Happy new year 2023 to all my readers. May you continue to be blessed with good health and good wisdom for your investment journey.
2022 was a rough year for most of the investor as the market is very volatile with wars, geo-political tension, election, rising interest rate, covid lock down. However, one thing that is certain for 2023 is a very positive outlook from Petronas on the local and international oil and gas prospect.
As we entered into a series of energy transition - towards cleaner energy, the current set up and infrastructure will slowly transit in stages with hydrogen as a core clean energy, and as an energy storage medium.
To achieve a cleaner energy production, an important aspect in the production of sour gas oil field (oil field with high CO2) will require carbon dioxide to be stored into depleted oil well instead of being released into the atmosphere. Another aspect of it will see the storing of CO2 into depleted oil well from the process of refining LNG into hydrogen.
All the method will require the installation of oil and gas pipe from production site into depleted storage well, which can run into more than 100 kilometers.
According to the Petronas 2023 to 2025 outlook activities, the required pipeline will run up to 11,000 kilometers.
Wah Seong Corporation Bhd (Waseong 5142) expertise in the oil and gas pipeline coating is the leading company in this niche industry. It has got a range of track record in the international presence, including the 1200 km long NORD STREAM 2.
In Feb 2022, Waseong announced RM 1 billion contract from EAST AFRICAN CRUDE OIL PIPELINE.
In Dec 2022, Waseong surprised the market with a topside module contract for YINSON FPSO worth USD 127 million.
However, there are still many other prospects for future project to be won by Waseong from the carbon capture and storage infrastructure.
1. Sarawak KASAWARI - site to storage approx 110km
2. Terengganu - blue hydrogen (CCS)
Waseong to see strong reversal on project impairment?
Waseong had in FYE 2021 impaired all the project that is being delayed due to oil price slump and covid19. However, all those projects in the middle east had since restarting slowly in stages.
The revival of project will be going to see massive reversal from the project impairment that runs up to more than RM 200 million.
On the technical outlook, Waseong does trade in technical points by looking at parallel lines created by 1 and 3, and project the parallel line to upwards spot 2 to predict the 4th spot.
The current upwards trend might signal a reversal on spot 3 (in green) heading towards spot 4 region.
After all, Waseong is fully impaired in its book, and do not have anything much to lose, but have everything to gain with a bright prospect in the oil and gas industry.
I am obliged to inform my readers that I owned Waseong shares. Currently at the price of RM 0.64, will it be a good entry point?
