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Marine Log

October 1, 2007

SembCorp Marine in new Brazil yard venture

Singapore's Jurong Shipyard, a subsidiary of SembCorp Marine, and Brazil's WTorre Empreendimentos Imobiliarios SA (WTorre) have signed a Memorandum of Understanding to form a joint-venture company to own and operate a shipyard in Brazil.

Located in the Southern Brazilian city of Rio Grande, the 553,880 sq.m shipyard will be equipped with a graving dock of 133 m x 350 m and ancillary steel fabrication facilities. The new dry dock is to be fitted with a 600- ton gantry crane. It will be the largest to be built in Brazil for three decades. It is capable of handling the construction and repair of semisubmersible units, including the largest production rigs, ship-shaped FPSOs and fullscale topside fabrication capacity.

Construction started in November, 2006, and will be completed in June, 2008.

Petrobras is expected to use the facilities of the shipyard for its projects, and has signed a contract for this purpose, by renting the shipyard for the next ten years.

Sao Paulo based WTorre is a large and well established civil engineering group with expertise and capabilities in infrastructure development. SembCorp Marine says the strategic partnership with WTorre is in line with itss strategy to deepen its commitment and investment in Brazil to further grow its offshore business.

Mr Wong Weng Sun, President and COO of SembCorp Marine said "We have been a key player in Brazil's oil and gas construction industry since 1997. In 2001, we teamed up with the Synergy Group in Brazil to participate in the revival and modernization of the country's marine and offshore industry in Niteroi in the state of Rio de Janeiro. The shipyard, Maua Jurong, is today an established yard achieving world-class status. It has well-equipped shipyard facilities, plentiful skilled workforce and proven track record in the offshore oil and gas industry."

"Having fulfilled our obligations and intention, we have exercised our Put Option on the expiry of our joint-venture agreement," Mr Wong continued. "Meanwhile, we have been invited by WTorre to develop the marine and offshore infrastructure and to operate and own a shipyard, targeting at the oil and gas construction industry in Southern Brazil, in the city of Rio Grande. The shipyard, when completed in 2008, will be the largest shipyard in the Southern Hemisphere and is ideally located in close proximity to cater to the potential offshore market in West Africa. Equipped with one of Brazil's largest newbuild drydocks, the yard is well-positioned to handle semi-submersible rigs, FPSO conversions and newbuild production semi-submersibles and topside modules. It will cater to the needs of Petrobras projects." .

Currently, Jurong Shipyard is in an advanced stage of negotiations on the terms of the joint-venture partnership with WTorre Group. It says a further announcement will be made on finalization of the agreements.