Harsh environment Jotun FPSO design taking precedence over haste

European contractors are struggling to batten down costs consumed by North Sea production floaters, but construction schedule overruns are not as bad as rumors suggest. This subject was a major issue at the 14th Annual Floating Production Systems Conference in London, organized by IBC Global Conferences. The negative aspects were touched on by Inge Laskemoen, Senior Vice President for Field Development at Kværner Oil & Gas Norway. He outlined events leading to delivery of the Jotun FPSO to Esso. Jotun is a joint development of three fields in the Norwegian North Sea, called Elli, Elli South, and Tau. For a Norwegian project, the international content is unusually high - operator Esso and Enterprise each own 45%, with the balance held by Statoil, Conoco, and Amerada Hess. Production, which started last October, is derived through wells drilled from a wellhead platform, with oil and gas exported to the floating production,storage, and offloading (FPSO) vessel, which in turn offloads to shuttle tankers. The location is 165 km west of Haugesund, in 126 meters of water. Kværner gained the EPIC contract for the FPSO in April 1997. First oil was achieved 30 months later. New challenges arose each day of those 30 months, according to Laskemoen - but the stiffest emerged before the contract had even been awarded. In 1996, Kværner had been toying with a new hull design developed by its Masa Yard division in Finland, which was about to be deployed in a floating storage unit on Norsk Hydro's Field. Schedule driven Duration of recent FPSO construction projects (in months) from contract award to first oil. Balder execution time includes re-build to meet field requirements. ((In architecture, a turret (from Italian: torretta, little tower; Latin: turris, tower) is a small tower that projects vertically from the wall of a building such as a medieval castle. Turrets were used to provide a projecting defensive position allowing covering fire to the adjacent wall in the days of military fortification. As their military use faded, turrets were adopted for decorative purposes, as in the Scottish baronial style. )) Modifications were required, however, particularly to the turret, in order to convert this concept into a seaworthy FPSO. In November that year, Kværner took the gamble of ordering a vessel based on this design from Masa Yards - in anticipation of winning the Jotun prize. That risk had to be taken, Laskemoen claimed, because of Esso's tight schedule for this project. "It was necessary to start several engineering activities on the topside facilities at this stage prior to award of the FPSO contract, in order to provide interface information from the topside facilities design needed for the detailed design of the vessel." Esso had demanded a 20-year working life for the vessel, with no drydocking in that period. Long discussions ensued between Kværner and Esso over how to interpret this 20-year rule, which differed from the detailed specs in the shipbuilder's tender. Compromises were eventually reached, but these enforced some re-design and changes to the fabrication process. Added complications followed. Late in the conceptual engineering phase, the field partners decided that the FPSO should itself provide saleable gas for direct export into the Statpipe trunkline system (unlike other FPSOs, which deliver their gas untreated for clean-up elsewhere). Accommodating this late change proved to be a struggle. "As a result, we got out of sequence in ordering the topside processing equipment," Laskemoen said. Waves dictate change A further dilemma was the potential impact of severe weather on the hull. Model tests had shown that large waves in this location would deposit green water onto the deck. Further analysis suggested that the quantity and impact could be significant, leading to further very late design changes being imposed. "The cost consequences became more significant than they could have been," said Laskemoen. Major improvements that had to be instituted included protection of cable racks, the deluge skid with bulkheads, more protection wall for the emergency generator and re-routing of the exhaust duct, and structural reinforcement of the escape route and other structures. At the time of construction, many other North Sea gas development projects were also underway, many incurring serious schedule/ cost overruns. Kværner and Esso tried to keep a lid on potential problems by strengthening the Jotun project team. They created an "alignment initiative" to aid staff interaction at all levels and thereby improve execution of the project. However, planning and execution problems continued to surface. As the project progressed, it emerged that the FPSO tender had been based on a concept that was not sufficiently matured. Topsides modification had to be performed at the detailed design phase. In turn, process overlapped into the detailed engineering phase, forcing further widespread modification. These overruns put engineering as a whole out of sequence. The effect of performing so many activities in parallel was to increase the strain on human resources to meet schedules. That situation was exacerbated by the high workload at the time in Norwegian yards, which meant that local pre-fabrication support staff was not readily available. "We had to buy to higher cost and lower quality," said Laskemoen, "resulting in reduced productivity." With delays hitting all main deliveries to the Jotun assembly site in Stavanger, Kvarner decided to insist on earlier arrival of outstanding packages such as the compression unit, "in order to have the major units lifted onboard the vessel for completion under our own control. There was more carry-over work than expected, and too many problems surfaced during completion and commissioning activities. This again resulted in increased workload to the assembly site, and further challenges regarding completion of the vessel." Other challenges Other problems that had to be faced included: •FPSO's mooring anchor chains: These had been installed prior to arrival of the vessel, and were lying on the seabed waiting to be lifted up. After the majority had been pulled in, some twisting of the chain was encountered due to sideways pulling. The chain locked in the guiding system, and as a result, the pulling method had to be modified •Flushing and preservation: The heating and cooling medium systems were flushed and preserved prior to sailaway from the yard, but preservation proved unsatisfactory. Chemical flushing was needed to clean the system properly. Esso, which had global expertise in this field, worked with Kværner to find a chemical medium applicable to the completed system which could be used without destroying gaskets and seals. •Firewater