Keppel Corp has won a US$2.9 billion ($4.97 billion) contract from Petrobras to build a floating production, storage and offloading vessel (FPSO).
Petrobras, Brazil's state-owned oil company, is a longtime customer of Keppel Corp,
The FPSO, named P-80, is scheduled for completion in the first half of 2026. It is the second FPSO that Keppel will be building for Petrobras for the Buzios field in Brazil. An earlier contract to build another FPSO, the P-78, is being executed.
P-80 is structured on progressive milestone payments and will be cash-flow neutral during its execution lifecycle.
When completed, the P-80 will be one of the largest floating production units in the world with a production capacity of 225,000 barrels of oil per day (bopd).
The design and engineering of the P-80 will be carried out through its centres in Singapore, Brazil, China and India. The fabrication of the topside modules will be spread across Keppel's facilities in Singapore, China and Brazil, with the integration and commissioning works to be completed in Singapore.
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Construction of the hull and accommodation will be carried out by shipbuilding company CIMC Raffles in China, with Keppel O&M undertaking the final phase of offshore commissioning works when the FPSO arrives at the Buzios field.
Keppel says the P-80, along with the P-78 FPSO, will incorporate green features such as carbon capture and reinjection of carbon back into the reservoir where it is stored. Both FPSOs are designed to maximise carbon reinjection and minimise the need for gas flaring.
Gas flaring is when FPSOs burn excess gas that is associated with oil production to dispose of it.
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In addition to carbon capture, utilisation and storage, the P-80 will also be outfitted with energy recovery systems for thermal energy, waste heat and gas, as well as seawater deaeration to reduce the consumption of fuel and carbon emissions of the vessel.
Keppel says this contract is not expected to have a material impact on its net tangible assets or earnings per share for the current financial year.
Keppel Offshore & Marine is in the midst of merging with Sembcorp Marine.
In her Aug 12 note on Sembcorp Marine's earnings, CGS-CIMB analyst Lim Siew Khee says that the combined entity, with a combined order book now of $6.9 billion, is likely to be profitable by FY2024. Lim's projections did not take into account this latest $4 billion order from Petrobras.
Chris Ong, CEO of Keppel Offshore & Marine, says the company is pleased to win another order from Petrobras, reaffirming the company's capabilities in this field.
He adds that the work on the P-78 is on track and within budget, and has been contributing to Keppel O&M's earnings.
"Drawing from our experience with the P-78, we are confident that we can further enhance the efficiency and economics of the P-80, as well as generate a
substantial amount of work in Brazil with thousands of jobs for the country,” adds Ong.
Shares of Keppel Corp closed at $6.96 on Aug 15, down three cents or 0.43% lower than its previous close.
