In a move that will add to its offshore vessel building expertise and give it an edge over competition, ABG Shipyard, the country’s largest private sector shipyard
MUMBAI:C In a move that will add to its offshore vessel building expertise and give it an edge over competition, ABG Shipyard, the country’s largest private sector shipyard, is looking at building sub-sea vessels, which can be employed underwater for exploration and production (E&P) activities.
The shipyard is currently in talks with a Middle East company for strategic technology tie-up, and as a packaged deal, it is also looking to secure contracts for the vessels, a source said.
The deal is expected to be finalised early next month, he added.
Sub-sea vessels are employed for offshore construction, inspection, repairs and maintenance of new and existing oil and gas fields, below the ocean floors.
ABG had built an undersea construction vessel, CCC Pioneer, for a Greek firm about five years back.
“With E&P spend increasing, the strategy to enter sub-sea vessels would work well for ABG and it would be going one step ahead of their offshore vessels expertise,” the source said.
ABG’s plan to enter this segment comes at a good time, given the shortage of suitable specialist vessels and robust global demand for sub-sea intervention work in the oil and gas industry.
At present, these vessels are sourced from yards in Norway, Japan and Korea.
Looking at the demand and current market levels, a new sub-sea vessel would cost $60-100 million and being technical in nature, take about three years to build.
ABG plans to build these specialised offshore vessels at its upcoming ultra-modern Dahej facility, which would have the capability of making rigs as well as large vessels.
The value-add initiative would not require any major investment, barring $25 million for some equipment ABG does not have today.
The company has an imposing order book of Rs 8,277 crore. All the same, it faces competition from Bharati Shipyard Ltd, the second-largest private shipyard, which specialises in smaller offshore vessels and is also building the first rig in the country.
Other shipyards, such as Pipavav Shipyard, state-owned Cochin Shipyard, Good Earth Maritime and Larsen and Toubro, also have huge expansion plans.
However, since no Indian shipyard currently builds sub-sea vessels, experts feel ABG will shoot ahead of peers with this move.
ABG has lined up a capital expenditure of Rs 1,400 crore to expand capacity in its Surat yard and meet the rising global demand for large cargo ships.
It has also invested Rs 1,200 crore to build a bigger facility in Dahej. The new yard, expected to commence production soon, has already received orders worth $1 billion.
It also builds dry bulk ships and smaller multi-purpose vessels.
s_archana23@dnaindia.net
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