systems: Some vibration was being experienced, which led to significant repair and re-design of some of the firefighting water system components. "For many of the FPSOs built in recent years," Laskemoen concluded in his pre sentation, "the production facilities are more complex and the execution time and investments are at another level compared to the more simple design. The main reasons for these differences are: •Long field life •Environmental requirements - zero emissions philosophy •Production of crude of a quality to achieve the best possible market price •For Jotun, gas production to sales quality Jotun's FPSO, which has a design capacity of 89,000 b/d, plus water treatment at 122,000 b/d, water injection at 190,000 b/d, and gas compression at 53 MMcf/d, was delivered five months later than originally planned. Compared to other recent North Sea FPSOs, this is reasonably good, Laskemoen claimed. In general, floaters are still being produced quicker than fixed platforms of similar capability, he claimed, and at lower cost. ============= UPDATE 1-Chevron-led Kazakh oil venture sees sharp output rise in 2018-19 Mon, Jan 28 07:19 AM EST By Raushan Nurshayeva ASTANA, Jan 28 (Reuters) - Output at Chevron-led Tengizchevroil (TCO), Kazakhstan's largest oil producer, is set to rise by 12 million tonnes per year in the 2018-19 timeframe from last year's 24.2 million tonnes, TCO General Director Tim Miller said on Monday. Data released by TCO project partner Lukoil this month said the venture's production stood at 25.1 million tonnes (about 503,000 barrels per day) in 2012. "Our 2012 production was 24.2 million tonnes. This was 3.7 pct lower than our business target of 25.1 million tonnes," Miller told an enlarged meeting of Kazakhstan's Oil & Gas Ministry. "The primary reasons for this were mechanical problems ... severe weather conditions and transportation restrictions." The huge Tengiz oilfield, located onshore in western Kazakhstan, is one of three main drivers of Kazakhstan's plans to raise its oil output by 60 percent by the end of the decade. Kazakhstan is now the second-largest post-Soviet oil producer after Russia. The vast Central Asian nation of 17 million plans to raise output to 130 million tonnes by 2020 through expansion at the Kashagan offshore field in the Caspian, higher output at Tengiz and the Karachaganak oil and gas field. Kazakh Oil & Gas Minister Sauat Mynbayev said earlier on Monday Kazakhstan's total oil output was set to rise to 82 million tonnes in 2013 from last year's 79.2 million tonnes. TCO's output is set to remain at the current level for a few years as the venture has first to implement the Wellhead Pressure Management Project (WPMP) to install a pressure boost facility and drill additional wells post-WPMP to lay the groundwork for the crucial Future Growth Project (FGP). "The Future Growth Project will expand production capacity by 12 million per year," Miller said. "Start-up of the FGP operation will be in the 2018 to 2019 timeframe." "We are targeting the final investment decision for the fourth quarter of 2013," he said without specifying the sum. Chevron holds a 50-percent stake in the venture, while ExxonMobil owns 25 percent, Kazakh state oil company KazMunaiGas has 20 percent and Lukarco, controlled by Lukoil, the remaining 5 percent. Since TCO's creation in April 1993, the venture's cumulative payments to Kazakhstan had totalled $74.2 billion, Miller said. "In 2012, total payments exceeded $14 billion for the second consecutive year," he said. ================== Product description With subsea tieback projects, what goes on above the surface is just as important as what is happening beneath it. EDG has the topside expertise to support your subsea tieback projects, and we are committed to quality, cost-effective designs. Tiebacks to deep water, floating facilities require a different approach than the traditional topsides projects in shallow water or to fixed platforms. Shallow Water and Fixed Platform Topside Projects Schedule Most projects have a target completion schedule. Depending on the aggressiveness of the schedule, maintaining it could take precedence over cost control and, possibly, quality. Quality Quality, sometimes equated with operability, is a primary consideration during the design and construction phases. Depending on the level of quality desired by the client, adjustments to the project budget and schedule may be required. Cost Cost is always a consideration on any project. Most projects have a cost threshold beyond which it is no longer economically feasible. Cost considerations may also limit factors such as the quality and delivery of equipment. Deep Water Topside Projects When designing for deep water projects, it is necessary to consider three additional priorities. Balancing these six priorities is a complex process and can become even more challenging when one must take precedence over the others as the defining criterion for design. Deep water priorities to consider beyond schedule, quality and cost Location The location (center of gravity) of new equipment is paramount to floating facilities that depend on ballast to return the vessel to an upright, level position. If the location for the new equipment results in a list that cannot be corrected with the available ballast, a new location must be found. Deck extensions, raised decks and mezzanines create more location options for equipment, at the expense of an increase in weight. However, this may be the only way to shift the Center of Gravity of the equipment to a location where ballasting can return the vessel to an even keel. Weight Floating facilities have a maximum weight they can accommodate and still maintain the required freeboard. If initial weight estimates for the tieback project exceed the allowance for new equipment, it may not be practical to complete the project at that location. Equally challenging, retrofitting additional flotation or reducing weight through the removal of other equipment can be prohibitively expensive. Precise weight estimates at the beginning of the project, as well as aggressive weight monitoring and control as the project progresses, are critical to achieving desired weight targets. Depending on the project weight allowance, some or all equipment may need to be selected based on the lowest weight versus the shortest delivery or lowest costs. Space If the available open space does not adequately house new equipment, and the applicable weight budget for the project cannot cover structural steel to allow greater deck space, the tieback may not be completed at a particular host. Choosing equipment that fits within the accessible space, and thereby eliminates the need for deck extensions or mezzanines, may take precedence over the lowest cost and fastest delivery.