Long-term shipowner agreements help secure a healthy future for the Singapore yard group’s repair and upgrade business sector
Singapore-based Seatrium is enjoying a strong recovery in business fortunes, following its creation last year as a result of the merger of the Sembawang and Keppel shipyard businesses. Overall, the company achieved revenues of around S$4 billion (US$3.1 billion) in the first half of 2024, generating a net profit of S$115 million (US$89 million) this period, compared with a net loss of S$264 million (US$205 million) in the equivalent months of 2023.
A strong increase in repair and upgrade activity has played a key part in the upturn, with the group securing a string of major repair and upgrade contracts, including the world’s first full-scale carbon capture and storage (CCS) retrofit for Solvang AS.
Over the first six months of 2024 Seatrium completed 133 vessel repair and upgrade projects, generating revenues of S$517 million (US$402 million), compared with $S504 million (US$392 million) over the first half of 2023. Highlights of the first half of this year included repairs to 28 LNG carriers, consolidating its market leading position in this segment; two FSRU special dockings; four cruise ship upgrades; two FPSOs; and two offshore rigs.
Seatrium has also been successful in securing Favoured Customer Contracts (FCCs) with leading shipowners, with six agreements of this type signed to date in 2024. This has included an FCC with Hyundai LNG Shipping, its first long-term strategic partnership agreement with a leading Korean liquefied natural gas (LNG) company, for the repair and upgrade of its LNG carriers. The contract includes the refit of a series of LNG carriers over the next two years. The first LNG retrofit under the FCC agreement took place at Seatrium’s Admiralty Yard this May and involved the LNG carrier Hyundai Utopia.
Additionally, Seatrium has secured an FCC with the Greek Angelicoussis Group. This two-year contract, with a one-year renewal option, includes the refit of 10 to 15 vessels a year, including LNG carriers, tankers and bulk carriers. Andreas Spertos, executive vice president and technical director of Angelicoussis group company, Maran Gas, says: “Seatrium was selected to be our partner as they have demonstrated a strong track record, and delivered over 70 successful retrofits, including 20 of our LNG carriers and a series of scrubber installations for our tanker fleet, since 2012.We are confident that this partnership will be the blueprint for a successful long-term fleet retrofitting programme, thereby enhancing our operational efficiency and instilling the highest standards of quality, safety, and environmental sustainability in the maintenance of our fleet.”
Another significant FCC has been signed with Teekay Shipping (Australia). This is its first long-term partnership agreement with a leading ship management company for the repair and upgrade of a fleet of vessels under the Australia Defence Maritime Support Services Program (DMSSP). The contract includes the refit of a series of vessels over the next two years and the first vessel under the FCC entered the Admiralty Yard in Singapore in July. Six more dockings for Teekay are planned over the next 12 months.
The importance of such agreements was stressed by Seatrium chief executive Chris Ong in announcing the impressive first half year results. He commented: “FCCs facilitate forward capacity planning, joint value creation and support a steady flow of repair and upgrades orders that contribute towards a recurring revenue base. Every docking space in our shipyard is valuable, and forward planning allows us to plan ahead for future projects.”
All the signs are that the second half of 2024 will also be positive for the Seatrium repair and upgrade business. Recently the company has announced that it has secured a further series of repair and upgrades contracts with an aggregate value of S$180 million (US$140 million). These include major repairs to offshore vessels, naval vessels, ferries, LNG carriers, tankers as well as damage repair work, for a wide range of customers, including Velesto Energy Berhad, Zonda Drilling, Seadrill and Sapura Energy Berhad.
The group has also won a contract for the docking and repair of Kaitaki, a ro-ro ferry operated by Interislander of New Zealand. In the tanker segment, Seatrium has been awarded periodic maintenance and upgrade work to two tankers for ConocoPhillips/Polar Tankers, and one main engine, dual-fuel ready MAN Lifecycle Upgrade of a tanker from Alaska Tanker Company, as well as a series of seven LNG vessel retrofits from long-term repeat customers.
Seatrium has also recently confirmed that major retrofits and upgrades are underway to Sea Challenger, an offshore installation vessel. The first steel was recently cut for this project at Seatrium’s Pioneer Yard, which will see the company performing engineering works, and the fabrication and installation of a new crane and upgraded leg jacking systems, over the next few months for Japan Offshore Marine (JOM), a joint venture between Penta-Ocean Construction and DEME.
