Reuters reported that Danish industrial group NKT Holding's 51% owned NKT Flexibles unit has won a record deal worth up to USD 1.86 billion to supply flexible pipes to Brazilian oil and gas company Petrobras.
NKT Flexibles, the maker of professional cleaning machines, power cables and flexible pipes for offshore oil and gas installations, said at least half the contract value was guaranteed for the 2012-15 contract period. It added that "Fully exercised, the contract may reach a value of up to USD 1.86 billion."

Mr Thomas Hofman Bang CEO of NKT Holding said that the deal with Petrobras was NKT Group's largest contract ever. He added that "This is a milestone for NKT Flexibles and a cornerstone in the strategic plan for 2011-15 we published a few months ago."

NKT Flexibles, 49% owned by Norwegian oilfield engineering group Subsea 7, will supply Petrobras with up to 694 kilometers of flexible pipe structures which, during the first two years of the contract period, will be manufactured in Kalundborg in Denmark.

NKT said that simultaneously, NKT Flexibles will start building a flexible pipe plant in Brazil and expects to complete it for commercial operation in 2013. The plant will represent an initial investment of about DKK 1 billion, to be funded by NKT Flexibles.

Mr Michael Hjorth CEO of NKT Flexibles said that the Brazilian market represented about half the total world market for flexible pipe for offshore installations.

Mr Hjorth said that NKT Flexibles will be the third player in the business in Brazil and will have about 25% to 30% of the capacity in the Brazilian market once its new plant was ready.

NKT said that the new deal supersedes a previous three year agreement with Petrobras worth up to DKK 1.4 billion and was fully used by the Brazilian company in 2009-11.

Mr Hofman Bang said that, with the new agreement, Brazil will overtake the United States as NKT's third largest market behind Germany and China.

(Sourced from www.reuters.com)