A specialist remanufacturing service for refrigeration compressors used in marine and offshore applications has been launched by Green Point.
The company was established by global compressor manufacturer Bitzer to provide high quality as-new rebuilds of compressors, with the initial focus on static cooling applications such as food production, and the chemical and process industry.
Following success in this sector, it is now extending its operations to cover critical marine and offshore applications which require very high standards of engineering and quality control to ensure reliability in this challenging environment.
Will Pribyl, General Manager of Green Point in the UK, said: “Compressors operating in marine and offshore applications have a vital role in providing cooling for people, products and on-board processes.
“Compressors must continue to operate reliably despite being subjected to harsh and often extreme environmental conditions, rarely encountered by static cooling systems. Green Point provides the highest quality remanufacturing process available, returning units to as-new factory standard with rapid turn-around times and covered under warranty.”
Green Point UK is the only compressor manufacturer with a remanufacturing operation in the UK. Part of Bitzer global compressor remanufacturing network, it was launched by the German compressor group in 2014, with the aim of bringing a new dimension of engineering quality and attention to detail to every stage of the process.
Will Pribyl says: “Most orders for replacement marine compressors arise from breakdowns, and speed of availability is a key issue. We have a huge advantage in being part of the global Green Point network. If we don’t have a particular model of remanufactured compressor in stock, we have access to equipment held across the network. This has proved invaluable already, enabling us to supply exact the unit required at very short notice.”
An example was a replacement project for Royal Fleet Auxiliaries following breakdown of a compressor on an Australian Navy vessel. It resulted in an urgent requirement for a large Bitzer CSH95 600kW compressor running on R134a refrigerant.
“There was no new replacement available in Australia, which led to a global search. We were able to tap into the international Green point network – and pinpoint an exact replacement at our sister Green Point facility in France, already remanufactured and ready for despatch.”
The unit, weighing 1300kg, was delivered and successfully installed on the Australian ship on a fast-track order, quickly restoring cooling duties for the vessel.
In another case, a ship en route from the Caribbean to Canada suffered an air conditioning failure due to a compressor breakdown. The UK-based maintenance company contacted Green Point, which arranged to fly a replacement remanufactured compressor out to Canada, to be available when the ship docked. The old broken unit was quickly replaced and cooling services restored.
Will Pribyl: “Ships have limited time in port, and turnaround time on key components such as compressors is critical. At the point of docking, the nature of a fault or cause of breakdown may not be known, and often there simply isn’t time to disassemble the system to diagnose the problem and repair it. However, we are able to fly remanufactured compressors to wherever needed in the world, to enable a fast-track, like-for-like replacement in port to get cooling systems up and running again and vessels back on track.”
Backed by Bitzer’s technical know-how, Green Point is able to upgrade compressors to as-new standard from any state or condition. The company fits new motors and replaces all wear components, while offering machines at a highly competitive price point compared to new compressors.
The quality of Green Point’s remanufactured compressors is reflected in excellent reliability and extended working life. They are also up to 10 per cent more efficient than some competing units, due to the thoroughness of the refurbishment process and use of state-of-the-art motor technology.
On November 4, 2016, the Oil and Gas Climate Initiative (OGCI) announced an investment of $1 billion over the next ten years, to develop and accelerate the commercial deployment of innovative low emissions technologies.
OGCI Climate Investments (OGCI CI) will aim to deploy successfully-developed new technologies among member companies and beyond. It will also identify ways to cut the energy intensity of both transport and industry. Working in partnership with like-minded initiatives across all stakeholder groups and sectors, the OGCI CI believes its emission reduction impact can be multiplied across industries.”
In a joint statement, the heads of the 10 oil and gas companies that comprise the OGCI said: “The creation of OGCI Climate Investments shows our collective determination to deliver technology on a large-scale that will create a step change to help tackle the climate challenge. We are personally committed to ensuring that by working with others our companies play a key role in reducing the emissions of greenhouse gases, while still providing the energy the world needs.”
This investment represents an unprecedented level of oil and gas industry collaboration and resource-sharing in this space. This new, additional investment will complement the companies’ existing low emissions technology programs and will draw on the collective expertise and resources of the member companies.
Through discussions with stakeholders and detailed technical work, the OGCI has identified two initial focus areas: accelerating the deployment of carbon capture, use and storage; and reducing methane emissions from the global oil and gas industry in order to maximize the climate benefits of natural gas. The OGCI believes that these are areas where the oil and gas industry has meaningful influence and where its collaborative work can have the greatest impact.
Beyond this, OGCI CI will make investments that support improving energy and operational efficiencies in energy-intensive industries. OGCI CI will also work closely with manufacturers to increase energy efficiency in all modes of transportation.
A CEO and management team for OGCI Climate Investments will be announced in the near future. The closing of OGCI Climate Investments is subject to customary conditions including regulatory clearances as required.
Ecosse Subsea Systems (ESS) is to invest up to £3 million in developing a water-jetting tool which has the potential to double trench production rates in seabed trenching operations.
The subsea and engineering technology company has awarded a contract to Northumberland-based Osbit which specializes in bespoke engineering projects for international energy clients.
Osbit will be the lead detail design and development provider for the SCARJet subsea vehicle which features ESS’s unique water-jetting and burial performance enhancement technologies and complements its range of SCAR-branded seabed preparation and trenching solutions.
Michael Cowie, Technical Director, Ecosse Subsea Systems Ltd
The technology will expand Banchory-based ESS’s capability to execute larger scopes of work – including soft soil projects - whilst the innovative design will differentiate them from existing suppliers.
ESS were recently awarded a subsea trenching contract by leading European offshore specialist JD-Contractor A/S for the Kriegers Flak windfarm offshore Denmark.
The Aberdeenshire company has just completed a £5 million seabed clearance project on behalf of DONG Energy on the Race Bank Offshore Windfarm located off the Norfolk coast and a route clearance and trenching project on behalf of Prysmian Group on the 70-turbine Wikinger offshore wind farm in the Baltic Sea.
