GE (NYSE:GE) Secures Contract for Chevron (NYSE: CVX) Project
$165 Million Deal for Equipment
This summer, Chevron Corporation (NYSE: CVX) announced a $2 billion project an offshore zone between the Republic of Congo and the Republic of Angola.
Though not the first West African project for the company, the Lianzi project is the first in the Republic of Congo. It is located 65 miles offshore and is to include a subsea production system.
And today, General Electric (NYSE: GE) announced it would be involved in that subsea system.
GE has signed a contract with Chevron worth $165 million, under which the company will provide equipment for the Lianzi subsea production system.
The equipment will include seven trees, nine subsea control modules (SCMs), topside and subsea controls distribution equipment, and vertical connection systems.
From the press release:
Rod Christie, vice president of Subsea Systems, said, “West Africa is one of the world’s key hydrocarbon basins, and we are excited to be working with Chevron Overseas Congo Limited as operator of the Lianzi project, the first cross-border development in the region. This contract win is not just an expansion of our relationship with Chevron. It represents our product competitiveness in the global marketplace, ongoing commitment to the region and continued demand for our state-of-the-art technology solutions.”
GE expects to complete the first tree by the end of next year. Chevron’s entire project is expected to begin oil production by 2015, eventually producing 46,000 barrels of oil equivalent each day.
But GE isn’t the only company providing equipment for the project. Earlier, Subsea 7 (PINK: SUBCY) also secured a contract worth $600 million, and the company will provide subsea umbilicals, risers, and flowlines.
With its subsea production system and an electrically heated flowline, it’s the first project like this at such a depth – 3,000 feet.
The flowline will be roughly 27 miles long, used to bring oil to Chevron’s existing Benguela Belize Lobito Tomboco (BBLT) platform.
Chevron officials are excited for what the development means for the future of oil production. From the Chevron press release:
“As the first cross-border development in the region, Lianzi represents a unique cooperative approach to shared offshore resources and may serve as a model for the development of similar cross-border fields between the two countries,” said Ali Moshiri, president of Chevron Africa and Latin America Exploration and Production Company.
Chevron’s subsidiary holds a 31.25% stake in the Lianzi project. Total (NYSE: TOT) is another major stakeholder with 36.75%, and also involved are ENI (BIT: ENI) with 10%, Sonangol with 10%, SNPC with 7.5%, and GALP (ELI: GALP) with 4.5%.
That’s all for now,
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