Shell Pens Bonga North-West Flowline, Installation Contract

Shell Nigeria Exploration and Production Company (SNEPCo) has signed a contract with Saipem Contracting Nigeria Limited for the provision of crude oil flowlines and installation of other production facilities for its Bonga North-West offshore project.
Tony Okonedo, corporate media relations manager, said that the development followed a competitive tender and agreement between SNEPCo, the Nigerian National Petroleum Corporation (NNPC/NAPIMS) and Saipem.
Under the terms of the contract, he said Saipem would design, fabricate, install and pre-commission the 13-kilometre subsea flowlines that will convey crude oil from the Bonga North-West’s wells to existing production facilities, as well as install production manifolds, umbilical and subsea controls distribution units.
The Bonga North-West project involves the drilling of 12-wells in water depths of some 1200 metres, and provision of associated facilities to tie into the existing Bonga floating production and storage facility (FPSO).
The initial phase of the project comprises the drilling of five subsea wells. Seven main contracts including the flowline and the installation contract are planned for the execution of the project.
Chike Onyejekwe, managing director, SNEPCo said: "We have chosen a highly qualified contractor for this assignment and our expectation is that the work will be executed safely and within the terms and conditions of the contract.
We remain convinced that as a team, we have what it takes to execute this work and deliver a project which will complement the existing and highly successful Bonga offshore project. "
Yves Inbona, chief operating officer, Offshore Business Unit of Saipem,  said: "For Saipem, it is a new milestone as well as another opportunity to demonstrate our dedication to safety. Saipem Contracting Nigeria holds the best safety record in the entire Saipem Group.
This comes as a result of dedication and training by safety experts both in the group and in Nigeria who have a strong commitment to safety in onshore, offshore and in green projects. We have been investing in facilities and this contract offers a technical challenge as well as an opportunity to deploy our tested technology with our local partners."
SNEPCo had earlier this year, awarded contracts for other aspects of Bonga North West to encourage Nigerian content. The Front End Engineering Design (FEED) and detailed design of topsides facilities were undertaken by the National Engineering and Technical Company Limited (NETCO) – a subsidiary of NNPC, in conjunction with SNEPCo engineers, while Weltek Limited is executing the topsides modification work, including procurement, onshore fabrication, offshore installation and hook-up.
Located in Oil Prospecting Licensed (OPL) 212, the Bonga concession was awarded in 1993 during the first round of bidding for Nigeria’s deepwater frontier acreage. It is operated by SNEPCo (55 per cent) on behalf of NNPC under a Production Sharing Contract (PSC).
SNEPCo has a Joint Operating Agreement (JOA) with Esso Exploration and Production Nigeria (Deepwater) Limited (20 per cent) NAE Nigerian Agip Exploration Limited (12.5 per cent) and Elf Petroleum Nigeria Limited (12.5 per cent) in respect of OPL 212.
Shell also disclosed on Monday it plans to start output from its proposed Prelude floating liquefied natural gas plant by 2016.
The Prelude FLNG project, off Western Australia state, the Browse basin, has an estimated operational life of 25 years, Shell said in an environmental impact statement released on Monday for public comment.
Shell said it expects to make a final investment decision on the project in early 2011, after which it will take about five years before construction of the FLNG facility will be completed and towed to site for start-up.
The proposed production timeframe for Prelude coincides with at least four other planned LNG projects in the Asia-Pacific region and could add to concerns about a potential supply glut in the middle of the next decade, a Reuters report said.
Projects that are targeting first gas in around 2016 include Chevron’s Wheatstone project, Woodside Petroleum’s Sunrise project, Inpex’s Ichthys development and the Bonaparte FLNG project owned by GDF Suez and Santos.
Shell said last week that the Prelude LNG project would be the first application of its FLNG technology anywhere in the world and could be the world’s first operational floating LNG platform, depending on the progress of rival projects.
The Prelude project will have a low environmental footprint as its location is restricted to 200 kilometres offshore, away from sensitive issues such as turtles, whales and the pristine coastline, Shell said in the report.
The Prelude FLNG project is estimated to produce a maximum of 3.6 million tonnes per year of LNG, 1.3 million tonnes of condensate and 400,000 tonnes of liquefied petroleum gas.