Shell has confirmed construction has started on its floating production, storage and offloading (FPSO) vessel for the Penguins redevelopment.
Geologist Michael Porter from the energy giant gave an update on the project at the DEVEX conference in Aberdeen.
He said that steel has now been cut on the Sevan 400-style FPSO, ahead of the eight well campaign which is set to begin in summer 2019.
Meanwhile he confirmed that the FPSO is set to arrive at the Penguins cluster in 2021.
US firm Fluor was awarded the construction contract.
Shell took a final investment decision on the Penguins redevelopment in January.
It is expected to have peak production of 45,000 barrels of oil per day.
Mr Porter said: “We’ve cut steel on the FPSO now, so construction has begun.
“We’ll come and install the competitively scoped subsea in 2020, in time for the arrival of the FPSO in 2021.
“We’re continuing to work the area, there is future for growth. There are spare risers, we’ve got a number of spare slots on the manifold to add future infill wells.
“Really, we just want to continue the work that we’re doing to make sure that Penguins remains a significant northern North Sea hub right through until 2040.
“We really do feel like this is the right option to provide a northern North Sea hub, not only to produce Penguins but to produce other things in the area and expand and add growth to the region.
“Although this style of FPSO may not be new to the North Sea, this will be the first of its kind operated by Shell.”