Sembawang Shipyard secures S$130mln contracts

Sembawang Shipyard, Sembcorp Marine's subsidiary, renewed its long-term contract with Eitzen Group and won others worth S$130mln.

Sembawang recently inked the following contracts:

LNG carrier longevity contract for North West Shelf LNG Venture

The first contract is a longevity project from North West Shelf LNG Venture, the shipyard’s Favoured Customer Contract (FCC) customer for the life extension of its LNG carrier, the Northwest Snipe. The six participants in the North West Shelf Venture gas interests are BHP Billiton Petroleum (North West Shelf) Pty Ltd, BP Developments Australia Pty Ltd, Chevron Australia Pty Ltd, Japan Australia LNG (MM) Pty Ltd, Shell Development (Australia) Pty Ltd and Woodside Energy Ltd.

The Northwest Snipe is scheduled to arrive in the shipyard in September 2010 to undergo sophisticated life extension works which include ballast tanks blasting and coating work, hull structural enhancement, integrated automation system renewal, HVAC and refrigeration system renewal, cargo and ballast value actuator system replacement and boiler system renewal. This will be Sembawang Shipyard’s second longevity project for the North West Shelf LNG Project following the successful completion of the life extension work on Northwest Sanderling in August 2009. This award further reinforces Sembawang Shipyard’s global leadership position in the specialised LNG carriers’ life extension work.

Damage repair contract

The second contract is awarded by Sembawang Shipyard’s regular customer from Taiwan, for major fire damage repair work on its 2005-built product tanker. With a contract value estimated in the region of S$35 million, the scope of work includes major steelwork renewal, complete renewal of the entire accommodation block, major electrical and instrumentation work in the engine room, mechanical work and pipework. Work on the product tanker has just commenced.

Other projects

Other contracts include three vessel upgrading/repair projects from cruise owners such as Star Cruises (Malaysia), the leading cruise line in Asia Pacific, Carnival Cruise Line 2 (United Kingdom), a subsidiary of Carnival Corporation, the world’s largest cruise ships owner and operator, and PT Pelayaran Nasional Indonesia (Pelni). Sembawang Shipyard was awarded these contracts on the strength of the shipyard’s capabilities and solid track record for the repairs, refurbishment and modification of passenger ships and more importantly its ability to meet the stringent QHSE (Quality, Health, Safety and Environment) requirements and fixed schedule of cruise ship owners and operators.

Besides the above contracts, other major contracts secured recently by Sembawang Shipyard include the refit and upgrade of two drillships.

Renewal of long-term contract with Eitzen Group

Sembawang Shipyard renewed its long-term contract with Eitzen Group. Signed on Jan.28, 2010 in Singapore, the long-term contract with Eitzen Group is the reaffirmation of the close relationship between Eitzen Group and Sembawang Shipyard. Eitzen Group controls some 100 ships trading worldwide and under this contract, Eitzen Group will continue to send some 6 to 8 ships to the shipyard annually for scheduled and upgrading repairs.

The above contracts are 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 Dec. 31, 2010.