Valmec inks $22m gas pipeline contract with Jemena

Valmec ASX VMX Jemena gas distributor pipeline Atlas pipeline
Valmec has secured more than $35 million in new energy and infrastructure contracts across Australia during the last month.

Energy services group Valmec (ASX: VMX) has snapped up a major contract with leading Australian gas distributor Jemena, adding another $22 million to its order book.

The company today reported the immediate commencement of the contract, which involves facility construction works at Jemena’s Atlas gas pipeline project in south west Queensland.

It will be delivered on a turnkey basis, with the project due to be completed later this year.

This latest deal is the result of the continued relationship between Valmec and Jemena following its recent completion of commissioning support services at the Northern Gas Pipeline compression facility in Mount Isa, Queensland.

It also follows about $25 million in new services and construction contracts awarded over the last two months, with Valmec’s order book now standing at around $80 million.

These recently announced contracts include the early renewal of a long-term services contract with Origin Energy (ASX: ORG), on behalf of the Australia Pacific LNG joint venture in Queensland, valued at about $15 million per annum.

Other new deals include: facility construction for Mineral Resources (ASX: MIN) on its Wodgina pipeline; compression installation for Beach Energy (ASX: BPT) in the Cooper Basin; and infrastructure development works for the Pilbara Ports Authority and Water Corporation in Western Australia.

According to Valmec, its latest contract award with Jemena was a “testament to the company’s specialised range of execution capabilities and industry experience, which makes Valmec the benchmark service provider for gas compression and processing infrastructure”.

“As we enter a new calendar year, we are excited about our developing project pipeline and continued expansion of our service portfolio as we look forward to further boosting our order book with high quality earnings during FY19 and beyond,” Valmec managing director Steve Dropulich said.

The company currently has a total project pipeline valued in excess of $436 million, including more than $176 million of new work in the tender submission phase.

Atlas gas pipeline project

The Atlas gas pipeline project is a 60km long underground pipeline that stretches between oil and gas operator Senex Energy’s (ASX: SXY) Atlas gas field in the Western Downs region of Queensland to Jemena’s Darling Downs pipeline.

The project also includes a compressor station, located close to the Atlas field.

Jemena and Senex are aiming to deliver first gas to the east coast domestic market by late 2019.

Danica has extensive experience writing and editing business news in the Oceanic and Southeast Asian regions. She has written across a range of industries including oil and gas, mining, energy, science and research, retail and travel. Danica has covered small and large cap companies listed on the Australian, Singapore, Hong Kong, Indian, London and Toronto exchanges.