A consortium of US-based McDermott International and China's Sinopec International Petroleum Service Corporation confirmed they have secured a conditional letter of award to build the upstream facilities for TotalEnergies' huge Tilenga project in Uganda.
The news on Wednesday confirms a report carried by Upstream in March that a McDermott-led group had been selected to build the Tilenga facilities for an expected contract value of $1.9 billion.
Tilenga and CNOOC International's nearby Kingfisher field will together produce about 240,000 barrels per day of oil, some of which will be sent to a new refinery to be built in Uganda, while the bulk will be exported to Tanga on Tanzania's coast via the East Africa Crude Oil Pipeline.
First oil from the 200,000-bpd Tilenga project is expected to flow in 2025.
The contract — which is subject to the approval of Tilenga's partners before it can be formally awarded — is valued at about $2 billion, McDermott said.
The consortium will provide engineering, procurement, construction and commissioning services for the development of Tilenga, which will produce up to 200,000 bpd of waxy oil.
Tilenga will be tapped by 31 well pads connected to a central processing facility via buried flowlines.
The project will be led from McDermott’s offices outside London in the UK and Sinopec’s office in Yangzhou, China, before transitioning to Uganda for the construction activities.
Commenting on the award, Tareq Kawash, McDermott's head of Europe, Middle East & Africa, said: “This is a first step which allows launching the detailed engineering and procurement activities before the final approval by the partners.
"This prestigious project demonstrates the continuity and strength of our business relationship with TotalEnergies and their partners CNOOC International of China and Uganda National Oil Company.”
He described Tilenga as a "momentous and essential project for Uganda for the development of its national companies and citizens," adding that "as we continue to grow our footprint in Africa, we are committed to expanding local content opportunities in the communities in which we operate".
McDermott said the project will stimulate economic growth in Uganda and create up to 20,000 direct and indirect jobs, bringing a significant number of meaningful training opportunities for the local labour force.
"McDermott is committed to implementing these projects in a manner that fully addresses the sensitive environmental context and the needs of all stakeholders in the area," said the US company.
Samik Mukherjee, McDermott’s head of projects, said: “This important step further strengthens years of successful collaboration with TotalEnergies on a wide portfolio of world-class projects in the offshore, petrochemicals and liquefied natural gas segments — where TotalEnergies is a major stakeholder.”
Tilenga is located in the Lake Albert basin and is at the heart of a project that aims to bring investments of over $10 billion to Uganda and Tanzania.
Tilenga comprises six oilfields and will feature 426 oil wells at full production.
The other key asset that will be developed is the Kingfisher field which will produce about 40,000 bpd of oil.
- OPINION: Total's Tilenga moves put carbon emissions in spotlight
- 'Difficult to conceive of a more dangerous project at a more perilous moment for the planet than EACOP'
- Total will open books on Uganda oil project
- Gas could power Africa's industrialisation
- African renaissance underpins new scramble for access