DNV Reaches Milestone: Awarded Classification Contract for Gulf of Mexico Newbuild Floater

The Delta House FPS will be a larger version of the Opti-EX floating production facility pictured here. Image (c) Exmar

A major milestone was reached today for Norwegian classification society, Det Norske Veritas (DNV).  For the first time ever, DNV has been awarded the classification contract for the Delta House FPS, a Gulf of Mexico-based newbuild floating production semi-submersible.

Until today, the American Bureau of Shipping has been the sole provider of such services for these Gulf of Mexico-based offshore facilities.

Following a detailed review of DNV rules and procedures, the U. S. Coast Guard has confirmed that they will accept plan review and inspection functions conducted by DNV for the Delta House floater as part of the unit’s certification under Title 33 Code of Federal Regulations. This follows from a general acceptance given by the U.S. Coast Guard in 2007 and provides a new option for owners and operators of offshore floating units.

“Owners have expressed a strong desire for choice of classification society’s for floating offshore installations in American waters,” notes Kenneth Vareide, DNV’s Director of Operations for Maritime in North America. “This contract is proof that they can do so, confident of legal and regulatory approval.”

“With local capabilities and expertise DNV is a well established alternative and experienced partner for classing floaters and complex projects in the Gulf of Mexico. We now look forward to address the industry’s needs and desires for increased safety, reliability, cutting edge technology and, of course, reduced downtime. We are confident that both owners and regulatory agencies will benefit from this,” commented Vareide.

As a class society with a great deal of harsh environment, offshore oil and gas experience in the North Sea, DNV has carried out extensive verification and independent analysis for offshore floating production units, including many Gulf of Mexico-based floaters throughout the past 20 years.  These analysis include many high profile failure and accident investigations.  DNV was also the classification society and Certified Verification Agent (CVA) for the BW Pioneer, the first ultra-deepwater FPSO to operate in the US Gulf of Mexico.

Delta House FPS

The Delta House FPS, an Exmar Offshore OPTI-11000® design, will be located in Mississippi Canyon 254 and operated by LLOG Exploration Company, the largest privately-owned oil and gas company operating in the Gulf of Mexico.  This installation is designed to accommodate production from a number of nearby fields, including LLOG’s previously announced discoveries in Mississippi Canyon 300 and Mississippi Canyon 431. The oil and gas export lines will connect the FPS to existing downstream pipeline infrastructure. The FPS will have capacity of 80 MBOPD, 200 MMCFD, and 40 MBWPD and space for 20 risers, which will allow production from up to nine simultaneously producing fields with dual flowlines. The FPS will have peaking capability up to 100 MBOPD and 240 MMCFD.  Audubon Engineering will perform the design and procurement of the topsides production equipment.

Fabrication of the hull will begin in early 2013 at Hyundai Heavy Industry’s yard in Ulsan, South Korea and upon completion, will be transported by one of Dockwise’s T-Class heavy lift transport vessels to Kiewit Offshore Services yard in Ingleside, Texas.  Kiewit Offshore Services will be responsible for fabrication of the topsides (including the deck) and integration of the topsides to the hull.  InterMoor will be responsible for mooring and installation of the FPS at Mississippi Canyon 254 in a water depth of approximately 4500 feet. The FPS is designed to withstand wind and waves from a 1000-year storm.

First oil is expected in 2015.

Financing

LLOG notes that over $2 billion in capital will be needed for this project.

Affiliates of energy-focused private equity investment firm ArcLight Capital Partners, LLC are providing construction financing for and will have a majority ownership interest in the entities that own the Delta House FPS and the oil and gas export lines.

“This is an important project for LLOG as we take our company to the next level,” said Scott Gutterman, LLOG’s President and CEO. “We are excited about having an experienced energy infrastructure investor like ArcLight as our partner. With ArcLight providing the capital for the FPS and export lines, LLOG will be able to focus its capital on drilling wells, which is where we can add the most value for our company”.