Dutch FPSO giant SBM Offshore has officially signed a contract for the second Fast4Ward FPSO hull with the Chinese SWS shipyard. SBM Offshore is ordering the FPSO hull on speculation and with no firm contract awarded for the FPSO.
The signing ceremony in Shanghai on Wednesday coincided with the keel laying ceremony for its first Fast4Ward FPSO hull which SBM Offshore had ordered earlier, and which is expected to serve ExxonMobil’s Liza 2 development in Guyana.
The hull is the second FPSO hull ordered under SBM Offshore’s Fast4Ward program developed to standardize, speed up, and lower cost of an FPSO construction. According to the company, the Fast4Ward program speeds up FPSO delivery by a year and could save half a billion dollars per FPSO.
To remind, SBM Offshore last week said it had ordered the second hull, and this is now just an official confirmation of what was said last week.
“With the signing for this second hull in its planned series of Fast4Ward FPSOs, SBM Offshore is signaling to the industry that it means business and its game-changing solution is on track and ready for when clients come calling. The level of client endorsement to date demonstrates that the concept is winning the confidence of the industry,” SBM Offshore said on Wednesday.
The Dutch company also explained that the order, while on speculation, is based on sound signals in the market.
“Although there is no concrete EPC contract for this second hull, the company views the continuing positive industry outlook as a good indicator, hence the move to sign with SWS for a second floater. Parallel projects for Fast4Ward are now in motion at the yard,” SBM said.
SBM Offshore CEO, Bruno Chabas, said: “The timing of our Fast4Ward strategy fits in perfectly with the market upturn. We have been preparing for this exact scenario since 2014 and today, we see tangible evidence of how Fast4Ward matches the industry’s need for cost-conscious, standardized solutions, which de-risk and accelerate projects.
As previously reported, ExxonMobil in July awarded SBM Offshore contracts to perform Front End Engineering and Design (FEED) for a second Floating Production, Storage and Offloading vessel (FPSO) for the Liza development located in the Stabroek block in Guyana.
Following the FEED and subject to requisite government approvals, project sanction and authorization to proceed with the next phase, SBM Offshore will construct, install and then lease and operate the FPSO for a period of up to 2 years, after which the FPSO ownership and operation will transfer to ExxonMobil.
The hull for the first Fast4Ward, for which the keel was laid on Friday, had also been ordered on speculation in August 2017.
The FPSO is designed to produce 220,000 barrels of oil per day and will have associated gas treatment capacity of 400 million cubic feet per day, as well as water injection capacity of 250,000 barrels per day.
Commenting on Wednesday, Chabas said: “Major players are starting to invest in projects and are seriously considering our game-changing solution, as we saw with our July announcement of an FPSO FEED for the Liza development, which is based on our Fast4Ward program.”
The CEO last week said it could take some in 24 to 30 months for the second hull to be completed. He also provided an optimistic outlook for FPSO demand, saying SBM Offshore was tracking 45 potential FPSO projects in 25 countries, that could materialize in the coming two to three years.