Sembcorp Marine Rigs & Floaters has received a contract from Teekay Offshore Partners to provide engineering, procurement and construction (EPC) works related to the modification, repair and life extension of the Petrojarl Varg floating production storage and offloading (FPSO) vessel.

The agreement for the $166m contract was signed with Teekay Offshore’s subsidiary Varg. The contract is expected to be completed in July 2020.

Under the contract, Sembcorp will provide detailed engineering, fabrication, installation and integration of the topside process skid.

The scope of the contract also includes the overhaul of existing internal turret and power generation, as well as the repair and life extension of the vessel’s hull, tanks and onboard systems.

“Under the contract, Sembcorp will provide detailed engineering, fabrication, installation and integration of the topside process skid.”

Upon completion, the Petrojarl Varg FPSO will be operated by Alpha Petroleum Resources and deployed at the Cheviot field development and the Peel satellite accumulation in the UK North Sea.

The contract is subject to Alpha Petroleum finalising its debt facilities with lenders and securing approval from relevant authorities for its final field development plan (FDP) for the Cheviot field.

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The Cheviot project comprises redevelopment of the Emerald field, which was discovered in 1975 and later abandoned after initial development in the 1990s.

Alpha Petroleum’s FDP involves the development of oil from the Cheviot and satellite Peel fields. The project is estimated to contain at least 55mmbbl of oil reserves and 120bcf of future gas volumes.

The company intends to use the Cheviot facility as a hub for other nearby discoveries and prospects. It awarded a contract to Teekay Offshore for the deployment of the Varg FPSO to Cheviot.