The Newfoundland and Labrador Oil and Gas Industries Association (Noia) is urging stakeholders to reach a deal on the Terra Nova FPSO project before a June 15 deadline expires.
In a press release Noia said during a recent call with investors, Suncor Energy CEO Mark Little commented on the future of the Terra Nova FPSO and efforts to confirm the Asset Life Extension project of the vessel. The oil and gas association said it is encouraged that the CEO indicated Suncor would like to proceed with the project and implores the parties to find a resolution before the deadline.
Suncor Energy operates the Terra Nova field, which is located offshore approximately 350 kilometres southeast of Newfoundland and Labrador. Discovered in 1984, the oil field was the second to be developed on the Grand Banks offshore Newfoundland. Production from the field began in 2002, using the Terra Nova Floating, Production Storage and Offloading (FPSO) vessel.
“Noia understands the business requirements of Suncor Energy to set a deadline for a decision on the Asset Life Extension Program of the Terra Nova FPSO and we remain hopeful that an agreement will be reached prior to June 15,” Noia CEO, Charlene Johnson said. “This project provides approximately 1,000 direct jobs and thousands more through the service and supply sector through the use of helicopters, supply vessels, environmental monitoring, catering, maintenance, health, safety and medical services, human resources and so much more.”
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Johnson said there are thousands more employed through spinoffs such as restaurants, accommodations like hotels and campgrounds, car and real estate sales, and struggling local businesses that will be greatly impacted, along with hundreds of organizations in the community and volunteer sectors.
On January 14, 2021, the Government of Newfoundland and Labrador announced a non-binding Memorandum of Understanding had been reached with the project owners. The province also committed up to $175 million on a matching contribution basis and possibly modifying the royalty regime should an agreement be reached. This commitment was based on an agreement for long-term production via the Terra Nova Project. Noia said it is requesting that all parties involved find a positive resolution as quickly as possible.
“Every effort must be made to ensure we maximize resource recovery and value for our province. The Terra Nova field has produced approximately 425 million barrels of oil and we know the asset life extension project was expected to capture another 80 million,” Johnson stated. “We should not strand those 80 million barrels. The project has provided billions of dollars in revenue to both the operating partners and the federal and provincial governments, and I do not believe anyone can simply walk away.”
She pointed out that in January, an MOU between the parties was announced and it seemed a deal was a strong possibility. “We need to get back to that place,” Johnson pleaded. “On behalf of the Noia members who rely upon the project, I implore all parties to find a positive resolution as soon as possible.”
One of the largest FPSO vessels ever built, the Terra Nova is 292.2 metres long and 45.5 metres wide, approximately the size of three football fields laid end to end. From the keel to the helideck, it stands more than 18 stories high.
