Published March 31, 2009

Keppel's yards win three contracts worth $300m

The deals are for various construction and conversion projects

By VINCENT WEE

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KEPPEL Corp's Keppel Shipyard and Keppel Fels Brasil units have secured three contracts worth a total of about $300 million for various small construction and conversion jobs.

Securing jobs: Keppel Shipyard says it is encouraged by the confidence shown by its repeat customers

The first two projects, secured by Keppel Shipyard from repeat customers Bumi Armada and Single Buoy Moorings (SBM), are for the construction of a derrick lay barge and the modification of a floating production storage and offloading (FPSO) vessel.

The third contract, won by Keppel Fels Brasil from new customer Noble Drilling (Nederland), is for the completion of a deepwater drilling semisubmersible rig.

'During these uncertain times, we are encouraged by the confidence shown to us by our repeat customers who appreciate our good quality and service. We look forward to the continued partnership and completing projects to their satisfaction,' said Keppel Shipyard executive director Nelson Yeo.

The first contract from Bumi Armada Bhd is to build a derrick lay barge for pipe laying operations with a 100-metre scope.

The job will involve the construction of two separate hull strips which will be mechanically completed in Keppel Shipyard before being transported through the narrow Volga-Don River Canal System to a shipyard in the Caspian Sea for the joining of the vessel.

The hull strips are expected to cross the canal by November. These are typically relatively simple jobs worth around $120 million, perhaps slightly more with the added logistics complexity involved.

The second project from SBM is for the modification of the FPSO Capixaba, which was a fast-track conversion carried out by Keppel Shipyard in 2006.

The new work scope includes the installation of four new modules and the associated integration plus modification of the existing topsides and turret. The FPSO is currently deployed in the Golfinho field, Brazil, and is expected to arrive at Keppel Shipyard in August.

FPSO Capixaba will be modified and upgraded for operation in the Cachalote field in offshore Brazil. The vessel is expected to be back in operation in Brazil in early 2010 and is expected to be operating in Cachalote for 12 years.

In Brazil, Keppel is making use of its local unit, BrasFels, to take on a contract from Noble Drilling (Nederland) for the completion of the ultra-deepwater semisubmersible drilling rig Noble Dave Beard, which is scheduled to arrive in Brazil at the end of the month.

The scope of work to be performed by Keppel Fels Brasil includes the mechanical completion of the rig, as well as assisting in the commissioning and installation of customer specified equipment.

Upon its expected completion in the fourth quarter, the rig will be chartered to Petrobras for work in offshore Brazil.

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

Keppel shares closed 31 cents lower at $4.96 yesterday.