SBM Offshore has received a Letter of Intent (LoI) for the 20-year charter and operation of two Floating Production, Storage and Offloading (FPSOs) for the deepwater Lula field offshore Brazil, with the value of the dual floater deal put at US $3.5 Bn – the company’s biggest ever contract award.

The LoI was issued by BM-S-11 subsidiary Tupi BV, with the floaters to be deployed on the giant pre-salt field in block BM-S-11, which is under concession to a consortium comprised of Petrobras (65%), BG E&P Brasil Ltda. (25%), and Petrogal Brasil S.A.(10%).

The FPSOs will be owned and operated by a Joint Venture company owned by SBM, with other partners including Queiroz Galvão Óleo e Gás S.A.(QGOG). SBM will be in charge of the construction of the two FPSOs with planned delivery expected respectively by the end of 2015 and early 2016.

The total contract value for which the Joint Venture company owned by SBM and QGOG will acquire the two FPSOs is approximately $ 3.5 Bn, with contract finalisation expected by Q2 2013.

One FPSO will be located on Lula Alto and the other on Lula Central in the Santos Basin. Each will be connected to 18 wells, 10 of which are production wells and eight injectors. Production is expected to begin in January 2016 at Lula Alto and in March 2016 at Lula Central.

The FPSOs will be executed with significant local Brazilian content, with substantial parts of the project management, procurement and engineering services carried out in Brazil. A substantial part of the topside module fabrication, integration, and commissioning will be performed at the Brasa yard, jointly owned and managed by SBM near Rio de Janeiro in Brazil. Local content requirements in the contract are 65% for each FPSO.

Lula is located around 300 km offshore Rio de Janeiro. SBM will convert two double hull sister vessels into FPSOs, to be moored in approximately 2,300 m (7,546 ft) of water, with a storage capacity of 1.6 MMbbl each.

The topside facilities of each facility will weigh around 22,000 tons, be able to produce 150,000 b/d of well fluids, and have associated gas treatment capacity of 6 MMcm/d. The water injection capacity of the FPSOs will be 200,000 b/d each.

Consortium BM-S-11 is operated by Petrobras (65%), in partnership with BG E&P Brasil Ltda. (25%) and Petrogal Brasil S.A (10%).