Flour, a global company headquartered in Texas, USA, which is leading a consortium of companies vying for the Engineering, Procurement and Construction (EPC) contract for Total E&P’s Tilenga oil project, is set to submit its second proposal for the project’s front end engineering design in the second week of May as the country prepares to make key pronouncements in the oil industry.
Chicago Bridge & Iron Company, the other US company that Flour is competing with for the Tilenga EPC contract, also plans to hand in its second proposal in early May and offer its bid price, says the latest Deep Earth International’s monthly report, for April 2018.
In the report, Flour, which has partnered Ponticelli from France and China Petroleum Engineering and Construction to bid for the Tilenga contract, says it has so far completed three project capital cost estimates over the last 16 months that it has been working on the Front End Engineering Design (FEED). The FEED will give Total E&P and its joint venture partners – Cnooc and Tullow Oil – the technical specifications, costs and timeline estimates for the development of the Tilenga project so that all the parties can make a final investment decision for the project.
It is not clear when the joint venture partners will make a decision on the EPC contract for Tilenga. There are two crucial parameters that will determine who wins the EPC contract for the Tilenga – the cost of the project and the national content strategy. The Tilenga project comprises of Exploration Area 1 and Exploration Area -2N, formerly operated by Tullow Oil, which cover much of Nwoya and Buliisa districts.
The report says the development of the Tilenga project is huge. The project includes a central processing facility (CPF) with capacity to process 190,000 barrels of oil per day, and more than 412 wells (including 189 injectors, 190 producers and 33 observers) which are planned to be drilled on 35 well pads, according to figures from the Petroleum Authority of Uganda.
The authority further says the Tilenga project plans to have 250-kilometre flow lines, which will transport crude oil within the oil fields and a 110km feeder pipeline which will transport the processed crude oil from the CPF in Buliisa to Kabaale, where the export hub and refinery will be located. It is estimated that these field activities need about 70MW of associated gas power to operate efficiently.
However, due to the excess gas in the area, Total E&P is working on developing a 130MW gas power plant. The development of the FEED for the Tilenga project is going on concurrently with the one for the Kingfisher oil field, which is operated by Cnooc. Cnooc chose its subsidiary, COOEC (China Offshore Oil Engineering Company Limited), as the lead contractor for the FEED. At group level, COOEC and Flour have a stronger bond. As early as 2015, Fluor and COOEC announced the launch of a new joint venture, COOEC-Fluor Heavy Industries Co., Ltd, which has won quite some huge contracts in China.
It is not clear at this point whether this relationship at group level favours Flour in the bid for the Tilenga EPC contract, considering Cnooc will take part in the decision process on who wins that award. The Kingfisher project will have a CPF with a capacity to process 40,000 barrels of oil per day and 31 wells. There will be 11 water injectors and 20 oil producers, drilled on four well pads. The project is planned to have 16 kilometres of flow lines and a 50km feeder pipeline from the CPF in Hoima district to the export hub and refinery in Kabaale.
COOEC’s FEED study has given the Kingfisher oil field a design life of 25 years. All the gas from the Kingfisher field will be converted into electricity. The electricity to be produced exceeds the requirement for the oil field. Some studies show that the gas at the Kingfisher is enough to produce 35MW of power.
It is estimated the field needs just about 20MW of power, according to Xin Shun, the design manager for COOEC. COOEC has undertaken 29 critical studies that identified 808 risks within its FEED study for the Kingfisher oil field. The company has made 365 suggestions on how to mitigate those risks. Perhaps the most eye-catching recommendation is the one that stops any flights around the Kingfisher’s well pads.
The company says small airplanes should not fly around the area, and says it is much safer if the nearby airfield is closed. Uganda is expected to make key pronouncements on the Tilenga and Kingfisher EPCs in the third quarter of this year, on top of the final investment decision for the crude oil pipeline.
