InnovOil Issue 33 May 2015 by NewsBase Ltd.

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Bringing you the latest innovations in exploration, production and refining Issue 33

May 2015

Cutting-edge carriers Japanese shipbuilders are poised to see a renaissance thanks to LNG Page 24

Flexible friend

Bronswerk’s Flexplate is a new approach to heat exchangers Page 10

A Win-Win for the industry?

DNV GL’s exciting new project explores floating wind-powered water injection Page 6

New tool kit

J2 Subsea’s 4 Port ROV Tool Changer Page 13

ith nt w me w it e 33 o N cru pag e re se

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InnovOil

May 2015

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Inside Contacts: Media Director Ryan Stevenson ryans@newsbase.com

J2 Subsea’s 4 Port Tool Changer allows ROVs to re-tool safely on the seabed, offering higher efficiency and lower costs

Tim Daiss explores why US vessels are starting to use LNG as a fuel source instead of bunker fuel, and the expansion of the trend is set to provide opportunities for smaller LNG projects

www.newsbase.com www.innovoil.co.uk Design: www.michaelgill.eu

Japan expects orders

Silver lining for Norway

News in brief

Japan is aiming for a shipbuilding renaissance as demand for cutting-edge tonnage grows as new market supply comes on stream, writes Kevin Godier

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and refining in exploration, production

May 2015

Issue 33

rs dge CArrie Cutting-ebuild ers are poised to Japanese ship to LNG see a renaissance thanks

Despite concerns about efficiency in Norway’s upstream sector, recent developments and technological advancements are seen as a likely shot in the arm, writes Helen Castell

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Friend FlexibleFlexpla te is a

Bronswerk’s gers new approach to heat exchan

Recruitment 33

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Core questions

LNG for maritime shipping 22

Phone: +44 (0) 131 478 7000

J2 Subsea’s 4

We asked industry experts for their perspectives on the global LNG sector and what technologies will be in demand

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kit neW tool Port ROV Tool Changer

Having a gas at WGC

Jérôme Ferrier, President of the International Gas Union (IGU), looks forward to a challenging year for the global gas industry

Editor Andrew Dykes andrewd@newsbase.com

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ROV tooling game-changer 13

Design & Web Dan Bell Danielb@newsbase.com

DNV GL’s excitin water injection floating wind-powered

Bronswerk’s Flexplate is a lighter, more versatile and more compact alternative to conventional heat exchangers

Media Sales Manager Gary Paterson garyp@InnovOil.co.uk

the industry? A Win-Wing For new project explores

Wind-powered Win-Win

Bronswerk steps up

Media Sales Manager Riley Samuda RileyS@InnovOil.co.uk

ations Bringing you the latest innov

DNV GL has kicked off the Win-Win JIP, a project aimed at driving wind-powered water injection with support from both the oil and gas and renewables industry

Associate Director of Business Development Andrew Stalker andrews@newsbase.com

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A note from the Editor

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A note from the Editor InnovOil prides itself on seeking out the newest and most innovative technologies. But sometimes, a wealth of innovation can be found in some of the most established industry sectors. Celebrating its fiftieth year in production, LNG has fostered some of the greatest changes in the energy market in recent years. It has also brought new methods of storing and shipping, and a raft of exciting engineering projects. In 2014, just under 240 million tonnes of LNG were imported worldwide, according to the International Group of LNG Importers. With 40% being supplied from the Middle East, and a further 38% from Asia-Pacific, it is also not – at present – a trend being led by Western producers. Nevertheless, with US exports scheduled to begin this year at Cheniere Energy’s Sabine Pass LNG and more expected on line over the next 5 years, the market is already set for change. Yet even so, the IEA’s head of gas, coal and power markets, Laszlo Varro, recently commented: “Africa will play a bigger role supplying the global trade growth than the US.” Substantial reserves of gas have been discovered off the coasts of Tanzania and Mozambique, with both countries planning new large-scale LNG export projects. These will add to existing facilities in Nigeria, Algeria and Equatorial Guinea. This changing landscape also brings new

innovation and opportunities, from the macro-scale of Royal Dutch Shell’s mammoth Prelude FLNG to the micro, with small-scale LNG liquefaction and regasification plants, not to mention the development of LNG as a maritime fuel, which brings new bunkering, storage and refuelling technologies to the fore. As well as our industry expert Q&A, this month we take a look at some of the recent developments in the LNG industry, including carrier manufacturing and marine fuels. This issue also features the Flexplate from Bronswerk, offering an alternative approach to conventional plate heat exchangers. J2 also highlights its 4 Port Tooling Changer, which allows ROVs to re-tool safely and quickly whilst subsea. As seen on our cover this month, we also profile a new DNV-led JIP, which looks to combine the practical benefits of wind power with the industry’s demand for better water injection EOR. Although in its early stages, the project has backing from international firms keen to see whether the technology could indeed be a Win-Win for their operations. You’ll also find our new recruitment section located at the rear of the publication, bringing you some of the best opportunities from across the world. The team and I are pleased to bring you the May edition of InnovOil.

Andrew Dykes Editor

NEWSBASE

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InnovOil

Wind-powered water injection could be a Win-Win

May 2015

DNV GL has kicked off the Win-Win JIP, a project aimed at driving wind-powered water injection with support from both the oil and gas and renewables industry

company celebrated its 150th year, marking enewable energy and the the occasion by offering up its own vision oil and gas industry have not of the future, as seen from the industries in always made easy bedfellows. The which it works. development path of both sectors DNV GL Energy’s Service line leader has often led companies and innovators to for offshore renewables advisory, Johan an either/or approach, despite the potential Sandberg, told InnovOil: “In benefits of closer working. 2013 I was given the responsibility Yet the benefits are evident. to develop our 2050 vision for The operational needs of renewable energy – obviously enhanced oil recovery (EOR), very exciting. Given our heritage for example, make it a good in the maritime and renewable target for the application of industries it was quite obvious renewables; many operations that we wanted to go for offshore do not require backup power, renewables in one way or another sidestepping the issue of so the third generation of wind intermittent generation, power - floating wind turbines was while the cost and life an obvious choice.” extension elements often Although offshore wind was mean the initial investment in Johan Sandberg, infrastructure can be paid off DNV’s energy division a natural choice for a company over the increased lifetime of service line leader for with its origins in the maritime the project. offshore renewables industry, it does present its own challenges. “Only a fraction of Schemes such as solarthe world’s oceans are shallow enough in powered steam EOR have already proved which to build offshore wind, so it was economically viable in the US and Middle quite obvious immediately that we needed East, and new developments could see to focus on floating turbines.” other technologies catch on. The DNV GL team wanted to identify The latest innovation comes in the form how they could make wind power “the of the promisingly-titled Win-Win joint shale gas of renewables – a game-changer.” industry project (JIP). The brainchild of However, to do this would require more classification society and maritime advisor than simple awareness of the technology, DNV GL, Win-Win combines water particularly in an industry known for its injection with wind power. Last year, the NEWSBASE

conservatism. “We quickly understood that we needed to find a market where this would be a purely commercially driven enterprise, so we started to look at oil and gas.” Float on While cleaner power can reduce costs in terms of emissions regimes (depending on local environmental regulations), any solution would have to be competitive on its own merits. “We thought: why not try to see if we can identify a process where

May 2015

floating wind would be THE preferred solution – not because it‘s subsidised or because of the effects on emissions, but because it works and because it is cheaper than the alternative, conventional solution,” Sandberg said. Water injection proved to be the best fit, primarily because it can often work with limited or even without backup power. “Producers often complain that they don’t have enough capacity to inject water, so anything which can help add injected water could be useful,” he continued.

InnovOil

It is a simple idea, but not one that has been put into practice so far. While some platforms – Beatrice in the North Sea for example – have wind turbines to generate electricity, they are supplementary to a grid connection or an independent supply. An independent, dedicated wind system powering a specific process is a bold new step. In particular, wind-powered injection would be most beneficial to platforms with a lack of associated gas to drive gas turbines, or to platforms which lack NEWSBASE

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sufficient generation capacity to power the process. DNV GL’s calculations suggest a typical injection pump system requirement of around 5 MW of power, either in one 5-MW induction motor or in two 2.5-MW motors running two smaller pumps for the benefit of added redundancy. Most wind turbine manufacturers now supply 6-8 MW models suitable for offshore use, although few have been proved for floating applications, meaning new prototypes may well have to be considered.

