Keppel Nantong Shipyard Co. Ltd (Keppel Nantong), the wholly-owned subsidiary of Keppel Offshore & Marine Ltd (Keppel O&M), has clinched three contracts worth a total of S$110 million (RMB$550 million), including owner furnished equipment, to build eight tugs.

The first contract is secured from Smit Internationale Beheer B.V (SMIT) to build two 90-tonne bollard pull offshore support tugs. It will have anchor handling, diving support, and fire fighting capabilities.

Delivery of these two vessels is expected in the first half of 2010. They will be deployed in West Africa.

The second and third contracts are awarded by Keppel Smit Towage Pte Ltd and Maju Maritime Pte Ltd. Each contract is for the construction of three 65-tonne bollard pull twin-screw Azimuth Stern Drive (ASD) tugs. They will be built in accordance to the MTD 3265ST design, developed by Keppel O&M’s technology unit, Marine Technology Development (MTD).

The vessels are expected to be progressively delivered in the year of 2011.

Mr Lee Tai Kwee, President of Keppel Nantong, said, “With the eight new vessels, Keppel Nantong has an orderbook of 26 vessels currently under construction on our 16 hectare site. We are glad that our customers have confidence in the capability of this new yard which is just under two years old.”

Acquired by Keppel O&M in 2005, Keppel Nantong engages in the construction of specialised vessels such as offshore support vessels and tugboats. Located along the Chang Jiang River, it is about 110 km north-west of Shanghai.

SMIT Internationale Beheer B.V is a division of Dutch company, SMIT Internationale NV. The company engages in services relating to transport barges, tugs, support vessels and self-propelled floating sheerlegs. It is a repeat customer of Keppel O&M.

Both Keppel Smit Towage and Maju Maritime are 51/49 joint ventures of Keppel O&M and SMIT Internationale N.V respectively.

Keppel Nantong Shipyard, a wholly-owned subsidiary of Keppel Corporation Limited through Keppel O&M, is the specialised shipbuilding arm. Keppel O&M’s ‘near market, near customer' strategy is bolstered by a global network of 20 yards in the Asia Pacific, Gulf of Mexico, Brazil, the Caspian Sea, Middle East and the North Sea regions. Integrating the experience and expertise of its yards worldwide, the group aims to be the provider of choice and partner in solutions for the offshore and marine industry.

These contracts are not expected to have any material impact on the net tangible assets and earnings per share of Keppel Corporation Limited for the financial year of 2007.