SembCorp Marine & WTorre Form JV for Brazilian Shipyard

Shipyard, a subsidiary of SembCorp Marine, and WTorre Empreendimentos Imobiliários SA has signed a Memorandum of Understanding to form a joint-venture company to own and operate a shipyard in Brazil. The company for this purpose already exists under sole control of WTorre Group since 2006.

WTorre is a large and an established civil engineering group with expertise and capabilities in infrastructure development based in Sao Paulo, Brazil. The strategic partnership with WTorre is in line with SembCorp Marine’s strategy to deepen its commitment and investment in Brazil to further grow its offshore business.

Located in the Southern Brazilian city of Rio Grande, the shipyard with an estimated total land area of 553.880 m2 will be equipped with a graving dock of 133 m x 350m in size, with ancillary steel fabrication facilities. The new drydock, to be fitted with a 600-ton gantry crane, will be the largest and the first purpose-built facility to be built in Brazil for three decades. It is capable of handling the construction and repair of semisubmersible units, including the largest production rigs, ship-shaped FPSOs and fullscale topside fabrication capacity. The construction started in November, 2006, and will be completed in June, 2008.

Petrobras is expected to use the facilities of the shipyard for its projects, and has also signed contract for this purpose, by renting the shipyard for the next ten years.

On the rationale for the partnership with WTorre, Mr. Wong Weng Sun, President and COO of SembCorp Marine said "We have been a key player in Brazil’s oil and gas construction industry since 1997. In 2001, we teamed up with the Synergy Group in Brazil to participate in the revival and modernization of the country’s marine and offshore industry in Niteroi in the state of Rio de Janeiro. The shipyard, Maua Jurong, is today an established yard achieving world-class status. It has well-equipped shipyard facilities, plentiful skilled workforce and proven track record in the offshore oil and gas industry."

"Having fulfilled our obligations and intention, we have exercised our Put Option on the expiry of our joint-venture agreement. Meanwhile, we have been invited by WTorre to develop the marine and offshore infrastructure and to operate and own a shipyard, targeting at the oil and gas construction industry in Southern Brazil, in the city of Rio Grande. The shipyard, when completed in 2008, will be the largest shipyard in the Southern Hemisphere and is ideally located in close proximity to cater to the potential offshore market in West Africa. Equipped with one of Brazil’s largest newbuild drydock, the yard is well-positioned to handle semi-submersible rigs, FPSO conversions and newbuild production semi-submersibles and topside modules. It will cater to the needs of Petrobras projects" added Mr. Wong.

Currently, Jurong Shipyard is in an advanced stage of negotiations on the terms of the joint-venture partnership with WTorre Group. A further announcement will be made upon finalization of the agreements.

WTorre is a large and an established civil engineering group with expertise and capabilities in civil and engineering infrastructure development in Brazil. Headquartered based in Sao Paulo, WTorre has more than 20 years of experience in Brazilian real state and, throughout these years, has contributed to the development and valuation of it. Nowadays, the company has more than 4.000.000 square feet built and is consolidated as one of the largest construction groups working on corporate buildings.

WTorre’s main values are accomplishment of workmanships, newness of proposals, efficiency in every square feet and the use of high standard technology. The company has made large investments in the construction of corporate buildings and, recently, has announced new business on residential segment.

Jurong Shipyard, a wholly-owned subsidiary of SembCorp Marine, is a one-stop total shipyard that has built up a strong reputation in ship repair, shipbuilding, ship conversion, rig building and offshore engineering.

A global leader in the offshore conversion of Floating Production Storage and Offloading facilities for the offshore oil & gas industries, Jurong Shipyard has converted the most number of vessels for Petrobras, Brazil’s national oil and gas company. These include 6 FPSO units, 1 FPU and 2 FSO units. The yard’s successful delivery of FPSO Petrobras 50 in 2006 was a major milestone in Brazil’s goal of achieving oil self-sufficiency. The Petrobras 54, which had its hull converted in Jurong Shipyard, is currently undergoing the final stages of topsides commissioning in Brazil and will be delivered soon.

In addition to its offshore conversion expertise, Jurong Shipyard is also an industry leader in ship repair and a niche shipbuilder with specialty in the design and construction of 2,600 TEU containerships, and the building of ice-class chemical tankers and cable-laying vessels. It is also an innovator in the building of highly sophisticated semi-submersible and jack-up rigs, with proprietary capabilities in fast-track semisubmersible construction.