SBM in Pole for Lingshui 17-2 Floater FEED Job

Friday 26 May 2017

Dutch floater specialist SBM has emerged as the front runner in a CNOOC Ltd tender to carry out front-end engineering and design services on a semi-submersible production platform at the Lingshui 17-2 deep-water gas project in the South China Sea.

Industry officials said SBM offered a very competitive bid for the tender, launched by CNOOC Research Centre in early April.

The job also attracted interest from players including French giant TechnipFMC, Saipem of Italy, Aker Solutions of Norway, US-based Keppel FloaTec, Japan's Modec, UK player Wood Group Mustang, and a consortium comprising Belgium's Exmar and Chinese contractor Richtech.

Sources said Keppel FloaTec offered the second-lowest bid, followed by TechnipFMC, while Exmar’s price offer was more expensive.

They added that while SBM appears to be in the driver's seat, Keppel FloaTec and TechnipFMC may not be out of the race yet. The FEED work is scheduled for completion at the end of this year, while an award could come within the next few weeks.

Sources said the FEED work will mostly cover the study of the floater hull, while CNOOC Ltd will handle the topsides.

Sources said some engineering houses in China and the US have already approached SBM about possibly sub-contracting engineering work on the Lingshui floater, adding that qualification work related to that is ongoing. An eventual contract award would be good news for SBM, which is currently considering placing some of its own work in China.

The Dutch floater specialist is considering awarding a contract to a Chinese yard — Shanghai Waigaoqiao Shipbuilding or China Merchant Heavy Industry (Jiangsu) — to build a standardised FPSO hull under its Fast4Ward development concept.

SBM chief executive Bruno Chabas said recently that the company should take an investment decision on that project by the middle of the year.

It already has experience of floater work in China, having previously converted three FPSOs at Chengxi Guangzhou shipyard.

The third and latest conversion, the Cidade De Saquarema FPSO, left the yard in 2015 to produce for Petrobras at the Lula oilfield in Brazil's prolific pre-salt play.

The Lingshui production facility is planned to be the world’s first deep-water semi-submersible production floater with condensate storage facilities. That solution is intended to avoid the need for an additional floating storage unit, which would normally be required to handle liquids for such a project.

It is not clear when CNOOC Ltd will launch a tender for the floater’s engineering, procurement and construction contract or if it would prefer approaching individual yards for bilateral negotiations.

Under the current challenging business environment, CNOOC Ltd’s house EPC contractor Offshore Oil Engineering Company (COOEC) may emerge as a preferred fabricator for the platform.

Located in the Qiongdongnan basin, Lingshui 17-2 represents CNOOC Ltd’s first self-financed development.

Lingshui, which lies in 1225 to 1551 metres of water about 160 kilometres from the producing Yacheng 13-1 field, will be developed as an 11-well subsea tieback to the deep-water floater.

The wells will be completed with conventional subsea trees, each of which will be equipped with multi-phase flow meters and a sand monitoring system.

If all goes well on the project, CNOOC Zhanjiang, which is responsible for exploration and development activities in the Qiongdongnan basin, aims to start drilling and completion operations at the end of 2018. That could lead to subsea installation work taking place in 2019, before first gas potentially flows in September 2020.

Initial production is targeted at 2.5 billion cubic metres per annum, rising to a peak of 10 Bcm in 2030.

CNOOC Ltd has drilled about 10 wells at Lingshui 17-2, which is thought to hold about 136 billion cubic metres of recoverable gas.

Gas will initially be sent to Hong Kong through an existing pipeline for power generation, but will also target markets in the Pearl River Mouth Delta region in Guangdong province.

The current plan also involves building a subsea spur linking the Yacheng-Hong Kong gas pipeline and the onshore Zhuhai gas terminal, which currently processes gas from the Liwan field in the Pearl River Mouth basin.

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