South Korea’s Samsung Heavy Industries is keen to hand Chinese yards some work related to the MJ floating production, storage and offloading vessel it is set to build for India's Reliance Industries, writes Xu Yihe.

Industry officials said Samsung has approached yards in northern China, including the Dalian facilities owned by COSCO Shipping Heavy Industry, Dalian Shipbuilding Industry Corporation, Bomesc Offshore Engineering and CIMC Raffles about their interest in a possible sub-contracting deal related to topsides module fabrication work for the FPSO.

They added that Samsung views sub-contracting the modules fabrication to Chinese yards as attractive because of the cost advantage.

The yards Samsung has approached are close to South Korea and seen as logistically easy to move modules to its Geoje Island fabrication yard for integration.

However, sources cautioned that it is unclear whether Reliance would support the sub-contracting plan.

Sources said that while Samsung is lead contractor and in a position to outsource some fabrication work on the 1.104 trillion won ($967 million) floater, it would need permission from Reliance on the specifics, and some believe the operator is not keen on the idea.

“Chinese yards have participated in a number of bids launched by Indian asset owners in recent years and their efforts have always ended without success,” said one official.

Yards officials said that if Samsung gains approval it should move quickly, as Chinese yards are busy with fabrication obligations and are planning yard space for jobs that could come their way next year.

Most Chinese offshore yards are busy with fabrication work on FPSOs and are bidding aggressive on jobs timed to arrive in 2020 and beyond.

Russian independent Novatek has already booked yard space at some Chinese module-focused yards such as Penglai Jutal Offshore Engineering, Bomesc and China Petroleum Offshore Engineering to secure capacity for work on its Arctic LNG 2 development, even without signing commercial contracts.

Dutch floater specialist SBM Offshore has locked in a drydock at Shanghai Waigaoqiao Shipbuilding for possible work on a third FPSO hull under its Fast4Ward concept.

Two weeks ago, Samsung announced the MJ FPSO is due for sailaway by 6 March 2022.

The double-hulled vessel is likely to be designed to handle 60,000 barrels per day of liquids and around 448 million cubic feet per day of gas.

Reliance wants a vessel with condensate production capacity of 30,000 bpd and water-handling capacity of at least 20,000 bpd, with potential for the latter to be increased.

Located in Block KG-D6 off India in water depths between 600 and 1200 metres, the MJ development is expected to include seven production wells tied back to the floater.

Reliance operates the block with a 60% interest, UK supermajor BP holds 30% and Canada's Niko Resources is on 10%.

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Samsung eyes China for MJ floater work