Keppel Offshore & Marine’s (Keppel O&M) wholly owned subsidiary Keppel Shipyard has secured a floating production storage and offloading (FPSO) conversion contract as well as three repair, upgrade and modification contracts worth a total of about US$89 million (S$125 million).
The FPSO conversion project Keppel Shipyard will be undertaking is for Armada Madura EPC Ltd, a joint venture between long-standing customer Bumi Armada Berhad (Bumi Armada) and Shapoorji Pallonji Group (Shapoorji Pallonji).
"This is our third conversion/upgrading project for the joint venture. We are confident that this FPSO will be as successful as our first two FPSOs, Armada Sterling and Armada Sterling II, which have been performing excellently at the D1 field and Cluster 7 field in India respectively. This also marks our thirteenth conversion/upgrading project for Bumi Armada,” said Michael Chia, managing director at Keppel O&M.
Work on the FPSO conversion, which has commenced, is scheduled to complete in 3Q 2016. Upon completion, the FPSO will produce for the Madura Strait Block BD which is located 65km east of Surabaya and about 16km south of Madura Island, Indonesia.
Separately, Keppel Shipyard has been awarded major repair, upgrade and modification contracts by Totem Ocean Trailer Express (Totem Ocean), Dolphin Drilling and Saipem Offshore Norway (Saipem Offshore). Dolphin Drilling and Totem Ocean are new customers to Keppel Shipyard while Saipem Offshore is a returning customer.
Keppel Shipyard's contract with Totem Ocean is for the world's first conversion of a large roll-on/roll-off cargo vessel to operate on a dual-fuel diesel LNG propulsion system. The work scope is a complex undertaking of the replacement of four engines, adding 2200cu m of LNG capacity along with the addition of 47km of new cabling.
When the conversion is completed, the vessel, Midnight Sun, will produce less greenhouse gas emissions, reducing emissions of particulate matter by 91%, nitrogen oxides by 100%, sulphur oxides by 90% and carbon dioxide by 35%.
Keppel Shipyard's work for a drillship of Dolphin Drilling, Belford Dolphin, includes renewal survey and modification, while for its project with repeat customer Saipem Offshore, Keppel Shipyard will undertake major refurbishment and upgrading works that include installation of a new 750-tonne abandon and recovery winch and additional thruster, as well as living quarters extension for a field development ship.
The above is not expected to have any material impact on the net tangible assets and earnings per share of Keppel Corp., the parent company of Keppel O&M, for the current financial year.