KUALA LUMPUR, 1 July 2019 – PETRONAS has awarded a group-wide, long-term Master Service Agreement (MSA) for Integrated Turnaround Main Mechanical and Maintenance Mechanical Static (TA4MS) to 17 local contractors to streamline its plant turnaround and daily maintenance vendor management.
The game-changing move, a consolidation of turnaround and daily maintenance contracts would provide local Oil & Gas Services & Equipment (OGSE) players with the avenue to increase their capability and capacity, while significantly achieving cost savings for the national oil company.
TA4MS will cover all onshore facilities encompassing Upstream and Downstream, including the Liquefied Natural Gas (LNG) re-gasification terminals (RGT), involving 28 operating units (OPUs) and is expected to deliver a cost savings of 5 per cent to 15 per cent over the next five years.
With this integrated approach, PETRONAS has grouped the different disciplines, streamlining its processes to involve fewer main contractors to service the entire plants, instead of having multiple small contractors servicing many low-value jobs. With higher-value contracts and a sustained workload, this approach enables contractors to grow and invest in developing a constant pool of skilled workforce.
PETRONAS Vice President of Group Procurement, Samsudin Miskon said this approach to turnaround and maintenance contracting is timely, to meet an expected increase in demand, following the strong growth downstream, especially at the Pengerang Integrated Complex (PIC).
Samsudin said, “This contract integration is in line with PETRONAS’ long-term efforts to empower local vendors, to increase their competitiveness and heighten their resilience against the ever-evolving industry landscape. We hope more local companies will be able to undertake all turnaround and daily maintenance jobs in their entirety, offering plant and equipment reliability that would create more value.”
Out of the 17 contractors who were awarded the contract, five are joint ventures (JVs) between local and foreign companies, with the Malaysian partners leading the collaborations. Through these JVs, the local contractors can leverage on their international partners’ expertise to increase their capabilities and accelerate their growth.
Samsudin added, “The implementation of TA4MS will promote collaboration and process simplification through reduction of several contracts required to execute a turnaround. This would also help improve Health, Safety & Environment (HSE) standards, productivity and quality of work, reducing reworks and shortening schedules by avoiding repetitive tasks.”
All 17 contractors have also been appointed as PETRONAS’ Vendor Development ProgrammeX (VDPx) anchor companies, to extend their knowledge and assistance to smaller industry players within their ecosystem.