Shell on the verge of doling out contract to M.A.R.S. for recycling of Brazilian FPSO

Shell Brasil, a subsidiary of the UK-headquartered energy giant Shell, has awarded a green recycling limited notice to proceed (LNTP) agreement to Modern American Recycling Services, Europe (M.A.R.S.) for a floating production storage and offloading (FPSO) vessel working off the coast of Rio de Janeiro.

FPSO_Fluminense; Source: MODEC

M.A.R.S. disclosed on Monday, 8 May 2023, that it had formalised a LNTP agreement with Shell for dismantling and green recycling of the FPSO Fluminense, after 20 years of service in the Campos Basin offshore Brazil.

Furthermore, the LNTP defines the terms of a contract between the two players which is expected to be awarded this year. It covers the engineering, preparation, dismantling and green recycling of the FPSO. This vessel is expected to arrive at M.A.R.S.’ yard in 2024, after obtaining the required approvals in compliance with local and international regulations.

“We are glad that Shell Brasil Petróleo Ltda. has chosen to retire and green recycle the Fluminense FPSO at our EU-approved green recycling facility in the Port of Frederikshavn, compliant with all local, national and international rules and regulations,” outlined M.A.R.S. while commenting on this deal.

The 390-metre-long FPSO Fluminense with an LDT of 51.000 Mt was commissioned in 2003 at the Bijupirá and Salema oil fields in the Campos Basin. These fields are located adjacent to each other, around 250 km east of Rio de Janeiro, in water depths ranging from approximately 470 to 800 metres.

M.A.R.S. has secured several recycling deals last year, including the one for Teekay’s Petrojarl Foinaven FPSO. This FPSO and its removal from the field were under the spotlight following a vote for strike action by workers on the vessel due to a dispute related to redundancy packages.