Two in Face-off for Shwe Phase Two FEED Work
Friday 30 June 2017
South Korean operator Posco Daewoo has shortlisted two leading offshore groups to take part in a front-end engineering design contest for the second development phase of its Shwe project off Myanmar.
At least three sources closely associated with the project’s tender process stated that Daewoo is thought to have chosen a consortium of US players McDermott and GE Oil & Gas to battle it out with London-registered TechnipFMC in the FEED contest.
“We are hearing that the two groups have been shortlisted by Daewoo. But there’s no confirmation yet by the operator,” one source said.
The FEED workscope includes both the subsea production system and the subsea umbilicals, risers and flowlines for the Shwe expansion project, comprising the Mya South and Shwe Phyu discoveries.
At the end of the FEED contest, which is likely to run for five or six months, Daewoo will decide on its favoured group, which would then be well positioned to land an engineering, procurement, construction, installation and commissioning contract.
Sources suggested that this contract could be worth upwards of $500 million.
Daewoo is understood to have sought approval from Myanma Oil & Gas Enterprise (MOGE) to select the two groups, and the expectations are that the FEED studies will begin within a month or two.
The studies were initially planned to run from July until November this year.
However, one source pointed out there may be a slight delay to the start date of the design competition.
Up to five leading offshore groups had submitted bids to Daewoo earlier this year to participate in the engineering and design contest.
The other contenders for the contract comprised a grouping of Italy’s Saipem with Norway’s Aker Solutions and Oslo-listed Subsea 7 with OneSubsea.
Another offshore contractor is also thought to have chased the work as well, sources said.
While the McDemott-GE and TechnipFMC rivals are being widely seen as the top contenders for the FEED contest, one source suggested that Daewoo may still call on the Subsea 7-OneSubsea combination to take part.
However, this suggestion could not be confirmed by other project watchers.
The project’s EPCIC contract is expected to take four years to complete, from August 2018 to mid-2022.
First gas from Shwe Phyu is expected in the second quarter of 2021, with Mya South scheduled to come on stream about a year later.
The project’s subsea workscope includes 10 subsea trees, manifolds, jumpers, umbilicals, flying leads and control systems.
The FEED work will also cover the modification of topsides on the existing production facilities of Shwe phase one.
The Shwe phase one production platform currently hosts 11 development wells, with another four tied back from the Mya North subsea satellite. Phase one production started in July 2013.
At Mya South, one subsea manifold will house three production wells in about 560 metres of water, while a similar scheme is being evaluated for Shwe Phyu, located in much shallower waters of only 95 metres.
Daewoo has a 30-year contract with China National Petroleum Corporation to provide up to 500 million cubic feet per day of gas. Daewoo has a 51% stake in Shwe, with Korea Gas holding 8.5%, India’s Gail on 8.5%, state-owned MOGE on 15% and India’s ONGC Videsh on 17%.