JX Nippon hires Deep Producer 1 FPSO
- Business & Finance
Malaysia’s TH Heavy Engineering has received a contract from JX Nippon Oil & Gas Exploration for the Layang Development Project, located in Block SK10, offshore Sarawak, Malaysia.
Under the contract, THHE will deliver and install the Deep Producer 1 FPSO at the project location, and lease the FPSO until November 2023.
An option to extend the lease from November 2023 is also included. JX Nippon will be able to keep the FPSO working at location for up to ten more years after the original contract expires.
The contract value for the firm period is estimated at US$372 million, with additional potential of up to $457 million if JX Nippon decides to extend the contract for ten more years.
The FPSO Deep Producer 1 is owned by Floatech, an 80% owned subsidiary of TH Heavy Engineering. Floatech, incorporated in Labuan in 2011, is principally engaged in owning and operating the Deep Producer 1.
The commercial production from the Layang field is expected to start in the second quarter of 2016 with the initial estimated incremental production of Helang/Layang gas to be about 100 MMscfd and Helang condensate/Layang oil/Layang condensate to be about 7 kbd.
Natural gas produced from Layang Field, together with Natural Gas from Helang Gas Field, is planned to be supplied through subsea pipelines of approximately 200km long to the MLNG Tiga Sdn. Bhd. liquefaction plant in Bintulu, Sarawak, which is partly owned by JX Nippon Oil & Energy Corporation. The natural gas will be sold as LNG after liquefaction, while the condensate and Layang oil is planned to be shipped from the FPSO.