J. Ray Signs JV with CSIC for New Fabrication Facility in China

McDermott International, Inc. announced that a subsidiary of J. Ray McDermott, S.A. has entered into a joint venture with a subsidiary of state-owned China Shipbuilding Industry Corporation (CSIC).

The joint venture company, Qingdao McDermott Wuchuan Offshore Engineering Company Ltd., plans to establish a new facility on over 111 acres in HaiXiWan, Qingdao, Shandong, China.

This new facility is anticipated to be strategically located adjacent to two new CSIC shipyards: Qingdao Wuchuan Heavy Industry Co. Ltd. (J. Ray's joint venture partner) and Qingdao Beihai Shipbuilding Heavy Industry Co. Ltd. In this developing area, CSIC has one floating dock and five dry docks capable of accommodating vessels up to 500,000 deadweight tons. McDermott Wuchuan anticipates focusing its business on floating, production, storage, off-loading (FPSO) vessel construction and integration.

"FPSOs represent one of the fastest growing offshore construction segments in our industry today," said Bob Deason, J. Ray's President and Chief Executive Officer. "China already commands a significant share of this market and has developed a proven project track record. Establishing this new joint venture focusing on FPSO's will add a critical component to J. Ray's comprehensive business strategy."

McDermott Wuchuan is planned to complement each partner's respective strengths. J. Ray's integrated engineering, procurement, construction and installation ("EPCI") capabilities and more than 60 years of international market experience will bring to the partnership consistency of methods, standards and procedures, and continuity of mature accredited project management systems, with a superior safety culture.

McDermott Wuchuan's new facility is initially expected to permit annual throughput of up to 33,000 tons, expending approximately six million man-hours, per year. The facility will include structural and pipe shops, blasting and painting facilities, module assembly buildings, covered warehousing and lay down areas.