ONGC Eyes KG-DWN-98/2 Floater Pre-Qualification
Friday 17 March 2017
India’s state-controlled Oil & Natural Gas Corporation (ONGC) is set to launch pre-qualification this month for the large floating production, storage and offloading vessel it plans to install at its $5 billion-plus KG-DWN-98/2 deep-water development off the country’s east coast.
Several sources close to the FPSO tender process stated that ONGC is expected to launch the much-delayed pre-qualification process within a week or two and suggested that at least five to six leading FPSO contractors are likely to respond.
“We are hoping that pre-qualification (for the FPSO) will start soon, followed by a limited tender that will be issued to select contenders,” a source from one of the interested FPSO contractors said.
ONGC was originally expected to start the tender process for the FPSO last year, but the process was delayed by more than six months.
However, industry sources suggested that ONGC’s high-level executive purchase committee (EPC) recently gave the go-ahead for the project, paving the way for the pre-qualification to get under way.
Those likely to show interest include a grouping of Malaysia’s Bumi Armada with India’s Shapoorji Pallonji group, SBM Offshore of the Netherlands along with India’s Sun Oil & Gas, and Japan’s Modec.
Malaysia’s Yinson Holdings, MISC and M3nergy are also expected to show interest, either alone or in a consortium with other players, industry sources added.
One source suggested that MISC and M3nergy could tie-up together, but this could not be confirmed.
BW Offshore of Norway also attended an expression of interest meeting organised by ONGC last year, but it is not clear if it will participate, said sources.
ONGC — headed by managing director Dinesh Kumar Sarraf — is expected to shortlist three to four key FPSO contractors after the pre-qualification process and aims to award the contract as soon as the middle of this year, sources said.
ONGC is looking for a unit capable of handling 90,000 barrels per day of oil and 135 million cubic feet per day of gas. The vessel should also have water injection capacity of 58,800 bpd of water. The FPSO is expected to have a storage capacity of 1.3 million barrels of oil and will be based on a very large crude carrier (VLCC) hull, sources said.
Sources have suggested that the mooring system is likely to be technically challenging, because the floater will be operating in environmentally harsh conditions in 413 metres of water.
The FPSO topsides will also have to withstand the potentially strong winds experienced at the field location.
ONGC is offering a fixed lease term of nine years, along with an option to extend that by a further six years.
It is targeting an FPSO with a design life of at least 20 years, and is thought to be in the market for either a conversion or relocation of an existing vessel.
ONGC will only pre-qualify contractors that have completed at least one FPSO project during the last 10 years, involving mooring and vessel installation in a water depth of at least 400 metres.
First gas from KG-DWN-98/2’s Cluster-2 development is targeted for June 2019, with oil planned to flow in 2020.
Industry sources have termed the completion schedule for the deep-water development as “quite aggressive”, but said ONGC is unlikely to further extend the project’s completion date.