SBM projects could face COVID-19 delays

– Liza Unity FPSO in Singapore yard affected

SBM OFFSHORE, awarded contracts to construct, install, lease and operate the Liza Unity Floating Production, Storage and Offloading vessel (FPSO), will likely face delays in some of its projects, given the extent to which the COVID-19 pandemic has affected its operations.

In a company update, on Wednesday, the company announced that a number of its crew members around the world have tested positive for the virus and have been transported back to shore.

It said that, while crew rotations have been extended for those offshore, crew changes have become more difficult due to travel restrictions in countries where the company has operations or crew members are located.

The Liza Unity, set to be Guyana’s second FPSO, saw progress first taking place at a construction yard in China, with the construction of SMB Offshore’s first generic hull as a part of the company’s innovative Fast4Ward® programme.

The hull was delivered to the construction yard in Singapore, in January 2020, for the construction of topside modules and other upgrades.

“Since last week, the authorities suspended activities at the yard in Singapore for a period of two weeks. Some delays in project execution will be unavoidable. The company is in close contact with clients and business partners to manage the situation, adjust execution planning, and, where appropriate, create mitigation plans,” SBM stated in the update.

The company said that the health and safety of its staff, contractors and their families, remain priority and it will work to ensure safe operations across the Company’s activities at the same time.

It has organised a dedicated task force to monitor the situation at all company locations across the globe on a daily basis and continues to follow advice from the relevant authorities and medical experts.

SBM stated: “In SBM Offshore’s office locations, most staff work from home and activities continue. Staff are updated on a regular basis and are supported with advice to help them achieve a healthy balance between professional and personal lives. Activity and operations therefore continue, although with some incremental expenditure to keep operations running safely. In this regard, measures have been taken to postpone non-vital programs to reserve cash to help offset these impacts.”

Liza Unity FPSO will be designed to produce 220,000 barrels of oil per day with a storage capacity of 2 million barrels, in comparison to the Liza Destiny FPSO with 120,000 barrels of oil per day, with 1.6 million barrels storage capacity.

Under the contracts, SBM Offshore will lease and operate the Liza Unity FPSO for up to two years. The awarding of the contracts followed the completion of a number of front-end engineering studies; receipt of government approvals and the final investment decision on the Liza Phase Two project by ExxonMobil and block co-venturers.

Meanwhile, the Liza Unity FPSO design is based on SBM Offshore’s industry leading Fast4WardTM programme which will incorporate the Company’s newly built, multi-purpose hull combined with several standardized topside modules.

The FPSO will have associated gas treatment capacity of 400 million cubic feet per day and water injection capacity of 250,000 barrels per day. It will be spread-moored in water depth of about 1,600 meters and able to store some 2 million barrels of crude oil.

CAPTIONS SAVED AS: A depiction of the Liza Destiny FPSO (credit: ExxonMobil)

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