Valmec, a leading energy, resources and infrastructure services group, has secured a Master Goods and Services Agreement with Origin Energy for the provision of compression facility, wellsite mechanical and electrical maintenance services.
The Agreement, with an estimated value of over $100 million, is for an initial term of 5 years and covers the provision of services at Origin’s Spring Gully gas facilities in South West Queensland. The Agreement may be extended further by Origin via two oneyear extension options.
Importantly, the new agreement supports Valmec’s long term commitment to the Maronoa and Western Downs regions to support local employment and community spend through works being delivered from Valmec’s operations facility in Roma, Queensland.
The agreement is the first major Asset Services contract secured by Valmec after last week unveiling an updated corporate strategy focussed on building out the Asset Services division to transition the Company into a full asset lifecycle provider (see ASX announcement ‘Valmec Strategy Update’,27 November 2020). The Origin contract also provides a significant boost to Valmec’s forward order book, lifting it to $193 million from $93million currently.
As the energy sector enters a major maintenance cycle, successful delivery of the Asset Services strategy will see Valmec pivot from its current heavy business weighting on design, construction and commissioning division to having at least 50% of the order book dominated by recurring service revenues.
Since 2016, Valmec has been providing Origin with maintenance and construction services on the APLNG Project’s upstream gas compression and power generation assets located in South West Queensland. The new five-year Agreement is another key step forward in this long-term relationship and highlights Valmec’s ability to deliver a ‘one-stop’ shop offering.
Valmec’s Managing Director Steve Dropulich said:
'Valmec has a long and proud working relationship with Origin which we are pleased to continue with this contract.
'Since starting work with Origin in 2016 we have provided specialist technicians, equipment and parts through preventative and corrective maintenance services as well as delivered brownfield construction services to the APLNG Project’s upstream gas compression and power generation assets.
'We are also proud of the active role we have played in the community and this long-term contract helps cement our Roma operations facility as a key regional hub for our business.
'Importantly, this agreement with Origin highlights our capabilities as a full-lifecycle provider, underpinning our Asset Services strategy update.'