This is what's in store for Cosco in latest semi-sub venture

The US$200m contract includes options for additional two units.

According to Nomura, Cosco Corp has signed a contract valued at over US$200mn to construct a harsh environment semi-sub accommodation vessel for Axis Offshore.

Here's more from Nomura:

The vessel will be built to Global Maritime’s GM500A design with a capacity of 500 persons and a DP3 (dynamic positioning) system designed to operate in the North Sea. The vessel is scheduled for delivery in 30 months (i.e. 1Q2015) from the Cosco Qidong shipyard.

The contract will be made effective within 3 months from the date of signing. We understand from the company that the buyer is still arranging for financing – a condition precedent for the contract. According to the buyer’s press release, the contract with Cosco includes options for two additional units, valid for 12 months and 24 months respectively.

Axis Offshore is a 50/50 joint venture between Danish shipowner, J. Lauritzen, and Norwegian private equity fund, HitecVision. Axis Offshore currently owns an accommodation and support vessel on a long-term contract with Petrobas.

J. Lauritzen is a repeat customer of Cosco’s and has taken delivery of 2x shuttle tankers from Cosco during the last 12 months. J. Lauritzen has been in operation since 1884 and now operates a fleet of over 150 vessels which includes offshore vessels, LNG carriers, tankers and bulk carriers. It now owns 3x shuttle tankers in its offshore division.

It is unclear whether the shipyard will make a profit from the building contract at this point. We looked toward recent accommodation semisub orders from Keppel Corp and Sembcorp Marine for a benchmark.