15 Nov 2006

MASNET: Incorporation of Subsidiary and Acquisition of Associated Company

Keppel Corporation Limited (“KCL”) wishes to advise that KS Investments Pte Ltd (“KS Investments”), a wholly-owned subsidiary of KCL, has incorporated a wholly owned subsidiary, KSI Production Pte Ltd ("KSI Production") in British Virgin Islands.

KSI Production has an authorised share capital of 50,000 shares with a par value of US$1.00, and a paid up capital of one (1) share of US$1.00.

KSI Production has entered into a joint venture with Sea Production Ltd (“Sea Production”). The joint venture company, Puffin Ltd (“Puffin”) is a newly incorporated Bermuda subsidiary of Sea Production.

KSI Production will subscribe to 39,000 newly issued shares in cash at the price of US$200.00 each and will own 30% of the total issued share capital of Puffin.

Puffin will own, operate and lease a Floating Production, Storage & Offloading (FPSO) vessel, Front Puffin. Keppel Shipyard is currently carrying out the conversion of the Aframax tanker.

The above transactions are not expected to have material impact on the net tangible assets or the net earnings per KCL share for the current financial year.