New Shuttle Tanker Contract of Affreighment to Operate in the North Sea

Teekay Offshore has secured a new three-year firm shuttle tanker contract of affreighment (CoA) with BP in the North Sea. BP is the operator of the new Glen Lyon FPSO which will operate on the redeveloped Schiehallion oil field, west of Shetland in the UK sector of the North Sea.

A consortium, known as the Schiehallion co-venturers, consisting of BP, Royal Dutch Shell and OMV Group, is the owner of the new FPSO and the Schiehallion and Loyal fields. Once fully operational, the Glen Lyon FPSO will have a production capacity of up to 130,000 barrels per day with storage capacity of up to 800,000 barrels. The overall volumes expected to be lifted equal to 50-70 roundtrip voyages per year.

The 3-year contract, plus extension options, is expected to commence in the first quarter of 2017 and is estimated to fully utilize approximately two vessels from Teekay Offshore’s existing North Sea shuttle tanker fleet. “These contracts further enhance our CoA contract portfolio and are expected to add future cash flow through higher shuttle tanker fleet utilization without the need for incremental capital expenditures,” commented Peter Evensen, Teekay’s President and Chief Executive Officer.