ExxonMobil Guyana has awarded a limited notice to proceed (LNTP) to Italy’s Saipem, related to its proposed Longtail project in Guyana, signaling a future full contract award that Saipem said could be worth up to US$1.5 billion.
The Italian engineering firm said it has been awarded a new limited notice to proceed (LNTP), worth around US$150 million, by ExxonMobil Guyana Limited for the engineering, procurement, construction and installation (EPCI) of the subsea structures, umbilicals, risers, and flowlines (SURF) system for the Longtail project.
The installation will occur in the Stabroek Block offshore Guyana at a water depth of approximately 1,750 meters, Saipem said.
Longtail is the first development offshore Guyana that will focus on the production of non-associated gas, with all projects before it developing oil fields.
The LNTP, typical for projects that are not yet sanctioned, allows Saipem to commence preliminary detailed engineering and procurement activities.
“Execution of the main EPCI scope (including construction and installation activities) is subject to the receipt of the necessary governmental and regulatory approvals, as well as the Final Investment Decision (FID) by ExxonMobil Guyana Limited and its co‑venturers in the Stabroek Block,” Saipem stated.
Once approved, Saipem expects the full contract to have an expected duration of around four years and an estimated overall value of between US$750 million and US$1.5 billion.
The Longtail project is expected to target gas production at a rate of up to 1.2 billion cubic feet per day (bcf/d) and condensate production of about 250,000 barrels per day (b/d). With government approval and a final investment decision expected later this year, ExxonMobil plans to start production at Longtail in 2030.
Saipem has operated in the Stabroek Block for ExxonMobil under seven offshore development contracts, four of which have already been completed, namely Liza 1, Liza 2, Payara, and Yellowtail.
SBM Offshore is expected to construct the floating production, storage and offloading (FPSO) vessel for the Longtail project, after being awarded a contract to perform front end engineering and design studies in March.
Currently, ExxonMobil produces only oil at more than 900,000 b/d in Guyana.
