Valmec's big LNG play

OIL and gas service provider Valmec has revealed its bullish sentiment towards the coming operational phase of resources boom by acquiring major US field and workshop support player Exterran’s Australian subsidiary for an undisclosed sum.

Anthony Barich

Valmec is now strategically positioned in project lifecycle as Queensland’s three LNG projects start production over the next two years, as Exterran already has sales and operations presence on Australia’s east coast.

On completion, Exterran’s Australian subsidiary will become part of the Valmec Group and will operate as Valmec Services Pty Ltd.

The acquisition turns Valmec into a full end-to-end contractor providing engineering, procurement, construction, servicing and maintenance services to the civil and gas industries.

The deal also gifts Valmec with greater access to Tier 1 Australian oil and gas producers, shippers and utility providers with a blue chip client base, plus new recurring streams, including long-term shipping agreements, technical service agreements and high volume labour and parts sales transactions.

It also exposes Valmec to new higher-value engineering, procurement and construction projects further up the supply chain, with the support of a global partner in Exterran.

The acquisition – which will be funded from cash reserves and additional debt facilities – nets Valmec about 50 staff, 75% of them field, workshop technicians and parts specialists, with an experienced management team with a proven track record.

Valmec managing director Steve Dropulich said the acquisition, coupled with the execution of an exclusive sales representation agreement and technical services agreement with Exterran Holdings, were key milestones in his company’s “single source” delivery strategy.

“We recognised that we needed an Australian-based full sales and service proposition, as part of our strategy of providing a ‘sole source solution’ to our clients,” he said.

“The acquisition of Exterran Holdings’ Australian subsidiary together with the execution of key sales, services and supply agreements with US-based Exterran, expands Valmec’s capabilities in the sector and leverages both groups to the expanding Australian gas sector.”

US-based Exterran is an industry leader in natural gas compression products and services, with annual sales exceeding $US3 billion. Exterran Holdings employs roughly 10,000 staff across over 30 countries, including a long-term sales presence in Australia.

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