China National Offshore Oil Corporation (CNOOC Limited) and ConocoPillips China Inc. signed a contract Tuesday with Shanghai Waigaoqiao Shipbuilding for the construction of the 300,000 dwt floating, production, storage and off-loading (FPSO) vessel in China's Bohai Bay.

Fu Chengyu, chairman and CEO of CNOOC Ltd, said that the vesselis the largest built in China, which will cost 200 million US dollars and is expected to be completed by May 2007.

The vessel will be 310 meters long, 60 meters wide and have a draught of 29 meters. It is expected to have an onboard storage capacity topping 2 million barrels of crude oil.

The vessel is very important for offshore oil and gas production, a process that combines oil and gas extraction, processing with storage and transportation, Fu said.

According to the CEO, the FPSO topside modules are being built in Singapore. Upon completion, it will have a processing and handling capacity of 190,000 barrels of oil and 510,000 barrels ofgas fluid per day.

When completed, the vessel will be bound for the Bohai Bay in north China where CNOOC and ConocoPillips China Inc. are co-developing China's largest offshore oil field -- the Penglai 19-3 oil field.

Fu said that CNOOC and ConocoPillips signed a petroleum contract in December 1994 granting ConocoPhillips the right to explore Block 11/05.

Under the contract, CNOOC participated in the second-phase development of the Penglai Oilfield with a 51 percent working interest and ConocoPhillips got the remaining 49 percent.

Production from the first phase development of the Penglai 19-3oil field began in December 2002, which utilized one wellhead platform and a leased FPSO.

On Jan. 17, 2005, the overall development program for Penglai 19-3 oil field phase 2 project and Penglai 25-6 oil field was officially approved by the Chinese government. And detailed engineering design, procurement and construction are in process onthe second phase development of the Penglai Oilfield which includefive wellhead platform, central processing facilities and a new FPSO.

Fu said that the first wellhead platform of phase two project will be put into production during the first half of 2007 and the new FPSO will be used for production by the end of 2008.

Source: Xinhua