Teekay Offshore Partners L.P. has entered into an agreement with a consortium led by Queiroz Galvão Exploração e Produção SA (QGEP) to provide a floating production, storage and offloading (FPSO) unit for the Atlanta field located in the Santos Basin offshore Brazil.
In connection with the contract with QGEP, the Partnership has agreed to acquire the Petrojarl I FPSO from Teekay Corporation (Teekay) for $57 million. Subsequent to the acquisition, the FPSO will undergo upgrades at the Damen Shipyard Group's DSR Schiedam Shipyard in the Netherlands for a fully built-up cost of approximately $240 million, which includes the cost of acquiring the Petrojarl I.
The FPSO is scheduled to commence operations in the first half of 2016 under a five-year charter contract with QGEP. The charter contract is expected to generate annual cash flow from vessel operations(1) of approximately $55 to $60 million.