Announcement on execution of agreement regarding establishment of JVC with TOYO

MODEC, Inc. (“MODEC”) announced today that MODEC and Toyo Engineering Corporation (“TOYO”) have executed the agreement for the establishment of a joint venture company for the Engineering, Procurement, Construction and Installation (EPCI) business of Floating Production Storage and Offloading (FPSO) vessels. The establishment of the joint venture company is subject to obtaining official permits and approvals of relevant authorities.

Purpose of Establishment of the Joint Venture Company
MODEC is a leading provider of floating production solutions such as FPSOs to the offshore oil & gas industry. MODEC performs EPCI activities, and further by owning and operating its own FPSOs, it provides oil companies around the world with comprehensive and competitive solutions for oil & gas production services. As offshore oil and gas development projects increase in scale and move into deeper waters, the durations of the client contracts for FPSOs have become long-term as well as FPSOs have increased in size and complexity. As one of the few companies that can address these large-scale FPSO projects, MODEC recognize the importance of enhancement of its engineering and project management capabilities to meet clients’ requirements and expectations. Furthermore, MODEC, as a leading company in the industry, is aiming to develop environmentally-friendly technologies for next-generation FPSOs.

TOYO is a Global Engineering group that has rich EPC experience in industrial facilities, such as oil & gas development, refinery, petrochemicals, fertilizer and power generation. There are 6 autonomous EPC group affiliates widespread across the world. With this global network, TOYO is aiming for solutions emphasizing both “Aim to realize an environmentally-friendly society” and “Enrich people’s lives”.

For the past 15 years, MODEC has been collaborating with TOYO, which boasts a robust track record as a Global Engineering group, on the topside EPC scopes for several FPSO projects. Through the establishment of the joint venture company, MODEC and TOYO will further deepen the form of collaboration and jointly strengthen the engineering and project management capabilities in order to carry out the challenging large-scale FPSO projects, and the two companies jointly aim to strengthen the technological capabilities and competitiveness in the FPSO industry. Furthermore, synergies between MODEC and TOYO are expected to be demonstrated in the exploration of new technology and product opportunities in growth markets as well as in the development of environmentally friendly FPSOs for realization of decarbonized society.

Outline of the joint venture company: name - Offshore Frontier Solutions Pte. Ltd. with head office in Singapore and EPCI business for FPSOs.

Execution of the agreement for the establishment of the joint venture company: August 5, 2022

Future outlook
Although MODEC expects that the impact of this matter on its consolidated financial results for the fiscal year ending December 2022 will be minor, it will promptly disclose any matters that should be disclosed when necessary.