Cyberjaya, 2 August 2022 – Dagang NeXchange Berhad (“DNeX”), via its subsidiary Ping Petroleum UK PLC (“Ping”), has signed a Memorandum of Understanding (“MoU”) with Cerulean Winds Limited (“Cerulean Winds”) to kick start a partnership initiative in delivering a dedicated offshore floating wind turbine for the Avalon Development in the Central North Sea, United Kingdom (“UK”).

Under the Agreement, Ping and Cerulean Winds plan to establish a Joint Venture (“JV”) company to deploy and operate the floating wind turbine, which will power the Sevan Hummingbird Floating Production Storage and Offloading (“FPSO”) vessel acquired by Ping in early July this year. The signing of the MoU was held in London, United Kingdom and observed by Kwasi Kwarteng, Secretary of State for Business, Energy and Industrial Strategy, Government of UK.

Ping aims to connect the FPSO to a dedicated floating offshore wind turbine to power the facility thus minimising diesel and fuel gas usage as well as associated Greenhouse Gas emissions in the UK waters. The innovative and pioneering project is set to be one of the first oil and gas production facilities to meet the UK Government’s emissions reduction targets agreed in the North Sea Transition Deal in March 2021.

Ping and Cerulean Winds will also endeavour to reach terms on the power purchase agreement for the Avalon Development with the JV company.

Tan Sri Syed Zainal Abidin Syed Mohamed Tahir, Group Managing Director of DNeX, said Ping is currently refining its concept to integrate the FPSO with the offshore wind turbine for the Avalon Development, with Field Development Plan approval and Final Investment Decision (“FID”) targeted for later this year.

“Ping is finalising conceptual development planning after preparing Front End Engineering works to submit the Avalon Field Development Plan. In addition, Ping will apply for an innovation licence under the Innovation and Targeted Oil and Gas Decarbonisation (“INTOG”) licensing from Crown Estate Scotland. The licence would allow us to operate and deploy the dedicated floating offshore wind turbine for the Avalon Development,” he said.

The planned development enables Ping to expand and diversify its portfolio of producing assets while supporting the UK’s energy security and Net Zero targets.

Ping has also been recently granted a 19-month extension by NSTA to the second term of the P2006 licence containing Avalon. This allows the company additional time to optimise and gain full regulatory approval of the Avalon Field Development Plan.

With a total estimated recovery of 23 million barrels of oil, production from the Avalon field is expected to come on stream by mid-2025.