President and Chief Executive Officer of Modec, Takeshi Kanamori said Friday the company came to an agreement with Toyo Engineering Corporation to establish a joint venture firm for the engineering, procurement and construction and installation (EPC) business of floating production, storage, and offloading (FPSO) vessels. The venture is subject to regulatory approvals.
The JV company, which will be called Offshore Frontier Solutions Pte. Ltd., is starting out with its head office in Singapore, and US$10 million in capital. MODEC will own 65% of the company, and TOYO will own the remaining 35% stake.
MODEC said TOYO, which boasts a robust track record as a global engineering group, has collaborated with it on the topside engineering, procurement, and construction (EPC) scopes for several FPSO projects. It expects the JV to deepen collaboration to carry out “challenging large-scale FPSO projects.”
The two companies also aim to make the FPSO industry more competitive, thereby maximising its technological capabilities.
They expect the specific partnership between MODEC and TOYO to demonstrate synergies in the exploration of new technology and product opportunities in growth markets, and in the development of environmentally friendly FPSOs.
“As offshore oil and gas development projects increase in scale and move into deeper waters, the durations of the client contracts for FPSOs have become long-term as well as FPSOs have increased in size and complexity,” MODEC said. “As one of the few companies that can address these large-scale FPSO projects, MODEC recognises the importance of enhancement of its engineering and project management capabilities to meet clients’ requirements and expectations.”
In the Latin America and Caribbean Region, MODEC and SBM Offshore have brought on new projects for Brazil and Guyana, two producers that will make up a substantial share of the deepwater oil and gas supply market in the years to come.
Offshore Brazil, Petrobras had outlined a strategic plan 2022-2026. Already in the implementation stage, the company plans to place 15 FPSOs offshore Brazil.
Recently, MODEC completed one of these – Almirante Barroso. The vessel has the capacity to produce 150,000 barrels of oil per day. It is currently on its way to Brazil, with a probable arrival date in October.
However, one of the FPSOs expected to produce larger volumes is being handled by SBM Offshore. Almirante Tamandare is designed to produce about 225,000 barrels of oil per day, according to Petrobras’ strategic plan.
Offshore Guyana, ExxonMobil is moving to deliver seven FPSOs by 2027, and potentially 10 by the end of the decade. SBM Offshore has been contracted by the US oil major to build and operate four of these vessels so far, with the most recent – One Guyana FPSO for the Yellowtail Development – having the biggest capacity, of around 250,000 barrels of oil per day.
Signaling it will aim for higher volumes, ExxonMobil indicated that its fifth project offshore Guyana, the Uaru Development, could produce up to 275,000 barrels of oil per day.
The FPSO builder has not yet been named.