Malaysia-based Yinson Berhad stands out as one of the leading global operators in floating production, storage and offloading (FPSO) services. They specialise in engineering, construction, procurement, installation and commissioning (EPCIC). While FPSO operations are their main focus, they strategically entered the renewables sector in 2019, rapidly expanding their presence in renewable energy.
Yinson aspires to be a globally recognised independent power producer in clean energy. To achieve this, they established Yinson GreenTech (YGT), which is headquartered in Singapore. YGT invests in new technologies and businesses that facilitate the global transition to a low-carbon environment, particularly in the marine, mobility and energy sectors. In 2023, Farosson was founded in Singapore, specialising in sustainable infrastructure investing and offering advisory, investment and asset management services.
Drawing on their expertise in the marine and energy fields, Yinson set out to electrify the marine industry. In November 2023, they achieved a major milestone by launching their first all-electric cargo delivery boat, the Hydromover, for harbour operations in Singapore.
In an interview with The Edge Singapore, Lim Chern Yuan, group executive officer of Yinson, says the Maritime and Port Authority of Singapore (MPA) spearheaded this initiative. Lim acknowledges that it took the group several years to reach this point.
“We started small with offshore support vessels (OSVs), floating storage and offloading (FSO) vessels and small FPSO vessels. These projects used to cost around US$400 million ($539 million). Today, we are doing FPSO projects that are nearly US$2 billion. And that’s over many years,” adds Lim.
“You don’t go in and just build a mega vessel on your first try. Over time, we have collaborated with industry partners like MPA on the Hydromover. The important thing is to get feedback from the industry and users so that we can build bigger and better vessels over time.”
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To support the launch of these electric sea cargo vehicles, MPA has launched its first pilot trial for an electric harbour craft charging point at the Marina South Pier. This pilot, together with Pyxis Energy, Pyxis Maritime and SP Mobility, will deploy a 150-kilowatt land-based charger. This charger will be able to charge a 500kWh capacity battery in around three hours, giving it an operating range of about 90km.
MPA has also awarded an innovative mobile charging concept proposed by Seatrium O&G and a high-power (350-450 kQ) DC charger proposed by Yinson Electric. MPA expects all new harbour craft operating in the Port of Singapore to be fully electric, use B100 biofuel, or be compatible with net-zero fuels by 2030.
New age energy
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Yinson aims to make green technologies a major revenue source and develop profitable clean technologies and digital ventures. Lim recognises the scale of this task, realising it exceeds any company’s capabilities. Hence, he stresses the importance of collaboration.
The company also wants to electrify Malaysia and Singapore’s FPSO industry and land transport. “We have launched collaborations in this space almost every month. In Malaysia, we partner with the local telcos Celcom and Digi to host battery charge and swap stations for their clients,” adds Lim.
In Singapore, YGT has formed a joint venture with LHN EVCO (LHNEV), a subsidiary of locally-listed LHN Group, to bring charge-fast charging hubs and services, facilitating easy and accessible cross-border charging between the two countries.
Through the partnership, both parties will jointly contribute to developing the city-state’s public electric vehicle charging system infrastructure by exploring new locations for installing EV charging stations. Under the agreement, YGT will handle the commercialisation, procurement, operation and development of the EV charging infrastructure, while LHNEV will handle the installation and maintenance of the EV charging system and provide customer assistance.
LHN provides space optimisation and real estate solutions. The group is in the business of operating co-living properties, car parks, logistics and more. LHN manages over 70 car parks in Singapore and will focus on developing and managing the newly added high-speed charging stations at its car parks and explore expanding them to more suitable locations across its carpark network.
YGT has also partnered with local public and private transport operator ComfortDelGro C52 to launch what was once the largest combined EV charging network across Singapore and Malaysia. The partnership will offer motorists across both sides of the Causeway a combined network of over 1,000 charge points. This number is set to increase to 8,000 in 2030 (5,000 in Singapore and 3,000 in Malaysia), cementing the duo’s position as the largest combined EV charging network across Singapore and Malaysia.
“The EV adoption rate is improving in Malaysia, but this is just off a very low base. Over time, I see that EVs will replace many internal combustion engine vehicles. Over the past three years, EVs in Malaysia have been quite cheap and will spur adoption,” says Lim. Yinson will capitalise on this trend by offering customers charging station installation services and building its vehicle leasing fleet.
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Lim envisions Yinson as Malaysia’s largest charging infrastructure player in the long term. This aligns with the group’s “30 by 30” goal, a sustainability-driven initiative for a better future. Annual targets, such as zero spills and fatalities are part of this, along with longer-term goals like installing EV chargers and investing in green businesses by 2030.
In the FPSO space, Yinson plans to reduce its carbon intensity. It has a 2030 target of 11 kg of carbon dioxide equivalent per barrel of oil equivalent energy use (kgCO2e/BOE) for its offshore production fleet. It also intends to invest 30% of its equity in non-oil-based FPSO activities. On the renewables front, Yinson targets 5,600 GWh of renewable energy generated annually from plants with majority ownership.
While the group’s main goal is sustainability, Lim explains that it will retain its profitability while achieving its goals. In its latest FY2024 ended Jan 31, the group’s revenue increased by 84.2% y-o-y to RM11.6 billion ($3.2 billion), bringing earnings to RM964 million, some 63.7% higher than a year ago. The group’s offshore production and offshore marine segment led the growth.
“Sustainability is our core value and we have a green ambition, but we are not a green company. We are an energy infrastructure company trying to transition to green energy. The reality is that more than 90% of our income continues to come from the oil and gas industry,” says Lim.
The large increase in revenue from the group’s offshore production and offshore marine segment was attributed to the commencement of a project for FPSO Agogo, a RM422 million contribution from the group’s completion of the acquisition of AFPS BV and the effect of charter day rate escalation. These increases were partially offset by lower contributions from FPSO Maria Quitéria and FPSO Atlanta.
The renewables segment incurred a loss of RM41 million, narrowing from a loss of RM129 million a year ago, which was contributed by a lower impairment loss on property, plant and equipment. The green technologies segment also saw a RM23 million loss, narrowing from RM28 million, due to fair value gains of RM11 million on debt instruments issued by an associate, which were partially offset by an impairment loss of RM6 million recognised on investment in associate and higher operational overheads incurred to drive the future growth of the business segment.
The group’s other operations faced a loss of RM110 million, compared to RM70 million last year. This increase was mainly due to higher operational expenses, particularly personnel costs, invested to fuel the group’s future expansion. Joint ventures and associates together added RM3 million to the loss.
Investment opportunities
In the future, Lim plans to reduce the group’s dependence on income from the oil and gas industry and increase focus on the electric energy sector, which he sees as more environmentally friendly and cost-effective. To achieve this, the group is actively investing in various energy technologies. Lim predicts a significant increase in energy demand over the next 20 to 30 years due to technological advancements requiring substantial power.
As the group increases its energy investments, it may explore spinning off its businesses to improve investment opportunities. He adds: “Though it is not something we are looking at now, we have thought about it and it could happen in the future if we want to unlock value, as we have a lot of joint venture partners throughout the group. The key thing is to give value to our stakeholders.”
