ABG Shipyard will build sub-sea vessels

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. The deal is expected to be finalised early next month.

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.

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. 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. At present, these vessels are sourced from yards in Norway, Japan and Korea.

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. 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.