Professional Documents
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Offshore Magazin May 2020
Offshore Magazin May 2020
CRISIS
MANAGEMENT
• FPU construction update
• Platform of the future
• France supplement
Ready? We are.
© 2020 Weatherford. All rights reserved.
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CONTENTS •
International Edition
Volume 80, Number 5
Celebrating 65 Years of Trends, Tools, and Technology
16
• CRISIS MANAGEMENT sector will see a significant slowdown in planned investments. Dis-
Industry responds to low oil prices, cretionary E&A budgets have been slashed, rig contracts cancelled,
coronavirus pandemic������������������������������������������������������16 and new project sanctioning is being reassessed.
The offshore oil and gas industry began 2020 on a cautiously opti-
mistic note. That optimism was quickly shattered with the onset • DRILLING & COMPLETION
of the novel coronavirus pandemic and the equally rapid collapse Third-party verification plays key role in HP/HT
in crude oil prices. The lockdowns and quarantines that followed technology adoption���������������������������������������������������������27
have taken a huge bite out of oil demand; this has further eroded Since the consequences of failure in offshore HP/HT environments
oil prices. The result is an unprecedented level of uncertainty in the are potentially severe, regulators such as BSEE have added extra
market. rigor in their permitting and approval process for such projects, re-
Pandemic, falling prices take steam out of floating quiring additional risk studies, design verification, and validation of
production market�������������������������������������������������������������22 equipment using an Independent Third Party (I3P) for verification
Prior to the COVID-19 pandemic and concurrent crash in oil prices, and oversight.
2020 was on track to be a strong year for new project awards and
ongoing construction in the floating production sector. Energy • ENGINEERING, CONSTRUCTION, & INSTALLATION
Maritime Associates anticipates that few new projects will be FSRU enables cleaner energy production
sanctioned this year, and that its previous five-year forecast for new for El Salvador�������������������������������������������������������������������30
orders should be reduced by approximately 20%. The 378-MW Energía del Pacífico project in El Salvador will not
Embattled industry goes into crisis only introduce a new source of energy to the country, but it will also
management mode������������������������������������������������������������26 include the development of the first offshore regasification vessel
The sudden drop in the oil price together with the coronavirus deployed off the Pacific Coast of Central America – thus demon-
pandemic has thrown the global offshore EPC market into a state strating the viability of floating LNG as an energy source for land-
of flux. 2020 budget cuts so far have been around 25%. The offshore based power generation in the region.
Offshore® (ISSN 0030-0608, print; 2688-3295, digital/USPS 403-760) is published 10 times a year by Endeavor Business Media, LLC, 1233 Janesville Avenue, Fort Atkinson WI 53538.
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• FRANCE
Eiffage Métal expanding offshore
wind construction capability���������52
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• ONLINE
THE COVID-19 PANDEMIC has forced millions Oil company operators have responded to the deteriorating
of people across the world to change the way economic conditions with cuts to capex plans for 2020, many
they live and work. This has led to a precipitous in the range of 20-30%. This includes pushing some project
decline in oil demand due to lower air and road sanctions to next year or beyond.
transportation, and thus downward pressure on Oil demand should improve when the stay-at-home and
oil prices. The OPEC+ agreement, sealed via physical distancing restrictions loosen, and business and travel
videoconference on April 12, is an important pick up again. At the time of this writing, some countries were
step toward rebalancing the market, but it will be a gradual beginning to rollout plans to reopen their economies, and with
process over the next several months. government-sponsored stimulus packages to support the
The agreement calls for a reduction of 9.7 MMb/d from May recovery.
1 until June 30, 7.7 MMb/d until December 30, and then 5.8 The IEA forecasts that the second half of this year could see
MMb/d for a subsequent 16-month period. Other producers demand exceed supply if the recovery plays out as expected.
outside the agreement may also see their output fall in the Key signals to keep an eye on are the level of compliance by
coming months due to the impact of the lower oil prices. OPEC+, oil storage inventories, and any improvements in global
This should help to reduce the supply overhang and build-up economic activity.
in storage, but it will not immediately bring supply in balance For more on the impact of COVID-19, see page 16.
with the rapidly declining demand.
The International Energy Agency (IEA) in its April oil report
projected oil demand to fall by 29 MMb/d in that month year-
over-year, which would be the lowest level since 1995. Demand
would gradually recovery to 2.7 MMb/d down in December and
close out the year down a record 9.3 MMb/d.
Equally daunting is the economic outlook. The International
Monetary Fund in April projected that the impact of COVID-19
would cause the global economy to contract by 3% this year,
which is worse than the contraction recorded during the 2008- To respond to articles in Offshore, or to offer articles for publication,
2009 financial crisis. contact the editor by email (dpaganie@endeavorb2b.com).
Layher SIM®
successful project with full planning
and scheduling certainty.
Worldwide offshore rig WORLDWIDE OFFSHORE RIG COUNT AND UTILIZATION RATE
APRIL 2018 – MARCH 2020
count and utilization rate
The total number of jackups, semis, and 1,000 100
drillships under contract grew by six
units from 483 in February to 489 rigs 900 90
through March, while the global supply
Number of rigs
zation improved from 63.7% in February
to 64.5% in March. The number of rigs 700 70
working also improved between Feb-
ruary and March, climbing by five units 600 60
to 462. However, it absolutely must be
noted that going into March of this year,
500 50
offshore drilling activity was still on the
incline as operators were only just begin-
400 40
ning to make adjustments in light of the
spreading COVID-19 pandemic and the
crash of the oil price. So, these metrics 300 30
Apr. Jun. Aug. Oct. Dec. Feb. Apr. Jun. Aug. Oct. Dec. Feb.
are currently falling and likely will contin- 2018 2019
ue to for at least some months to come.
Total utilization % Total supply Total under contract Working
– Justin Smith, Petrodata by IHS Markit
Note: Rig types included are jackups, semis, and drillships
Source: IHS Markit RigPoint
HIGH-IMPACT EXPLORATION
Exploration drilling falling HIGH-IMPACT DISCOVERED AND PROSPECTIVE
back to post-2014 levels EXPLORATION DRILLING VOLUMES
Exploration well numbers this year could
be 35% down on 2019 levels, according 120 Drilled 16 Drilled
to Westwood Global Energy Group. Kai Drilling Drilling
Gruschwitz, senior analyst, Global E&A, 14
100
Completed HI Exploration Wells
www.fifififificfififi.cfifi/KBE
NORTH AMERICA and Galp are the other partners. The Natator oil discovery was
TGS and PGS have released final data from 3D surveys offshore on the Sudoeste de Tartaruga Verde block in the Campos basin,
Newfoundland and Labrador, ahead of the Canada Newfound- 130 km (81 m) offshore Macaé in 1,080 m (3,543 ft) of water.
land Labrador Offshore Petroleum Board’s licensing round later The well proved oil in post-salt carbonate reservoirs.
this year. The Tablelands and North Tablelands data-sets cover ◆◆◆
12,500 sq km (4,826 sq mi) in the eastern Orphan basin off Apache Corp. and Total have made what appears to be a second
Newfoundland, and identify potentially promising reservoirs large oil discovery on block 58 offshore Suriname. The Sapakara
from Lower Cretaceous to Lower Tertiary intervals. West-1 well, drilled by the Noble Sam Croft, south of the earlier
◆◆◆ Maka Central-1 find, tested oil and gas condensate in multiple
Husky Energy has suspended major construction work on its stacked targets in Upper Cretaceous Campanian and Santonian
West White Rose platform offshore Newfoundland to protect intervals. On completion of the well, the drillship was due to
site staff and contractors against the spread of COVID-19. head 10 km (6 mi) to the northwest to drill the Kwaskwasi
However, production continues from the SeaRose FPSO, the prospect.
White Rose field and its satellite extensions 350 km (217 mi) ◆◆◆
offshore. Brazil’s licensing agency ANP has temporarily suspended this
◆◆◆ year’s planned 17th oil and gas licensing round, due to worsening
McDermott International is managing pre-front-end engineering economic conditions and the growing impact of the coronavirus.
design (pre-FEED) on behalf of BHP for a floating production It was reportedly set to offer 130 blocks across five basins.
unit for the deepwater Trian oilfield. The platform will be moored ◆◆◆
in 2,500 m (8,200 ft) of water, 180 km (112 mi) from the Mexican Searcher Seismic has reprocessed a further 8,008 km (4,976 mi)
coast and 30 km (19 mi) south of the US/Mexico offshore median of 2D seismic over Argentina’s offshore Austral and Malvinas
line. Houston Engineering and Wood are supporting McDermott basins. The Argentina Super-Tie 2D reprocessing project now
respectively on the hull and topsides studies. comprises over 19,000 km (11,806 mi) of broadband data to
◆◆◆ support the country’s future bid rounds and assessments of
Bahamas Petroleum Co. plans to re-schedule Perseverance #1, other commercial opportunities. Searcher said work to date
its first exploration well offshore the Bahamas, to mid-October had improved imaging of deeper stratigraphy and basement
or later. Recent shutdown measures imposed by the government potential.
have impacted movements of drilling rigs and associated prepa- ◆◆◆
rations, the company said, with the three-month hurricane Premier Oil and its partners remain committed to the Sea Lion
season ruling out drilling from mid-July. oilfield development in the offshore North Falkland basin.
However, the final investment decision will probably be delayed
SOUTH AMERICA until the external macro-environment improves, according to
Petrobras has two further deepwater oil discoveries off southeast Rockhopper Exploration. The partners now plan to target 250
Brazil. The well on the Araucária prospect, 200 km (124 mi) MMbbl from the first phase via 29 wells, 12 to be drilled prior
from the city of Santos and in 1,995 m (6,545 ft) water depth, to first oil, with production building to a plateau of around
was the first on the Uirapuru block in the presalt Santos basin. 85,000 b/d via a conventional FPSO.
It encountered oil in porous reservoirs. ExxonMobil, Equinor,
WEST AFRICA
BP and partner Kosmos Energy may delay start-up of the ul-
tra-deepwater Greater Tortue Ahemyim gas-condensate project
off Mauritania and Senegal until 2023, due to recent global
developments. Travel bans, social distancing, and office closures
have impacted the project’s progress, Kosmos said, including
construction of the breakwater for the LNG jetty during the
2020 weather window. BP has also notified Golar LNG that it
will not now be ready to receive the converted FLNG vessel
Gimi on the planned connection date in 2022.
◆◆◆
The BGP Prospector has started acquiring the 4,770-sq km
(1,842-sq mi) Gambito 2020 3D seismic survey in the MSGBC
basin offshore The Gambia. TGS, which is coordinating the
campaign with BGP and the government, says the deep/ul-
Location of Notator oil discovery in the Campos basin. tra-deepwater areas covered appear strongly prospective, based
(Courtesy Petrobras) on large basin floor fans identified on previous 2D surveys.
MIDDLE EAST
ADNOC has terminated two contracts awarded in February to
the Petrofac Emirates joint venture for the Dalma gas develop-
ment in the Ghasha ultra-sour offshore concession, 140 km (87
mi) northwest of Abu Dhabi. Petrofac said it would work with
the NOC over the coming weeks on alternative options better Blocks on offer offshore Timor-Leste. (Courtesy Autoridade Nacional
do Petróleo e Minerais de Timor-Leste)
suited to the present challenging environment. One of the as-
JOHAN SVERDRUP HITS PEAK EARLY However, most of this year’s scheduled wells already had con-
Equinor expected production from Phase 1 of its Johan Sverdrup tracted rigs, so the impact of deferrals will likely be felt more in
project in the Norwegian North Sea to reach a peak of 470,000 2021.
b/d this month, ahead of schedule. Arne Sigve Nylund, EVP for Just as the extent of the downturn was becoming apparent,
Development and Production Norway, credited higher plant Total announced a potentially commercial HP/HT gas, con-
capacity, adding that output had been stable since start-up last densate and light oil discovery in the Isabella prospect in the
October with the 10 wells drilled performing above expectations. UK central North Sea, 40 km (25 mi) south of the company’s
Sverdrup’s low operating costs mean that the field continues to Elgin-Franklin production complex. The well, drilled by the
provide stable revenue and cashflow both to the partners and jackup Noble Sam Hartley, delivered 64 m (219 ft) of net pay in
Norwegian society as a whole, he stressed. Work continues on Upper Jurassic and Triassic reservoirs. Wood Mackenzie analyst
Phase 2, which will raise production to 690,000 b/d via a second Glenn Morrall said the proximity to offshore infrastructure
drilling and production platform connected to the existing field could enhance the field’s economics when market optimism
center, with targeted operating costs of less than $2/bbl. eventually returns.
In the central Norwegian North Sea, MOL found light oil and
gas in the Evra/Iving structure, 8 km (5 mi) northwest of Vår
Energi’s Balder X redevelopment (the Balder and Ringhorne
fields), with potentially up to 71 MMboe recoverable. And
Wintershall Dea’s Bergknapp oil discovery in the Norwegian
Sea, close to the company’s producing but declining Maria field,
could hold up to 97 MMboe.
DRILLING CONTRACTORS STACKING RIGS In return, Shell has agreed to the introduction of an additional
As the low oil price and coronavirus pandemic have forced production volume and oil price-related tariff. The amendment
operators to cut budgets and cancel contracts, drilling contrac- also provides for a mutual right to terminate the contract on
tors have started stack- six months’ notice without payment of penalty, the termination
ing and retiring rigs. As not being effective before March 2022.
of this writing, Noble
Corp. has cold-stacked SOLSTAD TO RESTRUCTURE, REDUCE FLEET
the drillship Noble Bully Solstad Offshore has reached agreement with a majority of its
II and the semisub- stakeholders on a restructuring of the company.
mersible Noble Paul Key terms include:
Romano; and warm- • Around NOK10 billion ($959 million) of debt (secured debt,
stacked the jackups The drilling contractor has cold-stacked leasing obligations, bond obligations and others) to be
Noble Sam Hartley, No- the drillship Noble Bully II. (Courtesy converted to equity.
Noble Corp.)
ble Sam Turner, and • The group’s balance sheet and liquidity to be
Noble Hans Deul. In addition, the drilling contractor will retire strengthened.
the 1981-built jackup Noble Joe Beall. • The offshore service/construction/platform supply vessel
Transocean Ltd. has stacked the semisubs Henry Goodrich fleet to be rationalized, with 37 older vessels likely to be
and Transocean 712. sold or scrapped, with the long-term business based on a
Shelf Drilling has stacked the jackups Galveston Key and Key core fleet of around 90 vessels.
