President of Azerbaijan, HE Ilham Aliyev breaks ground for the new yard in the presence of Singapore’s Minister of Foreign Affairs, Mr George Yeo.
Fortifying its presence in the Caspian Region, Keppel Offshore & Marine Limited (Keppel O&M) joins hands with State Oil Company of Azerbaijan Republic (SOCAR) and Azerbaijan Investment Company (AIC) to develop and manage a new 52-ha shipbuilding and shiprepair facility in Baku, Azerbaijan.
The new SOCAR-Keppel Shipyard will be developed over a period of two to three years with an investment of US$386 million. The joint venture agreement will be signed with Keppel O&M taking a 10% share of the yard, and SOCAR and AIC the other 65% and 25% respectively.
Keppel O&M will be responsible for the management and operation of the yard, and will have the option to acquire another 10% stake in the next three years.
The new yard is designed to undertake construction of a variety of vessels ranging from offshore support vessels to tankers, as well as ship repair and conversion.
Speaking at the yard’s groundbreaking ceremony today, Singapore’s Minister of Foreign Affairs, Mr George Yeo, said, “A new chapter has opened in our bilateral relationship. There is great potential for the strengthening of economic and other ties.
“The oil and gas sector is an obvious area of greater cooperation. Although Singapore has no oil or gas, we have a strong chemicals and maritime support cluster, with many Singapore-based companies supporting the operation of large oil and gas companies. The development of this new SOCAR-Keppel shipyard supports the Oil Strategy promulgated by President Heydar Aliyev.”
Minister Yeo is the first Singaporean Minister to visit Azerbaijan since both countries established diplomatic relations 16 years ago.
Mr Rovnag Abdullayev, President of SOCAR, said, “We are deeply honoured to have the President of Azerbaijan HE Ilham Aliyev officiate the groundbreaking of our new shipyard, and Singapore’s Minister of Foreign Affairs Mr George Yeo witness this significant event.
“SOCAR and Keppel came together 13 years ago to form the Caspian Shipyard Company in Baku. Together, we delivered many landmark projects in the Caspian Sea, and brought Azerbaijan’s oil and gas sector to new heights.
“The new SOCAR-Keppel Shipyard is envisaged to be on par with the best shipbuilding facilities in the world. I am confident that with Keppel’s proven expertise and operational track record, we will continue to create new benchmarks for the oil and gas industry.”
Strategically located along the East-West energy corridor of the Caspian Sea region, the new yard will be critical in helping to meet the growing needs of the local oil industry. It will contribute towards the unlocking of Azerbaijan’s vast offshore hydrocarbon potential as part of the republic’s oil strategy, and support the renewal of SOCAR’s vessel fleet.
Mr Tong Chong Heong, CEO of Keppel O&M, said, “We are pleased to strengthen our win-win partnership with SOCAR through the development of the new SOCAR-Keppel Shipyard.
“This latest venture reinforces Keppel O&M’s Near Market, Near Customer strategy, and will place us in pole position to capture opportunities from the growth of the Caspian region. We are confident of replicating our success in developing and operating a first-class shipyard to service the unique requirements of this market.”
Spanning a 1,630-metre waterfront, the yard, when completed, will be able to undertake 80 to 100 repairs and conversions per annum and is estimated to achieve an average annual steel throughput of 25,000 tons when operating at full capacity.
“Through this new yard, we will be sharing our technology, know-how, and world-class operational standards in a sustainable way.
“In addition to provide local content to support the industry’s growth, we will also continue to support Azerbaijan through the offering of employment, training and skills development and apprenticeship schemes. When fully operational, our new yard will create employment opportunities for some 2,000 people,” Mr Tong added.
The above joint venture is not expected to have material impact on the net tangible assets or earnings per share of Keppel Corporation Limited for the current financial year.