Dyna-Mac pursuing ‘win-win’ opportunities in FPSO module fabrication and carbon capture and storage

Singapore’s offshore builder Dyna-Mac has set the wheels into motion to enable more flexibility in addressing spikes in floating production storage and offloading (FPSO) module fabrication demand and embark on a pursuit of global carbon capture and storage (CCS) projects, thanks to two memoranda of understanding.

The first memorandum of understanding (MOU) was signed with Kim Heng Marine & Oilfield, a wholly-owned subsidiary of Kim Heng, and provides Dyna-Mac with options to execute projects in its shipyards at agreed tariff rates. The duo claims that this “win-win collaboration” also enables Kim Heng to participate in larger, more complex FPSO module fabrication projects. The MOU, which has a term of two years, will automatically renew at the end of each term.

Lim Ah Cheng, Executive Chairman and CEO of Dyna-Mac, pointed out: “This mutually advantageous partnership between Dyna-Mac and Kim Heng aligns with the strategic vision of both companies, reflecting our shared commitment to providing enduring value for our respective shareholders.

“We continue to be on the lookout for relevant opportunities to collaborate with suitable, like-minded partners to expand our business operations, leveraging on their expertise and resources to achieve sustainable long-term growth for the Dyna-Mac group.”

Kim Heng’s two shipyards in Singapore have a combined waterfront of 205 metres, allowing Dyna-Mac to further entrench its presence in the FPSO module fabrication business, which refers to a specialised segment within the oil and gas industry that focuses on the construction, assembly, and integration of modules intended for use on FPSO vessels.

Thomas Tan, Executive Chairman and CEO of Kim Heng, highlighted: “This partnership empowers us to engage in more substantial, intricate, and high-value projects, marking a significant step forward in Kim Heng’s pursuit of sustainable long-term revenue growth in the industry.”

Meanwhile, Dyna-Mac Engineering Services (DMES), a subsidiary of Singapore’s Dyna-Mac, joined forces with BW Offshore Holdings, a Singapore-based, wholly owned subsidiary of Oslo Stock Exchange-listed BW Offshore, to pursue CCS projects around the world.

This enables the duo to leverage technical expertise in the oil and gas industry while meeting the rapidly evolving demands of a greener energy sector. The two players will be able to jointly pursue global CCS projects, including the current gas and condensate projects in the Northern Territory of Australia, thanks to Dyna-Mac’s second recently signed MOU.

The company explains that CCS – a process in which carbon dioxide (CO2) from upstream oil and gas extraction, mining, power plants, and other industrial sources is separated, treated, and transported to a long-term storage location, to prevent the gas from reaching the atmosphere and contributing to greenhouse gas emissions – is widely regarded as an important technology to mitigate climate change.

The duo intends to develop a catalogue of standardised engineering solutions based on proven designs to become “a leading global CCS solutions provider,” capitalising on existing resources and capabilities to offer clients an end-to-end value chain covering the capture, liquefaction, shipment, receiving, and sequestration of CO2.

“The collaboration also aligns Dyna-Mac with Singapore’s green agenda, and allows us to work with stakeholders to incorporate sustainability initiatives into our business strategy and operations. With the understanding that sustainability is a journey, we continually strive to do more to reduce our carbon footprint and contribute to the growth of a greener energy sector,” outlined Cheng.

According to Dyna-Mac, this also offers “a unique solution” and potentially contributes to Singapore’s push towards a net-zero carbon economy after the country raised its national climate target to achieve net-zero emissions by 2050, as part of its long-term low-emissions development strategy. Singapore plans to reduce emissions to around 60 million tonnes of CO2 equivalent in 2030, as part of its revised 2030 nationally determined contribution (NDC).

Marco Beenen, CEO of BW Offshore Limited, remarked: “We look forward to working closely with Dyna-Mac to explore solutions and opportunities within CCS, which is considered one of the key technologies to transition into low-carbon energy production solutions. The collaboration demonstrates our commitment to sustainability and highlights our shared vision to pioneer innovative solutions to enable a greener energy sector.”

A few months ago, Dyna-Mac secured several new contracts with existing customers with a total provisional sum of S$270 million (nearly $203.3 million). Another contract for the construction of the FPSO topside modules brought Dyna-Mac’s net order book in May 2022 to a record high level.