Letters of intent awarded to quartet of players for prized packages on phase three of offshore development.
Four Asian and European companies are set to be awarded contracts by Qatar’s North Oil Company (NOC) for work on the latest phase of its $1 billion-plus Gallaf project in the Persian Gulf.
NOC — a partnership of state-controlled Qatar Petroleum (QP) and France’s TotalEnergies — is executing the multi-phased Gallaf project, which aims to maintain output at Al Shaheen, Qatar’s largest offshore oilfield.
Gallaf phase three is centred on a pair of wellhead platforms and a large, new processing platform as well as subsea flowlines.
Multiple sources close to the project said letters of intent have been agreed with all four successful bidders and that contracts are set to be awarded later this month.
Another knowledgeable contact said the contracts could be awarded in one or two weeks.
Scope of work
At the heart of the Gallaf 3 scheme is a 30,000-tonne processing platform comprising a deck weighing around 20,000 tonnes and a jacket of some 10,000 tonnes, a well-placed source said.
Upstream was previously told that this structure will be pinned into place by about 8000 tonnes of piles.
Three sources with direct knowledge of the project said South Korea’s Daewoo Shipbuilding & Marine Engineering has been selected as the prime contractor to build the platform, under what is called Package 6.
Daewoo is due to build the topsides in Korea and is expected to subcontract the jacket construction work, a contact familiar with Package 6 said.
The South Korean player is believed to be in "clarification" talks with Malaysia Marine & Heavy Engineering over fabricating the substructure, but discussions have not yet progressed to a letter of intent or letter of award stage.
This processing platform contract is by far the biggest and most prestigious of the four to be awarded for Gallaf and, together with development drilling, would account for the bulk of the project’s capital cost.
Upstream could not establish the value of this contract, although one experienced fabrication source remarked it would be “far less than $1 billion”.
The smaller Package 5 calls for the turnkey provision of at least two wellhead platforms, with each of those structures expected to weigh between 4000 and 4500 tonnes, Upstream was told previously.
Two sources familiar with this workscope said that Vietnam’s Petro Vietnam Technical Services Corporation (PTSC) has secured an order to build two wellhead structures.
One project watcher close to PTSC added that the topsides weight of each of the platforms is about 3800 tonnes.
Packages 7 and 8, meanwhile, are set to be awarded to Oslo-listed Subsea 7 and Italy’s Rosetti Marino, respectively.
Subsea 7’s workscope covers about 50 kilometres of subsea flowlines, while Rosetti will be responsible for modifying existing platforms as well as other brownfield work.
Subsea 7’s first-quarter results presentation in late April noted that the company was pursuing Gallaf work.
Upstream understands this package covers a range of flowlines for, among other items, oil production, gas production, multiphase production, gas lift and water injection duties.
Key Qatari oilfield
Al Shaheen is a crucial field for the Qatari government because it accounts for about half of the country’s total oil production which, according to QP’s annual review for 2019, was running at just over 592,000 barrels per day in that year.
The field’s existing facilities include 33 platforms, 300 wells and several production hubs spread over nine separate locations.
PTSC was heavily associated with the first stage of Gallaf, having landed a key contract from NOC in 2018 that was thought to be valued at between $300 million and $350 million for the decks and bridges of three wellhead platforms.
Singapore’s Sembcorp Marine had earlier said that it had won deals to build platforms for the Gallaf Stage 2 development.
NOC was approached for comment on the status of the Gallaf 3 bid process, but had not responded to Upstream by press time.
Located in Block 5 about 80 kilometres from shore, Al Shaheen started production in 1994, with TotalEnergies — which recently changed name from Total — assuming operatorship in 2017 when production was about 300,000 bpd.
Under a 25-year concession agreement, the French supermajor holds a 30% stake in NOC, while QP holds a dominant 70% working interest.
Qatar's oil reserves stood at 2.23 billion barrels in 2019, stated QP in 2019, while condensate reserves were estimated to be 71.93 million barrels.
However, these resources are dwarfed by the nation’s vast gas reserves — mostly in the North Field — which equate to 386 billion barrels of oil equivalent, according to the state-controlled company.