U.S. oil and gas player Murphy Oil is on schedule to achieve the first oil from its Gulf of Mexico fields in the first half of 2022 as the King’s Quay floating production system (FPS) for the project has reached Ingleside, Texas.
South Korea’s Hyundai Heavy Industries built the deepwater semi-submersible FPS at its Ulsan facility in South Korea. The construction started in July 2019 and it was completed in the second quarter of 2021.
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The FPS then started its 14,000 miles long journey from South Korea to the shore base in the Gulf of Mexico at the end of the second quarter of 2021.
In an update on Tuesday, Murphy Oil said that the King’s Quay FPS arrived on Ingleside, Texas earlier this month.
“We are excited to see the project continue as planned, and eagerly await the first oil in the first half of 2022”, Murphy said.
COSCO Shipping was in charge of transporting the FPS hull to the U.S. The company also confirmed on Tuesday that, after nearly three years of working closely with Murphy Oil Corporation, Hyundai Heavy Industries, and Exmar Offshore, its specialized Xiang An Kou heavy lift vessel had delivered the 21,498mt King’s Quay FPS to Ingleside in early September.
Exmar Offshore was in charge of the engineering and construction supervision of Murphy Oil’s King’s Quay FPS, based on the OPTI hull design technology, at Hyundai Heavy Industries.
The commissioning services will be provided by GATE Energy under a contract awarded in August 2019. The scope of the project includes commissioning planning, onshore commissioning execution, and offshore commissioning / ready-for-startup services.
King’s Quay FPS will be located in Green Canyon Block 433 in the deepwater Gulf of Mexico and handle the production from the Khaleesi/Mormont and Samurai fields.
Further preparation work for the project, including the pipeline welding, subsea, flowline, and equipment installation, is scheduled to start in the last quarter of the year. With this schedule in place, the project is on track to produce the first oil in the first half of next year.
The Khaleesi/Mormont project will include a total of seven subsea wells and Samurai of four wells tied back to the King’s Quay FPS. The drilling campaign was scheduled to start in April 2021. The FPS is designed to process 80 thousand barrels of oil per day and 100 million cubic feet of natural gas per day.
The project was previously operated by LLOG until it was bought by Murphy Oil through Murphy’s acquisition of LLOG’s deepwater U.S. Gulf of Mexico oil fields in June 2019. The Final Investment Decision (FID) for the project was taken in August 2019.
Following a memorandum of understanding in early 2020, Murphy sold its entire 50 per cent interest in the FPS and associated export lateral pipelines to be located in the Gulf of Mexico for proceeds of $267.7 million to a fund managed by ArcLight Capital Partners in March 2021. As a result, the King’s Quay FPS and Associated Laterals are co-owned in a joint venture with entities managed by Ridgewood Energy Corporation, including ILX Holdings III.
The sale reimbursed Murphy’s past capital expenditures of around $270 million related to the King’s Quay FPS and the pipelines. The proceeds were used to repay borrowings under the $1.6 billion senior unsecured credit facility and the remainder was held for general corporate purposes. In combination with senior notes offering and redemption, the deal allowed Murphy to realise meaningful debt reduction in the first quarter of the year.
about 4 years ago
Murphy Oil is on schedule to achieve the first oil from its Gulf of Mexico fields in 1H 2022 as the King’s Quay FPS has reached Texas.
