DMG & Partners Research, Sept 19
KEPPEL Corp (KEP) has secured two floating production storage and offloading (FPSO) conversion contracts. This lifts its year-to-date new orders to $4.3 billion, accounting for 72 per cent of our $6 billion order win estimate for FY2013.
The contracts are positive as they reflect the group's strong execution capability and raise its net order book to $14.4 billion. We maintain our EPS estimates, "buy" rating and TP of $12.24.
Conversion project from SBM, a repeat customer. The first contract from SBM Offshore is for the conversion of a FPSO unit that will be used for the Stones ultra deepwater development by Shell in the Gulf of Mexico. The FPSO is designed with a processing capacity of 60,000 barrels of oil per day (bopd) and will be able to store 800,000 barrels of crude oil.
The second contract, awarded by M3nergy, involves the conversion of a FPSO for the Petronas-operated Bukit Tua Field, 35km north of Madura Island in Indonesia. The conversion is expected to be completed in Q2 2014. The FPSO will have a production capacity of 25,000 bopd and a storage capacity of 630,000 barrels. We understand KEP beat other yards to the job, including Malaysia Marine and Heavy Engineering Holdings.
BUY
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