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SembMarine signs letter of intent with Shell for floating production unit

SEMBCORP Marine, through its wholly-owned unit Sembcorp Marine Rigs & Floaters, has inked a letter of intent with Shell Offshore Inc for work on a floating production unit.

Should the deal go through, SembMarine will build the hull and the topside of Shell's Vito floating production unit, it told the Singapore Exchange in a filing on Tuesday.

It will also be responsible for the integration of the unit.

The Vito floating production unit is designed with a throughput capacity of 100,000 barrels of oil per day and 100 million standard cubic feet of gas per day.

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It will be a new facility located in the Mississippi Canyon, about 240 km south of New Orleans, Louisiana, the United States, in water depths of 4,050 ft.

The final contract award will be dependent upon Shell and its partners sanctioning the project.

SembMarine said the letter of intent is not expected to have any material impact on the group's net tangible assets and earnings for the year ending Dec 31.

The group's shares closed 0.5 per cent or one Singapore cent lower at S$1.91 on Tuesday, before the announcement was made.