Keppel Clinches S$210 Million Conversion and Newbuild Contracts
Keppel Offshore & Marine Limited has secured contracts worth a total of S$210 million to carry out the conversion of two floating production storage and offloading (FPSO) facilities and the construction of five Anchor Handling Tug/Supply (AHTS) vessels.
Mr. Nelson Yeo, Executive Director of Keppel Shipyard, a wholly-owned subsidiary of Keppel O&M, said, "Enquiries for FPSOs and offshore support vessels (OSVs) remain active and we expect this to continue, particularly for FPSO and FSO facilities. We see a strengthening in demand for upgrading and conversion of such vessels.
"Keppel is poised to meet these demands by drawing on our strong track records, competent staff in project management and engineering, skilled workforce and integrated global network of yards to offer high value added services and solutions to our customers."
The conversion contracts were clinched by Keppel Shipyard from regular customers, Monaco-based Single Buoy Moorings (SBM) and Frontline FPSO Ltd (Frontline), a new business unit of Frontline Ltd. of Bermuda.
Keppel Shipyard will convert for SBM the 310,000 dwt VLCC Litiopa into a FPSO, FPSO Saxi, which will have oil production capacity of 100,000 barrels of oil per day (bopd) and storage close to two million barrels of oil.
When completed in early 2008, the vessel will be leased to ExxonMobil for the Kizomba C Development, offshore Angola in West Africa.
This is Keppel Shipyard's ninth similar project for SBM since 2000. Its last project from same owner is the FPSO Mondo which was secured in June and will be leased to ExxonMobil. SBM is one of the world's largest operators of FPSOs and FSOs.
Keppel Shipyard will also carry out the conversion of a 112,000 dwt shuttle tanker, Front Puffin, into a FPSO facility for Frontline whose parent company commands the world's largest modern fleet of VLCCs, Suezmax tankers and Suezmax OBO carriers.
Upon delivery, Front Puffin will be able to produce up to 40,000 barrels of oil per day and store up to 720,000 barrels of oil. It will be leased to AED Oil Ltd for the Puffin Field, Bonaparte Basin in North Western Australia.
Keppel Shipyard has a strong track record of more than 60 FPSO and FSO conversion and upgrading projects. Currently, it has in hand six other FPSO and FSO projects.
Another wholly owned subsidiary of Keppel O&M, Keppel Singmarine Pte Ltd has secured five 62-meter AHTS vessels from first time customer, Whitesea Shipping & Supply LLC (WSS).
The vessels will be constructed in Keppel Nantong Shipyard, bringing the total number of vessels being built by the Chinese yard to 13 units. Deliveries for these vessels are scheduled between 2008 and early 2009 for operation in the Middle East.
Based in the United Arab Emirates, WSS is a regular customer of Arab Heavy Industries, an associate of Keppel O&M, which services WSS's fleet of offshore support vessels.
Keppel O&M, a wholly-owned subsidiary of Keppel Corporation Limited, is a global leader in offshore rigs, shiprepair and conversion, and as well as specialised 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 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 or the net earnings per Keppel Corporation Limited share for FY2006.
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