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    Keppel strengthens ties with Lukoil

    Yard News // July 10, 2006

    Keppel is to build an icebreaker and icebreaking supply ship for Lukoil.

    Keppel Singmarine Pte Ltd in Singapore has clinched contracts worth a total of S$260 million for two highly specialised vessels from Kaliningradmorneft (LUKOIL), a subsidiary of Russian oil company LUKOIL.

    The parent company of Keppel Singmarine, Keppel Offshore & Marine Ltd (Keppel O&M), has also signed an agreement with LUKOIL for further co-operation in potential newbuilding of offshore rigs, special purpose offshore facilities and vessels to service LUKOIL's offshore oil terminal vessels at Keppel O&M shipyards around the world.

    Mr Charles Foo, Managing Director (Special Projects) of Keppel O&M and Chairman of Keppel Singmarine, said: “This partnership with LUKOIL represents a strategic milestone in the Keppel Offshore & Marine group’s effort to enhance its services for the Russian energy and offshore-related market. We are pleased with LUKOIL’s confidence in Keppel. As we work in partnership with LUKOIL, we also endeavour to renew and strengthen our ties with other Russian owners to offer them our comprehensive range of products and services in our global yard network to meet their needs.”

    Russia has always been an important market for Keppel O&M, with its huge reserves of oil and gas. According to the latest reports by the Energy Information Administration (EIA), the country has the world’s largest proven gas reserves of 1,680 trillion cubic feet (Tcf), and its proven oil reserves at 60 billion barrels is the eighth in the world. Probable and possible oil reserves is even more at 67 billion barrels. It is currently also the world’s largest producer and exporter of gas, and ranks second in terms of world crude oil production.

    Keppel’s relationship with Russia dates back to the 1980s when Keppel Shipyard and Keppel FELS serviced various owners in shiprepair, ship conversion and offshore rig construction and repair respectively. Work from Russia tapered down following the dissolution of the USSR in 1991, as much of the country focused on developing a market economy. It is currently enjoying a renaissance of consistent economic growth.

    Keppel’s first projects in recent years for the Russian market are the construction of two 60 tonne bollard pull ice class Anchor Handling Tug/Supply (AHTS) vessels which Keppel Singmarine secured from LUKOIL in May 2005 and January 2006. The deliveries of these two vessels are due between end 2006 and mid-2007.

    The two new contracts, secured on the back of the AHTS, are turnkey projects. They are for the construction of an auxiliary icebreaker vessel and a multi-purpose icebreaking supply vessel.

    The contracts are the first such vessels to be built by an Asian yard, and the vessels will be delivered to their owner between end 2007 and mid-2008.

    To be deployed to the Barents and Arctic Seas, the vessels are designed and will be built to the rules and standards of the Russian Maritime Register of Shipping (RMRS), and are customised in accordance with the owner’s stringent requirements and technical specifications.

    The 100m auxiliary icebreaker vessel will have equipment and system capabilities to work in temperatures down to –40 degrees C and to proceed through 1.7m of level ice with 20cm snow cover.

    The 81m multi-purpose icebreaking supply vessel can proceed through landfast ice having an unbroken thickness of up to 1.5m with 20cm snow cover.

     

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