Hawaii. • Termination agreements in respect of the leasing agreements
for the five vessels owned by subsidiaries of SFL Corp, and
SHELL, BP RETAIN NORTH SEA FPSOS new leasing agreements on amended terms for two vessels
Teekay Corp. has entered into a new bareboat charter contract owned by a subsidiary of Ocean Yield, F-Shiplease.
with Britoil Ltd., a BP subsidiary, for the FPSO Petrojarl Foinaven CEO Lars Peder Solstad said: “We are entering a period where
for up to about 10 years. The FPSO has operated at the Foinaven global offshore activity is likely to be reduced with the impact
field west of Shetland of the COVID-19 virus and the drop in the oil price. A successful
since 1997. implementation of the restructuring will enable the company
Under the terms of to better meet the challenges of the current markets and position
the contract, Teekay is the company well for the coming years.”
expected to receive an
upfront payment of SILVER EAGLE ORDERS JACKUPS
about $67 million in Bahrain-based Silver Eagle Global has contracted PetroVietnam
cash, a nominal per day Marine Shipyard to build two self-elevating drilling units (SEDU).
rate over the life of the Based on the Levingston/MiNO Enhanced 430WC-4 design,
contract, and a lump- The FPSO Petrojarl Knarr will operate at the new series will have what Silver Eagle claims is the industry’s
the Knarr field in the Norwegian North
sum payment at the Sea until at least March 2022. (Courtesy largest deck area and deck load capacity, a cantilever with
end of the contract pe- Altera Infrastructure) modular design, and a high-speed jacking system. The self-pro-
riod, which is expected pelled design is said to be capable of working at greater water
to cover the costs of recycling the FPSO unit in accordance with depths and in harsh environments.
the EU Ship Recycling Regulations. ABS will provide classification for the series.
As part of the transaction, Teekay Offshore Partners L.P., now Matthew Tremblay, senior vice president, Global Offshore, ABS,
known as Altera Infrastructure L.P. has entered into agreements said: “These unique units offer the flexibility to adapt to the
with BP directly to provide the operations and shuttle tanker mission and payload. The large deck and cantilever are inno-
services for the FPSO. vative design features, while self-propulsion and the four legs
Altera Infrastructure subsidiary Teekay Knarr has agreed to allows the vessel to get on the job site independently. These
a contract amendment with AS Norske Shell concerning the unique design features of the Silver Eagle units will bring a new
Knarr field in the Norwegian North Sea. The contract for lease level of versatility for the offshore industry.”
and operation of the FPSO Petrojarl Knarr, which has operated Silver Eagle, which is associated with Rawabi Holding of
on the field since 2015, will now run until at least March 2022. Saudi Arabia, has also entered into a master service arrangement
Original duration of the firm contract period had been until with Baker Hughes. •
March 2021. Under the amendment, there will be a reduction
in the day rate from March 2021 to March 2022 and the fee
payable by the operator if the contract were not extended has
been waived.
AKER SOLUTIONS, COGNITE SECURE DIGITAL SUBSEA 7 WINS CONTRACT OFFSHORE GERMANY
OFFSHORE WIND ENERGY TECHNOLOGY GRANT Subsea 7 has announced the award of a sizeable contract by
Aker Solutions and Cognite have been awarded a $2-million innogy Kaskasi GmbH for the Kaskasi offshore wind farm project,
grant from the California Energy Commission (CEC) for a project located about 35 km northwest of Heligoland in the German
called NextWind Real Time Condition Monitoring. sector of the North Sea.
The project is focused on next generation solutions in wind The contracted work scope includes the transport and in-
through digitalization and aims to develop a holistic digital stallation of the offshore substation foundation, 38 wind turbine
solution that will enable monitoring the condition of an offshore monopile foundations and 52 km of inner array grid cables in
floating wind farm and its impact on the environment via live water depths of between 18 and 25 m. Offshore installation is
data streaming. scheduled for execution in 2021 and 2022 using Seaway 7’s heavy
lift, cable lay and support vessels. When completed, the Kaskasi
offshore wind farm will have an installed capacity of 342 MW.
Budget Cut
2016 downturn, it appeared that there was 30
light at the end of the tunnel. 40%
(US$ billions)
25
Budget cut
That optimism was quickly shattered
with the onset of the novel COVID-19 20 30%
(coronavirus) pandemic and the equally
15
rapid collapse in crude oil prices. The lock- 20%
downs and quarantines that followed have 10
10%
taken a huge bite out of oil demand; this 5
has further eroded oil prices. The result
0 0%
is an unprecedented level of uncertainty
Saudi Aramco
Shell
Chevron
Total
Petrobras
Equinor
Eni
ConocoPhillips
EOG Resources
Occidental Petroleum Corp.
Ecopetrol
Suncor Energy
Repsol
Woodside Petroleum
Pioneer Natural Resources
Canadian Natural Resources
OMV
Continental Resources
Husky Energy
Marathon Oil Corp.
Aker BP
Devon Energy Corp.
Noble Energy
Santos
in the market.
The industry is having to contend
with three fundamental challenges, says
Wood Mackenzie. The first is substantial
reduction in demand for equipment and
services. Stricter capital discipline from
operators will reduce demand substan- Source: GlobalData Oil and Gas Intelligence Center
tially this year both onshore and offshore,
which means that only a handful of major REDUCED CAPITAL SPENDING PLANS
projects will go forward this year. The sec- Global capex for exploration and production companies is expected to drop by up to
ond challenge will be a test of financial $100 billion this year, under Rystad Energy’s updated base case scenario of $34/bbl in
resilience. Companies across the supply 2020 and $44/bbl in 2021. According to the analyst’s data, the expected decline this
chain had already cut back significantly year will make 2020’s capex volumes, estimated at about $450 billion, the lowest in 13
in the past few years. It will be difficult for years. Its estimates before the coronavirus pandemic had indicated E&P would remain
many to identify further savings without flat year-on-year.
drastic measures such as refinancing or In a low case scenario, where Brent averages $25/bbl in 2020, global investments may
the restructuring of business models. Staff plunge to around $380 billion this year, falling to almost $300 billion in 2021, a 14-year
cuts and bankruptcies appear inevitable. and a 15-year low respectively.
The third challenge will be excess The estimated cost cuts will be mainly achieved by lower activity within US shale,
capacity. Companies holding onto idle delays to projects that are yet to reach the final investment decision (FID) stage, deferred
assets “just in case” will have to think exploration activity, and cost cuts within development and production for conven-
again. The prospect of sub-$40/bbl oil tional assets.
will force profound change and pain in By the end of March, GlobalData reported that E&P companies had cut more than
the short term, Wood Mackenzie said, $50 billion in capex.
but could ultimately create a more sus- Daniel Rogers, Oil and Gas Analyst at GlobalData, said: “Of the announced $50 billion
tainable business for those that survive. in cuts to date, approximately 20% of that is coming solely from Saudi Aramco, which
could have implications for its ongoing expansion projects in the country. Elsewhere,
across the supermajors, the investment cuts are within the 20-25% range, resulting in
multi-billion-dollar pull backs in new projects and non-critical investments.” 2020, and now envisages start-up of the
At that time, the analyst found that the the average announced capex cut for 2020 is two fields no earlier than late 2022.
29% from original forecasts. On the higher end of the spectrum, US operators with sig- Equinor and Husky Energy have report-
nificant shale acreage and Australian operators with imminent large-scale LNG proj- edly postponed the Bay du Nord project
ects have taken the most drastic reduction measures. offshore eastern Canada.
“The types and severity of the cuts seen will differ depending on stakeholder require- Husky also has deferred by a year devel-
ments. National oil companies will strive to protect obligated payments to the govern- opment of the block 15/33 oil field offshore
ment, whilst maintaining production volumes, whereas independent oil companies will China and put the brakes on developing
focus on strengthening balance sheets and continuing to generate returns for investors the MDA-MBH gas field offshore Indo-
in a challenging environment,” Rogers concluded. nesia. In addition, the company has sus-
In early April, ExxonMobil and BP cut capex spending by 30% and 25%, respectively. pended major construction activities
related to the platform-based West White
PROJECT DELAYS Rose development offshore Newfound-
Of the 50-plus projects Wood Mackenzie had identified as potentially going ahead land and Labrador.
this year, only 10 now look to have a chance of proceeding. According to Rob Morris Aker BP has put on hold the non-sanc-
of Wood Mackenzie’s upstream research team, “only those with the strongest balance tioned Hod redevelopment in the Valhall
sheets will even contemplate major project FIDs. The majors and certain NOCs will area of the southern Norwegian North Sea.
take the lead, while projects with financially stretched partners and at the higher end Siccar Point Energy E&P Ltd. and joint
of the cost curve will struggle.” venture partner Shell UK have deferred the
Projects least at risk of deferrals are thought to include large deepwater oilfield devel- planned sanction date for the deepwater
opments off Guyana and Brazil, and ‘niche LNG’, including low-cost greenfield and feed- Cambo project west of Shetland from 3Q
gas backfill at legacy liquefaction projects. 2020 to the second half of 2021.
“Two-thirds of all greenfield projects, representing $110 billion of total future invest- INEOS FPS delayed this summer’s
ment, face almost certain deferral,” Morris said. “Some project sanctions will be delayed planned shutdown of the Forties Pipe-
to 2021 and beyond. Some will be completely reworked or even put on hold perma- line System in the UK central North Sea
nently. These include projects with weaker strategic drivers, high breakevens, and/or to spring 2021.
financially distressed operators. Aker Energy has postponed the Pecan
“Africa, the North Sea, Southeast Asia, and Australian LNG face mass project defer- project in the Deepwater Tano Cape Three
rals. Australian LNG is perhaps the most high-profile casualty. As we predicted, both Points block off Ghana.
Woodside Petroleum and Santos have already announced delays at Scarborough and The BW Energy-led Dussafu joint ven-
Barossa until market conditions improve.” ture has temporarily postponed the start
At the time of writing, many offshore projects have been delayed. of the Ruche Phase 1 development off-
Woodside has pushed back the FID for the Scarborough gas project and Pluto Train shore Gabon.
2 on the North West Shelf to 2021. The Browse gas project has also been deferred. FAR Ltd. is working with Woodside and
Jadestone Energy has delayed development of the Nam Du and U Minh gas fields other partners in the Sangomar project
offshore Vietnam. The company had assumed receipt of government approvals by 1Q offshore Senegal to examine how costs can
be reduced, expenditure delayed or both
DOLLAR VALUE BY REGION FOR 2020 CONTRACT OPTIONS and any impact on the timeline to first oil.
ExxonMobil has delayed the green-
Africa $328.0 light on Mozambique’s multi-billion-dol-
Southeast Asia $256.3
lar Rovuma LNG project. The company
said it is collaborating with the partners
Middle East $238.8
and the government to optimize develop-
North Sea $188.2 ment plans through improved synergies
US Gulf of Mexico $136.1 and assessing opportunities related to the
Brazil $106.0 current lower-cost environment. BP and
Kosmos Energy are working to defer the
Mediterranean $101.7
2020 Tortue Phase 1 capital spending for
Eastern Canada $55.0 their multi-billion-dollar Greater Tortue
Australia $47.1 Ahmeyim gas-condensate project off Mau-
South America - Other $44.5 ritania and Senegal. The Phase 1 timeline
is expected to be delayed by 12 months.
Mexico $42.7
Shell’s Bonga Southwest, ExxonMo-
Others $44.5 bil’s Bosi, Owowo West and Uge-Orso, and
Source: RigLogix Chevron’s Nsiko projects offshore Nigeria
are likely to be delayed. equipment/services to and from rigs. This all means the num-
INPEX’s Abadi project offshore Indonesia, the Limbayong proj- ber of idle rigs will soon increase substantially. For rig owners,
ect in Malaysia, Shwe Yee Htun in block A6 off Myanmar, and the some of which were slowly inching their way back to profitability,
Kelidang Cluster in Brunei, are potentially at risk. the road to recovery will be longer, and some will be impacted
ExxonMobil said that developing the numerous deepwater more than others.
discoveries in the Stabroek block offshore Guyana remains an Terry Childs, head of RigLogix, pointed out many companies
integral part of its long-term growth plans. Operations onboard are having to face up to debt payments due in 2021. One major
the FPSO Liza Destiny are unaffected, and the second phase of rig owner believes nearly every public driller will be in Chapter
the Liza field development remains on target for start-up in 2022, 11 this year or next.
with the FPSO Liza Unity currently under construction in Singa- Currently, rig operations in most parts of the world continue
pore. However, as the company waits for government approval to be supported by rig owners, but with strict protocols in place
to proceed with a third production vessel for the Payara devel- concerning crews, equipment and supplies. But a growing num-
opment, some planned 2020 activities are in the process of being ber of drilling rig contractors are saying that they expect to cease
deferred, and this could potentially delay the start of production drilling soon and warm-stack their rigs, with the impact caused
by between six and 12 months. by COVID-19 on logistics cited as the main problem. And should
more countries end up adopting no-travel bans or lockdowns,
DRILLING MARKET this will only extend the number of idle rigs.
The consensus among drilling rig owners and operators is that RigLogix’s data shows that Africa, Southeast Asia, and the
things will likely get worse before they get better, according to Middle East have the highest dollar amounts at stake, and col-
a recent analysis offered by Westwood Global Energy Group’s lectively comprise 50% of the total rig options value. In South-
RigLogix service. This will be especially true if current conditions east Asia and the Middle East, the options are entirely related to
persist, the report said. jackup contracts, whereas the $136.1 million in the US Gulf of
Operators are typically cutting planned 2020 capex by 20-30%, Mexico is mainly for floating rig options.
and the coronavirus is impacting movements of personnel and Valaris ($331 million) and Transocean ($195 million) are said
discovered volumes by the end of the year reusable personal protection equipment for health care workers. The company said it is
could go even below the 2016 level of 8.9 applying its experience with and know-how in polymer-based technologies, in combina-
Bboe, which was the decade’s lowest. This tion with GCMI, to facilitate development and expedite third-party production of inno-
will solely depend upon how many key vative safety equipment.
wildcat wells will still see a spinning drill Shell is part of a consortium that has been developing new face protectors for doctors,
bit in the coming months, as some of them made of snorkel masks. These adjusted masks are said to cover the face fully and are con-
could be either suspended or postponed.” nected to a medical filter by a part produced using 3D printers at the Shell Technology
Bahamas Petroleum Co. has re-sched- Centre Amsterdam. •
uled drilling of its first exploration well
(Perseverance #1) off The Bahamas to
mid-October onwards.
Oryx Petroleum and FAR Ltd. have post-
poned exploration wells in the AGC Central
license area offshore northwest Africa and MAXIMIZE
The Gambia, respectively.
PRODUCTION.
COMBATING CORONAVIRUS
Even as it scales back its E&P campaigns,
MINIMIZE
the industry has been making its expertise
and technologies available to help stop the
DOWNTIME.
spread of the coronavirus. For over fifty years, Nylacast have helped
BP will provide access to its Center for and assisted its customers to enhance project
performance, efficiency and safety through
High-Performance Computing (CHPC) in
the design, manufacture and supply of
Houston to advance coronavirus research. award-winning materials technology.
