Keppel Offshore & Marine Ltd (Keppel O&M), through its wholly-owned subsidiary Keppel Singmarine, has strengthened its track record in the Liquefied Natural Gas (LNG)-related business by securing a contract worth a total of S$103 million to build two LNG carrier vessels for Stolt-Nielsen Gas B.V. (Stolt-Nielsen Gas), a subsidiary of Stolt-Nielsen Limited.
As part of the contract, Keppel Singmarine has also secured options to build another three similar units for Stolt-Nielsen Gas. The latter has 6, 12 and 18 months from the effective date of the contract to exercise the options respectively.
Mr Abu Bakar, Managing Director of Keppel Singmarine, said, "We are pleased to be selected by Stolt-Nielsen Gas to build their first two small-scale LNG carriers. Keppel yards have repaired a number of vessels for Stolt Tankers previously and we are glad to be able to further support them with our wide range of products and services.
"This order extends our track record in providing solutions along the LNG value chain, which includes two dual-fuel harbour tugs that we are currently building. We are able to leverage our shipyard's capabilities and innovative LNG research and development to meet our customer's needs."
The LNG carriers are expected to be completed in 2Q and 3Q 2019 respectively. They will each have a capacity of 7,500 metre cube, and come equipped with engines that can run on both diesel and LNG. The carriers will have a class notation for bunkering which adds to their versatility to not only transport but also provide LNG bunkering services if required.
There is a growing demand for small-scale LNG carriers especially for end users located in remote areas not served by pipelines. Tighter regulation on emissions continues to encourage growth in small-scale LNG projects which are economical and quick to market.
As a specialised shipbuilder, Keppel Singmarine is at the forefront of developing vessels that can run on LNG. In October 2016, it secured orders to build two dual-fuel (diesel/ LNG) harbour tugs based on its award-winning proprietary design. The 65-tonne bollard pull capacity tugs can run on both LNG and diesel fuel and was awarded the Outstanding Maritime R&D and Technology Award by MPA.
The abovementioned contract is 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.