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SembMarine set to deliver Singapore's first newbuild FSO next month

The Business Times by TAN HWEE HWEE

Singapore

THE first newbuild floating storage vessel (FSO) to be delivered from Singapore is due to set sail next month from Sembcorp Marine's Tuas Boulevard Yard for its designated gas field.

The Singapore-based yard group has completed the construction of the FSO, which will be owned and operated by leading floating production contractor Modec.

The newbuild, named Alisa, is also the first FSO in the world to feature a hull with a 40-year lifespan.

The delivery of the FSO is significant partly because it solidifies Singapore's claim on a stake in the newbuild floating production and storage vessel (FSO and FPSO) market.

In addition to rig-building, Singapore's leading yard groups, SembMarine and Keppel Offshore & Marine (O&M), have leant on conversion of FPSOs and FSOs to fill their order book during the last upswing in the O&M sector.

But that is set to change as the pool of available conversion projects has shrunk along with a contraction in O&M contracting activity since the second half of 2014.

IHS Markit's Apac head of research for yards and fabrication, Ang Dingli, noted that broadly speaking, demand for newbuild FPSOs is in fact recovering faster than that for converted units.

Mr Ang qualified however that SembMarine's venture into the newbuild segment could be motivated by other factors. IHS Markit's view is that the move also falls in line with the yard group's "desire to move up the value chain" by taking on "more complex engineering, procurement and construction projects".

Such projects mostly call on the yards to build structures from scratch. He also noted that yards in Singapore now have to deal with "growing pressure" from competition against Chinese yards in the conversion market.

With Alisa, SembMarine has also left its mark by delivering the newbuild FSO potentially boasting the longest designed operational life so far. The hull of FSO Alisa has a 40-year life-span, compared to an average of 25 years for most other FPSOs and FSOs that are currently in operations.

Mr Ang noted a trend among certain oil companies towards extending lives of production assets, which will see lower maintenance costs in the longer run. FSO Alisa is also intended to work at Total-operated Culzean gas field in the harsh environment of the North Sea. SembMarine has explained that the longer hull fatigue life enables ships to withstand harsher and more extreme environmental conditions, such as rogue waves, corrosion, large ambient temperature variation and thunderstorms.