Canada gives Terra Nova a break on FPSO import fees

Petro-Canada Ltd., Calgary, has been granted a $98.7 million (Can.) break on import fees owed on an offshore production vessel for the Terra Nova oil development off Newfoundland. The break represents 25% duties on the cost of building the hull and lower turret of the floating production, storage, and offloading vessel.


CALGARY�Petro-Canada Ltd., Calgary, has been granted a $98.7 million (Can.) break on import fees owed on an offshore production vessel for the Terra Nova oil development offshore Newfoundland. The break represents 25% duties on the cost of building the hull and lower turret of the floating production, storage, and offloading vessel.

The vessel was built in South Korea by Daewoo Heavy Industries and arrived at Bull Arm, Newf., May 17 after a 12,000 nautical mile journey. The vessel has production capacity of 150,000 b/d and storage capacity of 960,000 bbl.

Petro-Canada said it investigated building the vessel at a Canadian yard, but none had the capacity for the project. Canadian suppliers are providing topsides components and the upper turret for the vessel.

The Canada Gazette, which publishes federal government information, said relief from customs duties was granted in "assisting the Terra Nova project [to] maintain its costs and should not have an adverse effect on Canadian shipbuilders."

The $4 billion (Can.) Terra Nova development in the Jeanne d�Arc basin is scheduled to begin production in the first quarter 2001. Other partners in the project are ExxonMobil Corp., Husky Oil Ltd., Norsk Hydro AS, Murphy Oil Co., and Chevron Corp.

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