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It can also be cheaper, more efficient and take up less space than the alternatives. “In some cases [operators can] retrofit gas turbines to the platform,” Sandberg explained, “But the retrofitting costs alone and the lack of production during the fitting is also a formidable cost.” For producers without enough associated gas, an installed wind system may be more economical than importing diesel or LNG fuel to power generators and turbines. Citing Norway’s burgeoning expertise in the wind sector – Statoil pioneered the Hywind floating wind demonstrator in 2009 and is working on a similar project in UK waters – DNV GL set to work examining the country’s 140 or so producing platforms for those which might benefit most. The early results were positive. “We saw in some cases we got fantastic results, because in many cases the alternative is just to shut down altogether and decommission your platform.” How it works From an early stage, DNV GL considered varying designs, again dependent on the needs of different production profiles. The simplest system would see a floating turbine drive a subsea pump, injecting unprocessed seawater into the reservoir, while others of varying complexity could also be used depending on infrastructure and reservoirs. “We looked at cases with an integrated autonomous system, where the pumping and water injection system is integrated into the foundation of the turbine, or also where the turbine is connected to the platform via cables and runs the system already installed on the platform,” Sandberg said. Each has its merits, but an integrated floating turbine could be located far from the production host without need for costly power cables and water flow lines, one of the most expensive considerations in a water injection system. In its initial plans, DNV GL cited Norway’s Tyrihans field, where injection water is drawn directly from the sea via a newly developed subsea unit, operated remotely from the Kristin platform, 31 km away. It is one of few cases with raw sea water injection and this kind of technology may well form the

InnovOil

Possible design for an internal pump system first basis of a prototype wind system. Using raw seawater for injection is obviously the easiest method, and minimises the injection flowline, but future developments could see water processing and desalination incorporated into the system for use in low-salinity EOR operations. It is something DNV GL has considered, although it concedes that the need for significant salt removal may make a wind system unfeasible in some circumstances. The system also offers an attractive OPEX proposition as a counterpoint to the unit’s initial CAPEX costs. “The life expectancy of these turbines is longer than the life expectancy of most injection wells,” Sandberg enthuses. “So once you’ve depleted your field, you can just take the floating turbines/injectors, disconnect the mooring, take it to another field and start injecting water there, meaning very low CAPEX next time you connect your wind turbine.” State of play Having held an information meeting on the Win-Win JIP in November 2014, DNV GL is now collaborating with some of the first signed participants. Overall, Sandberg said cross-industry interest had been very encouraging. “We had 17 or 18 companies attend in person [in November] … and now we have 5 or 6 contracts and [are] in NEWSBASE

May 2015

the final stages of signing with another couple.” Most important has been the early sign-up from oil and gas companies. “We now have a handful of oil companies on board – platforms owners, not just from Norway, or Europe, but globally.” This support is vital to taking the project to a commercially applicable stage, through what Sandberg calls “The Valley of Death” – the period where developers need a significant capital boost to take an idea to a commercial phase. The next stage of the JIP will likely be the development of a project, although DNV GL does not have a firm timeline. Although consultations are already under way, new partners are still welcome to sign up – the company is still looking for participants right through the wind and oil and gas supply chain to make its analysis as comprehensive as possible. The system has a number of potential business models too. Sandberg suggests that platform owners may take over the operation and maintenance of the turbine and pump systems themselves, or even that a dedicated business could lease or hire them out to E&P companies. The system would not be limited to the North and Norwegian Seas, with conditions and interest in the Gulf of Mexico equally promising. Sandberg floated the possibility of deployment in the Barents – perhaps with the support of higher oil prices – but notes that developers are discussing it, which is encouraging. Most important of all, however, is the dialogue that has come between industries. “When we meet with engineers from oil and gas, they bring so much more to the discussion than we could have come up with ourselves,” he commented. “For example, if we can drill wells differently just because we have wind turbines instead, maybe more money can be saved that way.” Although the project is still in its early stages, it is an ideal beachhead for the kind of collaboration that will be required, if industry is to become more efficient, and if renewables are to be proven in commercial settings. If the enthusiasm of the early meetings is carried through, DNV may well be onto a Win-Win. n

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May 2015

Bronswerk steps up to the plate Bronswerk’s Flexplate is a lighter, more versatile and more compact alternative to conventional heat exchangers

Figure 1

Water at 5˚C

Air at 40˚C

Demister

Flexplate

Air at 10˚C

bronswerk_Radiax-01-A4-210x297.pdf

ing Clipp

State

16-12-13

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reater efficiency has become the mantra of many developed oil and gas operations. Although hardly the root cause, the recent run of lower prices has strengthened the case for production and operational efficiency, with more and more firms looking to make modest investments in solutions which can improve the asset performance. Bronswerk, based in Nijkerk in The Netherlands, has been providing air- and fluid-based heat transfer solutions since 1940. As such, it is no stranger to the fact that innovation can offer much greater performance and efficiency. InnovOil has previously reported on the company’s high-efficiency cooling designs using its Whizz-Wheel fans. The Whizz-Wheel system-based design produces the same – or better – output as conventional fan-based cooling units, requiring 50% or less driving power, a doubling of efficiency and where possible, much reduced space. Not only this, but the fan system’s noise level is 6dB lower than its quietest rival. This technology is scalable, and is now employed in everything from small fan systems necessary for computer cooling, to 20m

Condensation

Water at 15˚C fans used in cooling for turbo machinery across manufacturing, industry and of course, oil and gas and power. Similarly, Bronswerk’s Compact Header heat exchanger also offers weight and space savings of up to 70% in comparison with conventional exchangers. This is particularly useful in space-critical applications – such as offshore platforms – and also can mean significant reductions in load on the supporting steel structures. In the same vein as these solutions, Bronswerk’s latest innovation – the Flexplate heat exchanger – offers a sustainable and compact alternative to the conventional heat exchanger. Breaking from convention Until now, liquid has often been aircooled by means of conventional heat exchanger tubes, consisting of the familiar finned-tube design. Notwithstanding the advantages these finned pipes have – resistance to high pressure, for example – the Flexplate offers a suitable, and in many cases better alternative. Similar to a conventional plate heat exchanger, the Flexplate consists of a series of stacked stainless steel plates, NEWSBASE

welded together in pairs along their outer edges. Although the envelope-like structure closely resembles a typical plate heat exchanger, the inner design and construction of the Flexplate is an entirely new development in the air-cooling and/or heating of liquids and gases. Advanced spot-welding and processing of the stacked plates makes it possible for the inside to be used for the hot liquid medium, while the outside of the plate carries the cooler gas. Because these sets of stacked plates are very thin and close together, the heat transfer relative to the content is considerable, yet the entire installation remains compact. The Flexplate has numerous applications, including in condensers, evaporators, heaters and air cooling, as will be seen later. But besides being a suitable alternative to conventional heat exchangers, the Flexplate will also be suitable for other – and even entirely new – applications, depending on the processes involved. Applications Bronswerk sees the potential for the Flexplate in a number of processes. One anticipates its application in moist

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Composite structure showing the construction of the Flexplate

air conditions, where in addition to condensing the air, the Flexplate can also double as a de-mister. It has great potential for use in polluted air. Given that the stainless steel surface of the Flexplate is smooth, when combined with high air velocity there is a far smaller chance of dirt adhesion, also reducing the chances of failure and the need for component cleaning or replacement. In addition to dirt particles, this same robust, corrosion-resistant stainless steel/Inconel construction means the unit is capable of working in high air temperatures, and in environments with corrosive gases and liquids. The example seen in Figure 1 shows a process in which compressed air is then cooled by means of Flexplates. This set-up uses Bronswerk’s RADIAX® compressor, featured in InnovOil Issue 27. RADIAX® combines high flow with an incredible increase in pressure, offering a 20 bar per stage pumping pressure rise – ten times higher than most conventional pumps. Using the Flexplate in concert with the highly efficient compressor and the internal cooling plates package offers competitive performance via an extremely compact unit.

