US supermajor Chevron is following up on a newly-hatched plan to place a floating production, storage and offloading vessel on the Ubon wet gas project in the Gulf of Thailand.

Sources said the operator has approached the oilfield services market for a contractor to conduct a front-end engineering and design study on the FPSO.

They added that two Malaysian FPSO contractors - Yinson Holdings and MISC – and possibly one other FPSO player have been invited to battle it out for the FEED study following Chevron’s recent decision to revisit the development concept for Ubon.

Previously, the plan was to deploy a small central processing platform and a floating storage and offloading vessel on Ubon, but Chevron and its joint venture partners took a fresh look at the concept earlier this year in an effort to reduce some of the project’s capital costs.

Sources said the FEED study could be awarded in the first or second quarter of next year.

It is not clear if the FEED deal will eventually roll into an engineering, procurement and construction contract or if Chevron will instead launch a fresh tender for provision of the floater, though sources tipped that Chevron would prefer the latter route.

The proposed FPSO will be a conversion with oil processing capacity of 40,000 barrels per day and gas processing capacity of 130 million cubic feet per day. The produced water capacity, which will be re-injected into the reservoir, will be 60,000 bpd.

Sources said Chevron has decided to shorten the lease period of the floater from the previous 20 years to 10 years.

Chevron said in its recent Form 10K filing that FEED had been completed on the option of the central processing platform with an FSO, but as of the end of last year, the company had not recognised any proven reserves for Ubon.

Chevron’s interest in further investment in Thailand has been the subject of some uncertainty since the recent loss to state player PTT Exploration & Production of its production sharing contracts for the Erawan and Bongkot gas fields.

One source said Chevron will need certainty that the PSC for Ubon is of a sufficient duration to allow it to commit to the project.

PTTEP has made no secret of its desire to see Ubon accelerated.

In a conference call in early February 2019, management was asked by an analyst if Chevron wanted to divest its interest in Ubon.

Management answered only that “there are several options for Ubon. However, according to our strategy, PTTEP intends to seek partnerships to diversify risks of our portfolio”.

PTTEP’s most recent guidance on Ubon was that first production is targeted for 2022.

The Ubon field is located in Contract 4, which includes the producing Pailin, Nin, Morakot, Paytai, and Taptim fields.

Chevron owns a 35% operator interest, PTTEP has 60% and Mitsui Oil Exploration 5%.

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Chevron seeks FPSO for Thailand's Ubon project