MOL, Mitsui Invest in Modec FPSO Project in Mexico

Japan’s Mitsui O.S.K. Lines (MOL), Mitsui and Modec have reached an agreement to jointly provide a floating production, storage, and offloading system (FPSO) in Mexico.

The FPSO would have an oil processing capacity of 90,000 barrels per day and a gas processing capacity of 75 million cubic feet per day.

Under the deal, the parties would provide the unit, to feature a storage capacity of 900,000 barrels, for use in the Area 1 block offshore Mexico.

Construction of the FPSO is planned to be completed in 2021, and the vessel will be deployed for the development of the Area 1 block at water depths of about 32 meters.

Mitsui and MOL invested in MV34, a Dutch company established by Modec, which will engage in FPSO leasing, operations and maintenance services. The companies signed a loan agreement for the project on April 12, 2019.

In December 2018, MV34 concluded the charter agreement with Eni Mexico, the operator of Area 1 block and a subsidiary of Eni S.p.A. The charter contract initially runs for 15 years, with options for extension every year thereafter up to 5 additional years.

The loan agreement on a project finance basis, signed by a number of finance institutions, is the first project finance for the FPSO project in Mexico.

The transaction concluded with MOL holding 30 percent of the MV34 stake, while Mitsui and Modec each have a 35 percent share.