LNG

Sembcorp Marine, the Singapore-based shipbuilding and conversions yard for offshore energy platforms, including for the LNG sector, has issued a further explanation to shareholders scheduled to meet on February 16 to vote on the merger with Keppel Offshore and Marine.

Sembcorp Marine, the Singapore-headquartered global offshore, marine and energy platforms providers, is continuing to build its Brazilian shipyard business by completing its second floating, production, storage and offloading (FPSO) vessel for Brazil’s oil and natural gas rich offshore Santos Basin.

Semmarine's yard is called the Estaleiro Jurong Aracruz (EJA) facility and has been located since 2014 in the Espirito Santo state of southeast Brazil in the municipality of Aracruz.

The yard employs up to 4,500 workers during peak periods of production and in addition to tapping into the revived Brazilian offshore oil and gas industry, the EJA yard is offering field developments services for the in the Atlantic, Gulf of Mexico and West African regions.

The Sembmarine-owned yards “Petrobras P-71” FPSO is the second completed for the Tupi B.V. joint venture, majority-owned by state energy company Petróleo Brasileiro, known as Petrobras.

“The FPSO vessel, P-71, has just sailed away from EJA’s shipyard and will be deployed to the ultra-deepwater Itapu field,” said EJA.

Former LNG plan

Atapu is an oil and natural gas field with a shared deposit, located at a water depth of over 2,000 metres in the Santos Basin pre-salt.

Analysts note that for several years BG Group of the UK had spoken about an LNG production project in Brazil’s Santos Basin before being taken over by Shell in 2016. However, EJA’s the new FPSO is oil focused.

“When launched into operation, P-71 will produce up to 150,000 barrels of oil per day (BOPD). Measuring 316 metres in length and 54 metres in width, ‘P-71’ has a 1.6-million-barrel storage capacity and can accommodate 166 persons,” explained EJA.

EJA’s “P-71” work scope included fabricating six modules, pipe-racks and a flare, and integrating them on the vessel along with other modules and items supplied by the customer.

The yard said it also executed modification works on the FPSO’s topsides and hull to meet Itapu field requirements.

Premier facility

“Despite pandemic-related challenges which affected the project over a period of 20 months, EJA successfully delivered the P-71 FPSO on schedule, cementing its status as a premier facility in Brazil capable of taking on full engineering, procurement, construction and commissioning work for large-scale offshore projects,” said EJA President Thangavelu Guhan.

“We thank Petrobras and its partners for choosing to work with us on the ‘P-68’ and ‘P-71’ FPSO projects. We would also like to recognise our employees, vendors and community leaders whose assistance is important to our continued success,” stated Guhan.

EJA Chairman William Goh said that as a Brazilian shipyard with international expertise and advanced capabilities, the company had also become a major commercial entity and part of the social and economic fabric of Espirito Santo state and its local communities.

“We are committed to growing our business here by providing world-class engineering solutions for the offshore renewables, oil & gas and other clean energy sectors,” declared Goh.

Singapore’s largest shipping and energy sector companies, Keppel Corp. Ltd and Sembcorp Marine, have agreed a multi-billion-dollar deal to merge Keppel Offshore & Marine and Sembcorp Marine to create a global provider of offshore energy infrastructure services covering oil-to-LNG, transition fuels and reviving the Singaporean shipyards sector.

Feb 24 (LNGJ) - Kawasaki Kisen Kaisha (K-Line), the Japanese shipping company, said it was pleased to be the operator of the first Singapore-owned LNG bunkering vessel, the 7,500 cubic metres capacity “FueLNG Bellina”, as it entered service in the Asian port city. The vessel is owned by the FueLNG joint venture comprising Keppel Offshore and Marine and Shell Eastern Petroleum. “We are proud to get involved in this meaningful event through our technical expertise on ship management of liquefied gas carriers,” explained K- Line.

   “Singapore is one of the busiest bunkering locations on the globe. The vessel’s debut is part of the maritime industry’s efforts to reduce emissions of greenhouse-gas,” added K-Line. “LNG enables vessels to emit less GHG when used as marine fuel compared to conventional heavy fuel oils, and having the ‘FueLNG Bellina’ provide LNG bunkering on a ship-to-ship basis in Singapore offers more opportunities to various ship operators to choose a greener marine fuel,” stated K-Line.

The American Bureau of Shipping, the US maritime classification society, and Singapore-based Keppel Offshore and Marine said they were currently completing key features of the world’s first smart LNG bunkering vessel.

Infraestructura Energética Nova (IEnova), the Sempra Energy subsidiary in Mexico with plans for LNG production and whose assets include stakes in four major Mexican natural gas pipelines, has successfully completed an international offering to raise US$800 million, underpinning confidence in the North American gas sector.

The London-based Baltic Exchange, the main independent global source of maritime market information for the trading and settlement of physical and derivative shipping contracts, has named LNG Hub Singapore as the leading global shipping centre.

Sembcorp Marine of Singapore, ranked among the leading facilities in the world for LNG vessel repairs and upgrades, is the subject of a rights issue of S$2.1 billion ($1.5Bln) to recapitalise the shipyard group.

Sembcorp Marine shipyards in the Asian city state have built a reputation for LNG-powered vessels, bunkering ships and floating LNG storage.

