Chinese Yards Eye SBI's $1B Jackup Contract, Gain Ground in Newbuild OSVs

Chinese Yards Eye SBI's $1B Jackup Contract, Gain Ground in Newbuild OSVs
Chinese yards eye a $1 billion jackup contract from SBI Offshore, while gradually establishing themselves in the newbuild offshore support vessel market.

The Asian ship building industry is keeping an eye on who will win a $1 billion jackup construction contract expected in the fourth quarter of this year, with China-based shipyard tipped given its price-competitiveness.

Singapore’s SBI Offshore Ltd. is negotiating the contract with a Middle East-Chinese consortium to build five shallow-water jackups, each costing around $200 million. The jackups would be delivered in phases over the next six years for deployment in 360 feet (110 meters) water depth in Asia.

A number of industry officials said, when asked by Rigzone, that the Chinese yards would snare the deal, given the cheaper steel and labor costs.

“The confidence is growing for building time-sensitive projects at Chinese shipyards. The Chinese are also seeking advanced technologies including dynamic positioning (DP) systems,” a European technology vendor told Rigzone.

Concern about the quality of projects and delivery schedules at Chinese shipyards have receded somewhat in recent years.

Malaysia’s globally renowned Nam Cheong Ltd. has endorsed the track record of leading Chinese yards, saying they were as good as any in the world for building offshore support vessels and other marine structures.

“The Chinese shipyards have shown improved quality that is on par with European builds. Increasingly, the Chinese shipyards have shown their capabilities in building large and sophisticated vessels,” Nam Cheong CEO Leong Seng Keat said.


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