It houses what the company claims is one
Manufacturing components from initial
of the world’s largest supercomputers for chemistry to end product, Nylacast’s full
commercial research and processes enor- engineering solutions enhance performance
mous amounts of data. It has 16.3 petaflops and reduce maintenance through their
of computing capability, allowing it to pro- corrosion resistance, low weight and
low friction.
cess more than 16 million billion calcula-
tions per second and complete a problem in How can you enhance your projects?
Speak to our engineering team today.
an hour that would take a laptop nine years.
Petrobras will direct part of its super-
computer processing capacity to helping
researchers fight the virus. The Santos
Dumont, said to be Latin America’s largest
supercomputer, is in the Laboratório Nacio-
nal de Computação Científica in Petrópolis,
Rio de Janeiro. The other supercomputer
is in Salvador, northeast Brazil. The com-
pany plans to allocate 60% and 50% of the
two supercomputers’ capacity, totalling 3
petaflops. This will be used to accelerate
the simulation time so that researchers
can achieve results faster.
Eni has made its HPC5 supercomputer
and molecular modeling capability avail-
able for research. Unveiled in February, the
HPC5 hybrid architecture is said to make
the algorithms for molecular simulation
particularly efficient.
ExxonMobil and the Global Center for
Medical Innovation (GCMI) are collaborat-
ing to swiftly re-design and manufacture
www.nylacast.com/energy | info@nylacast.com
MAY 2020 OFFSHORE
PRIOR TO THE COVID-19 pandemic UNITS ON ORDER BY YARD LOCATION (FPSOs, SEMIs, FLNGs)
and concurrent crash in oil prices, 2020 Hull type (group) FLNG SEMI FPSO
Number of units
project awards and ongoing construc-
tion in the floating production sector. Redeploy 5
There are currently 23 FPSOs, seven 2
1 FPSO
production semisubmersibles and three 0 1 SEMI
1 SEMI
Main contractor
Modec Petrobras Equinor Eni Woodside Santos
SBM Petrobras TBD ExxonMobil
Sembcorp Petrobras Shell Equinor
TechnipFMC BP Eni Energean
Samsung BP Reliance
Golar LNG TBD BP
COOEC CNOOC
Yinson Petrobras
Bumi Armada ONGC
Hyundai Murphy
Daewood/Kiewit Chevron
Fluor Shell
Kvaerner Equinor
Worley Vaar Energy
0 1 2 3 4 5 6 7 8 9
Number of units
Source: Energy Maritime Associates Pte Ltd., April 2020
LEADING CONTRACTORS
The 33 production units are being executed by 14 different
contractors. Half of these are juggling multiple projects, with
the other half are working on a single project.
Modec is the busiest by far with eight FPSOs on order,
including four for Petrobras. Of the eight units, six are con-
versions and two are newbuilds. Modec will lease and operate
the FPSOs for Petrobras and Eni (Amoca), while the FPSOs
for Woodside (Sangomar), Santos (Barossa), and Equinor
(Bacalhau) to be completed under EPC contracts. SBM has
five FPSOs under way, with two for ExxonMobil in Guyana,
Mero 2 for Petrobras, and two speculative hulls earmarked
for future requirements. SBM will lease these FPSOs, with
ExxonMobil expected to take ownership after two years of
operation.
Sembcorp is building three new units (Vito and Whale pro- These units are primarily for locations in Brazil, North Sea, and
duction semis for Shell and the FPSO hull for Equinor’s Johan West Africa. Over the next five years, we foresee that Petrobras
Castberg) in addition to integrating the P-71 FPSO in its Brazil- and other large operators resume ownership of FPSOs rather
ian yard. TechnipFMC is the EPCI contractor for three develop- than sign 15- to 20-year leases. Leased units tend to be con-
ments (Energean’s Karish FPSO, Eni’s Coral South FLNG, and versions, but there has been a recent trend toward newbuilt
BP’s Tortue FPSO) and has engaged different yards for each hulls used by leasing contractors. SBM has placed five orders
project. Samsung, Golar, and COOEC have two units each. for its newbuilt Fast4Ward FPSO hulls while Modec has two
orders for its M350 FPSO. Both of these concepts are designed
COVID-19 AND THE OIL PRICE CRASH to reduce costs through standardization and repeatability.
With oil companies slashing capex across the board, only the Over the next five years, we forecast that newbuilt FPSOs will
financially strongest companies will proceed with new proj- account for almost half of all orders.
ects. Those that do move forward will only select the biggest Most of these new hulls will be constructed in China with
and best fields to be developed. We believe that Petrobras a few in Korea and Singapore. Conversion work will continue
and ExxonMobil will continue with plans for multiple, large to be dominated by yards in Singapore, Malaysia and China,
deepwater FPSOs. However, smaller companies that are not although European and Middle Eastern yards will also com-
as financially sound are revisiting plans and commitments. pete, particularly for upgrading existing units.
Most companies are looking to cancel uncommitted capi- Historically, redeployed units have accounted for around
tal and reduce or delay capital that had been committed. One 15% of FPSO orders, but we expect this number to increase to
FPSO project has been cancelled to date. In February 2020, 25% in the next five years. This is due to the large number of
Aker Energy issued an LOI for a leased FPSO on its deepwa- available units (30 as of April 2020), as well as the drive for cost
ter Pecan field offshore Ghana. However, this was cancelled effective and fit for purpose solutions. The majority of rede-
by Aker Energy on March 31. We anticipate that the devel- ployments will be small to mid-size FPSOs that can be mod-
opment will be revised to reduce costs, and that the project ified and given a life extension for another five to 10 years. In
could be re-sanctioned in 2021/22. The tender process had addition, the owners of idle FPSOs are often willing to accept
begun under Hess, which sold its stake in the field to Aker more flexible commercial terms, such as a lower fixed rate
Energy in 2018. The unit will be spread moored in 2,400 m of with an additional tariff linked to production and/or oil price.
water and is designed to produce 110,000 b/d of oil and 100 FLNG. Orders for one to four FLNGs are possible over the
MMscf/d of gas. The FPSO was to be leased for 10 years firm, next five years with a total capital cost between $3.5 and $9.0
with options for another five years. billion. The orders will range from small liquefaction-only
Going forward, we expect sanctioned developments to pro- barges to turret-moored gas processing and liquefaction units
ceed, with delays of three to 12 months due to supply chain with capacities up to 3.5 mtpa. The Petronas FLNG 2 was
disruptions and efforts to delay capex. Projects that are still in delivered in February 2020. Golar’s second FLNG unit, Gimi,
the engineering phase may experience larger delays, as there is scheduled to start operations on BP’s Tortue field in 2022.
is a smaller penalty for delaying a development at that stage. Production semis. Orders for three to six production semis
Once construction is under way, delaying the project could are expected over the next five years with a total capital
prove more costly than keeping to the plan. However, given the cost between $2.7 and $4.3 billion. Almost all will be pur-
need to preserve cash, it is certainly possible that some EPC pose-built hulls ordered by field operators, although some
projects could be stopped mid-way. This is especially true if may be financed through leasing or tolling agreements. The
financing has not been secured for the complete development. required production semis will likely be installed in the Gulf
of Mexico, Australia, and West Africa.
FIVE-YEAR FORECAST
The following is our low to mid-case 2020-2024 forecast, which LOOKING FORWARD
was created pre-COVID 19 and the oil price crash of March We believe that active projects in the floating production sec-
2020. As mentioned earlier, we expect very few projects to be tor will be challenged this year as companies try to preserve
sanctioned for the rest of the year. Therefore, the following cash, deal with supply chain interruptions and push schedules
forecast should be reduced by approximately 20%. to defer spending. Projects that are under way with secure
FPSOs. Orders for 40 to 60 FPSOs are expected over the next financing will most likely be completed, although not on the
five years with a total capital cost between $50.3 and $76.3 original schedule. Early stage projects may be delayed sub-
billion. Some 60% of orders will be leased, 40% owned. Rede- stantially or cancelled.
ployment of existing units will satisfy around 25% of future There had been fears of looming capacity constraints in the
FPSO requirements. Newbuilt hulls will be used for approxi- supply chain, which should now disappear. When oil prices
mately 40% of all orders. re-stabilize, we strongly believe that orders for floating produc-
The currently installed FPSO fleet is comprised of around tion systems will resume, particularly offshore South America
one-third newbuilt units. Over 80% of these newbuilt units and in the Gulf of Mexico. •
are owned by the field operator (mainly MOCs and Petrobras).
2005OFF16-26_crisis.indd1 25
2004OFF_Oceaneering 4/28/20
3/11/20 11:38 AM
1:29 PM
• CRISIS MANAGEMENT
THE SUDDEN DROP in the oil price together with the Corona- for $5.3 billion of offshore EPC contract value.
virus pandemic has thrown the global offshore EPC market into The outlook for oil prices looks bleak for the remainder of the
a state of flux. 2020 budget cuts so far have been around 25%, but year. Oil consumption fell by an estimated 5 and 10 MMb/d in Feb-
short-cycle US shale players have been the harder hit, announcing ruary and March, respectively, as Europe and the US joined Asia
average capex cuts of 35% and up to 75%. The offshore market in rolling out social lockdown measures to prevent the spread of
will see a significant slowdown in planned investments. Discre- COVID-19. April is expected to be the inflection point for demand
tionary E&A budgets have been slashed, rig contracts canceled, destruction with analysts estimating a drop anywhere between
and new project sanction- 15-30 MMb/d. OPEC+
ing is being reassessed. OFFSHORE EPC CONTRACT AWARD OUTLOOK finally agreed to 9.7 MMb/d
Announcements of 80 of production cuts on April
WGEG Anticipated delays
delays and deferrals are an 70 Announced delays 9 starting from May 1 and
almost daily occurrence. As Revised April 2020 outlook tapering until April 2022. A
60 Awarded contracts
of April 17, major offshore few days later, G20 mem-
projects that have been 50 bers pledged a further 3.7
deferred include Bay du MMb/d of cuts and inter-
$ Billion
40
Nord (Equinor – Canada), national oil purchases into
Scarborough (Woodside – 30 SPRs amounting to 200
Australia), Cambo (UK) and MMbbl. However, despite
20
North Field South (Qatargas this unprecedented inter-
– Qatar). These four projects 10 vention, oil markets are
alone equate to around $8.5 0
expected to remain over-
billion of EPC* contracts. 2013 2014 2015 2016 2017 2018 2019 2020 supplied for much of 2Q
But it is not just oil prices Source: Westwood Global Energy Group with global consumption
that are slowing down off- only reaching 90 MMb/d
shore field development activity. The Coronavirus pandemic in June/July, according to recent analysis released by the EIA
also poses major logistical challenges for large-scale construc- and IEA. Westwood has revised its 2020 annual average oil price
tion projects that rely on international procurement and signifi- assumption to $40/bbl, rising to $50/bbl in 2021.
cant imported manpower. This could see delays to the roughly $5 With $5 billion of offshore EPC contracts already awarded
billion of already awarded EPC contracts this year such as those year to date, Westwood still anticipates around $25 billion of
associated with Woodside’s Sangomar project off Senegal, and offshore EPC contracts to still be awarded, assuming prices
Santos’ Barossa gas project off Australia. are around $30 throughout the remainder of 2020. These proj-
All in all, Westwood now expects up to $30 billion of EPC con- ects are typically high-priority developments that already have
tracts to be awarded in 2020. This is $43 billion below the $68 substantial contracts awarded such as ExxonMobil’s Payara off
billion of possible offshore EPC contracts Westwood had iden- Guyana, Equinor’s Bacalhau off Brazil, and Shell’s Whale in the
tified for 2020 and 37% less than that awarded in 2019. From an Gulf of Mexico.
equipment perspective, possible contract awards in 2020 equate After a turbulent five years, the offshore E&P industry is once
to 110 subsea trees, six floating production systems, 1,350 km again adopting the brace position and operators and contractors
(839 mi) of line pipe, and 1,400 km (870 mi) of flexibles. Besides are treading a fine line between sustaining cashflow and ensur-
the delays announced at the time of writing, others at a high ing the health and safety of their workforce. •
risk of slipping include Western Gas’ Equus LNG off Australia
*Offshore EPC contracts include floating production systems, fixed
and high-profile African projects such as Shell’s Bonga South- platforms, subsea production systems, subsea umbilicals, risers
West and BP’s PAJ in the Gulf of Guinea and even Eni’s Mamba and flowlines and pipelines.
gas project off Mozambique. These four projects alone account
IN THE OFFSHORE ARENA, the journey to develop and pro- and service companies. To safely and successfully operate in HP/
duce oil and gas from high-pressure/high-temperature (HP/HT) HT environments, operators clearly cannot use equipment that
fields began more than a decade ago. At that time, project needs would quickly exceed its design capability. Operators need to rede-
were beyond the capability of the available technology. Nor had sign equipment to accommodate HP/HT conditions as well as
the applicable codes and standards been developed. The oil carry out advanced planning for modified operational procedures.
and gas industry needed new drilling, evaluation, completion Since the consequences of failure in offshore HP/HT envi-
and production equipment that could withstand these harsher ronments are potentially severe, regulators such as BSEE have
environments. added extra rigor in their permitting and approval process for
The US Department of the Interior’s Bureau of Safety and such projects, requiring additional risk studies, design verifica-
Environmental Enforcement (BSEE) defines an HP/HT environ- tion, and validation of equipment using an Independent Third
ment as any reservoir that requires completion equipment or Party (I3P) for verification and oversight.
well control equipment with an assigned pressure rating greater
than 15,000 psi and/or a temperature rating greater than 350°F. BECOMING A REALITY
These harsher and more extreme drilling environments present The oil and gas sector has waited a long time for offshore HP/
a series of challenges to offshore operators, equipment vendors HT production to become a day-to-day reality. In some cases,
the meter is running on these resources; operators are keen requirement which the industry could follow. BSEE has now
to develop them while they retain the rights to do so. With the published three Notice to Lessees (NTLs 2019-G02, 2019-G03
required technologies and regulations now in place, many oper- and 2019-G04) for HP/HT-related field development require-
ators with undeveloped offshore HP/HT assets are looking for- ments for offshore operators.
ward to converting them from reservoirs into reserves. To address equipment design challenges, the industry has fol-
BSEE requires the offshore operator to nominate an I3P that lowed the Technology Qualification (TQ) process for each piece
will be responsible for evaluating documentation pertaining to of equipment, including both design verification and design val-
the new technology, and to generate a report for BSEE’s review idation as separate processes.
