NETHERLANDS-based fabricator HSM Offshore is poised to land its largest fabrication contract for a UK North Sea project, covering a new compression platform for the Shell and NAM venture ONEGas in the Southern basin.
The bridge-linked compression platform for the Leman field will be the first of its type HSM has handled for the UK sector, although it follows a similar, albeit smaller, facility built for Centrica in the Dutch sector.
ONEGas opted for a new platform to refresh Leman’s compression capacity instead of a brownfield upgrade of the existing dilapidated compressors, which had also been on the table.
Market sources said confirmation of both the final investment decision on the new greenfield project and the contract award to HSM is due within weeks.
The procurement and construction contract will cover a jacket weighing in at about 1100 tonnes and a topsides that will weigh about 3000 tonnes, as well as a bridge that will connect it to the existing Leman facilities.
Delivery of the platform is due in April or May 2014.
Engineering has been carried out by Dutch-based company Iv Oil & Gas and HSM’s close collaboration on previous projects is likely to have been a factor in ONEGas’ decision making, sources said.
While this would be HSM’s first major compression platform in the UK, it is currently building a large compression module for a brownfield project on Talisman Energy’s Claymore facilities in the North Sea.
It has also built wellhead platforms for Ithaca Energy and EOG Resources off the UK.
HSM’s Schiedam yard near Rotterdam is currently building two production platforms — L5a-D and D18-A — for GdF Suez’s Dutch operations. HSM was unavailable for comment.
A Shell spokesman said a final investment decision on the Leman compression project has not yet been taken but refused to comment further.
ONEGas’s UK Southern North Sea projects manager Oliver Kleyn said earlier this year that Leman’s compressors were “on their last legs”. Kleyn, who was speaking on the sidelines of an industry conference, said two options to provide new compression capacity had been on the table.
“One is going in and pulling everything apart. That requires a lot of manpower. It is very difficult to plan safely. It takes a long time and there are a lot of risks associated with shutting down the platform.
“Our other option is to build an entirely new compression platform. Funnily enough, the costs aren’t too far apart.”
Shell is considering more than a dozen projects across the UK and Dutch sectors of the southern North Sea that will require investment of about £500 million ($790 million) over the next three years.
Three of these — the Leman compression unit, new accommodation facilities at the Clipper field and upgrades to the onshore Bacton terminal in Norfolk — will account for about 80% of that investment.
Others involve monotower platforms and single well subsea tie-backs.
Between 500 million and 1 billion cubic feet per day of production passes through Shell’s section of the Bacton terminal.
The ageing Leman field began producing in 1968 and lies about 70 kilometres off Lowestoft.