Ithaca’s GSA development faces further delays

Ithaca Energy’s Greater Stella Area in the UK North Sea is facing further delays, due to the slow work on the “FPF-1″ floating production facility in Poland.

The FPF-1 is being modified by Petrofac in the Remontowa yard in Poland for use on the GSA production hub and completion of this work has been described as “the critical path item for the delivery of first hydrocarbons from the hub.”

Although significant progress has been made on the FPF-1 modifications programme in recent months, the rate of progress is insufficient to achieve sail-away of the vessel from the yard in the second quarter of 2015, Ithaca Energy has said.

The sail-away of the FPF-1 is now planned for late in the first quarter of 2016, resulting in first hydrocarbons in the second quarter of the year.

According to Ithaca Energy, the FPF-1 is in an advanced state of mechanical completion and Petrofac has good visibility of all the remaining workscopes necessary to complete and commission the vessel.

3/4 done

Over three quarters of the construction works have been finished and mechanical completion is now scheduled for the third quarter of 2015. The vessel commissioning programme is planned to begin in parallel with completion of construction activities in the middle of the year and is forecast to take approximately six months. The FPF-1 and risers have been designed to enable year round installation, hence sail-away can occur at the earliest available opportunity, Ithaca Energy has added.

The company has said that the rest of the GSA development is moving ahead well. The Stella drilling campaign is largely complete, with the outcome of the clean-up flow test on the fifth and final well (Stella Ekofisk) expected  in March 2015. The major part of the subsea infrastructure has already been installed and the remaining elements are slated for installation in the second quarter of 2015.

The delayed start-up of the GSA is estimated to result in incremental costs prior to first hydrocarbons of approximately $10 million net to Ithaca. These relate primarily to project management costs for the overall development, as the FPF-1 modification costs are being borne by Petrofac. The Company’s peak net drawn debt is forecast to be materially unchanged at approximately $850 million, funded from total debt facilities of $1,010 million ($300 million five year senior unsecured notes, $610 million reserves based lending facility and $100 million corporate facility).

Les Thomas, Chief Executive Officer, said: “It is disappointing to incur a further delay in completion of the FPF-1 modifications programme. While the drilling and subsea installation aspects of the Greater Stella Area development have progressed well, completion of the FPF-1 programme has proved difficult. Petrofac has clear visibility on what needs to be done and we remain focused on ensuring that all the required work is completed in the yard in order to ensure an efficient offshore start-up.”