KrisEnergy inks agreement to appoint Keppel its preferred contractor

MAINBOARD-LISTED Keppel Corporation said in a Singapore Exchange filing on Monday morning that is has entered into a cooperation agreement to be appointed preferred contractor by upstream oil and gas company KrisEnergy.

Keppel, which is a controlling shareholder of KrisEnergy, said the agreement has been signed between its wholly-owned subsidiaries, Keppel FELS Limited and Keppel Shipyard Ltd, and KrisEnergy.

Under this agreement, Keppel will be the preferred contractor in the "newbuilding, repair, conversion and upgrading of a range of marine assets and/or vessels and the use of Keppel's yard and associated yard services for the construction and refurbishment of facilities."

These would include mobile offshore production units (MOPU), mobile offshore drilling units (MODU), production barges, floating production and storage units (FPSO) and floating storage offloading (FSO) units.

The agreement also covers the lease, chartering and the use of, or the provision of services by, Keppel's marine assets and/or vessels, including MOPU, MODU, FPSO, FSO, floating cranes, barges and tugs.

In a separate filing on Monday, KrisEnergy said the cooperation agreement will allow it to gain access to Keppel's experience, facilities and equipment at a competitive price.

"This will in turn give the group a competitive edge in specialised areas where Keppel is able to provide services to the group," it added.

KrisEnergy has convened an extraordinary general meeting (EGM) to seek shareholders' approval for the proposed adoption of a general mandate for interested person transactions in respect of the cooperation agreement and each contract awarded under it. The EGM is scheduled to take place on April 26 at 9.30am, or as soon thereafter following the conclusion or adjournment of the company's annual general meeting to be held on the same day and at the same place.

Keppel in its filing said the cooperation agreement will not have any material impact on its net tangible assets and earnings per share for the financial year ending Dec 31, 2018, it added.

Keppel shares ended S$0.05 or 0.7 per cent higher at S$7.70 on Friday, while KrisEnergy shares closed up S$0.011 or 13.4 per cent at S$0.093.