25 August 17 The Business Times by ANITA GABRIEL
KEPPEL Corp's wholly owned offshore and marine unit has clinched a contract worth more than US$400 million from a Honolulu-based ocean shipping firm to build two liquefied natural gas (LNG) vessels.
Under the contract for the dual-fuel LNG vessels, secured by Keppel Offshore & Marine's wholly owned subsidiary Keppel AmFELS from Pasha Hawaii, one vessel is expected to be delivered in the first quarter of 2020 and the other in the third quarter that year.
The LNG-fuelled containerships will be built to Keppel's proprietary design and customised to Pasha Hawaii's requirements.
The 774-foot Jones Act vessels will be able to carry 2,525 TEUs (twenty-foot equivalent units), including a fully laden capacity of 500 45-foot containers, 400 refrigerated containers, and 300 40-foot dry containers, with a sailing speed of 23 knots.
The ship's hull has been fully optimised using computational fluid dynamics (CFD) and, according to Keppel, will be one of the most hydrodynamically efficient hulls in the world.
The containerships will be able to run completely on LNG fuel - a cleaner alternative for shipping - hence reducing their environmental impact and increasing fuel efficiency.
"Keppel AmFELS is ideally located and well-equipped to build a wide variety of vessels for the Jones Act market...building these ships will have a direct impact on American jobs at our shipyard," said Keppel AmFELS president Simon Lee.
The Jones Act requires vessels carrying goods between US ports to be built in the US. Located in Brownsville, Texas, Keppel AmFELS is well-positioned to capture opportunities in this market, said the company.
The contract is not expected to have a material impact on Keppel Corp's net tangible assets or earnings per share for the current financial year.
DBS Group Research said: "This sizeable contract win is an encouraging news as order flow has been slow thus far this year." It added that the contract will lift Keppel's year-to-date wins to some S$850 million or 57 per cent of the house's order assumption of S$1.5 billion.
Moreover, this is Keppel's first newbuild contracts for Jones Act vessels in the US and underscores the importance of Keppel's global shipyard network, said DBS Research.