Keppel Offshore & Marine Ltd (Keppel O&M) has through its wholly-owned subsidiaries, Keppel FELS Limited (Keppel FELS) and Keppel Shipyard Ltd (Keppel Shipyard), secured contracts from repeat customers worth approximately S$130 million for a newbuild dredger and the modification of a Floating Production Storage and Offloading vessel (FPSO).
Mr Chris Ong, CEO of Keppel O&M, said, "We are pleased to secure these contracts from repeat customers as it reflects the market's confidence in Keppel O&M's customised solutions for newbuild vessels and FPSO conversions. This is the third newbuild dredger for Van Oord and the third FPSO project for Yinson. We are able to leverage the experience of working closely with our customers as well as our engineering and construction expertise to further improve productivity on their projects."
The first contract is between Keppel FELS and Van Oord to build a high-specification Trailing Suction Hopper Dredger (TSHD). This follows from an option(*1) granted to Van Oord based on earlier contracts entered in May 2018 for two similar dredgers.
Expected to be completed in 1Q 2022, the TSHD will have a hopper capacity of 10,500m3. The dredger will be built to the requirements of classification society Bureau Veritas (BV) and will be LNG ready.
Mr Jaap de Jong, Director, Ship Management Department at Van Oord, said, "The Keppel team has demonstrated strong project management expertise as well as firm commitment for the timely delivery and safe execution of our current projects. We are thus pleased to extend our partnership with this additional dredger. These dredgers are part of our strategic fleet renewal plan, and we look forward to their delivery between 2021 and 2022."
The TSHD is equipped with a climate control system which utilises the vessel's existing cooling and heating sources to recycle energy, as well as automation systems which send production data to the shore support centre for processing. The dredger will also be certified with the BV Green Passport and Clean Ship notations.
To date, Keppel has delivered three dredgers, including the world's first European Union (EU) Stage V dredger. Including the exercise of this option, Keppel currently has five dredgers on order with hopper capacities ranging from 6,000m3 to 10,500m3.
The second contract is between Keppel Shipyard and Yinson Nepeta Production Ltd, a wholly-owned subsidiary of Yinson Production Pte Ltd (Yinson), for the fast-track modification and upgrading of FPSO Allan. Keppel Shipyard's scope of work includes refurbishment and life extension works, fabrication and installation of a new riser balcony, spread mooring system and helideck, as well as modification of the vessel's topsides and marine systems.
The project for Yinson is scheduled to commence in 3Q 2019 with delivery expected in 1Q 2020. Upon completion, the FPSO will have a storage capacity of 700,000 barrels of oil and a processing capacity of 60,000 barrels of oil per day. It will be deployed in the Anyala and Madu fields, offshore Nigeria for First Exploration and Petroleum Development Co Ltd.
Mr Eirik Barclay, CEO of Yinson Offshore Production, said, "We have chosen to partner with Keppel Shipyard for this fast-track upgrade project just as the market is showing a positive trend with an increasing number of both project awards and tenders. We very much look forward to working with Keppel on this project and are confident that they, once again, can provide a high-quality, safe and on-time delivery to Yinson."
The above contracts are not expected to have a material impact on the net tangible assets or earnings per share of Keppel Corporation Limited for the current financial year.
(*1) - As announced on 16 May 2018, Keppel O&M's wholly-owned subsidiary Keppel Singmarine Pte Ltd and Van Oord entered into contracts to build two high specification TSHDs with an option granted to Van Oord for a third dredger. Following negotiations, it was agreed that the third dredger will be constructed by Keppel FELS.