Sembawang Shipyard Bags $480M Contract from Saipem for 2 FPSO Conversions

Sembcorp Marine announced Monday that its wholly-owned subsidiary Sembawang Shipyard has secured a Floating Storage Production Offloading (FPSO) conversion contract worth about $480 million (SGD 600 million) from Saipem SA, France for the conversion of two FPSOs for the Kaombo Project in Offshore Angola.

Sembawang Shipyard was awarded this milestone contract on the strength of its capabilities and established track record in the field of FPSO conversion, modification and upgrading work. Under the contract, the Shipyard is responsible for the conversion of two Very Large Crude Carriers (VLCCs) sister ships into two turret-moored FPSOs for the Kaombo project located in offshore Angola, approximately 94 miles (150 kilometers) from the coast.

Major works also include refurbishment of the VLCCs, construction engineering, the fabrication of flare, helideck, upper turret and access structure, integration of the topsides modules (which will be fabricated at Saipem’s Indonesian Yard) and lower turret components, and pre-commissioning of the FPSOs. The two converted FPSO units, owned by Total, will each have an oil treating capacity of 115,000 barrels per day, a water injection capacity of 200,000 barrels per day, a 100 million standard cubic feet per day (MMscf/d) gas compression capacity and a storage capacity of 1.7 million barrels of oil.

Ong Poh Kwee, deputy president of Sembcorp Marine and managing director of Sembawang Shipyard, said: “The award is a strong endorsement of our Shipyard’s capabilities in the highly specialized field of FPSO conversion, modification and upgrading work. We thank Saipem for selecting Sembawang Shipyard to execute this prestigious contract and for their trust and confidence in our high Health, Safety, Security and Environment (HSSE) standards, quality, project management know-how, engineering design, outfitting and commissioning capabilities. We are fully committed to work closely with all partners involved in this milestone project for a successful outcome. The buoyant offshore market offers exciting opportunities for both the Shipyard and owners and we look forward to a long-term collaborative partnership with Saipem.”

The first VLCC, Olympia, is expected to enter Sembawang Shipyard in third quarter 2014 while the second VLCC, Antartica, will be in the Shipyard in first quarter 2015. The total project duration will be 32 months.

The above contract is not expected to have any material impact on the consolidated net tangible assets per share and earnings per share of Sembcorp Marine for the year ending Dec. 31.


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