The contract, signed in Perth, Australia, by Mr. Nick Harrison, General Manager of North West Shelf Shipping and Ms Lee-Lin Wong, Executive Director and General Manager of Sembawang Shipyard Pte Ltd, commits the retrofitting and dry-docking of a number of NWS Liquefied Natural Gas (LNG) carriers to SembCorp Marine's Sembawang Shipyard and Jurong Shipyard for a five-year term with an option for extension of the contract. Sembawang Shipyard and Jurong Shipyard are subsidiary shipyards in the SembCorp Marine Group. The NWS venture owns and operates nine LNG ships which require dry docking services every 30 months. Approximately half of the refits will be performed by SembCorp Marine, while the remainder of the refits will be performed in the facilities of the original Japan Consortium builders, who have a separate agreement with NWS to provide similar type of services. In addition to the conventional refit scope work, a number of other major tasks are planned for the next five (5) years, including among others, the replacement of halon fire fighting systems with environmentally friendly alternatives, TBT paint removal, and vessel life extension.
The signing of the long-term contract marks a major milestone in the collaborative relationship between NWS and SembCorp Marine as it commits both partners to co-operating in the area of ship-repair and related services with the key objective of achieving short and long-term mutually compatible goals in HSE (Health, Safety and Environment), quality, timely delivery, cost and technology advancement.
iuWe have worked with SembCorp Marine over the years, the first being the refit of Northwest Shearwater and Northwest Swift in Sembawang Shipyard in 2001 and 2002 respectively and most recently the Northwest Swallow and Northwest Swan, earlier this year. The NWS venture firmly believes that for any partnership to be successful, it must be forward-looking with a clear and well defined focus. We look forward to working with SembCorp Marine in achieving safe, high quality and on-time delivery maintenance targets for our fleet of nine LNG carrierslc, said Mr Nick Harrison, General Manager of NWS Shipping.
"This prestigious award is a major milestone achievement for SembCorp Marine's Sembawang Shipyard and Jurong Shipyard as it is the first long-term LNG refit contract between a world renowned LNG ship operator with a Singapore shipyard group. We are honored and grateful to be chosen by NWS as their Singapore based partner. We have worked with the shipping entities of the various NWS owners for 5 years and this award thus gives great satisfaction to our team. This is also a strong affirmation from the large LNG operators of SembCorp Marine's capabilities in the highly specialised LNG refit market. We are confident that with NWS, we will work towards enhancing long- term partnership through value creation and leveraging our complementary skills and capabilities to improve and enhance the operating performance of NWS's fleet and SembCorp Marinelp, said Ms Lee-Lin Wong, Executive Director and General Manager of Sembawang Shipyard.
With the signing of this contract, NWS LNG vessels are scheduled to undergo maintenance drydocking and repairs including several major upgrades in SembCorp Marine's Sembawang Shipyard and Jurong Shipyard, at an estimated US$45 million (S$75 million) over 5 years. The Northwest Seaeagle will be the first vessel to be drydocked under the contract, first in the series of 3 LNG carriers scheduled for refits in 2005.
The long-term LNG refit contract is not expected to have any material impact on the net tangible assets and earnings per share of SembCorp Marine for the year ending December 31, 2004.
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