Keppel O&M Signs 30-Year Deal to Manage China's Titan Quanzhou Shipyard

Keppel Corporation reported Wednesday that the company's unit Keppel Offshore & Marine Ltd (Keppel O&M), through its wholly owned subsidiary, FELS Offshore Pte Ltd, has signed a management services agreement with Titan Petrochemicals Group Limited (Titan) - a company in which commodities trading conglomerate Guangdong Zhenrong Energy Co. Ltd. (GDZR) is a major shareholder - and Titan Quanzhou Shipyard Co. Ltd (TQS), to manage the TQS shipyard.

TQS, located in Quanzhou in Fujian Province, is one of the largest shipyards in China, occupying a total area of 271 acres (110 hectares) with 11,811 foot (3,600 meter) length of coastline.

When completed, TQS will have 4 ultra-large and wide dry docks, including one of the largest modern-designed docks in China, which will enable it to convert double hull vessels such as Floating Production Storage and Offloading (FPSO) units. Besides ship repair and conversion capabilities, the yard is also able to construct offshore rigs including jackups and semisubmersibles.

Under the agreement which is for a 30-year period, renewable thereafter as mutually agreed, the yard, managed by Keppel O&M, will undertake projects using Keppel's proprietary designs.

TQS is wholly-owned by Titan, which is a provider of logistics, transportation, distribution and marine services for petrochemical products in Asia. This agreement is conditional on the completion of the on-going financial restructuring of Titan and the resumption of the trading of its shares on the Hong Kong Stock Exchange.

Chow Yew Yuen, CEO of Keppel O&M said, "The offshore oil and gas market in China has been growing significantly, and there is increasing demand for high specification rigs and production vessels. At the same time, China is a market which has strong preference for China-made products. Having this yard is an extension of our near market, near customer strategy and enables us to service the Chinese market with our suite of proprietary solutions while meeting its requirement of building in-country. This is further complemented by our other shipyard in China, Keppel Nantong, which undertakes specialized shipbuilding and offshore fabrication."

"With 20 yards around the world, we have the experience in managing existing shipyards and optimizing their operations, just as we have done so in Brazil, the Netherlands, USA and the Philippines. Together with the strength of GDZR's extensive connections and experience in China, and our expertise and established track record in the global offshore and marine industry, we are confident that this is a win-win partnership that will enable Keppel and Titan to become a major offshore solutions provider for China."


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