Specialised engineering business SRJ Technologies (ASX: SRJ) has been awarded a contract with the Abu Dhabi National Oil Company (ADNOC), which this week made history with its drilling unit becoming the largest-ever initial public offering (IPO) on its national bourse.
SRJ’s contract involves designing, manufacturing and installing pipeline asset integrity solutions for pipeline, flange and valve systems on Das Island in the Persian Gulf.
The deal forms phase one of a ‘fast-track’ project to enable the use of adjoining facilities by eliminating the risk of gas leaks. SRJ has received its first order for this phase, which covers the site survey and design engineering valued at $160,000.
On completion of phase one, an additional purchase order is anticipated for phase two which SRJ said is “currently not quantified but expected to be significantly higher value”.
Phase two is expected to start in early November and comprises the manufacture and installation of about 25-30 of SRJ’s pipeline/flange/valve leak mitigation systems. Completion is scheduled for the end of the December 2021.
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ADNOC is a state-owned company of the United Arab Emirates and the world’s 12th largest oil company by production. Its extensive onshore and offshore production and processing facilities produce more than 3 million barrels of oil per day in total.
The oil giant’s drilling arm, ADNOC Drilling, started trading on the Abu Dhabi stock exchange on Sunday following its $1.1 billion IPO. At listing, it had a market capitalisation of about $10 billion with shares reportedly surging over 30% in early trade.
This is the second public flotation of a company owned by the oil major after it listed the petrol station and convenience store operator ADNOC Distribution in 2017.
SRJ chief executive officer Alex Wood said the contract demonstrates ADNOC’s recognition of the value the company’s products and expertise can bring to maintaining the integrity of its facilities.
“We look forward to delivering this project to assist ADNOC in their drive for business excellence and to meet their long-term safety and sustainability commitments,” he added.
SRJ specialises in coupling links for pipeline joints and weld-free leak and containment solutions. Eliminating the need to weld the parts on significantly reduces installation time, which is especially important for emergency repairs.
Today’s news follows the award of a contract in August for SRJ to supply its BoltEx inventory to offshore facilities owned by oil and gas major Qatar Petroleum.