No back-to-work date for Terra Nova FPSO
Suncor executive says company will provide updates early next year
The Terra Nova FPSO is not ready to sail yet.
In fact, there’s no definite date set for the ship’s return to the Newfoundland and Labrador offshore.
Suncor’s Floating Production, Storage and Offloading (FPSO) vessel is still moored at the quay in Bull Arm, Trinity Bay, undergoing more work to prepare to reconnect to the Terra Nova oilfield 350 kilometres southeast of the Avalon peninsula.
Brent Miller, vice-president of east coast operations for Suncor, told delegates at the Energynl conference in St. John’s this week the company anticipates providing an updated schedule early in the new year.
He assured a top priority for Suncor is a “safe, reliable return to production for Terra Nova.”
EXTENDING THE LIFE
The 20-year-old FPSO was drydocked in 2019 when it was determined it needed significant upgrades.
In 2021, Suncor and the Terra Nova joint venture owners — Cenovus and Murphy Oil — finalized an agreement to proceed with the refit.
It’s costly, and taxpayers are invested as well through a $500 million from the provincial and federal governments. It included a direct contribution of $205 million from the Newfoundland and Labrador Oil and Gas Industry Recovery Assistance Fund from the federal government, and changes to the royalty structure valued at over $300 million.
The payback should be in the employment, taxes and royalties that will return as the ship gets back to the task of sucking 70 million barrels of oil out of the Terra Nova field over the next 10 years.
Miller noted since first oil from the Terra Nova field in 2002, the project has generated over $6 billion in royalties.
SPIN-OFFS
Initially, Suncor had anticipated having the vessel ready to go back offshore by the end of 2023.
However, extra work was required “to ensure the asset is ready for a safe and reliable return to the field,” said Miller.
The FPSO spent most of 2021 in Europe, undergoing some of the refit work at a dockyard in Spain. It sailed back home in February of this year and after some time anchored in Conception Bay, has been at Bull Arm ever since.
While most would rather see the FPSO back to the business of pumping oil, the additional work at Bull Arm has pumped some money into the local economy.
According to Miller, it means work for around 250 people employed by local contractors.
Another 300 Suncor employees are also engaged.
Local businesses are also benefitting from the activity, he said, noting six hotels in the Clarenville to Bull Arm area are being used to provide accommodation for people associated with the retrofit, and local bussing companies are providing transportation for employees to and from the Bull Arm site.
Add in meals, IT, equipment rentals, crane services, engineering and other services, said Miller, and the spend by Suncor in this province is at $540 million since the retrofit project began in 2021.