Case study The installation illustrated in Figure 1 cools air using water, and is used in a plastics production plant. The biggest challenges for Bronswerk in developing this design were the low pressure drop and the limited installation space. The former was necessary, as an existing fan had to be used as part of the system. Likewise, as the design involved retrofitting the existing process to make it more efficient, both the Flexplate and compressor had to be installed within the limitations of the given space. Additionally, it was essential for the air in this process to be dry after cooling, and for it to remain below 10°C. Another client requirement was for the installation to have a very long service life – despite the high presence of moisture, which could cause corrosion of the unit. The image shows an outline sketch of this process. The air, which enters at 40°C, is cooled down to 10°C with a cross-counter flow of water. Since the water vapour in the air condenses through cooling, this water has to be drained off, so the plates serve as a de-mister as well as a condenser. NEWSBASE

Owing to the requirements on pressure, the internal plate distances had to be highly accurate – i.e. the spaces between each plate were larger than in a standard plate heat exchanger – in order to guarantee that the pressure drop would remain limited, yet maintaining cooling capacity. The condensing water vapour gives a sizable increase in the overall heat transfer coefficient (OHTC) values of the condenser, ensured by the fact that the shape and arrangement of the internal Flexplates mean that the water droplets are able to flow away quickly. After the success of the first Flexplate project, Bronswerk is now embarking upon full commercial production. With such a wide a range of potential applications, from offshore production to refining and petrochemical plants, the Flexplate heat exchanger offers a wealth of efficiency and space-saving benefits to operators. n Contact:

Bronswerk Heat Transfer Tel: +31 332 472 500 Email: info@bronswerk.com Web: www.bronswerk.com

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J2 Subsea introduces an ROV tooling game-changer J2 Subsea’s 4 Port Tool Changer allows ROVs to re-tool safely on the seabed, offering higher efficiency and lower costs

emotely operated underwater vehicles (ROVs) are working deeper and performing more tasks than ever before. With more versatility and class options available, various models are carrying more tooling capabilities, scanners and peripherals, depending on the required mission. Operators looking to maximise their operational efficiency also want to keep ROVs operating at depth for as long as possible. Deploying and retrieving ROVs to re-tool can be time-consuming and expensive – particularly in deepwater locations – as running costs include not just the equipment, but the crew and vessel as well. Repeated returns to surface also increase the risk of damage to the system whilst it is in the splash zone. Game-changing solution The J2 Subsea ROV-operated 4 Port Tool Changer is designed to revolutionise the way tools are used subsea, giving operators greater efficiency and cost savings. Importantly, the Tool Changer allows the ROV to connect with a tool without compromising its hydraulic system. This means that it is possible to use a host of tools and carry out a large number of tasks without hydraulic fluids escaping into the marine environment every time a new connection is made. Key areas that required addressing included a no-leak capability, ease of operation, ease of maintenance, a high flow and high pressure capability, low weight for manipulator handling, secure latching and failsafe unlatching. Key features include: • Zero leak • 5000mtr rated • 250kg lift capacity • Emergency disconnect (optional) • Ease of maintenance • 345 bar standard rating, 690, 1034 (option)

In the standard tooling configuration, the ROV and tool ends are fitted with the new clean break zero leak connectors, which can operate to a maximum 345 bar. The four port systems utilise clean break technology, resulting in minimal escape or intrusion of either hydraulic fluid or seawater. The Tool Changer therefore not only offers a saving in subsea scenarios but has a wider cost-saving implication on increasing up time for vessels, reducing the potential for damage to the ROV – as a result of less time spent in launch and recovery.

to a fully developed commercial product. A comprehensive testing and qualification programme was then undertaken, which included hyperbaric testing to ensure the connector met the demands and was robust enough to offer reliable service in the deepwater environment. Through its partnership with Walther, J2 has signed an exclusive agreement to sell or rent the tool changer globally and offer support/service/repair and rental from all of its international bases. n

Development The concept was conceived by Aberdeen’s J2 Subsea and Walther Prazision, through innovative design and manufacturing technique. Working in partnership, the two firms took the design from concept through

Contact:

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John Walker / Oliver Gilbert Tel: +44 (0)1224 248 090 Email: john.walker@j2subsea.com oliver.gilbert@acteon.com Web: www.j2subsea.com

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InnovOil

May 2015

Having a gas at WGC Interview

Jérôme Ferrier, President of the International Gas Union (IGU), looks forward to a challenging year for the global gas industry

e find ourselves at a pivotal point in our industry’s history. The world continues to contend with some challenging economic headwinds and energy is increasingly being positioned as a core driver of economic and social stability and progress. But with the outlook for crude oil prices unclear and the impact on other energy technologies far from certain, 2015 therefore represents an important opportunity to address supply and demand challenges and to deliver on goals for sustainable development. Gas, both conventional and unconventional, remains under-explored in much of the world, despite global reserves currently estimated at 187 trillion cubic metres. We believe it is the most flexible, reliable and resilient energy source currently available to consumers. It is difficult to pinpoint which technology or aspect of the sector is most important, as only by collaborating throughout the industry can we deliver the

most value to governments and consumers. The programme for the 26th World Gas Conference (WGCPARIS2015), held on June 1-5 in Paris, is the culmination of three years’ worth of research and studies to which more than 1,000 industry leaders have contributed, and truly reflects the wealth of skills and experience of our industry. We will explore technologies from across exploration, production and distribution, and analyse how we make best use of our human capital to develop these technologies for the future. The rise of LNG Celebrating its 50th birthday in 2014, LNG has made great changes to the global market in recent years. A 2014 study presented by the IGU – a global, nonprofit association aimed at promoting the technical and economic progress of the gas industry – found that global liquefaction capacity will grow substantially between 2020 and 2025, with re-gasification capacity set to increase by around 75%.

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LNG is becoming increasingly recognised as an enabler in connecting markets, with countries such as Australia, Canada, Mozambique, Tanzania and the US expanding their LNG capabilities. Its advantages have propelled it to become a viable long-term alternative to the often convoluted and expensive planning processes that preface pipeline developments. Additionally, its flexibility means that it is particularly suited to fuelling development in emerging markets. We are already seeing these markets responding positively, with LNG being increasingly used as a source of primary power generation, in place of coal or oil. LNG has the ability to bring gas to places located far from other major infrastructure, expanding the reach of operators and the global gas market. We are particularly pleased that for the first time at WGCPARIS2015 the conference will feature a dedicated village within the exhibition devoted to natural gas for transportation. We have consciously made it a key element of this

May 2015

InnovOil

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Interview Below and below opposite: pictures from previous WGC conferences

year’s conference. The use of natural gas in transportation has advanced from being a cheap option for urban transport, mainly in light-duty vehicles in developing countries, to a real alternative for almost every mode of transport around the world. The IGU welcomes the participation of co-hosts NGV Global and NGVA Europe, and looks forward to seeing how the village profiles this rapid growth. One way that LNG gas markets could be made more flexible and fit for purpose is a revision of the application of destination clauses to shipments. Adapting these clauses to reflect the new, more dynamic realities of today’s energy markets would enhance our ability to redirect supplies to where they are needed most. In addition, the increase of FLNG will enable us to meet short-term demand better, helping the industry to deliver security of supply. Progress through policy There is much to be done and our conference in June seeks to highlight where change is needed and how that can be best

enacted. Gas flaring, much of the time, is wasteful and can contribute to negative public perception, so it is incumbent on us to identify ways of making the best uses of these by-products of the production process, enhancing efficiency and minimising waste. We, like policymakers around the world, have the climate at the front of our minds. We must take a progressive view towards our contribution to climate change and the gas sector is uniquely positioned to play a central role in the transition towards a lower-carbon economy and as a foundation fuel for the future energy mix. As the IEA’s World Energy Outlook 2014 highlighted, using natural gas for power generation reduces carbon emissions by 50%, meaning that, in the medium term, it can provide a meaningful contribution to global emissions control. The IGU supports climate policies that introduce a cost of carbon that is uniform and predictable across economies, and can drive the innovation of low-carbon technologies and energy efficiency. Furthermore, we encourage governments

NEWSBASE

across the world to work with industry to develop operational and regulatory approaches that ensure that gas resources are developed in an environmentally progressive manner. Inspiring innovation Our industry is renowned for its innovation – and that is a reputation that I hope will prevail for many decades to come! One of our core goals at WGCPARIS2015 is to review, identify and discuss means for the effective communication, co-operation and enhancement of research, development, and innovation within the gas industry. One major technology that will benefit the industry greatly – but which in turn requires considerable innovative thinking and strategic investment – is carbon capture and storage (CCS). CCS represents a natural progression towards building a sustainable gas industry and, in places, is becoming a reality, with 21 projects under construction worldwide. Commercialising the technology will require further partnerships between governments and

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InnovOil

May 2015

Interview Below: Jérôme Ferrier, President of the International Gas Union

discussions that I am very much looking forward to. Global leaders from Total, GDF SUEZ, Qatargas, Chevron, ExxonMobil, Royal Dutch Shell, BP, Woodside, Statoil, GasTerra and Beijing Gas Group will address the major energy challenges facing the world today and how the gas industry can deliver the means to overcome them. Topics on the agenda are the ongoing impact of global oil price volatility, supply and demand challenges, technological innovations and the role of gas in an affordable, secure transition to a lowercarbon economy. I am also particularly pleased to be launching the IGU’s official Annual LNG Report 2015, which presents the most important developments in the sector and analyses implications for future growth. I am also very keen to hear from the wider gas community on what is driving and challenging their businesses, and how the IGU can further advocate for them on a national and international level. Most importantly, WGCPARIS2015 provides our industry with a unique opportunity to re-state the case for gas and outline its place as a long-term enabler of development, contributor to overall emissions reduction and as a foundation fuel that will meet the energy needs of the world’s communities for many years to come. n

industry in order to gather momentum and encourage investment. We are not alone in recognising this: the International Energy Agency (IEA) also argues that the most effective incentives for industry to engage with CCS development will come from government subsidies. Floating LNG (FLNG) is also an exciting development in technology, and its impact on the global LNG industry could be massive. It has the potential to unlock smaller or remote fields that may not be otherwise reachable with conventional infrastructure. However, FLNG still faces a number of technical and commercial challenges, particularly across standardisation, project finance, supply chain, and nurturing human capital and skills. If these challenges are met, FLNG could emerge as a more standard approach to extracting offshore resources. It will save time and cost, and improve efficiency, providing further flexibility to the global marketplace. Open for discussion WGCPARIS2015 is an extremely important event in the calendar and I am very proud to be hosting it in Paris. The event is unrivalled in its breadth and depth of expertise, and promises to further the debate significantly on the role of gas in the global energy market and the transition to a lower-carbon economy. It has already attracted participation from more than 100 countries and 600 organisations, with delegates representing technical, engineering, strategic and commercial disciplines. This year, we have also received a record number of abstracts, and I feel confident that delegates will gain a comprehensive understanding of key industry issues and new solutions that will stimulate growth. The event is packed full of highprofile speakers and important

