Japan’s Modec and Toyo Engineering Corporation (Toyo) have initiated talks to assess the business alliance related to floating production storage and offloading (FPSO) vessels.

The parties have also agreed to undertake a feasibility study regarding the business alliance for the engineering, procurement, construction and installation (EPCI) services for the FPSO vessels.

Additionally, the firms are considering launching a joint venture company by the end of this year, subject to the positive results of the discussion and the feasibility study.

The proposed alliance is expected to improve engineering and project management capabilities while optimising human resources and organisational structure.

By leveraging the capacities of Modec and Toyo, the potential venture would help in addressing multiple large-scale projects.

In addition to developing new technologies for the next-generation FPSO vessels, the alliance will explore new technology and product opportunities in growth markets.

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Moreover, the firms anticipate the business alliance to have a more cost-competitive offering to secure projects.

It is also expected to enhance EPCI business profitability through efficient cost estimate/reduction initiatives.

In a press statement, Modec said: “Potential demand for FPSOs is expected to remain consistent with global demand for oil and gas, and development of new projects is also expected to proceed steadily.

“Therefore, Modec and Toyo recognize the important roles they play in contributing to the society by supplying stable energy through the FPSO business.”

Since past 15 years, Modec and Toyo have been working together on the topside engineering, procurement, and construction (EPC) scope for the FPSO projects.

Modec said: “Both companies expect further synergy effects of more comprehensive collaboration which covers a full range of EPCI business, including hull and marine of FPSOs.”