Brazil OSX Gets Go-Ahead To Start Building Acu Shipyard

RIO DE JANEIRO (Dow Jones)–Brazilian oil-field services company OSX Brasil SA (OSXB3.BR) said Monday that it had received approval to start construction of a shipyard at the Acu Port complex in Rio de Janeiro state.

OSX will start work next month to build “the largest shipyard in the Americas,” the company said. OSX, part of billionaire Brazilian businessman Eike Batista’s industrial conglomerate, will partner with South Korea’s Hyundai Heavy Industries Co. (009540.SE) to build the shipyard, the company said.

Brazil’s ship-building industry is undergoing a renaissance as the company ramps up production to meet growing demand from the country’s oil and natural-gas industry. Several new shipyards are under construction along Brazil’s Atlantic Ocean coast, while many yards that were closed during an industry downturn in the early 1980s are being revived.

Brazil was among the world’s largest ship producing countries in the 1980s before a global downturn in the industry saw the local docks shuttered.

Last week, OSX said that it had received approval for a credit line worth up to 2.7 billion Brazilian reals ($1.69 billion) from Brazil’s Merchant Marine Fund to finance construction of the shipyard.

OSX plans to build vessels for sister company OGX Petroleo e Gas Participacoes SA (OGXPY, OGXP3.BR), which will produce crude oil from the Campos Basin off the coast of Rio de Janeiro state. The 2,400-meter docks at the shipyard will have the capacity to build up to 11 floating production, storage and offloading vessels, or FPSOs, at the same time. The FPSOs use hulls about the size of an oil supertanker.

Another OSX sister company, LLX Logistica SA (LLXL3.BR), which is responsible for construction of Acu port, said Monday it gained an environmental permit to construct a navigation channel within the port. The channel, called TX2, will provide 8,000 meters of quayside, substantially boosting the quayside capacity available on the port’s coastal stretch.

Part of the additional quayside space will be used by the OSX shipyard, while the rest is planned for use in loading and unloading of products including steel, coal, granite and oil, LLX said.

-By Jeff Fick and Diana Kinch, Dow Jones Newswires

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