[US GOM] King's Quay FPS

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LLOG makes $451 million floater order at Hyundai Heavy

South Korean shipbuilder Hyundai Heavy Industries (HHI) has been awarded a contract by the U.S. exploration and production company LLOG to build a floating production system (FPS) for deployment in the Gulf of Mexico.

Hyundai Heavy said in a regulatory filing on Wednesday that the order is worth about $451 million.

According to Pulse News, a Korean business newspaper, Hyundai will start the construction process in August next year and deliver the unit in the first half of 2021.

Pulse also said that this was Hyundai’s first offshore work in four years.

Offshore Energy Today reported in June on Hyundai’s decision to suspend work at facilities specializing in building offshore oil and gas rigs and platforms due to lack of orders. The rig builder then in July decided to cut about a third of its executives in the offshore and engineering division.

It is also worth mentioning that LLOG’s Delta House floating production system (FPS), located in Mississippi Canyon 254 in the U.S. Gulf of Mexico, was also built by Hyundai Heavy’s yard in Ulsan, South Korea. The facility was installed on the field in October 2014.

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King’s Quay FPS project background

The King’s Quay FPS project was initiated by LLOG Exploration in 2018 as part of its plan to develop mid-size oil and gas discoveries in the Green Canyon area.

Murphy Oil acquired the US Gulf of Mexico oil and gas assets as well as King’s Quay FPS project from LLOG Exploration in May 2019.

Murphy Oil acquired a total of 26 blocks containing seven producing fields and four development projects in the Grand Canyon and Mississippi Canyon areas of the Gulf of Mexico from LLOG Exploration Offshore and LLOG Bluewater Holdings for $1.2bn (£950.7m).

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COSCO SHIPPING Specialized delivers King’s Quay FPS.
September 21, 2021

After nearly three years of working closely with Murphy Oil Corporation, Hyundai Heavy Industries and Exmar Offshore, COSCO SHIPPING Specialized’s M/V Xiang An Kou safely delivered the 21,498mt King’s Quay FPS to Ingleside, Texas, in early September 2021.

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Murphy Oil Corporation Achieves First Oil at King’s Quay Floating Production System in Deepwater Gulf of Mexico
April 12, 2022 06:55 AM Eastern Daylight Time

HOUSTON--(BUSINESS WIRE)--Murphy Oil Corporation (NYSE: MUR) announced today that it has achieved first oil from the Khaleesi, Mormont and Samurai field development project in the deepwater Gulf of Mexico, as production has begun flowing through the Murphy-operated King’s Quay floating production system (King’s Quay FPS).

The project is comprised of the Khaleesi / Mormont fields in Green Canyon blocks 389 and 478, respectively, and the Samurai field, located in Green Canyon Block 432. Completions operations are ongoing for the remaining five wells in the seven-well project.

“This has been a strategic project of ours since we acquired the Khaleesi / Mormont assets in mid-2019 and integrated our Samurai discovery into the overall development. Achieving first oil on schedule and within budget, while managing the challenges of the COVID-19 pandemic, illustrates the competitive advantage of our industry-leading offshore execution ability. I am proud of our team’s accomplishments these past three years with the fabrication and installation of the King’s Quay FPS and our subsea flowline systems, as well as drilling and completing the wells,” said Roger W. Jenkins, President and Chief Executive Officer. “The production coming online is forecast to generate significant free cash flow, which will allow us to continue to delever with $600 to $650 million of targeted debt reduction this year and the optionality of up to $1 billion in 20231, while simultaneously reviewing our dividend. I look forward to the ongoing production growth from the Gulf of Mexico as the remainder of the wells come online throughout 2022.”

Murphy’s subsidiary, Murphy Exploration & Production Company – USA, operates the King’s Quay FPS and associated export lateral pipelines, which are owned 50 percent by an affiliate of Third Coast Infrastructure, LLC and 50 percent by entities managed by Ridgewood Energy Corporation, including ILX Holdings III, LLC. The King’s Quay FPS is designed to process 85 thousand barrels of oil per day and 100 million cubic feet of natural gas per day.