Dutch company, SBM Offshore on Wednesday announced that it has been awarded contracts to perform Front End Engineering and Design (FEED) for a Floating Production, Storage and Offloading vessel (FPSO) for the Yellowtail oil extraction project offshore Guyana.
A release from SBM said that the FEED contract award triggers the initial release of funds by ExxonMobil’s subsidiary Esso Exploration and Production Guyana Limited (EEPGL) to begin FEED activities and secure a Fast4Ward® hull.
The release said that following FEED and subject to government approvals in Guyana of the development plan, project sanction including final investment decision by ExxonMobil, and EEPGL’s release of the second phase of work, SBM Offshore will construct, install and then lease the FPSO and operate it for a period of up to two years. First oil from the Yellowtail well is expected in 2025.
SBM Offshore, the release said, will design and construct the FPSO using its industry leading Fast4Ward® programme allocating the Company’s sixth new build, Multi-Purpose Hull combined with several standardized topsides modules.
“The FPSO will be designed to produce 250,000 barrels of oil per day, will have associated gas treatment capacity of 450 million cubic feet per day and water injection capacity of 300,000 barrels per day. The FPSO will be spread moored in water depth of about 1,800 meters and will be able to store around 2 million barrels of crude oil”, the release said..
This will be the fourth FPSO that SBM will build for operations in Guyana’s waters.
“Building on the experience to date on the Liza Destiny, Liza Unity and Prosperity FPSOs, SBM Offshore continues to commit to local content development in Guyana through sourcing fabrication scope locally and the integration of Guyanese engineers in the execution and operational teams”, the company said.
Liza Destiny has been producing oil here since December 2019, The Liza Unity is now in Guyana’s waters and being connected to begin extraction next year. The Prosperity, for the Payara well, is now in dry dock in Singapore.
In order to strengthen its execution model given the current challenging market environment, SBM Offshore said in the release that it has established a special purpose company (SPC) with McDermott for the execution of the turnkey phase of the project. This SPC will benefit from the combined engineering and fabrication capacity as well as the experience of the two companies in delivering EPC solutions to the energy industry. SBM Offshore will hold 70% and McDermott will hold 30% equity ownership in this SPC. The FPSO will be fully owned by SBM Offshore.
Bruno Chabas, SBM Offshore’s Chief Executive Officer was quoted as saying in the press release:
“SBM Offshore is proud to announce ExxonMobil has awarded the contracts for the fourth FPSO to be deployed in Guyana. When finished, the FPSO will be the largest producing unit ever built by the Company. This project again demonstrates the value that our industry leading Fast4Ward® program continues to bring to our clients and other stakeholders. We are also pleased to announce our partnership with McDermott and look forward to working together through the execution phase and deliver this world class project.”
The release said that McDermott is a premier, fully-integrated provider of engineering and construction solutions to the energy industry. Operating in over 54 countries, McDermott’s locally-focused and globally-integrated resources include more than 30,000 employees, a diversified fleet of specialty marine construction vessels and fabrication facilities, the release said.
SBM’s main activities are the design, supply, installation, operation and the life extension of floating production solutions for the offshore energy industry over the full lifecycle. As of December 31, 2020, the release said that the Company employs approximately 4,570 people worldwide spread over offices in our key markets, operational shore bases and the offshore fleet of vessels.