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September 22, 2006

Sembcorp Marine unit to purchase Texas yard

According to a Singapore Stock Exchange filing, PPL Shipyard, a subsidiary of Singapore's Sembcorp Marine is in the process of acquiring Texas's Sabine Shipyard

Sabine is a 223-acre size shipyard, situated in Sabine Pass, Texas, USA. It is strategically located on the Gulf of Mexico with immediate access to Texas and Louisiana offshore drilling activities.

The Port of Sabine is located approximately one mile from the Gulf of Mexico, on the Texas-Louisiana border and one and a half hours from Houston and minutes from Beaumont, Port Arthur and Orange, Texas.

Sembcorp Marine says the intended main activity of the Sabine Shipyard is the building, repair and refurbishment of drilling rigs.

PPL Shipyard already hard a part ownership interest in the yard with a local partner.

With the international market for jackups growing, it seems possible that PPL may now be eyeing the possibility of jackup new construction at the Sabine yard. Baker Marine Pte Ltd, a wholly owned subsidiary of PPL, owns the designs for the Baker Marine jack up rigs, and jacking systems.

The shipyard is equipped with full bulkheads, relatively deep water and easy access. With over 2,000 feet of water front facilities and between 15 to 22 feet of water depth with capability to deepen to 30 feet coupled with equipment including six cranes capable of lifting 165 ton, and a newly refurbished workshop, the shipyard is well-positioned to take on more contracts for the repair and refurbishment of rigs.

Sembcorp Marine says the intended acquisition of the yard is in line with its strategy of establishing a presence in the Gulf of Mexico region of establishing a hub to grow its offshore business.

Mr Ong Tian Khiam, Managing Director of PPL Shipyard said "With the acquisition of the Sabine Shipyard, we will be better positioned to serve customers in the offshore rig refurbishment and rig building market". This intended acquisition is not expected to have a material impact on SembCorp Marine's earnings.