Technip (Paris:TEC) (ISIN:FR0000131708) was awarded a 5-year frame agreement contract from Petróleo Brasileiro S.A. (Petrobras) for the supply of around 1,400 kilometers of flexible pipes. The contract is effective today with supply starting in 2013 and orders are guaranteed for at least 50% of the total value, which is currently estimated to be worth around US$2.1 billion.
The scope of the contract includes the manufacture of over 150 types and diameters of risers(1), flowlines(2) and associated equipment and accessories. Deliveries under this frame agreement will be spread over the contract period and order intake recognition will progress as specific work orders are confirmed.
Flexible pipes for the contract will be produced both at Technip's existing manufacturing site in Vitoria, and also at our new manufacturing facility under construction in Açu, Brazil. Accordingly, this award confirms the strong rationale of the investment announced last year in a second flexible pipe plant in Brazil capable of delivering a range of technologically advanced, high-end flexible pipe products to meet the strong demand growth and evolving technology requirements we expect in the Brazilian market.
Frédéric Delormel, Executive Vice President and Chief Operating Officer, Subsea, stated: “This agreement demonstrates the great potential of flexible pipe solutions to facilitate the development of deeper and more complex offshore oil and gas fields worldwide. This frame agreement reinforces our leadership in flexible pipes and the subsea industry overall, where we have a unique vertically integrated offer for our clients, combining a global footprint, proprietary R&D and technology, substantial engineering resources, manufacturing plants and a fleet of state-of-the-art vessels.”
The contract will be fulfilled by Technip with a high level of Brazilian content and is a great success for Technip's operations in Brazil where the Group has been present for more than 35 years. During that time, Technip has invested continuously in leading-edge assets and technology, developing the know-how and expertise of its 3,500 people in the country. Technip is very proud to support its long term partner Petrobras, and to help Brazil develop its offshore resources.
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