NOIA - Presentation Area/Gaffney Cline... · NOIA - Presentation. 2 ... FEED/Basic Engineering...
Transcript of NOIA - Presentation Area/Gaffney Cline... · NOIA - Presentation. 2 ... FEED/Basic Engineering...
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© 2016 Gaffney, Cline & Associates. All rights reserved. Terms and conditions of use: by accepting this document, the recipient agrees that the document together with all information included therein is the confidential and proprietary property of Gaffney, Cline & Associates and includes valuable trade secrets and/or proprietary
information of Gaffney, Cline & Associates (collectively "information"). Gaffney, Cline & Associates retains all rights under copyright laws and trade secret laws of the United States of America and other countries. The recipient further agrees that the document may not be distributed, transmitted, copied or reproduced in whole or in part
by any means, electronic, mechanical, or otherwise, without the express prior written consent of Gaffney, Cline & Associates, and may not be used directly or indirectly in any way detrimental to Gaffney, Cline & Associates’ interest.
St. John’s 23 November 2016
NOIA - Presentation
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Confidentiality and Disclaimer Statement
This document is confidential and has been prepared for the exclusive use of the Client or parties
named herein. It may not be distributed or made available, in whole or in part, to any other
company or person without the prior knowledge and written consent of GCA. No person or
company other than those for whom it is intended may directly or indirectly rely upon its contents.
GCA is acting in an advisory capacity only and, to the fullest extent permitted by law, disclaims all
liability for actions or losses derived from any actual or purported reliance on this document (or
any other statements or opinions of GCA) by the Client or by any other person or entity.
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Report Approvals
This report was approved by the following Gaffney, Cline & Associates
personnel:
Project Manager: Charles Goedhals
Project Reviewer: Chris Rachwal
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Basis of Opinion
This document must be considered in its entirety. It reflects GCA’s informed professional judgment based on accepted
standards of professional investigation and, as applicable, the data and information provided by the Client and/or
obtained from other sources e.g. public domain, the limited scope of engagement, and the time permitted to conduct the
evaluation.
In line with those accepted standards, this document does not in any way constitute or make a guarantee or prediction
of results, and no warranty is implied or expressed that actual outcomes will conform to the outcomes presented herein.
GCA has not independently verified any information provided by or at the direction of the Client and/or obtained from
other sources e.g. public domain, and has accepted the accuracy and completeness of these data. GCA has no reason
to believe that any material facts have been withheld from it, but does not warrant that its inquiries have revealed all of
the matters that a more extensive examination might otherwise disclose.
In carrying out this study, GCA is not aware that any conflict of interest has existed. As an independent consultancy,
GCA is providing impartial technical, commercial and strategic advice within the energy sector. GCA’s remuneration
was not in any way contingent on the contents of this report. In the preparation of this document, GCA has maintained,
and continues to maintain, a strict independent consultant-client relationship with the Client. Furthermore, the
management and employees of GCA have no interest in any of the assets evaluated or related with the analysis carried
out as part of this report.
Staff members who prepared this report are professionally-qualified with appropriate educational qualifications and
levels of experience and expertise to perform the scope of work set out in the Proposal for Services.
GCA has not undertaken a site visit and inspection because [state reasons]. As such, GCA is not in a position to
comment on the operations or facilities in place, their appropriateness and condition and whether they are in
compliance with the regulations pertaining to such operations. Further, GCA is not in a position to comment on any
aspect of health, safety or environment of such operation.
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▪Overview of Project Objectives
▪Activity Levels that may Develop
▪Evolution of the Industry
▪Contracting Strategies that have Evolved
▪Key Contractors
▪ Implications for Atlantic Canada
▪Questions
Agenda
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Provide:
▪ Guidance as to the levels of activity that may be expected from the current
licence rounds
▪ Insight into the Deepwater production contracting, engineering, construction
and operations industry
▪ Recommendations on the way forward for Atlantic Canada industry
Project Objectives
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What is Different about Deepwater?
▪ Drilling– Longer distance logistics
– Longer mobilisation and rig-up times
▪ Floating solutions:– Deep ocean swell
– Long export/shuttle distances – storage
▪ Subsea– Flow assurance
– Proprietary solutions
– Deep ocean swell in installation / intervention
– Limited installation fleet
– High installation cost and intervention cost
▪ Operations– Greater distances – logistics and maintenance implications
– Higher cost
– Challenging economics
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Potential Development Solutions for NL
▪ Subsea is a fundamental
▪ Solutions will require ~10 days storage;
▪ Will need to be bankable;
Likely solutions:
▪ GBS and long distance tie-back;
▪ FPSO, disconnectable turret
▪ Other solutions (TLP, concrete spar)
possible, but not yet proven, storage
issue?
▪ Ultimately, the opportunities for NL lie in
subsea and modules/module integration
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Potential Activity Levels – Exploration and Appraisal Wells
Low CaseHigh Case
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Potential Activity Levels – Capex and Opex Spend
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Well Capex Facilities + Subsea Capex Potential Capex Opex Potential Opex
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Contracting Strategies
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Trends in Contracting - Subsea
▪ History of contracting strategies for the Subsea component shows a trend based on
project type, and the expanding skills and capabilities of the Contractors.
