Keppel Wins S$100 Million in Floating Production Conversion Work

Keppel Shipyard Ltd has been awarded two conversion contracts, worth a total of S$100 million, one by Prosafe Production Pte Ltd, and the other by Shipping Logistics Incorporated for a long term charter to Perenco S.A.

The first contract awarded by Prosafe is for the conversion of a 101,832 dwt double-sided tanker, MT Kudam, into a Floating Production Storage and Offloading (FPSO) facility.

Subic Shipyard & Engineering Inc (SSEI), an associate of Keppel Shipyard, will carry out the first phase of this FPSO conversion. This includes the demolition, refurbishment and preparation of the topside installation for the FPSO conversion in the Philippines. Keppel Shipyard will undertake the integration of the topside modules and the completion of the conversion work in Singapore.

Work on the vessel is expected to be completed by late 2008.

Mr. Nelson Yeo, Executive Director of Keppel Shipyard said, "Prosafe has entrusted us exclusively to carry out the conversion of all their FPSO and FSO systems in the last 10 years. With this new contract, the company has, to date, awarded us 10 projects.

"Our partnership with Prosafe is characterized by open communication, teamwork, flexibility and mutual understanding. We will support Prosafe in their efforts to meet the requirements of the offshore industry."

The FPSO, with an oil storage capacity of 700,000 bbls and production capability of 63,000 bopd and gas compression facility of 80 mmscfd, will be equipped with a Prosafe designed disconnectable internal turret mooring system. It will be leased to Apache by Prosafe for use on the Theo-Van Gogh deepwater oilfield off Western Australia.

Prosafe Production, the wholly-owned Singapore unit for Prosafe SE, is a major owner and operator of FPSO and FSO facilities worldwide.

The second contract is for a Floating Storage and Offloading (FSO) conversion for repeat customer, Perenco S.A. Perenco had recently awarded Keppel O&M two contracts. The first was to Keppel Shipyard for the conversion of the FSO Fernan Vaz. The second was to Keppel Verolme for the construction of a Mobile Offshore Application Barge (MOAB).

For this contract, the 138,105-dwt tanker is to be converted into a FSO unit to be named FSO Kalamu. It will be moored by a soft yoke arm, off the coast of the Democratic Republic of Congo.

The major scope of the conversion includes the installation of guide sheave foundations at the FSOs bow to enable connections to the soft yoke. It also includes the upgrading of accommodation facilities for 112 persons, as well as the installation of a gas turbine power generation package and a metering skid unit. The conversion of water ballast tanks into cargo oil tanks and the modification of the cargo and ballast piping system will also take place.

The FSO unit will have a storage capability of about 1.045 million barrels of oil upon its completion in the first quarter of 2008.

Keppel Shipyard is a wholly-owned subsidiary of Keppel Corporation, through Keppel O&M, a leader in offshore rigs, ship repair and conversion and specialized shipbuilding. Keppel O&Ms near market, near customer strategy is bolstered by a global network of 20 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 contracts are 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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