Independent Oil and Gas Plc (LON:IOG) has signed up Heerema Fabrication Group for the construction of normally unmanned platforms for the group’s North Sea hub production hub projects.
According to a letter of intent,Heerema will build up to four platforms which will be used for the Blythe Hub and Vulcan Satellites Hub developments. It covers both FEED (front end engineering and design) and EPCI (engineering, procurement, construction and installation).
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Notably, the FEED costs are being fully deferred and the EPCI costs will be partially deferred, coming due once the assets come online and produce ‘first gas’.
“Our commercial model aligns the incentives of all project participants towards the efficient delivery of IOG's substantial gas resources and the intended cost deferral will contribute significantly to funding the portfolio into production,” said Mark Routh, IOG chief executive.
“We look forward to finalising the contract with Heerema and agreeing similar terms with other key contractors to continue implementing our gas hub strategy for the undersupplied UK market."
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Routh highlighted that the deal with Heerema represents “strong operational progress”
“Heerema are a very experienced and accomplished platform fabricator and FEED will start immediately with a view to adapting an established UK Southern North Sea design previously built by Heerema,” he added.