SembMarine secures 6 new projects worth S$400m

SEMBCORP Marine (SembMarine) has snagged six new projects valued at a total of S$400 million to provide engineering solutions for offshore gas and wind farm developments as well as cruise ship upgrades.

With the latest contracts, SembMarine has entered the “highly competitive” offshore wind sector in Taiwan, and is also partnering both repeat and new customers, the group said in a filing on Monday morning.

One of the contracts is for a floating production, storage and offloading (FPSO) conversion project with the joint venture companies of Shapoorji Pallonji Oil & Gas and Bumi Armada. Sembcorp Marine Rigs & Floaters will convert a very large crude carrier, into an FPSO unit for deployment in the east coast of India. The vessel will produce up to 90,000 barrels of oil per day and have a 1.3-million-barrel storage facility. The work will be done at the Tuas Boulevard Yard, with delivery scheduled in the second half of 2021.

Meanwhile, Sembcorp Marine Repairs & Upgrades has added three new gas projects to its portfolio. These entail the conversion of a liquefied natural gas (LNG) tanker Dwiputra into a 125,000 cubic metre (cu m) floating storage and regasification unit (FSRU) for a joint venture between Mitsui OSK Lines and Karpower International; the conversion of NYK Line’s former gas carrier LNG Flora into a 127,000 cu m floating storage unit (FSU) for Gasfin Development; and upgrading works on the 173,400 cu m FSRU BW Magna for BW LNG. All three projects will be completed at Sembcorp Marine Admiralty Yard, for delivery between the end of 2019 and February 2020.

Sembcorp Marine Repairs & Upgrades also clinched the makeover project for Japan’s largest cruise ship, Asuka II, for new customer NYK Cruises. To be executed over 45 days at the Admiralty Yard from January 2020, the extensive refit project includes installing a sulphur oxide scrubber unit on the vessel to comply with new environmental regulations.

Lastly, Sembcorp Marine Offshore Platforms has landed a contract with Jan De Nul to fabricate 15 jacket foundations for the Formosa 2 Offshore Wind Farm. The 376-megawatt facility will be Taiwan’s largest offshore wind farm, generating electricity for more than 380,000 households when it starts operations in late 2021. SembMarine will deliver the jacket foundations by December 2020.

Commenting on the latest project wins, SembMarine president and chief executive officer Wong Weng Sun said: “Despite the challenging market conditions, we have been steadfastly pursuing the available pockets of opportunities.”

“Sembcorp Marine will continue to innovate and improve our capabilities, so that we can sustain our long-term competitiveness by having the best solutions for the evolving global offshore, marine and energy industries,” Mr Wong added.

These contracts are not expected to have a material impact on the net tangible assets and earnings per share of SembMarine for the year ending Dec 31, 2019.

Shares of Sembcorp Marine were trading at S$1.17, up three cents or 2.63 per cent, as at 1.02pm on Monday.

Citi Research maintained a “buy” call on SembMarine’s shares on Monday afternoon, after the announcement. The latest bout of new contracts brings the company’s year-to-date order win tally to S$575 million, or about 30 per cent of Citi’s full-year target of S$2 billion, said analysts Chang Kwong Wei and Patrick Yau.

“These contracts underscore SembMarine’s diversified product offering, indicating that the group’s order book replenishment prospects do not solely hinge on the crystallisation of several well-recited large scale projects,” the analysts wrote on Monday.


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