Brazil: Mitsui, MOL & Marubeni Reach Final Agreement on FPSO Chartering Project

MODEC, Inc., Mitsui & Co., Ltd., Mitsui O.S.K. Lines, Ltd. and Marubeni Corporation  have agreed that Mitsui, MOL and Marubeni will invest in a long-term charter business (“Project”), operated by MODEC, for the purpose of providing a floating production, storage, and offloading system ( FPSO) for the use in the Iracema Norte area of a pre-salt oil field off the coast of Brazil.

The above 4 companies have entered into definitive agreements today, March 22, 2013. This project is subsequent to the long-term charter business for the purpose of providing an FPSO, intended  for the use in the Iracema Sul area in which the aforesaid companies invested through Cernambi Sul MV24 B.V.

Construction of the FPSO will involve the conversion of a VLCC (very large crude oil carrier), which will be renamed “FPSO Cidade de ITAGUAÍ MV26” upon its completion. It will be deployed to the Iracem a Norte area of the BM-S-11 block off the coast of Brazil in the fourth quarter of 2015. The area is part of a deepwater oil field located approximately 300 km south of Rio de Janeiro, Brazil. The oil is contained in the pre-salt layer approximately 5,000 m beneath the seabed.

For this Project, Mitsui, MOL and Marubeni will invest in Cernambi Norte MV26 B.V. (MV26), a Dutch company established by MODEC. MV26 has signed a long-term chartering agreement with Tupi B.V., a Dutch company owned by Petrobras Netherlands B.V. (65%), BG Overseas Holding Ltd. (25%), and Galp Sinopec Brazil Services B.V. (10%).

The FPSO will be chartered to Tupi B.V. for 20 years under the chartering agreement signed in February 2013.

MODEC and Mitsui have already provided three FPSOs for pre-salt oil fields, and this will be their fourth pre-salt related FPSO chartering project. It is the third project of its type for MOL and the second for Marubeni. The Schahin Group, the joint bidder with MODEC for this project as the local partner in Brazil, plans to invest up to 15% in MV26 by the commencement of the FPSO charter.

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MODEC, March 22, 2013