The subsea trencher is a modular design, incorporating hydraulically driven track assemblies, a primary burial tool water feed and deployment systems, and a work-class ROV docking interface, compatible with the most widely used ROV systems in service today.
ESS technical director Michael Cowie said: “This is a major investment which will strengthen our suite of SCAR seabed tools and offer real benefits to clients operating in the renewables and oil and gas sectors. It is anticipated the SCARJet could double trench production rates compared to existing trenchers in the same class, with significant time and cost savings for the end-client.
“We chose Osbit to deliver this important addition to the SCAR range because of their impressive track record, technical expertise and ability to offer a flexible approach to the project. Our operations team are looking forward to collaborating with Osbit to develop and deliver what we believe will be a game-changing trenching system.”
Osbit director Robbie Blakeman said: “We see a natural fit between Osbit and ESS, with us providing world-class expertise in the design and manufacture of subsea vehicles, while ESS has a wealth of operational experience and a vision for sustainable trenching technology.”
“We share a passion for delivering engineered solutions which reduce complexity and drive down costs, maximize operational effectiveness and reliability, whilst constantly improving safety.”
The R&D for the SCARJet has been supported by Scottish Enterprise and part funded by the European Structural and Investment Funds Programme.
Gasoline Strength Supporting Refining MarginsOil prices are expected move higher with ongoing rebalancing, with non-OPEC supply still declining and demand growth healthy. OPEC cuts are not necessary for rebalancing but they would accelerate the drawdown of surplus stocks. Relatively firm gasoline cracks are supporting margins and runs despite the season. The IMO decided to implement tighter global bunker limits beginning in 2020. Gasoil-fuel oil spreads, sulfur spreads, crude quality differentials and freight costs will all increase substantially but not until ~2019/20.
Natural gas futures are headed for the largest weekly decline since January, with week-to-date selling postponing $3/MMBTU prices until mid-2017. With most of the sell-off occurring in the front of the curve, the Dec 2016 contract is now more aligned with injection season prices. The Q1 2017 strip has fared little better, maintaining only a slight premium to 2017 injection strip. To be sure, the contraction in the Mar17/Apr17 widow-maker spread — trading at a mere 6 cents, or the lowest recorded price — is a testament of how little concerned the market is about the industry meeting upcoming seasonal demand. Given how U.S. balances have shaped up so far, the market’s reassessment is more than understandable, especially with the storage carry-in shifting from less than 3.9 TCF to more than 4.0 TCF.
In a week when the front-month baseload German contract prices temporarily reached €50/MWh on the back of a new EDF statement on further delays for the restart of five units, STEAG provided some additional details around the future of its coal fleet. STEAG plans to close the units at West 1 and 2, Herne 3, Weiher and Bexbach, for a total capacity of 2.3 GW (BNetZA data) before the end of 2017. These closures are on top of the two units at Voerde already planned for closure by April 2017, whose combined capacity is 1.4 GW. PIRA calculated the additional coal capacity across Germany, other than STEAG, that may be at risk of closure.
The bullish march of seaborne coal prices continued this week, with 1Q17 FOB Newcastle prices rising by $7.00/mt from the end of last week, while API#4 and API#2 prices rose by $6.65/mt and $5.15/mt, respectively. With China's import demand remaining strong on a sluggish supply response to the strength in pricing, there are not many fundamental factors blocking further pricing increases. However, in a change from the past several weeks, the back of the forward curve gained more than the front, in a seeming acknowledgement of the view that the backwardation in the curve was too pronounced.
California 2015 cap-and-trade emissions data released today showed a slight decline year-on-year in overall emissions. In their first year with a compliance obligation, broad-scope emissions were up. However, narrow-scope emissions dropped, with imported power emissions coming in strongly lower. PIRA estimates that the cumulative California market surplus reflects a few months of emissions. Quebec recently released 2015 emissions data, but only for the narrow-scope sectors, which were flat year-on-year. We are awaiting Quebec’s first-time reporting of covered transport emissions, which could impact market outlooks and prices.
For the second consecutive week, Asian LPG markets performed best globally. December propane eased less than 1% to $382/MT. Meanwhile January and February Saudi Propane CP futures made big moves lower – dropping 4.5% and 5.8% respectively in last week’s trading. These futures track market expectations for Saudi contract prices, and their move lower is in opposition to the mostly flat market structure seen in MT Belvieu C3 markets.
Global equities generally were lower again on the week. In the U.S, all the tracking sectors lost ground. Materials and housing fared the best, while technology, retail, energy, and consumer staples were the weakest. Many of the sectors, now, have a cautionary tone. Internationally, all the indices also lost ground.
Ethanol prices rose to a four month high in October as the markets tightened. Manufacturing margins decreased slightly as co-product DDG values dropped while corn prices advanced. Brazilian ethanol prices soared but are leveling off as hydrous ethanol is becoming non-competitive with gasoline in most states.
Much like Chicago Cubs fans, the markets felt a bit hung over to end the week. Poor late-week volume can be attributed to the lack of interested traders but there’s also the most bitter U.S. election to “look forward” to next week as well as the November WASDE. Funds have reduced their positioning to very little in corn while remaining bullish beans and especially the over-priced soybean oil market. Wheat shorts are heavy as usual.
Amid evolving OPEC talks, Iraq’s field-level accounting of its own crude production has garnered significant attention. The Iraqi oil ministry claims that September output averaged 4.77 MMB/D, over 300 MB/D higher than both the volumes estimated by the OPEC Secretariat’s secondary sources and PIRA’s own calculations. The accounting discrepancy comes from estimates for northern Iraq, where the ministry is double counting (and overestimating) production from two fields formerly operated by NOC. Specifically, the Bai Hassan and Avana fields, under KRG control since 2014, are included in Baghdad’s calculations for both NOC and KRG production.
