02 July 2014 – Norway’s Kvaerner has forged an engineering joint venture with China Offshore Oil Engineering (COOEC) in an extension of its existing pact with the Chinese partner to cut costs in bidding for international work.
The new venture, Kvaerner COOEC Engineering & Technology Ltd (KCET), was officially launched on Tuesday at its Qingdao location in China’s Shandong province.
Kvaerner said in a statement that KCET would execute engineering, procurement and construction contracts as well as develop the co-venturers’ engineering capability for international projects.
Seventy engineers from both companies are already working on basic engineering for KCET’s first topsides module project on phase two of China’s Enping project.
Officials said the alliance would give the Norwegian player a stepping stone into China’s offshore arena, while giving COOEC better access to the international market.
Kvaerner is the majority stakeholder in the joint venture, sources said, suggesting that such a structure could enable the company to enjoy preferential policies in Qingdao.
The Oslo-listed engineering and construction contractor, which has been streamlining its fabrication capability to cut costs, said the new joint venture would be integrated into the pair’s delivery model for EPC projects.
The two companies last year signed a 10-year strategic pact for co-operation for global business development and COOEC has secured a sub-contract with Kvaerner to provide modules for Shell’s Nyhamna onshore expansion project on the west coast of Norway.
It is understood that the Chinese contractor has to complete the fabrication work within one year, starting in August.
“The COOEC partnership is important for Kvaerner’s future international growth as well as further development of cost-efficient delivery models,” said Kvaerner chief executive Jan Arve Haugan, adding it will “further accelerate the promotion of our joint delivery model to customers”.
*Steve Marshall, Bianca Bartucciotto – Upstreamonline