MARCH 12, 2013 — It looks like Singapore's Keppel FELS shipyard won't be building two Black Sea semisubmersibles for Naftogaz of Ukraine any time soon.

Keppel Corporation announced the contract, which would have been worth $1.2 billion, back in December 2012 (see earlier story).

The rigs were to have been built to Keppel FELS' proprietary DSSTM 38U design, customized for the Black Sea environment where weather conditions include extreme freezing temperatures, storms with strong winds and heavy seas.

Today, though, Keppel released the following statement:

We refer to our announcement on 4 December 2012 on the conditional contract between Keppel FELS Limited (Keppel FELS) and Ukraine's National Joint-Stock Company, "Naftogaz of Ukraine" (Naftogaz), to construct two semisubmersible drilling rigs.

We wish to announce that the contract will not be taking effect as certain conditions within the timeline set were not met.

Keppel will continue to seek opportunities where we can support Naftogaz in their E&P activities.