E&P Highlights: June 4, 2024

From a new marine warranty survey contract awarded in Saudi Arabia to Woodside receiving a $1 billion loan, below is a compilation of the latest headlines in the E&P space.

Activity headlines

ABL Secures MWS Contract Offshore Saudi Arabia

China Offshore Oil Engineering Co. (COOEC) has awarded Norway-based consultancy ABL a contract to provide marine warranty survey services for their CRPO 122 project at the Safaniya oil field offshore Saudi Arabia, the company announced May 29.

The scope includes the review, survey and approval of all operations pertaining to the transportation and installation of 13 shallow water steel jackets, associated piles, conductors and other project critical items.

The steel jackets and other associated items are to be transported from Qingdao, China, to the Safaniya offshore oil field.

Operated by Saudi Aramco, the Safaniya Field is said to be the largest conventional offshore oil field globally, both in terms of recoverable reserves and production capacity.

The project will be supported by ABL’s teams in Bahrain and Saudi Arabia to manage and execute the project, with completion anticipated by July 2024.

South Korea Approves Offshore Oil, Gas Exploration Initiative

South Korean President Yoon Suk Yeol gave the go-ahead on June 3 to begin a new offshore exploratory drilling program off the country’s east coast, with finds expected in 2025, according to CNBC.

The project, which will begin before the end of 2024, is estimated to cost more than $363 million. Yoon said Pohang, a south-eastern industrial port city, would be the center of operations.

Yoon said in a press conference that the East Sea exploratory area could hold as much as 14 Bboe. A government official said about 75% of the area to be assessed is thought to contain natural gas and the remainder holding oil.

Commercial production is scheduled to start in 2035.

Contracts and company news

Woodside Receives $1B Loan for Scarborough Project

Woodside Energy will receive a $1 billion loan from the Japan Bank for International Cooperation (JBIC) to support the development of their Scarborough LNG project, the company said on May 30.

The project will be part of Woodside’s Scarborough gas field, located 230 miles off Australia’s northwest coast. At full production, Scarborough is projected to produce 8 million tonnes per year (mtpy) of LNG. The project’s first LNG cargo is scheduled for 2026.

Woodside and JBIC already have an agreement in place to develop a stable supply of emissions-reducing power supplies and have made financing agreements on two other projects, according to Woodside.

AltaGas, Royal Vopak Take FID on LPG Canada Exporting Facility

Calgary, Alberta-based AltaGas Ltd. and the Netherland’s Royal Vopak announced a positive final investment decision (FID) on the Ridley Island energy exporting facility (REEF) joint venture, according to a May 29 press release.

REEF is a large-scale LPG and bulk liquids terminal located on Ridley Island in British Colombia, Canada. The facility will be developed on a 190-acre site next to AltaGas and Vopak’s existing propane exporting terminal.

Phase 1 of the project will include 55,000 bbl/d of initial LPG export capacity and 600,000 bbl of LPG storage. The project also includes a new multi-product jetty structure to project the coastline as well as rail and logistics infrastructure.

As part of the FID, AltaGas is increasing its 2024 capex guidance to CA$1.3 billion (US$950 million).

The bulk of REEF's construction is planned for 2025 and 2026 with select workstreams beginning in 2024.

Havila Shipping Extends Reach Subsea Vessel Contract

Havila Shipping has agreed with Reach Subsea to extend a contract for the inspection, maintenance and repair of vessel Havila Subsea, according to a June 3 press release.

The existing contract ends at the close of 2024. The contract extension is for a firm period of 3 years and includes two 1-year options.

The contract extension is on market terms and includes improved terms valid from June 1, 2024.

ZPMC Completes Construction of New Deepwater Pipelay Vessel

Shanghai Zhenhua Heavy Industry (ZPMC) recognized the completion of the JSD6000 deepwater lift pipelay vessel on May 28, the company said on June 3.

ZPMC’s JSD6000 integrates technology with intelligent control systems and high-strength materials. The vessel can perform pipe-laying operations in shallow, deep and ultradeep waters, ensuring efficient and safe offshore oil and gas pipe-laying operations in environments as deep as 3000 m.

The vessel is also capable of underwater salvage, platform dismantling and installation as well as offshore wind power installation. Its operational areas cover major seas worldwide.

The vessel is equipped with a 5000-tonne fully rotating crane, both J-Lay and S-Lay pipe-laying systems, an 8-point mooring system and a DP3 dynamic positioning system. It is the first multifunctional heavy lift pipe-laying vessel in China capable of performing both J-lay and S-lay operations.