Size matters as ONGC evaluates FSO options
Bigger might just be better for ONGC as it considers three size options for its first Floating Storage and Offloading (FSO) vessel at the Mumbai High.
"Three options have been drawn up and were presented to senior management last month (March 2024)," says a source. "These options will be discussed, and then the final due diligence will be carried out, followed by a final investment decision before the tender."
By February 2024, ONGC had prepared the three options, more than seven months after receiving EoIs from nine companies ready to deploy an FSO on a 10-year contract to store Mumbai High crude oil. Among those who sent in EoIs by June 12 (2023) were Dutch contractor Bluewater Energy, Chennai-based Adbhoot Estates, Qatar-based Milaha, Delhi-based Srisriport, state-owned SCI, Malaysia-based Duta Marine, UAE-based OCS Services, Mumbai-based Shapoorji Pallonji and Singapore-based Omni Offshore.
However, ONGC has yet to decide on the best vessel storage size and where it will be moored. "A larger vessel can store more crude," we hear.
"But mooring a large FSO can be challenging at the Mumbai High because of the many production facilities in the field." Among the options under consideration is a converted Very Large Crude Carrier (VLCC - also known as a "supertanker"), which can store about 2m barrels.
"Using a VLCC as an FSO means fewer voyages for the 'daughter' tanker that loads crude from the FSO for onward delivery to customers," we hear. But this means ONGC must budget for CAPEX to modify or relocate some structures and pipelines to allow the VLCC to be moored and the daughter tanker to be moved in and out.
ONGC might also need a separate Single Buoy Mooring (SBM) system. Another option is a converted Suezmax tanker, which can store 1m barrels.
"As this is smaller than the VLCC, manoeuvrability will be easier," we hear. "But again, some infrastructure will have to be relocated."
ONGC is also considering a converted Aframax tanker which can store 600,000 barrels. "Unlike the other two options," we hear, "this sort of FSO is more readily available."