Italian major ENI has awarded a contract for the conversion of Scarabeo 5 semisubmersible drilling unit into a separation and boosting plant (Floating Production Unit – FPU) for a gas project in Congo Brazzaville.
The contract is worth more than $100Million.
The FPU is a semisubmersible production platform that receives the production fluids from wellheads riser platforms, separate the gas from liquids and boosts the gas in order to feed the nearby Floating LNG (FLNG) unit.
It is the second time in one week that Saipem is announcing the award of a contact of significant value to it by ENI, a company in which it holds significant ownership, for a project in Africa.
On August 9, 2023, Saipem announced a $1Billion contract for a Libyan gas utilisation project awarded to it by ENI. In that statement, Saipem admitted that the Libyan contract was a “related party transaction”, pursuant to Article 6 of the Consob Regulation on related party transactions, since ENI S.p.A. jointly controls both Saipem and Mellitah Oil & Gas B.V (the Joint Venture which owns the project).
ENI owns 30% of Saipem. Indeed, until 2016, it owned 42.5% of Saipem. This means that ENI is one major oil company operating in Africa which thrives on awarding key contracts to a service provider which is almost its own subsidiary.
The Congo contract, subsequent to an agreement signed early this year for the execution of preliminary engineering and procurement activities, entails the Engineering, Procurement, Construction, Transportation and Commissioning of the FPU, to be installed offshore the coast of the Republic of Congo, located northwest of the Djeno Terminal, in a depth of about 35 metres. The commissioning offshore works and the start-up of the FPU are scheduled by the fourth quarter of 2025.
This contract awarded to Saipem is part of Eni’s Congo LNG Project, the country’s first natural gas liquefaction project that is expected to reach an overall liquefied natural gas (LNG) production capacity of 3 million tons per year (approximately 4.5 billion cubic meters/year) from 2025.
