Keppel O&M unit bags $560m offshore wind-farm deal

Keppel FELS and Norwegian energy services provider Aibel are to produce a 900MW offshore converter station and an onshore converter station in Germany which will connect offshore wind power plants to the grid.
Keppel FELS and Norwegian energy services provider Aibel are to produce a 900MW offshore converter station and an onshore converter station in Germany which will connect offshore wind power plants to the grid.PHOTO ILLUSTRATION: AIBEL AS

Keppel Corp and Norwegian energy services provider Aibel will design and build converter stations for offshore wind farms in the North Sea.

Keppel FELS, a wholly owned subsidiary of Keppel Offshore & Marine, is looking at about $560 million in its share of the contract with European grid operator TenneT Offshore, Keppel Corp said on Tuesday.

It declined to disclose its shareholding in the consortium with Aibel.

But it described the deal as Keppel Offshore & Marine's "first major project in the renewable energy sector since 2010", when the Keppel unit entered the offshore wind market and built an electrical transformer and maintenance platform for a German offshore wind farm.

Renewable energy will also be an area of growth for Keppel Offshore & Marine, the parent group said.

Mr Chris Ong, chief executive of Keppel Offshore & Marine, said that the latest contract "extends our track record in supporting the renewable energy industry".

"We see opportunities in this segment as the offshore renewables market is expected to increase significantly over time with increasing concerns over climate change," he added.

Keppel FELS and Aibel are to produce a 900MW offshore converter station and an onshore converter station in Germany which will connect offshore wind power plants to the grid.

The partners, along with subcontractor ASEA Brown Boveri, will also carry out the installation and start-up operations for the converter stations, which are slated to be finished by 2024.

The contract is not expected to have a material impact on the net tangible assets or earnings per share of Keppel Corp this financial year, the group added.

Research analyst Gerald Wong of Credit Suisse's Asian Equity Research said in a note: "We expect new-order momentum to continue with strong enquiries in the production unit segment and a bottoming in the drilling rig market."

Separately, Keppel Corp has finished issuing $150 million in 3 per cent notes due 2024 and $350 million in 3.66 per cent notes due 2029.

A version of this article appeared in the print edition of The Straits Times on May 09, 2019, with the headline 'Keppel O&M unit bags $560m offshore wind-farm deal'. Print Edition | Subscribe