Keppel US unit wins $545m contract for two LNG vessels

The deal with Honolulu-based Pasha Hawaii will be Keppel's first for a large-sized Jones Act vessel and a new-build container ship.
The deal with Honolulu-based Pasha Hawaii will be Keppel's first for a large-sized Jones Act vessel and a new-build container ship.PHOTO: KEPPEL CORPORATION

Ships for Pasha Hawaii will be built to Keppel's proprietary design and delivered in 2020

Keppel AmFELS, which operates in the United States, has secured a contract worth over US$400 million (S$545 million) from Honolulu- based Pasha Hawaii for the construction of two container ships fuelled by liquefied natural gas (LNG).

These LNG vessels will be built to Keppel's proprietary design, with delivery of the first vessel expected in the first quarter of 2020 and the second vessel in the third quarter of that year.

Keppel AmFELS is a wholly owned subsidiary of Keppel Offshore & Marine (Keppel O&M) which is part of Keppel Corp. The unit is located in Brownsville, Texas.

Keppel AmFELS president Simon Lee said: "Keppel O&M is at the forefront of designing vessels that run on LNG propulsion systems and has the experience in LNG vessel conversions as well as the expertise in new-build specialised vessels."

He added that the Keppel unit is ideally located and well-equipped to build a wide variety of vessels for the Jones Act market.

The recent Jones Act requires vessels carrying goods between US ports to be built in the US. For Keppel, this contract will be its first for a large-sized Jones Act vessel and a new-build container ship.

Market observers noted that with the oil and gas market remaining challenging, the contract win is a significant one that highlights Keppel's diverse product offerings.

"This contract with Keppel allows Pasha Hawaii to continue to move forward in our commitment to providing the best resources possible for our customers and Hawaii's shipping industry, while minimising our environmental footprint," said Mr George Pasha IV, president and chief executive of The Pasha Group.

Customised to Pasha Hawaii's requirements, the new, 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 container ships will be able to run completely on LNG fuel, dramatically reducing their environmental impact and increasing fuel efficiency.

Energy savings will also be achieved with a state-of-the-art engine, an optimised hull form, and an underwater propulsion system with a high-efficiency rudder and propeller.

Keppel said the contract is not expected to have a material impact on its net tangible assets or earnings per share for the current financial year. The shares ended six cents higher at $6.36 yesterday.

A version of this article appeared in the print edition of The Straits Times on August 25, 2017, with the headline 'Keppel US unit wins $545m contract for two LNG vessels'. Print Edition | Subscribe