MODEC is a general contractor specializing in the engineering, procurement, construction and installation of floating production systems. Since its first floating production storage and offloading (FPSO) vessel contract, the company has been awarded more than 25 FPSO and floating storage and offloading (FSO) projects around the world.

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Founded in 1968, MODEC (Mitsui Ocean Development and Engineering Co.) says it was positioned for growth since the beginning. A general contractor specializing in the engineering, procurement, construction and installation of floating production systems – including floating production storage and offloading (FPSO) vessels and floating storage and offloading (FSO) vessels, tension leg platforms (TLPs), production semi-submersibles and mobile offshore production units (MOPUs) – MODEC’s first growth stage occurred when it designed and constructed its offshore construction vessels, it says.

It wasn’t until 1985, however, that MODEC received its first contract for FPSO. FPSO Kakap Natuna was installed at the Kakap KH field offshore Indonesia. Furthermore, in 1998, MODEC commenced operations on FPSO MODEC Venture 1 in the Elang/Kakatua/Kakatua North oil fields in the Timor Gap JPDA (Joint Petroleum Development Area) and on FSO Ta’Kuntah in the Cantarell field offshore Mexico. Owning and operating the FPSO/FSO units have brought stable profits and helped MODEC grow in the industry, the company says.

Since its first FPSO contract, MODEC has been awarded more than 25 FPSO and FSO projects around the world. MODEC says FPSO and FSO have become today’s primary method for producing oil from subsea reservoirs around the world. Currently, about 130 FPSOs, 20 TLPs, 15 spars, 40 production semi-submersibles and 90 FSO vessels are in operation worldwide, according to the International Maritime Associates’ report.

MODEC, headquartered in Tokyo, Japan, maintains offices in Tokyo, Houston and Singapore. The company also has regional offices in Angola, Australia, Brazil, Belgium, Indonesia, Mexico, Nigeria, Thailand, Vietnam and Cote d’lvoire, West Africa.

President and CEO Kenji Yamada says health, safety, environment and quality (HSEQ) is of high importance. “We have a global HSE Management System and Quality Assurance and Quality Control System, which are based on the HSEQ policy,” he explains. “Under the leadership of [our] global HSE and quality and integrity managers, as well as the senior management, we ensure that our products and services comply with the global HSEQ requirements. In the construction sites in a Chinese shipyard, for example, we send supervisors – many of whom are senior engineers who used to work in Japanese shipbuilding companies – to manage and supervise the project to make sure the quality of our products meets the global standard. Those supervisors not only supervise the project, but also train the workers in the shipyard to pass down the professional skills.”

Finding Alternative Fuel
In 2007, MODEC partnered with Velocys, a leader in the field of microchannel process technology, and Toyo Engineering, which specializes in engineering and construction of oil and natural gas refining and chemical facilities, to develop and commercialize gas-to-liquids (GTL) facilities for offshore applications.

“Our companies have the unique and the complementary capabilities to enable the offshore oil and gas industry to recover natural gas that, prior to this, has not been economically viable,” Yamada explains.

Yamada adds that GTL plants used to be deployed onshore because of their large footprint. “Velocy’s microchannel process technology enables the footprint size to become smaller, so a GTL plant can be installed on the FPSO deck,” he continues. “By installing a GTL plant onboard FPSO, we can utilize the associate gas, which is usually either flared or compressed back to the subsea reservoir. By liquefying the associated gas to synthetic fuels, we can enjoy not only economical advantages, but also can contribute to reducing the greenhouse gas emissions.”

The GTL plant application is significant to today’s current economic climate, MODEC points out. According to the company, there are more than 300 trillion cubic feet of natural gas that has no access to the world markets. This is enough to produce 350 billion barrels of synthetic fuels, which is the equivalent to 70 years of U.S. oil imports.

“Synthetic diesel is a superior alternative fuel that can be used as a one-to-one replacement for petroleum-derived diesel or jet fuel,” MODEC explains. “The high cetane number and low sulfur content can improve engine performance for many applications. In fact, the U.S. Air Force has set a goal to supply 50 percent of its domestic fuel requirements from synthetic sources by 2016.” China’s Advantage
To take advantage of the lower labor costs, MODEC recently moved its shipyard work from Singapore to China. This transition, however, doesn’t mean that MODEC will no longer use shipyards in Singapore, Yamada says.

“[The] Jurong shipyard in Singapore has been and will be our good partner in business,” Yamada stresses. “Meanwhile, the biggest advantage in using a Chinese shipyard is its cost-competitiveness. The decision to use which shipyard depends on the system complexity of [a] project, schedule requirement and dock availability. We [are] flexible in choosing the most suitable shipyard for each project.”

Employing Local People
MODEC has been growing steadily at 10 to 15 percent each year. Yamada credits this success to the “commitment and enthusiasm of all management and employees.”

Because MODEC does business globally, it says it makes an effort to help develop the communities near its operations. Being a global company is more than a tagline, MODEC says, which is why it employs natives from more than 25 countries.

“In our offshore operations in Brazil, 80 percent of our employees are Brazilian,” the company adds. [They] are enthusiastic about giving back to the community and have developed several programs to provide for the needy families.”

Continuous Trend
Orders for FPSO have increased dramatically over the last decade, MODEC says, and this trend is “expected to continue as the world’s energy consumption continues to grow and advancements in technology provides the capability to extract more hydrocarbons in challenging environments.”

Yamada says he would like to see MODEC continue to flourish. “I would like to see MODEC grow and become the global leader in the FPSO industry,” he says. “MODEC has a unique diversity in its management and employees. By maximizing the best output from all the resources, I believe we can realize this vision.”