K Line has taken a stake in a second floating production, storage and offloading vessel being developed by Malaysian floating unit specialist Yinson Holdings, the Japanese shipowner has confirmed.
The Tokyo-listed company will take a 10% stake in the FPSO unit being developed for Petrobras’ Marlim II Project, 150 km offshore from Rio de Janeiro. Financial terms were not disclosed.
Operations are expected to commence by the first quarter of 2023, with a 25-year charter period thereafter, with no options for extension.
In April, Japanese trading house Sumitomo Corp agreed to take a 25% stake in the Brazilian FPSO project in a further boost of its ties with Yinson.
Sumitomo’s participation follows an agreement between the two companies signed two years ago to collaborate in FPSO and floating storage and offloading projects worldwide.
K Line’s previous FPSO investment with Yinson was in a project off Ghana. It was one of four Japanese companies that took a 26% stake in the project.
Further expansion
The Japanese shipowner said it intends to further expand its FPSO activities with Yinson and Sumitomo Corp, which also invested in the Ghana project.
K Line, like most of the major Japanese shipowners, is looking to move away from the more volatile segments of the shipping industry in favour of more stable, long-term projects.
Kuala Lumpur-based Yinson is reported to be in line for a second FPSO project in Brazil, but the Covid-19 outbreak is reported to have delayed the award of the contract.
However, analysts at Singapore’s UOB Kay Hian believe the award for the Parque das Baleias FPSO will be made “sometime in the near-term horizon”.
Yinson’s recent annual report stated it had “high confidence” of winning the award for the $1bn project in the second half of this year.
The outfit describes itself as the sixth largest independent FPSO leasing company with a market capitalisation of about $1.65bn.
Yinson has six FPSOs and one floating storage and offloading vessel in operation spread across locations in West Africa, Vietnam, Malaysia and Brazil.
