Sembcorp downturn offset by higher value work


Te first half of the year saw a sharp decline in the number of vessels drydocked for repairs and upgrades at the company’s Singapore yards, although there are some positive elements within the overall performance


eor Marine’s Tuas shiard will handle soe of the Maran Taners’ green retrofit wor O


ver the first six months of 2018 Sembcorp Marine handled 158 vessels for drydocking, repairs


and upgrades, compared with 239 in the equivalent period in 2017. The impact of this 34% drop in activity in terms of vessel numbers was partially offset by a significant increase in the average revenue generated per vessel, as a result of the company attracting more higher value work and a better mix of vessel types. Overall turnover for Sembcorp


Marine’s repair and upgrade division was Sin$204.5 (US$ 147.97) million in the first six months of 2018, down 11.7% from the Sin$231.7 (US$167.66) million achieved in the first half of 2017. One of the reasons behind the more limited reduction in revenues generated by repair and upgrade work was the group’s success in the cruise and LNG carrier markets. Notable visitors in the first half of the year included the cruise ships Sapphire Princess and Carnival Spirit, and the LNG carrier Southern Cross. A statement from the company at the time


of the announcement of the first half results pointed out: “Competition in the repair and upgrade segment remains intense. Te segment will be underpinned by regulations that require ballast water treatment systems


Shiprepair & Maintenance 4th Quarter 2018


and exhaust gas scrubbers to be installed over the next 2-5 years.” Underlining


the importance of


environmental refits to the fortunes of this side of the shipyard group’s business, in September the company announced its biggest green technology retrofit contract to date. This was awarded by Maran Tankers for the installation of marine scrubbers and ballast water management systems on 13 of the Greek owner’s vessels. Under the terms of the contract, four


of Maran’s Suezmax tankers will be fitted with marine scrubbers and ballast water management systems between the third quarter of 2018 and the fourth quarter of 2019, while a further nine VLCCs will have marine scrubbers installed between May 2019 and February 2020. Te installation of a total of 13 marine scrubbers and four ballast water management systems will take place at Sembcorp Marine’s Tuas Boulevard and Admiralty yards in Singapore. Other green technology retrofit


customers in recent times for Sembcorp Marine include ASP Shipmanagement, ASEAN Cableship, Carnival Corporation, Chevron Shipping, KLC Shipping, MOL Shipping, Naſtomar Shipping, Petroleum Geo-Services, Solvang Skibs and Wilhelmsen Ship Management. Sembcorp


Marine points out that its own Semb-Eco LUV Ballast Water Management System, claimed to be the only ballast water management system to be researched, developed, manufactured and factory- tested in Singapore, is expected to receive US Coast Guard Type Approval in the next few months. Outside of the conventional repair and


upgrade business, Sembcorp maintains a strong market position in the FPSO conversion sector. One of the highlights of the first half of 2018 was the delivery of the FPSO Kaombe Norte for deployment offshore Angola, following its conversion from a VLCC for Saipem. Work on a second conversion for Saipem, the FPSO Kaombu Sul, is now underway. This October Sembcorp Marine


signed an agreement with Varg, a Teekay Offshore subsidiary, to modify, repair and carry out life extention work to Petrojarl Varg FPSO. Scheduled for completion in 2020, the scope of work includes detailed engineering, fabrication, installation and integration of the topside process skid; overhauling exisiting turret and power generation systems; and repairs to the vessel’s hull and tanks. Te contract for Petrojarl Varg FPSO is worth a reported US$166 million. SR


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