Kiewit in Line for White Rose Job
Friday 14 April 2017
US-based Kiewit Offshore Services is poised to secure a key contract from Husky Energy to build the topsides for the Canadian operator’s White Rose Extension Project (WREP), which will be developed with a gravity-based structure off Newfoundland & Labrador.
Sources said Kiewit has a strong lead late in the battle for the work, having beaten the competition, notably from South Korea’s Samsung Heavy Industries.
Sources also confirmed that Husky has opted to develop the field with a wellhead platform, supported by a GBS, tied back to the existing SeaRose floating production, storage and offloading vessel. Project sanction could come as soon as next month.
The GBS award will likely go to a Canadian-Spanish consortium comprising SNC-Lavalin and Dragados, sources said. It is expected to be built at a graving dock in Argentia, Newfoundland, which has already been built.
The deck will be built at Kiewit’s yard in Corpus Christi, Texas..
Husky is said to have ruled out an all-subsea development option once favoured by partners including Suncor Energy. While the up-front costs are larger for a GBS concept, the ultimate recovery is higher than the subsea option, Husky added.
A Kiewit win would be a major upset for Samsung, which had been tipped for the fabrication contract in 2014 before Husky suspended plans in early 2015 to scrutinise the project’s economics. Sources said Samsung was still in the running as Husky evaluated a round of new bids early this year. Samsung’s compatriot Hyundai Heavy Industries and a consortium of China’s Offshore Oil Engineering Company and Norway's Kvaerner had also submitted bids in the original tender.
Kiewit’s bid is thought to have appealed to Husky’s cost-cutting goals for WREP, one source said.
It is understood that Kiweit is also set to win a contract to build the living quarters for the White Rose Extension Project.
Wood Group Mustang designed the topsides for the GBS project, which will tap the West White Rose field. Wood Group led deck design optimisation last year in a bid by Husky to cut project costs.
The topsides had ballooned in weight from early projections of around 14,500 tonnes to as much as 23,000 tonnes before Husky halted work. It is now thought to be closer to an operating weight of around 21,000 tonnes.
Although a final investment decision on WREP is expected soon, Husky declined to comment this week on a timeline, or to confirm contracting plans. However, it has previously indicated plans to sanction in the first half of this year.
It was not immediately clear how much Husky expects WREP to cost. The original scheme was said to be costing $4.1 billion, but that has likely changed. Husky has said WREP can generate an internal rate of return of 10% on $45 oil.
The West White Rose reservoir holds an estimated 115 million barrels of recoverable oil, and output is expected to peak at about 37,000 barrels per day, with first oil no sooner than 2020.