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Thursday, August 04, 2011

Wayne Malouin
Vice President - Fabrication Aker Solutions Malaysia Sdn. Bhd.

Aker Solutions: Fabrication quotation Pilot 9 Project Quote Ref: 12270r0

Dear Sir, With reference to our recent correspondence, we are pleased to offer our best price for Supply and manufacture of the Pilot 9 Module in accordance with your inquiry and clarification requests. Please note that Profab considered all Variation Order occurred during fabrication as JN1026 as listed attached with assumption escalation price approx 5%. We trust we have interpreted the requirements correctly and ask if you have any queries, please contact the undersigned.

Best Regards,

Paul McFarlane General Manager Business Development - International

390 Havelock Road #06-02 Kings Centre Singapore 169662

Main Office: +65 6774 7997 Singapore HP: +65 977 18697 Email:

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Aker Solutions: Fabrication quotation Pilot 9 Quote Ref: 12270r0 Terms & Conditions
OUR BASE PRICE INCLUDES: Supply of bulk materials based on indicated weight in the price summary and consumables. To clarify this is limited to: o Structural steel o Piping bulks (including stud bolts and gaskets) o Paint materials for identified specification. o E&I material as specifically identified in the price summary QC documentation and supply of MDR. Structural Steelwork fabrication to AWS D1.1 NDT per code ABS inspection cost for inspection activity at Profab shop. Installation of Internal Trays of Deaerator Vessel. Painting included for CS (pipe and structural) items only as o Primer : Inorganic Zinc : 60 m nd o 2 coat : High Build Epoxy : 150 m rd o 3 coat : Polyurethane : 50 m WPS based on our existing qualified weld procedure, any new WPS required would be an additional cost. Material of construction as indicated in the RFQ and specification unless otherwise noted Material certificates shall be confirmed to EN-10204 3.1 / 2.2. Ex-works Profab Batam. OUR BASE PRICE EXCLUDES: Third Party design Verification. Hot dip galvanized and touch-up on field joints at Profab Painting of alloy materials Any machining and alignment of rotating equipments. All Valves All Tagged items All equipment All instruments Any process items All fluids and lubricants Any FAT materials (other than water, compressed air, 440V50Hz power) PWHT (not required by spec or identified in scope) Supply of any equipment, valves, any tagged items, special equipment, special tools Installation and trial fit of free issue equipment if any Packaged equipment FAT Packaged equipment or tagged item painting Load testing Rigging or rigging platform Site assembly and erection Site acceptance test. Any taxes, duties or withholding taxes for materials or completed goods if any. Any performance bond, bank guarantee or similar. Any warranty retention.

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CLARIFICATIONS & ASSUMPTIONS: Our estimate is based on weights as indicated in your weight document. The final cost shall be calculated using these rates applied as a rate per tonne against the final weight to be built. Moreover we reserve the right to recalculate any item which changes by more than 15% in weight in favor of accepting the above unit rate calculation. Welding will be primarily FCAW with no gas shielding for structural. Piping systems shall be hydro tested in the painted condition. Only flanged field fit spools shall be hydro tested. Any spool requiring additional welding at site is assumed not to be hydro tested in Profab. Spools are assumed not to require any internal treatment other than flushing to remove grit, dirt and debris. The module is assumed to be able to be lifted and loaded out using SPMT or similar. As such it is assumed that the underside of the module will be suitable for support by the SPMT at 2.5m wide in 2 rows. No provision for additional steel support has been considered. All preheat is by gas UON. Material certificates will at least be good quality photocopies as original certificates on some materials are typically retained by the mill or supplier in cases of small quantities. Profab operates a Material traceability procedure that utilises unique numbers fully traceable to the material certificate. It is assumed that the hold points will only Progress reporting for all work shall follow Profab Reporting Procedures. This is based on welding weight for all fabrication work and on units or weight for all installed equipment. Fabrication schedules will relate to durations determined from the detailed analysis of weight and units. Any S curve will be based on these units only. Specific Clarification Requests taken from JN1026 for consideration. Titanium tubing not included? o Included. Carbon steel supports (tube 3") not included? o Included. Slings and Shackles for final lifting included? o Included sufficient for Profab Loadout and handling however these items are not delivered with the equipment (i.e. is the property of Profab). All bolts and gaskets excluded? Seems odd o Please refer to separated price summary for gaskets and bolts. Do have required welding procedures for carbon steel, stainless steel and super duplex piping? o Yes, Profab has all necessary procedures Your quote says "Excluded - installation and trial fit of free issue equipment if any" I assume this is a generic proposal statement that should be taken out as there is a lot of free issue material to be installed. o Correct. The statement should be deleted. Where we have offered a price for the installation, it is included. I presume your FCAW with no gas shielding will not be a problem to be accepted by Modec? o Yes, for structural steel fabrication FCAW innershield is a normal process. They should not take exception to this. I presume Site Rates should be removed from the proposal o Correct. Our offer is based strictly on work in Profab yard. Site rates are not applicable. Pickling and passivating of SS & SD piping included? o Confirm included using pickling paste with subsequent wash On skid crating of panels, junction boxes and instruments included. o Confirm included on skid boxing with plywood and plastic wrap. Third party inspection fees such as ABS included? o Excluded. Profab has made no allowance for any 3d party verification. Only items with a price provision have been included. As a budgetary amount we would expect basic non class verification to be USD 50,000 for this work excluding any design review. How much money can we save to go to Ex works?

