Teekay Offshore Partners’ charter deal for the Petrojarl Varg floating production, storage and offloading (FPSO) unit has been terminated, according to a company statement.
Under the contract, signed between the company’s subsidiaries and Alpha Petroleum Resources Limited (Alpha Petroleum) in October 2018, the vessel was to operate on the Cheviot oil field on the UK continental shelf.
The deal was for a seven-year fixed term from first oil, which was targeted for the second quarter of 2021, after a life extension and upgrade phase for the Petrojarl Varg taking place at Sembcorp Marine’s shipyard in Singapore.
The effectiveness of the agreement remained subject to a number of conditions precedent being satisfied, including that Alpha Petroleum provide initial funding to cover life extension and upgrade costs.
“As a result of this condition precedent not having been satisfied by the prescribed contractual deadline, this agreement and all commitments related thereto, have now been terminated and as such the partnership and its subsidiaries will be immediately pursuing a range of alternative deployment opportunities for the Petrojarl Varg,” Teekay Offshore explained.
Chris Brett, President Teekay Offshore Production, said that the company is looking forward “to advancing the next project for the Petrojarl Varg, which could still include the Cheviot development under a revised financing model.”