BW Offshore said it has signed a head of agreement (HoA) with Equinor Canada Ltd as the preferred bidder for the floating production, storage and offloading (FPSO) unit for the Bay du Nord project offshore Newfoundland and Labrador, Canada.
Bay du Nord, Canada’s first deepwater oil project, is operated by Equinor in partnership with BP plc and holds an estimated 400 million barrels of recoverable light crude in its initial phase, BW Offshore said in a news release.
Under the HoA, BW Offshore and Equinor will further discuss how to proceed with the technical and commercial aspects of the FPSO project, including a smart and cost-effective design through front end engineering design (FEED) work, as well as agreeing on a commercial solution, according to the release.
BW Offshore said the planned FPSO will be tailored for the harsh environment of the sub-Arctic. The unit is expected to support production of up to 160,000 barrels of oil per day.
The topside is planned to include emission reduction initiatives such as high-efficiency power generation and heat recovery, variable speed drives and a closed flare system. The FPSO will be designed for future tiebacks to enhance the project’s long-term economic viability and value creation, the company said.
Following pre-FEED completion in mid-September, BW Offshore and Equinor plan to enter into a bridging phase to prepare for FEED in early 2026, subject to approvals by Equinor and BP. BW Offshore said it plans to establish a local office in Newfoundland during FEED.
“We are honored to have been selected by Equinor, which shows confidence placed in BW Offshore’s capabilities to support such a pioneering Canadian project,” BW Offshore CEO Marco Beenen said. “This HoA follows a constructive and close dialogue with Equinor since late 2023 and highlights our commitment to bringing substantial value to the Bay du Nord project. It affirms BW Offshore’s commitment to continue work with Equinor to develop a fit-for-purpose and cost-attractive solution where safety, human rights and search for local value creation come first during all phases of the project and operations”.
The Bay du Nord project consists of several oil discoveries in the Flemish Pass basin, around 500 kilometers 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, the company states on its website. In May 2023, Equinor and BP had decided to postpone the Bay du Nord development project, citing changing market conditions and subsequent high inflation.
In June, BW Offshore said the FPSO BW Opal was hooked up at the Santos-operated Barossa gas field. Barossa LNG is an offshore gas and condensate project that aims to provide a new source of gas to the existing Darwin liquefied natural gas facility in the Northern Territory of Australia.
“We deliver a strong quarter on the back of high operational uptime on our producing assets. The BW Opal is set to start producing gas from the Barossa field shortly before ramping-up to start its 15-year contract, providing material earnings and cashflow to BW Offshore and supporting future growth. Based on the progress to date in 2025, we are increasing our EBITDA expectations for the full year,” Beenen said in a recent company earnings release.
To contact the author, email rocky.teodoro@rigzone.com
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