Photo: BW Offshore

BW Offshore and Saipem target Shell’s Gato do Mato contract

FPSO operator BW Offshore has been awarded a limited notice to proceed (LNTP) by Shell and its partners for early-stage engineering and supplier reservations for the supply of an FPSO for the Gato do Mato oil and gas field offshore Brazil.

The LNTP is valued at up to $50 million and, upon its completion, Shell and its partners target to award a lease and operate contract to a consortium comprising BW Offshore and Saipem.

As explained by BW in a statement on Thursday, the consortium will be jointly responsible for the engineering, procurement, construction, and installation (EPCI) of the FPSO with the expected delivery in 2026.

The Gato do Mato project is a pre-salt gas-condensate discovery that covers two neighbouring blocks: BM-S-54 and Sul de Gato do Mato.

Gato do Mato map - Shell
Gato do Mato map; Source: Shell

The award is subject to the parties finalising the commercial and pricing terms of the contract in view of the current inflationary supply chain market and a final investment decision to proceed by Shell and its partners.

The FPSO lease and operate contract will have a firm period of 18 years with seven years of options.

“We have a clear strategy of developing and operating infrastructure type floating production solutions with long-term contracts and investment grade counterparties. Gato do Mato is a robust project meeting all our requirements,” said Marco Beenen, the CEO of BW Offshore.

“We will replicate the Barossa project model, bringing in equity partners, and take it one step further by partnering with Saipem for the EPCI phase to add execution capacity and capabilities.”

BW Offshore secured a contract from Santos for the Barossa FPSO, which will operate offshore Australia, in March 2021. The contract is valued at $4.6 billion.

Beenen added: “We are very pleased to team up with Saipem and look forward to building a long-term relationship with Shell and its partners in Brazil.”

It is worth reminding that, back in October 2019, Shell farmed out a 30 per cent stake in its Gato do Mato project to Colombia’s Ecopetrol.