LNG

The BW Group of Singapore with LNG and shipping interests and led by Andreas Sohmen-Pao has shuffled shareholdings by acquiring a bigger stake in BW Energy with a purchase of shares in the energy unit from another affiliate BW Offshore.

Nov 16 (LNGJ) - BW Offshore reported third-quarter net profits of US$28.9 million, up from US$10.9M in the previous quarter, as it continued to execute the Barossa floating production, storage and offloading (FPSO) platform project work as part of the Darwin LNG lifespan extension in the Australian Northern Territory with overall completion at 77.2 percent in line with the schedule.

   BW said the FPSO, which is destined for the Australian LNG project run by Santos, was currently on its way to Singapore following completion of the hull at the shipyard in South Korea. BW explained that. lifting and installation of the topside modules was set to commence at the integration yard in Singapore. “We see a continued strong FPSO market with oil and gas companies seeking efficient solutions for safe, secure and reliable production. We are selectively maturing projects that meet our criteria,” said Marco Beenen, Chief Executive of BW Offshore. “Operationally we have full focus on delivering the ‘BW Opal’ per plan for the Barossa project and maintaining high operational uptime on our core assets,” Beenen added.

BW Offshore, the global operator of floating production, storage and offloading (FPSO) units, said the Barossa natural gas project for the Timor Sea was progressing as part of plans to prolong the lifespan of the Australian Darwin LNG export plant.

BW Offshore, which has main offices in Oslo and Singapore, said it continued to execute the Barossa FPSO project with overall completion on schedule at 67 percent at the end of April 2023.

“Hull blocks have been assembled in the floating dock and preparations for float out are progressing, with major equipment arriving at the topside construction yard,” explained BW Offshore in its first-quarter earnings report.

The company said that it also progressed its strategy of capturing value from non-core assets with the sale of “BW Opportunity” in the first quarter and the subsequent divestment of “BW Athena” in April.

Operator

The Darwin plant in the Northern Territory is operated by Adelaide-based Santos with capacity to produce around 3.7 million tonnes of LNG per annum, mainly for Japanese buyers, including JERA Co. Inc, the Asian nation’s largest LNG importer and power group.

The Japanese have participated in the Darwin LNG project since 2003 through the power companies that formed JERA and when the Australian plant was first operated by ConocoPhillips before the US major sold its stake to Santos.

Darwin LNG was constructed to receive feed gas from the Bayu-Undan gas field, located in the Timor Sea, and had contributed to the stable supply of LNG for almost 17 years before becoming depleted.

BW Offshore reported net profit for first quarter of $17.8 million, down from $41.3M in the previous quarter and $46.3M in the first three months of 2022.

“We deliver on our plan to generate value from our asset base through divestments and are discussing potential redeployment-related work for ‘BW Opportunity’ with its new owner,” said Marco Beenen, Chief Executive of BW Offshore.

“This reflects a strong FPSO market with oil and gas companies seeking efficient solutions for safe, secure and reliable production,” added Beenen.

Gross operating income for the three months came to $79.0M, down from $84.4M in the prior-year quarter and $104.9M in the previous quarter.

Outlook

“The reduction is largely due to a non-recurring reimbursement recorded in fourth quarter 2022 for expenses incurred under the limited notice to proceed (LNTP) contract with Shell for the Gato do Mato (Brazil) project,” said BW Offshore.

In its Outlook, BW Offshore said it expected that the core units in the existing fleet would continue to “generate significant cash flow” in the time ahead supported by the $5.8Bln of firm contract backlog at end of March 2023, including the Barossa contract.

“The company is experiencing continued strong interest for infrastructure-type lease and operate FPSO projects, combined with continued access to equity and debt financing for field development initiatives with long-term production, low break-even costs and low carbon emissions,” it stated.

“Discussions are ongoing with the buyer of ‘BW Opportunity’ for EPCC work and an operations and maintenance contract related to a redeployment of the FPSO which can drive growth in the FPSO segment,” added BW Offshore.

