Keppel Offshore & Marine has joined hands with State Oil Company of Azerbaijan Republic (SOCAR) and Azerbaijan Investment Company (AIC) to develop and manage a new 52-ha shipbuilding and shiprepair facility in Baku, Azerbaijan.

The new SOCAR-Keppel Shipyard will be developed over a period of two to three years with an investment of US$386 million ($539 million). The joint venture agreement will be signed with Keppel O&M taking a 10% share of the yard, and SOCAR and AIC the other 65% and 25% respectively.

Keppel O&M will be responsible for the management and operation of the yard, and will have the option to acquire another 10% stake in the next three years.

The new yard is designed to undertake construction of a variety of vessels ranging from offshore support vessels to tankers, as well as ship repair and conversion.

Strategically located along the East-West energy corridor of the Caspian Sea region, the new yard will be critical in helping to meet the growing needs of the local oil industry. It will contribute towards the unlocking of Azerbaijan’s vast offshore hydrocarbon potential as part of the republic’s oil strategy, and support the renewal of SOCAR’s vessel fleet.

Spanning a 1,630-metre waterfront, the yard, when completed, will be able to undertake 80 to 100 repairs and conversions per annum and is estimated to achieve an average annual steel throughput of 25,000 tons when operating at full capacity.

The above joint venture is not expected to have material impact on the net tangible assets or earnings per share of Keppel Corporation for the current financial year.