North Sea-focused Independent Oil and Gas (IOG) has signed a letter of intent with Heerema Fabrication Group for front-end engineering and design (FEED), and engineering procurement, construction and installation (EPCI) of up to four normally unmanned installation platforms (NUIs).
The NUIs will be used for IOG’s Southern North Sea (SNS) gas project, which consists of the Blythe Hub and Vulcan Satellites Hub developments. FEED costs will be fully deferred and EPCI costs are to be 50% deferred.
IOG says the FEED work is a key step towards reaching final investment decision on the SNS gas project, which is targeted by the end of Q1 2018. The LOI is to be followed by a full contract covering both FEED and EPCI, which is expected to be signed before year end.
"The intention is that FEED costs are to be fully deferred and EPCI costs are to be 50% deferred until first gas from the SNS gas project," says IOG. "This would significantly reduce IOG’s funding requirements for the project."
Mark Routh, CEO and interim chairman of IOG commented: “FEED will start immediately with a view to adapting an established UK Southern North Sea design previously built by Heerema. Efficient platform fabrication and installation will be critical to the successful and timely development of our two gas hubs, and Heerema represents the best technical and commercial solution to achieve this."
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