Yangzijiang inks US$170m jack-up rig deal

Plus an order for FPSO.

According to Barclays Research, Yangzijiang Shipbuilding announced last night after the Singapore market close details of two separate wins in the offshore oil and gas space.

Here's more from Barclays Research:

Order for jack-up rig: First, Yangzijiang Shipbuilding announced that it had secured an order for a US$170mn jack-up rig to be delivered by 2Q2015.

The order includes a buyer option for a second rig. The order is through an investment vehicle “Mena Offshore Investment Limited” and managed by Offshore Logistics (Asia Pacific), an established Singapore-based off-shore firm.

Order for FPSO: Second, YZJ announced the signing of a Letter of Intent with SSP Offshore (SSZ CN) for a FPSO (floating production storage and offloading).

According to statements filed on the Toronto Stock Exchange, YZJ is essentially building this on spec, with YZJ commencing construction without a firm leasing customer for the rig.

SSP Offshore does not appear to be funding the order, rather has granted YZJ “certain exclusive rights” for SSP Offshore FPSO designs in exchange for commencing work.

The idea is that an end-customer would be forthcoming once YZJ makes progress in construction. These wins come following the establishment of a JV with Qatar Investment Corp for the new offshore yard, Taicang Yard near Shanghai.

As of 3Q2012, YZJ's conventional order book was for 75 vessels and a total value of US$3.6bn, 72% of which are higher-end container vessels.

As one of the top-quality yards in China we expect YZJ to be relatively successful in moving away from the weak dry bulk new build market through further order wins in offshore and +10,000 teu container vessels.