McDermott Announces Planned J-Lay Modifications for Pipelay and Construction Vessel Amazon

HOUSTON, July 31, 2018 /PRNewswire/ -- McDermott International, Inc. (NYSE: MDR) announced today its modification plans to convert the Amazon to an ultra-deepwater J-Lay vessel.

The Amazon will be capable of installing hex-joints up to 24 inches (60 centimeters) in diameter on a worldwide basis. The Amazon is operated by McDermott under a long-term bareboat charter that started in 2017. The vessel is equipped with twin 400 metric ton (440 ton) cranes and accommodations for 200 personnel. 

The modifications will consist of removing the existing tower and replacing it with a J-Lay system with 1,500 metric tons (1,653 tons) of dynamic top tension on the tower, which will enable large subsea structures and hex sections of pipelines from 4.5 to 24 inches (11 to 60 centimeters) to be installed. The Amazon modifications will include an integrated multi-joint facility, where single joints will be welded to form hex joints. The 10,000 metric tons (11,023 tons) of existing cargo space onboard will remove the requirement for onshore facilities to produce the multi-joints, enhancing mobility of the vessel and reducing reliance on shore bases for support.

"Today's announcement represents our strategic vision for the Amazon to competitively position it as one of the world's best ultra-deepwater vessels," said David Dickson, President and Chief Executive Officer of McDermott. "Expected to have one of the most efficient J-Lay systems in the world, the Amazon will enable McDermott to pursue major field development projects with rigid pipelay requirements at depths of nearly 3,500 meters (11,500 feet). This is an exceptional opportunity for the Company to expand the technical capabilities of our global fleet and address the anticipated growth in deepwater and ultra-deepwater spending."  

Royal IHC from the Netherlands (IHC) has been selected to design and build the J-Lay system, based on IHC's innovative and proprietary design, and will perform overall management of the modification project. The original equipment manufacturers will be used for all modifications to the ship's systems, including an additional five megawatts of power and pipe handling cranes, under the management of IHC.

"The extensive use of existing proven technology and process automation, combined with early collaboration with the system designers, means we expect to have a very efficient and cost effective asset," said Alan Marriott, Global Vice President, Marine Assets & Operations. "The Amazon will provide a key enabling asset within the McDermott fleet. The vessel is designed to be self-sufficient, allowing easy transition from project to project. The vessel is expected to provide pull through opportunities for the rest of the McDermott subsea fleet."

Initial engineering began on the project in October 2017 and transitioned into full engineering design in January 2018. McDermott will pay for the modification project primarily through an increased bareboat charter rate over an extended 12 year term once the modifications are complete. The Amazon owners have secured an export credit-backed senior loan facility from a group of lenders.

The Amazon will be delivered to IHC in the Netherlands in August 2019 for a conversion period that is expected to last 10 months. Redelivery to McDermott is expected in the summer of 2020.

About McDermott

McDermott is a premier, fully integrated provider of technology, engineering and construction solutions to the energy industry. For more than a century, customers have trusted McDermott to design and build end-to-end infrastructure and technology solutions—from the wellhead to the storage tank—to transport and transform oil and gas into the products the world needs today. Our proprietary technologies, integrated expertise and comprehensive solutions deliver certainty, innovation and added value to energy projects around the world. Customers rely on McDermott to deliver certainty to the most complex projects, from concept to commissioning. It is called the "One McDermott Way." Operating in over 54 countries, McDermott's locally focused and globally-integrated resources include approximately 40,000 employees and engineers, a diversified fleet of specialty marine construction vessels and fabrication facilities around the world. To learn more, visit www.mcdermott.com.

Forward-Looking Statements

In accordance with the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, McDermott cautions that statements in this press release that are forward-looking, and provide other than historical information, involve risks, contingencies and uncertainties that may impact McDermott's actual results of operations. These forward-looking statements include, among other things, statements about: the Amazon's future capabilities, the benefits to us from the vessel modifications; and the timing for delivery of the vessel to the shipyard and completion of the modifications. Although we believe that the expectations reflected in those forward-looking statements are reasonable, we can give no assurance that those expectations will prove to have been correct. Those statements are made by using various underlying assumptions and are subject to numerous risks, contingencies and uncertainties, including, among others, changes in the modification project design or schedule. If one or more of these risks materialize, or if underlying assumptions prove incorrect, actual results may vary materially from those expected. You should not place undue reliance on forward-looking statements. For a more complete discussion of these and other risk factors, please see McDermott's annual and quarterly filings with the Securities and Exchange Commission, including its annual report on Form 10-K for the year ended December 31, 2017 and subsequent quarterly reports on Form 10-Q. This press release reflects management's views as of the date hereof. Except to the extent required by applicable law, McDermott undertakes no obligation to update or revise any forward-looking statement.

Contacts:

Investor Relations
Scott Lamb
Vice President, Investor Relations
+1 832-513-1068 
[email protected]

Global Media Relations
Gentry Brann
Global Vice President, Communications
+1 281-870-5269 
[email protected]

SOURCE McDermott International, Inc.

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