Latin American gasoline demand is projected to grow slightly in 4Q16 while distillate demand is estimated to be ~50 MB/D lower than 4Q15. Brazilian gasoline demand is forecast to increase vs. 4Q15, stimulated by lower pump prices. On the crude side, Brazilian heavy crude exports are falling but medium crude exports are rising fast. Castilla Blend exports from Colombia were partially displaced by Basrah Heavy in the Indian market but have found a home in China. On the refining space, PIRA expects L. American crude runs to drop 370 MB/D year-on-year in 4Q16.
Thanks to gas seasonality and increased power demand, spot gas pricing has risen 57% and is back over the coal switching price in Germany. Recently, coal has acted as a ceiling to gas pricing – this ceiling has finally been punctured. However, PIRA does not anticipate a huge divergence of gas over coal and expects this anchor to remain important and close to gas pricing for the moment. The shift north of the coal switching level has led to some declines in gas-to-power demand and is already relieving some pressure off of gas. Without gas rising drastically over coal and continued pressure on the European electrical grid relating to French nuclear outages, PIRA does not expect a major step back in gas-to-power demand.
Tesla introduced the residential storage Powerwall 2.0 unit, along with a new integrated rooftop solar design and updated specifications for its commercial-scale Powerpack product. The Powerwall 2.0, with a capacity of 7 kW-14 kWh, is double the size of the original Powerwall. The total installed price offers a 15% price reduction versus the original Powerwall system on a kWh basis. Although increasing the overall system costs, pairing storage with residential can also address ongoing changes to peak demand charges and net metering policies that may limit residential solar penetration.
CA Carbon trading activity has picked up, but is well below prior levels, with pricing on a halting upward path. Reported 2015 CA emissions were down slightly year-on-year and the implied surplus/bank after 2015 is at about 4 months’ worth of emissions. First time broad scope QC emissions and ON emissions are still to be released. An undersubscribed Nov auction could see unsold allowances moved to the reserve reducing CP2 supply. Inflation indicators have been creeping up, pointing to an even higher 2017 reserve price Through the Scoping Plan, CARB is pursuing a preferred option based on cap and trade, with new refinery measures to help address environmental justice concerns.
The S&P 500 moved lower by about 2%, while volatility increased. High yield debt and emerging market debt both moved lower in price. The U.S. dollar was generally weaker, and commodities were mixed.
Tanker rates are expected to improve seasonally in 4Q16 but weaken in 2017 as vessel supply growth outpaces demand.
U.S. ethanol production rose 31 MB/D to a nine-week high of 1,022 MB/D the week ending October 28, just 7 MB/D short of the record set earlier this year. Inventories fell by 180 thousand barrels to 19.7 million barrels following a large build in the preceding week. Ethanol-blended gasoline manufacture rose for the second consecutive week, reaching 9,160 MB/D, up 3.3% from this time last year.
A Republican or Democrat in the White House should make no difference to these markets in the near term; discounting a huge move in the dollar if the unexpected occurs. Then again grains, and especially oilseeds, have been disconnected from the expected inverse effect of the dollar for a while now.
PIRA estimates the average OPEC budgetary breakeven price will fall to $80/Bbl in 2017, marking the third consecutive decrease in annual breakevens since the 2014 peak of nearly $110/Bbl. The gap between Brent oil prices and breakevens is poised to narrow. Breakevens have been coming down on fiscal reforms and higher net oil exports out of Iraq, Iran, and Saudi Arabia. Currency depreciation has also played an important role. Even so, most OPEC members still face significant budget shortfalls, which is driving material policy reforms. We have already started to see some major OPEC countries cut fuel subsidies, loosen resource control policies, and make moves to reduce economic dependence on oil. More immediately, we believe the pinch from low oil prices is behind OPEC’s newfound spirit of cooperation, and will likely facilitate a production agreement on November 30.
While overall U.S. crude stocks rose in October, Cushing stocks declined 4 million barrels on reduced incoming flows from West Texas due to pipeline maintenance. The price of WTI climbed above $50/Bbl, before falling off at the end of the month. Differentials for Canadian and Bakken crudes declined, while Midland differentials strengthened.
Any possible concern about the profitability of sending cargoes into N.W. Europe has completely evaporated for the moment. European gas prices are spiking due to a combination of French nuclear problems, cross-border power constraints, below-normal temperature forecasts, and production problems in Norway. If there will ever be a moment to open the flood gates between the U.S. Gulf Coast and N.W. Europe, now appears to be the time.
Total commercial stocks built by 9.05 million barrels this past week, as crude stocks gained by 14.4 million barrels, partly offset by a 5.4 million barrel product draw. Highest weekly crude oil imports since 2012 of about 9 MMB/D led to the large crude oil stock build. Three major light product stocks declined by 5.5 million barrels. For the next week the key light product stocks are expected to continue falling. This week’s temporary outage of the Colonial Pipeline will lead to additional product imports in the following two weeks.
The price of natural gas sold domestically to Egypt’s industrial sector increased by about 50% as a result of floating of the Egyptian pound against the U.S. dollar. Factories’ agreements for gas were signed according to the official market rate at the time. The price of the U.S. dollar currently stands at EGP 14, while at the time of signing the agreement the price was EGP 8.88. The source expected industrial sectors to request maintaining a fixed price for the US dollar in contracts signed with EGAS and lifting their products on the market to cope with the increase.
In the U.S., after last week’s GDP data indicated solid growth for the third quarter, this week’s releases (job growth, business confidence, and vehicle sales) showed the momentum persisting in October. Medium-term drivers of economic growth pointed to further expansion in the future: the housing sector’s recovery still has a way to go; the recent pace of household formation has been constructive; and the labor market likely contains sufficient slack. The Fed is not likely to get in the way of continuing expansion.
Crude runs fell back to near the lows seen in early October as maintenance continues. Crude imports came in very low and crude stocks drew 2.1 MMBbls, after the large 9.2 MMBbl build the previous week. Finished products again drew. Gasoline demand was modestly lower and appeared to lack any uplift from the Culture Day holiday. Gasoil demand was fractionally lower, although stocks still drew. Margins and cracks again improved on the week with overall levels remaining very healthy.
