Statoil signs LOI for construction of FPSO hull and living quarters

The FPSO will be located on the Johan Castberg field in the Barents Sea. The contract will be signed at the final investment decision scheduled before Christmas this year. Covering engineering, procurement and construction, the contract for Sembcorp has a value of NOK 4 billion (US$491 million). The contract was won through international competitive bidding and marks an important milestone for the progress of the Castberg project, Statoil said. There were no bids from Norwegian yards for the contract. “We will be working closely with Sembcorp Marine to ensure safe and efficient delivery based on our requirements for HSE, quality, time and cost. The remaining procurement work will be progressed in parallel with this,” said Statoil’s chief procurement officer, Pal Eitrheim. The construction of the hull is the most time-critical delivery for the completion of the Johan Castberg project for the scheduled start-up in 2022. The contract will have a separate cancellation clause linked to the approval of the plan for development and operation (PDO). Johan Castberg is the next major field development on the Norwegian continental shelf and important to future infrastructure in the Barents Sea. The estimate for Norwegian content in the field development is about 50% in the project phase and about 80% in the operations phase for Castberg. The Castberg project is actively pursuing ways of increasing the percentage of pre-qualified suppliers from Northern Norway. The Johan Castberg development is planned to consist of a large subsea system tied in to a FPSO vessel. Recoverable resources are estimated at 450-650 million barrels of oil equivalent. The field is located in the Barents Sea, 240 kilometres north-west of Hammerfest. Some 30 wells are planned to be drilled on the field in the period 2019-2024.