MPWT19-15325

Structural FRP Applications on Topside Projects – How do CAPEX and OPEX costs really
compare to conventional carbon steel?

Simon Eves
NOV Fiberglass Systems
Roborough
Plymouth, UK, PL6 7BP
United Kingdom

1 Abstract

Offshore projects today are demanding ever more reductions in both CapEx and OpEx. Tertiary structural
products (eg handrails, gratings, ladders and platforms) made in steel may at first seem to be the lowest
cost option, but steel is heavy and eventually suffers from corrosion which can be a significant drain on
budgets and resources.

The benefits of FRP (fiber reinforced polymer) tertiary structural products for offshore oil and gas projects
can be very significant, with substantial weight reduction, lower installation costs and minimal
maintenance. But how can these recognized FRP benefits against steel be translated into actual CapEx
and OpEx savings when used in oil and gas projects?

This aim of this paper is to offer answer to this question, by presenting a study of the projected Whole
Life Cost and Value Proposition for the MARRS Offshore FRP Handrail using data drawn from the recent
BP Clair Ridge Project.

Key words: Value proposition, FRP, GRP corrosion, weight saving, whole life costs, CAPEX, OPEX
 2 Introduction

FRP (fiber reinforced polymer) materials are well known as providing weight and corrosion resistance
benefits over conventional carbon steel materials. Even with mainstream type FRP materials (glass
reinforcements with polyester type resins) significant weight savings for structural applications can be
made, with FRP solutions being typically 1/3 the weight of an equivalent carbon steel solution.

The corrosion resistance of FRP is now proven over many years of practical case histories, especially in
the marine environment. A good example is the Ellen Platform in the Gulf of Mexico, where FRP polyester
FRP grating was installed on an open deck area in 1979 and is still in excellent condition and in daily use
today [Ref 1].

FRP is being increasingly widely used in many industries including automotive, aerospace, construction
and renewable energy to name a few [Ref 2]. Advances in mechanical performance, durability,
manufacturing, quality assurance and fire resistance have allowed FRP applications to advance from
simple non-structural applications to main critical components such as aircraft wings and fuselage, wind
turbine blades and primary civil construction components.

In offshore oil and gas applications, FRP piping products have been well established for many years on
both fixed & floating production platforms and also marine vessels. This has been supported by standards
and regulatory approvals for FRP products which have set out performance requirements and permitted
areas of use.

The application of structural FRP products offshore has been more limited. FRP grating is the most widely
used product as it was perhaps the easiest to initially adopt as a replacement structural product offshore.
In the early 1990s, when the first tension leg platforms (TLP) were being designed for deep-water in the
Gulf of Mexico, the demand for weight saving led to the first large volume use of FRP gratings made
using phenolic resins which provided a level of fire integrity which conventional polyester resins could
not. Early TLP deep-water projects (eg Shell MARS, Ram Powell) each used over 10,000 sq. m of
phenolic FRP grating, saving in the order of 300 tons of topside weight. Regulatory approval was granted
on a “case by case” basis, but this led to the development of a fire integrity test standard by the US Coast
Guard which has been adopted by Regulatory Authorities globally [Ref 3]. Today, FRP grating is in
widespread use offshore. However, the adoption of other structural FRP products offshore has been
slower to happen.

In many cases, the adoption of FRP structural products has often been driven by a single project
imperative, for example, when a new-build project is running overweight and urgent solutions are
required. However, a more comprehensive analysis of all the benefits arising from the lower weight and
corrosion resistance benefits is not usually undertaken or well understood.

In today’s cost sensitive offshore oil and gas market, the pressure to reduce both CapEx and OpEx is
significant. Final Investment Decisions can often be marginal, and a true understanding of the combined
CapEx and OpEx benefits for a project are critical. This paper sets out to address this, to capture some
of the key issues influencing both CapEx and OpEx to offer a value proposition model which can be
further adapted and refined with other project data.
 3 Value Proposition Approach

There are many variables which will influence the value proposition for FRP on individual projects, for
example:

3.1 Type of Asset: Floating or Fixed:

Floating platforms such as TLPs or SPARs are usually very weight sensitive as buoyancy is limited.
Larger FPSOs are less weight sensitive. However, the recent trend to use smaller standard hull designs
for FPSOs has made weight a more important issue than before.

