BW Offshore has signed a Letter of Award (LOA) with Premier Oil for an FPSO to operate on the Catcher oil field in the UK North Sea.

The LOA will be converted into a final contract subject to final partner sanction and Department of Energy and Climate Change (DECC) approval, expected to be completed during Q2 2014.

The field is owned by Premier Oil (50%, operator), Cairn Energy (30%) and MOL (20%). The firm charter period of the contract is 7 years, with extension options. Based on a field life of 10 years, the contract value is USD 2.3 billion including FPSO charter rate and opex.

BW Offshore was awarded a FEED study as part of a funded tender process by Premier Oil in Q4 2012, and has performed extensive engineering studies on the project during 2013 and Q1 2014.

BW Offshore’s scope includes the delivery of the FPSO, mooring system, installation and operation of the unit throughout the charter period. The FPSO will have a processing capacity of 60,000 bopd and a storage capacity of 650,000 bbl. BW Offshore will order a new built hull from Japan for the project, while conversion and integration work will be performed in Singapore. The FPSO shall be ready for production mid-2017.

The project will be financed by a project specific bank facility of USD 800 million and BW Offshore’s existing liquidity.