18 Feb 2005

Sembawang Shipyard And SMOE To Build New FPSO Topsides Facilities For ConocoPhillips China Inc.

Sembawang Shipyard Pte Ltd, a subsidiary of SembCorp Marine, in partnership with SMOE Pte Ltd, the offshore engineering unit of SembCorp Industries through SembCorp Utilities announces that it has signed a Letter of Intent with ConocoPhillips China Inc. to fabricate and integrate topsides for a new build floating production, storage and offloading (FPSO) vessel for a major oil development in Bohai Bay, China.

Estimated at more than US$200 million (approximately S$321 million), the project is scheduled for completion in mid-2008.

The FPSO facility is bound for shallow-water Bohai Bay where ConocoPhillips China Inc., a unit of the US-based integrated petroleum company ConocoPhillips, is developing the massive Peng Lai 19-3 Phase II Oil Development Project in cooperation with CNOOC Ltd.

Sembawang Shipyard (SSPL) will be executing the project in partnership with SMOE under a 50/50 joint venture arrangement. SSPL and SMOE have collaborated previously in similar partnership arrangement and successfully delivered three FPSO projects, including the FPSO topsides currently under construction for the Erha Field Development in Nigeria.

Under the project, SSPL and SMOE will provide the secondary structural steel materials and fabricate 15 FPSO topside modules, one flare tower and seven pipe-rack modules, as well as integrate the facilities onto the hull of the FPSO vessel and commission the facilities prior to the vessel’s departure for China. The topsides, weighing approximately 35,000 tonnes, will have a processing capacity of 190,000 barrels of oil per day with 510,000 barrels of fluid handled per day.

When completed, the FPSO vessel will be the largest ever in China. It will have a length of 300 metres, breadth of 60 metres and a depth of 29.4 metres, with an onboard storage capacity of 1.8 million barrels of crude oil. The hull will be built in China.

Total order book as at December 31, 2004 stood at S$2.3 billion. Total contracts secured for 2005 to-date stands at S$575 million.

Barring unforeseen circumstances, SembCorp Marine expects a positive contribution to its earnings from the contract. However, this contract is not expected to have material impact on the net tangible assets and earnings per share of SembCorp Marine for the year ending December 31, 2005.

Revenue from the contract will be recognized according to SembCorp Marine’s revenue contribution policy based on the percentage of completion method measured by reference to the value of work performed relative to the total contract value over the duration of the contract.

About Sembawang Shipyard

Sembawang Shipyard is a wholly-owned subsidiary of SembCorp Marine, the marine engineering arm of SembCorp Industries. Sembawang Shipyard has one of the largest integrated ship repair facilities in Southeast Asia. The shipyard’s world-class reputation is based on the company’s commitment to high Quality, Health, Safety and Environment standard, timely delivery, superior customer service and innovative solutions.

Sembawang Shipyard has more than three decades of experience and proven track record in ship repair, FPSO and offshore conversions, servicing an average of 220 vessels of all types annually for an international clientele in the oil, bulk, chemical and gas trades.

The shipyard has evergreen alliances with Shell International Trading & Shipping Company Limited, BP Shipping, Jo Tankers and BHP Billiton and long term contracts with Alaska Tanker Company, TESMA Shipmanagement, V. Ships, TMT Ltd, Tecto B.V. and Northwest Shelf Shipping, all of which are internationally renowned shipping companies.

About SMOE

SMOE is the offshore engineering subsidiary of SembCorp Utilities, the wholly-owned utilities arm of SembCorp Industries. As one of the industry leaders in offshore oil and gas engineering and construction, SMOE is capable of handling the full spectrum of Engineering, Procurement, Construction and Installation (EPCI) work for the industry. SMOE offers its customers:

  • Integrated Production Platforms
  • Compression, Water Injection and Power Modules
  • Wellhead and Riser Platforms
  • Living Quarters and Pre-Assembled Modules
  • Sub-structures
  • A complete range of FPSO topside facilities

SMOE has delivered more than 100 projects in its 30-year history, and its clients include the world’s major oil and energy companies such as Shell, ExxonMobil, ChevronTexaco, ConocoPhillips, TotalFinaElf, Marathon and Unocal.

For media & analysts enquiries, please contact:

Judy Han (Ms)
Senior Vice President
Investor Relations & Communications
Tel No : (65) 6262 7203
Fax No : (65) 6261 0738
Email : judy@sembcorpmarine.com.sg

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