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Scrubber and LNG contracts boost Keppel Offshore & Marine's orderbook in 2018

LNG projects and scrubber retrofits boosted Keppel Offshore & Marine's Keppel (O&M) orderbook last year as it sees growing optimism for the sector as whole.

Exhaust gas cleaning system retrofits and LNG accounted for over SGD600m ($440.9m) of the SGD1.7bn in new contracts booked by Keppel O&M in 2018.

Loh Chin Hua ceo of parent Keppel Corp told the group's annual results briefing on Thursday: “Keppel Shipyard has also seen a pick-up in ship repair works boosted by exhaust gas scrubber retrofits. We secured 65 of such contracts last year from a variety of customers.”

Shipowners have ordered thousands of scrubbers globally to comply the IMO's 2020 0.5% sulphur cap for marine fuel.

Read more: Scrubber numbers surge to 1,850 - 'decision to invest should be made yesterday'

The division's net orderbook increased to SGD4.3bn as at end-2018, compared to SGD3.9bn at end-2017.

Keppel was cautiously optimistic on the outlook for floating production units for both oil and gas. “We see opportunities in FPSOs, especially conversions, with several projects approaching Final Investment Decisions (FID) in 2019 and 2020. Global demand for gas, led by Asia, continues to grow, with a few FSRU projects also targeting FID later this year,” Loh said.

Keppel O&M is also moving forward on its second Floating LNG conversion and has received a limited notice to proceed from Golar LNG to commence early conversion works on Golar Gimi for BP’s Greater Tortue-Ahmeyim field.

Despite the improved optimism Keppel O&M recorded a SGD109m loss including an additional provision of S$167 million for expected losses on the rigs for Sete Brasil.

Keppel had contracts to design and build six-semisubmersible drilling rigs for Sete Brasil valued at $4.9bn, however, it has received no progress payments since November 2014 and the Brazilian company later filed for judicial recovery.

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