Kakinada Seaports Ltd has formed a joint venture with Sembavang Shipyard to set up a marine and offshore facility in the eastern coast of India to tap the growing oil exploration and shipping activities in the region.
Sembavang Shipyard is a wholly owned subsidiary of Sembcorp Marine Ltd, a Singapore based ship repairs and ship conversion company. “We are looking at an investment of $375 million in different phases and aim to achieve the financial closure for the project in the next three months. The JV aims at tapping the repair and reconstruction activities of offshore vessels along the Indian coastline,” Kris K Nittala, director, Sembmarine Kakinada Ltd (SKL), said.
A large part of the business is likely to come from shipping companies which go to Singapore for repair and maintenance activities, he said, adding, the firms spend around $2-200 million on ship repair and maintenance. “A facility in the country itself will help them save at least 20%-30% on these.”
India’s exploration and production investment is forecast to be around $5 billion by 2012 with the Krishna-Godavari and Mahanadi Basin areas being one of the world’s exploration hotspots.
“We are very optimistic of the region’s growth in terms of shipping and offshore activities, oil & gas drilling and exploration, which will provide sustainable demand, growth and expansion for SKL,” Ong Poh Kwee, deputy president, Sembcorp Marine, said.
The facility will be developed in three phases over three to five years and offer services including new buildings, conversions, repairs and servicing of offshore vessels and ships, building of offshore modules and equipment.
In the first phase (2010-mid 2011), SKL will provide equipment repairs, afloat repairs and module fabrication while in the second phase (2011-2013), the shipyard plans full dry-docking and repairs services, afloat repairs, building of new ships and rigs, equipment repairs and module fabrication.
In the third phase (post 2014), the yard will provide additional facilities with the further expansion of the workshops and the docking facilities. Kakinada port has also lined up its expansion plan. “We have four cargo berths and five offshore berths. We are adding 635 metres to the cargo berth for which the work has been awarded to Navayuga Constructions. We are also carrying on dredging activities at the port. The total investment envisaged is $235 million,” K V Rao, managing director, Kakinada Seaports, said.
“We are targeting a capacity of 20 million tonne (mt) in the next three years. This year we are looking at handling 10 mt, and 12 mt next year,” Rao said.
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