Cerulean Winds and Ping Petroleum UK have signed a new agreement that would create one of the UK’s first oil and gas facilities powered almost exclusively by offshore wind.
The deal would see the floating production storage and offload (FPSO) facility at Ping Petroleum’s Avalon site, located in the UK Central North Sea, powered largely by a new floating offshore wind turbine developed by Cerulean.
The two signed a memorandum of understanding for the project during a meeting in London on Monday, hosted by business and energy secretary Kwasi Kwarteng.
Ping – a subsidiary of Malaysia-based Dagang NeXchange (DNeX) – acquired a 100% stake in Avalon site in August 2021, and intends to make a final investment decision (FID) on the 23 million-barrel project later this year, ahead of production start up in 2025.
DNex’s managing director Tan Sri Syed Zainal Abidin Syed Mohamed Tahir, said Ping is currently refining its concept to integrate the FPSO with the offshore wind scheme ahead of FID.
Cerulean has already stated its intention to bid for four gigawatt-scale sites when the Innovation and Targeted Oil and Gas (INTOG) wind auction is opened by Crown Estate Scotland later this month.
It said using a turbine to power Avalon would avoid the equivalent of up to 20,000 tonnes of CO2 emissions every year from the facility.
The proposed development concept for the plans have already been cleared by the North Sea Transition Authority (NTSA), and a field development plan is to be submitted later this year.
Cerulean said the model used would be “one of the largest floating wind turbines built in the UK” and will provide the majority of power required by the FPSO.
As part of the agreement with Ping, Cerulean Winds have committed to fully manufacturing and assembling the offshore wind turbine in the UK – a move expected to bring between £80-100 million investment in local supply chains.
It is expected that green power produced by the turbine will exceed the energy needs of the production vessel, with the partners exploring options to supply excess energy to other nearby production facilities.
Avalon will eventually be served by the Hummingbird Spirit FPSO, currently being revamped by Global Engineering and Construction (E&C) at the Port of Nigg. The 60-metre diameter facility has a storage capacity of 270,000 barrels of oil and is capable of producing up to 30,000 barrels of oil per day.
© Supplied by Global E&CThe project was welcomed by Mr Kwarteng, who said that the UK must “keep supporting production on the UK Continental Shelf for security of supply as we transition to clean, affordable, home-grown energy. In the meantime, we need to cut emissions from production.”
“Platform electrification projects such as this are a welcome step forward to reduce emissions from oil and gas production, secure jobs and new skills and deliver on the commitments of the landmark North Sea Transition Deal.”
Tan Sri Syed Zainal Abidin said Ping was “excited to be an early implementor of this revolutionary technology in the UK North Sea for our new greenfield project, Avalon.”
“In addition, it enables us to seize market opportunities arising from the energy sector’s low-carbon transformation and development. The creation of an additional revenue stream via the supply of excess energy to nearby facilities will positively contribute to our financial performance. “
Cerulean founding director Dan Jackson added: “Our partnership marks a significant milestone for the oil and gas industry in creating one of the UK’s first production facilities to be powered by clean, green and affordable offshore wind energy.
“This innovative and pioneering project will be ‘Made in the UK’ and through our delivery partners, we will be realising significant investment in UK fabrication yards and ports. This is a critical step in scaling the UK supply chain and building experience and a track-record to exploit future opportunities in the fabrication, assembly and servicing of offshore wind developments.”
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