LNG

Petróleo Brasileiro S.A., the Brazilian major known as Petrobras and the first national oil company to import LNG to chartered floating storage and regasification units (FSRUs) back in 2009 while never developing LNG production itself, posted an almost 35 percent drop in first-quarter profits as global energy prices eased.

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.

Sembcorp Marine, the Singapore-headquartered global offshore, marine and energy platforms providers, is continuing to build its Brazilian shipyard business by completing its second floating, production, storage and offloading (FPSO) vessel for Brazil’s oil and natural gas rich offshore Santos Basin.

Semmarine's yard is called the Estaleiro Jurong Aracruz (EJA) facility and has been located since 2014 in the Espirito Santo state of southeast Brazil in the municipality of Aracruz.

The yard employs up to 4,500 workers during peak periods of production and in addition to tapping into the revived Brazilian offshore oil and gas industry, the EJA yard is offering field developments services for the in the Atlantic, Gulf of Mexico and West African regions.

The Sembmarine-owned yards “Petrobras P-71” FPSO is the second completed for the Tupi B.V. joint venture, majority-owned by state energy company Petróleo Brasileiro, known as Petrobras.

“The FPSO vessel, P-71, has just sailed away from EJA’s shipyard and will be deployed to the ultra-deepwater Itapu field,” said EJA.

Former LNG plan

Atapu is an oil and natural gas field with a shared deposit, located at a water depth of over 2,000 metres in the Santos Basin pre-salt.

Analysts note that for several years BG Group of the UK had spoken about an LNG production project in Brazil’s Santos Basin before being taken over by Shell in 2016. However, EJA’s the new FPSO is oil focused.

“When launched into operation, P-71 will produce up to 150,000 barrels of oil per day (BOPD). Measuring 316 metres in length and 54 metres in width, ‘P-71’ has a 1.6-million-barrel storage capacity and can accommodate 166 persons,” explained EJA.

EJA’s “P-71” work scope included fabricating six modules, pipe-racks and a flare, and integrating them on the vessel along with other modules and items supplied by the customer.

The yard said it also executed modification works on the FPSO’s topsides and hull to meet Itapu field requirements.

Premier facility

“Despite pandemic-related challenges which affected the project over a period of 20 months, EJA successfully delivered the P-71 FPSO on schedule, cementing its status as a premier facility in Brazil capable of taking on full engineering, procurement, construction and commissioning work for large-scale offshore projects,” said EJA President Thangavelu Guhan.

“We thank Petrobras and its partners for choosing to work with us on the ‘P-68’ and ‘P-71’ FPSO projects. We would also like to recognise our employees, vendors and community leaders whose assistance is important to our continued success,” stated Guhan.

EJA Chairman William Goh said that as a Brazilian shipyard with international expertise and advanced capabilities, the company had also become a major commercial entity and part of the social and economic fabric of Espirito Santo state and its local communities.

“We are committed to growing our business here by providing world-class engineering solutions for the offshore renewables, oil & gas and other clean energy sectors,” declared Goh.

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.

Sept 17 (LNGJ) - Sembcorp Marine of Singapore said its wholly-owned and operated Brazilian subsidiary, Estaleiro Jurong Aracruz (EJA), has crossed a significant operational milestone with the completion of its first floating production, storage and offloading (FPSO) project. The P-68, a newbuild FPSO vessel, has left the Brazilian shipyard and will be deployed to the ultra-deepwater Berbigao and Sururu fields in Brazil’s Santos Basin.

   Sembcorp. said the vessel was constructed for Tupi BV, a consortium comprising Brazil’s Petrobras, France’s Total, Shell and Galp-Sinopec Brazil Services. EJA’s P-68 work scope includes fabricating six modules, pipe-racks and a flare, and integrating them on the vessel.

French energy company Total, a stakeholder in global LNG projects including the most recent to come on stream on Russia’s Yamal Peninsula, is also keeping its exploration and production business on track by completing an acquisition of oil and gas assets in the prolific Santos Basin offshore Brazil.