Yinson awarded Enauta FPSO project in Brazil
Monday 20 December 2021
Yinson Holdings Berhad has been awarded a Letter of Intent (“LOI”) by Enauta Energia S.A. (“Enauta”) for the provision, operation and maintenance of a floating, production, storage and offloading (“FPSO”) asset in the Atlanta Field located in the Santos Basin, offshore Brazil (“Project"). The LOI comes with a call option exercisable by Yinson to acquire the asset-owning company of the project with a 15-year time charter agreement and operation & maintenance agreement of the same duration, with Enauta having a right to extend the terms of these agreements by a further 5 years.
The estimated aggregate value of the Project is USD505 million (including a 2-year operations and maintenance agreement), with a further increase to USD1,981 million (inclusive of 5 years extension period) should Yinson exercise the call option. The LOI was issued to Yinson Acacia Ltd, an indirect wholly owned subsidiary of Yinson.
The LOI follows the signing of a binding Memorandum of Understanding (“MoU”) between Yinson and Enauta on 27 August 2021 to engage in exclusive negotiations for the potential supply and charter of the FPSO.
Yinson Group Chief Executive Officer Lim Chern Yuan commented, “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 Officer Flemming Grønnegaard said that emission-lowering technologies had been included into the FPSO’s design. He commented, “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. 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.”
The FPSO will be Yinson’s third project award in Brazil, with the earlier two awarded assets on track for completion in 2023 and 2024 respectively.