and approval. These BSEE requirements require the operator, In addition, TQ involves additional areas of concern regarding
original equipment manufacturer, and sub-vendors to work with material selection/qualification, and the study of potential failure
the I3P and BSEE. modes and risks with their mitigation methods. The materials
From the beginning of these developments, ABS acted as the performance criteria in HP/HT drilling environments has not
ISP on behalf of numerous offshore operators. Over last five to yet been established due to the limited availability of case histo-
six years, the classification society has been involved at various ries and the remaining uncertainties related to the composition
stages of design verification, validation for various equipment, of the fluids involved at elevated temperatures and pressures.
and studies aimed at addressing the risks of HP/HT technology As part of the TQ process, various risk and reliability studies
and operations. are required to better identify the hazards and evaluate subse-
Early in the development process, the industry identified the quent risks associated with a proposed technology during its ini-
important technical challenges it would need to address early in tial evaluation. These studies must be continuously updated to
the cycle. These chal- manage risk over the
lenges included a lack TYPICAL RISK AND RELIABILITYSTUDIES FOR HPHT EQUIPMENT/SYSTEM asset lifecycle.
of industry codes and
standards; lack of reg- RISK AND
ulation; equipment RELIABILITY
design; the need for The TQ process
newer materials includes evaluating
(both elastomer and HP/HT drilling haz-
metallic); and the ards using risk assess-
resources for manu- ments and reliability
facturing and inspec- studies. These studies
tion of this much are an essential step
larger equipment. in the TQ process to
ensure the ability of
CODES AND HAZID - Hazard Identification SIL - Safety Integrity Level the novel technology
HAZOP - Hazard and Operability RAM - Reliability Availability Analysis
STANDARDS FMEA - Failure Mode and Effects Analysis RAM - Reliability, Availability and Maintainability aspects in achiev-
Over the last decade, FMECA - Failure Mode Effects and Criticality Analysis ing their functional
the industry has requirements and
worked systemati- goals.
cally to address these challenges and the result is that operators In addition, the risk and reliability studies provide extra veri-
now have field resources contracted and projects very close to fication that the technology meets the functional requirements,
final investment decision. in order to provide an adequate level of safety. The flow chart in
To address the challenges of industry codes and standard prac- this article presents a typical process for the risk and reliability
tices, ABS worked closely with various standards organizations studies when undergoing the technology qualification of HP/HT
and has developed HP/HT-related requirements to the standards equipment and system.
of the American Petroleum Institute (API) and American Society
of Mechanical Engineers (ASME). These standards can now be MATERIALS SELECTION
used for design and manufacture of HP/HT drilling equipment. HP/HT conditions add an increased challenge to the process of
BSEE and API codes require that HP/HT equipment meet material selection for equipment due to the extreme operating
ASME design check methodology. This presents a unique chal- conditions. At the beginning of the study of HP/HT operations,
lenge for the industry, since these are new methodologies for there were many uncertainties involving the specific environmen-
design compared to traditional API methods. ABS quickly noticed tal effects on the material properties due to the lack of field data.
that application and understanding of ASME methodology var- As a result of this data scarcity, uncertainty concerning mate-
ied by manufacturer. This variability poses a unique challenge for rial suitability to operate in the HP/HT environment required
the I3P, in particular for fatigue and fracture mechanics analysis. manufacturers to make major investments, to qualify their pro-
ABS worked closely with BSEE to develop a regulatory posed materials. Various factors having a major bearing on the
material selection included but were not limited to: verification and validation.
• Temperature
• Chemistry UNLOCKING THE POTENTIAL
• Manufacturing procedure The work of the past decade shows that the industry has grasped
• Material properties the challenges of HP/HT operations and has become more com-
• Exposure to environment: seawater, wellbore, drilling and fortable with the requirements from a technical and regulatory
completion fluids, general and localized corrosion perspective. Operators are now able to make final investment
• Erosion decisions on the basis that the R&D work has produced approved
• Elastomers technology.
• Design life The first phase of actual operations will be critical in provid-
• Creep at high temperatures ing real world data and experience of how the technology per-
• Material interactions. forms in this environment, and whether new items need to be
Over the last 10 years, an increasing proportion of equipment considered from a risk or system perspective.
has been designed, built, and tested under the TQ process and Once this begins to happen, the industry can move toward
been approved by both the independent third party and BSEE. standardization of the technology components and begin to
Getting equipment qualified under this extremely challenging make inroads into managing and reducing the high costs asso-
development process has been a significant achievement for the ciated with the development of first-generation equipment. •
industry, but greater challenges are still ahead.
The next phase of the HP/HT story is building the equipment THE AUTHOR
and developing the fields themselves. Looking at the bigger pic- Harish Patel is Senior Technical Advisor, Technology–Drilling
ture, the operator needs to address risk related to development and Process, ABS.
of the field. There will be numerous challenges.
The equipment qualified for operations are of new design and
as a result their reliability is still unknown and will require a great
deal of attention during manufacture, testing, and operations.
• Higher weight of HP/HT equipment World Trends and Technology for Offshore Oil and Gas
EMERGING ECONOMIES continue to record sharp increases the rapidly increasing gas-to-power market in places where there
in energy demand, and the floating storage regasification unit is no access to existing gas infrastructure.
(FSRU) concept has demonstrated that it can deliver a fast and
cost-effective solution. POWERING EL SALVADOR
The first FSRU unit was installed in the Gulf of Mexico in 2005, Energía del Pacífico (EDP) is an ambitious project that is introduc-
and by mid-2016, 19 more were in operation. According to the ing a new, clean, and more efficient source of energy to El Salva-
publication, “Natural Gas and the Clean Energy Transition,” pro- dor, where most power generation today is fueled by heavy fuel oil
duced by the International Finance Corp., a sister organization (HFO). The goal of the EDP development is to expand El Salvador’s
of the World Bank, countries have turned to FSRUs primarily for energy mix, adding LNG to the current hydropower, geothermal,
three reasons: needing LNG for a secure supply of natural gas, solar, and HFO sources to provide consistent and reliable energy.
using LNG to provide back-up to hydroelectricity, or making up The project – which is being executed via a partnership headed
for declining gas reserves. by Invenergy and supported by El Salvador-based partners Grupo
By the end of 2018, there were 40 LNG-importing countries, and Calleja, VC Energy de Centroamerica and Quantum Energy –
almost all new importers are emerging markets that have developed includes an FSRU that will transport regasified LNG via subsea
FSRU-based terminals. In some cases, FSRU projects are serving pipeline in the Port of Acajutla to a newly constructed 378-MW
thermal power plant onshore. This new facility will meet 30% of El FSRU will be moored on the Pacific coast of El Salvador, orientated
Salvador’s energy demand. A 44-km (27.3-mi) transmission line and at approximately 225° to minimize waves on the starboard bow
substations also are part of this development, which constitutes and to position the mooring lines from the stern of the vessel to
the largest private investment to date in El Salvador. avoid interfering with pipelines. The vessel position was chosen to
minimize interference with other port infrastructure, port traffic
RISING TO THE CHALLENGE and anchorage areas and place it outside the nearby buoy moored
Laying the groundwork for this technically complex project did oil importation terminal exclusion zone and out of the way of the
not come without challenges. In addition to introducing the first associated marine terminal operations.
LNG-fueled power plant to El Salvador, this project includes the The FSRU is designed with 137,000 cubic meters of storage and
first FSRU for the region. Regulations needed to be formulated 280,000,000 scf/d of regasification capacity which is four times the
and approved for offshore gas storage as well as for transporta- throughput needed to meet the maximum power plant capacity
tion to shore. The scope of the transmission network expansion providing a high level of reliability and redundancy. The FSRU will
was another challenge because rights-of-way negotiations had to receive LNG from ship-to-ship (STS) deliveries from LNG carriers
be finalized before construction could begin. (LNGC) that will be supported and maneuvered alongside FSRU by
Another challenge was designing the physical components of tugboats from SAAM Towage. The LNGC is berthed to the FSRU,
the project – the supply, storage, and regasification of LNG; the positioned along the starboard side. LNG is transferred between
power plant; and a transmission network – all of which required the LNGC and FSRU via their mid-ship manifolds using cryogenic
creative technical solutions. hoses. The LNG is regasified onboard FSRU, and gas is delivered to
shore from the regas manifold on the FSRU via a riser from a port
INTRODUCING A NOVEL CONCEPT side porch, to a pipeline end termination connecting to a 1,750-m
Initial development concepts included onshore regasification and (5,741-ft) subsea pipeline to the onshore power plant.
LNG tanks, a jetty, and an offshore FSRU barge protected by a EDP has signed a long-term supply agreement with Shell to
near-shore cofferdam. Located close to shore in 17-m (56-ft) water supply LNG for the development for around 13 years.
depth and exposed to open ocean swell, these options became
very expensive and potentially rendered the project unviable. In DESIGNING THE MOORING SYSTEM
the end, the most practical and cost-effective solution was a per- An affordable mooring system that could permanently moor an
manently moored FSRU. FSRU for 20 years in 17 m (56 ft) water depth was needed to allow
The team procured the Gallina Moss LNG carrier from Shell the project to move forward. The main objective was to design a
and contracted BW LNG to carry out the FSRU conversion. The mooring system that provides uninterrupted transfer of gas from
the FSRU for both operational and extreme conditions. in STS loading conditions as well as additional scenarios to deter-
The installation site of the FSRU is south of the hurricane/trop- mine the mooring capacity in conditions in which any single com-
ical cyclone belt in an area with relatively benign environmental ponent in the station keeping/mooring system is lost.
conditions. However, the vessel would be exposed to seasonal long Further simulations were performed with the most loaded line
period swell and possible seismic activity with the potential to cre- removed and with the second most loaded line removed. The
ate tsunamis. The design environmental conditions considered results from the simulations form the basis for the line-broken
most severe scenarios in 100-year wave, wind, and current con- line tensions and FSRU offsets. For these single-component fail-
ditions and extreme 1,000-year events for tsunamis, including sea ure scenarios, the criterion for peak loads in the remaining anchor
level variations as well as current speeds. lines and 100-year extreme condition loads is defined by API RP
Nominal 100-year conditions include: 2SK – the industry standard for mooring systems. CAN Systems
• 100-year significant wave height of 3.3 m (11 ft) with peak peri- also conducted simulation and modeling to validate mooring per-
ods of 12 to 18 sec formance for tsunami conditions.
• 100-year wind speeds of 20 m/sec (1 hour mean) The validated mooring arrangement was verified and approved
• 100-year surface currents of 1 m/sec. for use on the EDP project by classification society DNV GL.
CAN Systems in Norway developed and designed the restricted
catenary mooring (RCM) system, a refined spread mooring sys- EFFECTING POSITIVE CHANGE
tem that comprises a bow mooring system, a mooring restrictor The 378-MW EDP project in El Salvador will not only introduce
arrangement and stern hold back lines. The main feature of the a new source of energy to the country, but it will also include the
RCM system is a specialized, subsurface connecting plate and development of the first offshore regasification vessel deployed
restrictor arrangement that keeps the mooring lines at the bow off the Pacific Coast of Central America – thus demonstrating the
and stern close together viability of floating LNG as
below keel level, thereby an energy source for land-
preventing the mooring based power generation in
lines from interfering with the region.
the offloading LNGC. EDP is a transforma-
The RCM system con- tional project for El Salva-
sists of the bow mooring dor and Central America
system secured by chains as a whole, introducing a
affixed to connecting new source of energy with
plates arranged from deck a system that provides the
The specialized mooring system will
level hangoff with restrictor include a subsurface connecting plate
efficiency and flexibility to
chains to hold the moor- designed to prevent the mooring lines from supplement varying pro-
ing lines together and interfering with the offloading LNGC. duction from solar and
away from STS moored hydro generation sources.
LNGCs to avoid interfer- This added capacity will not
ence during offloading. The holdback lines at the stern have a only balance energy availability but will also reduce the environ-
similar arrangement as the bow mooring lines. The flexible 14-in. mental impact of energy production. Beyond the added benefits
gas export riser is routed from a balcony at the side of the ship to to the energy mix and environment, the project is a catalyst for
the pipeline end termination (PLET) on the seabed where it tran- growth for the country. •
sitions to the pipeline that carries the gas to shore.
The seabed where the FSRU will be moored is relatively sandy THE AUTHOR
with the presence of volcanic boulders, which led to the selection Alberto Osorio is Director of Thermal Engineering at Invenergy
of the Vryhof Stevshark REX drag embedment anchor for the and Project Director of the Energía del Pacífico
mooring system. The REX anchor is designed with spread shanks (EDP) project, currently under development and
and a geometry that improves installation, penetration, stability, construction in Acajutla, El Salvador. In this role
and strength. The RCM mooring system consists of 84-mm chain he is responsible for leading and coordinating all
for the lower anchor legs and 100-mm chain in the top chains project activities including EPC contractor man-
for additional corrosion allowance in the splash zone (above the agement. He holds a BS in Civil Engineering from
restrictor chain). Mooring legs have variable lengths from 135 m the University of Granada, Spain; a BS in Civil Engi-
(443 ft) to 235 m (771 ft) to fit within the site restrictions. The Vry- neering from the National Autonomous University of Mexico; and
hof Stevshark Rex anchors vary in weight from 12.5 tons to 23 tons an MS in Engineering of Roads, Canals and Ports from the Uni-
including extra ballast weight. versity of Granada, Spain. He is a licensed professional engineer
Model testing to confirm the RCM design in 100-year wind, in Spain and Mexico.
