McDermott International, Inc. announced the signing of a Memorandum of Understanding (MOU) with Darwin Clean Fuels Pty Ltd. The MOU is for the feasibility study, technology, front-end engineering design (FEED) and engineering procurement and construction (EPC) for a Clean Fuels Condensate Processing Plant in Darwin, in the Northern Territory, Australia.
"The refinery would leverage our proprietary technologies, including alkylation and sulfur recovery, and is evidence of McDermott's technology-led EPC capabilities," said Ian Prescott, Senior Vice President of Asia Pacific. "Our engineering feasibility studies often serve as the essential underpinning of client decisions about moving forward with major investments."
Condensate is a cleaner fuel; it is a light petroleum liquid that condenses from natural gas, requiring less processing to create quality transport fuels. Australia is a major producer of condensate which is forecast to export 260,000 barrels per1 day by 2020 growing to 305,000 bpd by 2030. Darwin Clean Fuels plans to design, build and operate the condensate plant which has 75 percent lower CO² emissions than crude oil refineries. Australia consumes some 1,000,000 barrels a day of transport fuels and currently imports 600,000 barrels per day to meet its transport fuel needs.
"Darwin Clean Fuels looks forward to the next phase of the project with McDermott to move it toward a final investment decision," said Tony Debenham, Darwin Clean Fuels, Managing Director. "The Clean Fuels Condensate Refinery is a great, long-term investment in Australia, creating jobs and contributing to the economy by reducing the reliance on fuel imports. It also creates an opportunity to maximize both the output and use of this great resource by refining condensate onshore in Australia rather than exporting it overseas for processing it into petrochemicals or refinery blendstock, helping to address the long-term fuel security issues that Australia faces."
As part of the initial contract, McDermott will undertake the feasibility study and FEED through to final investment decision. Upon final investment decision, McDermott will be the lead EPC contractor for the refinery. Early phase engineering work will commence immediately and be completed by quarter one in 2020.
About McDermott
McDermott (NYSE: MDR) is a premier, fully integrated provider of technology, engineering and construction solutions to the energy industry. For more than a century, customers have trusted McDermott to design and build end-to-end infrastructure and technology solutions to transport and transform oil and gas into the products the world needs today. Our proprietary technologies, integrated expertise and comprehensive solutions deliver certainty, innovation and added value to energy projects around the world. Customers rely on McDermott to deliver certainty to the most complex projects, from concept to commissioning. It is called the "One McDermott Way." Operating in over 54 countries, McDermott's locally focused and globally-integrated resources include approximately 32,000 employees, a diversified fleet of specialty marine construction vessels and fabrication facilities around the world.
About Darwin Clean Fuels
Darwin Clean Fuels Pty Ltd (DCF) is seeking to develop, construct and operate a 60,000 / 100,000 barrels per day (bpd) condensate processing facility to be located in Darwin, Northern Territory, Australia. This will be the first petroleum refinery of significant size to be built in Australia for over 45 years and the first in Australasia to be utilizing entirely condensate as its feedstock. DCF aims to take advantage of the, low sulphur, and high-quality condensate feedstock for processing into transport fuels that meet the stringent Australian clean fuel standards introduced in 2008/09 but will also meet Euro 6 standards which are mandated for 2027. In strategic alliance with BP, DCF will replace imports of fuel to the Northern Territory and imports of petrol to the Australian east coast markets. Australia has become a net importer of refined fuels, shifting from being a net exporter, through a combination of demand growth and shrinking refining capacity with further refinery plant closures forecast. Refining industry capital expenditure in Australia in recent years has been applied to meet the new clean fuel standards rather than increase refining capacity.