China’s gasoil/diesel demand growth weakened over the past few years. Based on traditional apparent demand calculations, that slowdown continued into 2016 with gasoil/diesel apparent demand growth weaker versus last year. However, on a closer look at China Customs Statistics, imports of light cycle oil have increased sharply over the past two years.
The economy of Burma / Myanmar is going through a major transformation. After a long period of international isolation, political liberalizations in recent years have opened up doors for foreign investment in a major way. Oil demand growth has also picked up strongly in recent years, and there are no obvious reasons to expect a slowing.
Saudi Arabia's December formula prices for Asia and Europe tightened. The pricing adjustments were largely within market expectations. Our Saudi market share calculations for Asia are at the low end of recent history. If restoring market share was a tactical goal at this time, less aggressive tightening would have been necessary.
The Colonial Pipeline Company is dealing with a halt of flows of gasoline supplies from the USGC to the North and South East due to a fire. This is the second incident involving Colonial’s gasoline line in less than 2 months.
October weather for the three major OECD markets turned out to be normal compared to the 10-year normal and the resulting oil-heat demand impacts were 46 MB/D below normal. On a 30-year-normal basis, the markets were 11% warmer.
EIA recently released their August oil balances. Domestic crude supply, which is domestic crude production plus the balancing item, rose off its July cyclical low by 203 MB/D, while the year-on-year decline in supply lessened to -494 MB/D for August, from -871 MB/D in July. This jump in domestic crude supply is viewed as a one-month occurrence, rather than sustained trend change.
EIA recently released its final monthly August 2016 (PSM) U.S. oil supply/demand data. August 2016 demand came in at 20.13 MMB/D, very slightly below what PIRA had assumed. Overall demand was revised lower by 536 MB/D, compared to the weeklies. Distillate demand was raised 150 MB/D. Total product demand increased 1.0% versus year-ago or 201 MB/D, compared to the August 2015 PSA data, and a snap back from the -2.1%, or 414 MB/D decline seen in July. End-August total commercial stocks stood at 1,367.7 MMBbls, which was 4 .1 MMBbls lower than PIRA had assumed in its balances, with product stocks coming in 5 MMBbls lower than assumed. Compared to final August 2015 PSA data, total commercial stocks are higher than year-ago by 101.2 MMBbls, versus an excess of 123.2 MMBbls seen at end-July.
The information above is part of PIRA Energy Group's weekly Energy Market Recap - which alerts readers to PIRA’s current analysis of energy markets around the world as well as the key economic and political factors driving those markets.
Subsea cable and connector specialist Hydro Group has announced the appointment of William (Bill) Mildon, as president of newly formed Hydro Group Systems Inc. - a wholly owned subsidiary in Pinellas County, Florida.
Boasting nearly 40 years’ experience in undersea product development from complex sonars to sensors and undersea cable and connectors, Bill has held a number of senior positions, most recently as technical director at Nest Technical Services. His leadership skills saw him successfully lead teams in submarine penetration designs, under water connectors and numerous fiber optic inter-connect products.
In his new role Bill will be focussed on shaping and delivering Hydro Group Systems to carry the same vision of Hydro Group Plc, based in Aberdeen, Scotland. Along with developing this vision in the US naval, oil and gas and renewable sectors, he is also to set up a manufacturing facility to produce Hydro Group products to the US market.
Doug Whyte, Hydro Group managing director, said: “We are growing at a significant rate, going from strength to strength which has led to the creation of Hydro Group Systems. As president, Bill will deliver product and service excellence, develop our people, shape innovation and ensure Hydro Group - as a whole - continues to exceed expectation at all levels.
“Throughout his time in the industry Bill has built up invaluable experience and expertise, and I look forward to working with him and seeing the value he will bring to both our business and our customers.”
Commenting on his appointment, Bill said: “I am thrilled to be joining Hydro Group at such an exciting time for the company. I’m confident that my previous experience will assist me in identifying new opportunities in the US market, and globally, for Hydro Group to continue expanding its business.”
From its state-of-the-art manufacturing facilities in Scotland, Hydro Group develops the complete subsea electrical and optical interconnect package, built to withstand the harshest environmental conditions.
Hydro Group employs more than 100 full time staff worldwide and operates on a global platform providing total solutions to a portfolio of prime contractors, major operators, OEM's, defence agencies, defence organisations and the UK MOD.
Statoil, on behalf of the Trestakk license holders, is awarding an EPCI contract to FMC Technologies and Technip Norge, and a topside contract to Aker Solutions, for deliveries to the Trestakk development.
FMC Technologies and Technip will jointly deliver an EPCI contract (engineering, procurement, construction and installation) – subsea, umbilicals, risers, flowlines – including subsea template, manifold, subsea trees, completion system, wellheads, pipelines, risers, control systems, control cable and marine operations.
Image courtesy: Statoil
“Statoil has cooperated closely with partners and suppliers to reduce development costs for the Trestakk field. We submitted the plan for development and operation to the authorities on 1 November, and we are pleased to be able to award contracts already now to FMC Technologies, Technip and Aker Solutions.” “The Trestakk development is important to maintain activity on the Norwegian continental shelf,” says Torger Rød, senior vice president for project development in Statoil.
Aker Solutions in Trondheim will be awarded the contract for the Åsgard topside work. The Åsgard A production vessel will be modified to receive oil and gas from the Trestakk field.
The work mainly consists of piping to connect the well stream to the vessel, and upgrading of the metering systems.
Bosch Rexroth is launching a modular hydraulic power unit (HPU) program specially developed for the Maritime and Offshore market. These high-end power units cover a power range of 350 to 3,000 kW, and have obtained the type approval by Lloyd’s Register. The program starts with a "basic" unit which can be expanded using all kinds of options. Because all variants are included in the modular options matrix, a design can quickly be calculated complete with dimensions and weights. This gives Bosch Rexroth a lead in the world of hydraulic power units.
