Duratec Secures $45M PNG Contract With Newmont Subsidiary in Geographic Expansion
Duratec Limited (ASX: DUR) has announced the Duratec PNG Services Contract Award, with its wholly owned subsidiary securing a ~A$45 million contract with Lihir Gold Limited, a subsidiary of Newmont Corporation. The 12-month contract marks Duratec’s first services delivery in Papua New Guinea, expanding an existing client relationship into a new geography through the provision of plug and abandonment (P&A) services at the Lihir Operations.
Duratec secures ~$45 million PNG contract with Newmont subsidiary
The contract, awarded to Duratec (PNG) Limited, is expected to generate revenue of approximately $45 million over the 12-month term, subject to scope and performance. A portion of the work relates to Phase 1 of the Lihir Nearshore Soil Barrier (NSB) Project, with additional scope available to Duratec as approved by Newmont.
This award represents an important milestone in Duratec’s expansion in the Energy and Resources services sector and marks its continued growth in the Papua New Guinea market. The contract demonstrates Duratec’s ability to grow wallet share with major global mining clients by following them into international operations, a capital-efficient growth approach that leverages existing relationships rather than competing for new clients.
Work is expected to commence immediately with the mobilisation of equipment and personnel under standard commercial terms with no material conditions precedent.
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What are plug and abandonment services?
Plug and abandonment (P&A) services involve the safe sealing and decommissioning of wells that are no longer productive or required for operational purposes. This specialised, technically complex service requires specific expertise and equipment to ensure wells are permanently sealed in compliance with environmental and safety regulations.
In the context of the Lihir Operations, P&A services form part of the Nearshore Soil Barrier Project, a specialised environmental management initiative. The work involves integrated services to safely execute well P&A activities, ensuring compliance with regulatory requirements whilst minimising environmental impact.
This represents a growing market segment as mining operations mature and environmental regulations tighten globally. For contractors like Duratec, P&A services offer recurring revenue opportunities as operators increasingly require specialised decommissioning capabilities.
Scope of work at Lihir Operations
The contract scope includes the provision of integrated services to safely execute well P&A activities at the Lihir Operations in Papua New Guinea. Key elements of the scope include:
- Provision of integrated services for safe well P&A execution
- Support for Phase 1 of the Lihir Nearshore Soil Barrier (NSB) Project
- Additional scope available as approved by Newmont
- Immediate mobilisation of equipment and personnel
- Standard commercial dry hire arrangements for required equipment
The 12-month contract term provides Duratec with revenue visibility, whilst the scope for additional work offers potential upside beyond the initial ~$45 million value.
How Duratec will deliver the project
Duratec (PNG) Limited will deliver the project by leveraging experienced personnel from across the group, together with established subcontractors with extensive technical and local experience. The project will also be supported by the broader technical expertise of Duratec’s joint venture, DXP Energy Solutions.
Equipment required for the project will be sourced under standard commercial dry hire arrangements, allowing Duratec to mobilise quickly without significant capital expenditure.
| Delivery Component | Provider |
|---|---|
| Lead contractor | Duratec (PNG) Limited |
| Technical expertise | DXP Energy Solutions JV |
| Local execution support | Established subcontractors |
| Equipment | Dry hire arrangements |
This delivery structure enables Duratec to combine group-wide technical capabilities with local knowledge and execution experience, positioning the company to deliver specialised services efficiently in a new geographic market.
Strategic significance for Duratec’s growth
The Duratec PNG Services Contract Award represents an important milestone in the company’s expansion in the Energy and Resources services sector and marks its continued growth in the Papua New Guinea market. The contract validates Duratec’s cross-selling capability, demonstrating the company’s ability to win new work by leveraging existing relationships rather than competing for greenfield clients.
This capital-efficient growth strategy allows Duratec to expand its geographic footprint by following established clients into new markets. By growing alongside existing clients into geographies where they operate, Duratec minimises business development costs whilst capitalising on proven relationships and technical credibility.
For investors, the contract demonstrates Duratec’s ability to convert existing client relationships into expanded revenue opportunities. The Newmont relationship, now extending into Papua New Guinea, illustrates how Duratec’s multi-disciplinary capabilities and technical expertise can drive organic growth without significant capital deployment.
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Managing Director’s outlook
Chris Oates, Managing Director
“We’re delighted to expand our relationship with Newmont through the delivery of services in Papua New Guinea for the first time. This award reflects Duratec’s ability to deliver specialised services by leveraging expertise across our group, including DXP Energy Solutions, and supports our strategy of growing alongside existing clients into geographies where they operate.”
The Managing Director’s commentary emphasises the strategic importance of the expanded Newmont relationship and the milestone achievement of delivering services in Papua New Guinea for the first time. The statement highlights Duratec’s group capability leverage strategy, which enables the company to deliver specialised, technically complex services by drawing on expertise from across its operations.
This approach positions Duratec to pursue similar geographic expansion opportunities with other major clients, potentially creating a repeatable growth model that leverages existing relationships into new markets.
Contract terms and conditions
The contract operates under standard commercial terms with the following key parameters:
- Contract value of approximately $45 million subject to scope and performance
- 12-month contract term
- No material conditions precedent
- Additional scope available as approved by Newmont
- Further details subject to standard confidentiality obligations
The revenue is subject to scope and performance, which is typical for services contracts of this nature. This structure aligns Duratec’s compensation with project execution and provides flexibility for scope variations as the project progresses.
The absence of material conditions precedent allows for immediate mobilisation, enabling Duratec to commence work and begin generating revenue without delay. The potential for additional scope provides upside optionality beyond the initial contract value, subject to Newmont’s approval as the project develops.
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