Ghanaian insurers insure Kwame Nkrumah FPSO for $1.1b
The Kwame Nkrumah Floating Production Storage and Offloading System (FPSO) will be insured to the tune of US$1.1 billion when it has been converted – which should be by November.
The deal was pulled through by the Ghana Insurers Association Consortium in June this year and has currently pegged the contract insured value at US$885 million.
The cover now for the FPSO is against material damage.
Twenty-one Ghanaian general business companies are participating in the Consortium, which is being managed by the Re-insurance department of the SIC Insurance Company.
A source close to the deal who disclosed this to the B&FT said the deal offers Ghanaian companies an opportunity to participate in the country’s nascent oil sector.
The Kwame Nkrumah FPSO constructed at the Juron Shipyard in Singapore arrived at the Jubilee Field in the Western Region last month. The vessel measures 330 metres and is 65 metres wide with the capacity to store 1.8 million barrels of oil. When finally installed, it will process the crude oil which will be extracted from the ocean bed by separating the gas from the crude – to the tune of 120,000 barrels of oil per day.
The equipment is about three football fields and has 17 modules weighing more than 12,500 tonnes installed on the vessel – including a water treatment plant, crude separation plant, chemical injection plant, gas processing and injection plant, the turret, electricity generation plant, as well as a 120-room accommodation unit among others. It has a 100 megawatt gas turbine on the facility, which could be used for internal use.
The multi-purpose vessel for Ghana’s oil industry is expected to offer the opportunity for supplier’s vessels to offload the supplies offshore to their various destinations, serve as a storage facility for the processed crude, provide the required energy for the production process and help manage the oil wells for optimum production through the injection of chemicals into the wells, among others.
The Jubilee Field is a world-class oil field discovered in 2007 and named as such in commemoration of the 50th anniversary of Ghana’s independence, with an estimated recoverable resource of up to one billion barrels and significant further potentials yet to be explored.
Ghana’s first oil will be pumped this year, but it is estimated it will take close to four – six months to reach its planned output of 120,000 barrels per day (bpd).
It is estimated that Ghana’s oil and gas industry would need US$$9 billion of investments over the next five years.
Gas production should also begin towards the end of this year or in the first half of 2011, but will initially only be used to generate power for use in oil production.
During the period of ramping up (oil production) the gas coming out of the wells will be used to produce electricity on the FPSO (floating production, storage and offloading vessel).
Source: B&FT