Please note: Online registration closes soon and we encourage you to register your place today and to start planning your networking activities. Register here at www.wgc-paris2015.com/ registration vv NEWSBASE

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InnovOil

Core questions page 18

Month May 2015

This month we asked industry experts for their perspectives on the global LNG sector and what technologies will be in demand as the industry continues to grow “Designing the operation of berthing the LNG carrier to the FLNG for a specific field may be helpful. At MARIN we believe it is important to close the gap between engineering and operations.” Olaf Waals

Olaf Waals

Manager Offshore at Maritime Research Institute Netherlands (MARIN) What technologies are most important to the global gas sector right now? From the perspective of floating offshore developments in the global gas sector, we see the development of large floating LNG producing facilities. Important technologies in this field are the offloading of the gas to a LNG tanker. This can be done either in side by side or tandem configuration. An important aspect is the workability of these offloading operations. Understanding the LNG vessel motions in close proximity of the FLNG is a challenge, especially when taking in to account that the internal sloshing of the LNG in the tanks may also affect the dynamic motions of the whole system. The internal sloshing of LNG in the cargo tanks is also subject to further research. We are starting a new project that addresses the impacts of LNG on the tank wall. This is a challenging subject because both the liquid and gas properties play a role in the physics of the impact. That is also why we will build a special testing facility where we can control the

properties of the liquid and the gas, the temperature and the pressure. From this we will understand the loading process on the inside of the LNG tank. A further aspect is the tandem offloading – where the LNG carrier will be behind the FLNG to take on the cargo. Typically, this will be done using a dynamically positioned (DP) vessel, controlled in such a way that it will follow the stern of the FLNG. The challenge is to have a safe DP operation where the gas carrier can dynamically follow the FLNG –the yaw motions of the long FLNG vessel especially can lead to difficult situations. In our experience a combination of a stern thruster on the FLNG with a DP operated LNG carrier leads to the most stable situation, but we believe there is still room for innovation of multi vessel DP systems and we are starting a project to address this. How has the proliferation of LNG affected the sector and gas markets? At this moment we still see a number of large FLNG projects that are in pre-FEED or FEED stage. This means that projects are currently under development, but we have to wait and see if they will actually be built. Next to the large projects there are also concepts being developed for smaller LNG production fields. As a hydrodynamic

NNEEW WSSBBAASSEE

research institute we are a bit further away from the actual gas market, but we see that there is a lot of activity around floating LNG projects in 2015 and early 2016. Are there any aspects – from up- to downstream- which are in need of more innovation(s)? There is always a need to innovate the overall chain from offshore production, transport and offloading to regasification units. An important aspect is to reduce the operational cost of the overall system. Increasing the uptime of the terminal, for example by appropriate heading control of the FLNG can improve the overall performance. Designing the operation of berthing the LNG carrier to the FLNG for a specific field may be helpful. At MARIN we believe it is important to close the gap between engineering and operations and to think about the operation from the very early design stage. By designing the operation itself, we try to question how the facility will be used before it has been built. In the design stage, we can still optimise the operation – for example by adding a heading control thruster or choosing the height where the bollards are on the FLNG. Once the structure has been built, a refit is usually too expensive. n

May 2015 Month 2015

InnovOil

page 19

LNG Tanks at the Port of Barcelona

Richard Lockhart

Senior Editor, Global LNG Monitor NewsBase What technologies are most important to the global gas sector right now? Floating technology is a major growth area just now, both in terms of liquefaction and regasification. Small-scale LNG, where LNG acts as an efficient, low emission fuel for ships is emerging as in response to new as emissions rules and Europe and the US. Downstream, combined cycle gas turbine (CCGT) generation technology offers high efficiency rates and lower emission that other fossil fuel technology. This is the most popular technology for gas-fired generation projects, usually serving large industrial customers and urban areas. How has the proliferation of LNG affected the sector and gas markets? LNG supply is set to rise over the next five years – import rose 1% in 2014 to 239.2 million tonnes – with the US and Australia likely to overtake Qatar at the top of the list of producers by 2020. Demand is also set to remain strong, and should be able to absorb the new supply with emerging importers such as India. Yet lower than expected demand from China is causing some concerns about future oversupply. Plentiful gas supply is keeping prices low however, and the low-price environment is threatening the viability of the more expensive supply projects, such as in Australia. Cheap and abundant US shale gas, however, can absorb low prices. LNG trading has created routes to market for new supply volumes, such

as the US shale gas. It also offers new import channels for countries dependent on pipelines, for example in Lithuania, or experiencing falling gas production, such as Egypt. Are there areas of policy/practice where change is needed – e.g. gas flaring? How could these be made effective? The rate of change to current procurement models must be higher to keep pace with the evolution of sources of supply and demand. More spot trading and shortterm contracts are needed to improve transparency in the market and to promote price convergence between Asia, Europe and the US. Procurement alliances and trading hubs are two more ways to achieve greater price stability and transparency. The move away from traditional

NEWSBASE

procurement models has begun and this is set to continue, reducing the dominance of long-term contracts, which fell to a record-low 71% in 2014. This will create more pricing and destination flexibility. Are there any aspects – from up- to downstream- which are in need of more innovation(s)? More innovation is needed to promote LNG as a shipping fuel. Emissions rules in Europe and the US Atlantic seaboard has made LNG technology more relevant to shippers, and will stimulate the development of small-scale LNG infrastructure, such as LNG fuelledengines and bunkering infrastructure. The first LNG-powered passenger and cargo vessels have been built. More innovation in terms of costs and bunkering capacity will be needed. n

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May 2015 Month 2015

Paul Shields

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InnovOil

page 21

“An accelerated pace of adopting current innovation is more important than new innovation and – an important point to note –an additional benefit of LNG and its adoption as a fuel alternative to diesel and other distillates, is that it doesn’t require significant new technological innovation.” Paul Shields

What technologies are most important to the global gas sector right now? Liquefaction, and in particular the technologies that enable what is generically termed “small-scale and mid-scale LNG.” Traditionally, liquefaction has been the domain of large baseload plants, but outside of China – where a significant number of much smaller liquefaction plants have been built and are operating successfully – there hasn’t been a significant uptake in other regions. However, with Stabilis opening its 100,000 gallon per day plant in George West, Texas, earlier this year and other North American plants under construction, the future for small-scale LNG liquefaction looks bright – even prompting a headline from CERAWeek ’15: “Gas leaders see small-scale LNG gaining momentum.” Largely through the abundance of shale gas, the US is considering a number of LNG export projects whose capacities and logistics aren’t suited to a current world scale base load facility. Therefore, without the economies of scale of a full baseload project, solution partners have needed to “think differently” to provide overall economical solutions and that’s meant new and refined liquefaction processes, together with new perspectives on key liquefaction equipment and overall plant construction and operation. This month we’ve seen positive news from both Venture Global and Parallax Energy regarding mid-scale LNG projects in North America. A quote from Martin J. Houston, Chairman of Parallax is a good summary of where the associated

technology and resultant acceptance of a modular solution to mid-scale LNG has brought us to: “We have an innovative, efficient and cost effective way to safely produce what customers want – smaller amounts of LNG that they can purchase incrementally”. Are there areas of policy/practice where change is needed – e.g. gas flaring? How could these be made effective? Any clean air legislation is always welcome, as natural gas will always win the environmental argument against distillate fuels. Look at the maritime sector and MARPOL regulations to see evidence of that. In the US, LNG as a vehicle fuel is taxed on a volumetric basis, which creates a 70% penalty versus diesel on an energy equivalent basis, and is an area where Chart, and others, will continue to lobby to establish a level playing field. Are there any aspects – from up- to downstream- which are in need of more innovation(s)? For a long time there was a chicken-andegg conundrum with regards to LNG and transportation. Potential customers were reluctant to adopt LNG owing to the lack of infrastructure and providers reluctant to invest in infrastructure because they weren’t seeing the demand pull. Happily we’re now seeing evidence of significant positive movement in both areas, in both Europe and the US.

