Latest update December 4th, 2024 2:40 AM
Guyana to pay almost US$3B to lease two oil storage vessels
By Kiana Wilburg
The Liza Destiny which is Guyana’s first Floating Production Storage and Offloading (FPSO) vessel will be leased for approximately US$1.2B while the second FPSO, called the Liza Unity, will be leased for approximately US$1.6B.
The Liza Unity under construction
ExxonMobil’s subsidiary, Esso Exploration and Production Guyana Limited (EEPGL), and its partners on the Stabroek Block, Hess Corporation and CNOOC/NEXEN, will be handling these costs but will recover same.
Just recently, Country Manager for ExxonMobil, Rod Henson, noted that the Liza Unity is already under construction by Dutch firm, SBM Offshore, at yards in China and Singapore.
SBM in its 2019 half year earnings report states that the Liza Destiny contract covers 10 years of lease and operate but based on discussion with the client (ExxonMobil), it is expected that the client will purchase the unit after a period of up to two years of operations.
As for the Liza Unity contract, SBM said that it covers a maximum period of two years of lease and operate within which the unit will be purchased by the client.
Kaieteur News understands that the Liza Unity FPSO design is based on SBM Offshore industry leading Fast4WardTM programme as it incorporates the company’s new build, multi-purpose hull combined with several standardized topsides modules.
It was further noted by the company that the FPSO will be designed to produce 220,000 barrels of oil per day, will have associated gas treatment capacity of 400 million cubic feet per day and water injection capacity of 250,000 barrels per day.
Additionally, the FPSO will be moored in water depth of about 1,600 meters and will be able to store around two million barrels of crude oil.
US$720M Liza Destiny
Kaieteur News had previously reported that SBM Offshore was able to put together the Liza Destiny at a cost of US$720M after project financing was secured by a consortium of 12 international banks.
Kaieteur News understands that FPSO Liza Destiny is owned and will be operated by SBM Offshore for a couple of years. In fact , the lease and operate contract it has with ExxonMobil’s subsidiary, Esso Exploration and Production Guyana Limited, includes an initial period of 10 years with extension options up to an additional 10 years.
Kaieteur News understands that the FPSO is designed to produce up to 120,000 barrels of oil per day, will have associated gas treatment capacity of circa 170 million cubic feet per day and water injection capacity of circa 200,000 barrels per day.
The converted Very Large Crude Carrier (VLCC) FPSO will be spread moored at the Liza field located in the Stabroek Block circa 200 kilometers offshore Guyana, in water depth of 1,525 meters and will be able to store 1.6 million barrels of crude oil.
LONG-TERM AGREEMENT
A few weeks ago, SBM Offshore also inked a Long-Term Agreement with ExxonMobil covering potential future FPSO orders. SBM noted in a missive to the media that this agreement is non-exclusive and establishes the general legal framework and specific terms in relation to the engineering, procurement, construction and installation work regarding potential future contracts relating to leased FPSOs, which includes Build-Operate-Transfer projects that generally cover a short lease term.
The company noted that the relationship between SBM Offshore and ExxonMobil is well-established and goes back over four decades, starting in the 1970s. During this period, SBM Offshore said it has supplied more than 10 floating systems to ExxonMobil in five countries, including five FPSOs, deep water offloading systems and an FSO. Additionally, multiple major projects are currently in various stages of progress.
Currently, ExxonMobil is ramping up efforts to secure an environmental permit for its third field development project in the Stabroek Block called Payara. It recently noted that the FPSO for this field will be bigger than the Liza Destiny and will be called “Prosperity.”
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