Traditional shipyards in Singapore are benefitting from booming oil and gas business, as work orders flow in for Floating Production Storage and Offloading (FPSO) and Floating Storage and Offloading (FSO) conversions, states a new report by business intelligence experts GBI Research.
The new report* cites Singapore as the location of around 70% of conversions for the FPSO industry globally, with traditional shipyards such as Keppel, Sembawang, Jurong, and ST Marine fully equipped and responding to substantial demand for FPSO conversions, in addition to the regular ship repair work orders.
In July 23, 2012, Keppel shipyard won three conversion contracts worth US$82m from Petro Vietnam Technical Services (PTSC) Asia-Pacific Pte Limited, Perenco Group, and BC Petroleum. PTSC have contracted the shipyard to convert a tanker into a FPSO unit, to be deployed in the Thang Long and Dong Do oil fields in the Cuu Long Basin offshore of Vietnam, with a scheduled completion date of late 2013. The contract with Perenco involves the conversion of a tanker into an FSO unit to be deployed in the Lucina field offshore of Gabon in 2013, and the contract with BC Petroleum involves the conversion of a tanker into an Early Production Vessel (EPV) to be deployed in the Balai Cluster oil fields in offshore Malaysia. Keppel is already engaged in six FPSO and FSO contracts, and these new projects will work to further improve the yard’s impressive reputation.
Oil and gas majors globally possess single hulled tankers that provide the perfect utility as converted FPSO vessels, which represent an ideal choice for marginal fields or small reserves where the amount of capacity required is low.
Conversion of a single hulled tanker into a FPSO unit costs around 10% of the cost of building a brand new unit, as costs and time needed for engineering, construction, outfitting and commissioning are a great deal reduced, materials and basic structural design already being present. The ‘fast-track conversion’ is very popular, taking under a year to complete, enabling firms to bring high-priority offshore reserves to production in previously unheard of timescales.
However, FPSOs and FSOs deteriorate more rapidly than fixed platform structures, and their technical complexity require regular maintenance procedures to ensure smooth-running operations. Over 35 FPSOs worldwide are approaching the middle or end of their design life, and the limited numbers of onboard personnel able to perform maintenance operations affects the upkeep of these aging vessels. Cost effective integrity programs are therefore urgently needed in order to increase the functional life of these assets.