-wave and -current design conditions was carried out by MARIN
in the Netherlands. Tests also evaluated LNGC alongside the FSRU
2005OFF30-40_eci.indd
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• ENGINEERING, CONSTRUCTION & INSTALLATION
THE MARINE and offshore oil and gas industries are coming Siemens delivered the first modern diesel-electric propulsion
under immense pressure to reduce emissions and improve the system to a Norwegian offshore supply vessel in 1996. The com-
sustainability of their operations. Considering this, the applica- pany has since implemented similar systems on 300+ marine
tion of low voltage direct current (DC)-based diesel-electric pro- vessels worldwide. In 2018, another significant milestone was
pulsion systems has gained significant traction. achieved on the West Mira drilling rig in the North Sea. It became
Low voltage DC grids provide numerous advantages when the world’s first modern drilling rig to operate a low-emission
compared to traditional power systems based on alternating cur- power plant using lithium-ion batteries.
rent (AC) electrical distribution, including the ability to optimize
the loading on diesel gensets by changing the speed according DC POWER GRIDS
to the load, which reduces specific fuel consumption and asso- The application of DC power grids on offshore marine vessels
ciated emissions. is not new and can be traced as far back as the 1880s. However,
Additionally, by reducing loading on the gensets, maintenance most ships and rigs in operation today use AC power distribu-
intervals can be extended. These benefits are especially relevant tion. In these systems, prime movers (typically diesel engines)
for offshore rigs and platform support vessels (PSVs), which have are connected to a generator, which distributes power to various
highly variable power demands for drilling, dynamic positioning, consumers across the facility, including the propulsion system.
and station-keeping. DC power plants also enable easy incorpo- Although these systems have been used with success for
ration of energy storage technologies to create hybrid or all-elec- decades, one inherent disadvantage is that the diesel engine
tric power schemes. must be kept running at a fixed speed in order to maintain con-
stant frequency and voltage within defined static and dynamic
limits. This speed is typically less than the rated output of the electrically powered ferry boat. Named Ampere, the ferry carries
engine, which results in partial loading. When this occurs, engine passengers and cars across a 6-km (4-mi) crossing between two
temperature is not high enough to burn all the available fuel. As communities in the Fjord area of Norway. At 80 m (262 ft) long,
a result, unburnt fuel passes into the exhaust system, reducing it is driven by two 450 kilowatt (kW) electric motors powered
efficiency and increasing specific fuel-oil consumption (SFOC) by lithium-ion batteries. The batteries have a combined capac-
– both of which lead to higher emissions. ity of 1,000 kilowatt-hours (kWh). With electricity in the Fjord
Modern low-voltage DC solutions solve this problem by decou- area being generated exclusively by hydroelectric plants, Ampere
pling the power grid from frequency and allowing the diesel cuts emissions by 95% and lifecycle cost by 80% compared to a
engines to be operated at variable (i.e., more optimal) speed, which fuel-powered ferry traveling the same route, which consumes
lowers SFOC. This can yield substantial fuel savings and emis- around one million liters of diesel fuel and emits 2,680 tons of
sions reductions for PSVs, which only require full power a small CO2 and 37 tons of NOx each year.
proportion of the time they are in operation. In such cases, total Similar savings are possible in hybrid power plants by enabling
fuel reduction on the order of 10-25% can be achieved. NOx emis- diesel engines to be operated at an optimal combustion level most
sions reductions as high as 80-85% are also possible due to higher of the time, which improves fuel utilization. This is the case with
exhaust temperature and more efficient utilization of scrubbers. the Norwegian offshore construction vessel, Edda Freya. This ves-
In addition to the environmental benefits, DC power grids are sel was commissioned in 2016 and features Siemens’ BlueDrive
more flexible and unlike AC grids, do not require a frequency con- PlusC DC power grid with 23MW installed power generation and
verter for connection to onshore power sources. There are also 500kWh battery capacity, coupled with an energy storage solution
safety advantages, including rapid fault clearing, which eliminates from Corvus Energy. The hybrid power system enables lower fuel
the possibility of generator synchronization failures and drasti- consumption when compared to vessels of similar size – and in
cally improves blackout recovery time. turn, a lower emissions profile.
In the case of offshore rigs with hybrid power plants that use
LEVERAGING ENERGY STORAGE energy storage, excess power produced from diesel generators or
Another significant benefit of low voltage DC power grids is that gas turbines could potentially be stored and used to support and
they allow for easy incorporation of energy storage technologies improve operation of the primary energy source. Energy could be
to create hybrid (i.e., diesel-electric) or all-electric power schemes. used for immediate consumption to improve dynamic operation
The latter is typically not feasible for large PSVs with high power of engines with low response capability in critical situations, as
loads; however, there are many commercial transport vessels in well as for reducing rapid speed changes during normal operation.
operation today that are fully electric. The application of energy storage for drilling rigs or PSVs ulti-
In 2015, Siemens supplied the power system for the world’s first mately enables companies to fundamentally change the way they
operate assets. A summary of the key benefits is outlined below. first lithium-ion battery solution to an offshore drilling rig. The
Reduced fuel consumption and lower emissions. As previously West Mira is a sixth-generation, ultra-deepwater semisubmers-
stated, by integrating low voltage DC power grids with energy stor- ible that will operate in the North Sea’s Nova field, about 120
age, it is possible to optimize the loading on combustion units, km (75 mi) northwest of Bergen, Norway. It will be the world’s
such as diesel gensets, which reduces specific fuel consumption first modern drilling rig to operate a low-emissions hybrid (die-
and associated emissions. This is particularly beneficial on drilling sel-electric) power plant using Siemens’ BlueVault lithium-ion
rigs, where power plants have highly variable power demand for battery technology.
drilling, dynamic positioning, and station-keeping. Hybrid power The solution consists of four converter-battery systems (total
schemes can also be used to lower transient loads on gensets and 6MW). The battery system is connected to the main switchboard
improve dynamic response times of thrusters. using a Clean Grid Converter (CGC) and step-up transformer
Improved reliability with better redundancy schemes. Relatively to medium voltage AC connections. The batteries are charged
speaking, diesel engines are slow to handle large, abrupt load from the rig’s two diesel-electric generators and used for sup-
changes. Using batteries or supercapacitors to provide temporary plying power during peak load times. In addition, they serve as
power affords facility/vessel operators more flexibility and pro- back-up to prevent blackout situations and provide power to the
vides the opportunity for new redundancy schemes, thus ensuring thrusters in the unlikely event of loss of all running machinery.
safety, lower opex and improved uptime throughout operations The installation of the ESS on the West Mira will result in
by reducing the number of engines / gensets on the platform. an estimated 42% reduction in the runtime of on-platform die-
For example, in a power plant where there have been tradition- sel engines, reducing CO2 emissions by 15% and NOx emissions
ally three gas turbines, an oper- by 12%, which is equivalent to
ator could potentially use two annual emissions from about
gas turbines with an energy stor- 10,000 automobiles.
age solution attached to it. Addi-
tionally, batteries can be used to THE ROAD AHEAD
remove the need for load shed- The long-term success of the
ding and bridge the gap between offshore oil and gas industry is
one engine failing and another predicated on reducing costs
starting up. and minimizing environmental
Reduced footprint and impacts. Low voltage DC power
increased payload. Low volt- grids coupled with energy stor-
age DC grid diesel-electric plants Installation of a hybrid power plant aboard the deepwater age provide a means to achieve
incorporating ESS have a smaller semisubmersible West Mira is expected to enable the rig to increase that objective by providing
its energy efficiency and lower emissions. (Courtesy DNV GL)
footprint than traditional power clean, flexible, and dispatch-
schemes which use gas turbines. able power.
For example, a 6.6kV high-voltage power plant with dual fuel tur- The benefits of deploying a hybrid power plant with energy
bine-driven generators and one auxiliary diesel generator requires storage in the offshore environment could potentially be real-
approximately 120 sq m (1,292 sq ft) of space in the process area. ized on any facility. However, regional economic, environmental,
By comparison, a 690V plant with four 4MW diesel generators, and regulatory factors play an important role in cost-effective
a main switchboard, integrated variable speed drive (VSD), and deployment.
ESS requires zero square meters of space in the process area. This In Norway, for example, the government is incentivizing the
increases payload and enables operators and EPCs to rethink industry to reduce emissions. This is one of the main benefits of
topsides philosophies, opening the door to more flexible designs. developing and using energy storage solutions for offshore facil-
ities in the North Sea. Other countries, including the USA and
PAVING THE WAY FOR RENEWABLES other EU nations, do not heavily incentivize the industry to sup-
The concept of using renewable sources of energy, such as off- port emissions reductions. However, new International Maritime
shore wind farms, to provide clean power to offshore oil and gas Organization (IMO) 2020 regulations which came into effect this
assets continues to gain traction. But there are still many hur- year are making these types of novel power solutions more attrac-
dles to overcome in order to make this a reality, not the least of tive and cost-effective. •
which involves finding ways to offset the intermittence and inher-
ent unpredictability of electricity generation from wind. Energy THE AUTHORS
storage is an important part of the solution to this problem and Stig Settemsdal is CTO Offshore Solutions with Siemens Energy AS.
will play a key role in helping the offshore industry drive toward Lars Barstad is DC Power & Drives Program Lifecycle Manager,
decarbonization. also with Siemens Energy AS.
In 2018, Siemens took an important step on the way to reduc- Wolfgang Voss is DC Power & Drives Program Lifecycle Manager
ing emissions and eventually harnessing renewable sources of with Siemens Energy AG.
energy to power oil and gas operations by supplying the world’s
various types of floaters from the Far East to the western hemisphere, ranging from Boskalis: Petrobras chose Boskalis to
a ship-shaped FPSO for BP’s Schiehallion redevelopment west of Shetland in 2016, transport these hulls based on the bene-
to the circular FPSO for Eni’s Goliat project in the Norwegian Barents Sea, and the fits a dry transport provides. The contract
Moho Nord FPU offshore Congo for Total in 2017. Whatever the design or shape, the was signed with the Chinese fabricator
process of taking it onboard BOKA Vanguard is always the same, i.e. submerging the (COOEC), however Petrobras’ preference
vessel’s deck to a sufficient water depth to accommodate the cargo, which is brought for a dry-tow really helped to secure these
in using tugs and winches. jobs.
These are sister vessels, both of a box-
Offshore: Did Petrobras select Boskalis to transport the P-70 for Atapu based shape designed by Petrobras. P-70 was a
on good experiences with the Lula Norte project? couple of hundred metric tons heavier
than P-67. But because it was in most
other aspects a replica of P-67, a lot of
experience could be incorporated from
the first job for the second FPSO trans-
port. In addition, both the loading and
discharge locations were the same and
we were able to use our experiences from
the loading/discharge operations for P-67
to optimize planning for the P-70, espe-
cially in the use of tugs and the anchor
spread to position the FPSO during load-
ing. The overall process was more effi-
cient for the second job, which was one of
the biggest cargoes we have ever loaded.
This was a first-time role of its type
for COOEC. The hulls for the two FPSOs
had been awarded and constructed and
were transported to Brazil for integration
of the topsides. But when the previous
oil crisis of 2014-16 hit Petrobras, both
hulls had to be taken back to China for
the topsides integration.
AS THE WORLD CONTINUES to demand energy sources, on ageing fields is to assess the condition of existing infra-
there is mounting pressure on hydrocarbon producers to structure and its ability to handle current operational loads.
find new reserves and extract more from existing assets. If a condition assessment indicates concerns, then further
In recent years, the industry has made noticeable advance- analysis is required to determine the appropriate remedial
ments in recovery techniques, using efficient technology to action to ensure continued, safe operations.
extend the life of mature fields.
As these facilities are extended beyond their original design FITNESS FOR SERVICE
life and the burden for integrity verification and assurance Fitness for service (FFS) provides a quantitative engineering
steadily increases, it is essential to demonstrate continued evaluation to demonstrate the integrity of a component to
safety and integrity of ageing assets. continue to operate under a specific set of conditions, poten-
Any infrastructure which has been in service for an tially in the presence of a defect or degradation mechanism.
extended period, whether a pressure vessel, pipeline or It translates inspection results into quantifiable operational
machine component, has the potential to degrade until it and safety risks, enabling informed integrity management
no longer meets the original design requirements. There- decisions.
fore, the first step in reviewing redevelopment programs FFS provides a basis for engineers to distinguish between
acceptable and unacceptable defects and conditions, with pressure retention could leave operators exposed to a sub-
principles based on internationally recognized procedures. stantial risk. Performing at least basic FFS once the design
Although many industry standards address some form of fit- requirements are no longer satisfied can reduce the risk
ness for service assessment, the American Petroleum Insti- and provide valuable insight into operating boundaries and
tute (API) compiled the best practices into a single, modular future degradation, as well as highlight future requirements
assessment standard (API 579-1), which has become the for advanced FFS and potential repair.
authoritative publication on FFS.
DECODING DEGRADATION
CLEAR UNDERSTANDING OF RISK The first step of assessing any defect is identification of the
The benefits of carrying out FFS assessments are clear: damage type. The assessment procedures are damage specific,
reduced downtime, improved safety, proactive maintenance, with the API 579-1 standard providing assessment methods
all the elements necessary for keeping continued opera- for 12 different types of damage. Understanding the damage
tions as safe, compliant, and efficient as possible. However, is also important for predicting the progression and deter-
the question often arises as to when FFS should and must mining the remaining safe, operating life.
be applied. For each damage type there is a subset of assessment
Identifying the point of deviation from design intent is methods, each with specific applicability and limitation
often more complex than expected due to the absence of criteria that needs considering. There are also different
detailed design information, changes in operating environ- levels of assessment, with progressively increased accuracy
ments, and multiple or complex loading scenarios. There- and reduced conservatism, accompanied by an increase in
fore, an FFS assessment should be considered as soon as any required accuracy of input information:
reported defects exceed the design code limits. For exam- • Level 1 - very basic and aimed at quick screening of defects
ple, defect size exceeding the limit stipulated in the original in simple components, normally considering pressure
fabrication quality control standard, metal loss exceeding retention only
the design corrosion allowance, material property degrada- • Level 2 - intermediate, for more complex components with
tion to below the material specification limits, or exposed additional loads, increased accuracy enables a reduction
to pressures and temperatures outside of original operat- in design safety margins
ing boundaries. • Level 3 - advanced assessment of complex components
In oil and gas, degradation is often dominated by metal loss or severe degradation using detailed mathematical mod-
as a result of corrosion. Operators tend to use the minimum eling to determine structural stability.
allowable wall thickness (MAWT) as a guideline to initiate
FFS. For piping components there is also a significant reli- COMPONENT CLASSIFICATION
ance on the API 574 guidelines for minimum structural wall API 579-1 uses an alpha-numeric classification system based
thickness; although these do not consider material grade, on component complexity and loading conditions to deter-
span length, operating medium or support arrangements. mine the appropriate minimum level of assessment:
For example, a 6-in. schedule 40 pipe system has a nom- • Type A - is the most basic component, with a simple
inal thickness of 7.11 mm, inclusive of a potential 12.5% geometry and equation relating thickness to pressure, and
thickness under tolerance. If this is specified to have a 1.5 simple loading conditions dominated by pressure. Type A
mm corrosion allowance, it results in a minimum design components are perfectly suited for Level 1 assessment
wall thickness of 4.72 mm. The API 574 Default Minimum • Type B class 1 - have similar basic geometries and thick-
Structural Thickness for a 6-in. carbon and low-alloy steel ness equations to Type A components but requires con-
pipe is 2.8 mm. If designed for internal pressure of up to 50 sideration of additional loading conditions due physical
bar (725 psi), the MAWT for pressure retention could be 1.21 size and/or exposure temperature. Type B class 1 com-
mm (depending on material grade). ponents requires level 2 assessment as a minimum
If MAWT is used to initiate FFS assessment, there would • Type B class 2 - are more complex components with
be no possibility of a successful outcome for this hypothet- thickness interdependencies requiring procedural design
ical scenario, the remaining wall thickness would not sat- evaluation rather than simple thickness. Type B class 2
isfy the API 579 Limiting Thickness criteria. Similarly, if components requires Level 2 assessment as a minimum
the API 574 structural thickness is used for initiating FFS • Type C - have the most complex geometries and load dis-
assessment and the pipe system is operating at temperatures tribution normally causing significant local structural or
above 149°C (300°F), it could experience local thermal pipes stress discontinuity requiring advanced mathematical
stress levels requiring levels well in excess of the structural analysis by means of the Level 3 assessment.
