BW Offshore has signed a front-end engineering and design agreement with Equinor for the Bay du Nord development project offshore Newfoundland and Labrador, Canada.

The agreement follows BW Offshore's selection as the preferred bidder for the floating production, storage, and offloading vessel, marking the project's progression to the next phase ahead of a potential final investment decision in 2027.

The front-end engineering and design phase is expected to continue until the end of 2026, focusing on advancing the FPSO design, finalizing the execution plan and delivery schedule, and progressing commercial and contractual alignment, including the selection of subcontractors and suppliers.

The company stated that it will also develop a localization plan in accordance with the existing agreement.

Marco Beenen, CEO of BW Offshore, said, "Signing the front-end engineering and design agreement is a significant step for the Bay du Nord project. BW Offshore is highly enthusiastic and fully committed to the Bay du Nord development and will work closely with Equinor and local stakeholders to advance the project."

BW Offshore has established a local office in St. John's and appointed a local benefits manager to support engagement with Equinor, authorities, and the regional supply chain during the front-end engineering and design phase.

Bay du Nord is Canada's first deepwater oil project, operated by Equinor with BP as a partner. The initial phase is estimated to contain recoverable resources of approximately 400 million barrels of light crude oil. The discovery is located in waters about 1,170 meters deep. Subsequent discoveries in the adjacent EL1156 exploration license area, in waters about 650 meters deep, could be developed as potential tie-back projects within a joint development.

In May 2023, due to changing market conditions and subsequent high-cost inflation, Equinor and its partner BP decided to postpone the Bay du Nord development project by up to three years. Equinor stated at the time that it would use the delay to optimize the project and continue to actively work towards the successful development of Bay du Nord.