Equinor hands out FEED deal for FPSO destined to work at Bay du Nord oil project

Equinor Canada, a subsidiary of Norway’s state-owned energy giant Equinor, has awarded a letter of intent (LOI) to KBR’s Canadian entity – KBR Industrial Canada – for the front-end engineering design (FEED) of the topside facilities of the Bay Du Nord floating production, storage, and offloading (FPSO) vessel, which will work off the coast of Newfoundland and Labrador, Canada.

KBR explains that the FEED scope comes on the back of the pre-FEED engineering carried out by KBR in 2022. The agreement also includes an option for the continuation of detailed design and procurement management services through to final completion of the FPSO. According to the firm, this will further mature the engineering and execution planning, working towards a final investment decision with the first production expected to be in the late 2020s.

Jay Ibrahim, president of KBR’s Sustainable Technology Solutions business, remarked: “We are excited to be a part of this significant project with Equinor. This win is indicative of KBR’s strategic commitment to work with clients not only to secure energy supply for the world but to do it in a safe, responsible, and sustainable way. KBR adds maximum value to clients such as Equinor, by drawing on our extensive global engineering expertise and applying the latest technology and processes to deliver extraordinary outcomes.”

Furthermore, KBR claims that it will continue to help Equinor during the FEED engineering to develop “one of the lowest carbon emitting FPSOs in the world,” using an onboard combined cycle power system and the latest technology to minimise the number of crew onboard and maximise digital solutions in a bid to produce energy safely and securely while minimising carbon emissions.

The company will execute the FEED work scope jointly with Canadian sub-contractor Hatch, an employee-owned multidisciplinary engineering, project management, and professional services firm, and will provide Equinor with an integrated team across Canada and London.

Based on KBR’s statement, the Bay du Nord FPSO is a deepwater facility utilising technology and digital solutions to ensure safe and reliable production. The Bay du Nord project consists of several oil discoveries in the Flemish Pass basin, some 500 km northeast of St. John’s in Newfoundland and Labrador, Canada.

The first discovery was made by Equinor in 2013, followed by additional discoveries in 2014, 2016 and 2020 while the confirmed discoveries in 2020 in adjacent exploration license EL1156 – Cappahayden and Cambriol – are potential tie-ins in a joint project development. The Bay du Nord discovery is at a water depth of approximately 1,170 meters whilst the new discoveries are at around 650 water depth.

As Equinor’s plans for the development of the Bay du Nord project entail an FPSO vessel, suitable for the tie-back of adjacent discoveries and future prospects, Salt Ship Design disclosed in September 2022 that it had designed a hull for a harsh environment FPSO, which would serve on the Bay du Nord project.

In addition, Equinor is also working on early-phase concept studies for this project with the final investment decision expected in the next couple of years while the first oil could be achieved as early as late 2028. Previously, the FID was anticipated in 2021 and the first oil in 2025.

“The optimisation of the Bay du Nord development project is ongoing to make it more robust for the future market and evaluation to include confirmed new discoveries in adjacent license EL1156,” says KBR.

However, the development of this project is facing opposition from environmentalists. To handle this, Equinor spent two days in court at the start of March 2023, tackling the scrutiny over the development of its controversial Bay du Nord oil project, as Ecojustice set out to overturn the government’s approval for the $12-billion project.

The outcome of this challenge and its impact on the project will be known once the court’s decision is revealed.