thickness. For pressure vessels it is even more complex due
to local changes in geometry, localized reinforcement zones, ASSESSMENT IN ACTION
major structural discontinuities, and loading complexities. During a routine inspection localized corrosion under insula-
Simply considering components based on thickness for tion (CUI) was detected above a horizontal stiffener ring in a
F. Jay Schempf
2005OFF41-50_prodOps.indd
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AM
• PRODUCTION OPERATIONS
large vertical vessel. Local metal loss spanned approximately The company quickly provided a preliminary (Level 2)
200 mm upwards from the stiffener ring covering locally the assessment based on the initial information available, while
entire circumference of the shell. Accurate thickness mea- the operator proceeded with short-term shutdown for surface
surements were not immediately possible due to surface preparation and detailed inspection. Although not suitable
condition, but estimates suggested only 7 mm remaining of to certify the integrity, the indicative assessment provided
the original 16 mm wall in the worst affected area. a preliminary indication of the potential failure risk and
Oceaneering was contacted for advice on how to accurately the likelihood of a successful Level 3 assessment outcome,
assess the safety and ongoing operability of the equipment. thereby enabling the operator to focus immediate efforts on
The production facility had capacity for a short-term, partial recommissioning or repair. It also initiated geometric mod-
shutdown of five days for surface preparation and inspection eling for FEA to expedite the assessment process.
of the damaged vessel. Beyond this, if a longer repair time The original vessel design included consideration of both
was necessary, the facility would require a complete shut- internal pressure and vacuum conditions, with normal opera-
down, resulting in substantial financial loss. Primary con- tion under partial vacuum. The company’s indicative assess-
cern centered around the immediate safety of personnel and ment showed that the original design was governed by the
equipment, followed by mitigation of any required downtime. vacuum loads, not internal pressure. It anticipated that the
FFS would provide valuable information on whether con- vessel would withstand internal pressures well in excess of
tinued operation was safe and achievable, while a suitable the maximum design pressure, as well as full vacuum con-
repair strategy was investigated, designed, and implemented. ditions, at the initially reported thickness levels. However,
The vessel dimensions did not satisfy the requirements subsequent detailed inspection revealed the metal loss was
for Type A component classification, as additional loading substantially greater than originally stipulated, with remain-
©2020_WPC_RA1
conditions had to be considered. The location of the defect, ing thickness of only 2.5 mm in the worst affected area. This
immediately adjacent to a stiffener also did not satisfy Level increased the urgency for a Level 3 assessment, and reduced
2 applicability requirements, indicating finite element stress confidence in a successful outcome.
analysis would be required to evaluate the local stress and To expedite results, a phased approach to assessment
strain distribution. Therefore, advanced FFS (Level 3) was load cases was followed. Firstly, combined vacuum, weight,
the only suitable assessment. and thermal loads were assessed to demonstrate safety for
2003OF
2005OFF41-50_prodOps.indd 44 4/28/20 11:38 AM
PRODUCTION OPERATIONS •
continued normal operation. The limit load and buckling PROVEN BENEFITS OF APPLYING FFS
assessment indicated overall structural stability and adequate Due to the criticality and urgency associated with FFS, reg-
resistance to buckling under full vacuum, with no change in ular progress feedback and preliminary results are critical to
design buckling behavior in the presence of the defect, and enable accurate decision making without the need to wait for
no excessive plastic strains. The vessel was deemed fit for a final formal report. For the above example, the company
continued service for normal operation (partial vacuum) and provided the customer with indicative results and the abil-
preparations for recommissioning could commence, with ity to make an informed decision within three days, ensur-
appropriate protections to avoid upset conditions. ing equipment could be safely recommissioned, in tandem
Secondly, assessment of internal pressure, weight, and with seeking repair solutions.
thermal loads during upset conditions were assessed. The In most cases, when FFS is conducted by competent
assessment indicated potential structural instability and industry advocates, the cost of the assessment is greatly
excessive plastic strains at pressures exceeding 70% of design outweighed by the benefits of gaining a more detailed under-
maximum pressure, requiring derating of the vessel for poten- standing of the damage, potential risk, safe operating bound-
tial upset conditions. Finally, assessment of wind loads indi- aries and likelihood of repair. FFS provides valuable insight
cated that vessel integrity would not be compromised at into the risks associated with component and defect combi-
design wind speeds. nations and it supports effective future integrity management.
Oceaneering concluded that due to the low minimum Including FFS technology and assessment capabilities as
remaining thickness and the required derating for internal part of asset management strategy can create substantial
pressure, the vessel would not be able to sustain any significant operational efficiencies, reduce the likelihood of unplanned
further metal loss. It was deemed fit for short-term continued and costly repairs. Ensuring that operators are fully aware
service, provided it was derated to 70% of its original design of what FFS is and why it exists as part of a maintenance
maximum pressure, that further degradation was inhibited program budget can prevent extended shutdowns, enhance
by temporary corrosion protection, and a suitable repair is recovery, and keep assets safe for longer. •
designed and implemented in a reasonable timeframe.
at WPC2020.COM
DEC 6-10, 2020
PRESENTED BY
AUTONOMOUS OPERATIONS can help make systems safer, ensure their facilities are safer and more efficient.
more capable and reliable, as well as more cost-effective. Remov- The strongest driver, that can be seen from several direc-
ing people from the process reduces the scope for errors and tions in the industry, is cost reduction. Since the oil price plum-
improves safety. The journey toward autonomous operations meted in 2014, reducing the capital and operating costs has
is happening in the energy sector, predominantly now where been a key priority for energy companies. There has always
digital technologies are being used to sense, measure, and con- been a focus on safety and the prospect of removing people
trol connected assets. from the hazards of offshore operations has been a tantaliz-
ing prospect for the oil and gas market. Then of course we are
DRIVERS FOR AUTONOMOUS OPERATIONS increasingly starting to evaluate how we can make operations
Drivers for autonomous operations are multi-faceted and can more sustainable by reducing carbon intensity and improving
change from operator to operator depending on the exact asset efficiency. The desire to look at whether there are alternatives
or process to be automated. to the way things are done currently, with a more sustainable
There are several trends that are driving exploration and outcome. It is a challenge that the energy industry is actively
production within the energy sector, with the most notable addressing and will continue to address.
being the rise of digitalization and the need for companies to However, it is not a journey the industry can jump into; it
is a steady progression rather than a revolution. Commonly is vitally important and a necessary part of operators’ journey
it is seen as a five-step process starting with isolated opera- toward autonomy.
tions that includes connectivity to shore automation and some Traditional maintenance routines are based on service time,
on-board automation, moving through connected operations not actual requirements, despite the fact 70 to 90% of fail-
where on-platform sensors and servers are added, then inte- ures are unrelated to equipment age. The problem with such
grated operations, remote operations, and finally achieving approaches is that considerable effort is devoted to devices that
autonomous operations. are working perfectly well. It also does not address the reality
An operator must ensure proper measures and competence where 20% of the equipment tends to cause 80% of the issues.
are in place before moving from one level of autonomy to the Furthermore, up to 40% of production losses can be attributed
next. In a highly regulated industry, input and collective deci- to preventable operator errors where, in a typical facility, this
sion making from technology providers like ABB, operators, could account for 1 to 2% of facility’s total production capac-
and regulators is necessary to help the energy sector progress ity. The result of excessive maintenance can be that facilities
through the steps. become less reliable due to increased human intervention.
Companies that use predictive maintenance, however, are
REDUCING COSTS alerted to issues that need addressing based on actual need.
A milestone on the journey toward autonomous operations Failure modes are remotely monitored using sensors and ded-
came last year at the Aasta Hansteen platform. Located in icated analyses are performed to assess the equipment itself
1,300 m (4,265 ft) of water in the Norwegian Sea and 300 km and/or its environment for clues to drive maintenance pro-
(186 mi) from land, automation was used to improve start up grams. When data is collected from a large amount of identi-
time and reduce capex costs. cal equipment operating under similar conditions, it becomes
Digital solutions driven by the need to reduce costly sched- possible to build a precise model of that device’s degradation
ule delays, served as the basis Aasta Hansteen’s fully automated process. By reducing downtime for maintenance operations
first gas start-up process. To achieve this, a sequence of more through a predictive approach, companies can optimize oper-
than 1,000 manual interventions needed to be reduced to as ations and avoid losses.
few as possible. The outcome is a series of buttons that are as In practice, ABB engineers have been helping Australian nat-
simple as starting a car. ural gas company QCG, now owned by Shell, whose upstream
The teams went through the start-up steps, identified and facilities stretch across the Surat basin, where coal-seam gas is
defined obstacles that needed to be improved, then used the gathered and transported along a 540-km (336-mi) underground
ABB Ability System 800xA simulator to do a virtual start-up of pipeline, to an LNG plant on Curtis Island near Gladstone.
the plant. It was at this stage that a lot of improvements were All process facilities including control, safety, telecom-
made for starting up and operating the plant. Through auto- munications, CCTV, electrical and maintenance systems are
mating much of the process the company managed to reduce a controlled and monitored via the ABB Ability System 800xA
complex set of manual interventions to just 20. It is estimated distributed control system allowing QCG total visibility of all
that this process saved about 40 days in the commissioning assets and production. Live data gathered from its onshore
phase of the project. unmanned operations, incorporating 24 field compression
stations, six central processing plants, two water treatment
SAFETY FIRST WITH PREDICTIVE MAINTENANCE plants, and two-training LNG export facilities are collated and
One of the most significant trends is the drive toward unmanned reviewed at a central Collaborative Operations Centre, where
and autonomous operations of offshore platforms. This increase advanced analytics on the health and performance of equip-
in the ability of platforms to run themselves, and to move the ment, systems, and devices using the data can be assessed.
engineers who monitor them to onshore control rooms has
resulted from cost reduction pressures, safety, and increas- TAKING THE SMART APPROACH
ing environmental concerns. Supplying an offshore crew and For autonomous operations to be successful, open access
flying them back and forth by helicopter is an expensive and and the ability to process and analyze huge volumes of data
inherently dangerous business. Ever more capable automation remotely in real time is critical. The company’s advances in
systems hold out the prospect of running a production facility this area continued this year in partnership with Norwegian
either with no, or very low, staffing levels – like an old-fash- oil and gas producer OKEA. They are using digitalization and
ioned lighthouse. automation to achieve substantial productivity gains through
One of the primary reasons for a physical presence in off- agile and dynamic business models.
shore and remote facilities is maintenance intervention. For Connectivity and the right infrastructure need to be in place
offshore operators, reducing persons on-board by one can jus- as companies work toward increasingly autonomous opera-
tify an investment of about $1 million.¹ Reducing the number tions. In the case of the Draugen platform, high-quality data is
of human operators also enhances plant safety by lowering the streamed to shore, creating a digital twin in real time. Unlike
risk of on-site accidents, whatever the cause. conventional digital twins of such systems, the data stream
Therefore, refining and reducing maintenance operations is transmitted right from the heart of the platform’s control
terms of the expected life of the asset and the reserves. operation? How can we reduce manning levels? What is it that
There are layers of autonomy and benefits in the early stages we need the operators to do and that process of analysis? This
and you need to go through these early stages to get more will guide you through the five levels and show you how far
advanced. But that is where everyone must start. You are you need to go at each facility.
embarking on a journey that asks, how can we improve this To date plant operation technology has reached a level of
igus GmbH
®
Knowledge
in Other Industry Areas
also taking its first steps in the indus-
try. Advanced robotics exist that are
made specifically for the inspection of
equipment. These robots can replace the
manual inspection of facilities, including
inside tanks and pipes, as well as other
Our nontechnical series is tailored for energy parts of the platform.
industry professionals, especially those who lack ABB works with its customers to pro-
technical training in an area, providing a basic vide digital solutions to assist them on
understanding of the industry in a simple, easy-to- the journey toward autonomous oper-
understand language. ations. From automated processes for
plant start-up, through to simulators,
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• Basic petroleum • Petrochemicals REFERENCE
• Drilling • Petroleum production 1. ABB White Paper: Next level oil, gas
• Financial management ! and chemicals. Harnessing the power
• Geology & exploration • Pipelines of digitalization to thrive in the ‘new
• Natural gas • Well logging normal’ of low oil prices https://new.
abb.com/images/librariesprovider94/
whitepaper/digital-oil-gas-and-chemi-
cals.png?sfvrsn=93c3bd12_0
THE AUTHOR
Martin Grady is Vice
President and Global
Industry Manager, Oil
and Gas for ABB Energy
Industries. He joined ICI
plc in 1984 and held sev-
eral engineering, production and senior
management roles. He moved to ABB in
2001 as part of the acquisition of ICI’s
engineering subsidiary, Eutech. Since
then, he has held various senior manage-
ment roles, including general manager of
ABB’s Oil, Gas and Petrochemical busi-
ness in the UK from 2011, which included
FRANCE
SUPPLEMENT
Courtesy TOTAL
of St. Nazaire, then installed by DEME development of interest was the proposed Phase 2 of BP/Kosmos Energy’s Greater
between spring 2021 and summer 2022. Tortue Ahmeyim project off Mauritania and Senegal. This could involve an extension
“The variable seabed soil conditions to the 1.2-km (0.75-mi) long Phase 1 LNG terminal breakwater jetty that Eiffage GC
at the offshore location oblige us to Marine is currently working on, possibly also a living quarter platform. For Phase 1,
use different installation methods for the company is using a yard in Senegal and the local supply chain to build the jetty’s
the monopiles,” de Villepin explained, 25 supporting concrete caissons, each weighing 16,000 metric tons (17,637 tons). The
with a specially-fabricated subsea waves yard, part of a major development at the Port of Dakar, could also be used to bid for
protection device deployed from DEME future local offshore projects. •
Offshore’s installation vessel Innovation.
“Some of the monopiles can be driven
conventionally, while others have to
be drilled, or in some cases drilled and
Eiffage Métal
driven. The dimensions of the monopiles
will be strong enough for each case, this
having been taken into account in the Our name represents more
engineering phase.” than a hundred years of
A floating offshore wind farm market
is also starting to emerge in Europe, led experience acknowledged
by Equinor’s Hywind projects offshore worldwide in the field of
Scotland and in the Norwegian North steel construction and
Sea. Eiffage Métal is the EPCI contrac-
tor for a pilot floating wind farm project civil engineering
in the French Mediterranean Sea, which structures.
involves assembly of a floater designed
by Principle Power Inc.