▪ The Subsea market has become dominated by a reducing number of SPS vendors,
Installation Contractors or a combination.
▪ This is driven by the investment that these companies have made in SPS technology
and installation vessels – hence emphasis on proprietary solutions.
▪ Further consolidation is likely as activity levels reduce due to lower numbers of project
sanctions.
▪ Recently this consolidated contracting has been resisted by some operators who seek
best-in-class for each segment.
▪ Subsea is likely to feature in all of the potential future developments, but the impact on
NL will be determined by its skill sets and, critically, the subcontracting plans of the
Prime Subsea Contractors.
Note: Local subsea engineering and fabrication work has been a matter of public
policy and may influence subcontracting plans.
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Trends in Contracting - FPSOs (applicable to all surface facilities)
▪ The FPSO market has become dominated by two types of Prime FPSO
Contractor:
– The first are the longer established FPSO owner / technology provider, such as
SBM, MODEC, who typically subcontract fabrication of the vessel and topsides, and
the integration;
– The second are the major shipyards of South East Asia, such as Samsung &
Hyundai, who where possible, undertake the majority of the work in-house.
▪ The extent to which Newfoundland industry will be able to compete is likely to
be driven by the size and technical complexity of the FPSO, and the nature and
location of the Prime FPSO contractor.
▪ More complex and larger FPSOs likely to be contracted to the SE Asian
contractors
Note: Local engineering and fabrication work re FPSO topsides has been a
matter of public policy and may influence prime contractor subcontracting plans.
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Typical Contracting Strategy that Has Evolved
▪ Deepwater pre-FEED frequently
done in-house by Operator, with
limited engineering support
▪ FEED tends to be done by
specialist or EPC contractor
▪ Two major EPC contracts (but
recent exceptions on subsea
scope)
▪ Integration in near-shore or on
location
Development Studies
Conceptual Design
Basic Engineering
FPSO
FEED
Subsea
FEED
EPC
Vessel Turret Topsides Umbilical
FPSO
Integration
SPS R&F
Subsea
Integration
Installation &
Commissioning
EPC EPC
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Examples
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GoliatProject Name Goliath
First Oil 2016
Location 85km Northwest of Hammerfest, Norway
Water Depth 400 m
Facilities Type Sevan FPSO (100kbopd), Eight subsea templates. Oil export via shuttle tankers
Daily Production 100,000 bopd
Storage Capacity 950,000 barrels
Distance to Supply/Heli Base 85km
Number of Wells 22 (12 producers, 7 water injectors and 3 gas injectors)
Activity
Facilities Subsea SURF
Substructure Topsides SPS Trees Controls Umbilicals Risers Flowlines
Concept Design
FEED/Basic Engineering Sevan Marine Aker
Detailed Engineering
Hyundai
Aker Aker / ABB TechnipEquipment and Material Procurement
Fabrication
Onshore Integration &
CommissioningTechnip
Offshore Installation
Offshore Hook-up & CommissioningAibel
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Project Name Stones (SHELL)
First Oil 2016
Location 320km offshore New Orleans
Water Depth 2926m
Facilities Type Leased FPSO (50 kbopd)
Daily Production 60,000 bopd gas
Storage Capacity 800,000 Bbls
Distance to Supply/Heli Base 320km
Number of Wells 8
ActivityFacilities Subsea SURF
Substructure Topsides SPS Trees Controls Umbilicals Risers Flowlines
Concept Design
FEED/Basic Engineering Shell/SBM
Detailed Engineering SBM
FMC
Technip
Equipment and Material
ProcurementKEPPEL DYNA
Fabrication MAC
Onshore Integration &
Commissioning KEPPEL
Offshore Installation
TechnipOffshore Hook-up &
Commissioning
Operations SupportSBM
Stones (Shell)
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Engineering
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Deepwater Engineering Trends
▪ Pre-FEED is frequently done by Operators, with specialised support from
consultants – limited revenue opportunity (US$2-5MM per development)
▪ FEED now mainly by EPC contractors (US$10-30MM)
▪ Detailed Engineering is part of EPC supplier scope
▪ Fabrication support engineering is conducted at fab yard
▪ Operations Support engineering covers full spectrum of technical
requirements, provides opportunity for operational experience in the
engineering process
▪ Operational experience is best deployed in interface management, integration
and commissioning support
▪ NL has a real advantage in this area – currently providing operations
engineering support, fabrication engineering.
