COMPANY PROFILE
2014
Baku Shipyard
994 1244 64944
Flying start in Caspian home waters Editorial: Colin Chinery
Within months of its opening, the Baku Shipyard in Azerbaijan this year scooped a $378 million contract from BP Exploration to design and build a Subsea Construction Vessel. A case of the right place at the right time for this rising new “local star” in the remote but oil and gas-rich Caspian region. The opening of the Baku Shipyard in Azerbaijan last September 2013 was a moment when timing and location went in lockstep. Baku, largest city in the Caucasus region, and at 28 metres below sea level the lowest lying national capital in the world, projects out into the
PAGE 2
Caspian Sea, one of the oldest of all oil producing areas, and according to the US Government’s Energy Information Administration, location of the world’s seventh biggest oil and natural gas reserves. Today the Caspian has become one of the world’s leading hydrocarbon
provinces, the development of its oil and gas fields and onshore pipelines making Azerbaijan a focal point of the global energy market. Baku Shipyard’s General Manager, KC Lam, shares on the rationale of developing a new shipyard in Baku, “With all these oil and gas activities in the Caspian region, which continue to grow, it was clear that the industry needed a modern yard equipped with both marine and offshore facilities to provide shipbuilding, repair and related services. Strategically located along the East-West energy corridor of the Caspian Sea region, the new 71.4 hectare yard is a joint partnership between State Oil Company of the Republic of Azerbaijan (SOCAR – 65% shareholding), the Azerbaijan
Baku Shipyard Investment Company (AIC – 25% shareholding), and Singapore-based Keppel Offshore & Marine (10% shareholding). Keppel Offshore & Marine is responsible for the management and operation of the yard.
LANDMARK CONTRACT It took two and a half years to build, opening in the same week that BP announced a $45 billion landmark international project – the Southern Gas Corridor - to export natural gas from the giant Shah Deniz field passing through seven countries to Europe. Seven months later, in April, the BP link re-surfaced when Baku Shipyard won a $378 million contract from BP
Exploration - operator of the Shah Deniz gas field development to design and build a Subsea Construction Vessel (SCV). Scheduled for completion in April 2017, the Caspian flagship vessel will install the field’s subsea structures over 11 years up to 2027, providing essential support for Stage Two of the biggest subsea production system in the region. With a 1,200-meter waterfront, the yard’s $470-million phase one development could perform up to 100 repairs and
conversions a year, with average annual steel output of 25,000 tonnes. A second phase plan, yet to be finalised, envisages the construction of a graving dock and further facilities for larger marine and offshore projects.
TRACK RECORD Keppel Singmarine (KSM), which is a subsidiary of Keppel Offshore & Marine, has a track record in building complicated diving vessels similar to SCV and also a host of other specialized vessels such as Anchor Handling Tugs (AHTS),
PAGE 3
Tenglee Marine & Engineering Pte Ltd (TL) was established in 1993; together with Yong Cheong Marine & Engineering Pte Ltd, Yong Ming Marine & Engineering Pte Ltd and Hong Yat Steelwork & Engineering Pte Ltd, it combines its resources to cater for shipbuilding, marine repairs and specialised engineering works for the marine & offshore industry in Singapore. TL is recognised as one of the most reliable and competent steel hull fabricators in Singapore and has been granted resident contractor status by the Keppel Group of Shipyards (Keppel Singmarine, Keppel O &M and Keppel FELS) and PRM Offshore Heavy Industries.
Since its establishment 20 years ago, TL has taken an active role in the oil & gas industry, constructing more than 18 supply vessels, taking part in 7 jackup-rigs and even Southeast Asia’s first construction of an icebreaker for Lukoil between 2006-2008. With its team of highly trained personnel, TL has maintained its reputation of delivering top quality vessels as well as always on time. In 2012, TL also set up operations in Baku, Azerbaijan in support of the oil exploration activities of SOCAR (the national oil Company of Azerbaijan). It is now currently building several marine offshore vessels in Baku, including a semi-submersible and an upcoming subsea vessel for pipe-laying. Apart from Azerbaijan, TL has broken into the Brunei market with its local partner ZHMD Engineering Services SDN BHD in 2013. Together, we have been granted the rights to tender for all Brunei Shell Petroleum contracts and our foremost goal is to set up a shipyard locally. TL also intends to expand into Mexico and Brazil, notwithstanding our invitation to partake in the China market in Nan Tong.
Contact: Director – Ray Teng 994 502 789 278 ray.teng@tengleemarine.com PAGE 4
Teng Soon Kiat Founder
Baku Shipyard Platform Support Vessels (PSVs), and ice-class vessels etc. In the case of SCV, the two (2) hull strips are being built in KSM whilst the Bow Block and Superstructure are built in Baku Shipyard LLC (BSY) almost concurrently in order to meet the critical delivery date of April 2017. KSM struck steel on 9 June 2014 whilst BSY struck steel on 15 Aug 2014.
