Feature 2 | SOUTH EAST ASIA Lion’s share


Te oil and gas sector is providing a flow of steady newbuilding and conversion orders for Singapore’s traditional shipyards


W


hile China may be busy establishing itself as the world’s leading light for OSV


production, shipyards across Singapore are also benefiting from the offshore boom, with the Lion City having snapped up a high volume of contracts for floating, production, storage and offloading (FPSO) and floating, storage and offloading (FPO) conversions. According to a report issued by business analyst GBI Research, Singapore is currently responsible for approximately 70% of all global FPSO conversions, with yards such as Keppel, ST Marine, Jurong and Sembawang leading the way in converting single-hulled tankers into dedicated FPSO units, on top of their regular repair work schedules. Current demand for these unit types is


high, particularly given that more than 35 FPSO vessels, deployed internationally, are reckoned to be nearing the ends of their shelf lives. Given that converting a single- hulled tanker into an FPSO unit works out to be 90% less expensive than commissioning and building an FPSO vessel from scratch, scores of owners and operators are turning to the relatively cheap Singaporean yards to effect ‘fast-track’ conversions, and to get their revamped FPSO assets out to sea and engaged in the production chain as quickly as possible. In the majority of cases, single- hulled tankers are barely desirable assets in themselves, and FPSO conversions seem the only logical step to counter financial loss. Why, then, are Singaporean yards doing


so well in this field at present, compared to rivals based in South East Asia – particularly South Korea – and the Middle East? GBI Research Energy analyst KS


Bharath tells Offshore Marine Technology: “[Singapore] took an early lead in FPSO conversion when Keppel Shipyard became the first shipyard in Asia to convert a tanker, Mariblanca, into an FPSO, in 1981. Tis conversion earned the country a great reputation and made Singapore an obvious choice for tanker repairs and major projects of this kind.”


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By incorporating a PEMA Welding Automation welding system into its facilities, Singapore’s Keppel FELS hopes to cut rig production costs and increase efficiency


Bharath also identifies the Singaporean


yards’ abundance of “innovative engineering and processing capability, and increased commitment towards R&D / developmental technology” as crucial factors in the country’s ascent to the number one spot for these types of conversions. Additionally, Singapore is blessed with government agencies who are able to recognise the value of its national maritime sector, and who have assisted the yards, financially, in such advances in R&D. Bharath also highlights the Lion City’s “world class infrastructure and logistics facilities”, and its reputation as a hub for engineers, vendors and suppliers, as key elements behind its ongoing success.


High stakes Te gains are certainly worth the extra work; for instance, three FPSO / FSO contracts bagged by Keppel in mid-2012 are estimated to have a total value of US$82 million, on top of an existing six FPSO and FSO conversion works in progress. Tis particular contract trio includes: conversion of a tanker into an FPSO on behalf of Petro Vietnam Technical


Services, for entry into service in Vietnam’s Cuu Long Basin in late 2013; a tanker-to- FSO refit, for deployment off the coast of Gabon, on behalf of Perenco Group; and the conversion of a tanker into an early production vessel (EPV) for BC Petroleum, which will put the finished ship to work in the Balai Cluster oil fields, Malaysia. Similarly, May 2012 saw Sembcorp


Marine-owned Sembawang Shipyard land contracts worth approximately US$105 million, including the upgrading of a Sonangol Pesquisa e ProduÇão 30-man FPO for deployment off the coast of Angola, in addition to effecting repairs aboard two 20-year old LNG vessels operated by Australia’s North West Shelf Shipping Service Company. Meanwhile, Keppel’s offshore-specific


Keppel FELS subsidiary is continuing to stack up orders for rigs, a mainstay of its business. In December 2012, the group was contracted to construct a pair of semisubmersible drilling rigs, worth approximately US$1.2 billion, for Ukraine-based Naſtogaz, with both units to be customised to handle the


Offshore Marine Technology 1st Quarter 2013


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