NEWSBASE

In Europe we’ve seen recent announcements about Shell’s LNG fuelling stations at sites in the Netherlands and Scania’s Euro 6-approved truck. In the US we highlighted earlier the acceptance of small and mid-scale LNG liquefaction, which opens up the supply side. Therefore, I’d conclude that an accelerated pace of adopting current innovation is more important than new innovation and – an important point to note –an additional benefit of LNG and its adoption as a fuel alternative to diesel and other distillates, is that it doesn’t require significant new technological innovation. How has the proliferation of LNG affected the sector and gas markets? In the US it’s the proliferation of shale gas that’s driving LNG. In answer to the question “what shall we do with all this natural gas?” 3 of the 4 main suggestions directly involve LNG: 1. Export it – evidence the number of export projects submitted for consideration 2. Use it as a low-cost fuel – a good example is the oil industry where LNG is increasingly used to power high horsepower engines in the oil and gas fields 3. Use it to reduce our dependence on imported crude oil, in heavy haulage vehicle fuelling. n

InnovOil

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May 2015

COMMENTARY

LNG for maritime shipping offers opportunities

Tim Daiss explores why US vessels are starting to use LNG as a fuel source instead of bunker fuel, and the expansion of the trend is set to provide opportunities for smaller LNG projects

he use of LNG as a fuel for the US maritime shipping industry is starting to gain momentum as new, tougher emission standards are implemented. Last week, the first vessel in the US to operate exclusively on LNG power, the Harvey Energy, began service for Shell Upstream America’s deepwater operations in the Gulf of Mexico. In February, WesPac Midstream and Clean Marine Energy (CME) signed a contract with Conrad Shipping to build the first LNG bunker barge for the North American market. After completion in 2016, the barge will be relocated to Florida to serve Totem Ocean Trailer Express’ (TOTE) newly built container vessels and other LNG-powered vessels in the Port of Jacksonville, Florida. CME’s CEO, Pace Ralli, said a comprehensive LNG supply and distribution network for the marine market in North America was critical for the shipping industry. He added that WesPac and CME were taking the necessary steps to complete the LNG supply chain so ship owners could be assured LNG

would be available when and where it was needed. WesPac and CME plan to exercise further options with Conrad to construct additional LNG barges for other ports in North America. Replacing bunker fuel These developments are significant for several reasons. First, they show the emergence of LNG as a fuel source, replacing dirtier-burning bunker fuel. In September 2014, IHS Maritime said looming global requirements for lowsulphur fuel were prompting vessels to consider LNG to power container ships on long-haul international routes as well as regional feeder services. On March 3, the Washington, DCbased Brookings Institution commented on this trend in a report. According to the report, as efforts to combat climate change increase worldwide, pollution stemming from maritime shipping presents a particular challenge, but also a promising new market for LNG. The report said that the heavy bunker fuels predominantly used by the world’s 90,000 cargo ships were among the dirtiest

Wärtsilä’s LNGPac system seen here in the Harvey Energy NEWSBASE

and highest polluting – a single container ship can emit as many chemicals as an estimated 50 million cars. As a result, it said, marine shipping may account for around 3-4% of greenhouse gas (GHG) emissions worldwide. “With shrinking profit margins and increased regulation of emissions, shippers are looking to alternative fuel sources such as LNG,” the report said. LNG benefits The use of LNG as a maritime shipping fuel source in order to meet new standards also has marked environmental benefits over other options such as using either a distillate, or installing a scrubber that removes sulphur from the exhaust after combustion. In addition, using LNG as a fuel source for shipping also has significant cost savings. A recent Poten & Partners report said that LNG was not only cleaner burning, but might have economic advantages on a calorific value basis, and that even high Asian LNG prices were lower than global bunker fuel prices. Thus the US shipping industry may have even

InnovOil

May 2015

page 23

COMMENTARY

more incentive to switch to LNG as a fuel source if the gas prices it will pay are based on the Henry Hub price, which continues to remain low. A University of Delaware’s College of Earth, Ocean, and Environment professor, James Corbett, said recently that the marine sector needed to be engaged in becoming less polluting, and was already in the process of achieving this. “You’re going to see impressive year-to-year gains in it because it got started much later than other forms of transportation,” he said. Opportunities America’s Natural Gas Alliance (ANGA) predicted in October 2014 that within 15 years, 363 US-flagged vessels could generate 380 million gallons (1.4 billion litres) per year of LNG demand. This is equivalent to 1.04 million gallons (3.9 million litres) per day of LNG. ANGA added that much of the growth was projected to come from chemical and Researched & Ogranized by:

product tankers, containerships, offshore support vessels and push-boats. This number is forecast to grow even more globally. Maritime classification society DNV GL anticipates a global fleet of around 1,000 LNG-fuelled vessels within the next five years. In light of recent developments, InnovOil anticipates that this increase in LNG-fuelled vessels will provide promising supply opportunities for small and medium-sized US-based LNG projects that will be coming on stream in the next 5-10 years. This is particularly because mega-LNG projects will mostly earmark long-term offtake agreements with large customers in the Asia-Pacific region, mainly large Japanese and South Korean utilities. Also, since the recent convergence of Asian and European LNG prices, large US-based LNG projects will also try to meet European natural gas demand as well as serving markets in Latin America. Smaller US-based LNG projects, however,

seem more likely to find a solid niche market as LNG is increasingly used as a fuel source for domestic maritime shipping. The Eagle LNG Partners proposed North Jacksonville, Florida project provides an example of how this could unfold. The project will contain three 300,000 gallon (1.1 million litre) liquefaction and purification facilities, and is aimed at exporting LNG to smaller Caribbean utilities that want to switch from heavy fuel or diesel to natural gas for power generation. However, Eagle LNG also intends to target the domestic marine shipping market and fuel ships along the US East Coast. InnovOil expects that other small to medium-sized projects will follow a similar path in targeting the maritime shipping industry in their particular regions. As a result, a supply-demand model will likely unfold regionally, with projects in various coastal regions serving the markets near them. n

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NEWSBASE

25/03/2015 11:55

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InnovOil

May 2015

COMMENTARY The Sayaringo StaGE “apple” design Source: MHI

Japan expects new wave of LNG carrier orders

Japan is aiming for a shipbuilding renaissance as demand for cutting-edge tonnage grows as new market supply comes on stream, writes Kevin Godier

hipbuilders in Japan are anticipating a windfall from the steadily growing LNG market, in which new liquefaction projects are set to begin exporting in the next few years. Although rival South Korea has become the world’s largest shipbuilder, seizing the crown Japan once held, “the wind is in the sails of Japan’s shipbuilders,” according to Nobutaka Nambu, chief executive officer at World Ships Future, a Tokyo consultancy. “They are now in a position to make a dent in the [South] Koreans’ oligopoly,” said Nambu, quoted in a March 14 Bloomberg report. South Korean rivals Resource-scarce Japan entered the LNG tanker market in 1981, more than a decade after it first began importing the fuel from Alaska. Domestic Japanese yards expanded and led the global fleet of gas carriers in the 1980s and the early 1990s, before South Korean shipbuilders emerged, and grew to a position where they overtook Japanese yards in 2000. Japanese yards delivered seven LNG vessels in 2008 and just two in 2013,

according to data produced by analyst Masanori Wakae at Mizuho Securities. South Korean builders now hold over 70% of the new orders in the market, and Japan’s wider shipbuilding efforts have been hit by the sluggish dry bulk market. Japanese shipyards’ orders plunged 70% year on year in February, as investment in new-builds slumped. Juxtaposed against Japan’s dwindling share of the gas carrier market has been its evolution into the world’s largest importer of LNG in the wake of the March 2011 Fukushima disaster. Although this has so far cost an extra US$28 billion, spent on imports of LNG and coal, it also provides a ready-made market for Japanese yards that construct LNG carriers for around US$200 million each. Japanese shipbuilders are now hoping their evolving ship designs can deliver new revenue flows and claw back business from their South Korean competitors. More demand, better technology One reason for confidence among Japan’s domestic shipbuilders is the growing volume of global LNG trade, which is poised to exceed US$120 billion this year, according to Goldman Sachs projections. NEWSBASE

Furthermore, Sanford C. Bernstein estimated in a recent report that about 90 million tonnes of new LNG production capacity would need to be approved over the next five years to meet long-term worldwide demand. Demand is forecast to rise by 80% to 440 million tonnes per year by 2025, Bernstein predicts. Japan itself has agreed to buy about 20% of its LNG needs from US shale-fed export projects. According to Japan’s Ministry of Economy, Trade and Industry (METI), the plan is to buy about 17 million tonnes per year from terminals in Louisiana, Maryland and Texas. Such an upturn in LNG trade will inevitably require more ships to transport the fuel. LNG ship orders hit a record high of 67 last year. “Demand for ships should be quite big,” forecast Shigeyasu Tanaka, general manager of the ship and ocean business of Mitsubishi Heavy Industries, Japan’s top producer of LNG vessels, who was also cited in Bloomberg’s report. Another reason for confidence among Japanese yards is an advance in the technological capability characterising the next generation of LNG tankers in the pipeline at shipyards throughout Japan.

