Petrofac cause Ithaca Energy delays at the firms Greater Stella Development it has emerged, with production startup now being put back.
Ithaca made the claim in an operations update released Tuesday January 12th, in which it said completion work being undertaken by Petrofac is now delayed due to: “slippage in completion of certain commissioning milestones”.
Floating Production Facility -1
Floating Production Facility -1 (FPF-1), is a semisubmersible asset being constructed by Petrofac in Poland. The FPF-1 will be the at the centre of Ithaca’s Greater Stella Development once complete.
According to Ithaca the sail-away from the Remotowa shipyard in Poland was scheduled for the first quarter of 2016 but is delayed by 6 to 12 weeks due to: “completion of certain commissioning milestones and the requirement for some marine system re-work in order to ensure the vessel meets the required sail-away certification standards.”
The delay has had a knock on effect to production from the UK Greater Stella Development with first oil now expected during the third quarter of 2016.
The contract between Petrofac and Ithaca involved performance incentives worth up to US$34 million, with the maximum paid to Petrofac if the sail-away was achieved on schedule- before March 2016.
The incentives continue to reduce to zero if the FPF-1 were to sail-away after July 31st 2016.
At the current delayed schedule the FPF-1 will be leaving after the end of July, not only loosing Petrofac all of the US$34 million, but forcing them to absorb all costs relating to the overrun.
Greater Stella Area Development
All pre works on the Greater Stella have already been completed, including all well completion and testing. The developments subsea infrastructure has also been installed, leaving just the arrival of the FPF-1 and the platforms hookup.