China: Departure of P-63 (Papa Terra) EPC Conversion Project Delayed

The EPC conversion project P-63 (Papa Terra) is under construction at the COSCO Dalian yard in China. As a consequence of increased work scope compared with initial plans, the departure of the unit has been delayed.

A thorough review of the consequences of the extended yard stay and additional scope has resulted in a revision of the forecasted cost for completing the project. The second quarter will as a result be negatively impacted by USD 50 million. BW Offshore will release the second quarter results 2012 on 30th August 2012 as previously announced.

The additional project costs are mainly linked to increased steel replacement, completion of the boiler systems, increased engineering and commissioning cost and increased yard costs associated with the delayed schedule. All possible efforts are being made by BW Offshore and its Brazilian partner to meet the overall project schedule requirements from Petrobras.

The Papa Terra project is accounted for as a fixed-price construction contract where revenue is recognised in accordance with the “Percentage of Completion” (POC) accounting method. BW Offshore is receiving milestone payments from the client Petrobras throughout the project period.

Main Technical Characteristics of P-63 (Papa Terra):

1. Conversion based on the VLCC BW Nisa vessel
2. Length: 334m x Width 57.3m (Foot Print)
3. Draft: 7.5 m
4. Depth: 28.5 m
5. Fixed Mooring System with 25 mooring lines
6. Oil processing = 140,000 barrels/day
7. Gas compression = 1,000,000 m3/day at 300 bar abs
8. Liquid processing = 350,000 barrels/day
9. Treatment of produced water = 325,000 barrels/day
10. Water Injection System = 54,054 m3/day at 200 bar abs
11. Gas lift system = 400,000 m3/day at 180 bar abs
12. Off-loading system = 1,000,000 bbl of oil in up to 30 hours
13. Oil API Grade = 14.2 (ultra-heavy)
14. Gas molecular weight = 18.2
15. Oil arrival temperature = 55°C
16. Treatment temperature = 140°C
17. Water Depth: 1200m

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Source: bwoffshore, July 19, 2012; Image: quip