Keppel Adds New FPSO Conversion, Rig Repair Contracts to Orderbook

Keppel Offshore & Marine Ltd (Keppel O&M), through its subsidiaries, Keppel Shipyard Limited (Keppel Shipyard) and Keppel FELS Limited (Keppel FELS), has secured contracts worth S$160 million for a Floating Production Storage and Offloading (FPSO) vessel conversion, a Derrick Lay Barge completion and the life extension of a semisubmersible rig.

Tong Chong Heong, CEO of Keppel O&M said, "As market sentiments liven up, we are receiving more enquiries with some new contracts materializing in the last quarter of this year.

"Including these latest contracts, for the year-to-date, the Keppel O&M group has secured contracts totalling S$1.5 billion. Overall, the new contracts have helped to replenish our orderbook as we end a peak year of deliveries."

The first contract was secured by Keppel Shipyard for the conversion of an FPSO from Emas Offshore Construction and Production Pte Ltd (EOCP), a subsidiary of EOC Limited (EOC). This is the second project Keppel Shipyard will undertake for EOCP, having completed the conversion of Lewek Arunothai, an FPSO for deployment in Thailand.

Lim Kwee Keong, CEO of EOC, said, "We are looking forward to another successful project with Keppel Shipyard. They have proven to be a reliable partner to execute our projects successfully and safely. We are glad to have Keppel Shipyard's expertise as we grow a fleet of premium FPSOs in the region."

The conversion of the Suezmax tanker into an FPSO is expected to be completed in 1Q 2011 and will be able to produce up to 50,000 barrels of oil per day (bopd), and store about 680,000 barrels of oil. The converted FPSO unit will be leased to Premier Oil Vietnam Offshore B.V. for the development of the Chim Sao field, offshore southeastern Vietnam.

The major scope of work for the conversion includes refurbishment and life extension works; accommodation upgrade; fabrication and installation of topside modules and turret mooring system, flare tower, helideck and pipe racks; tank coating work; structural steel additions and new piping systems. It will also feature an internal turret designed by EOC's associate company, London Marine Consultants (LMC).

Separately, Keppel Shipyard has also secured a job to complete the NorCE Endeavour, a Derrick Lay Barge for NorCE Offshore Pte Ltd.

Keppel Shipyard will undertake the installation of various equipment, the furnishing of a new 284-man accommodation block, the fabrication and installation of outfitting steel, painting works, as well as assist in the vessel's commissioning.

Expected to be completed in 2Q 2010, the 146 meter-long barge will incorporate a modern 1100 metric tonne ringer crane and advanced pipe-lay equipment, which will enable it to operate in a wide range of offshore marine construction activities in the region.

Meanwhile, Keppel FELS has won a job to repair and perform life extension works on M G Hulme Jr, a deepwater semisubmersible rig for Transocean Ltd.

Work on the rig is expected to commence in 1Q 2010 when the vessel arrives from West Africa. The scope involves the refurbishment of existing accommodation, installation of a new accommodation block and helideck, various machinery overhauls and inspections.

The vessel will be deployed to operate in Libya for Gazprom with delivery expected in 2Q 2010.

"We would like to thank our customers EOC, NorCE Offshore and Transocean for their continued support and trust in Keppel O&M and our subsidiaries. As we continue to pursue new jobs, we remain committed to deliver on our promises and be the global industry’s preferred offshore and marine partner," Tong said.

Keppel Shipyard and Keppel FELS are subsidiaries of Keppel Corporation Limited through Keppel O&M. Keppel O&M is a global leader in offshore rigs, shiprepair and conversion, and as well as specialised shipbuilding. Its "Near Market, Near Customer" strategy is bolstered by a global network of shipyards 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 a provider of choice and a partner for solutions in the offshore and marine industry.

The above contracts are not expected to have material impact on the net tangible assets and earnings per share of Keppel Corporation for the financial year ending 2009.

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