Benefits arising from weight reduction for floating platforms include:

a. Smaller hull or pontoons
b. Saved weight can be used to add production capacity

Fixed platforms (especially larger ones) are also weight sensitive, with the lift capacity of the offshore
installation crane often being the limiting factor.

Benefits from weight reduction for fixed platforms include:

a. Reduced risk of having to split a platform into smaller lighter modules (this can cost £10M+ if this
happens during the detailed design stage)
b. More yard-commissioned equipment installed, saving offshore commissioning time and costs
c. Saving in primary and secondary structural steel (for every 5 tons of tertiary structure weight
saved, 1 further ton of secondary steel can be saved)
d. Potential saving in primary steel and jacket steel costs

3.2 Location of Asset:

In high corrosion regions, such as Brazil, West Africa, Caspian Sea, southern Gulf of Mexico or South
East Asia, temperature and humidity conditions result in very aggressive corrosion of carbon steel. In
these areas, galvanized steel tertiary structural products (grating and handrails) need frequent
maintenance, usually annually, with full replacement reported as required every 5 - 7 years or even less.
Maintenance and replacement is very expensive to carry out offshore, resulting in high OPEX costs.

In medium corrosion climates, such as the colder UK North Sea, corrosion rates are slower but
nonetheless still take place. The same types of galvanized steel tertiary products are reported to require
maintenance every 5 years or so, with replacement after 20 years.

Correctly designed and manufactured FRP products with appropriate UV protection will have a design
life of 30 – 40 years, even in the high corrosion regions, with minimal maintenance (if any) required, thus
eliminating need for onerous maintenance and replacement.

4 Case History: BP Clair Ridge Project:

The BP Clair Ridge platform is situated in the UK North Sea, west of Shetland in approx. 400 meters
water depth. It comprises a utility and quarters platform, and a production platform, each on separate
jackets.

BP set early strategic goals for the Clair Ridge project:

 a. Minimize weight: To meet offshore crane weight limit and to maximize the amount of equipment
which could be installed and commissioned in the fabrication yard (CAPEX goals)

b. 40 years to first major maintenance: Use designs and materials to eliminate (so far as possible)
maintenance and avoid long term replacement costs

The client and design team recognized early on that FRP materials could provide solutions to both these
requirements. A number of different FRP products were chosen including FRP pipe systems, pressure
vessels, gratings, handrails, ladders and tertiary platforms.

4.1 Weight:
Table 1 below lists the total volume of the FRP products used on the Clair Ridge project, comparative
weights in steel and the weight saving achieved. In total, 718 tons were saved for the production platform
(total weight approx. 29,000 tons).

Products Weight of FRP Weight of Steel Weight saving

Products used equivalent (tonnes) (tonnes)
(tonnes)
Pipe Systems
Pipe Spools 2950M 85 339 254
Structures
Access Platforms #4 20 60 40
Handrails 4200 M 59 176 117
Gratings 8800 sq M 166 473 307
Totals 718
Table 1: FRP Products used on BP Clair Ridge Platform, quantities and weight savings

4.2 Maintenance:
A detailed FRP specification for both piping and structural FRP components was drawn up by the project
engineering team to ensure FRP products would remain fit-for-purpose over the 40-year design life of
the project with minimal maintenance. This included specifications for load, deflection, impact resistance,
flammability and fire integrity, salt mist resistance, extreme thermal conditions and UV durability. Lessons
learned from over 25 years use of FRP phenolic gratings was incorporated into the specifications.

