Keppel Offshore units seal S$160m deal

One in the Philippines and another in the Netherlands.

According to a release, Keppel Offshore & Marine Ltd's (Keppel O&M) subsidiaries, Keppel Subic Shipyard, Inc. (Keppel Subic Shipyard) in the Philippines and Keppel Verolme BV (Keppel Verolme) in the Netherlands, have secured contracts totalling S$160 million.

Keppel Subic Shipyard has been awarded a contract from Shell Philippines Exploration BV (SPEX) to build a Depletion Compression Platform (DCP) to support the recovery of natural gas from the Malampaya gas field near Palawan Island, in the Philippines.

When completed, the DCP will be deployed next to an existing shallow water production platform. The DCP is designed to maintain the current availability and deliverability of natural gas from the Malampaya field through regulating the gas export pressure and flow rates.

Keppel Subic Shipyard will be responsible for the fabrication of the entire DCP, integration of the topside modules as well as the fabrication of the link bridge connecting the DCP to the shallow water platform. The DCP comprises gas compression facilities mounted on a barge deck, supported by four tubular legs on base footings.

Mr Michael Chia, Managing Director (Marine), Keppel O&M, said, "Over the years, Keppel Subic Shipyard has established a creditable track record in ship repair and major fabrication work. This DCP project is a good platform for us to further enhance our competencies for complex offshore work.

"With a 1,500 tonne gantry crane, various other cranes and worksite facilities which are being set up in conjunction with this project, we are positioning our yard with stronger capabilities to offer better services, take on more onshore and offshore fabrication projects as well as handle conversion work for Floating Production Storage and Offloading (FPSO) vessels, including the fabrication of topside modules.

"Keppel Shipyard in Singapore, which has extensive experience in offshore production modules, is supporting Keppel Subic Shipyard on its work scope. Keppel Subic Shipyard will work closely with all stakeholders to ensure that the project is delivered to the highest quality, in a safe and timely manner."

Mr Sebastian Quiniones, Managing Director of SPEX and Malampaya Asset Manager, said, "Keppel Subic Shipyard has demonstrated that it is one of the most comprehensive yards in the Philippines and a natural choice for us for this project. We are confident that with Keppel's experience and competencies, the yard will be able to deliver the project to our highest satisfaction and enable us to support the Philippine government's goal towards energy security."

The development of the DCP forms Phase 3 of the Malampaya Deep Water Gas-to-Power project, which is jointly undertaken by government agencies and private companies. The Philippine Department of Energy leads in this project, and is supported by a consortium comprising the Malampaya project operator, SPEX, and its joint venture partners, Chevron Malampaya LLC and the Philippine National Oil Company-Exploration Corporation (PNOC-EC).

Over in the Netherlands, Keppel Verolme has secured a contract from its repeat customer Heerema Marine Contractors Nederland B.V. (HMC) for the drydocking survey of the deepwater construction vessel (DCV) Balder. One of the largest crane vessels in the world, Balder measures 154 metres (m) in length and 86m in width, and is capable of lifting 6,300 tonnes.

The yard's work scope for this project includes the painting of the hull, bracings and cranes. It will also undertake steel renewals, as well as the maintenance and repairs to the tanks, including piping and conservation works. The vessel is expected to be delivered in 1Q2013.

This is Balder's second visit to Keppel Verolme; in 2001, it underwent an extensive conversion programme at the yard. The project work scope included the construction of facilities to receive the 120m-high pipe-laying tower and accompanying components.

Another project recently completed by Keppel Verolme for HMC was the life extension of the DCV Thialf, HMC's largest such unit. Over the years, Keppel Verolme has undertaken several major projects for HMC.

Mr Harold Linssen, Managing Director of Keppel Verolme, said, "Keppel Verolme is pleased to be of service to our repeat customer Heerema Marine Contractors again and look forward to delivering yet another high quality project to them safely, on time and within budget. We pride ourselves on our ability to respond swiftly to our customer's needs with innovative and cost-effective solutions."

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.