McDermott Wins Caspian Construction Contract
McDermott International, Inc. has signed contracts with the Azerbaijan International Operating Company (AIOC) in Baku for the fabrication of integrated topside decks for Phase 2 of the development of the Azeri, Chirag and deepwater portion of the Gunashli (ACG) field in the Azerbaijan sector of the Caspian Sea and the installation of a 28" gas trunkline from the Azeri field to the Sangachal Terminal. The total value of the two contracts is approximately $390 million and will take approximately 41 months to complete. This follows the first contract award that MCCI received in November 2001 with a contract value of approximately $320 million.
"We are extremely pleased MCCI has been selected by AIOC for this second major contract award," said Kurt Nelson, vice president and general manager, J. Ray McDermott's Eastern Hemisphere operations.
"The level of openness and commonality of project goals between AIOC and the J. Ray companies will help to ensure our future success in this area of the world. We believe that J. Ray will be in Azerbaijan for the long term, and over the next four years, we intend to dedicate our energy to the success of this project," continued Nelson.
MCCI's fabrication scope of work includes fabrication of the West Azeri (WA) and East Azeri (EA) topside decks, each weighing approximately 16,000 tons. The two decks will support drilling facilities, living quarter, power generation facilities and other process equipment and facilities. The pipeline scope of work includes installation of the 187 km. long 28" gas pipeline from the Central Azeri platform to the Sangachal onshore terminal facility.
Prefabrication work is scheduled to start in J. Ray's Jebel Ali yard in March 2003. Fabrication work will be done primarily in Azerbaijan utilizing the infrastructure, equipment and labor of SOCAR's Shelfprojectstroy (SPS) fabrication facility in Baku and is scheduled to commence in May 2003.
MCCI has established a full project infrastructure at the SPS yard including a comprehensive upgrade program of existing facilities of approximately $20 million. MCCI has also implemented extensive safety and craft training programs for the local workforce consistent with its commitment to AIOC to perform the work safely while achieving maximum local Azerbaijanian content. Currently, approximately 72% of the workforce is comprised of local Azerbaijanian employees, and this percentage is anticipated to be maintained with this recent award.
ACG participating interests are: BP (operator - 34.1%), SOCAR (10%), Unocal (10.3%), Lukoil (10.0%), Statoil (8.6%), ExxonMobil (8%), TPAO (6.8%), Devon (5.6%), Itochu (3.9%), Delta Hess (2.7%).