“At the management level we have evaluation processes in place to ensure our staff are groomed and hopefully retained within the company and where they will have a career” “One of the reasons BSY subcontracted to KSM in Singapore for part of the work was because of its expertise and background in building similar kinds of vessels,” says Mr Lam, who with a 20 year background in the marine and offshore industry, and a Keppel executive since 1989, joined Baku Shipyard in April 2014. “In this way, we are able to utilize the required experience, expertise and track record in many ways to support this project. “So while it is challenging to build a vessel for the first time with subsea construction and support facilities and complexities such as automation and dynamic positioning, these are taken care of by our shareholder (KOM) and its Singapore subsidiary
(KSM).” The Shah Deniz SCV is designed by Marine Technology Development, the ship design arm of Keppel O&M, and includes dynamic positioning, a 750 metric tonne-main crane for 600 metres-deep subsea operation, an 18-man two-bell diving system, two work-class remotely operated vehicles, a strengthened moon pool, two engine rooms, and a deadweight of 5,000 metric tonnes at 6.5 metres draft. In its first seven months Baku Shipyard has already completed a variety of projects including the construction of two pontoons, an anchor handling tug, and the
yard’s own floating dock, some in partnership with Baku-based sister organisation Caspian Shipyard Company (CSC) - a 16 year old partnership between SOCAR and Keppel, and the first international rig construction, repair and conversion yard in the region. Other prominent on-going project is the construction of 3 units of 80-men Crewboat for Caspar. Currently BSY employs close to 980 people, comprising of a mix of local and foreign nationalities to tap on various skillsets. “And with stiff skills competition from other yards and employers, we have started a series of training
Our core business comprises wide range of comprehensive services such as ship repairing, steel work, piping, electrical, mechanical, hydaulic and pneumatic tubing jobs in FPSO offshore, marine and Mobile Drilling Units, repairs, control system design, farbication and installation onboard the vessel. We are specialist for all kinds of offshore marine solutions. SBM GROUP OF COMPANIES SINGAPORE ADDRESS: 5 SOON LEE STREET, #04-41 PIONEER POINT, SINGAPORE 627607. Tel: +65 6710 4933 Fax: +65 6710 4934 BAKU, AZERBAIJAN ADDRESS: City mansion, 153, Azadlig Avenue, Baku AZ 1106, Azerbaijan. Tel: (+994 51) 9488811 Fax: (+994 12) 4998582
mail@sbmgroupsg.com | sbmbaku@gmail.com
www.sbmgroupsg.com PAGE 5
PAGE 6
Baku Shipyard programmes, one of which is inhouse for people like welders and fitters”. “Another approach is to send Baku Shipyard supervisors to our subsidiary in Singapore for on the job training, immersing them in the right environment where the work is on-going and they pick up supervisory and related skills. And we compliment this training and local expertise with foreign subcontractors - also from Singapore - bringing in a pool of experienced personnel.” “At the management level we have evaluation processes in place to ensure our staff are groomed and hopefully retained within the company and where they will have a long term career.”
ICON MISSION Proximity and topography means
that the yard’s business focus will be almost exclusively from clients within the Caspian Region. “BSY’s business strategy is to focus on the Caspian region market. There is no competitive advantage for BSY to compete in the international markets, as companies may not have reasons to build in the Caspian and bring any vessel out of Caspian through the restrictive Volga-Don Channel.,” says Lam. Part of the Unified Deep Water System of European Russia, along with the lower Volga and the lower Don, the Canal is the most direct navigable connection between the Caspian Sea and the Sea of Azov and out to the world’s oceans. And as the thrusting new entrant in these prized and secluded waters, Baku Shipyard is part of Azerbaijan Government’s plan to develop its oil & gas industry to
the fullest. This augurs well with Keppel O&M’s ‘Near Market, Near Customer’ strategy, enabling it to unlock synergy in its Caspian operations, given that it already has another yard, Caspian Shipyard Company, in the region. And independent projections are highly promising. According to the Singapore Stock Market News, this ‘captive market’ means “Keppel will be ahead of its competitors in bids for any contracts in the Caspian region requiring local content elements. Other Asian yards may miss the opportunities due to the lack of presence and yard proximity.” Baku Shipyard is unique, says Mr Lam “in the sense that it is a modern, brand new yard. We aspire to become the iconic shipyard in the Caspian region. And this is our mission.”
TTS Shiplift and Transfer System Tel. +47 64 90 79 10 info@tts-hs.no www.ttsgroup.com
PAGE 7
+44 (0) 1603 411569 info@totalworldenergy.com East Coast Promotions Ltd, 2 Ardney Rise Norwich, Norfolk NR3 3QH
www.totalworldenergy.com