TNB Fuel Services Sdn. Bhd. has signed 5 long-term Contracts of Affreightment (COA), valued approximately at US$537 million or RM2.3 billion for the shipment of coal from Indonesia.
The contract, 10 yrs and 15 yrs are with the following Malaysian shipping companies:
The awarding of the long-term COA reflects TNBF’s commitment in promoting and nurturing the growth of Malaysian owned shipping companies which eventually will allow them to own and/or operate Malaysian flagged vessels. Simultaneously, the long-term COA allows TNBF to diversify its freight contracts’ portfolio to 60% term COA, 20% spot contract and 20% long-term COA, subject to market condition.
As the Long Term COA commences, the total allocated 7.5 million tpy is actually less than 30% of the total shipping services required by TNBF in 2016 i.e. 27 million tpy. By 2019 when the coal requirement is anticipated to be around 40 million tpy, the Long Term COA will contribute to about 18.75% of the total shipping services.
The long-term COA is planned for shipments of coal from Indonesia since almost 60% of the coal procured by TNBF is from this country to the three (3) discharge ports namely Lekir Bulk Terminal (Manjung), Jimah Power Plant (Jimah) and Tanjung Bin Power Plant (Tg.Bin).
TNBF is the nominated coal and fuel supplier to TNB and Independent Power Producers having Power Purchase Agreements with TNB.
Edited from press release by Angharad Lock