Shell gets cracking on deep-water Bonga SW

Development: Shell’s Bonga FPSO in deep waters off Nigeria

Anglo-Dutch giant Shell has ­issued long-awaited pre-qualification documents for its $12 billion Bonga Southwest-Aparo project in Nigeria’s deep-water.

Assuming the 820 million barrel development goes ahead, this will be the first major deep-water Nigerian project — not operated by Total — that an operator has begun the tendering process for, before knowing the final outcome of the Petroleum Industry Bill.

Just over a year ago, the project was budgeted at $11.8 billion, more recently edging up to $12 billion.

The key pre-qualification documents cover three critical long-lead items, including a major newbuild floating production, storage and offloading vessel, pipelines, flowlines and risers, plus a single point mooring and offloading system.

Shell’s move had been expected by contractors for at least a year, and they have until 21 December to apply to Shell for the pre-­qualification packages before making their submissions by 1 February 2013.

Contractor sources said that they are not expecting a quick decision as Shell said awards would come in late 2014 or early 2015.

This is also understood to be the estimated timing of a final investment decision.

Given the slow rate of progress of Nigerian projects, this would suggest first production in 2020, said sources.

Samsung Heavy Industries and Hyundai Heavy Industries would be well placed to chase this contract, given their heavy involvement in the ongoing bid process for Total’s delayed Egina project off Nigeria, where local content issues are driving the schedule.

Samsung, in a joint venture with Amec, also provided Shell’s Bonga FPSO in Nigeria which came online in 2004, and is also familiar with Shell’s way of working through its heavy involvement in the supermajor’s first floating liquefaction vessel destined for the Prelude field off Australia.

Daewoo Shipbuilding & Marine Engineering may also consider participating in the Bonga SW-Aparo pre-qualification exercise.

A second contract covers the engineering, procurement, construction, transport and installation of pipelines, flowlines and risers.

Saipem, Technip, Heerema and Subsea 7 will likely chase this significant package which covers 82 kilometres of pipe-in-pipe flowlines, four production loops, three water injection lines, 70 kilometres of static and dynamic umbilicals and a 98-kilometre, 16 to 18 inch gas export pipeline.

The workscope takes in fabrication of the pipeline and riser gear, installation of the pipeline and all subsea hardware, pre-commissioning of the entire subsea system and an option to install the SPM buoy and floating hose system.

Moreover, the winning contractor will need to carry out structural modifications to an existing shallow-water platform that will receive gas from the field.

A pre-qualification exercise covering a 40-well subsea production system is expected to come out within the next few weeks.

Bonga SW-Aparo straddles OMLs 118, 132 and 140 where the remaining partners are Chevron, ExxonMobil, Eni, Total and Sasol Petroleum.

Shell said it plans to award the contracts “sometime between the fourth quarter of 2014 and the first quarter of 2015, subject to normal board approval… as well as regulatory approvals”.

It said board approval will be driven by factors such as the project’s overall economic viability and the fiscal and regulatory framework.


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