Statoil ASA (NYSE: STO) plans to sign a letter of intent with Singapore-based Sembcorp Marine Rigs & Floaters Pte. Ltd. for the Castberg project, it said on Nov. 10. The contract is valued at NOK$ 4 billion (about US$ 490 million).

The contract covers the engineering, procurement and construction services for the hull and integrated living quarters of a FPSO vessel that will be located on the Johan Castberg Field in the Barents Sea.

The two companies will sign the contract at the final investment decision scheduled before Christmas.

The contract, which was won through international competitive bidding, marks an important milestone for the progress of the Castberg project. There were no Norwegian bids for the contract.

“We will be working closely with Sembcorp Marine to ensure safe and efficient delivery based on our requirements for HSE, quality, time and cost,” Pål Eitrheim, Statoil’s chief procurement officer, said. “The remaining procurement work will be progressed in parallel with this.”

The construction of the hull is the most time-critical delivery for the completion of the Johan Castberg project for the scheduled start-up in 2022, according to Statoil. The contract will have a separate cancellation clause linked to the approval of the plan for development and operation.

“Johan Castberg is the next major field development on the Norwegian continental shelf and important to future infrastructure in the Barents Sea,” Torger Rød, Statoil’s senior vice president for project development, said.

“Analyses from Agenda Kaupang show that the project will generate some 47,000 man-years of employment in Norway in the development phase from 2018 to 2022 given a competitive Norwegian supply industry,” he added.

Offshore