- Oil and gas explorer Carnarvon Petroleum (CVN) has hired three separate contractors for a storage vessel at the Dorado oilfield
- The contractors are individually taking on early-stage design work for the Floating Production Storage and Offtake (FPSO) vessel
- Once finished, Carnarvon will review all three designs and choose the best one
- The FPSO vessel will be able to store and process oil and gas from the Dorado field onboard
- Carnarvon owns 20 per cent of Dorado in a joint venture with fellow ASX-listed Santos
- Today, Carnarvon shares are trading just over four per cent lower at 22 cents each
Oil and gas explorer Carnarvon Petroleum (CVN) is edging closer to building a major offshore storage vessel at the Dorado oilfield.
The company told shareholders today it has made some important progress in the necessary steps to build a Floating Production Storage and Offtake (FPSO) vessel.
Simply put, an FPSO is a large floating ship that comes decked out with storage facilities and processing equipment. The vessel receives crude oil, water, and other substances from subsea wells and can separate oil, gas, water, and impurities onboard.
Of course, the design and construction of such an important vessel is delicate work. As such, Carnarvon outlined its plan to ensure its future FPSO is as efficient and cost-effective as possible.
Pre-Front End Engineering Design, or pre-FEED, work is the early stage of design planning. A pre-FEED document, like a pre-feasibility study, highlights the technical and economic aspects of a potential project.
It becomes the basis for a FEED document, which is a detailed design and engineering plan predicting everything from costs, to project life, to outcome efficiency.
Carnarvon has awarded three separate pre-FEED contracts to three different contractors.
Each of the contractors will work independently on their FPSO designs and supply terms.
Carnarvon explained that by appointing the three individual contractors, it can review their work individually and choose the optimal technical design, cost, and schedule for the FPSO.
Carnarvon Managing Director Adrian Cook said the pre-FEED contracts are a “significant step” for the company.
“This is a testament to the quality of the project as we have the confidence to enter the next phase of development during this short period of uncertainty,” Adrian said.
He said each of the appointed contractors is experienced and world-class.
“The short-listed organisations have supplied excellent vessels in recent times and Carnarvon looks forward to working with them during the next phase of the project to ensure we have an optimised technical and financial solution,” he said.
For investors worried that hiring three separate contractors might be some unnecessary spending, Carnarvon told shareholders today the FEED process is a relatively low-cost phase of the total oil field development.
Final Investment Decision from the FEED contracts is slated for 2021, though Carnarvon admitted market conditions might push this further back.
Carnarvon owns 20 per cent of the Dorado field in a joint venture with fellow ASX-listed Santos.
Today, Carnarvon shares are down 4.26 per cent and trading for 22 cents each. Santos shares are down 2.72 per cent and worth $4.65.