TOKYO -- Chiyoda Corp. will partner with the U.K.'s Subsea 7 in offshore energy development as the construction company seeks to expand its business to new regions.
Subsea 7's experience with underwater construction projects in the North Sea, the U.S. and Brazil is expected to complement Chiyoda's expertise in building oil and gas plants in the Middle East.
The British company and Europe's TechnipFMC are the world's top two subsea construction companies, owning vessels to build pipelines and facilities to extract crude oil and gas from below the seabed.
To challenge the two major subsea construction companies, Chiyoda created a 50-50 joint-venture with a Singapore's Ezra Holdings last year. But the effort faltered due to falling project numbers stemming from a decline in oil prices. Emas Chiyoda Subsea eventually petitioned for business reorganization under Chapter 11 of the U.S. bankruptcy code.
The partnership with Subsea 7 will help Chiyoda keep its offshore development business afloat, while helping the engineering company diversify from its plant business, which is suffering from low prices.
Chiyoda has experience building liquefied natural gas plants as well as oil refineries in countries like Qatar and Saudi Arabia. The construction company also owns Xodus Group, a British advisory firm specializing in offshore development.