BW Offshore is making progress on the Barossa natural gas floating production, storage and offloading (FPSO) project for the Timor Sea as part of plans to prolong the lifespan of the Australian Darwin LNG export plant.

June 15 (LNGJ) - Saipem of Italy said it was awarded a limited notice to proceed (LNTP) by BW Offshore for the early-stage engineering services for the supply of a Floating Production Storage and Offloading (FPSO) unit. The FPSO will then be provided to Shell and its partners for the development of the Gato do Mato natural gas and oil field located about 200 kilometres offshore Brazil in the prolific Santos Basin in water depths of around 2,000 metres.

   “The LNTP is a key step ahead for this initiative and the Saipem project team is already fully mobilized. Upon completion of the LNTP, Shell and its partners target to award a lease and operate contract which will include the award of the engineering, procurement, construction, and installation (EPCI) of the FPSO to a consortium comprising Saipem and BW and with expected delivery in 2026,” said Saipem.

BW Offshore is making progress on the Barossa natural gas floating production, storage and offloading (FPSO) project for the Timor Sea as part of plans to prolong the lifespan of the Australian Darwin LNG export plant.

BW Offshore, the platforms company listed on the Oslo stock exchange, has formed a partnership with global infrastructure investors for the equity financing of the floating storage and offloading (FPSO) unit for the Barossa gas field offshore Australia to prolong the lifespan of the Darwin LNG plant.

BW Offshore already has a fleet of 14 FPSOs with potential for growth to meet the reliable clean energy needs provided by natural gas.

The Barossa FPSO Services contract has an initial production period of 15 years, with options to extend the production period (in the aggregate) for a further 10 years.

The contract value based on the initial production period of 15 years is US$4.6 billion.

BW Offshore will be responsible for engineering, procurement, construction, installation, and operation of the FPSO.

The FPSO will be turret moored with a new built hull based on BW Offshore's Rapid-Framework design.

Initial gas production from the FPSO is expected during the first half of 2025.

The Barossa FPSO will be financed by a 14-year combined construction and long-term debt facility of US$1.15Bln and US$240 million from the equity joint venture.

Pre-payments

There will also be around US$1Bln in pre-payments by the Barossa gas field operator, Adelaide-based LNG and energy company Santos, and the Barossa Upstream joint venture partners during the construction period.

“The joint venture agreement has been signed by all parties and completion of the agreement is subject to certain customary regulatory approvals which are expected within the next month,” said BW Offshore.

The FPSO joint venture comprises BW Offshore with 51 percent and with a further 25 percent held by ICMK Offshore Investment, a venture comprising Japan’s Itochu Corp. and a subsidiary of the Japanese Meiji Shipping Group.

The Australian financial group, Macquarie Bank, will own the remaining 24 percent.

Santos, which is currently finalizing its agreed take-over of Papua New Guinea LNG stakeholder Oil Search, took a positive final investment decision in March 2021 on the Barossa field development.

The Barossa project represents the biggest investment in Australia’s oil and gas sector since 2012.

The Santos-operated Darwin liquefaction plant in the Northern Territory has the capacity to produce around 3.7 million tonnes of LNG per annum, mainly for Japanese buyers.

Santos has said Barossa and Darwin LNG life extension will create 600 jobs throughout the construction phase and secure 350 jobs for the next 20 years of production at the Darwin facility.

The FID came a year after Santos completed the acquisition of the assets of US major ConocoPhillips in northern Australia and the Timor Sea, including the existing offshore Bayu-Undan field providing the feed gas now for Darwin.

The Barossa development will comprise the FPSO, subsea production wells, supporting subsea infrastructure and a gas export pipeline tied into the existing Bayu-Undan-to-Darwin LNG pipeline. 

BW Offshore, the Norway-listed floating production units provider for oil and gas, has been awarded an Australian contract worth US$4.6Bln by LNG operator Santos for the Barossa gas field to provide feed-gas for the Darwin liquefaction plant.