Transition to green energy well on track, says Sembmarine

SINGAPORE - Even as it negotiates with Keppel Corp to create a bigger energy entity with the merger with Keppel Offshore & Marine, Sembcorp Marine remains well on track to transition to the renewables and clean energy segment.

The company said this in notes attached to its annual general meeting notice posted on the Singapore Exchange on Thursday (April 7).

Sembmarine said it had embarked on its business transformation in 2015 to rebalance its product solutions portfolio by increasing its focus on renewables, cleaner energy and other green solutions.

"The group's sustainable solutions segment constituted 30 per cent of total revenue in 2021 and 43 per cent of the group's net order book as at end 2021," it said.

"In the near term, with high oil and gas prices, the group will continue to respond to increasing opportunities to offer offshore oil and gas production solutions."

It added that in the longer term, renewable energy and other cleaner and green solutions will increasingly account for a greater share of its order book and revenue.

All this comes even as the company continues in negotiations with Keppel Corp on the proposed combination of Sembmarine and Keppel O&M to create a stronger entity, which it said would leverage respective strengths to realise synergies and deliver sustainable value over the long term for shareholders.

"The proposed combination aims to create a stronger player and accelerate the combined entity's transition to seize new and emerging opportunities in the renewable and clean energy sectors," Sembmarine noted.

"The combined entity would bring together the best talents, engineering skills, intellectual properties and technical know-how from both companies."

It reiterated that both parties were working towards a definitive agreement by April 30.

Meanwhile, Sembmarine is pushing ahead to build up its "green energy" order book.

This comprises projects to design, construct, install and commission offshore wind farms, build battery-powered ferries, offshore substations and living quarters for newbuild semi-submersible floating production units.

Negotiations are also in progress with the Brazilian Navy on the construction of the Antarctic Support Vessel "NapAnt", which is part of the Brazil Navy Research Vessel Project, with a contract award expected in the first half of this year.

Meanwhile, it is actively pursuing multiple projects and tender opportunities in the renewable energy and gas solutions and process solutions segments, including projects relating to offshore vessels for the energy sector.

Sembmarine's repairs and upgrades business has also secured advance orders for liquefied natural gas carriers and cruise vessels and is working on active inquiries for offshore vessel upgrading projects.

"In addition, the group has continued to secure green technology retrofit solutions, including projects relating to ballast water management system and scrubber installations, and identified opportunities in sustainable repairs and upgrading, such as air lubrication systems and ammonia-based fuel solutions," the firm said.

"Underpinned by its operational and technology bench strengths, the group is well placed to support the global energy needs, premised on a low-carbon footprint with a balanced portfolio across offshore, marine and energy product solutions."

Sembmarine said it would continue to further diversify its business portfolio and extend into new areas of renewable energy, electrification, gas value chain, ocean living as well as carbon capture and storage solutions.

All these initiatives could get a huge leg-up after the merger with Keppel O&M is completed, as the combined entity will be a stronger player that could accelerate the transition to seize new and emerging opportunities in the renewable and clean energy sectors.

It said "significant progress" had been made on advancing the proposed combination, including mutual due diligence, the transaction structure, exchange ratio and other related matters.

Sembmarine shares closed up 4 per cent at 10.4 cents on Thursday.