Shell has confirmed construction has started on the Penguins redevelopment – its first new manned installation in the North Sea for nearly 30 years.
Geologist Michael Porter, from the energy giant, gave an update on the floating production, storage and offloading (FPSO) vessel at the DEVEX conference in Aberdeen yesterday.
He said steel has now been cut on the Sevan 400-style FPSO, ahead of the eight-well campaign which is to begin in summer next year. Meanwhile, he confirmed the FPSO will arrive at the Penguins cluster in 2021.
The project is located 150 miles north-east of Shetland. US firm Fluor was awarded the construction contract, with the work being headed up by its office in Manilla in the Philippines.
Shell took a final investment decision on the Penguins redevelopment in January.
It is expected to deliver 80 million barrels of oil, at peak production of 45,000 barrels per day. Mr Porter said: “We’ve cut steel on the FPSO now, so construction has begun.
“We’ll come and install the competitively scoped subsea in 2020, in time for the arrival of the FPSO in 2021.
“We’re continuing to work the area, there is future for growth.
“There are spare risers, we’ve got a number of spare slots on the manifold to add future infill wells.
“Really, we just want to continue the work that we’re doing to make sure that Penguins remains a significant northern North Sea hub right through until 2040.
“We really do feel like this is the right option to provide a northern North Sea hub, not only to produce Penguins but to produce other things in the area and expand and add growth to the region.
“Although this style of FPSO may not be new to the North Sea, this will be the first of its kind operated by Shell.”
At the time of sanctioning the project, Shell’s vice-president for upstream in the UK and Ireland, Steve Phimister, said the construction phase of the FPSO should create work for up to 400 people in the UK.
The roles will be in areas such as UK-based project delivery and subsea activity.
He said: “The Penguins field redevelopment is a very significant project for Shell and has been a long time coming.
“If you were to go back a few years, this sort of development would have been hard to justify, but we’ve driven costs down with the supply chain.”
Between 50 and 70 people will work on board the new vessel once it is up and running.
Oil and Gas UK chief executive Deirdre Michie said: “A global leader like Shell making a commitment on this scale demonstrates the investment potential the UK Continental Shelf still holds.”
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