The boards and management teams of Sembcorp Marine and its parent company, Sembcorp Industries, believe that the proposed rights issue and demerger will strengthen the financial positions of both and unlock shareholder value.

“With greater flexibility following the demerger, both companies can pursue their own sustainable growth paths on the back of changes to their industries in recent years,” it added.

Sembcorp Marine proposes to build on its core engineering solutions for the offshore, marine and energy industries.

One of its projects is the 12,000 cubic metres capacity LNG bunkering vessel ordered from Sembcorp’s Tuas Boulevard Yard.

On completion, currently scheduled for early 2021, the dual-fuel bunkering vessel will be chartered to Singapore’s Pavilion Gas for deployment for fueling ships with LNG in the Port of Singapore.

The vessel is the largest of its kind being built locally, in terms of size and LNG tank capacity and is Sembcorp’s first LNG bunker vessel construction project.

Other ongoing upgrades and conversion projects in LNG at Sembcorp’s Admiralty yard include the floating storage and regasification unit (FSRU) “Karmol LNGT Powership Africa” destined for Mozambique and other work.

Parent company Sembcorp Industries will continue to be focused on its core areas of energy and urban development and be poised to capture opportunities in the sustainable energy transition.

“Sembcorp Marine, which has been doubly hit by the Covid-19 pandemic and recent collapse in oil prices, will also be able to better address its urgent need to recapitalise, meet liquidity requirements, and strengthen its balance sheet to ride through the prolonged downturn in the offshore and marine industry,” said the statement.

Both Sembcorp companies will be seeking their respective approval of their shareholders at extraordinary general meetings (EGMs), which are expected to be convened around the of August or early September 2020.

The rights issue is also conditional on Sembcorp Marine shareholders passing a resolution to waive their rights to receive a general offer from Singapore wealth fund Temasek and in connection with the proposed distribution.

Sembcorp Industries has given an undertaking to vote in favour of the rights issue resolution at Sembcorp Marine’s EGM.

The current Sembcorp Marine order book comprises a fairly broad spectrum of product types, including several new-build floating production, storage and offloading vessels, offshore production platforms, as well as battery-operated roll-on, roll-off passenger vessels and LNG bunkering and conversions work.

The Sembcorp construction and conversion work for LNG mainly affects projects involving joint ventures of Japanese shipping company, Mitsui OSK Lines (MOL).

Sembcorp noted in its most recent earnings the Ministry of Manpower in the city state announced movement restriction measures that prevented migrant workers from leaving their dormitories for work.

The workforce of the shipyards normally amounts to 20,000 persons but was substantially reduced to 850 person.

The reduced workforce was deployed to manage critical works and support yard essential services such as emergency response teams, facilities and utilities management and yard security.

Karmol “LNGT Powership Africa” is part of a joint venture involving MOL and the Turkish floating power plant company Karpower International and the vessel is destined for Mozambique.

The London-based Baltic Exchange has added quarterly assessments (GOPEX) on the cost of operating liquefied natural gas carriers and and liquefied petroleum gas tankers to its growing suite of shipping investor tools.

The Baltic Exchange Escrow Service continues to gain traction, with new transactions completed in the fourth quarter of 2019 and the first three months of 2020.

The Baltic Exchange, owned by the Singapore Exchange, follows a robust due diligence process and complies with the Monetary Authority of Singapore requirements without compromising on flexibility and service speed to ensure the transactions are handled seamlessly. 

This is reinforced by the strict internal control of fund movements from the dedicated escrow account held with AA-rated Singapore banks Overseas-Chinese Banking Corp (OCBC) and United Overseas Bank (UOB).

The escrow service, operated from Singapore, facilitates both shipping and non-shipping transactions around the world. 

Escrow services give certainty to all sides in a transaction that payments will be made on completion as they are held by a trusted third party.

In LNG, the London-based Exchange collects data from shipping brokers to provide assessment of three routes on the CME Group trading platform.

These form the basis for a suite of assessments for gas shipping and freight contracts, the first LNG derivative swap took place in July 2019, with cleared trades following since then as company built open-interest positions.

The LNG swaps based on shipments from Australia’s Gladstone port in Queensland to Tokyo, from the US Sabine Pass LNG plant in Louisiana, owned by Cheniere Energy, to the UK. A third freight contract is from Sabine Pass to Tokyo.

So far the Baltic Exchange’s transactions supported by escrow have included asset sales and disputes. However, the service is available for any transaction requiring an escrow agent. 

The Baltic Exchange is an independent organisation whose international membership is mainly made up of shipowners, shipbrokers and charterers. 

It is the provider of trusted benchmarks and settlement data in the shipping industry. Its escrow service builds on this independence and trust. 

Users of the service are assured of the highest levels of confidentiality, professionalism and security. 

“The Baltic Exchange acted as escrow agent in the context of a recent sale and purchase transaction providing a professional, swift and efficient support at each stage of the process,” said customer  Federico Grimaldi, Sale &Purchase Manager at shipping company Vroon B.V.

“A customer-oriented approach, professionalism and high responsiveness of the Escrow team allowed for a seamless transaction,” added Grimaldi.

Dmitry Pismenny, who heads up the escrow service, said that the Exchange was very pleased to see growing interest in the escrow service. 

“Our flexibility and efficiency in supporting different types of transactions has earned plaudits from our clients.,” added Pismenny.