Sembcorp Marine secures new contracts worth $175m

An artist's impression showing the LNG bunker vessel to be built by Sembcorp Marine by 2021 for a Mitsui OSK Lines subsidiary.
An artist's impression showing the LNG bunker vessel to be built by Sembcorp Marine by 2021 for a Mitsui OSK Lines subsidiary.PHOTO: LMG MARIN

It will build LNG vessel for MOL; repair, modernise 13 cruise ships

Sembcorp Marine has secured new contracts worth an estimated $175 million to design and build a liquefied natural gas (LNG) bunker vessel, and for the repair and modernisation of 13 cruise ships.

The LNG vessel will be built for a subsidiary of Mitsui OSK Lines (MOL) at the Sembcorp Marine Tuas Boulevard Yard.

The 112m-long craft will be the largest of its kind to be built here in terms of size and LNG tank capacity, said SembMarine. It is also the company's first LNG bunker vessel construction project.

SembMarine said it will fabricate the vessel's membrane tanks, which will have a combined 12,000-cubic-metre capacity, under a licensing agreement with French LNG containment specialist GTT.

The vessel will be chartered to Pavilion Gas, a subsidiary of Pavilion Energy, for deployment in Singapore once it is completed in 2021.

In a separate announcement yesterday, Pavilion Energy, a wholly-owned unit of Temasek Holdings, said it was awarded a $3 million grant under a Maritime and Port Authority of Singapore programme that will go towards building the bunker vessel.

Pavilion Energy and Total Marine Fuels Global Solutions, a subsidiary of French energy giant Total, have also agreed to co-share utilisation of the vessel.

There is a growing interest among shipowners in opting for LNG as a marine fuel as the global shipping industry looks to adapt to stricter emissions standards, said Pavilion Energy.

SembMarine has also partnered Carnival Cruise Line, Royal Caribbean International, Star Cruises, Norwegian Cruise Line, and Star Clippers Monaco for 13 new cruise vessel repair and modernisation projects. The projects will be executed at its Admiralty and Tuas Boulevard yards.

The 112m-long craft will be the largest of its kind to be built here in terms of size and LNG tank capacity, said Sembcorp Marine. It is also the company's first LNG bunker vessel construction project.

The firm expects a positive contribution to its earnings from the contracts, but they are not expected to have any material impact on net tangible assets and earnings per share for the year ending Dec 31, 2019.

SembMarine president and chief executive Wong Weng Sun said the LNG bunker vessel project "will be a sophisticated new-building that not only delivers optimal technical performance, but also helps MOL and Pavilion Energy contribute to the expected standard of LNG bunkering operations in Singapore".

A version of this article appeared in the print edition of The Straits Times on February 26, 2019, with the headline 'Sembcorp Marine secures new contracts worth $175m'. Print Edition | Subscribe