Keppel Corporation yesterday announced that Keppel Shipyard has secured an FPSO conversion contract from long-standing customer, SBM Offshore. The Tina VLCC will be converted to an FPSO which will be deployed to the Liza field (offshore Guyana) developed by ExxonMobil.

The converted FPSO will have a storage capacity of 1.6m bbl of crude oil and is able to produce up to 120k bbl of oil per day.

Keppel’s work scope includes refurbishment and life extension works, such as the upgrading of living quarters, fabrication and installation of spread mooring systems, as well as the installation and integration of topside modules, and we estimate a contract value of more than S$100m for Keppel.

Maintain BUY with S$7.36 fair value estimate on KEP.

Source: OCBC Research - 6 Oct 2017