BW Offshore emerges as preferred FPSO bidder for Canada’s $12B oil project

September 1, 2025, by Melisa Cavcic

Norwegian state-owned energy giant Equinor has taken another step to bring to life its oil project off the coast of Newfoundland and Labrador by inking heads of agreement (HoA) with BW Offshore for a floating production, storage, and offloading (FPSO) unit that will be deployed on the $12-billion Canadian project, which was put on ice for three years a couple of years ago.

FPSO for Bay du Nord oil project; Source: BW Offshore

After putting the Bay du Nord project on a shelf for three years in 2023 because of the rise in costs, Equinor set the wheels in motion to develop the oil project in January 2025 by awarding preliminary front-end engineering design (pre-FEED) work to BW Offshore and Altera Infrastructure.

BW Offshore has now signed an agreement with Equinor, which is said to confirm its selection as the preferred bidder for the FPSO destined for work at the field that is expected to be among the world’s lowest-carbon projects per barrel of oil and Canada’s first deepwater oil development.

As a result, BW Offshore and Equinor will continue to advance discussions on all technical and commercial aspects of the FPSO project, including further maturation of a smart and cost-effective design through front end engineering design (FEED) work, and agreeing on a commercial solution.

Operated by Equinor in partnership with BP, the project is perceived to hold an estimated
400 million barrels of recoverable light crude in its initial phase. The FPSO, which will be tailored for the harsh environment of the sub-Arctic, is expected to support production of up to 160,000 barrels of oil per day.

While the unit will feature a disconnectable turret system and extensive winterization, the
topside will entail emission reduction initiatives such as high-efficiency power generation and heat recovery, variable speed drives, and a closed flare system. Salt Ship Design disclosed in September 2022 its design of a hull for Equinor’s harsh environment unit.

$12-billion mega Bay du Nord oil project put on the back burner for three years

Business & Finance

BW Offshore claims that the FPSO will be designed for future tie-backs to enhance the project’s
long-term economic viability and value creation. Following pre-FEED completion in mid-September, Equinor and its preferred bidder will enter into a bridging phase to prepare for FEED in early 2026, subject to approvals.

Marco Beenen, CEO of BW Offshore, commented: “We are honoured to have been selected by Equinor, which shows confidence placed in BW Offshore’s capabilities to support such a pioneering Canadian project. This HoA follows a constructive and close dialogue with Equinor since late 2023 and highlights our commitment to bringing substantial value to the Bay du Nord project.

“It affirms BW Offshore’s commitment to continue work with Equinor to develop a fit-for-purpose and cost-attractive solution where safety, human rights and search for local value creation come first during all phases of the project and operations.”

Thanks to this project, deemed to support BW Offshore’s strategy to deliver high-performance offshore solutions to progress the future of energy, the company will establish a local office in Newfoundland during FEED. The original hydrocarbon discovery, made in 2013, is estimated to hold around 300 million barrels of light, high-quality oil. Other finds followed in 2014, 2016, and 2020.

The Bay du Nord discovery lies in waters approximately 1,170 meters deep, while other discoveries are in adjacent exploration license EL1156, Cappahayden and Cambriol, in approximately 650 meters, and are potential tie-ins for a joint project development.

Following delays, Equinor received approval from the Canadian government in April 2022 to develop the Bay du Nord project, situated in the Flemish Pass basin around 500 kilometers northeast of St. John’s in Canada. This move set off legal battles over the project’s approval, with environmental groups later deciding to appeal the court’s dismissal of their lawsuit that same year.

More court action brews on the horizon for giant Bay du Nord oil project

Business Developments & Projects

The postponement of the final investment decision (FID) and first oil, which were expected in 2021 and 2025, respectively, is being utilized to optimize the project and continue to mature it toward development, as Equinor’s partners, contractors, and stakeholders work to improve overall project competitiveness.

To this end, Subsea Integration Alliance, comprising OneSubsea and Subsea7, won a long-term strategic agreement for collaboration on early, joint concept studies last year. Afterward, Fugro was hired to conduct surveys for the project. Based on the previously revised timeline, the FID is anticipated in the next couple of years, followed by the first oil as early as late 2028.