America’s deepwater project edging closer to first oil as FPS reaches Gulf Coast

Texas-based exploration and production player Beacon Offshore Energy, co-owned by ShenHai which is a subsidiary of Israel’s Navitas Petroleum, is closing in on the first oil from its deepwater project in the Gulf of Mexico/Gulf of America, as a floating production system (FPS) has come to the Gulf Coast of Texas, U.S.

The departure of the FPS for the Shenandoah project was confirmed in December 2014, when the unit sailed away from South Korea’s Hyundai Heavy Industries (HHI) shipyard, hired to handle the design, procurement, construction, and delivery of the FPS and its installation, and began its transit to the Gulf of America.

Navitas described the completion of the FPS construction and its sail-away to the U.S. as “a significant milestone” in the project’s development. Based on the estimated time of arrival (ETA), the FPS was expected to reach its destination in February 2025, with the production start-up anticipated in the second quarter of 2025. Previously, the beginning of the production stage was targeted in late 2024.

According to COSCO Shipping Heavy Transport, COSCO Shipping & Guangzhou Salvage Heavy Transport (CSGS) delivered Beacon Offshore Energy’s Shenandoah FPS to Ingleside, Texas, on February 10, 2025.  After HD Hyundai Heavy Industries built the 26,050-metric ton (mt) FPS in Ulsan, Korea, the firm transported it to the U.S. Gulf on board the 80,000 mt deadweight tonnage (DWT) Xin Yao Hua semi-submersible vessel.

At the end of December 2024, the project partners approved the expansion and acceleration of the project development, including the advancement of key future stages, to advance and enhance the value creation from the oil asset, while ensuring the optimal capacity of the FPS that will serve the project.

The expanded development plan entails increasing the FPS’s capacity from 120,000 barrels of oil per day to 140,000 barrels of oil per day via debottlenecking activities, which will accommodate the additional production volumes from Shenandoah, as well as the Monument and Shenandoah South (North Yucatan) oil assets.

This plan also encompasses the drilling of two additional development and production wells, with the first drilling scheduled to kick off in early 2026 and the second in early 2028. The installation of subsea pumps is due to start in early 2028. This is expected to increase the oil flow rate from the production wells to the FPS, extending the production lifespan and anticipated production duration.

According to Navitas, the expanded development plan was approved to capitalize on the existing market opportunity, ensure the provision of services by a suitable drillship for the execution of the required operations in the coming years, and order long-lead items.

The updated budget for the expanded development plan, designated for capital investments until the end of 2028, is approximately $753 million, of which around $319 million has been approved at this time with the remaining amounts to be approved subject to election by the project partners.

Moreover, the FPS is also expected to serve the Monument oil asset, located approximately 27 kilometers south of Shenandoah as well as the Shenandoah South oil asset adjacent to Shenandoah, as part of efforts to generate additional value from the FPS by utilizing it as a regional hub for oil discoveries in the area.

The partners in the Shenandoah South asset are advancing the work toward the final investment decision (FID) for the development of the asset, alongside its connection to the Shenandoah FPS, which is anticipated to be achieved by Q2 2025.

Under the provisions of the existing financing agreement for the project’s development, three lenders have approved the expanded development plan. Navitas also confirmed an increase in the existing project financing by around $150 million, which was green-lighted by some of the existing lenders, as well as new international lenders.

As a result, the updated financial model puts the project’s total budget from the date of the FID in August 2021 until the first oil at around $1.03 billion. The Shenandoah field is situated in the Walker Ridge blocks approximately 230 miles from New Orleans, with water depths up to 5,500 feet.

The U.S.-based Williams was picked to provide offshore natural gas gathering and transportation services and onshore natural gas processing services for the development. Subsea 7 was tasked with engineering, procurement, construction, and installation (EPCI) and commissioning of the subsea equipment, including structures, umbilicals, and production and gas export flowlines.

Trendsetter was selected to provide a 20,000 psi subsea well intervention package for the Shenandoah project. Additionally, Gate Energy was contracted to take care of a commissioning execution segment for the U.S. portion of the FPS.

After Beacon Offshore announced a final investment decision to develop another oil discovery in the U.S. Gulf of America, the asset was tied back to one of the spar platforms operated by Occidental (Oxy), former Anadarko Petroleum Corporation.