Home Fossil Energy Australia-bound FPSO on track for first gas in 2025 but BW Offshore facing cost overruns (Gallery)
November 15, 2024,
by
Melisa Čavčić
Norway’s floating production solutions provider BW Offshore is anticipating additional costs of up to $150 million for the completion of the remaining work related to its newbuild floating production storage and offloading (FPSO) vessel, which is anticipated to start work at a Santos-operated giant gas project off the coast of Australia in the second quarter of 2025.
FPSO BW Opal; Source: BW Offshore
Following a contract in March 2021 for the construction, connection, and operation of an FPSO, now known as BW Opal, destined for the Barossa field, the final investment decision (FID) for the project, kick-started a $600 million investment in the Darwin LNG life extension and pipeline tie-in projects. BW Offshore picked Dyna-Mac to build the topside modules for the vessel.
This Australian development project located 300 kilometers off the coast of Darwin encompasses the FPSO Opal, subsea production wells, supporting subsea infrastructure, and a gas export pipeline tied into the existing Bayu-Undan to Darwin LNG pipeline to extend the facility life for around 20 years. The Gas Export Pipeline (GEP) to deliver gas from the field to Darwin LNG has been completed.
In addition, construction activities for the Darwin Pipeline Duplication are underway. The Barossa project is a joint venture between Santos (50%), SK E&S (32.5%), and JERA (12.5%). BW Offshore disclosed a $1.15 billion project debt financing in September 2021 for the construction and operation of the FPSO, which will handle natural gas production at the Barossa field, thanks to the 4.6 billion, 15-year FPSO contract, with additional ten-year extension options.
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The first shipboard turret module was integrated into the hull on February 4, 2024. According to BW Offshore, the Barossa project is progressing in line with its schedule. As of the end of October 2024, the project was 90% completed. The FPSO BW Opal is undergoing commissioning and preparations for sail-away from the yard in Singapore, where it will be towed to the field in Australia.
The integration is 95% completed with pre-commissioning and commissioning well underway, thus, the FPSO is on track to be ready for the first gas in the second quarter of 2025. However, BW Offshore claims that closing out variation orders and prioritizing the schedule, combined with additional manhours at the yard is expected to lead to net additional investments of $100 – $150 million until project completion.
The project CAPEX totaled $2.16 billion at the end of Q3 2024. With a processing capacity of up to 900 million standard cubic feet per day (mmscfd) of gas and a design capacity of 11,000 barrels per day of stabilized condensate, the FPSO is expected to head to Australia in the first quarter of 2025. The first gas at the project is due in the third quarter of 2025.
Marco Beenen, CEO of BW Offshore,