Subsea 7 S.A. has revealed that it has been awarded a project manager deal by LLOG Exploration Offshore LLC for the Salamanca development project in the U.S. Gulf of Mexico.
Subsea 7 describes the award, which it highlighted is worth between $50 million and $150 million, as “sizeable”. The contract scope includes the installation of three infield subsea pipeline systems, as well as the design and fabrication of subsea structures, the company noted. It also includes the installation of oil and gas export pipelines which depart from the Salamanca FPS and tie into existing pipeline transport systems approximately 48km away, Subsea 7 revealed.
The company outlined that subsea development will consist of two pipeline systems for the Leon field, located in Keathley Canyon 686, and one pipeline system for the Castile field, located in Keathley Canyon 736. The infield pipelines will produce and flow from wellsite PLETs to the Salamanca FPS in water depths ranging from 1,800 to 2,000 meters, Subsea 7 noted.
Project management and engineering will commence immediately at Subsea7’s office in Houston, Texas, with offshore activity expected to begin in 2024, the company stated.
“We are excited about the opportunity to work closely and openly with LLOG on this fast-paced, greenfield development,” Craig Broussard, the Vice President for Subsea7 U.S., said in a company statement.
“Our strengths as a collaborative partner and the versatility of our fleet will be instrumental in ensuring predictable, safe, and timely project delivery,” he added.
In its latest results statement, which was released last week, Subsea 7 said its order flow remains strong, “with a book-to-bill of 1.5x” and revealed that the company had a backlog of $9.7 billion as of March 31, 2023. Of this figure, $4.0 billion is to be executed in 2023 and $3.4 billion in 2024, the company highlighted.
In the first quarter of this year, Subsea 7 posted revenue of $1.24 billion (1Q 2022: $1.19 billion), adjusted EBITDA of $107 million (1Q 2022: $86 million), and a net loss of $29 million (1Q 2022: net loss of $12 million).
“The first quarter of 2023 unfolded as we expected and Subsea7 is on track to meet management’s guidance for the full year,” Subsea 7 Chief Executive Officer John Evans said in the results statement.
“Our backlog continued to grow during the quarter, with awards in both subsea and offshore wind, and bidding remains very active in both businesses. The sustained high level of demand from our clients supports our view of a return to an Adjusted EBITDA margin range of 15-20 percent in the coming 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, next year and beyond,” Evans continued.
Also last week, Subsea 7 announced the issuance of new shares in the company in connection with the completion of a voluntary exchange offer to acquire all shares in Seaway 7 ASA. The company supports developers to bring sustainable, renewable energy to the world through the construction of 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, its website shows.
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