A new shipbuilding yard that is jointly developed by Keppel Offshore & Marine Ltd (Keppel O&M), State Oil Company of Azerbaijan Republic (SOCAR) and Azerbaijan Investment Company (AIC) was officially opened this morning by President of Azerbaijan, H.E. Ilham Aliyev. Singapore's Senior Minister of State for Trade and Industry, Mr Lee Yi Shyan, also attended the inauguration ceremony of the new yard.
Named Baku Shipyard LLC (Baku Shipyard), the new 62-ha yard in Baku, Azerbaijan, is designed to undertake the construction of a wide range of specialised vessels and merchant ships including subsea vessels, anchor handling tug/supply vessels and multi-purpose offshore support vessels such as platform supply vessels, as well as tankers and cargo vessels.
The yard also has ship repair and conversion capabilities. Baku Shipyard adds to Keppel's existing footprint in Azerbaijan where it has been operating the Caspian Shipyard Company (CSC), also a joint venture between Keppel O&M and SOCAR, since 1997.
Keppel O&M currently has 10% share in the new yard, while SOCAR and AIC own the remaining 65% and 25% respectively. Keppel O&M will be responsible for the management and operation of the yard. Phase 1 of the yard was built at an estimated cost of US$470 million (S$586 million). When operating at full capacity, it is able to undertake up to 100 repairs and conversions per annum and is estimated to achieve an average annual steel output of 25,000 tons. Plans for Phase 2 include the construction of a graving dock with added facilities for offshore projects.
Below is Mr Lee Yi Shyan's speech at the opening ceremony:
Good morning. I am honoured to join you today for the inauguration ceremony of the Baku Shipyard. I wish to congratulate Keppel Offshore & Marine, the State Oil Company of Azerbaijan or SOCAR, and the Azerbaijan Investment Company for achieving another important milestone in their long-standing partnership. This is my first visit to Azerbaijan and I would like to thank His Excellency, President Ilham Aliyev, the Government of Azerbaijan, and Keppel for their kind hospitality.
Three years ago, in March 2010, Singapore's former Foreign Minister George Yeo and Your Excellency, President Ilham Aliyev, graced the groundbreaking ceremony of the Baku Shipyard. Today, I am privileged to witness the completion of the shipyard, and to participate in its inauguration.
Singapore and Azerbaijan share warm and friendly relations. I am pleased to note that there have been a growing number of interactions between our Ministers and among our officials in recent years. Last November, we were honoured to receive your Excellency, President Ilham Aliyev, and your distinguished delegation in Singapore. This was an excellent opportunity for our officials and businessmen to network and explore areas of cooperation.
A clear area of economic cooperation is in the oil and gas sector. Azerbaijan presents attractive opportunities to international oil companies, which have carried out various offshore development projects, including the Baku-Tbilisi-Ceyhan and the Baku-Tbilisi-Erzurum pipelines. Although Singapore has no oil or gas resources, we have a strong chemicals and maritime support cluster, and many Singapore-based companies such as Keppel are supporting the operations of large oil and gas companies.
Keppel and SOCAR first established their partnership in 1997 with the formation of the Caspian Shipyard Company or CSC in Baku. Since then, they have achieved several 'firsts' together. In 2000, the CSC completed Transocean's Gurtulush jackup rig - the first offshore drilling rig to be deployed in the Azerbaijani section of the Caspian Sea. In 2003, CSC delivered the first semi-submersible to be built in the Caspian Sea. In 2009, CSC delivered the Caspian Sea's first ice-class Floating Storage and Offloading (FSO) vessel to Russia's Lukoil company. Known internationally for our maritime expertise and services, Singapore's vibrant maritime support clusters will be able to support the growth of Azerbaijan's oil and gas sector. I am confident that Keppel and SOCAR will continue to achieve new successes through their new partnership in the Baku Shipyard.
Beyond oil and gas, I believe that there is also potential for greater co-operation in other sectors such as transportation, city infrastructure, and waste and water management. Many Singapore companies have built up their expertise in these areas and are now working to deliver integrated urban solutions to overseas partners.
I would also like to encourage our Azerbaijani friends to consider Singapore as a location to expand your Asian operations. Singapore is located in the heart of Asia - a strategic gateway to engage ASEAN and the world, given our location, excellent connections within Asia and business-friendly environment. ASEAN, with a combined population of 620 million people, offers an attractive end-market and investment location for companies.
Finally, I would like to take this opportunity to encourage our friends from Azerbaijan to visit Singapore. It is through more frequent people-to-people exchanges that we will gain a greater understanding of each other, paving the way for more business opportunities and long-term partnerships.
Let me end by congratulating Keppel, SOCAR and the Azerbaijan Investment Company once again on the successful completion of the Keppel-SOCAR shipyard. Thank you.