Marine Log

MPU Heavy Lift

December 20, 2006

Keppel Verolme to build decommissioning heavy lifter

Keppel Verolme BV has secured a EUR140 million (US$591 million) contract to build a floating heavy lifter for the decommissioning of offshore structures.

The contract provides for additional work on the vessel that could potentially increase the contract value by another EUR24 million.

The order for this first-in-the-world heavy lifter of its class was awarded by MPU Offshore Lift ASA (MPU), a subsidiary of the Norwegian design and development company MPU Enterprise AS.

This semisubmersible platform is expected to be completed by early 2009.

Developed by MPU, the MPU (Multi Purpose Unit) Heavy Lifter distinguishes itself from other removal vessel designs by its use of concrete technology which gives the heavy lifter greater robustness and less motion on the sea. Other differentiating factors are the cost-effectiveness in the construction and operation of the platform, and as well as additional capabilities. The heavy lifter may also be used for installing topsides and jackets.

Moonpool width 50.0 m
Moonpool length 63.0 m
Total length 92.0 m
Total width 104.0 m
Minimum draught, even keel 9.1 m
Minimum GM 2.4 m
Ballast / Storage capacity 50,700 m3
Lightship weight 44,700 t

Keppel Verolme will execute the marine outfitting works and build the accommodation block as well as fabricate and carry out steelwork and install equipment for lifting topsides and jackets. It will also lease its facilities for the construction of the concrete substructure by the owner's appointed civil contractor.

Mr Harold Linssen, Managing Director of Keppel Verolme, said, "We are glad to be entrusted with the task of building this multi-purpose heavy lifter for MPU, primarily to support the decommissioning of redundant platforms in removing topsides and steel jackets.

"The project is the result of four years of partnership with them in developing an innovative, safer, robust and cost-efficient single lift solution for the lifting operations required to remove oil and gas platforms in the North Sea and globally."

Decommissioning is required when an operational rig reaches the end of its productive life or when a reservoir is depleted.

With the design life of most of world's platforms putting their retirement at 20 to 25 years, the market for decommissioning will only grow with time.

The process of decommissioning includes engineering and planning for the plugging and abandonment of wells, the removal of platforms and the cleaning out of hydrocarbons and other contaminants from lines, tanks and equipment.

One of the world's largest decommissioning projects is the Ekofisk project, in the North Sea.

Contracting work on this project has already started for the removal of more than 10 platforms planned to go by 2013.

Mr Linssen commented, "Decommissioning in the North Sea is a very new market. In this segment of the offshore market, one of the challenges has been to come up with new lifting techniques which can perform the tasks quicker, safer and at less cost."

For MPU. the contract concludes an eight year period, of conceptual development, model tank testing, design and verifications.

"The response from the market, potential clients and the investors has been very enthusiastic, and we are now looking forward to seeing the vessel ready for operation in 2009 as there is a great demand for new lifting capacity in the offshore decommissioning and installation market," said Mr. Kolbjorn Hoyland, CEO of MPU Offshore Lift ASA.

MPU Offshore Lift ASA is a single purpose company established by the design and development company MPU Enterprise AS. In a separate announcement, MPU Enterprise reported today that Solstad Offshore ASA, has decided to enter into an industrial and financial cooperation agreement with MPU Offshore Lift ASA to build the the MPU Heavy Lifter

Solstad Offshore ASA will invest NOK130 million (US$21 million) in MPU Offshore Lift ASA.

MPU Offshore Heavy Lift will "in the nearest future" raise approx. NOK450 million (US$73 million) in further funding through an equity issue and NOK715 million (US$115 million) in the bond market. The final structure of the overall financing will be announced in 2007.