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ONGC launches delayed deep-water floater bid

Indian major plans shortlist of up to four contenders for KG-DWN-98/2 east coast development FPSO

INDIA'S Oil & Natural Gas Corporation (ONGC) has launched the long-awaited pre-qualification process to charter a large floating production, storage and offloading vessel for its KG-DWN-98/2 deep-water development off the country’s east coast.

Leading international FPSO contractors are expected to submit pre-qualification documents to ONGC by 6 June and bids are likely to be submitted in July.

“Pre-qualified players will be asked to submit technical and commercial offers by 31 July,” a source from one of the FPSO contractors told Upstream.

The Indian giant was originally expected to launch the tender process for the FPSO last year, but the process was delayed by more than six months.

Those expected to compete include a consortium of Malaysia’s Bumi Armada with India’s Shapoorji Pallonji group, SBM Offshore of the Netherlands along with India’s Sun Oil & Gas, Japan’s Modec and Malaysian players Yinson Holdings, MISC and M3nergy.

Although more than half-a-dozen players are expected to join the pre-qualification exercise, ONGC aims to short-list up to four contenders, one source suggested.

ONGC is believed to have further tightened the financial and technical qualification criteria for the FPSO project. It aims to pre-qualify only those contractors that either own or operate at least one FPSO of minimum 80,000 dead weight tonnes.

The contractor should also have leasing, operations and maintenance experience of not less than five years during the past decade. While ONGC has initiated the process to charter the FPSO, some industry sources have indicated there could be further delays as ONGC plans to make some changes with KG-DWN-98/2’s workscope.

“We are hearing that ONGC could add some compression facilities on the FPSO,” one said.

First gas from KG-DWN-98/2’s Cluster-2 development is targeted for June 2019, with oil planned to flow in 2020. However, a second source suggested that ONGC is unlikely to compromise on the project’s execution schedule.

The Indian giant is looking for a unit capable of handling 90,000 barrels per day of oil and 135 million cubic feet per day of gas. The vessel should also have water injection capacity of 58,800 bpd of water. 

The FPSO is expected to have a storage capacity of 1.3 million barrels of oil and will be based on a very large crude carrier hull.

The mooring system is likely to be technically challenging, because the floater will be operating in environmentally harsh conditions in more than 400 metres of water. The topsides will also have to withstand the strong winds experienced at the location, sources said.

ONGC is offering a fixed lease term of nine years, along with an option to extend that by a further six years.

The operator is targeting an FPSO with a design life of at least 20 years, and is thought to be in the market for either a conversion or relocation of an existing vessel.