Norwegian operator Statoil ASA (STO) has issued a letter of intent to Samsung Heavy Industries to construct a new permanent floating storage unit (FSU) for the Heidrun field in the Norwegian Sea.
Thexi new storage unit will be a substitute for the esting buoy loading system on the field. The contract estimated at about $230 million and includes options to procure two additional units.
Operational since 1995, the Heidrun field was developed using a floating tension leg platform with a concrete hull. Since the beginning, liquid from the field has been transported overseas through a buoy loading system comprising two buoys and purpose-built shuttle tankers.
The new FSU will be permanently tied to a buoy and the oil will be hauled up from the FSU with the help of shuttle tankers. The new FSU has been designed to have an intended life of about 30 years and will be permanently operated manually.
Management seeks to sustain Heidrun output till at least 2045. The new storage unit will offer an efficient and robust oil storage solution in the Heidrun area.
The unit will be built at the world's second-largest shipyard in Geoje Island, Republic of Korea. The engineering work will begin instantly and the unit is expected to be delivered to the site in the first half of 2015.
Statoil will be applying maritime approach in the contract strategy in a manner that all systems incorporate the maritime approach in accordance with the classification system and maritime legislation. This will result in lower unforeseen costs arising from new and unfamiliar requirements in the shipbuilding industry.
Samsung will perform engineering, procurement and construction (EPC) services and has used its own vessel design to meet Statoil's requirements. This will be in line with the shipyard's design and construction practices and at the same time facilitate cost-effective design.
Statoil, which recently hired Schlumberger Limited (SLB) for electric wireline logging services on the Norwegian Continental Shelf, has a Zacks #3 Rank, which is equivalent to a Hold rating for a period of one to three months. Longer term, we maintain our Neutral recommendation.