The type approved Modular HPU concept reduces time to market and optimizes dimensions and footprint.
Pierre Wouters, responsible for detail engineering of HPU at Bosch Rexroth in Boxtel, explains how the idea for this remarkable modular concept was born. "Within the Maritime & Offshore sector, power units are nearly always unique," says Wouters. "This means that until now, each HPU was separately designed and drawn. However, the market more than ever now demands fast response times and so a power range of 350 to 3,000 kW was chosen based on market demands. The units can be configured using a list of options, enabling the system to be made more maintenance-friendly, more reliable and more efficient."
The Modular Hydraulic Power Unit (MHPU) program starts with a configured solution for standard applications. This takes account of the minimum functions demanded by the customer. The HPU can also easily be adapted to additional requirements. For instance, if one requires it to include an e- cabinet and/or starter cabinet configuration. A large number of options can also be supplied, such as double cooling pumps for situations requiring redundancy, but also a cleanliness measurement system or depth filtration kit. The MHPU can also be fitted with pulsation dampeners, as well as a number of other options. Efficient IE3 electric motors, which can drive one or more pumps, are employed for driving the pump units. The MHPU program means that based on the request, often a detailed quotation and a 3D drawing of the aggregate can be presented on the same day. All this including relevant information on dimensions and weight. Moreover, a Lloyd's Type Approval has been obtained for the entire MHPU program.
"What we are doing now is developing 'industry 4.0-like features'," continues Pierre Wouters. "That means that we fit the HPU with extra sensors and interfaces so that in the near future we can enable communication via the Internet between the MHPUs and the customer's technical department or with our headquarters."
According to Pierre Wouters, the current program covers a large part of the market needs in the Maritime & Offshore sector. "Of course some parts will always remain that have to be designed separately," says Wouters. "The systems are designed for a design pressure of 350 bar and a maximum flow of 6,000 liters/min. The functional switch blocks behind the HPU are often tailor made so that we are still talking about ETO (Engineered To Order). But the fact that the units can now be compiled with literally just a few mouse clicks saves so much time, also in production. This partly contributes to a significant improvement of the delivery times and costs and will ensure that Bosch Rexroth can operate even more competitively in this market."
Historically, the oil & gas industry has witnessed merger and acquisition (M&A) activity through cycles, as companies try to create value in volatile oil price environments. The current downturn has resulted in a number of M&A opportunities for suitably placed players, as illustrated below.
*This graph is not exhaustive, but it is illustrative of the extent of M&A activity in 1990-2016
However, last Monday’s merger announcement of General Electric (GE) and Baker Hughes (BHI) is of a different nature compared to what we have seen so far, whereby the merger will create a fullstream offering, encompassing the entire lifecycle from exploration to downstream and power generation. As operators are struggling with increasing production costs, and the need for production optimization and improved operational efficiency is growing, GE may be on to a winning diversification opportunity. If the merger is successful, GE will improve its core capability through product and service bundling, and thus create more value for its customers in a distressed oil price environment. The transaction has potential of significant cost synergies, currently projected at $1.6bn by 2020, according to GE, but it remains to be seen where these cost savings will stem from.
But is there enough demand for fullstream services? Since the downturn the industry has faced divestment activity, as operators have cut out less profitable segments of their businesses and moved away from the fully-integrated business model. Whilst a fullstream offering may improve cost competitiveness, indiscriminate cost-cutting and inefficient resource allocation could prevent companies’ potential to grow as the sector recovers. Total global OFS spend has been significantly impacted by the downturn, with expenditure falling 49% between 2014 and 2016. Through to 2020, DW expects OFS spend will only recover to 69% of 2014 levels.
GE’s merger with BHI matches the rationale of other recent deals, including Schlumberger’s acquisition of Cameron and Technip’s merger with FMC. These transactions are likely to result in increased standardization of manufacturing practices and improved project efficiency for cash-constrained operators, though demand has to be sustained for fullstream offerings to be successful. Supply chain players who are using the market correction to diversify offering are likely to be better positioned for the coming recovery, however the success of fullstream offerings will depend on companies’ tolerance towards risk and demand evolution in the transition period.
Marina Ivanova, Douglas-Westwood London
Chevron North Sea Limited announced on Monday, November 7, 2016, it has started production at Alder, a high-pressure, high-temperature (HPHT) gas condensate field in the Central North Sea.
"First gas at Alder represents a significant milestone for Chevron and highlights our commitment to investing and developing resources in the U.K.,” said Greta Lydecker, managing director, Chevron Upstream Europe. “The safe and successful completion of this project was underpinned by strong collaboration between Chevron and Alder co-venturer ConocoPhillips. Alder supports our goal of helping maximize the economic recovery of the U.K., adds significant production to our portfolio, and helps extend the field life of Britannia, an important asset to Chevron in the North Sea.”
Installation of the Alder Subsea Isolation Valve (Britannia Platform in background). Photo credit: Chevron
Andy Samuel, chief executive at The Oil and Gas Authority, said: “We are very pleased to see the safe flow of first gas from the Alder Field. Chevron’s application of innovative subsea technologies and use of the U.K.’s experienced supply chain is closely aligned to the Maximizing Economic Recovery Strategy, adding reserves and extending the life of an existing asset.”
Alder is a single subsea well tied back, via a 28 kilometer pipeline, to the existing ConocoPhillips-operated Britannia Platform, in which Chevron holds a 32.38 percent non-operated working interest. The project has a planned design capacity of 110 million cubic feet of natural gas and 14,000 barrels of condensate per day. Production from the HPHT Alder Field is expected to ramp up over the coming months.
More than 70 percent of the Alder development work was executed by U.K. based companies, providing significant investment to the U.K. supply chain. The contracts supported several hundred jobs across a range of U.K. locations including Aberdeen, Invergordon, Leeds and Newcastle.
