Malaysia's MISC unit eyes $1 bln funding - source

KUALA LUMPUR, Nov 27 (Reuters) - A subsidiary of Malaysian shipper MISC Bhd, the world's largest carrier of liquefied natural gas, may raise up to $1 billion to fund its expansion activities, a source familiar with the plan said on Monday.

Malaysia Marine and Heavy Engineering Sdn Bhd could borrow between $500 million and $1 billion, the source said.

"It's still very preliminary," the source said, adding that the company had not yet appointed any banks to handle the fund-raising exercise.

MISC and Malaysia Marine were not immediately available for comment.

Malaysia Marine, previously known as Malaysia Shipyard & Engineering Sdn Bhd, provides marine and heavy engineering services to the oil, gas and related industries. Its building yard is one of Southeast Asia's largest.

Malaysia Marine Managing Director Wan Yusoff Wan Hamat said in September that the company would upgrade its capacity to win orders for complex and high-value drilling rigs and production platforms to meet the growing demand.

Recent discoveries of deep-sea wells have pushed up demand for offshore facilities such as production platforms, semi-submersible rigs and drilling rigs.

Malaysia Marine's 123-hectare (304-acre) yard in southern Malaysia recently finished building the hull of its first deep-water floating production platform, known as a Truss-Spar.

A Truss-Spar has a submerged cylindrical hull anchored to the sea-floor above an oil well. Its dry topside houses drilling, processing and storage facilities. It is usually made in European and U.S. yards and deployed in the U.S. Gulf of Mexico.

Malaysia Marine's Truss-Spar is the first to be built by an Asian yard and was ordered by French oil-and-gas services firm Technip for use in Malaysia's first deep-water field, Kikeh, which is being developed by U.S. oil firm Murphy Oil .

Shares of MISC, Malaysia's third-biggest listed firm valued at $9.4 billion, have fallen 7.5 percent since the start of the year, compared with a 19 percent gain for the benchmark share Kuala Lumpur Composite Index .

MISC shares were up 1.1 percent at 9.20 ringgit at 0716 GMT. ($1=3.633 Malaysian Ringgit)

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