Keppel Wins FPSO Conversion Contract from Prosafe

Keppel Shipyard, a wholly owned subsidiary of Keppel Offshore & Marine, has been awarded a conversion contract, worth around S$100 million by Prosafe Production.

The contract, signed with Prosafe, is for the conversion of a tanker into a Floating, Drilling, Production, Storage and Offloading facility (FDPSO). This will be the world's first converted FDPSO.

Keppel Shipyard will convert a Very Large Crude Carrier (VLCC) size tanker into an FDPSO constructed with a moonpool used for drilling purposes. It will have the drilling package modules and derrick integrated into the FDPSO. The provision of the drilling packages will be by Prosafe's client.

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

Mr. Nelson Yeo, Executive Director of Keppel Shipyard said, "We are excited at the prospect of building the world's first FDPSO for our long-time customer Prosafe. The FDPSO concept represents a cost-efficient solution for drilling and producing in deepwater fields. "

When completed, the FDPSO will have an oil storage capacity of about 1,300,000 bbls. Its gas compression capacity will be 18 MMscfd and its production capacity will be 40,000 bopd.

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

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&M's 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 contract is not expected to have material impact on the net tangible assets or earnings per share of Keppel Corporation for the financial year ending December 31, 2007.