Baker Hughes, a GE company (BHGE - Free Report) and McDermott International, Inc. (MDR - Free Report) have been awarded subsea umbilicals, risers and flowlines (SURF), and subsea production system (SPS) equipment contracts from BP plc (BP - Free Report) for the Greater Tortue Ahmeyim natural gas project.
The project, located offshore Mauritania and Senegal, will require all the three companies — BP, BHGE and McDermott — to cooperate for attaining competence, synergies and improved delivery times.
Per McDermott, a contract is considered as substantial if its value is between $500 million and $750 million. The company’s upgraded Amazon vessel, DLV 2000, North Ocean 102 (NO 102) and third-party vessels are intended to be used to support installation that is anticipated to commence in late 2020.
The alterations to Amazon, which includes a multi-joint (hex) J-Lay system to manage the most challenging ultra-deepwater projects, as well as the addition of a multi-joint facility, dual pipe loading cranes and additional power generation, are projected to be completed before the installation campaign begins. The pipeline and riser structures to be designed by McDermott will be fabricated at its yard in Batam, Indonesia.
The benefits of early commitment and alliance can be noticed in case of Baker Hughes, as it brings in its expertise in deepwater, long-offset gas projects. The company will provide five large-bore deepwater horizontal xmas trees (DHXTs), a 6-slot dual bore manifold, a pipeline end manifold, subsea distribution units (SDUs), three subsea isolation valves (SSIVs), diverless connections and subsea production control systems. These will be exclusively designed to facilitate the incorporation of additional wells in the future for the first phase of the development.
These latest awards follow an initial front-end engineering and design (FEED) phase, awarded in March 2018, during which BHGE and McDermott jointly worked to identify the technology and equipment scope for a four-well development phase. Project management and engineering teams from BP, Baker Hughes and McDermott will remain co-located at McDermott's London offices for this next phase.
The initial subsea infrastructure links the first four of 12 wells consolidated via production pipelines leading to a floating production, storage, and offloading (FPSO) vessel. Liquids are removed and the export gas is transferred from the FPSO vessel through a pipeline to the floating liquid natural gas (FLNG) hub terminal, wherein the gas is liquefied.
Zacks Rank & Key Picks
Baker Hughes currently carries a Zacks Rank #3 (Hold).
Investors interested in the energy sector can opt for another better-ranked stock as given below.
CrossAmerica Partners L.P. (CAPL - Free Report) is involved in the wholesale distribution of motor fuels, comprising gasoline and diesel fuel. The company delivered average positive earnings surprise of 655% in the last four quarters. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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