SINGAPORE - Offshore marine company Otto Marine announced on Monday (Jan 11) that its wholly-owned subsidiary, Otto Marine Shipyard, has signed an agreement with a "world-renowned port operator" to explore the potential development of a fabrication and marine facility.

In a stock exchange filing, Otto Marine said the proposed development is strategically located in close proximity to Singapore and will be able to tap on the Indonesian oil and gas industry.

The identity of the port operator and location of the proposed project, which is expected to be fully operational by July 2017, were not disclosed.

Commenting on the memorandum of understanding, Otto Marine group chief executive officer Michael See said: "This is especially uplifting with the continued dreary conditions in the oil and gas industry. The proposed development will provide new avenues which will improve our overall competitiveness and give us an edge in the region."

Mr See believes the partnership will be "highly beneficial" to both parties in the long-run.

"We have strong capabilities in fabrication, ship repair and conversion and we have a healthy client base that has utilised our sophisticated offshore fabrication services over many years. Furthermore, being in Batam helps us obtain cabotage related business. For this upcoming fabrication and marine base, we can provide the above mentioned expertise along with infrastructural and labour support, and the local know-how," he added.

Otto Shipyard currently operates a 65 hectare shipyard through its sister company PT Batamec.

The proposed development will use a fraction of the yard space and is not expected to cause any disruption on PT. Batamec's existing shipyard facilities, Otto Marine said.