Teekay Offshore Partners is to provide a Floating Production, Storage and Offloading (FPSO) vessel for the heavy oil Atlanta field offshore Brazil, using the tried and tested offshore workhorse Petrojarl I.
Teekay entered into an agreement with a consortium led by Queiroz Galvão Exploração e Produção SA (QGEP) to provide the FPSO for the field in the Santos Basin.
In connection with the contract, TOP has also agreed to acquire the Petrojarl I from Teekay Corporation for US $57 million. Subsequent to the acquisition, the unit will undergo upgrades at the Damen Shipyard Group’s DSR Schiedam Shipyard in the Netherlands for a fully built-up cost of approximately $240 million, which includes the cost of acquiring the Petrojarl I.
Damen was awarded an engineering, procurement and construction contract for the upgrade work, which includes basic engineering, detailed and construction design and engineering, marine and process equipment procurement, fabrication, construction, corrosion protection/coating, transport and lifting operations, integration, mechanical completion, performance testing and commissioning activities. It also includes upgrades and modifications related to marine, hull and life extension according to class, conversion of the process systems (i.e. separation train and produced water topsides) and integration, and Brazilian compliance.
Damen has also formed partnerships with Frames and Nevesbu. Frames will carry out the design and fabrication of the new topside skids. Nevesbu will carry out the marine and topside integration engineering. The FPSO is scheduled to start operations in the first half of 2016 under a 5-year charter contract with QGEP which is expected to generate annual cash flow from vessel operations of approximately $55-$60 million.
The redeployed Petrojarl I will work as an early production system on Atlanta, which is located 185 km offshore in a water depth of approximately 1,550 m (5,086 ft). Atlanta contains an estimated 260 MMboe of recoverable reserves.
The acquisition of the turret-moored floater is expected to close by the end of January 2015. The Petrojarl I has of course been pumping barrels for operators in and around the North Sea since 1986, on fields including Oseberg, Troll, Lyell, Fulmar, Angus, Hudson, Blenheim, Kyle and Glitne. It’s job on Atlanta will be the deepest water depth it has worked in so far.
- TOP has also acquired the Petrojarl Knarr FPSO from Teekay, subject to the unit achieving first oil and starting its charter contract. The purchase price for the FPSO, which is based on a fully built-up cost of approximately $1.2 billion, is expected to be financed through the assumption of an existing $815 million long-term debt facility and up to $400 million of short-term credit financing from Teekay.
The installation and offshore testing of the Petrojarl Knarr FPSO on its North Sea field is progressing. However, recent poor weather conditions have delayed certain activities, says TOP, with the acquisition of the floater and the start of its charter with BG Group expected to start during the first quarter of 2015.