially from clients whose offices are in the vicinity.
An attraction for potential clients is that this is a relatively uncongested sea area compared to the alternative site of Jurong.
At the jetty, assets can be unloaded from, or loaded onto, vessels with the use of Technics' heavy lift equipment.
Facilities are available for other services such as sand-blasting and spray-painting.
It's early days to be certain about the revenue from the jetty business but let's use the following simple parameters to get a sense of the numbers:
1). Up to 5 vessels can berth at any one time and vessels berth for only 3 hours each.
2). Conservative average revenue of S$3,000 per vessel for berthing, crane services and labour.
3). Average of 2.5 vessels a day for 365 days a year.
The revenue would then be S$2.75 million a year.
Add on a host of other services that vessels are likely to require, and the potential upside to that conservative revenue guesstimate becomes evident.
Technics expects to welcome its first jetty customer before July 10, when a vessel is scheduled to arrive from India with a ROV (remotely operated vehicle) for demobilisation.
On a separate topic, we asked David about the termination of negotiations for a S$166-m contract from a potential South Asian customer (re: announcement of letter of award: TECHNICS in S$166m deal for gas facility).
David revealed that Technics and its consortium partner decided to walk away from the deal as the potential customer's terms were onerous.
See also forum: Technics Oil & Gas