The contract is subject to certain conditions being met by 30 April 2007.
The new-generation floatel will be built to the DSS20NS DP3 design, co-developed by Keppel's R&D arm, Deepwater Technology Group and Marine Structure Consultants.
Accommodation semis, also known as Floatels, provide accommodation for the additional workforce required for offshore construction, maintenance services or platform decommission work. Accommodation vessels also provide construction support with their large deck area and crane support for the handling of goods and materials.
Mr Peter Jacobsson, Chief Executive Officer of Floatel International, said, "The existing fleet of floatels has an average age of 25 years. This will not be able to satisfy the growing demand for safe and reliable offshore accommodation services, both in terms of number of units, as well as their quality."
The increased investments in new deepwater and harsh environment developments will require new, high-specification DP3 Floatels.
Mr Jacobsson added, "The new floatel will be the industry's first for the North Sea in more than 20 years. As such, we recognize the importance of working with a proven shipyard capable of delivering quality projects.
"We are convinced that Keppel FELS, with its track record of on-time and on-budget delivery of quality products, is the right shipyard to build a North-Sea compliant floatel."
Mr Choo Chiau Beng, Chairman & CEO of Keppel O&M, said, "There is a strong demand for accommodation floaters worldwide. We have developed the DSS20NS DP3 accommodation semi design in anticipation of this need."
The innovative DSS20NS DP3 design is a combination of the tried and tested DSS 20 semi drilling rig design and the SSAU 3600 accommodation semi. Keppel FELS has previously built the Maersk Explorer and the Safe Concordia based on the two respective designs.
Upon delivery in the second quarter of 2010, the new floatel will meet the most stringent rules and regulations for worldwide operation including the Norwegian North Sea sector with accommodation for 440 men. It will also be the first floatel to be equipped with DP3 (Dynamic Positioning 3) capabilities, resulting in a safer, environmentally friendly, and more optimal and reliable unit.
The new-generation DSS20NS DP3 will also provide the following benefits to its operator:
Mr Choo added, "This enhancement in design underscores Keppel's continued commitment in providing best-in-class solutions to meet our customers' needs. As the demand for advanced drilling and production equipment increases, technological innovation will sustain our long-term competitive edge.
"We are committed and will continue to invest in the research, design and development of products and processes that will help us to continue to grow and meet the needs of the market."
Floatel International Ltd. was established 2006 and is incorporated under the laws of Bermuda. Floatel International's business idea is to build and acquire offshore accommodation vessels to support the expanding oil and gas industry. The vision of the company is to own and operate the most modern fleet of accommodation and construction support vessels to satisfy the increased market demand – both in terms of increased activity and our customer's requirement for modern vessels able to support new challenging projects in deep water and hostile environments.
Keppel FELS is a wholly owned subsidiary of Keppel Corporation, through Keppel O&M, a leader in offshore rigs, shiprepair and conversion and specialized shipbuilding. Keppel O&M'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, the group aims to be the provider of choice and partner in solutions for the offshore and marine industry.
The contract is not expected to have material impact on the net tangible assets or earnings per share of Keppel Corporation for the financial year ending 31 December 2007.
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