Hong Kong-listed Honghua Group has disclosed that its wholly owned subsidiary Honghua Offshore Oil & Gas Equipment (Honghua Offshore) entered into an agreement with South Korean UDIN Engineering to build six oil tankers valued in excess of USD 200 million.
This is the first tanker order for Honghua Offshore since its establishment in 2009.
“Entering into the shipbuilding contracts indicates that Honghua Offshore has built up the diversified operation capacbilities and helped entering into a wide range of energy related transportation equipment,” said Zhang Mi, Chairman of Honghua Group.
In addition, Honghua Group also announced that Honghua Offshore and Orion Engineering and Management entered into a Letter Of Intent (LOA) for the construction of one offshore rig by Honghua Offshore.
According to the terms and provisions of the LOA, Orion plans to purchase the rig from Honghua Offshore for a total consideration of approximately USD 320 million (excluding owner-furnished equipment).
The agreement is expected to be executed within 60 days. Subsequent to the execution of the agreement, Orion has the option to purchase an additional three option rigs with the same specification at an interval of six-months from the effective date of the agreement.
Orion will contract a subsidiary of Opus Offshore Ltd. to supervise that the construction of the rig is in accordance to the latest regulations and highest quality standards in place.
Zhang Mi added: “We have always been emphasizing that Honghua must be innovative and develop its self-developed core equipment in offshore engineering sector. Signing the LOA symbolised that the company has started a new chapter of its manufacturing business, and successfully entered into the offshore drilling equipment market.
Meanwhile, the construction of a series of semi-submersible drilling rigs will capitalize on the strengths of the extraordinary capability of Honghai Crane to fully achieve the innovative concept of onshore manufacturing of offshore equipment, thus reducing contruction cost and production cycle time.”