Malaysian floater specialist Yinson Holdings has signed a contract to provide a leased floating production, storage and offloading vessel to Brazilian independent Enauta for the Atlanta deep-water field in the Santos basin.

The letter of intent between the two parties follows on from the signing of a binding memorandum of understanding on 27 August to engage in exclusive negotiations for the supply and charter of the OSX-2 FPSO.

The letter of intent comes with a call option exercisable by Yinson to acquire the OSX-2 FPSO with a 15-year time charter and operation and maintenance agreement of the same duration, with Enauta having a right to extend the terms of these agreements by a further five years.

The estimated value of the project to Yinson is $505 million, including a two-year operations and maintenance agreement, with a further increase to $1.98 billion, inclusive of the five-year extension period, should Yinson exercise the call option.

Yinson Group chief executive Lim Chern Yuan said: “We are confident that the great working relationship between Yinson and Enauta, which has been the foundation of our very fruitful MoU and LOI negotiations, will continue to see us through the execution of the project and its subsequent operations."

"We believe that this will ultimately allow both parties to reach our shared goal of advancing Brazil’s energy industry through solutions that are as sustainable as possible.”

Yinson Offshore Production chief executive Flemming Gronnegaard said emission-lowering technologies had been included in the FPSO’s design.

“We believe that Yinson and Enauta’s joint commitment in pioneering low-emission designs will pave the way for the FPSO industry to contribute towards mitigating the world’s climate change issues," said Gronnegaard.

"Having successfully strengthened our resources, capacity and expertise in Brazil over the past few years, we are excited to swing into high gear in order to execute this project well and deliver on our commitments.”

According to Enauta, the conditions agreed upon in the LoI will be subject to the signing of the definitive contracts, which should occur upon the final investment decision in the first quarter of 2022.

“In our understanding with Yinson, we have continuously ensured the implementation of viable technologies for minimising carbon emissions. We reaffirm that the adaptation of this FPSO unit will be a pioneering project in terms of avoided emissions, optimising its operational and environmental efficiency,” said Enauta chief operating officer Carlos Mastrangelo.

Enauta operates Atlanta with a 100% stake. The company is currently conducting an early production system in the field with the Altera Infrastructure-owned Petrojarl I FPSO.

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