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o Price item 9 A.1 refers to the Loadout price. We have included additional cost requirements as requested on the 8th August including; Additional price for Extra deluge and foam piping Extra stairways and ladders as per weight indicated. Optional price for CS piping to be HDG. Price for walkways and ladders for the Deaerator as per weight indicated. FABRICATION YARD Fabrication will be by PT PROFAB INDONESIA located in Batu Merah, Batam Island, Indonesia. VALIDITY Our quotation remains valid for 30 days. LIQUIDATED DAMAGES Excluded from this offered. WARRANTY Upon acceptance of the Goods by Buyer, PROFAB guarantees to cover the Goods and workmanship for a period of 18 calendar months from delivery, or 12 months from installation, whichever occur first DELIVERY To be discussed. PAYMENT TERMS All invoices shall be paid based on the following milestones 30 days from date of invoice without retention. 10% of the total Contract value at the Contract signature. 20% upon purchase of material. 30% upon receipt of major materials. Balance by monthly progressive based on a mutually agreed progress measurement procedure. SITE RATES Refer to Breakdown, Unit Rate and charges price summary NOTE Rates include taxes, holiday, TDR, etc Profab to supply safety boots and one set of overalls Minimum 8 hours per day to 12hours maximum Mon to Saturday only Hirer responsible to provide specific safety induction Hire charge to start from day the employee leaves Profab th Daily time sheets to be faxed to Profab every Friday and Prior to 24 of each month Rate applicable to work in Batam only DOCUMENTATION All documentation approvals should be returned within 2 weeks of submittal. DESIGN All process, structural, equipment and piping design and detail drawings to be provided by AKER SOLUTIONS. AKER SOLUTIONS to provide the AFC fabrication drawings in A1 size and electronic format suitable for Profab to print and use as base for shop detailing as considered necessary upon award. Delays to issue of AFC data may affect delivery. Profab will prepare shop detail drawings All drafting will be performed using autoCAD. PREPARATION FOR SHIPMENT Module to be offered loaded out onto barge (supplied by AKER SOLUTIONS) with no provision for sea fastening. Page 4 of 5

MATERIALS All material supplied by Profab shall be supplied with copies type 3.1 or 2.2 certificates. Any free issue equipment & material as detailed on the following page, shall be delivered FOT Profab, Batam. Profab will provide shipping marks and contact details for incoming shipments to ensure that all goods are received by our forwarder for correct handling to Batam. 3RD PARTY VERIFICATION 3rd party verification included the following scope of services. Material verification and traceability Random fit-up inspection, dimensional inspection and final visual inspection. Welding Procedures review and confirmation acceptable for the job. Welder Certificate review and confirmation acceptable for the job. NDT plan, NDT procedures & NDT personnel review. NDT results evaluated and confirmed acceptable. Hydrostatic test witnessed and confirmed satisfactory. The fabrication was performed in accordance to the approved drawings. HSE POLICY Profab operates our Batu Merah facility to our company HSE policy and procedures, which are available on request. Our personnel do no divert from these procedures unless specifically agreed to during precontract negotiations. Profab are willing to revise our procedures by means of an addenda for mutually agreeable specific requirements. SUB-CONTRACT ACTIVITIES: Clients wishing to engage sub-contractors on our Batu Merah facility are required to process the contract(s) through Profab with a cost + 15% mark up. QUALITY INSPECTION & AUDITS All Client approved representatives shall have right of access for the purpose of inspection. Due to current workload, all audit requests will be accepted based on mutually agreed dates & times. Photographs are only permitted by written approval from the General Manager. Any photos taken without permission shall remain the property of Profab. It is assumed that the hold points applied by client and end user will not inhibit production and be limited to Final Inspections, critical dimension inspections, hydrotests, MDR review and that interim inspections such as material verifications, non critical dimensional inspections shall not have hold points and that these shall be for review only. This does not limit the clients involvement in any inspection and is only to clarify that Profab takes responsibility for its QC to avoid unnecessary production delays. INSURANCES All Profab insurances are available for review upon request. CLIENT FACILITIES All AKER SOLUTIONS representatives shall have right of access for the purpose of inspection. Office facilities (2 office containers) shall be provided in accordance with AKER SOLUTIONS requirements. Use of telephone and internet, courier service, documentation assistance etc shall be charged at cost plus 15%. Office electrical, drinking water and such will be provided free of charge.

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