Sembawang to Build FPSO Topsides for ConocoPhillips
Sembawang Shipyard Pte Ltd, a subsidiary of SembCorp Marine, in partnership with SMOE Pte Ltd, the offshore engineering unit of SembCorp Industries through SembCorp Utilities have signed a Letter of Intent with ConocoPhillips China Inc. to fabricate and integrate topsides for a new build floating production, storage and offloading (FPSO) vessel for a major oil development in Bohai Bay, China.
Estimated at more than US$200 million (approximately S$321 million), the project is scheduled for completion in mid-2008.
The FPSO facility is bound for shallow-water Bohai Bay where ConocoPhillips China Inc., a unit of the US-based integrated petroleum company ConocoPhillips, is developing the massive Peng Lai 19-3 Phase II Oil Development Project in cooperation with CNOOC Ltd.
Sembawang Shipyard (SSPL) will be executing the project in partnership with SMOE under a 50/50 joint venture arrangement. SSPL and SMOE have collaborated previously in similar partnership arrangement and successfully delivered three FPSO projects, including the FPSO topsides currently under construction for the Erha Field Development in Nigeria.
Under the project, SSPL and SMOE will provide the secondary structural steel materials and fabricate 15 FPSO topside modules, one flare tower and seven pipe-rack modules, as well as integrate the facilities onto the hull of the FPSO vessel and commission the facilities prior to the vessel™s departure for China. The topsides, weighing approximately 35,000 tonnes, will have a processing capacity of 190,000 barrels of oil per day with 510,000 barrels of fluid handled per day.
When completed, the FPSO vessel will be the largest ever in China. It will have a length of 300 meters, breadth of 60 meters and a depth of 29.4 meters, with an onboard storage capacity of 1.8 million barrels of crude oil. The hull will be built in China.
Total order book as at December 31, 2004 stood at S$2.3 billion. Total contracts secured for 2005 to-date stands at S$575 million.
Barring unforeseen circumstances, SembCorp Marine expects a positive contribution to its earnings from the contract. However, this contract is not expected to have material impact on the net tangible assets and earnings per share of SembCorp Marine for the year ending December 31, 2005.
Revenue from the contract will be recognized according to SembCorp Marine™s revenue contribution policy based on the percentage of completion method measured by reference to the value of work performed relative to the total contract value over the duration of the contract.
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