May 2015

InnovOil

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COMMENTARY Ships and cranes in the Japanese wharf harbour of Kure.

Mitsubishi Heavy Industries (MHI) has designed a new LNG ship design – called Sayaringo STaGE – with a propulsion system powered by steam turbines and engines that can be fired by gas for greater efficiency. MHI has also improved the tanks that carry the LNG, switching to an appleshaped design that can accommodate 16% more gas than conventional designs. For Japanese shipbuilders, the prevailing template has been to store LNG in spherical tanks, distinguishing themselves from South Korean LNG carriers which typically have gas containment tanks fitted into the hull, beneath flat decks. An element of the South Korean design pattern is to be incorporated within a new series of LNG carriers to be built by Japan Marine United and partner IHI. The two are to resume construction of large gas carriers after a two-decade hiatus. A selling point for the vessels is proprietary tank design technology called SPB, which uses prismatic-shaped aluminium tanks stored beneath a flat upper deck. This reduces wind resistance and makes the ships more fuel-efficient. What next? Critically, these upbeat sentiments are

mirrored by Japan’s key domestic shipping customers. The country’s top three shippers – Nippon Yusen KK, Mitsui OSK Lines and Kawasaki Kisen Kaisha intend to spend more than 1 trillion yen (US$8.25 billion) by 2020 to expand their LNG fleet to at least 281 vessels, including ships jointly owned by other companies. Nippon Yusen and Mitsui are already the world’s two largest operators of LNG carriers. Mizuho’s Wakae is equally bullish, predicting that of the 50 to 60 LNG ships per year that are forecast to be delivered globally in 2017 and 2018, 12 to 15 may be delivered by Japanese suppliers. Wakae said the remainder were likely to be supplied by the South Koreans, led by Daewoo Shipbuilding & Marine Engineering (DSME), which secured a staggering 50% or so of all new LNG carrier orders last year, and has already won new LNG ship orders this year. DSME announced in February that it would build an LNG carrier for Mitsui OSK. The South Korean giant is also offering new technology designed to help minimise LNG losses during transport. Chinese shipyards are also participating in the battle for market share. They are NEWSBASE

aiming to take some US$10 billion in orders for new LNG tankers over the rest of the decade. Up to 50 LNG tankers, or more than 20% of the 225 LNG vessels expected to be added worldwide by the end of 2020, are set to be built in China to deliver gas to its ports, according to estimates from the American Bureau of Shipping. The fight for new orders is taking place against a backdrop of shipping rates that have been falling because of weak global demand for LNG in recent months, and LNG prices that themselves are on a downward trend owing to their peg to crude oil. NewsBase believes that neither of these trends will affect the longer-term picture. Instead, investment in LNG export and import facilities and carrier vessels will continue unabated. Asia’s longstanding buyers will continue to dominate investment, accompanied by surging sales from LNG export facilities coming on stream in Australia and the US. Equally encouraging for the Japanese yards willing to innovate is the reality that LNG ships ordered three or four years ago have struggled to find work and compete with newer, larger and more fuel-efficient vessels. n

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InnovOil

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COMMENTARY

New technology offers a silver lining to Norwegian upstream Despite concerns about efficiency in Norway’s upstream sector, recent developments and technological advancements are seen as a likely shot in the arm, writes Helen Castell

The first subsea wet gas compressor, manufactured by OneSubsea for the Gullfaks field

orway’s government should pile pressure on oil companies operating in the country to push forward with time-critical projects, its Auditor General said last week. Otherwise, some of its oil resources could be lost forever, he warned. Based on oil companies’ current plans, more than 50% of Norway’s oil and gas resources will be left untapped, argued Per-Kristian Foss, who oversees the government’s use of public resources. Much of Norway’s oil reserves are held in ageing fields where infrastructure is old and would be expensive to replace. Projects to extract oil left in mature offshore fields have also faced further delays since crude oil prices started their downward slide in summer 2014. These delays could see equipment age beyond the point at which it can be used, he warned. Boosting production, though, remains critical for Norway’s government coffers and for its general economy, which relies heavily on the energy industry. Increasing the recovery rate at existing fields by just one percentage point would create around 260 billion kroner (US$33 billion), even with oil prices as low as US$57.90 per barrel, Foss calculated. Based on recent data, Norway appears to be a long way from achieving this. Its daily oil output shrank in March, although it did come in about 1.5% above forecasts by the NPD. During the month, technical problems caused production drops at the Alvheim, Draugen, Grane and Gullfaks Soer fields.

Efficiency drive Energy firms, meanwhile, are confident that despite the challenges associated with developing older fields, advances in technology are fast improving their ability to tap such resources at a lower cost. “The North Sea has many older fields,” Statoil executive vice president Tim Dodson told a recent conference. “I believe we have some new and maybe more old tricks that can keep these producing fields producing properly for many more years.” One way that Statoil aims to improve its detection of reserves in mature areas is by making better use of all acquired data, including well and seismic data. “One example is broadband seismic, which has the potential to provide increased resolution or clearer images of the subsurface in shallow areas and enhance our geological understanding,” Dodson said. “We are not only looking deeper. We are looking shallower.” While Statoil has already raised its average recovery factor in Norway to 50% from 30%, it believes 4-D seismic monitoring technology will be key to helping it further NEWSBASE

increase the figure to 60%. At the Gullfaks field, the company has drilled 19 wells over the past decade based on 4-D data, adding at least US$1 billion in value, Dodson said. It now wants to expand its recovery factor at Gullfaks from 59% to 62%, helped by the installation of a subsea multiphase compressor that OneSubsea delivered in March (see image) and which could enhance recovery from the Gullfaks South Brent reservoir by 22 million barrels of oil equivalent, Statoil said. Indeed, Norway has a sizeable challenge on its hands, and with oil revenue so critical to its economy the government cannot afford to be complacent. While there is no guarantee that low oil prices will not trigger further delays at marginal and mature fields, technology is already boosting energy majors’ ability – if not willingness – to find and extract as much oil as possible. As such technology continues to improve, and an eventual rebound in oil prices improves economics, oil extraction in Norwegian waters could yet stage a surprising recovery. n

InnovOil

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May 2015

News in brief

ONEOK, Fermaca partner on Permian pipeline to Mexico Oklahoma-based ONEOK Partners and a subsidiary of Mexico City-based Fermaca Infrastructure have struck a deal to build a 200-mile (322-km) natural gas pipeline from West Texas’ Permian Basin to Mexico. The 50-50 joint venture, called the Roadrunner Gas Transmission pipeline, will have the capacity to carry up to 640 million cubic feet (18 million cubic metres) per day of gas. The project is estimated to cost US$450-500 million. The first phase of the project is scheduled for completion by the first quarter of 2016 and will have a capacity of 170 mmcf (4.8 mcm) per day. The second phase, set for completion in the first quarter of 2017, will raise capacity to 570 mmcf (16.1 mcm) per day. The third and final phase will ramp it up to 640 mmcf per day. This phase is due to be completed by 2019. The pipeline will extend from the

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ONEOK WesTex Transmission pipeline system at Coyanosa to the US-Mexico border near San Elizario. There, it will connect to Fermaca’s existing Tarahumara pipeline. The pipeline will be built using 30inch (762-mm) diameter pipe. Firm transport agreements established by the two companies will have a 25-year term. Additional capacity could become available through future expansions depending on

market conditions, ONEOK said in a statement. “The pipeline will connect with ONEOK Partners’ extensive existing natural gas pipeline and storage infrastructure in Texas and create a platform for future cross-border development opportunities,” ONEOK’s president and CEO, Terry Spencer, said. “These integrated assets also will provide markets in Mexico access to upstream supply

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Top-level Data and Digital Perspectives Include: Brock Meyer Continuous Improvement Production Engineer, Hess Cliff McBain IT Manager (E&P Systems), Marathon Oil Stan Cullick Director, Corporate Technology, Linn Energy Gary Krushell IOF Coordinator, ConocoPhillips Philippe Flichy Senior Digital Oilfield Advisor, Baker Hughes

25/03/2015 09:57

May 2015

InnovOil

page 29

News in brief

basins in West Texas and the Mid-Continent, which adds location and price diversity to their supply mix and helps CFE [Mexico’s electric utility] replace fuel oil-based power plants with natural gas-fuelled power plants, which are friendlier on the environment and less expensive.” The deal comes as other companies with a presence in Texas’ unconventional plays are developing or considering pipelines to Mexico. In late March, Blackrock and First Reserve acquired a 45% stake in the Los Ramones II pipeline projects from Mexico’s Pemex. Upon closing, the two projects – Los Ramones Phase II North and Los Ramones Phase II South – will be the first major Pemex-sponsored midstream infrastructure to be built with foreign capital since Mexico brought in its energy reforms. The projects will carry natural gas from the Eagle Ford shale to central Mexico. n Edited by Anna Kachkova annak@newsbase.com

Start of construction for the Aasta Hansteen project in Norway Progress on the Statoil led Aasta Hansteen project has been positive. In the past few months, there have been two further discoveries of natural gas in the region and now one of the biggest pipe-laying vessels in the world began its journey to build the Polarled gas pipeline.

