Sevan continues FLNG study as loss deepens

Norway’s Sevan Marine started working on the follow-up study for a specific FLNG field development with a U.S. oil major during the second quarter.

The company expects to have the study wrapped up by the end of the year, according to its quarterly report issued on Thursday.

The current focus of the study has been put on the hull and marine aspects of Sevan Marine’s cylindrical design. The concept won the AIP from the American Bureau of Shipping in November 2014.

The unit can be designed to have gas processing and liquefaction capacity of up to 4 mtpa and storage capacity of up to 240,000 cubic meters of LNG and 36,000 cubic meters of condensate, according to Sevan Marine.

However, the company is bracing itself for tough times ahead as it is faced with difficult market conditions with continuous delays on a number of key projects.

Sevan Marine noted its 2016 revenue and profit targets will be missed and has stressed the need for further cost reductions.

Despite the cost reduction measures already taken, the quarterly report shows a net loss of US$11.6 million, compared to a net loss of $8.1 million in the previous quarter. Net profit was negatively impacted by a $13 million impairment related to Logitel loan, the company said.

The losses were, however, cut in comparison to the corresponding quarter in 2015, when it reported a $39.1 million loss.

Under current cost reduction measures, Sevan Marine reduced its headcount from 203 to 110 and is anticipating a 43 percent cost reduction in 2016 when compared to the year 2015.