Keppel Clinches Conversion, Specialized Shipbuilding Contracts

Keppel Offshore & Marine (Keppel O&M), through wholly-owned subsidiaries Keppel Shipyard and Keppel Singmarine, has clinched new contracts totaling S$240 million.

These comprise the upgrading of a Floating Production Storage and Offloading (FPSO) vessel, the conversion of a livestock carrier, as well as the building of a diving support vessel.

With these latest projects, the total value of new contracts secured by Keppel O&M in 2010 has edged up to S$3.2 billion.

Mr. Nelson Yeo, Managing Director (Marine) of Keppel O&M, said, "I would like to thank our customers for their confidence in the capabilities of the Keppel O&M group of companies. These latest contracts strengthen the mutual trust and partnership we have established. As a partner for solutions, we constantly strive to provide safe and high quality services to our customers."

For one of these contracts, Keppel Shipyard has been engaged by long-time customer Single Buoy Moorings Inc (SBM) for the fast track modification and upgrading of FPSO Espadarte, which was previously converted by the yard in 2000.

The FPSO is expected to arrive in Keppel Shipyard in the second quarter of 2011. Keppel Shipyard's work scope includes upgrading the accommodation facilities, modifying the existing topside modules and internal turret mooring system, as well as installing and integrating new topside process modules.

FPSO Espadarte is expected to return to Brazil in the first quarter of 2012 where it will be deployed by Petrobras in the Baleia Azul field in Campos Basin.

Mr. Tony Mace, CEO of SBM Offshore said, "Keppel has long been a preferred partner of SBM, having collaborated on numerous FPSO projects since 2000. Throughout our strong working relationship, the Keppel team has consistently lived up to their schedule commitments, promises of reliability, and quality service. We are confident this project will be of the same high standards."

Keppel Shipyard's current projects with SBM include the conversions of FPSO Okha, FPSO Aseng and FPSO Cidade de Paraty.

Additionally, Keppel Shipyard has secured its third livestock carrier conversion project from the Hijazi & Ghosheh Group, a world-leading owner and operator of such vessels. This contract involves converting the Reestborg container ship into a livestock carrier for Hijazi & Ghosheh's affiliate company, Reestborg Compania Naviera S.A.

Keppel Shipyard's work scope includes providing design engineering services, equipment procurement, as well as modifying the ship's structural, piping and electrical systems. When completed in the second quarter of 2011, the livestock carrier will ply the route between Australia and the Middle East.

Fortifying its track record for customized ship solutions, Keppel Singmarine has also won a contract from a Malaysian customer to build a diving support vessel.

The 80-meter ship will be based on a new design specially developed by Keppel's Marine Technology Development unit for the customer. When completed in the second quarter of 2012, this diving support vessel will be able to perform multiple functions including rescue and subsea operations.

The above contracts are not expected to have material impact on the net tangible assets and earnings per share of Keppel Corporation for the financial years ending 2010 and 2011.


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