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South Koreans miss out at Shell's Crux project

Anglo-Dutch supermajor invites offshore builders to pre-qualify for EPCI tender for platform off Western Australia, but South Korea's big three are conspicuous by their absence

South Korea’s three big offshore fabricators have been passed over by Shell in the early stages of securing contractors for the Crux gas development off Western Australia.

The Anglo-Dutch supermajor has invited a series of well-known offshore builders in Asia to pre-qualify for the competitive tender for engineering, procurement, construction and installation services for the Crux offshore platform.

However, sources said Hyundai Heavy Industries, Samsung Heavy Industries and Daewoo Shipbuilding & Marine Engineering were not invited to participate.

Those that have been invited to the tender by Shell are McDermott International of the US, Malaysia's Sapura Energy, China’s Offshore Oil Engineering Company, Italian player Saipem, Sembcorp Marine of Singapore, and India's Larsen & Toubro, according to sources, who were unable to explain why the South Koreans appear to have fallen out of favour with Shell.

Sources said pre-qualification ends on 17 May and that Shell will shortlist four contractors to bid.

The development concept for Crux comprises a fixed offshore platform and a 165-kilometre 26-inch diameter subsea pipeline to Shell’s Prelude floating liquefied natural gas vessel.

The platform will feature a 10,000-tonne topsides sitting atop a 16,000-tonne jacket in 165 metres of water.

The normally unmanned platform will include dry trees, minimal processing facilities, associated utility systems and limited accommodation facilities for use during maintenance campaigns.

The topsides will be capable of producing 550 million cubic feet per day of gas, and be fed by five subsea production wells.

The plan is for the platform to be operated remotely from the Prelude FLNG vessel and only require occasional maintenance.

Shell has set up three separate offshore packages — the platform topsides, the platform jacket/piles and the subsea equipment — but the Anglo-Dutch supermajor has left the door open to a single contracting party delivering the topsides and the jacket/piles.

For the topsides, Shell intends to issue the tender in the third quarter this year, and choose a winner in the first quarter of 2020.

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For the 190-metre-tall jacket and piles, Shell aims to award in January 2020 to ensure the completion of the jacket installation, inclusive of all piling, before the start of the 2023 cyclone season.

Shell recently said its expectation is to build the Crux jacket and piles “at a competitive cost by leveraging capable yards in Southeast Asia or China”.

The operator added a cautionary note that the North-West Shelf region “is well known as challenging for fixed offshore structures”.

“A significant number of projects executed in the region, including Shell joint venture projects to date, have experienced a range of technical difficulties during the installation of platform foundations,” said Shell.

For the subsea scope — comprising the main pipeline to the Prelude FLNG vessel and various subsea structures — Shell is aiming to award the package in mid-2020, with offshore installation to begin in late 2023.

Wood and KBR are currently performing a multi-million dollar front-end engineering and design contract for Crux. The project's partners are Shell, Osaka Gas and Seven Group Holdings.

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