Shell lets contract for first LNG-FPSO vessel
Samsung Heavy Industries said it received a $1.2 billion order from Royal Dutch Shell PLC for construction of a LNG floating production, storage, and offloading vessel, which is the first vessel in a 15-year supply contract signed a year ago.
OGJ Oil Diplomacy Editor
LOS ANGELES, Apr. 15 -- Samsung Heavy Industries said it received a $1.2 billion order from Royal Dutch Shell PLC for construction of a LNG floating production, storage, and offloading vessel, which is the first vessel in a 15-year supply contract signed a year ago.
“This marks the full-fledged launch of a historic project that will be recorded as the world’s largest contract of its kind,” said SHI Chief Executive Officer Roh In-sik, referring to the 15-year contract he signed in July 2009 with Shell and Technip SA.
Under the contract, SHI will be the exclusive supplier of LNG-FPSOs to Shell for the next 15 years. Industry experts predict that as many as 10 LNG-FPSOs priced at $5 billion each eventually will be ordered.
The contract amount for the body of the LNG-FPSO ordered this week is fixed at 1.32 trillion won, while the upper structure equipped with LNG production and liquefaction functions will be confirmed by yearend.
SHI and Technip will jointly design the ship, and Geoje Shipyard will exclusively build it. The vessel will be 468 m long, 74 m wide, 100 m high, and weigh 200,000 tons.
Construction will begin in 2012, with delivery set for 2016. When delivered, the LNG-FPSO will produce 3.5 million tonnes/year of natural gas from fields off northwestern Australia.
Last month, Arrow Energy Ltd.’s board accepted an increased offer from Shell Energy Holdings Australia Ltd. and PetroChina International Investment Co. Ltd. to acquire Arrow (OGJ Online, Mar. 22, 2010). The move marks another step by the majors into the CSM-LNG projects in Queensland (OGJ, Mar. 15, 2010, Newsletter).
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