The 30 year deal, signed by Keppel O&M subsidiary FELS Offshore, will see the yard embark on projects using Keppel's proprietary designs.
The 110 hectare yard has 3.6 km of coastline and is one of China's largest shipyards. Upon completion, TQS will have four ultra-large and wide drydocks, one of which will allow for the conversion of double hull vessels into Floating Production Storage and Offloading (FPSO) units. The deal marks a major increase in Keppel's presence in China, which currently consists of offshore vessel build yard Keppel Nantong Shipyard.
As the world's largest builder of jack-up rigs and converter of FPSO's Keppel is coming under increasing pressure from Chinese yards as they try and capture a slice of the lucrative offshore market.
The TQS deal hinges on Titan's financial restructuring and resumption of its shares trading on the Hong Kong Stock Exchange.
"The offshore oil and gas market in China has been growing significantly, and there is increasing demand for high specification rigs and production vessels," said Chow Yew Yuen, ceo of Keppel O&M. "At the same time, China is a market which has strong preference for China-made products. Having this yard is an extension of our near market, near customer strategy and enables us to service the Chinese market with our suite of proprietary solutions while meeting its requirement of building in-country."
Titan Chairman Zhao Xu Guang added, "I am confident that with Keppel managing this yard which has good development potential, we will be able to quickly build up the track record of the shipyard and deliver winning Keppel designs and products to Chinese oil and gas operators. Having studied the market, we believe there are a significant number of potential projects that this yard is capable of undertaking."
China's 12th five year plan included an announcement of and increase in offshore exploration and production spending from RMB120bn to RMB300bn, with offshore oil and gas production targeted to double to 100 million tonnes per annum, from 50 mtpa.
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