ST Engineering's marine arm inks S$179m shipbuilding contract

Two additional Offshore Support Vessels and a series of upgrades will be done.

In a release, Singapore Technologies Engineering Ltd (ST Engineering) announced today that its marine sector has won shipbuilding and repair contracts worth about S$179m. These wins include a contract to build two additional Offshore Support Vessels (OSVs) as well as a series of repair and upgrading projects.

On shipbuilding, Hornbeck Offshore Services, LLC (Hornbeck) has exercised the options for two additional OSVs valued at about S$111m (US$89m), to be built by the marine sector’s US shipyard, VT Halter Marine. On 18 November 2011, VT Halter Marine announced the contract to construct eight 97.2m long OSVs worth about S$441m (US$353m) for Hornbeck, with options for up to 24 additional identical vessels. These two new vessels are expected to be delivered in the fourth quarter of 2014 and first quarter of 2015.

Based on VT Halter Marine’s Super 320 design developed for Hornbeck, the DP2 OSVs are designed to have approximately 20,800 bbl of liquid mud carrying capability, 1,136sqm of deck area and a fire-fighting class notation. All the OSVs will be constructed in VT Halter Marine’s yards at Moss Point Marine and Halter Moss Point in Mississippi.

On ship repairs and upgrading, ST Marine has secured a series of contracts not involving Hornbeck in the last two months worth about S$68m, on track with its focus to support the burgeoning oil and gas exploration activities. These include repairs and upgrades to various types of OSVs such as drillship, dredgers as well as a rig. The last of these projects are expected to be completed by the first quarter of 2013.

“We shall continue to ride on the demand for offshore support vessels and pursue this segment with our track record as a shipbuilder and repairer of choice for such vessels.” ~ NG Sing Chan, President, ST Marine

These contracts are not expected to have any material impact on the consolidated net tangible assets per share and earnings per share of ST Engineering for the current financial year.