Calendar An icon of a desk calendar. Cancel An icon of a circle with a diagonal line across. Caret An icon of a block arrow pointing to the right. Email An icon of a paper envelope. Facebook An icon of the Facebook "f" mark. Google An icon of the Google "G" mark. Linked In An icon of the Linked In "in" mark. Logout An icon representing logout. Profile An icon that resembles human head and shoulders. Telephone An icon of a traditional telephone receiver. Tick An icon of a tick mark. Is Public An icon of a human eye and eyelashes. Is Not Public An icon of a human eye and eyelashes with a diagonal line through it. Pause Icon A two-lined pause icon for stopping interactions. Quote Mark A opening quote mark. Quote Mark A closing quote mark. Arrow An icon of an arrow. Folder An icon of a paper folder. Breaking An icon of an exclamation mark on a circular background. Camera An icon of a digital camera. Caret An icon of a caret arrow. Clock An icon of a clock face. Close An icon of the an X shape. Close Icon An icon used to represent where to interact to collapse or dismiss a component Comment An icon of a speech bubble. Comments An icon of a speech bubble, denoting user comments. Ellipsis An icon of 3 horizontal dots. Envelope An icon of a paper envelope. Facebook An icon of a facebook f logo. Camera An icon of a digital camera. Home An icon of a house. Instagram An icon of the Instagram logo. LinkedIn An icon of the LinkedIn logo. Magnifying Glass An icon of a magnifying glass. Search Icon A magnifying glass icon that is used to represent the function of searching. Menu An icon of 3 horizontal lines. Hamburger Menu Icon An icon used to represent a collapsed menu. Next An icon of an arrow pointing to the right. Notice An explanation mark centred inside a circle. Previous An icon of an arrow pointing to the left. Rating An icon of a star. Tag An icon of a tag. Twitter An icon of the Twitter logo. Video Camera An icon of a video camera shape. Speech Bubble Icon A icon displaying a speech bubble WhatsApp An icon of the WhatsApp logo. Information An icon of an information logo. Plus A mathematical 'plus' symbol. Duration An icon indicating Time. Success Tick An icon of a green tick. Success Tick Timeout An icon of a greyed out success tick. Loading Spinner An icon of a loading spinner.

Costs rising for Santos’ Barossa FPSO as supply chains stressed, says BW Offshore

Concept: a rendering of the FPSO and subsea infrastructure at the Barossa field development off northern Australia Photo: MODEC
Concept: a rendering of the FPSO and subsea infrastructure at the Barossa field development off northern Australia Photo: MODEC

Norway’s BW Offshore (OL:BWO) said that the Barossa floating production storage and offloading (FPSO) vessel project for Santos (ASX:STO) is experiencing some cost increases due to price inflation for materials.

However, the company said yesterday in its quarterly results that the inflation is covered by “project contingency”. BW Offshore said it “is focused on locking in suppliers and equipment packages to manage costs and maintain schedule amid increasing stress on global supply chains.”

In the third quarter, BW Offshore said it continued to progress the Barossa FPSO project according to plan, including completing the debt financing and the equity joint venture partnership for the project.

First steel cut for the FPSO hull was achieved in September ahead of original schedule, it added.

The Barossa FPSO is financed by a 14-year combined construction and long-term debt facility of $1,150 billion with a syndicate of nine international banks and by $240 million from the equity joint venture, consisting of BW Offshore (51%) and ICMK Offshore Investment (a 50:50 JV of ITOCHU Corporation and a subsidiary of Meiji Shipping Co Ltd) (25%) and Macquarie Bank (24%).

In addition, about $1 billion in pre-payments will be paid by the Barossa Upstream Joint Venture Partners during the construction period. These pre-payments are linked to progress and milestones on the project. By end September a total of $133 million has been received as per plan, said BW Offshore.

Santos announced in March that BW Offshore will build, connect and operate the FPSO for its Barossa project. The contract marks the largest capital expenditure component of the $3.6 billion Barossa offshore gas and condensate project designed to backfill the ageing Darwin LNG export terminal.

Under a hybrid financing agreement, the Barossa joint venture will lease the FPSO following an upfront prepayment of around half the capital cost and hold an option to buy-out the floater. This “achieves an overall reduction of approximately $1 billion in capital expenditure,” Santos said at the time.

Recommended for you

More from Energy Voice

Latest Posts