The Kwame Nkrumah Floating Production Storage and Offloading System (FPSO) - to be insured to the tune of US$1.1 billion when conversion is completed by November - is still under insurance cover.
This is contrary to speculations that FPSO insurance cover had been cancelled.
B&FT gathered that the FPSO has been insured against Construction All-Risk. Also, when the vessel sailed off from the Juron Shipyard in Singapore where it was constructed, the Principal insured, Modec International Inc, Singapore, took a cover for the voyage
B&FT also learnt that, technically, this second cover taken in respect of a smooth voyage to the shores of Ghana automatically terminated when it berthed in Ghana’s territorial waters.
The FPSO oil and gas conversion project deal was pulled through by the Ghana Insurers Association Consortium from the time it entered Ghanaian waters in June.
Twenty-one Ghanaian general insurance companies participated in the consortium which is being managed by the Reinsurance department of SIC Insurance Company.
A source close to the deal discloses to B&FT that it offers Ghanaian companies an opportunity to participate in the country’s nascent oil sector.
Details of the contract number - M0180410(1) - were mailed to B&FT yesterday when news of the cancellation broke out.
The vessel measures 330 metres and is 65 metres wide, with the capacity to store 1.8 million barrels of oil. When finally installed, it will process the crude-oil which will be extracted from the ocean bed by separating the gas from the crude - to the tune of 120,000 barrels of oil per day.
The equipment is about three football fields in area and has 17 modules weighing more than 12,500 tonnes installed on the vessel - including a water treatment plant, crude separation plant, chemical injection plant, gas processing and injection plant, the turret, electricity generation plant, as well as a 120-room accommodation unit among others. It has a 100 megawatt gas turbine on the facility, which can be put to internal use.
The multi-purpose vessel for Ghana’s oil industry is expected to offer the opportunity for supplier’s vessels to offload the supplies offshore to their various destinations, serve as a storage facility for the processed crude, provide the required energy for the production process and help manage the oil wells for optimum production through the injection of chemicals into the wells, among others.
The Jubilee Field is a world-class oil-field discovered in 2007 and named as such in commemoration of the 50th anniversary of Ghana’s independence, with an estimated recoverable resource of up to one billion barrels and significant further potentials yet to be explored.
Ghana’s first oil will be pumped this year, but it is estimated it will take close to four-six months to reach its planned output of 120,000 barrels per day (bpd).
It is estimated that Ghana's oil and gas industry will need US$9billion in investments over the next five years.
Gas production should also begin towards the end of this year or in the first half of 2011, but will initially only be used to generate power for use in oil production.
During the period of ramping up (oil production), the gas coming out of the wells will be used to produce electricity on the FPSO (floating production, storage and offloading vessel).
By Elliot WILLIAMS
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