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.

Most Popular

Canada’s Cedar LNG names FLNG

Canada’s Cedar LNG, a joint venture of Canada’s Pembina Pipeline and the Haisla Nation, has picked a name for its floating LNG facility, which will be located in the traditional territory of the Haisla Nation, on Canada’s West Coast.

NextDecade, Jera seal 20-year LNG SPA

Japan's Jera has signed a 20-year deal to buy liquefied natural gas from the planned fifth train at NextDecade's Rio Grande LNG facility in Texas.

Australia’s Viva Energy gets OK for Geelong LNG import terminal

Australia’s Viva Energy has secured approval from the Victorian government for its proposed FSRU-based LNG import terminal in Geelong, Australia.

More News Like This

Seatrium appoints new finance chief

Singapore's Seatrium has appointed Stephen Lu, the group’s executive VP for strategy, as its new chief financial officer.

Seatrium, Golar agree to let third FLNG conversion contract lapse

Seatrium, previously known as Sembcorp Marine and renamed as Seatrium following its merger with Keppel Offshore & Marine, revealed this in a...

Seatrium bags new LNG carrier repair jobs

Seatrium, previously known as Sembcorp Marine and renamed as Seatrium following its merger with Keppel Offshore & Marine, revealed the new...

Singapore’s FueLNG completes 200th STS bunkering operation

Singapore’s FueLNG, a joint venture consisting of Shell and Seatrium, has completed its 200th ship-to-ship (STS) LNG bunkering operation. FuelLNG...