Discovered in 1975, the development has been enabled through the application of innovative subsea technologies designed to meet the temperature and pressure challenges of Alder. Key technologies have included a number of firsts for Chevron in the North Sea, including a vertical mono-bore subsea tree system; a subsea high integrity pressure protection system (HIPPS); and a specially designed corrosion monitoring system to measure the real-time condition of the production pipeline.
Chevron Upstream Europe (CUE) is a strategic business unit of Chevron’s Europe, Eurasia and Middle East (EEME) Operating Company, and is headquartered in Aberdeen, Scotland. CUE manages the company’s upstream exploration and production interests in Denmark, Greenland, Norway and the United Kingdom. Chevron currently has over 800 upstream staff and contractors across its European operations, including the Global Technology Centre (GTC) in Aberdeen.
In the United Kingdom, Chevron North Sea Limited (CNSL) has working interests in 10 offshore producing fields, including three operated fields (Alba, 23.4 percent; Captain, 85 percent; and Erskine, 50 percent) and seven non-operated fields (Britannia, 32.4 percent; Brodgar, 25 percent; Callanish, 16.5 percent; Clair, 19.4 percent; Elgin/Franklin, 3.9 percent; Enochdhu, 50 percent; and Jade, 19.9 percent). CNSL’s net daily production in 2015 from these fields averaged 40,000 barrels of liquids and 115 million cubic feet of natural gas.
More information about Chevron in the UK is available here
International project services consultancy, Cambla, has launched an upgraded version of its Schedule Animation Tool (S.A.T) to the renewables market.
Initially launched to market last year, the technology was a world-first for the oil and gas industry and has been further developed to ensure effective and efficient planning of renewable marine operations. S.A.T provides an accurate visual representation of vessel locations and planned activities, offering project teams full fleet management support and significant cost savings.
Alexander MacLeod, founder of Cambla
The most recent upgrades to the tool significantly improve user experience and include improved comparison view, detailed project infrastructure and the addition of renewable graphics.
Alexander MacLeod, founder of Cambla, said: “Ultimately, we aim to ensure that S.A.T offers the best possible user experience for planning renewable marine operations, so we have continued to upgrade the technology to meet our clients’ business requirements. Cost effective, time saving processes are always in demand and S.A.T offers operators an innovative tool for the most efficient project planning.
“The tool is particularly effective for renewables operations, and allows operators to view the fabrication of project infrastructure including the installation of wind turbines and associated subsea construction work. Users can also monitor the delivery requirements for the project to effectively control the management of parts, materials and equipment required for the complete construction of a renewables project.“
Cambla has also recruited Lee Birnie, a Computing placement student from Robert Gordon University’s School of Computing Science and Digital Media, to support with the development of the upgrade.
Alexander continued: “We recruit graduates every year through the Scottish Government’s ScotGrad scheme, which not only provides us with further support for our projects and product development plans, but also offers valuable hands-on experience for young people looking to kick-start their careers.
“I believe it is particularly important to bring students and graduates into the business. Lee has been an invaluable addition to the team so far and we look forward to supporting his development during his time with the company.”
Established in 2013, Cambla offers expert project planning, cost control and probabilistic services to support oil and gas and renewable projects using a pre-built toolkit of processes and reports. Cambla’s team of expert project planners support client projects across the globe, from early appraisal through to the final close-out period, ensuring a high quality result is achieved at all stages of the project.
Subsea 7 contracted STATS Group to provide positive isolation of pressurized mechanically lined BuBi® pipe to facilitate reeling onto a pipe lay vessel at their facility in Norway, prior to installation at the Aasta Hansteen gas field.
When the Aasta Hansteen gas field was discovered in the Norwegian Sea in 1997, its remote location and deep water were always going to make recovering resources challenging. Situated 300 kilometers from shore and at water depths of 1300 meters, its location is out with the current established infrastructure.
The planned field development, including a SPAR platform, will be the first such installation on the Norwegian Continental Shelf (NCS). The SPAR floating installation, consisting of a vertical column moored to the seabed, features conventional topsides and processing facilities. Once installed, the risers transporting the gas from the seabed to the platform and further to the Polarled pipeline will be pure steel, another first for the NCS.
12” I-PEP with handling bracket during FAT. Photo courtesy: STATS Group
Subsea 7 were contracted to perform the tow-out and hook-up of the SPAR FPSO, including the Steel Catenary Riser (SCR) system and reeled installation of 12” BuBi® mechanically lined pipe. This involved the fabrication of flowlines and SCRs at Subsea 7’s spool base facility at Vigra, Norway. In order to allow the 12” BuBi® pipe to be welded and reeled onto the vessel, STATS Group provided positive isolation of the pressurized pipe during spool reeling operations.
Aberdeenshire-based STATS proposed the use of their Pipe End Plugs which feature locks and dual seals and are capable of conducting pressure tests up to 200 bar. Pipe End Plugs are typically used during the construction and fabrication of pipe spools and piping systems, these fail-safe tools cap open-ended pipe, facilitating hydrostatic leak and strength tests. Pipe End Plugs provide many benefits and hydraulically activated they are quick and easy to install, providing a safe and cost effective solution. STATS range of Pipe End Plugs cover two separate products, the I-PEP™ which fits internally to the pipe and the E-PEP™ which grips the pipe externally.
Prior to the arrival of the pipe lay vessel the first pipe stalk of 1.5 kilometers was positioned on the spooling rollers and Hi-Diff Pigs were inserted into the vessel end of the stalk. Once installed, a reel flooding head was welded to the pipe stalk and a Pull-In Head was bolted to the stalk flange. The second pipe stalk of 1.5 kilometers was positioned and welded to the first stalk.
After the arrival of the vessel, the pipe stalk was attached to the vessel using the Pull-In Head. A STATS E-PEP™ was then installed to the pipe stalk and a small volume of water was injected through the E-PEP™ into the stalk.
This water would be used to act as a buffer for the Hi-Diff Pigs which are pigged through the stalk as the pipe is pressurized from the vessel. The pipe stalk was then pressurized to 45 bar and the High-Diff Pigs were pigged towards the E-PEP™.
