May 3, 2009
Credit crunch kills contract for innovative MPV
Keppel Singmarine Pte Ltd. , a wholly owned subsidiary of Keppel Offshore & Marine has received a notice from Romania's GSP Titan Ltd. to terminate the contract for a DP3 multi-purpose vessel, effective May 1.
Designed by Ulstein Sea of Solutions, the 161.5 m multipurpose vessel was designed to combines three offshore operating capabilities into one vessel design: pipelay, heavy lift and tender assist drilling operations. It would also have been the first large pipelay/heavy lift vessel to be propelled by three Voith Schneider propellers aft that would also be used for roll damping. The design featured a customized 1,800 t Huisman heavy lift mast crane lowered and integrated in the starboard aft side so the vessel could pass the Istanbul Strait under the Bosphorus bridge to enter the Black Sea.
Keppel says the cancellation is due to the owner's difficulties in securing project financing as a result of the current tight credit situation. Contracted to Keppel Singmarine at Singapore $181 million (US $121 million) in late July 2008, the newbuilding project is at its early stages of execution. Keppel Singmarine has received milestone payment for the project which covers costs incurred on the project as well as the expected loss of profit.
The cancellation is not expected to have material impact on the net tangible assets or earnings per share of Keppel Corporation Limited in the current financial year.