SBM Offshore Orders Two More FPSO Hulls in China, Citing Increased Demand

The Dutch Company of FPSO SBM Offshore Ordered Two New FPSO Hulls in China. These Will Be the Fourth and Fifth Hulls from SBM Ordered Under the Company’s Fast4Ward Program.

The SBM Offshore Fast4Ward program includes standardized FPSO, designed to accelerate deployment time and reduce construction costs. The Dutch company said on Thursday that it ordered the two hulls from Shanghai Waigaoqiao Shipbuilding and Offshore Co., Ltd. (SWS) and China Merchants Industry Holdings (CMIH).

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The two shipyards are currently working on the construction of the first three hulls from SBM Offshore, which are already allocated to the projects.

Bruno Chabas, CEO of SBM Offshore: “We continue to have good visibility due to new active commitments with clients. This has given the company the comfort to accelerate the program and commit to two additional Fast4Ward hulls. Currently, the Company is building five hulls simultaneously, which highlights the fundamentals of our market and SBM Offshore’s competitive position. During this period of growing demand, SBM Offshore remains disciplined and selective regarding market opportunities.”

SBM Offshore said that its Fast4Ward can accelerate the delivery of an FPSO by up to 12 months. For a typical project, this can increase the value to a client by over US$ 0.5 billion, substantially reducing the project’s breakeven prices, SBM stated. The FPSO Liza Unity will be the first unit from SBM Offshore delivered under the Fast4Ward program.

The first FPSO to be delivered under the Fast4Ward program is the Liza Unity. This hull had been ordered under speculation, but ExxonMobil contracted the FPSO for deployment in its Liza field in Guyana, as part of the second development phase.

The development of Phase 2 of Liza was sanctioned in May 2019 and will use the FPSO Liza Unity to produce up to 220,000 barrels of crude oil, with first oil expected in mid-2022.

Regarding the growing demand for FPSO units, Norwegian analysts Rystad said in August that global market FPSOs were heading for a major revival, with up to 24 FPSO contracts expected for 2020, largely driven by Brazil.