BG Group Awards Contracts for Construction of Eight FPSO Hulls in Brazil

BG Group and partners have today awarded Engineering, Procurement and Construction (EPC) contracts for eight hulls for the Floating Production, Storage and Offloading (FPSO) vessels that will be used in the full field development of the discoveries on blocks BM-S-11 and BM-S-9 in the Santos Basin, offshore Brazil.

The EPC contracts for the hulls have been awarded to the Brazilian company, Engevix Engenharia S.A. The total value of the eight hull EPC contracts is approximately $3.5 billion, with net costs to BG Group of approximately $911 million.

Upon final completion, each FPSO will have a production capacity of 150 000 barrels of oil per day (bopd) and approximately 212 million cubic feet of gas per day. Six of the eight completed vessels will be allocated to block BM-S-11 containing the Tupi, Iracema and Iara discoveries and the remaining two will be allocated to block BM-S-9 containing the Guará and Carioca discoveries.

The completed vessels will be in addition to the first permanent 100 000 bopd FPSO already in operation on Tupi and a further two 120 000 bopd FPSOs due onstream on Tupi and Guará in 2013. BG Group Chief Executive Frank Chapman said: “The contract awards for the construction of eight FPSO hulls in Brazil adds further momentum and certainty to the rapid development of our substantial interests in this world-class play.”

BG Group plc is a world leader in natural gas, with a strategy focused on connecting competitively priced resources to specific, high-value markets. Active in more than 25 countries on five continents, BG Group has a broad portfolio of exploration and production, Liquefied Natural Gas (LNG), transmission and distribution and power generation business interests. It combines a deep understanding of gas markets with a proven track record in finding and commercialising reserves.

BG Group has a 25% interest in the Tupi, Iracema and Iara discoveries in BM-S-11 concession, offshore Brazil (Petrobras, operator 65%, Petrogal 10%). The Group has a 30% interest in the Guará and Carioca discoveries in the BM-S-9 concession, offshore Brazil (Petrobras, operator 45%, Repsol 25%).

[mappress]

Source: BG Group, November 12, 2010