MODEC and Altera: Marrying FPSO tech with renewable and low-carbon plays to shape energy transformation beyond oil & gas

Given the rising expectations about oil and gas, especially liquified natural gas (LNG), being in demand even after 2050, entwining innovation and technology arms is increasingly being recognized as the right recipe to not only unleash untapped low-carbon barrels but also unlock the gates of green power. Japan’s MODEC and the UK-based Altera Infrastructure have set their caps on addressing the pressing challenges of the energy transition era by accelerating the shift toward a more sustainable future while supporting the security of power supply.

The offshore energy industry and its supply chain are upping their decarbonization ante as the demand for hydrocarbons continues to run unabated against the backdrop of energy cost hikes, escalating geopolitical tensions, increasing population growth, and many other challenges the world is facing on its mission to reach net zero aspirations and pivot to the greener side of the energy equation.

Japan’s floating offshore oil and gas industry solutions provider is determined to lend oil and gas operators a helping hand in ensuring a stable and sustainable energy supply through reliable operations and continuous improvement of offshore facilities’ asset integrity with lifecycle value maximization through the deployment of digitalization and emerging technologies to ramp up production and curb greenhouse gas (GHG) emissions footprint.

While diving into the opportunities and challenges stemming from low-emission initiatives within the FPSO market and wider energy industry during an event in Norway, Boyd Howell, Director of Business Development at MODEC, highlighted the Japanese player’s plans to focus on minimizing carbon emission intensity, as part of the path to net zero by 2050.

MODEC has found that the lion’s share of carbon emissions, around 65%, arises from power generation, with flaring taking about 8-10%, thus, it is determined to tackle power generation issues. Recently, the firm and JGC Corporation finished a project designed to measure and quantify emissions of methane and other greenhouse gases from two FPSOs off the coast of Brazil.

Furthermore, MODEC has already bolstered its digitalization moves and is looking at floating offshore wind, as another tool in its decarbonization toolbox. Howell highlights that MODEC will not necessarily work on developing a large offshore wind farm but is interested in putting a couple of turbines to good use.

Aside from eyeing renewables, the floating production solutions provider is also keeping an eye on other low-carbon options, such as hydrogen, to combine them with the innovation in FPSO technology.

A week ago, Mitsui O.S.K. Lines (MOL) disclosed plans to get a bigger stake in MODEC to convert it into an equity-method affiliate in pursuit of further growth in both firms’ offshore businesses in the energy transition landscape that pushes the decarbonization envelope further. Before this move, the shipping major joined others in a study exploring dung power as a solution to tap into the production and utilization of biomethane from animal manure.

The floating production player’s zest to minimize GHG and other emissions across its business operations and supply chain while developing clean energy solutions to achieve global goals, deliver and operate innovative and digitally-enabled solutions, in response to changes in the energy landscape is also outlined in the firm’s recent strategy update.

One of MODEC’s latest milestones that hammers home its intention to step up the low-emission game is illustrated by DNV’s approval in principle (AiP) for Abate notation, enabling the firm’s newly built Brazil-bound FPSO to become the world’s first unit of this type to sport such a notation.

The UK-based energy infrastructure services player is chasing a carbon-free future by embracing innovation and technological advances as the North Star that will light up the way forward to bring the next generation of FPSO units to life, boost production levels to meet the ever-growing hunger for more energy, and slash emissions.

While discussing the drivers paving the way for a sustainable energy future, Jun Zhu, Senior Concept Designer at Altera Infrastructure, said during the event in Stavanger that the world might have passed or reached the peak in oil and gas demand, however, these fuels would still be important over the next 30 years, as significant gas production is forecast to continue after 2050.

Zhu emphasizes the need to explore new pathways toward energy security and climate mitigation impacts while going to great lengths to pursue ambitious net zero goals. He believes that increased energy efficiency will play an important role in the overall pace and progress of the energy transition to a greener future.

Currently, the company is working on upgrading the FPSO Petrojarl Knarr at Drydocks World in Dubai, UAE. This vessel is expected to be deployed at Equinor’s Rosebank oil and gas field off the coast of Shetland in Scotland. Once the unit has been upgraded, refurbished, and electrified with power from shore, it is expected to work for 25 years without drydocking.

The  FPSO Petrojarl Knarr, which previously worked for Shell on the Knarr field in the North Sea offshore Norway, has a production capacity of 63,000 barrels of oil equivalent per day and a storage capacity of 800,000 barrels. Equinor previously expected the beginning of production in 2026-2027, however, Zhu has confirmed that the start-up is now anticipated in 2026.

At its peak, the Rosebank field could produce 69,000 barrels of oil or 9,000 tons per day, equivalent to 8% of the UK’s entire output between 2026 and 2030. With electrification, it is estimated that the Rosebank lifetime upstream CO₂ intensity would decrease from 12 kg to about 3 kg CO₂/boe.

Altera Infrastructure secured 15-year contracts in October 2023 to redeploy the FPSO Voyageur Spirit and the Nordic Brasilia shuttle tanker, following conversion into an FSO, for work at Eni’s Baleine Phase 2 project located off the coast of Côte d’Ivoire.

Once the refurbishment was done at Drydocks World, a naming ceremony was held in Dubai, changing the FPSO’s name to Petrojarl Kong, while the shuttle tanker was renamed Yamoussoukro.

Altera Infrastructure is bent on employing multiple emission-curbing technologies, such as power from shore alongside the blue power hub, renewables, and carbon capture and storage (CCS). All of these, especially the last one, are perceived to be critical industry pieces for Norway and Europe to meet their climate targets.

The UK company is convinced that the Norwegian Continental Shelf (NCS) is well-suited to receive CO2 on a large scale from across Europe. While emphasizing that technology is not a barrier, the firm pinpointed the need for predictable policy and regulatory frameworks.

Altera sees its Stella Maris concept for flexible, large-scale CO2 transport and storage as a ready-to-deploy, cost-efficient solution for medium to large emitters across Europe.

Note: Reporting from ONS in Stavanger by Nadja Skopljak, Managing Editor for Offshore Energy; article written by Melisa Cavcic, Senior Editor at Offshore Energy.

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