It will transport the gas from Aasta Hansen and the neighboring discoveries to the Norwegian west coast starting in 2017. Since September 2014, Wintershall has been a shareholder in the Aasta Hansteen development project, neighboring licenses and Polarled. The 480-kilometre-long Polarled will be the deepest pipeline of its kind. With a diameter of 90 centimeters (36 inches), Polarled will be laid at a maximum water depth of 1,265 metres. The pipeline is designed to transport up to 70 million cubic meters of gas per day. Pipelaying will be completed by August of this year, with the first gas is set to flow to Nyhamna facility in 2017. Aasta Hansteen is one of the largest and most complex industrial projects in the whole of Europe and - like the neighboring licenses - has enormous potential natural resources. However, there is virtually no infrastructure available in this part of the Norwegian Sea in order to transport the gas to the mainland. The construction of the infrastructure is of major strategic importance for the future development of the region. The project planning is also far-sighted: to allow the infrastructure to be expanded any time, by now gadgets are applied to connect other fields to the pipeline easily at a later time. This foresight has already proven worthwhile as the further discoveries in the Snefrid license (Wintershall 24%) and “Roald Rygg prospect” (Wintershall 10%) show recently. The neighboring concession Asterix (Wintershall 19%) also shows enormous potential. n WINTERSHALL

Proserv and JCE Group form partnership in Middle East and Africa Proserv and hazardous environment specialist JCE Group (UK) Limited have announced a strategic working partnership in the Middle East and Africa (MEA) region. The agreement will see Proserv supporting JCE Group by offering its products and services whilst also delivering in-country engineering and technical support. Together, the companies aim to further build on their industry-leading standards of quality, service and reliability, and help cultivate a world-class QHSE culture. Andy Anderson, Proserv’s president for MEA, said: “Proserv has a long and successful track record in the region where our working relationship with JCE Group goes back more than two years. Through recognising that an increasing demand for JCE’s high-quality products fits in with that of Proserv’s suite of technologies and service proposition, establishing a partnership became apparent as the strategic way forward. Martin Craig at JCE Group said: “By combining JCE Group’s industry expertise and status as a market leading ATEX & IECEx solutions provider with Proserv’s worldwide reputation as a leading International Energy Services company, this new partnership allows both JCE & Proserv to offer an unrivalled clientfocused service, as well as providing both product and technical expertise which we believe has never been offered in the region before.” Both companies originally discussed working in partnership during 2013 after members of Proserv’s senior staff were impressed with the capabilities of, one of JCE Group’s product range, the Solar Power Pod. This is believed to be the world’s only Zone 1 system that can use solar energy in remote areas of the globe which lack conventional power and where resources are limited, including oil-wells, pumping stations, production facilities, effluent plants and fuel storage. n PROSERV

NEWSBASE

page 30

InnovOil

May 2015

News in brief Shell

DNS urges decommissioning innovation

combination of falling oil prices, rising costs and ageing infrastructure means that decommissioning activity in the North Sea is set to surge over the next few years. But industry body Decom North Sea (DNS) believes firms hoping to secure a slice of this lucrative market may need to innovate in order to cut costs. Last year, spending on decommissioning projects in the North Sea exceeded GBP1 billion (US$1.5 billion) for the first time. Though this figure remains a small portion of the industry’s overall outlay, by 2018 it is expected to exceed GBP2 billion (US$3 billion). According to data from Oil and Gas UK, over the next 35 years around GBP50 billon (US$75 billion) is to be invested in

taking numerous wells, pipelines, platforms and other infrastructure offline. In February, Royal Dutch Shell said it intends to begin dismantling the Brent Delta platform, which was synonymous with the 1970s boom in the UK’s oil and gas sector. As well as the Brent field, CNR International’s Murchison field – which was first discovered in 1975 and produced more than 150,000 barrels per day at its peak – is currently being dismantled. And other high profile assets such as Marathon Oil’s Brae and BP’s Miller fields are due to be shut down and disassembled. Speaking to The Journal newspaper Nigel Jenkins, CEO of DNS, said that this is creating a huge opportunity for business, particularly in the northeast of the UK. NEWSBASE

“We can see the work coming and our job is to get the supply chain ready, with subsea companies well-placed to win a lot of work,” he added. “The market is already starting to become more active and there are some enormous jobs coming through. Eni, Centrica, Conoco and Talisman are all pressing ahead with decommissioning plans. “The decommissioning programmes take a lot of planning and development. The Murchison scheme took four years and has now begun.” He went on to say that cost pressures are likely to force innovation, pointing to Able UK, the winner of the decommissioning contract to dispose of four offshore structures from Shell’s Brent field as an example. Under the six-year deal, Able UK is to transport three platform topsides and a 138-metre high steel platform jacket from the Brent field over 100 miles (161 km) northeast of Scotland to Able Seaton Port on Teesside, where more than 97% of the material will be reused or recycled. The platforms will be individually transported on board the newly constructed Allseas Pieter Schelte vessel, which was specially designed for single-lift installation and removal works. “Able took a close look at the market, saw what was needed, understood the cost base and invested in facilities, skills and infrastructure to allow them to bid for this and similar projects,” said Jenkins. “There are going to be opportunities for the North-east such as this one. One thing we want to encourage is the industry to work together and collaborate on cutting costs.” This view was echoed by George Rafferty, chief executive of NOF Energy, who said decommissioning would “deliver extensive opportunities for the supply chain in the short and long term”. He said operators were already actively planning programmes as set out in Oil & Gas UK’s 11 stage decommissioning process, which has to completed and agreed by the Department of Energy & Climate Change before production ceases to enable the process to begin. “It is important that during this programme companies engage with operators and prime contractors to highlight their products and services to enable them to potentially secure a position in their supply chains for decommissioning operations,” Rafferty said. n

InnovOil

May 2015

page 31

News in brief

Modules for use with high pressure gas injection engine technology from MAN Diesel & Turbo. It also signals Alfa Laval’s commitment to providing ship owners with more comprehensive solutions to use cleaner, affordable fuels, such as liquefied natural gas (LNG), as alternatives to heavy fuel oil, marine diesel oil and marine gas oil. Under the terms of the agreement, Alfa Laval will use DSME patents with Alfa Laval Fuel Conditioning Modules for use on natural gas-powered ships, such as LNG carriers. The agreement also paves the way for Alfa Laval to adapt its fuel conditioning systems using DSME technology in order to use LNG as secondary or tertiary fuels aboard commercial ships of the future. n ALFA LAVAL

Ceona and Seaweld form Ghana partnership Ceona, SURF contractor with heavy subsea construction capabilities, has entered into a significant Joint Venture (JV) with Seaweld Engineering which will act as a strategic partner for offshore deepwater construction projects in Ghana. The JV allows Ceona to extend its operations in West Africa and build upon the success it has already achieved in the region. The agreement will see Seaweld Engineering supporting Ceona in delivering its full line of products and expertise in Ghana. The companies have been working together since late 2014 and the JV was officially registered by the Petroleum Commission in Ghana in March 2015. As part of Ceona’s growth plans, the company has opened an office in Accra as well as taking on a further office and yard space in Takoradi. Mark Preece, Executive VP Commercial and Business Development at Ceona, said: “It was important for us to find an experienced and respected partner to support our move into Ghana as we increase our growing geographical footprint across West Africa. Seaweld Engineering is headquartered in Takoradi and is a specialist in steel fabrication for the oil & gas industry. The

news comes as Ceona’s flagship vessel, the Amazon, nears completion at Huisman’s yard in Schiedam, Netherlands. The Amazon, specifically designed for deepwater markets including West Africa, is a unique field development vessel built with the capability to operate in multiple pipelay and operational modes, changing from rigid to flexible pipelay within a week. Designed to operate independent of spoolbases, the Amazon is ideal for projects in Ghana where spooling operations create long transit requirements and increased costs. n CEONA

