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Marine Log

March 26, 2007

Nakilat and Keppel O&M to develop Ras Laffan shipyard

Qatar Gas Transport Company Ltd. (NAKILAT) has signed an agreement with Keppel Offshore & Marine Limited (Keppel O&M) through its wholly owned subsidiary, KS Investments Ltd., to jointly develop a world-class shipyard facility in the Port of Ras Laffan, Qatar.

The proposed shipyard will be part of the massive expansion of the Port of Ras Laffan, in the Arabian Gulf, and is expected to begin operation in 2010.

NAKILAT and KS Investments have agreed to form an 80/20 joint venture company (JVC) to manage the design, construction and operation of the 43-hectare shipyard, which will be built on reclaimed land. KS Investments will contribute US$23 million for its 20% interest in the joint venture.

The name of the JVC is Nakilat-Keppel Offshore & Marine Ltd.

The new facility will be suitable for the repair and maintenance of very large LNG carriers and a wide range of other vessels, and the conversion of tankers to Floating Production Storage & Offloading systems (FPSO) and Floating Storage & Offloading (FSO) systems. The estimated cost of the shipyard is approximately US$450 million.

Qatar Petroleum (QP) will fund the reclamation of the land and construction of the yard's infrastructure, such as the two dry docks, the quays, buildings and utilities distribution networks. QP will lease the infrastructure to the JVC.

The JVC will fund the shipyard's mobile equipment, such as the floating dock, cranes and workshop machinery, and provide cash for operations.

The shipyard can be expanded for the construction of specialized small ships (such as offshore supply vessels), and the fabrication of structures for the offshore oil and gas industry (such as jack-up drilling rigs, process modules and decks, jackets, wellhead decks and flare booms), and the fabrication of components for land-based petrochemical and industrial plant. The facility will also provide life-cycle support in all the markets it serves.

Mr. Muhammad A. Ghannam, Managing Director of NAKILAT, said: "In our negotiations and through visits to Keppel's shipyards in Singapore, we found the overall culture of Keppel, their best practices and business operations to be a good fit with our vision for the new shipyard. Keppel has very high standards of professionalism and commitment to service excellence which we appreciate.

"Our vision is for the new shipyard to become a centre of excellence for the repair and maintenance of LNG carriers, thereby securing a strategically important link in the supply chain of natural gas from wellhead to consumer."

Mr. Tong Chong Heong, Managing Director/Chief Operating Officer of Keppel O&M, said: "This business venture is in line with our "Near Market, Near Customer" strategy to be close to our customers so that we can better serve them.

"We will replicate our proven management system in the new shipyard, and leverage the resources of our global network of 17 yards and commercial agents to ensure success of this joint venture with NAKILAT."