Keppel’s contract for newbuild asset commissioning gets terminated

Singapore’s Keppel has entered into a settlement agreement with an undisclosed global oil and gas services company to terminate a contract for the integration and commissioning work of a newbuild asset.

Illustration; Keppel’s Verolme yard; Image by: Kees Torn; Source: Flickr – under the CC BY-SA 2.0 license

The company said on Friday that the termination was settled through Keppel FELS, a wholly-owned subsidiary of Keppel Offshore & Marine.

Keppel added that the value of the deal was approximately S$165 million ($120 million at current rates).

The termination of the contract was mutually agreed with the customer after taking into consideration the customer’s requirements and current market conditions, the company explained.

Keppel FELS has received milestone payments for the approximately 30 percent of the project completed which covers its costs incurred on the project.

According to Keppel, the termination will not have any material impact on the net tangible assets and earnings per share of Keppel Corporation for the financial year ending December 31, 2018. It is not expected to result in any write-down.

In recent company news, Keppel Offshore & Marine clinched a contract earlier this month for the modification and upgrading of a production barge for SJ Production Barge Ltd, a wholly-owned subsidiary of oil and gas company, KrisEnergy.