Alfa Laval expands LNG solutions portfolio to strengthen commitment to alternative fuels Alfa Laval has entered into a patent licence agreement with Daewoo Shipbuilding & Marine Engineering (DSME) for the use of DSME’s patents on high pressure fuel gas supply systems. The agreement, signed in March 2015, enables Alfa Laval to further develop the Alfa Laval Fuel Conditioning NEWSBASE

Increased cooperation on exploration in the Barents Sea Statoil, Eni Norge, Lundin Norway, OMV and GDF SUEZ will collaborate on solving operational tasks tied to exploration in the Barents Sea. The project, called BaSEC, Barents Sea Exploration Collaboration, will initially last for three years. The project will cover the Barents Sea, but with a special focus on the areas included in the 23rd licencing round. “We are taking operational responsibility seriously and have connected leading companies with operations in the Barents Sea to work together to find good and robust solutions for the tasks we see ahead, especially considering the new areas that have been opened in the Barents Sea south-east,” says Statoil’s Irene Rummelhoff, senior vice president for exploration in Norway. The project, which was initiated by Statoil and Eni Norge, will be led by Statoil in the first phase, but all the companies participate in the steering group and contribute to the working groups, and the work will start immediately. “Our goal is to increase coordination and develop cost-effective solutions for exploration in the Barents Sea in both the short and medium term. We will collaborate with authorities, industry organisations and other relevant institutions to deliver on

page 32

InnovOil

May 2015

News in brief

this. We aim to be effective and address the concrete actions that need to be taken and share relevant solutions and data with both the authorities and the rest of the industry. It is in our common interest to have robust exploration activity in the Barents Sea,” says Rummelhoff. The companies aim to find common solutions for operations in the Barents Sea, and through that contribute to high level of safety and emergency response. This will happen through sharing of data, costeffective solutions, more collaboration and increased coordination. The following working groups will be established: MetOcean and ice; Environment and oil spill response; Logistics and emergency preparedness; Mobile drilling units; Health and working environment. The criteria for participation is to either have made discoveries in the Barents Sea and/or have two or more operated licences north of 73° N. The project will evaluate adding more participants after the awards in the 23rd licencing round. n STATOIL

Fugro provides rov systems and innovative tooling for new total contract

and testing, using an ROV equipped with a BOP skid specifically designed for this project by Fugro. Primary responsibility for controlling the BOP lies with the rig, but the ROV operated BOP skids are also used to operate the BOP in accordance with Total’s requirements. When a subsea BOP is installed, under Total’s test procedures various rams are operated and tested on a regular basis. The ROVs also routinely inject glycol into the BOP to prevent hydrate buildup. “Moho Nord is the first major field in which rig BOP test closures have been carried out using Fugro’s new BOP skid system,” said Richard Mathieson, Fugro Subsea’s

Fugro has been awarded a five-year contract with an estimated value of US$100 million by Total E&P Congo. The agreement is for ROV services and remote subsea tooling in the Moho Nord field, situated around 75 kilometres off the coast of Pointe Noire in the Republic of Congo. Fugro will supply four 200hp FCV 3000 work class ROV systems and innovative BOP tooling which will be installed onboard three mobile drilling units and one field support vessel. Three ROV systems have been mobilised from Fugro’s Singapore base and are now operating in Moho Nord. Two of them are onboard ultra-deep water drill ships and will be working in water depths of approximately 1,200 metres. The fourth system will be installed on a semi-submersible vessel, which is under construction in China and expected to join operations with its ROV later this year. A central task is subsea BOP intervention NEWSBASE

ROV services project manager. “This uses a special high-flow pump on the ROV to drive further pumps located on the BOP skid, allowing the transfer of large volumes of water-based fluid from the skid reservoirs into the rig’s BOP hydraulic rams when directed.” Other ROV tasks include setting up regular fluid injection, drilling re-entry, bullseye checks and routine video monitoring, inspection, cleaning and intervention tasks on and around the BOP, as well as alignment control during manifold installation. The ROV on board the field support vessel recently installed transponder arrays on the seafloor to accurately position the drill ship at its drilling location. Each operational drill ship carries three ROV personnel for 12-hour coverage, and this can be increased to six people and 24hour coverage for certain operations such as BOP installation and recovery. Fugro is expanding its existing Pointe Noire base to provide operational, maintenance and repair services and also training on FCV ROVs and tooling for expatriate and Congolese personnel. n FUGRO

• Recruitment Search & Selection • Market Intelligence / Mapping • Competitor Analysis Department Lead – Mechanical, Middle East

Project Services Manager, London, UK

Quality Assurance Engineer, Houston USA

Site Assurance Manager, Various, UK

An expanding, international operator are in the search for a mechanical engineering department lead working on one of their key business regions in the engineering management of mechanical attributes within their production operations. Providing technical and managerial support to the discipline and lead in critical decision making surrounding the upgrade, modification and development of their large portfolio of production asset, your remit will include: • Accountability for the day to day management of the mechanical engineering function • Delivery of the safe design and quality construction/ installation and commissioning of mechanical project aspects • Act as an interface with JV partners and EPIC contractors Experience on the Green and Brownfield developments for large, offshore assets in addition to having managed a mechanical engineering function at TA level is desirable.

A global Oil and Gas EPC have an immediate requirement for an experienced Quality Assurance Engineer to join their Project Management Team on a major Subsea project in the Gulf of Mexico. Working from our client’s offices in Houston you will assist in the development and maintenance of the project quality programs. Specifically this will include: • Providing support to the Quality Assurance Manager to monitor and control Quality • Register improvement initiatives in QA processes. • Monitor compliance with quality assurance during the execution of the various activities of the project. To be considered you will have proven experience providing quality assurance and quality control works on subsea projects, be familiar with ISO 9001, degree qualified in a relevant engineering discipline and ideally speak and understand Spanish.

As a result of expansion, a global Consultancy are currently seeking an experienced PSM to assume responsibility in the delivery of commercial project services on a flagship international oil and gas project. To be considered for this position, you will have a solid commercial background having worked across cost engineering, quantity surveying, project controls and contracts management Responsibilities will include: • Providing support in the provision of commercial / quantity surveying and measurement services • Working on quantity models, pricing variations and holding regular meetings to ensure alignment • Evaluating work completed and ensuring compliance with contractual stipulations This is a client facing position therefore strong communication, advisory and negotiation skills are essential.

Immediate opportunity for a Site Assurance Manager to join a leading global Consultancy and provide technical and commercial management services on a series of high value contracts across the National Gas Transmission Network. Working with one of their major Energy clients your role as Site Assurance Manager will be to represent the client and oversee civil engineering and construction contracts on the UK Gas Transmission Network. Principally this will involve strong leadership, effective communication skills and sound technical, Health & Safety, Environmental and commercial management expertise on Gas Transmission projects. Exposure working to NEC standard contracts is also highly desirable.

Please contact us to discuss these positions further +44 (0)131 573 0030 www.headnorthconsulting.com enquiries@headnorthconsulting.co.uk

page 34

InnovOil

What next …? To make enquiries about any of the products or technologies featured in this edition, use this list of vital connections

If you are interested in the weight- and space-saving potential of Flexplate, please contact Bronswerk on +31 332 472 500 or email info@bronswerk.com. To make an enquiry about J2 Subsea’s 4 Port Tool Changer for ROVs, get in touch with John Walker or Oliver Gilbert on +44 (0)1224 248 090. You can also email john.walker@j2subsea.com or oliver.gilbert@acteon.com. If DNV GL’s Win-Win project presents new possibilities for water injection, please get involved by contacting Johan Sandberg at johan.sandberg@dnvgl.com or Project Manager Are Kaspersen at are. kaspersen@dnvgl.com. For more information on Johnson Matthey’s PURASPECJM range, call +44 (0) 1642 553 601, or visit www.jmprotech.com To find out more about Marine Cybernetics’ HIL testing, visit www.marinecyb.com. If this month’s LNG focus has piqued your interest in the LNG sector, why not contact news@newsbase.com or call +44 (0)131 478 7000 and request a free trial of the Global LNG Monitor (GLNG), for weekly news, commentary and analysis.

NEWSBASE

May 2015

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InnovOil, from the NewsBase group, is a technology-driven, monthly magazine which aims Andy Hill, Group Marketing Manager to provide a platform for innovators and engineers to share to share their ideas and expertise. IPU Group Our publication remains a trusted, solicited information source for technology news across the complete spectrum of the upstream, midstream and downtream oil andwith gas the sectors. “We were pleased

immediate interest that our article attracted.”

“The article on Kongsberg Oxford Catalysts Group Maritime’s Munin AUV is excellent” Mark Hampton, Manager of Exploration and Technology, Shell Exploration and Production Inc. Published by

e-mail: sales@innovoil.co.uk Phone: +44 (0) 131 478 7000 www.innovoil.co.uk