Japanese floater expert Modec and its compatriot Toyo Engineering Corporation have initiated talks to establish an alliance in the engineering, procurement, construction and installation business for floating production storage and offloading (FPSO) vessels.

The partners have reached an agreement to execute a memorandum of understanding and to conduct a feasibility study. The business alliance also contemplates the establishment of a joint venture company by the end of 2021.

Modec and Toyo have been collaborating on the topside EPC scopes for several FPSO projects over the past 15 years. The potential tie-up would aim to develop new technologies for next-generation FPSOs through the synergies of the two companies.

Demand for FPSOs is expected to remain consistent with global demand for oil and gas, and the development of new projects is also expected to proceed steadily with a total of 20 contracts for FPSO units expected to be awarded in 2021 and 2022.