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Major Players and Principal Business Areas
▪ Most of the major contractors are capable of both facilities and subsea engineering
▪ Increasing integration of development and ops support capabilities
▪ Consolidation has seen engineering brought in-house by EPC contractors
Facilities Subsea Facilities Subsea Facilities Subsea
AmecFW
CBI
Exodus/Saipem
Genesis/Technip
Granherne/KBR/Subsea 7
Kvaerner
PetroFac
Saipem
Wood Group
Worley Parsons
Pre-FEED Basic/FEED Ops SupportContractors
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Fabrication
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Key Contractors in Deepwater FPSOs
Source: SBM
FPSO Contractors
Traditional
FPSO
"Owners"
EPC
Contractors -
Newbuild
EPC
Contractors -
Conversion
Facilities /
ModulesIntegration
SBM
MODEC
BUMI ARMADA
YINSON
BLUEWATER
BW OFFSHORE
SAMSUNG
HYUNDAI
COSCO
KEPPEL
SEMBCORP
KEIWIT
McDERMOTT
DYNAMAC
DOMESTIC
BULL ARM
COWHEAD
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Key Contractors in Deepwater Subsea
Prime Contractor
Sub Contractor
Legend:
Subsea ContractorsPrime EPC
ContractorsSPS Vendors
Umbilical,
Flowlines &
Risers
Vendors
Integration /
Installation
Contractors
TECHNIP / FMC
GE / McDERMOTT
AKER
SAIPEM
EMAS / CHIYODA
SUBSEA 7
DRILL-QUIP
CAMERON
NEXANS
DUCO
NOV
OCEANEERING
ALLSEAS
HEEREMA
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A Facilities Solution that would favour the NL Industry
▪ Conversion vessel or concrete
substructure.
▪ Small modules (300-1500t),
fabrication local/international.
▪ Module assembly in NL
▪ Integration in NL
NL has proven module fabrication
and integration skills
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Subsea Solution that would favour the NL Industry
▪ Structure and foundations
fabrication in NL
▪ Complete manifold/flow
base/guide base etc. structure
assembly
▪ Jumper fabrication
▪ Bundle fabrication
Building on proven capability
Potential JVs with key SPS
vendors?
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Operations
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Operational Challenges
Longer distances:
▪ Lower load capacity on existing aircraft – more or different aircraft
▪ Longer shipping routes – more vessels.
Environmental conditions:
▪ Ice-breaking capacity
▪ Crew transfer by both helicopter and support vessel
▪ Oil spill response
▪ Campaign maintenance
New Northern supply base:
▪ Vessel or air supply
▪ Vessel or air crew transfer
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Helicopter Load Capacity
▪ Recent support for Statoil drilling
campaign has seen transfers of
4-5 personnel per trip.
▪ Increased activity implies larger
crew changes, more frequent
flights.
▪ Longer flights raise issue of flight
crew fatigue.
▪ Two solutions:
– Refuelling at destination with
crew swaps. Some industry
resistance, will need investment.
– Heavier-duty aircraft. Will need
investment in decks.
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Specialised Supply/Emergency/Oil Spill Response Vessels
Dual roles are common with standby vessels capable of limited spill response, for example Goliat.
Also, interchangeable supply and standby vessels
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Supply Bases and Logistics
▪ St Johns likely to remain a major supply base, due to largely ice-free conditions
– Expansion of facilities may be required to meet increased exploration and development activities, ops support.
▪ Advance supply base likely for areas in 2017/2019 licence rounds:
– Airfield for airfreight and helicopter ops,
– Road access,
– Water depth and ice conditions may necessitate seasonal solutions
▪ Investment will be required:
– Heavier duty, longer runways,
– Road load and traffic capacity,
– Heliport and refuelling,
– Accommodation,
– Quayside loading capacity
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Implications for NL
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Building on Current NL Strengths
▪ Proven capability in subsea systems design and engineering
▪ Local Operational Engineering support available
▪ Local capability in environmental and regulatory compliance support available
▪ Extensive knowledge of local environmental conditions and appropriate solutions
▪ Proven ability in fabrication of modules of larger capacity than lilkely needed
▪ Proven module load-out and integration capability
▪ Proven near shore commissioning capability
▪ Proven fabrication support logistics capability
▪ Proven GBS/deck mating capability
Leverage these proven capabilities, to create a niche in:
▪ Operational support for complex, high-value, high maintenance items
▪ High value, high maintenance equipment items
▪ Construction, commissioning the modules containing these technologies
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Roadmap for Engineering and Fabrication
Focus on a strategy that combines:
▪ Accommodation modules with control room and control and digital oilfield/integrated operations support systems;
▪ Electrical control room modules, as an extension of the control system;
▪ Power generation modules as an extension of the electrical system;
▪ Gas compression modules, as high value, high maintenance items which are similar in type to generators (the turbines dominate);
▪ Subsea control system modules, as an extension of the control system;
▪ Topsides integration of vessel (perhaps delivered partially complete), or importation, installation and integration of all topsides modules;
▪ Subsea module engineering and fabrication;
▪ Integration testing of topsides and subsea controls;
▪ Pre-commissioning and commissioning prior to sail-away, and
▪ Commissioning support during sail-away, hook-up and offshore commissioning.
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Roadmap for Operational Support
▪ Ongoing engineering support for high value, high maintenance items
▪ Focus on support of long distance logistics for exploration phases in licence
areas
▪ Industry and Operators to cooperate to ensure compatibility of longer range,
higher capacity aircraft and helidecks on drilling vessels and /or refuelling and
crew change-out?
▪ Ice-hardened supply vessels will be needed in the long term (if this takes off),
and are long lead items
▪ Combine solutions for crew transfer helicopter/fast vessel/advanced transfer
▪ R&D Opportunities in personnel transport solutions.
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End