5 Example Value Proposition Based on Case History

The example whole life cost value proposition (VP) presented in this paper considers the FRP handrails
used on the BP Clair Ridge (BPCR) project. The project selected the MARRS Offshore Phenolic FRP
handrail, chosen partly due to its high mechanical performance, but also its fire integrity capability
which allowed it to be used in fire sensitive locations.

Summary of BPCR project:

• Fixed platform project, production platform 29,000 tons
• Platform fabricated in HHI yard, South Korea
• Installed in UK North Sea (medium corrosion type region)
• 40 years operational life
• 4200 lin. meters of FRP handrail in external open deck areas
As much data as possible in this paper has been derived from industry sources. It should be noted that
such data is difficult to obtain and is often confidential. However, research is ongoing to add to this
database so as to strengthen the validity of this value proposition for different projects and asset types.
It is acknowledged that a number of assumptions have been made and best estimates proposed, but
the aim of this paper is to promote discussion and encourage sharing of data.

The value proposition includes direct costs such as materials, labor, overhead management costs etc.
It does not include consideration of lost opportunity costs such as production down time due to hot work
permits needed, better use of bed spaces, etc.

5.1 CAPEX analysis:

The CAPEX analysis can be divided into the following categories:

5.1.1 Procurement:
Table 2 shows the procurement costs for steel and FRP, i.e. the cost for the engineering, fabrication
(including painting) and delivery of the handrail panels to the yard ready for installation.

For steel, these costs can vary considerably depending on where the handrail fabrication takes place
and where the yard is located. Prices in South Korea, China or Singapore can be perhaps half that of
Europe or North America. For the purposes of this analysis, typical South Korea fabrication prices were
used as the fair comparison, with minimal add-on for delivery as the BPCR platform was fabricated in
that country.

For this first large project, the MARRS FRP handrails were fabricated and shipped from the UK.
However, for future projects, fabrication will be undertaken more locally to the yard, and this is partly
taken into account in the procurement cost for the FRP handrails.

5.1.2 Yard Installation:

It is assumed that the handrail panels (steel or FRP) would be delivered packaged and would be lifted
by crane to a laydown area local to the point of installation. It is also assumed that method of fixing
would be the same for steel or FRP, either a pre-fitted socket or bolted connection.

The key difference between steel and FRP arises when the handrails are to be individually carried to
the point of installation (perhaps 50 meters from the laydown location) and then installed. If a simple 2.5
metre panel is considered, steel would weigh approx. 100kgs, requiring some form of mechanized
transport or trolley with a lift device. The FRP alternative would only weigh approx. 35kgs, allowing a
safe 2 man lift and installation. This saves both time and labor, decreasing yard installation costs by
$108,000 as shown in Table 2

5.1.3 Additional steel support:

It is understood that for every kg of weight saving of tertiary structures (ie. handrail), approx. 20% of
that weight can be additionally saved on the supporting secondary steelwork. This is shown in Table 2
as an additional cost of $188,000 for the steel handrail option, a cost not needed when FRP handrail is
used.

5.1.4 Lift Hook Limit:

As described earlier, for a fixed platform, weight targets are usually set by the maximum lift capability of
the offshore installation crane. This cannot be exceeded and if, as the design progresses, the platform
weight creeps beyond this maximum, then the platform needs to be further split into smaller modules.
The additional costs arising from this during the detailed design stage can be substantial, reported as
being $10M - $100M depending on the platform size and implications.

The question arises – if a module split is avoided by using FRP, how much of this additional cost saving
can be attributed to the FRP handrails? This is not easy to calculate, but for the purposes of this
analysis, a conservative estimate has been made of $400,000, shown in Table 2 as an additional cost
to the steel handrail if it had been used.

5.2 OPEX Analysis:

The OPEX analysis is considered as follows:

• Regular Ongoing Maintenance
• Replacement

5.2.1 Regular Ongoing Maintenance:

Over the lifecycle of steel handrail, there will be maintenance required to repair any areas of corrosion.
This would include preparation of the affected areas back to bare metal, priming & painting. This is, of
course, carried out offshore in external environments, is labor intensive, has safety implications and is
weather dependent. If may require some walkways to be closed off during the works, causing
inconvenience and operational considerations.

