Subsea 7 SA has revealed that LLOG Exploration Offshore LLC has awarded it a project manager contract for the Salamanca development project in the US Gulf of Mexico.
Subsea 7 describes the award, which it noted is worth between $50 million and $150 million, as “significant.” The scope of the contract includes the installation of three subsea pipeline systems in the field, as well as the design and manufacture of subsea structures, the company said. It also includes the installation of oil and gas export pipelines that leave the Salamanca FPS and join existing pipeline transportation systems some 48km away, Subsea 7 revealed.
The company noted that the subsea development will consist of two pipeline systems for the Leon field, located at Keathley Canyon 686, and one pipeline system for the Castilla field, located at Keathley Canyon 736. The inland pipelines will produce and flow from the well site PLET to the Salamanca FPS in water depths ranging from 1,800 to 2,000 meters, Subsea 7 noted.
Project management and engineering will begin immediately at Subsea7’s office in Houston, Texas, and offshore activity is expected to begin in 2024, the company said.
“We are excited about the opportunity to work closely and openly with LLOG on this fast-paced, green development,” said Craig Broussard, vice president of Subsea7 US, in a company statement.
“Our strengths as a collaborative partner and the versatility of our fleet will be critical to ensuring a predictable, safe and timely delivery of the project,” he added.
In its latest earnings release, which was published last week, Subsea 7 said its order flow remains strong, “with a record to turnover of 1.5 times” and revealed that the company had a portfolio of $9.7 billion as of March 31, 2023. Of that figure, $4 billion will run in 2023 and $3.4 billion in 2024, the company noted.
In the first quarter of this year, Subsea 7 reported revenue of $1.24 billion (Q1 2022: $1.19 billion), adjusted EBITDA of $107 million (Q1 2022: $86 million) and a loss net of $29 million (1Q 2022: net loss of $12 million).
“The first quarter of 2023 played out as we expected and Subsea7 is on track to meet management’s guidance for the full year,” Subsea 7 chief executive John Evans said in the results statement .
“Our backlog continued to grow during the quarter, with awards in both offshore and offshore wind, and bidding remains very active in both businesses. The sustained high level of demand from our customers supports our view of a return to an adjusted EBITDA margin of 15 to 20 percent over the next four years,” he added in the statement.
“While this year marks a period of reinvestment in both the subsea and renewables businesses, we are confident that our strategy positions the group for strong cash generation and the return of excess capital to shareholders, the ‘next year and beyond,” Evans continued.
Also last week, Subsea 7 announced the issue of new shares in the company in connection with the completion of a voluntary exchange offer to acquire all the shares of Seaway 7 ASA. The company supports developers to bring sustainable and renewable energy to the world by building fixed offshore wind farms, its site notes.
Subsea 7 describes itself as a global leader in the delivery of offshore projects and services for the energy industry. The company employs more than 13,000 people and is present in more than 30 countries, according to its website.
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