Keppel looking to merge offshore unit with Sembcorp Marine

Singapore’s Keppel Corp has revealed plans to merge its offshore and marine unit with compatriot Sembcorp Marine.

Keppel said on Thursday the duo has signed a non-binding memorandum of understanding to enter into exclusive negotiations with a view to combining Keppel O&M and Sembcorp Marine.

Keppel and Sembcorp Marine said they would undertake mutual due diligence and discuss the terms of the potential combination.

This would take several months, according to the statement.

“Dramatic changes”

The objective of these discussions is to create a stronger combined entity and sustainable value over the long term for Keppel O&M and Sembcorp Marine and their respective stakeholders, it said.

This is in response to “dramatic changes” in the global offshore and marine engineering and energy sectors due to a sustained reduction in oil exploration and development activities, low oil prices, and the impact of Covid-19, it said.

In addition to this move, Keppel also revealed plans to sell Keppel O&M’s legacy rigs.

“While the outlook for oil exploration and related activities remains uncertain, the outlook for energy transition is robust, including areas such as offshore wind and hydrogen,” the statement said.

If completed, the new combination would create a “stronger player to capitalise on growing opportunities in the O&M, renewable and clean energy sectors,” the statement said.

Under the deal, Sembcorp’s shareholders will hold shares in the listed combined entity. Also, Keppel will receive shares in the combined unit and a cash consideration of up to S$500 million ($372 million).

Strong LNG presence

Keppel O&M and Sembcorp Marine have both strong presence in the LNG industry and they own a network of shipyards in Singapore and overseas.

Among others, their combined experience includes building all kinds of LNG vessels as well as LNG-powered ships. The duo also repairs and converts LNG vessels.

Keppel O&M also has a stake in Singapore’s first LNG bunkering vessel and in Qatar-based shipyard N-KOM.

- Advertisements -

Most Popular

QatarEnergy, ExxonMobil update on Golden Pass LNG work

Energy giants QatarEnergy and ExxonMobil released the latest construction update for their Golden Pass LNG export terminal on the...

LNG freight rates, European prices climb

Spot charter rates for the global liquefied natural gas (LNG) carrier fleet and European prices increased this week compared...

Samsung Heavy to sue Russia’s Zvezda over LNG carrier contract termination

South Korean shipbuilding giant Samsung Heavy Industries said it will sue Russian shipbuilder Zvezda after the latter decided to...

More News Like This

Singapore’s FueLNG completes 150th STS bunkering operation

Singapore’s FueLNG, a joint venture consisting of Shell and Seatrium, has completed its 150th ship-to-ship (STS) LNG bunkering operation. FuelLNG...

Seatrium renews LNG carrier repair deal with GasLog and Shell

Singapore's Seatrium has renewed its long-term favored customer contract with units of Greece's LNG shipping firm GasLog and UK-based...

TMS Cardiff Gas awards LNG carrier repair and upgrade job to Seatrium

Singapore's Seatrium has secured a contract from Greek LNG shipping firm TMS Cardiff Gas for the repairs and upgrades...

Seatrium wins LNG carrier contracts from BP, Seapeak

Singapore's Seatrium has secured LNG carrier upgrade and repair contracts from Seapeak and BP's shipping unit. The group, previously known...