Assuming contracts are awarded this
year as originally planned, Eiffage Métal
would fabricate three floater structures Oil & Gas and Renewable
between 2021 and 2022. Each would
weigh 2,000 metric tons (2,204 tons) and
would operate in water depths of up to For over fifty years, our
70 m (229 ft), over an area of 3.5 sq km plateforms, modules and
(1.35 sq mi). According to de Villepin, living quarters enable
PPI’s concept is based on dynamic bal-
lasting. Eiffage Métal would manufacture petroleum companies to ex-
parts of the columns and bracings, then plore and exploit petroleum
assemble these at its yard in Fos-sur-Mer. fields.
In addition, the company aims to submit
bids for other planned conventional and
floating wind farms off Le Tréport and More recently, Eiffage has
Dunkerque in northern France; another become the europeen lea-
close to the island of Noirmoutier off the
west coast; and three offshore floating der of the foundations and
wind farms, one located off the coast of the offshore substations for
Britanny and the other two in the Med- offshore wind farms.
iterranean Sea.
Before the sudden oil price collapse,
the company had been monitoring poten- Quality - Satefy - Environment
tial oil and gas projects offshore Nigeria
These are the essential priorities of our company, based on the expertise,
suited to its local living-quarter fabrica- competence, adaptability and dedication of our teams.
tion capability. These included Shell’s
shallow-water Block H development
and the quarters module for SNEPCO’s www.eiffagemetal.com
deepwater Bonga SW project. Another
full-scale onshore storage. The company claims that all units continued “GTT’s technology was not viewed as optimal for
currently being built will also feature its technologies. As for for such a platform, particularly for withstanding sloshing in
FLNG ( floating LNG) vessels, only a few are in service: GTT FLNG units, and the company had to demonstrate to Shell,
equipped 10 Mark III tanks to Shell’s Prelude, the world’s largest amongst others that its membrane containment systems could
FLNG vessel, and delivered systems for Petronas’ two smaller be adapted to work on the Prelude project offshore northwest
FLNG vessels operating offshore Malaysia. In addition, GTT Australia. Instead of the conventional arrangement of one row
technologies will be fitted to the first ultra-deepwater FLNG, of four to five LNG storage tanks, the design of a central cof-
under construction by Samsung in South Korea for Eni’s Coral ferdam solution between two rows of five tanks extending the
South gas field in 2,000 m (6,562 ft) water depth in Area 4 of length of the platform was adopted. This solution reduces the
Mozambique’s offshore Rovuma basin. The facility is due to start risk of sloshing loads as well as acting as structural support for
operations from mid-2022, producing 3.4 MM metric tons/yr the platform’s very heavy topside. Other tank solutions, such
(3.75 MM tons/yr) of LNG over a designed lifespan of 25 years. as spherical tanks, would not afford enough flat deck space to
GTT has licensed its membrane technology to leading Far accommodate the topsides.” Other alternative solutions which
East shipyards including Samsung, Hyundai Heavy Industries, do feature a flat deck, have been, according to Colson, consid-
DSME, Hudong Zonghua, and Jiangnan. Last December, it also ered to be more expensive.
signed a technical assistance and license agreement with Wison “In a scenario of two banks of normally dimensioned 50-m
Offshore & Marine in China to equip FLNGs, FSRUS, floating (164-ft) wide tanks, there would be a potential for quite an
storage, regasification and power generation units and other important amount of liquid motion at certain filling levels.
vessels with its membrane containment systems. Teams of the But if the tank breadths are halved, it reduces the sloshing
licensed partners are then trained by GTT in the principles of effect significantly. In addition, FLNG vessels are massive, sta-
membrane installation. ble structures that do not move excessively in water compared
According to GTT’s Commercial Vice President David Colson, to normal vessels.”
the company undertakes most of its R&D at its headquarters in The redundancy built into the design means that nine of the
St Rémy-lès-Chevreuse south of Paris. “We study the materials tanks can continue to operate normally while the other tank is
that go into the containment system: all selected materials and taken off line to be emptied of gas. The process entails visual
developed sub-assemblies then have to be qualified and tested inspections and checks for tightness, with maintenance and
at room and cryogenic temperatures. We then approve suppli- repairs, if required, performed on site. “If there is an issue at
ers and shipyards for the fabrication process. the higher part of the tank,” Colson said, “our team may have to
“Our facilities include a liquid motion/sloshing laboratory erect scaffolding in the tank on site, because the vessel cannot
with four machines designed to simulate all the different move- be brought ashore at any time for dry-docking.”
ments of the LNG vessel, with 6 degrees of freedom. We use a “Our membrane systems on all our clients’ vessels are con-
1/40 scale tank, equipped with pressure sensors, to measure stantly monitored for any potential leak in the tank or barrier.
at laboratory scale how the liquid in the tank would behave We also conduct visual checks to verify that there are no objects
on an offshore vessel or platform. We can then optimize the in the tank which could become loose. A bolt which has become
membrane system design through reinforcements or to pro- unbolted may lead to damage under sloshing in operation.”
pose modifications to the design of the platform itself through GTT has also been awarded a contract with Shell to main-
changes in the dimensions or adding stability. GTT also works tain the tanks on Prelude on a five-yearly basis.
with universities in Europe if we do not have the necessary For LNGC’s, FSRUs and FLNGs, GTT subsidiary Cryovision
equipment in-house. provides different types of membrane test services such TAMI
“Offshore ship-owners are less concerned about improv- (Thermal Assessment of Membrane Integrity) for testing the
ing thermal performance to reduce the boil-off rate (a prime tightness of tank secondary barrier as well as other tightness
concern for LNG carriers; matching the boil off to the engine tests (Primary barrier, Global tank test). The company may
requirements). However, the thermal performance of tanks can also use in-tank equipment to facilitate testing such as: MOON
be an issue for offshore re-gas applications as a resultant boil- (Motorized BalloON) operates in similar fashion to a drone. In
off situation could halt a send-out of an FSRU.” this case, a balloon is dispatched to inspect a tank’s primary
A different approach is required for modeling sloshing on membrane. TIBIA (Tank Inspection by Integrated Arm) is an
offshore re-gas/FLNG vessels, Colson explained. “With an LNG arm-like tool developed by GTT that can roam around tanks
carrier, you typically operate it up to 10% of tank height when on FSRUs and FLNGs and perform maintenance of the pri-
on ballast, and not below 70% on laden voyages. But for offshore mary membranes.
vessels, you must be able to maintain the filling height in all GTT continues to offer innovative services for monitoring and
conditions. So we must demonstrate to the client that our sys- maintaining the membrane tanks offshore. Recently GTT North
tem can perform sufficiently well to meet all sloshing require- America signed a five-year global technical services agreement
ments under the offshore environment.” with Excelerate Energy to support maintenance of nine FSRUs
“At the start of FLNG development, some years ago”, he equipped with NO96 membrane technology. •
AGAIN, ANOTHER CRISIS for the offshore industry, or rather, two piped to shore. Preliminary studies are complete and in February, the
crises, with COVID-19 and the oil price slump. However, DORIS is UK government launched the project’s next phase which involves
confident it can adjust to these unexpected market conditions, as developing a 2-MW prototype. Later, with a full-scale unit, a single
it has done over the past 55 years, thanks to its diversified activity offshore 10-MW floating wind turbine should be able to produce
and R&D investments. sufficient low-carbon hydrogen to heat around 2,500 homes, fuel
Despite the recent developments, climate change remains a over 120-240 buses, or run eight to 12 trains.
worldwide concern, and the reduction of greenhouse gases (GHG)
in oil and gas production is now part of the group’s design remit, OFFSHORE WIND FARMS
from conceptual to detailed design stages. One current project Renewables are also part of the solution. DORIS has developed two
involves reducing GHG generation onboard four FPSOs off West innovative concepts for floating wind, with the Nerewind semisub-
Africa: DORIS is preparing recommendations to that effect. mersible suitable for deeper water, and the Articulated Wind Col-
Another global priority is the replacement of hydrocarbons with umn (AWC) for intermediate depths. The group’s first project in this
other sources of energy. The group is participating in various ini- field dates back to 2002 with a pre-front-end engineering design
tiatives, including carbon-free generation of hydrogen. Its UK sub- (pre-FEED) study for a wind farm offshore Zeebrugge, Belgium.
sidiary ODE is collaborating in the DOLPHYN project (Deepwater Since then, the group has provided engineering and associ-
Offshore Local Production of HYdrogeN) to design the process ated services to developers for projects such as Ormonde, Scroby
equipment, electrical system, and overall technical safety require- Sands, and Wikinger. The experience led the group to expand this
ments for the production of hydrogen from seawater. service to Asia, with an office in Taiwan in 2016, followed by activ-
The facilities will be installed on a semisubmersible, supporting ities in Japan, Korea, Vietnam, and Boston, and prospects for fur-
a wind turbine to provide carbon-free energy, with the hydrogen ther developments.
ENGINEERING
FOR
ENERGY
DORIS GROUP
58 A, rue du Dessous des Berges - 75013 PARIS - FRANCE
Phone : +33 1 44 06 10 00 - Fax : +33 1 45 70 87 38
MAY 2020 OFFSHORE | WWW.OFFSHORE-MAG.COM57 www.dorisgroup.com
2005OFF51-62_FranceSup.indd
2005OFF_DorisGroup 1 57 4/28/20
4/20/20 11:38 AM
8:22 AM
• FRANCE
thousands of meters from the target. One in terms of providing an overview of the situation - but the Gaps M7 was able to do it in
application that benefits from this capa- such noisy environment. In addition, two transponders were installed on each pipe sec-
bility, he explained, is laying a pipeline in a tion allowing complete monitoring through iXblue’s Delph Roadmap Software’s 3D view,
field congested by structures and geohaz- delivered with every product in the Gaps Series.
ards. “If the USBL is sufficiently accurate, it “Another client used a Gaps M7 in combination with our 2D/3D visualization soft-
can be used to narrow down the optimum ware on an offshore construction vessel to ensure safe placement of the structure on
corridor for the pipeline. And therefore, the seafloor.” •
unlock shorter safe pipeline routings and
decrease sleepers dimensions.”
Gaps M7’s USBL antenna and Phins
Fiber-Optic-based inertial navigation sys-
tem (the latter pre-calibrated at the com-
pany’s factory) are combined within the
same housing. Its acoustic capabilities,
Mini and
which include wideband signals, are said
to maximize performance even in the
most problematic conditions, and the 3D
acoustic array allows for tracking even at
angles above horizontal. Offshore applica-
tions range from structure placement to
mighty.
ROV navigation, AUV operations, towfish
tracking, cable/pipelay support, touch-
down positioning, mattress placement,
plough/trenching positioning, rig and
anchor moves, riser positioning and OBC
node placements for 4D seismic surveys.
Both Gaps M7 and Gaps M5 are based
on an open architecture with serial and
Ethernet connectivity and Web control OUR USBL FAMILY IS GROWING
command, and according to iXblue both
are also compatible with third-party equip-
ment. Even if they operate on the same
medium-frequency bandwidth, the two
systems can be deployed simultaneously,
Bagot added, typically as permanent and
temporary subsea positioning systems.
Application wise, the new Gaps M5 is
perfectly suited for inshore applications,
while Gaps M7 can cover all applications, NEW
from inshore to offshore, with ultimate
performance. Gaps M5
Among recent applications was a pipe- Export-free and
lay project where the lay barge already omnidirectional
USBL system
had a permanent USBL system onboard. operating from the
“However, when the laying operation surface to medium
started, this could not provide the client’s water depths (995m).
requested accuracy. In this case, the situa-
tion was resolved by installing a Gaps on
the vessel’s stinger.
“For another project, in shallow water
depths, the client wanted to install pipes in
20-m [65.6-ft] sections, one after the other.
The operation, involving three divers, and
an inspection ROV, was quite challenging
CONVERSION IS OFFERING a second life to gas carriers, but as more countries see the capex and opex-reducing potential
repurposing these vessels as floating storage and regasification these units bring compared to onshore LNG terminals.
units (FSRUs) and floating storage units (FSUs) comes with Furthermore, because they offer greater flexibility and are
technical and operational challenges for owners. less infrastructure intensive, FSRUs can provide an intermediate
The liquefied natural gas (LNG) market is growing as more solution (the time charter can be less than five years), during
countries turn to gas to meet their rising energy needs. In par- the length of time it takes to develop a permanent onshore
allel, there has been an increase in the number of gas carriers solution. As the FSRU sector is still relatively new and develop-
providing LNG transportation and distribution. In recent years, ing, relationships between countries that require LNG and the
numerous laid-up ships have become available for varying rea- FSRU providers can be complex. There are several key points
sons: they may be nearing the end of their design lives, or may be that FSRU and FSU developers should consider to ensure their
outside of modern specifications, phased out, or off-charter for vessels are safe, fully compliant with environmental regulations,
the market. Owners are seeking to repurpose their vessels and and appropriate for market demands.
extend their lifecycle by converting them to FSRUs and FSUs Regulatory questions at both flag state and class levels are a
turbine section hot gas path corrosion. Operationally, this be urgently deployed in a field trial as a technology collab-
resulted in poor engine reliability, reduced availability and oration initiative.
premature engine overhaul and/or replacement. All of which Thanks to a longstanding relationship between the two
severely impeded the long-term strategic planning for the companies, BP was able and confident to pilot AAF’s N-hance
platform for both production and maintenance. technology. The N-hance filters and conversion parts were
Eventually, the poor filtration provided by the high veloc- delivered to the operator within five weeks, and commis-
ity bag system resulted in a catastrophic failure of GT2 after sioned along with the new GT2 engine on the Clair platform
12,000 operating hours, which equated to only one-third of in February 2017.
the engine design life. The root cause of the failure being inlet The pilot delivered excellent results. There was an increase
guide vane seizure and in turn compressor section imbal- in engine availability resulting from a reduction in unplanned
ance and ultimately blade liberation. This resulted in irrep- downtime and shortened shutdown periods. There was also
arable damage and a new replacement engine was required, a decrease in CO2 emissions improving sustainability, as well
incurring unplanned long-term shutdown and significant as retained power output (compressor efficiency) and heat
unbudgeted costs. rate. Critically, BP has also eliminated the risk of potential
BP was aware that AAF International was in the final GT failure due to corrosion at just one-third of design life.
stages of developing a new EPA E12 high velocity filtration Commenting on the project, BP’s asset team said: “The
solution. Critically this new design could be installed within upgrade project has enabled improved reliability, cost sav-
an existing high velocity housing with no penalty in differ- ings and will feed into the reformation of outdated air filtra-
ential pressure (dP), therefore negating the need for a larger tion standards as well as playing a part in helping to achieve
housing replacement. Because of this failure on GT2, BP was offshore asset efficiency of 90%.”
expediting the GT original equipment manufacturer (OEM)
for fasttrack delivery of a replacement engine and approached NEW MECHANISMS TO DRIVE TECHNOLOGY
AAF to determine if this new technology (N-hance) could ADOPTION
EPA E12 air filtration is currently available within low veloc-
ity systems and already in use on assets owned by super
majors. However, few operators are aware that EPA E12 fil-
tration is now supported within high velocity systems. This
is partially due to the fact there needs to be significantly
TAKE THE PLUNGE! more support for the widespread adoption of the technol-
ogy used on the Clair platform. This includes the adoption
of EPA E12:EN1822 standards within OEM offshore turbine
specifications to extend the life of all new gas turbines oper-
Deepwater Petroleum ating in the offshore environment and provide the opera-
Exploration & Production is tor with the added benefit of a small and lightweight filter
the most comprehensive and
housing in comparison to the traditional low velocity large
E12 filter housings. Operators also have their part to play
authoritative text available
and need to question why they are repeatedly offered low
on the business, engineering,
efficiency filter bags for high velocity systems. The accepted
science, and technology norms of poor air filtration in offshore environments can
of this multibillion-dollar Best-Selling
2nd Edition! be redefined, and operators can benefit from the improved
industry. technology. Immediately, the result will be to eliminate fre-
quent water washing of the gas turbine, increasing produc-
NEW TO THE SECOND EDITION: 372 Pages/Hardcover/2011 tion efficiency while at the same time providing a longer
• New chapters on geology and geophysics,
rigs, and service vehicles operational life of the gas turbine. Furthermore, a sustained
• Greater coverage of engineering and scientifc effort is needed to communicate the evolution in filtration
schemes used in deepwater
performance and demonstrate the findings, which support
• Final chapter presents the latest technology used in the “third
wave” of industry evolution the use of new proven EPA E12 technologies.
