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UPSTREAM ONLINE- Coming into view: Yards primed for Bay du Nord FPSO bid battle

Source: Upstream Online 

Bid documents due within weeks for engineering work on hull of major new floating production, storage and offloading vessel.

Equinor is set to issue bid documents early next year to yards battling to build the hull of a floating production, storage and offloading vessel for its US$9.4 billion Bay du Nord project offshore Canada.
Located offshore Newfoundland & Labrador, Bay du Nord will be tapped by multiple subsea wells tied back to a newbuild FPSO likely to handle about 200,000 barrels per day of oil, with first production targeted for 2028 or 2029.

Last year, Equinor was about to select the preferred contractors to build the FPSO hull, topsides and subsea hardware, but stalled its decision-making process after making two nearby oil discoveries which meant a bigger FPSO was needed.

Despite a lack of FPSO pedigree, Salt Ship was retained to revamp the FPSO hull design, while APL — which has been contracted to provide the mooring system — was tasked with reworking this element of the project.

Three industry sources familiar with Equinor’s plans said invitations to bid for front-end engineering and design work on the FPSO hull are due to be issued in January, a few weeks later than originally planned.

South Korea’s Samsung Heavy Industries and Daewoo Shipbuilding & Marine Engineering will be sent the tender documentation, having been carrying out studies on the FPSO for some years.

It is understood that Equinor will likely select one of the yards for a 10-month to 12-month FEED study that is expected to begin in the second quarter of next year.

This would suggest that, if all goes to plan, FEED completion in the second quarter of 2024 would prepare the ground for a final investment decision later that year.

The traditional construction time for a newbuild FPSO is three years but given its unusual design, the schedule to fabricate the minimally manned, low-maintenance, low-carbon and winterised Bay du Nord vessel may be extended for another year.

In addition, construction completion and transport of the vessel from South Korea to location will need to be timed to hit the short summer hook-up and installation window available in eastern Canada’s harsh waters.

Aker Solutions and KBR have been involved in the early topsides engineering and have been liaising with the South Korean yards to co-ordinate hull and deck studies.

The winning hull contractor would have to work with Equinor’s preferred topsides FEED contractor — which was due for selection in the first quarter of 2023 — to iron out FPSO integration issues.

Sources expect the chosen FEED contractor for the hull would also be tasked to build the entire FPSO, with the preferred topsides contractor handling engineering and procurement for the deck.

There is also a requirement for Equinor to place some fabrication work in Newfoundland, but it is unclear what this would amount to.

Traditionally, the province’s yards have been able to build the technically simpler topsides structures such as living quarters, helidecks and flares, with the more complex modules built overseas.

The deep-water Bull Arm yard has in the past been used to carry out final integration work on FPSOs before they head to their offshore locations.

Bay du Nord’s FPSO will be moored at a water depth of about 1170 metres in the remote Flemish Pass basin.

The floater is expected to host production from about 50 subsea wells tapping the Bay du Nord, Bay de Verde, Baccalieu, Cappahayden, Cambriol and Harpoon discoveries.

Equinor’s unsuccessful Cambriol step-out exploration well this year and the technical failure of its nearby Sitka probe — it did not reach its objective — have not impacted on the subsea design, one knowledgeable source said.

In total, the current discoveries hold up to 1 billion barrels of oil, although Equinor’s internal figure is not as high as this, Upstream was told, and could be closer to 800 million barrels.

Earlier this year, BP became Equinor’s sole partner in Bay du Nord after acquiring — in an asset and cash deal — the 35% stake held by Cenovus.