Saturday, March 23, 2013

Another Leading Container Shipping Line Expands its Interest in Energy Production

Japanese Consortium to Extend Brazilian Offshore Activities and Deploy VLCC
Shipping News Feature

JAPAN – BRAZIL - Four major Tokyo based corporations announced yesterday they would be cooperating in an offshore oil production and recovery facility for use in the Iracema Norte area of a pre-salt oil field off the coast of Brazil. Container shipping operator Mitsui OSK Lines (MOL) is a partner in the floating production, storage, and offloading system (FPSO) venture and is the latest of the conventional lines to expand its interest in the energy sector.

The three other partners in the venture are Modec Inc. a floating production systems specialist plus Mitsui & Co and the Marubeni Corporation, both general traders whose business interests range from energy and chemicals to forest products and, more controversially of late, food supply. Mitsui, MOL and Marubeni will invest in a long-term charter business to be operated by Modec for the purpose of providing a floating production, storage, and offloading system and comes after the long-term charter business for the purpose of providing an FPSO for the use in the Iracema Sul area (formerly referred to as Cernambi Sul) in which the Companies invested through a company known as Cernambi Sul MV24 B.V.

Modec and Mitsui have already provided three FPSO’s for pre-salt oil fields, and this will be their fourth pre-salt related FPSO chartering project. It is the third project of its type for MOL and the second for Marubeni. For this Project, Mitsui, MOL and Marubeni will invest in Cernambi Norte MV26 B.V. (MV26), a Dutch company established by Modec. MV26 has signed a long-term chartering agreement with Tupi B.V., a Dutch company owned by Petrobras Netherlands B.V. (65%), BG Overseas Holding Ltd. (25%), and Galp Sinopec Brazil Services B.V. (10%). The FPSO will be chartered to Tupi B.V. for 20 years under this chartering agreement signed in February 2013.

Construction of the FPSO will involve the conversion of a VLCC (very large crude oil carrier), which will be renamed FPSO Cidade de ITAGUAÍ MV26 upon its completion. It will be deployed to the Iracema Norte area of the BM-S-11 block off the coast of Brazil in the fourth quarter of 2015. The area is part of a deepwater oil field located approximately 300 km south of Rio de Janeiro, Brazil. The oil is contained in the pre-salt layer approximately 5,000 m beneath the seabed. The Schahin Group, the joint bidder with Modec for this Project as the local partner in Brazil, plans to invest up to 15% in MV26 by the commencement of the FPSO charter.