Keppel Shipyard wins four contracts worth S$85m

SINGAPORE—Keppel Offshore & Marine, through its wholly-owned subsidiary, Keppel Shipyard, has won four contracts worth a total of S$85 million for the conversion, repair and modification of vessels, said the company in a statement yesterday.

“Despite the current challenging market conditions, we continue to receive a regular stream of conversion, repair and modification work from both new and long-standing clients,” said Mr Chor How Jat, managing director (conversions and repair), Keppel Offshore & Marine and managing director, Keppel Shipyard.

Keppel Offshore & Marine is a unit of Keppel Corporation.

Keppel Corp has been hit by an oversupply of offshore oil drilling rigs, with customers delaying contracts and orders while oil prices hover at about half their 2014 peak. In January, the company said it had cut 10,600 jobs last year in the offshore and marine division, comprising 35 per cent of the unit’s total direct workforce.

However Nomura analysts said in a note to investors in April that a slow but sustainable recovery in the South-east Asian offshore and marine sector had begun.

The first contract is from Dixstone Holdings Ltd, for the conversion of the M/T Tempera into an FPSO (a floating vessel located near an oil platform). Work is expected to commence in the third quarter.

For the second contract, Keppel Shipyard will carry out repair work for the life extension and conversion of an oil tanker into an FPSO, MTC Ledang, for new customer MTC Engineering. Upon its completion, the FPSO will be deployed to the Ophir Field, offshore peninsular Malaysia.

The third contract that Keppel Shipyard secured is from Royal Boskalis Westminster, for the conversion of a semi-submersible heavy lift vessel, Finesse, to a crane vessel.

The vessel, which is already berthed at Keppel Shipyard, will also be capable of transporting and installing offshore wind turbine foundations upon its completion in the third quarter of the year.

For the fourth contract, Keppel Shipyard will carry out major refurbishment for an Exmar Ship Management managed gas carrier, LNG Lerici. Work on the vessel has commenced and is expected to be completed in the first quarter of next year.

The above contracts are not expected to have a material impact on the net tangible assets or earnings per share of Keppel Corp for the current financial year, said the company.