Cosco Corporation (Singapore) said late Monday that its subsidiary – Cosco Nantong Shipyard – has secured a contract worth over $370 million to build a floating production storage and offloading (FPSO) unit for an undisclosed European client.
The FPSO – scheduled for delivery in June 2015 – will have a storage capacity of up to 400,000 barrels of oil.
Cosco's FPSO contract win will come as no surprise to FPSO industry watchers, given the fact that traditional powerhouses Singapore, Malaysia, South Korea and the United Arab Emirates have been grappling with an over-capacity at their shipyards.
IHS CERA's Principal Researcher of Cost and Procurement, Kelvin Sam, said at an industry conference in September this year that Chinese shipyards are "hungry" to take on more FPSO projects.
Sam noted in his address that Cosco Dalian Shipyard has room for FPSO conversion projects moving towards the end of this year, while Shanghai Waigaoqiao Shipbuilding is keen to move into the FPSO conversion space, even though it is currently only involved in jackup projects until 2013.
Cosco Nantong Shipyard is sited in the Yangtze River Delta, and it has a handling capacity of around 150 vessels.