SBM Offshore has announced that it has been awarded contracts for the Front End Engineering and Design (FEED) for the Floating Production Storage and Offloading vessel (FPSO) for the Yellowtail development project.
This is the fourth development project between the Government of Guyana and ExxonMobil’s local subsidiary, Esso Exploration and Production Guyana Limited (EEGPL). The FEED contract award triggers the initial release of funds to EEPGL to begin FEED activities and secure a Fast4Ward hull.
Following FEED and subject to government approvals of the development plan, project sanction including final investment decision by ExxonMobil, and EEPGL’s release of the second phase of work, SBM Offshore will construct, install and then lease the FPSO and operate it for a period of up to two years. First oil for Yellowtail is expected in 2025.
SBM Offshore will design and construct the FPSO using its industry leading Fast4Ward programme allocating the company’s sixth new build, Multi-Purpose Hull combined with several standardised topsides modules. The FPSO will be designed to produce 250,000 barrels of oil per day, will have associated gas treatment capacity of 450 million cubic feet per day and water injection capacity of 300,000 barrels per day. It will be moored in water depth of about 1,800 meters and will be able to store around two million barrels of crude oil.
In order to strengthen its execution model given the current challenging market environment, SBM Offshore established a special purpose company (SPC) with McDermott, an engineering company, for the execution of the turnkey phase of the project. The SPC will benefit from the combined engineering and fabrication capacity as well as the experience of both companies in delivering EPC solutions to the energy industry. SBM Offshore will hold 70 per cent and McDermott will hold 30 per cent equity ownership in the SPC. The FPSO will be full- owned by SBM Offshore.
The government has already commenced the review of the Yellowtail development project. This review is slated to come to an end in December.
Its initial production phase is scheduled to commence in 2025 and will continue for 20 years. The proposed development, according to joint public hearings into the project between EEPGL and the Environmental Protection Agency, could provide 1,300 jobs across its four phases.
ExxonMobil has already received approval for three development projects in the Stabroek block, where it has made discoveries totalling 10 billion oil equivalent barrels.
Of those projects, production began on December 1, 2019 with the FPSO vessel at the Liza Phase One site. Production is scheduled to begin at the Liza Phase Two operation in early 2022, with the Liza Unity having arrived in the block recently. The Prosperity FPSO is currently being outfitted in Singapore for the Payara project, scheduled for first oil in 2024.
