Keppel Secures S$130 Million FPSO Contracts from Prosafe

Keppel Shipyard Ltd has been awarded two contracts valued at approximately S$130 million for the conversion of two new Floating Production Storage and Offloading (FPSO) facilities for Prosafe Production.

Over the last nine years Keppel Shipyard has been Prosafe's exclusive provider of conversion services for all their FPSO and FSO systems.

Keppel Shipyard has completed six FPSO/FSO conversions for Prosafe since 1997.

With these two FPSO conversions projects, the number of such projects carried out by Keppel Shipyard for Prosafe will add up to eight.

Mr. Nelson Yeo, Executive Director of Keppel Shipyard said "We are delighted with the trust and confidence that Prosafe has in Keppel Shipyard. We will continue to focus on fast track conversions to further strengthen our market position."

Added Mr. Hugh Parry, Managing Director of Prosafe Production, "We have entrusted Keppel Shipyard with the conversion of a number of sophisticated FPSO projects due to their strong track record. We have confidence in their reliable and quality service."

The first award is for the conversion of the 25-year old tanker, M.T. Apollo, into an FPSO capable of handling a daily oil production of 90,000 barrels of oil per day (bopd), daily fluid capacity up to 150,000 barrel of fluid per day (bfpd) and having a storage capacity of 1.78 million barrels of oil.

The work scope for the 257,865 dwt tanker will include the fabrication and installation of the internal turret, flare tower and helideck; integration of production skids, boilers and turbo alternators and renewal of bottom plates, as well as internal tank blasting and painting.

Upon delivery in end 2006, the facility will be deployed in Polvo Field off Brazil for Devon Energy.

The second award is for the conversion of a Suezmax tanker, a 25-year old tanker, M.T. Ionikos, into an FPSO capable of handling a daily production of 50,000 bopd, daily fluid capacity up to 120,000 bfpd and having a storage capacity of 770,000 barrels of oil.

Work on the vessel will include the fabrication and installation of the internal turret, flare tower and helideck; integration of production skids, boilers and turbo alternators; renewal of bottom plates, and internal tank blasting and painting.

Due for completion in first quarter 2007, the FPSO facility will be deployed at the Tui Field located in the Taranaki Basin offshore New Zealand for New Zealand Overseas Petroleum Ltd.

Keppel Shipyard is the world leader in FPSO/ FSO conversions, having completed 56 FPSO/ FSO conversions and upgrading projects since 1981. It is also the leading yard in ship repair and other vessel conversion.

An innovative supplier of products and services in niche areas in the global offshore oil and gas industry, Prosafe is a leading owner and operator of FPSO/FSO vessels outside the North Sea, specializing in the supply, lease and operation of cost-effective vessels for projects where the company can differentiate itself through its innovative proprietary system designs, e.g. mooring systems and fluid swivels, and long proven track record.

Keppel Shipyard is a wholly owned subsidiary of Keppel Corporation Limited through Keppel Offshore & Marine (Keppel O&M). Keppel O&M is a global leader in offshore rigs and ship conversion and repair as well as a specialized shipbuilder. Combining the expertise and experience of its subsidiaries, Keppel FELS, Keppel Shipyard and Keppel Singmarine, the group's near market, near customer strategy is bolstered by a global network of 17 yards in the Asia Pacific, Gulf of Mexico, Brazil, the Caspian Sea, Middle East and the North Sea regions. Integrating the experience and expertise of its yards worldwide, Keppel O&M aims to be a provider of choice and a partner in solutions for the offshore and marine industry.

The contracts are not expected to have material impact on the NTA and earnings per share of Keppel Corporation for the financial year ending 2006.


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