Once water began to flow through the open valve on the E-PEP™, the valve was closed and the pressure held. The pressure acting on the E-PEP applies differential pressure across the tool, which self-energizes the locks and seal, ensuring fail-safe operation. The pipe stalk was then reeled onto the vessel until the end of the pipe stalk was located in the welding station. The pipe stalk was then depressurized and the valve on the E-PEP™ was opened allowing the water to drain from the stalk and the E-PEP™ was hydraulically unset and removed from the end of the stalk.
The pipe stalks were then welded together and non-destructive testing (NDT) was carried out to confirm the integrity of the new weld. The E-PEP™ was then positioned and installed at the end of the pipe stalk and water was injected through the valve on the E-PEP™. The sequence was then repeated to pressurize the pipe stalk, pigging the High-Diff pigs through the stalk and allowing the mechanically lined stalk to be reeled onto the vessel.
Prior to commencing the final stage of the spooling operation, STATS installed a 12” I-PEP™ into the pipe stalk, the internally installed I-PEP™ features locks and seals which grip the inside of the pipe. Installing this tool ensured there was nothing on the outside of the pipe that could clash or restrict the pipe stalk as it was reeled through the pipe rollers between the quayside and the vessel.
Campaigns took place in 2016 which consisted of 17 km of BuBi® mechanically clad flowlines being reeled onto the vessel and installed at the Aasta Hansteen gas field. STATS also supplied a mechanical clamp and 1” hot tapping machine to facilitate the draining of the pressurized spooling fluid from the pipe once it was reeled onto the vessel. STATS provided specialist hot tapping cutters and a four stage process to allow the mechanically lined pipe to be hot tapped to eliminate contamination of the flowlines with drilling swarf.
This project added to a record of collaboration between Subsea 7 and STATS during pipe reeling and installation projects. This successful project follows a similar workscope completed in the ultra-deep Guara and Lula fields offshore Brazil at water depths of 2100 meters. STATS I-PEPs™ and E-PEPs™ were used to facilitate the pressurized installation of 85 km of 8” BuBi® mechanically clad flowlines during a 15-month campaign.
Churchill Drilling Tools, an oil field service company specializing in down-hole tools, has reaffirmed its commitment to Middle Eastern expansion by opening a bespoke tooling and service workshop in Abu Dhabi, UAE.
This brand new, purpose-built facility in ICAD III, Mussafah, covers more than 11,000sqft of workshop floor, with an additional 2,000sqft of office accommodation.
The facility in Abu Dhabi is the latest significant investment by the company in the UAE, where Churchill has responded to growing local demand for its range of innovative dart activated products. It follows the opening of a base in Dubai at the beginning of 2016 to enhance Churchill’s support structure in the Emirates.
Founder and chairman Andy Churchill, who opened the new facility, said of the investment:
‘I am very pleased that we are able to continue to invest in the company and expand our global footprint. The UAE is an important market for us, and our investment in the new workshop facility in Abu Dhabiwill enable us to cover the whole of the UAE from a central hub. Tool mobilization, servicing, repair and maintenance can now all be done in country, allowing Churchill Drilling Tools to further embed itself into the UAE supply chain.
“The new investment in Abu Dhabi is part of our Middle East strategy and places the company in a prime position to serve towhole UAE market. With ADIPEC approaching, I am pleased that we continue to be able to invest in the UAE and offer highly skilled careers in our innovative and growing company.”
Nicholas Kjaer, general manager of the Middle East for Churchill Drilling Tools, added: “This new facility is functional as of today and will allow us to provide full lifecycle support for the Churchill product line throughout the UAE. We have already made a number of new appointments and plan to expand our technical support staff well into 2017. I look forward to welcoming new and existing clients to stand 8556 at ADIPEC and being able to show how our products can help operators solve their well challenges.
A major metrology campaign conducted off the coast of Western Australia has been completed in just 26 hours thanks to the time saving features offered by specialist survey software supplied by subsea technology company Sonardyne International Ltd, UK.
The project was led by global offshore construction company, EMAS CHIYODA Subsea (ECS), who was contracted by Apache Energy to install infrastructure at the Julimar natural gas field. The scope of work included installation of two manifolds, connected by five 30 metre vertical spools and five 80 meter horizontal spools.
Underwater metrology requires accurate, precise and robust measurements which are critical for successful fabrication and installation of spools and jumpers. Surveyors estimated that to gather the 10 metrologies at Julimar could take anywhere between 60 and 80 hours. By opting to use Sonardyne’s Connect software package to streamline the process, the entire operation was subsequently completed in just 26 hours.
Connect was developed in partnership with survey engineering company, 4D Nav, and speeds up metrology campaigns by introducing expert settings, automated data collection and robust processing of acoustic measurements from planning through to report delivery. Not only does Connect help users’ save time and money, it also reduces the risk of spool pieces being fabricated incorrectly.
The work at Julimar was conducted from ECS’ heavy lift, deep water, multi-lay vessel Lewek Constellation, operating with Sonardyne’s 6G (Sixth Generation) acoustic positioning transponder hardware. These were deployed on the seabed and placed in survey receptacles attached to the various structures. The design of the ROV-friendly transponders enabled them to be moved around the site and easily and precisely aligned relative to each structures’ north.
During the operation, the survey team collected depth and profile data using an ROV held digiquartz depth sensor, then heading and inclination data at each survey receptacle whilst also collecting Long BaseLine (LBL) acoustic range measurements. The collected data was analyzed as one data set. The site’s shallow water depth meant paying particular attention to sound velocity.
Connect’s ability to edit the sound velocity applied to individual and groups of baseline observations and reprocess multiple metrologies to evaluate the effect of the changes with a few mouse clicks, proved invaluable to the ECS team. Once the data QC was completed, each spool metrology was processed and a final report generated which contained a summary of the results including hub-to-hub horizontal distances, slant range, depth differences, attitudes, plus details of the calculations to support the results.
