Singapore: Sembcorp Marine’s Jurong Shipyard Secures $268 Million FPSO Conversion Contract

Jurong Shipyard (JSPL), a wholly-owned subsidiary of Sembcorp Marine, has secured an approximately S$351 million (Approximately $268 USD) contract to convert the Aframax tanker, the MT Arc II (ex MT Arc), to a Floating Production Storage and Offloading (FPSO) vessel, to be renamed FPSO Petrojarl Cidade de Itajai, for Teekay Petrojarl Production AS.

The conversion contract involves the conversion of the oil tanker to an FPSO that includes detailed engineering, installation and integration of 16 topside modules, installation of spread mooring and power generation systems, accommodation upgrading as well as extensive piping and electrical cabling works.

Scheduled for delivery in the 1st quarter of 2012, FPSO Petrojarl Cidade de Itajai will constitute part of the Tiro e Sidon field development plan. On completion, owner Teekay Petrojarl Production AS will charter the FPSO to Petrobras for 9 years with options. FPSO Petrojarl Cidade de Itajai will be installed in approximately 277 meters water depth on the Tiro e Sidon Field offshore Brazil. It will be capable of processing at least 80,000 barrels of oil per day and 70.0 MMscfd of production gas, injecting more than 96,000 barrels of water per day and storing 650,000 barrels of oil. In addition, the FPSO is designed to remain on the field for up to 15 years without dry docking.

Mr Don Lee, Senior General Manager, JSPL’s Offshore Division said “We are pleased to be a partner to Tiro Sidon LLC for this prestigious FPSO conversion project which will be on long-term charter to Petrobras, Brazil’s national oil company and operated by Teekay Petrojarl Production AS. The award of this key contract is an affirmation of Jurong Shipyard’s proven expertise in offshore conversion, our strong execution capabilities as well as our high standards of workplace safety and health. We would like to thank Teekay for placing their confidence in us and we look forward to a fruitful partnership ahead.”

Mr Peter Lytzen, President & CEO of Teekay Petrojarl Production AS said “We are delighted to have signed our first FPSO contract with Jurong Shipyard and see this as the start of long and mutually rewarding relationship. JSPL has built a reputation as a 1st class offshore construction yard with a strong track record in delivering successful turnkey projects. We are very confident JSPL will deliver to Teekay a quality product that meets our expectations in every respect and we’re looking forward to taking the FPSO into operation”

FPSO Petrojarl Cidade de Itajai will be the 12th major FPSO/FPU/FSO/FDPSO conversion project that Sembcorp Marine’s shipyards have undertaken for Petrobras, including P-62 that is currently undergoing pre-FPSO conversion in Jurong Shipyard.

The above contract is not expected to have any material impact on the consolidated net tangible assets per share and earnings per share of Sembcorp Marine for the year ending December 31, 2010.

About Teekay Petrojarl Production AS

Teekay Petrojarl is the largest operator of Floating Production, Storage and Offloading (FPSO) vessels in the North Sea. With a combined production capability of 350,000 barrels of oil per day and a crude storage capacity of more than one million barrels, Teekay Petrojarl has a long, proven track record in safely operating FPSO vessels in one of the harshest environments in the world.

Teekay Petrojarl owns and operates five FPSOs, two are on each of the Norwegian and UK Continental shelves and one on the Siri Field off the southeastern coast of Brazil. All its production units are under long-term contracts producing for oil and gas companies. Its operating fleet also includes two shuttle tankers and one storage tanker.

About Jurong Shipyard

Jurong Shipyard, a fully-owned subsidiary of Sembcorp Marine, is a leading shipyard offering integrated services and customised solutions in ship repair, shipbuilding, ship conversion, rig building and offshore engineering to a world-wide clientele. Apart from its proven track record in the building and servicing of jack-up and semisubmersible rigs, Jurong Shipyard is also a global leader in the EPC conversion of tankers to floating production storage and offloading units (FPSOs), floating storage tankers (FSOs) and floating production units (FPU).

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Source:Sembcorpmarine , October 12, 2010;