RONGSHENG Heavy Industries started construction on a 2.38-billion-yuan (US$347.9 million) pipe-laying crane vessel yesterday for China National Offshore Oil Corp, paving the way for the oil producer's first independent deep-water voyage.

The vessel will be able to operate in waters of up to 3,000 meters and lay pipes under the sea at a rate of 5 kilometers per day. It will be able to operate in any waters on Earth except for the Arctic.

Rongsheng said it would be China's first self-designed and developed deep-water pipe-laying crane vessel.

Rongsheng, which is based in Rugao, Jiangsu Province, and is China's top private-sector shipbuilder, said delivery was expected in the first half of 2010.

The vessel would be owned and operated by CNOOC's unit, Offshore Oil Engineering Co, or CNOOC Engineering.

The cost of the vessel would be 2.38 billion yuan, which is part funded by a corporate bond issue and an additional shareRongsheng Heavy Industries started sale, according to the interim report by Shanghai-listed CNOOC Engineering.

"About 70 percent of the world's new oil and gas discoveries were made in the sea over recent years, and among them most are in the deep sea," said Zhou Shouwei, CNOOC's deputy general manager and the chairman of CNOOC Engineering.

CNOOC, China's top offshore oil and gas producer which now mainly operates in shallow waters, has expected to invest up to 15 billion yuan on deep-water equipment to tap deep-water resources at home and abroad. It has awarded the construction of a 4.5-billion-yuan deep-water semi-submersible drilling platform to Shanghai's Waigaoqiao shipyard.

Rongsheng will accelerate its pace of expansion while demand for ocean engineering equipment was strong, according to Chairman Chen Qiang.

The three-year-old Rongsheng, aiming for a stock market listing by the end of the year, has already been ranked among the world's top 10 shipbuilders.

Rongsheng signed a US$1.6 billion deal last month with Brazil's Vale to build 12 iron ore carriers for the mining giant, in the world's largest single shipbuilding order.