The amount of maintenance will depend on geographic region. In medium corrosive areas, this type of
work may only take place every 5 years or so during an organized maintenance campaign. For high
corrosive regions, this will likely take place annually.

In this analysis, the BPCR project is located in the UK North Sea, a medium corrosive region. It is
assumed that 20% of the steel handrail (ie 840 meters) will need some maintenance every 5 years. The
costs suggested in this study for this maintenance allows for 2.5 hours labor (UK Offshore rates) and
required materials per meter, assuming relatively small local areas of the 840 meters of handrail will
require maintenance. The FRP handrail of course will not require maintenance due to corrosion.

It is recognized that the surface finish on the top rail of either the steel and FRP handrail may become
worn in areas of high personnel use. An allowance has therefore been made for both steel and FRP for
this worn surface to be reinstated as part any regular maintenance. In this analysis, the costs for this are
suggested as being the same; in reality the costs to do this for the FRP handrail will be lower as less
preparation is required before re-application of the finish to FRP handrail compared to the steel.

Note that a further 150% is added to the direct costs for management and overhead. This is a verified
overhead charge for such offshore work.

5.2.2 Replacement:

Depending on the location of the platform and its operational life, there may come a point that the
handrails can no longer be maintained and require to be replaced. This is a significant undertaking, and
will require a detailed offshore survey, onshore engineering, handrail fabrication, offshore delivery and
installation.

In highly corrosive regions, this may be required in as little as 5 years; in medium corrosion regions
perhaps after 15 – 20 years.

In this analysis of the BPCR project, the assumption is made that the steel handrails would need to be
replaced after 20 years, effectively the midlife of the platform (considering its 40-year design life). The
offshore installation requires careful planning, as the heavy steel replacement handrails will need to be
manually moved from the laydown area to the place of installation. In addition, the old handrails once
removed will need to be taken back to the crane area for offloading back to shore.

Note that a further 150% is added to the direct costs for management and overhead. This is a verified
overhead charge for such offshore work.

6 Summary and Conclusions

Again, it is acknowledged that highlighted assumptions have been made and best estimates put forward
in this value proposition.

From a CapEx perspective, when all aspects of procurement, construction and commissioning are
considered, the CapEx difference between steel and FRP is shown as being potentially relatively small.
Indeed, it is likely in many project cases where the weight saving contribution is more significant, that
FRP CapEx could be less than steel.

For many project cost studies, the CapEx analysis only looks at procurement costs, but it is clear that
many other factors are in play and significantly affect the true CapEx costs. For this analysis, the
CapEx difference is not as significant as would first appear (FRP only 12% greater).

From an OpEx perspective, even in a more moderate corrosion region, it is clear that the maintenance
costs for steel handrail can be significant. This is particularly the case given the potential replacement
cost if the asset life is greater than say 20 years. If FRP is used instead of steel, payback arising from
maintenance savings for the small additional CapEx could be only a few years.

The conclusion of this study is that FRP materials have potentially much more value to offer the offshore
oil and gas industry than is currently understood. There is much to be done to better understand and
quantify the benefits of FRP, and there is a need to share more data and information in the industry to
achieve this.

References

1 “Strongwell’s Grating after 30+ years in Offshore Environment” Strongwell Corp,

https://www.strongwell.com/news/strongwell-grating-after-30-years-in-offshore-environment/ (April
2019)

2 “Fiber Reinforced Polymer (FRP) Composites Market Analysis by Fiber Type, by Application and by
Region and Segment Forecasts 2018 – 2025, Grand View Research (October 2017)

3 “ASTM 3059 - Standard Specification for Fiber Reinforced Polymer (FRP) Gratings Used in Marine
Construction and Shipbuilding”, American Society for Testing and Materials, (2015)