A 30-year agreement for management services for Titan Quanzhou Shipyard
An important step towards rebuilding of business
HONG KONG, April 11, 2014 /PRNewswire/ -- Titan Petrochemicals Group Limited (HKSE stock code: 1192, "Titan" or "the Company", together with its subsidiaries the "Group") and Titan Quanzhou Shipyard Co., Ltd. ("TQS"), a wholly owned subsidiary of the Company entered into a conditional 30-year management services agreement with FELS Offshore Pte Ltd ("FELS") in relation to the management and operation of the shipyard (the "Shipyard"). FELS is a subsidiary of Keppel Offshore & Marine Ltd, which in turn is a subsidiary of Singapore-listed Keppel Corporation Limited.
Pursuant to the management services agreement, FELS will, upon the agreement coming into effect, make available certain employees to TQS to supervise and manage the operations of the Shipyard, and TQS will use the Shipyard, during the 30-year term of the agreement, to carry on the business of construction, repair, conversion and upgrading of mobile offshore drilling units (which are used for offshore oil drilling operations); the repair, conversion and upgrading of vessels into FPSO, FSO, FSRU and FLNG vessels (which are oil and gas production vessels); and the construction, repair, conversion and upgrading of other vessels in accordance with the terms of the agreement.
Located in Quanzhou, the Fujian Province, the Shipyard is one of the largest shipyards in China, occupying a total area of 110ha with 3,600m length of coastline. When the improvement work at the Shipyard is completed, the Shipyard is expected to have four ultra-large and wide dry docks, including one of the largest modern-designed docks in China, which is expected to enable it to convert double hull vessels such as Floating Production Storage and Offloading (FPSO) units. Besides ship repair and conversion capabilities, the yard is also expected to construct offshore rigs including jackups and semisubmersibles using Keppel's proprietary designs.
Mr Zhao Xu Guang, Chairman of Titan said, "Through the partnership with Keppel, we aim to quickly build up the track record of our Shipyard and enhance our presence in the offshore and marine business. With Keppel's established goodwill, reputation, technical knowhow and expertise, and business contacts in the field of manufacturing mobile offshore drilling units, the Company will be able to utilize the existing production facilities of the Shipyard to diversify into a business of significant potential."
Mr Chow Yew Yuen, CEO of Keppel O&M said, "The offshore oil and gas market in China has been growing significantly, and there is increasing demand for high specification rigs and production vessels. Having this yard enables us to service the Chinese market with our suite of proprietary solutions while meeting its requirement of building in-country. This is further complemented by our other shipyard in China, Keppel Nantong, which undertakes specialised shipbuilding and offshore fabrication. Together with the strength of Guangdong Zhenrong's extensive connections and experience in China, and our expertise and established track record in the global offshore and marine industry, we are confident that this is a win-win partnership that will enable Keppel and Titan to become a major offshore solutions provider for China."
Mr Zhao concluded, "The cooperation arrangement with Keppel under the management services agreement will provide a core basis for the Company to formulate its business plan. With the support of our major shareholder Guangdong Zhenrong Energy Co. Ltd., the management is keen on moving forward with all stakeholders' support in finalising our restructuring plan, turning a new page for Titan's promising future."
