Teekay Corporation has signed a new fixed-rate contract with Petroleo Brasileiro to provide a floating production storage and offloading (FPSO) unit for the Tiro and Sidon fields located in the Santos Basin offshore Brazil.

The contract with Petrobras will be served by a new converted FPSO unit, to be named the Petrojarl Cidade de Itajai, which is currently under conversion from an existing Aframax tanker at the Sembcorp Marine’s Jurong Shipyard in Singapore.

The vessel, which was partially converted prior to the company’s project bid, is expected to be completed for an estimated total cost of approximately $370m.

The new FPSO is scheduled to deliver in the second quarter of 2012 when it will commence operations under a nine-year firm period time-charter contract to Petrobras, with six additional one-year extension options.