Petrobras Awards FEED Contract for Floating LNG Unit



On Friday, December 18, Petrobras, BG Group, Repsol and Galp Energia, partners in the joint venture aimed to build an onboard natural gas liquefaction unit (ONGU) to use the gas from the pre-salt area, signed the agreements with the best bidders in the tender to develop the FEED (Front End Engineering and design) for the liquefaction unit.

The winners were Saipem (Italy) and the SBM (Switzerland)/Chiyoda (Japan) and Technip (France)/JGC (Japan)/Modec (Japan) consortia. The tender, carried out in the international invitation mode, was launched last August, and the offers delivered in October.

With acknowledged experience in building FPSOs (floating production, storage and offloading units for oil and gas) and LNG plants, the hired groups have up to December 16, 2010 to develop the FEEDs, and the projects will be carried out parallelly. The purpose is to drive competition among the suppliers and, thus, help reduce unit deployment costs.

In 2011, based on the technical and economic feasibility analysis of the FEEDs and of other alternative solutions, such as installing submarine gas pipelines, a decision will be made regarding the best option to outflow the gas from the Santos Basin's Pre-Salt Pole.

Once the deployment of an onboard liquefaction unitized as the most feasible alternative from the technical and economical viewpoints, a new tender will be opened to pick, from among the groups that will develop the FEEDs, the one that will be in charge of building and operating the project, the completion of which is planned for July 2015.

Without Precedents

An unprecedented project in the world, the onboard natural gas liquefaction unit (ONGU) will operate in Santos Basin Pre-Salt Pole blocks BM-S-9 and BM-S-11, located some 300 km off the Brazilian coast. The unit will be installed near the oil and gas floating production, storage and offloading units (FPSOs), and will receive, process and liquefy up to 14 million cubic meters of associated gas per day.

The ONGU will also store and transfer processed products (LNG, propane, and butane) to vessels, which, in turn, will then transport it to the consumer market. In the case of LNG, the product will be delivered to regasification terminals, where the natural gas is transformed from the liquid to the gaseous state and, finally, injected into the gas pipeline network. In Brazil, Petrobras' LNG regasification terminals are installed in Pecém (state of Ceará) and in the Guanabara Bay (state of Rio de Janeiro).

Petrobras holds 51.1% of the stakes in the joint venture that will develop the FEEDs to build the ONGU unit. The three partners (BG, Repsol, and Galp Energia) split the remaining 48.9% equally, each with 16.3% interest in the project. These companies are also partners in blocks BM-S-9 (Petrobras, BG Group, and Repsol) and BM-S-11 (Petrobras, BG Group, and Galp Energia). Together, they will share resources and competencies in order to develop and deploy this innovative project.

Strategic to Petrobras and to its partners, the ONGU project will allow Santos Basin's Pre-Salt Pole gas reserves to be monetized, ensuring flexibility to supply the internal market and the possibility of exporting the product in the spot market during periods of low demand in the Brazilian thermoelectric segment.
 


RELATED COMPANIES
Company: Petrobras more info
Operates 35 Offshore Rigs
Manages 12 Offshore Rigs
 - Brazil Regulator Allows Petrobras To Source Libra Rig Hull From Abroad (Oct 04)
 - Exxon's Big Bet on Brazil Oil Could Signal Major Pre-salt Role (Sep 29)
 - Exxon Mobil Bets on Brazil, Buys 10 Oil Blocks in Auction (Sep 28)
Company: BG Group more info
 - Shell Mulls LNG-Hub Network as Use by Ships and Trucks Expands (Jul 11)
 - Tanzania Laws Would Allow Govt to Tear Up Mining, Energy Deals (Jun 29)
 - Despite Cuts, Big Oil to Expand Production into the 2020s (Sep 05)
Company: Repsol more info
 - Exxon Mobil Bets on Brazil, Buys 10 Oil Blocks in Auction (Sep 28)
 - Repsol Says Drilling Suspended On Vietnam Oil Block Disputed By China (Aug 02)
 - China Urges Halt To Oil Drilling In Disputed South China Sea (Jul 25)
Company: Saipem more info
Manages 12 Offshore Rigs
 - Ifax: Saipem To Conduct Feasibility Study On Rosneft Chemical Plant (Sep 15)
 - Saipem to Build Pipelines for Kuwait Refinery Project (Aug 16)
 - Saipem Warns On Profits After Falling To 2Q Loss (Jul 25)
Company: Technip more info
 - Sasol Plans More Hiring for Louisiana Project (Oct 12)
 - Bapco To Meet Technip-Led Consortium For Talks On Refinery Expansion (Aug 22)
 - Fluor Wins Malaysia Isononanol Plant Contract (Aug 07)
Company: MODEC International more info
 - Shell Extends MODEC's Contract for FPSO Fluminense to December 2020 (Sep 02)
 - Keppel's BrasFELS Completes Project for MODEC's FPSO (Jun 29)
 - McDermott Joins 14 Other Offshore Firms to Establish Industry Standards (May 19)
Company: SBM Offshore N.V. more info
 - SBM Offshore, Repsol to Get $247 Million in Yme Insurance Settlement (Jul 17)
 - Weak Oil Pushes SBM Offshore To Axe More Jobs (Aug 10)
 - FPSO Cidade de Saquarema Commences Ops at Brazil's Offshore Lula Field (Jul 13)
Company: Galp Energia more info
 - Galp Cuts Investment Plan, Sees Higher EBITDA Growth (Feb 21)
 - Eni Board Authorizes Investment for First Phase of Coral Discovery (Nov 18)
 - European Oil, Gas Companies Looking to Cut Costs Further (Oct 31)
Company: JGC more info
 - Australia's UGL Faces More Provisions On Work For Ichthys LNG (Jun 06)
 - JGC Clinches $240M EPC Contract to Build Gas Processing Plant in Aceh (Apr 01)
 - PETRONAS FLNG2 Reaches Milestone with Keel Laying at SHI's Shipyard (Nov 09)