BP, Royal Dutch Shell and OMV Group have awarded shuttle tanker contracts of affreightment (CoA) to Teekay Offshore Partners for the Quad204 project west of Shetland in the North Sea.

The three-year contracts with extension options involve offtake and transport of oil produced from the new Glen Lyon floating production storage and offloading (FPSO) vessel.

The FPSO is part of the Quad204 development and has a storage capacity of 800,000 barrels of oil.

Glen Lyon is expected to process 130,000 barrels of oil and 220 million standard cubic feet of gas a day.

"Glen Lyon is expected to process 130,000 barrels of oil and 220 million standard cubic feet of gas a day."

The contracts are expected to start in the first half of 2017 and require at least two shuttle tankers.

Teekay intends to use its existing shuttle tanker fleet for the new contracts.

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Teekay Offshore Partners CEO Peter Evensen said: “These contracts further enhance our CoA contract portfolio and are expected to add future cash-flow through higher shuttle tanker fleet utilisation without the need for incremental capital expenditures.

“Looking ahead, the shuttle tanker market in the North Sea is expected to remain tight supported by a combination of more lifting points from new fields coming on-line and limited fleet growth with no uncommitted shuttle tanker newbuildings on order.”

Quad204 is the £3bn redevelopment of the Schiehallion and Loyal fields, which are 175km west of Shetland and 15km north of the Foinaven field.

The project is set to extend production beyond 2035.