Collectively if adopted by the offshore oil and gas indus-
try, these measures trigger a new “front end” approach to
ORDER TODAY! gas turbine reliability and availability, which is beginning to
VISIT WWW.PENNWELLBOOKS.COM OR CALL 800-752-9764! gain momentum in some areas of the sector. With cost con-
FIND US:
trol and environmental improvements, such as CO₂ reduc-
tion now more critical than ever, taking the necessary steps
to address current technology adoption should be delayed
no further. •
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2005OFF63-68_ee.indd 65 1
2001OFF_EndeavorOffshore 4/29/20
1/2/20 11:39 AM
1:26 PM
• EQUIPMENT & ENGINEERING
IN EARLY 2016, when the oil price dropped below $30/bbl, the oil and gas industry took a
close look at offshore development costs and realized things needed to change. Operators
worked with suppliers to achieve cost reductions and cooperated in some cases to share
services like crew transfers. Today, with oil prices at a 21-year low, making changes is even
more critical, and the solutions that were feasible four years ago are not equal to the task.
New technologies and new thinking are needed if offshore developments are going to be
economically viable.
DECREASING COMPLEXITY
According to Dril-Quip CEO Blake DeBerry, delivering better solutions does not mean
tweaking components in traditional designs. “It is about rethinking how we do things to
deliver permanent cost savings,” he said, “and that means new ideas.”
DeBerry jumpstarted plans for differentiation when he became CEO in 2011. He ramped
up the company’s R&D program and invested in full-scale testing of the entire subsea well-
head system.
“This was our first foray into how to develop products that structurally change how cus-
tomers drill wells offshore,” DeBerry said.
The decision to pursue a different direction for the subsea vertical tree was initiated by
a comment from a frustrated operator. The operator’s question was simple: “Why can’t we
run the tubing hanger in the wellhead without regard to orientation, lock it down, get a
In-house validation testing of the VXTe
good test and land the tree at any orientation required? system. (Images courtesy Dril-Quip)
“That was an ‘aha moment,’ DeBerry said. “It seemed to me that, compared to traditional
systems, there had to be a simpler and less complicated solution.” DeBerry and his team of
30 engineers and designers began brainstorming about how to land the tubing hanger, and
five days later, Dril-Quip filed a provisional patent. “Then, the real work started,” he said.
carried out without temporary well suspension or pulling the BOP a tubing hanger in the same lead time as a wellhead so when we
stack. It also removes the need for well barriers, which eliminates mobilize rigs to the drill site, the installation process is streamlined.
risk and saves time. There is no rig remobilization. And if I can push drilling closer to
The stab sub-assembly – with 7-in./10 ksi, 5-in./15 ksi, and 5-in./20 the time I’m going to complete the well, it improves IRR because
ksi ratings – uses the same sealing interface for the stab to the tub- the money has been spent in a narrower window,” he said.
ing hanger. “A single tubing hanger running tool works for all these
systems,” he said. TAKING RISKS OUT OF THE EQUATION
The coupler body housing element of the stab assembling con- While time and cost savings were critical design considerations,
tains the hydraulic and electric couplers. It can rotate +/- 180 degrees according to DeBerry, minimizing safety risks was also a “must
to allow the 13 hydraulic and two electrical coupler lines to connect have” for the new vertical tree. The ideal solution would reduce the
to the corresponding couplers in the tubing hanger. This exceeds amount of required hardware and necessary trips and keep work-
IOGP specification requirements for nine downhole hydraulic func- ers out of harm’s way.
tions and one electrical function, providing optionality for future “A seasoned worker told me when I started in this industry, ‘Don’t
innovations in smart completions that could require more down- ever run something down the hole if you don’t have to,’” he said. “If
hole lines. you eliminate running things, you eliminate risk.”
Automatic space-out adjustment is another design advantage, This was the primary driver for a design that simplifies the instal-
DeBerry said. The tubing hanger of the VXTe contains a mecha- lation process, eliminating placing pins in the BOP stack to orient
nism to automatically adjust to variances in the hanger’s position. the tubing hanger or having to install a tubing spool, which requires
When the tubing hanger is landed, a pressure test verifies the a 40-ton piece of hardware to be maneuvered into place.
hanger is in the correct position. Then, a hanger lock mandrel is Removing components and shortening the installation process
placed with a tubing hanger running tool, creating a flat lock man- also delivers environmental gains.
drel-to-lock ring interface. “The tubing hanger can be picked up and “ESG (environmental, social and corporate governance) is import-
loaded against the shoulders of the wellhead to establish a known ant for our industry,” DeBerry said, “so our designs are created with
elevation, and the VXTe tubing hanger adjustment mechanism the goal of reducing waste and carbon footprint in any way we can.”
automatically activates and removes any gaps,” he said. By designing a vertical tree that does not use a tubing spool, the
A 15-ksi rated annulus isolation valve inside the tubing hanger company has eliminated 40 tons of steel and the associated cost
provides a reliable barrier in place of a wireline plug for installation of manufacturing it, moving it, and installing it. The reduction in
and interventions. The annulus flow path isolates the hydraulic hardware and tooling within the VXTe eliminates more than 30,000
and electrical couplers, which protects the wellhead gasket from HSE heavy lift touch points.
contact with the annulus fluid and adds another barrier between “By itself, it isn’t huge, but every little bit helps,” DeBerry says.
the annulus fluid and the environment. “Although there is a lot of focus toward renewables, oil and gas will
The ingenuity of the VXTe system earned it a Spotlight on New be around for a long time. We need affordable, reliable energy, and we
Technology Award from the 2020 Offshore Technology Confer- should put the least amount of carbon into the atmosphere to get it.”
ence (OTC).
THE VALUE OF STANDARDIZATION
CAPTURING COSTS The introduction of the VXTe sets new expectations for flexibility and
“We are proud of the elegant engineering and what that delivers to efficiency, DeBerry says, delivering a product that provides standard
the end user,” DeBerry said, explaining that the innovative design functionality with exceptional benefits and allows predictability in
eliminates multiple steps in the installation process and reduces the installation. This sets an expectation for operators by standardizing
time from FID to first oil production. “Being able to eliminate steps is installation and improving project economics through enhanced
as valuable as reducing capex. A 10% reduction in capex and a 10% delivery schedules, reduction in engineering, manufacturing and
reduction in time have a similar impact on the breakeven point.” installation costs, and less risk in project execution.
According to DeBerry, one operator calculating the potential Dril-Quip intends to standardize the VXTe with a single tubing
value of Dril-Quip’s VXTe in terms of reduced installation time esti- hanger with multiple ports, some of which will be plugged if they
mated savings at $3 million to $4 million per development well. “The are not required. This will allow the company to deliver the tubing
Dril-Quip design can deliver savings of $30 million to $40 million on hanger with the other wellhead equipment more quickly, he said.
a 10-well drilling program – and that’s meaningful,” DeBerry said. Making this shift requires a willingness on the part of operators
The interesting thing about the economics, he said, is that when to reevaluate some of the components they used to have tailor
rig rates go up, the value of installing the VXTe goes up. “If the spread made, DeBerry said, but the savings in time and installation will
cost is $600,000 per day, and this technology saves a day and a half, be strong drivers for adoption.
it has delivered $900,000 in savings. If the spread cost is $1 million, Dril-Quip has sold the first VXTe tree which is scheduled for
the same product delivers $1.5 million in value.” installation at year-end. “What Dril-Quip is doing is something
Additional savings can be captured by sequencing the drilling totally different,” DeBerry said, “we are fundamentally changing
program differently because running the tubing hanger is exactly the norm for the industry.” •
like running the casing hanger. “Our objective is to manufacture
PEOPLE
CNOOC Ltd. has appointed Hu Guangjie as to support Seadrill Ltd. on a full-time basis. John T. Roche,
president and an executive director. He succeeds CEO of Seadrill Partners, will assume the responsibilities of CFO
Xu Keqiang, who remains an executive director in addition to his current role until a replacement is found.
and CEO. The African Energy Chamber has appointed Elizabeth Rogo
MODEC Inc. has appointed Ryo Suzuki as as president for East Africa and Leoncio Amada Nze as exec-
executive officer. utive-president for the Central African Economic and Monetary
ClassNK has appointed Hiroaki Sakashita Sakashita Community.
as president and CEO and Koichi Fujiwara as chairman of the President João Lourenço has reappointed Diamantino
board of directors. Pedro Azevedo as Minister of Mineral Resources, Petroleum
Grant Creed has stepped down as CFO of Seadrill Partners and Gas of the Republic of Angola.
Lloyd’s Register has named Mark Darley as Leith as rentals division manager.
Marine & Offshore COO. Carsten Plougmann Andersen, Jean Cahuzac, Yves-Lou-
National Oilwell Varco has named David is Darricarrere, and Florence Weingarten have joined the
Reid as corporate vice president and chief tech- Société Phocéenne de Participations Supervisory Board.
nology officer. He succeeds Hege Kverneland, Shi Wenchao has joined LOC China as managing
who has retired. director.
Darley
Atkins has appointed Karen Blanc as oper- Captain Jaimie Jones has joined LOC Doha as marine
ations director for its Resources business in the manager.
UK, Europe and Middle East. OspreyData has promoted Charissa Santos to product
Dr. Andy Samuel will continue as the chief manager.
executive of the Oil and Gas Authority for two Sercel-GRC has named Alejandro Villa as global customer
more years. support engineer.
The Petroleum Equipment & Services Asso- Stratagraph has promoted Elizabeth Viator to controller
ciation has elected Rod Larson as chair and Krisanda
and human resources manager.
Michael Reeves as vice chair for 2020-21. Pearl Alan Kiraly, Bentley Systems’ senior vice president for asset
Chu, Karen David-Green, Robert Drum- and network performance, has been elected to the board of
mond, Doug Polk, and Warren Zemlak were MIMOSA.
selected for a first term on the board of directors. Quality Companies has hired Wayne Lacey as vice president
Matt Armstrong, Chuck Chauviere, Galen of operations for Zadok Technologies.
Cobb, Mike Kearney, Craig Lange, Rod Lar- Technical Toolboxes has appointed Joseph Ladner as en-
son, Michael Reeves, Kirk Shelton, and An- gineering performance advisor.
drew Way were reelected to the board of direc- Berg
tors. Melissa Cougle, Barry Glickman, Stefan COMPANY NEWS
Radwanski, Gabriel Rio, and Etienne Roux Flowline Specialists has launched a service and maintenance
were approved as new members of the PESA division. It will operate from the firm’s existing workshop facility
Advisory Board. Edward Bayhi, Jeff Boettiger, at its Oldmeldrum headquarters and use existing personnel.
Marco Caccavale, David Christmas, Kevin AeonX Ltd. has signed a partnership agreement with WFS
Crowley, David de Roode, Todd Ennenga, Technologies to promote and deliver the full range of Seatooth
Bonnie Houston, Michelle Lewis, Scott Liv- products for asset integrity and flow assurance monitoring to
ingston, Josh Lowrey, Jill Massonne, Quay Villa
existing and new clients in Nigeria.
McKnight, Kyle O’Neill, David Paradis, Dan Dolfines and CIMC Raffles have signed a memorandum
Pratt, Kyle Ramachandran, J. Wayne Rich- of understanding to boost floating wind in Europe and Asia.
ards, Bruce Ross, Sanjiv Shah, Tom Shep- AqualisBraemar has opened a new office in the Port of
herd, S. Soma Somasundaram, Dave War- Tyne.
nick, Jim Wicklund, D. Lyle Williams, and STATS Group has opened a new workshop, storage and
Donald Young were reappointed to the Advi- testing facility in Muscat, Oman. The company also secured a
sory Board. two-year extension to a master services agreement with Pe-
Ron Krisanda has joined Survitec as exec- Viator
troleum Development Oman to provide pipeline isolation
utive chairman. and hydrostatic testing services.
The Huisman Supervisory Board has appoint- Unique Group has signed an exclusive rental agreement
ed David Roodenburg as CEO. He succeeds with UK-based OTAQ Offshore to represent the latter’s tech-
Theo Bruijninckx, who will remain the com- nology and products across the Middle East, APAC and the
pany’s CFO. Americas.
Ingrid Due-Gundersen has joined Ocean Add Energy’s Asset and Integrity and Management division
Installer as CFO. has opened an office in Calgary, Canada.
ASCO has appointed Gary Paver as CFO. Lacey
ABS Group has launched an eLearning training platform
Applied Petroleum Technology has hired Carl to provide educational tools and offer a catalog of professional
Peter Berg as CFO. training courses to technical personnel worldwide. The new
Rovco has appointed Reena Rowan as CFO, training solution will feature on-demand courses to augment
Martin Young as chief technology officer, Iain classroom training in the practice areas of cyber security, risk
Wallace as chief scientific officer, Ian Bryan as management, asset reliability, compliance management and
consultant COO, and Simon Miller as general process safety, and to support excellence in organizational
manager of Rovco Scotland. performance. •
Motive Offshore Group has named David Ladner
This page reflects viewpoints on the political, economic, cultural, technological, and environmental issues that shape the future of the petroleum industry.
Offshore Magazine invites you to share your thoughts. Email your Beyond the Horizon manuscript to David Paganie at dpaganie@endeavorb2b.com.
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