Euronav NV (NYSE: EURN & Euronext: EURN) (Euronav) announces that the joint venture with International Seaways (“INSW”) has signed a contract for five years for the FSO Africa and FSO Asia in direct continuation of the current contractual service. The contract was signed with North Oil Company (“NOC”), the future operator of the Al-Shaheen oil field, whose shareholders are Qatar Petroleum Oil & Gas Limited and Total E&P Golfe Limited.
Euronav FSO Asia - Image courtesy of Euronav
The new contracts for these custom-made 3 million barrels capacity units which have been significantly converted and that have been serving the Al-Shaheen field without interruption since 2010 will have a duration of five years starting at the expiry of the existing contracts with Maersk Oil Qatar. The existing contracts will remain in force until expiry in the third quarter of 2017.
The new contracts are expected over their full duration to generate EBITDA (earnings before interest, taxes, depreciation and amortization) in excess of USD 360 million for the joint ventures. Based on Euronav’s 50% ownership in the joint ventures the five year contracts are expected to generate in excess of USD 180 million of EBITDA for the Company.
The FSO Africa and FSO Asia floating storage platforms are both high specification and long duration assets with a potential trading life to 2032. In addition the joint venture with International Seaways will be debt free from July 2017 providing further optionality to create value.
Paddy Rodgers, CEO of Euronav said: “We are pleased as these contracts provide Euronav with an additional degree of high quality earnings visibility. Combined with our underlying time charter portfolio, this provides Euronav with a solid base of fixed income”.
Euronav takes this opportunity to highlight to investors a short film on the original conversion of the FSO Asia to indicate the scale, investment and technical complexity of the operation.