Singapore-based Sembcorp Marine's wholly-owned subsidiary Jurong Shipyard Pte Ltd bagged a $696 million contract to convert a shuttle tanker into a floating, production, storage and offloading (FPSO) vessel for OOGTK Libra GmbH & Co KG, a joint venture between Brazil’s Odebrecht Oil & Gas and Teekay Offshore (OOG-Teekay).

Under the contract, Jurong Shipyard will convert the Navion Norvegia shuttle tanker to an FPSO. The firm will be responsible for detailed engineering, installation and integration of topside modules, installation of external turret and power generation, accommodation upgrading as well as extensive piping and electrical cabling works.

“We are pleased that Odebrecht Oil & Gas and Teekay have chosen Jurong Shipyard as their strategic partner. The conversion work will be done at our Sembmarine Integrated Yard @ Tuas which will soon commence work on its first FPSO conversion project,” William Gu, general manager of Jurong Shipyard’s Offshore Division said in a press release.

The FPSO, targeted for completion in the third quarter of 2016, will be equipped to produce 50,000 barrels of oil per day and 141.26 million cubic feet (4 million cubic meters) of natural gas per day.

The floating facility is expected to be chartered to Petrobras for work on the Libra field in the ultra-deepwater section of Brazil’s Santos Basin as an early well-test unit. Petrobras announced Thursday that it has signed a letter of intent with OOG-Teekay to charter a FPSO for the Libra project, with the floating facility expected to commence a 12-year charter in late 2016.

“Petrobras decision to appoint our joint venture with Teekay Offshore as the leading consortium to develop the Libra field reaffirms the longstanding relationship and trust developed throughout the last years with Petrobras,” Jorge Luiz Mitidieri, vice president of Odebrecht Oil & Gas added.

The Libra block, covering an area of 598 square miles (1,550 square kilometers) and lies in water depths of around 6,500 feet (2,000 meters), has a reservoir depth of 11,500 feet (3,500 meters) below the sea floor. Brazil's petroluem regulator ANP indicated that total gross peak oil production could reach 1.4 million barrels per day.

“We are happy to be working with both Odebrecht Oil & Gas and Jurong Shipyard on the Libra FPSO conversion project ... We are pleased to be at the forefront of this new phase of Petrobras’ development into deeper and more challenging waters, providing the necessary skills, tools and the best solutions to Petrobras for the tasks ahead,” Peter Evensen, CEO of Teekay Offshore commented in the press release.

Sembcorp Marine revealed that the FPSO conversion deal brings the year-to-date contracts secured by the company to $2.96 billion (SGD 3.7 billion).