Sembcorp unit secures $308.8 million contract to build new jack-up drilling rig

The Hakuryu-10, a proprietary Pacific Class 375 jack-up delivered by PPL Shipyard to Japan Drilling Co., Ltd in June 2008, is currently on charter to Total E&P in Indonesia. -- PHOTO: SEMBCORP
The Hakuryu-10, a proprietary Pacific Class 375 jack-up delivered by PPL Shipyard to Japan Drilling Co., Ltd in June 2008, is currently on charter to Total E&P in Indonesia. -- PHOTO: SEMBCORP

Sembcorp Marine said on Monday that its subsidiary PPL Shipyard has secured a US$240 million (S$308.79 million) contract to build a new jack-up drilling rig from BOT Lease Co., a leasing company of The Bank of Tokyo-Mitsubishi UFJ which is under the umbrella of Mitsubishi UFJ Financial Group.

The contract value may be higher on additional specification requirements to be negotiated among the parties involved, it said.

Scheduled for delivery at the end of October 2016, the new rig, to be named Hakuryu 14, will be built based on PPL Shipyard's established proprietary Pacific Class 400 (PC 400) design. This latest generation of high-specification jack-up rigs is capable of operating in deeper waters of 400 feet and drilling high pressure and high temperature wells to depths of 35,000 feet.

This will be the second jack-up rig that PPL Shipyard is building for BOTL, with Japan Drilling Co. once again being the project coordinator as well as providing the project management team during the rig construction phase. The first unit, named Hakuryu 12, is presently under construction with contractual delivery at end January 2015. PPL Shipyard also built the Hakuryu 10, a PPL Shipyard proprietary Pacific Class 375 series, for JDC - that unit was delivered in June 2008 and is currently chartered to Total E&P Indonesia.

Said Mr Wong Teck Cheong, managing director of PPL Shipyard, said: "Since the launch of this Pacific Class 400 series, eighteen such jack-ups have been ordered with nine units delivered and operating in West Africa, Gulf of Thailand, South East Asia, Qatar and the Middle East. This clearly shows the PC400 is a proven design well accepted by the industry. This jack-up rig order reflects the owner's confidence in the premium jack-up rig market and in PPL Shipyard's design capabilities, efficient project execution, and track record for quality and timely deliveries."

Sembcorp said the contract is not expected to have any material impact on its consolidated net tangible assets per share of for the year ending December 31, 2014.