Mr Paul Carsten Pedersen, Group Senior Vice President of Maersk and Mr Nelson Yeo, Executive Director of Keppel Shipyard (centre) seal the contract for Maersk Contractors’ second FPSO conversion out of Singapore.

Keppel Shipyard Limited (Keppel Shipyard), a wholly-owned subsidiary of Keppel Offshore & Marine Limited (Keppel O&M), has secured contracts worth over $215 million for its excellent track record in Floating Production Storage Offloading (FPSO) conversions.

These include the conversions of a tanker for Maersk Contractors and the first US Gulf of Mexico FPSO for BW Offshore.

Second FPSO for Maersk

The latest Maersk Contractors contract is for the conversion of the company’s second FPSO out of Singapore. The FPSO will have a new VLCC hull that is due to arrive in the yard from China in the fourth quarter of 2008, and is expected to complete by end 2009.

Mr Nelson Yeo, Executive Director of Keppel Shipyard, said, “We are delighted that Maersk Contractors has entrusted us with a second FPSO. This is a vote of confidence to the good work we have accomplished together on the first vessel, which is nearing completion. We look forward to continuing our excellent partnership to deliver yet another quality project.”

Mr Paul Carsten Pedersen, Group Senior Vice President of Maersk, said, “Maersk and Keppel have built a longstanding partnership on mutual understanding, trust and teamwork. We are impressed with what Keppel Shipyard has done for us on the first FPSO, which will be named this weekend. It is natural to appoint Keppel Shipyard again for our latest FPSO, a project which we believe they will complete to a similarly high degree of satisfaction.”

The workscope on the fast-track outfitting of the newbuild VLCC includes the installation and integration of the topside modules; the fabrication, installation and integration of the APL internal turret, flare tower, process piperack and helideck; and the upgrading of the accommodation. The FPSO will operate in a water depth of around 100 metres at the Peregrino field in Brazil’s Campos basin, and is capable of producing 100,000 bopd with a storage capacity of 1.6 million bbls.

Maersk Contractors is part of the A.P. Moller - Maersk Group and is a significant drilling contractor and supplier of floating production solutions. The fleet counts 26 drilling rigs and four FPSOs including five high efficiency jack-up rigs, three deepwater development semi-submersibles and one FPSO vessel under construction.

First FPSO in the US Gulf of Mexico

BW Pioneer Ltd, an affiliate of BW Offshore, has awarded Keppel Shipyard a contract to convert the first FPSO for the Cascade and Chinook fields in the US Gulf of Mexico (GoM).

When completed in the third quarter of 2009, the FPSO will be turret moored at a water depth of around 2600 metres – the deepest waters ever for an FPSO. It is designed to disconnect and move by its own propulsion to safe waters from an approaching storm.

Mr Svein Moxnes Harfjeld, CEO of BW Offshore commented: “We have great confidence in Keppel Shipyard and in their abilities and experience, based on our former collaboration. Being the first FPSO for the US GoM waters, the Cascade and Chinook project represents a great challenge in many ways. Keppel Shipyard’s solid competence is therefore of strong value”.

Executive Director of Keppel Shipyard, Mr Nelson Yeo said, “This is the second FPSO conversion awarded to Keppel Shipyard by BW Offshore since the conversion of FPSO Berge Helene in 2005. We thank BW Offshore for this trust and are delighted to carry out work on the first FPSO to be deployedin the US GoM.“

To be named BW Pioneer, the FPSO will have a storage capacity of about 600,000 barrels of oil, a process capacity of 80,000 bopd and gas export facilities of 16 mmscfd. This FPSO unit will be leased by Petrobras America Inc., and production on the Cascade and Chinook fields is expected in the first quarter of 2010.

Listed on the Oslo Stock Exchange, BW Offshore is one of the world’s leading FPSO contractors and a market leader in advanced offshore loading and production systems in the oil and gas industry with 25 years’ experience and a solid track record.

Keppel Shipyard is a wholly owned subsidiary of Keppel Corporation, through Keppel O&M, a leader in offshore rigs, ship repair and conversion and specialised shipbuilding. Keppel O&M’s near market, near customer strategy is bolstered by a global network of 20 yards in the Asia Pacific, Gulf of Mexico, Brazil, the Caspian Sea, Middle East and the North Sea regions. Integrating the experience and expertise of its yards worldwide, the group aims to be the provider of choice and partner in solutions for the offshore and marine industry.
The above contracts are not expected to have material impact on the net tangible assets or earnings per share of Keppel Corporation Limited for the financial year ending 31 December 2008.