Friday 31 March 2017

Maersk Oil is set to go out to tender imminently for the main fabrication contracts to rebuild its key Tyra gas hub off Denmark, a matter of days after the Danish oil industry secured long-awaited tax concessions from the government.

After months of drawn-out negotiations, Maersk said the agreement with the authorities in Copenhagen is one that will “protect the future of the Danish North Sea”, including Tyra, which processes 90% of Danish gas but needs to be redeveloped because of subsiding platforms.

Maersk Oil chief executive Gretchen Watkins said: “It paves the way for the Danish Underground Consortium (DUC) partnership to go full-steam ahead on the full rebuild of the Tyra gas field, which we expect to sanction later this year.

“But it also is a deal for the industry. It encourages investment in oil and gas for many years to come. So it is a real win-win agreement… for the industry but it is also a real win for the state.”

Maersk, operator of Tyra on behalf of its DUC partners — Shell, Chevron and state entity Nordsofonden — had raised the prospect it would have to decommission the facilities without financial assistance.

But following the agreement, Watkins said the company will now issue tenders and progress engineering work in preparation for a final investment decision on the reconstruction project by the end of 2017.

“Front-end engineering and design for the rebuild is just about complete. So, we are actually really close to going out to tender for the big contractual pieces that will come next. We will be doing that fairly soon,” she said.

“So, we will go full-steam ahead along those lines.”

Watkins stated that Maersk’s contracting strategy for Tyra will be “fairly typical for the type of projects that we do” but did not elaborate.

Market sources stated they now expect the operator to issue invitations to tender “within weeks or even days”. Up for grabs are expected to be four engineering, procurement and construction contracts, with the prime package focused on the process deck, expected to tip the scales at 12,000 to 13,000 tonnes.

The second package takes in the 3000-tonne accommodation deck.

The third offering covers decks for four wellhead and two riser platforms plus bridges.

Completing the quartet is a contract centred on two jackets for the gas processing and accommodation platforms, with weights in the region of 7500 tonnes and 4000 tonnes, respectively.

Brownfield work will also be on offer.

South Korea’s Hyundai Heavy Industries, US giant McDermott, Sembcorp Marine Offshore Platforms of Singapore, Heerema Fabrication Group (HFG) of the Netherlands and Spain’s Dragados Offshore are all understood to be circling for the work.

Two other South Korean players — Samsung and Daewoo Shipbuilding & Marine Engineering — are also understood to be interested in the big deck contract.

Middle East-based Lamprell is also understood to be interested, although Norwegian yards, including Kvaerner, are not expected to chase the job with great enthusiasm, sources said.

Sembmarine and HFG, which have carried out major fabrication work on the same operator's Culzean high-pressure, high-temperature project in the UK, are seen as likely to be well positioned in the Tyra race even if they are unlikely to be taking anything for granted at this stage.

As the industry-government talks moved into 2017 with no conclusion in sight, Maersk notified the gas markets in January that it had been compelled to start engineering work for decommissioning alongside the FEED - being carried out by CB&I - for the rebuild.

Watkins said the work done since January on the abandonment scenario will now be folded into the rebuild project, which contains decommissioning elements. “It’s a reasonably complex project because there’s a lot of brownfield rebuild work that will take place. There’s quite a lot of decommissioning. We’re going to pull a few topsides off and replace them.”

Maersk has now informed the gas markets that it expects Tyra output to be suspended between 2019 and 2022.

The agreement with the government of Denmark is subject to Danish parliamentary approval.