Updated 16 July 2025: We've updated this article to include more information.
MARS best meets the Australian Government’s aims for completing this important decommissioning work.
We contracted MARS following a global, competitive open tender. Under the contract, MARS will recycle the FPSO and manage the waste streams, including hazardous waste. The priority is for MARS to complete the work to high safety and environmental standards and meet all Australian and international requirements.
MARS’ role in the recycling program
COSCO Shipping Heavy Transport will dry tow the FPSO to Denmark using their semi-submersible heavy transport vessel, the Hua Rui Long. MARS will complete the recycling at its ship recycling facility in Frederikshavn.
This purpose-built facility has the capacity to recycle the Northern Endeavour FPSO and meets the European Union’s Ship Recycling Regulation. The regulation aims to prevent, reduce and minimise accidents, injuries and other negative effects on human health and the environment when recycling ships.
MARS’ proposal meets our project aims and represents a value-for-money solution, including:
- Safety and environmental protection
Meeting Workplace Health and Safety ISO45001 and Environmental ISO14001 standards protects the safety of people and the environment.
- Timeliness
Timely acceptance of the FPSO title and starting the recycling is important because of the FPSO’s worsening condition. An established and certified ship recycling facility ensures the recycler can meet relevant regulations and timeframes.
- Capability
Previous experience and capability in similar recycling works is important. This includes having the necessary infrastructure and meeting industry standards and compliance with national and international regulatory obligations. MARS has recent experience recycling other FPSOs including the Fluminense, Capixaba, Foinaven and the Petrojarl Banff.
We thoroughly assessed all tenders against the evaluation criteria of capability, capacity, experience, compliance, pricing and economic benefit to Australia. We determined that the MARS tender best met the evaluation criteria in accordance with the Commonwealth Procurement Rules (CPRs). The CPRs govern how Commonwealth officials must buy goods and services.
Meeting regulatory requirements
Our contract with MARS will maximise recovery of recyclable material. As required under the Basel Convention, it will also ensure that MARS disposes of hazardous waste in an environmentally sustainable way.
The 44,000 tonne FPSO contains hazardous waste distributed throughout the vessel’s structure and systems. For example, asbestos and mercury. The tender process did not identify a suitable domestic solution that met our requirements for recycling the whole FPSO at this time. Under these circumstances, the Basel Convention allows for international transport of the FPSO. We are now working to secure relevant approvals in full compliance with the Basel Convention and domestic law.
Opportunities for Australian business
There are no purpose-built facilities in Australia equipped to recycle a vessel as large and complex as the Northern Endeavour FPSO.
However, Australian industry has led the Northern Endeavour decommissioning program works to date. This includes the lead contractor for Phase 1 FPSO disconnection works, Petrofac Facilities Management Limited, whose team is in Perth, Western Australia. Phase 1 employed a range of local workers from engineers, electricians and mechanics, to pilots, nurses, cooks and cleaners.
The Australian Government is also investing $30 million to carry out Australia’s Offshore Resources Decommissioning Roadmap. Our Offshore Decommissioning Directorate is delivering the roadmap to support growth of Australia’s decommissioning industry. They work with states and territories to ensure local infrastructure is suitable and accessible for decommissioning activities. They will also support the decommissioning industry to make investment decisions with greater certainty. This will help Australia decommission our own offshore energy infrastructure.
Future opportunities
Recycling of the Northern Endeavour FPSO accounts for less than 2% of the overall cost of the Northern Endeavour decommissioning program. While the FPSO recycling will happen overseas, there will be ongoing opportunities for Australian industry involvement in the Northern Endeavour decommissioning program. We will release procurement opportunities for Phases 2 and 3 and publish the details on AusTender.
Phase 2 focuses on permanently plugging the Laminaria and Corallina wells. This includes:
- permanently sealing and abandoning the wells to prevent future hydrocarbon leaks. This follows the successful temporary well suspension in Phase 1
- removing the well infrastructure, including dismantling and removing wellheads and connected subsea equipment.
Phase 3 focuses on removing the remaining subsea infrastructure, recycling and waste management. This includes:
- removing thousands of tonnes of subsea infrastructure such as risers, umbilicals, flowlines and manifolds, including over 12,000 tonnes of steel
- managing the subsea infrastructure after removal, including sorting, decontamination, recycling and disposal
- restoring the marine environment at the Laminaria and Corallina oil fields.