McDermott Set for Angelin Deal
Friday 7 April 2017
Engineering and fabrication giant McDermott is poised to win the contract to design and build the main facilities for the Angelin natural gas project off Trinidad & Tobago after operator BP and the government came to a basic agreement on the economic terms of the project.
The US contractor is expected to beat rival Technip to the engineering, procurement, construction and installation contract for Angelin, sources familiar with the process stated, with a formal contract award from BP subsidiary BPTT expected in the coming weeks.
With planned capacity of 600 million cubic feet of natural gas, Angelin will be among the largest installations off Trinidad.
Development plans submitted to environmental regulators in Trinidad & Tobago call for the drilling of four dry-tree development wells to be installed on a new platform and a 25-kilometre, 26-inch subsea pipeline connecting Angelin back to the existing Serrette platform.
McDermott previously completed front-end engineering and design work for Angelin and completed the pipeline installation for the Sercan platform — a joint venture between BPTT and EOG Resources — late last year.
Technip was hoping for its second major win with BPTT after securing the EPC contract for the Juniper development — the largest in the history of Trinidad & Tobago — which is currently being installed off Trinidad ahead of planned first gas later this year.
The Angelin field was discovered in 1995 with the El Diablo exploration well and successfully appraised in 2006 with the La Novia well on the BP-operated portion of the TSP block, located 40 kilometres off the east coast in 65 metres of water, according to regulatory filings.
Contracting on Angelin had been stalled due to dragging negotiations between BPTT and Trinidad & Tobago’s state-controlled monopoly Natural Gas Company (NGC) over the commercial terms of the development.
NGC holds a virtual monopoly on the midstream sector in Trinidad, including setting the prices that operators receive for their natural gas, which is then sold to downstream users in the LNG and petrochemical sectors.
BPTT officials had said that they needed the right price, as well as other favourable fiscal terms, to move ahead with Angelin.
On the last day of March, BPTT announced that it had reached agreement on the major negotiating points of the gas contract for Angelin and that the project was still progressing in time for first gas by 2019.
“We are pleased that negotiations with the NGC on a new gas sales agreement have reached this critical milestone,” BPTT president Norman Christie said. “Finalising the gas sales agreement will pave the way for the Angelin project and future investments.”
In a blow to the local fabrication sector, government officials said the project would not be built at the Trinidad Offshore Fabricators (Tofco) yard in La Brea due to the quick turnaround time needed to hit first gas by 2019.
Sources stated that the project is expected to be built at McDermott’s yard in Altamira, Mexico.
Maintaining the project timeline is critical because Trinidad & Tobago is already suffering from shortfalls in natural gas supply, and the situation is expected to get worse in 2019.
Trinidad & Tobago looms large in the UK supermajor’s development plans in the coming years.
BPTT recently awarded a front-end engineering and design contract for the proposed Cassia C compression platform to another US contractor, Fluor.
In all, BPTT plans to invest more than $5 billion in Trinidad & Tobago by the end of 2022.