TotalEnergies’ recently acquired oil tanker to be converted to African FPSO

An oil tanker acquired by TotalEnergies last month will be converted into a floating production, storage and offloading vessel for the supermajor's $6 billion Kaminho project offshore Angola.

One month ago, it emerged that New York-listed Euronav had sold a very large crude carrier (VLCC) to the French giant for conversion to an FPSO, but it was unclear where the production vessel would be used.

There were tentative suggestions in the market that the FPSO would be deployed in Namibia to tap the supermajor's big oil finds there, but this was quickly discounted by market watchers.

Two well-placed sources told Upstream that the FPSO will be deployed in Block 21/11 in Angola's Kwanza basin to tap the Cameia and Golfinho discoveries in about 1700 metres of water.

TotalEnergies’ deal with Euronav involves it acquiring the VLCC Alsace, targeting delivery in the first quarter of 2025, with the seller saying the tanker was bought “for an FPSO conversion project”.

Euronav said the sale will secure it “a capital gain” of about $27.5 million.

Euronav chief financial officer Ludovic Saverys told analysts last month that the deal comes with “a nice profit as well”.

The Alsace was built in 2012 and has a deadweight of 299,999 tonnes

It is unclear why TotalEnergies decided to procure the tanker instead of Saipem, the prime FPSO contractor on Kaminho.

However, market sources suggested the supermajor's chief executive Patrick Pouyanne keeps a very close eye on project costs globally and has a very hands-on approach to tendering exercises, so may have asked his teams to secure the vessel.

Saipem is handling engineering, procurement, construction, transportation and commissioning of the FPSO and also has a 12-year operations and maintenance contract, extendable by eight years.

The Italian player has sub-contracted China Merchants Heavy Industry for the conversion work.

The Kaminho FPSO will be designed to process 70,000 barrels per day of oil, with initial production eyed for 2028.

The Cameia and Golfinho discoveries are thought to hold hold reserves of about 420 million barrels of oil equivalent, with the potential for the project to also tap the recent Grenadier discovery.

TotalEnergies holds a 40% operating stake in Kaminho, with Malaysia's Petronas and Angola's state oil company Sonangol controlling 40% and 20% stakes, respectively.

TotalEnergies and Saipem have been approached for comment.