Speaking about the success of the Connect software utilized during the Julimar project, Gerry Quinn, Survey Manager (Operations) with EMAS CHIYODA Subsea said, “Our team were blown away with the speed in which these metrologies were undertaken – in particular the unprecedented time of 26 hours total to measure five 30 meter vertical jumpers (Manifold to Wells) and five 80 meter horizontal jumpers (Manifold to Manifold to PLEMs) in 80 meters water depth. The 4-man Survey team conducted not just the metrology, but the overall operations as smoothly and as efficiently as one.”
For more information on Connect, click here
Bibby Offshore, a leading subsea services provider to the oil and gas industry, has this year been awarded two contracts from Shell to provide inspection services on assets in the Corrib Natural Gas field in the North Atlantic Ocean.
The first contract, completed in June this year, saw Bibby Offshore’s construction support vessel Olympic Ares - equipped with Quantum Work Class and SeaEye Cougar Inspection Class ROVs - perform subsea inspections 83km off the North West coast of Ireland, in water depths of approximately 360m.
Construction support vessel Olympic Ares
The 40 day campaign involved pipeline survey inspection work on a 83km long 20” gas pipeline, and internal wellhead and manifold fault diagnostics, structural inspection and cathodic protection measurements, to ensure optimum levels of productivity were achieved.
Bibby Offshore’s successful completion of this scope of work resulted in Shell awarding the company a second contract at its West Ireland assets. The project commenced in July and is set for completion by the end of this year.
Barry Macleod, managing director at Bibby Offshore, said: “These contracts are very important for Bibby Offshore and our relationship with Shell is continuing to strengthen. Securing the second scope of work off the back of our success in June is testament to the skill and dedication of our team to deliver for our clients.”
The second contract will see Bibby Offshore also utilise its construction support vessel Olympic Ares - equipped with two Quantum Work Class ROVs.
The three week campaign involves Bibby Offshore installing an electrical distribution unit and several replacement control jumpers. The company will also perform inspection, repair and maintenance services in water depths of 400m.
Bibby Offshore successfully provided riser replacement services on Shell’s Pierce project in 2014, and supported work on its Curlew in early 2015.
NorSea Group (UK) Ltd and Scotoil Services Ltd, two of the leading service companies in the onshore decommissioning sector, have joined forces as NSDecom. The new collaborative venture will bring more efficient and cost effective benefits to the sector by providing a single project focal point for all services related to quayside and onshore decommisioning activity.
Targeted at operators, project managers and lead contractors the new partnership combines the logistics expertise of NorSea Group with Scotoil’s track record of experience in waste management and NORM decontamination. NSDecom will deliver a complete onshore service from receipt of waste and equipment at the quayside through the cleaning and cutting process to the final reuse/recycle/disposal option.
The main centre of operations will be at NorSea Group’s purpose-built, deep-water decommissioning facility at Smith Quay in Peterhead. Relevant licences are also in place at Aberdeen Harbour and NorSea’s supply base in Montrose.
Walter Robertson, left, and Craig Smith.
“With the decommissioning sector being guided by SEPA, we recognised the importance of working alongside an experienced and well-established specialist waste contractor,” said Walter Robertson, MD of NorSea Group (UK). “Scotoil Services has more than 30 years of experience and both parties saw the benefits to the sector of combing NorSea Group’s quayside assets and logistics experience with Scotoil’s market-leading NORM decontamination service and special waste management capabilities.”
Craig Smith, MD of Scotoil Services, said: “The collaborative alliance was developed in response to industry calls for more efficient and effective ways of working which would bring about lower costs and robust operational improvements. Together we have the key components to offer a complete and seamless onshore service which will benefit both operators and lead decommissioning contractors.”
Kongsberg formally opened its first office and warehouse facility in the Republic of South Africa on Friday 4th November 2016. Located in Cape Town’s airport zone, Kongsberg Maritime South Africa has been established to better serve customers located in, or visiting ports across the country and throughout the Sub-Saharan region. The new facility joins Kongsberg Maritime’s extensive global network of first party sites, consisting 64 offices located in 20 countries, employing over 4000 people.
Kongsberg’s expansion in South Africa comes as the Government’s National Development Plan turns towards maritime resources as part of ‘Operation Phakisa’; a program implemented to unlock the economic potential of South Africa’s oceans. Kongsberg Maritime’s diverse technology portfolio can support all major pillars of the Operation Phakisa maritime program, including: Marine transport and manufacturing, offshore oil & gas, aquaculture, marine protection and ocean governance/monitoring.
From left to right: Alastair Pettie, Rune Haukom, Steve Nell, Shaun Ortell, Pierre Marais, Wojtek Kowalczyk
The Kongsberg Maritime South Africa facility currently combines office and warehouse space in addition to a testing lab, with plans already in place to open training facilities that will help local offshore operators to meet local content requirements. Kongsberg Maritime is also committed to employing local engineers to support a diverse customer-base across the African continent through technical skills and knowledge in addition to cultural experience.
Kongsberg Maritime South Africa currently addresses all customer needs within the merchant automation and dynamic positioning segments, with an ambitious plan to quickly expand scope as the facility grows next year. Current focus is on service, maintenance and after-market support, but the facility will act as a local contact point for all customers in the region. With its location close to Cape Town International Airport, Kongsberg Maritime South Africa can deploy technicians to customer vessels throughout Sub-Saharan Africa faster and for lower-costs.
“The current shipping and offshore markets are challenging but it’s vital that we continue to support our global customer-base by ensuring we have local facilities ready to help wherever a vessel may be,” said Vegar Arndal, EVP Global Customer Support, Kongsberg Maritime. “Our new South Africa office positions a team of experts closer to our customers in the region, enabling a faster, more cost-effective response should we need to visit a vessel. I see Kongsberg Maritime South Africa as a first and important building block in our journey in the region. We have a long-term focus and expect the African continent to be even more exciting going forward.”
“We see an ocean of opportunities in South Africa and throughout the continent, with fast growing economies that attract more and more shipping traffic and a steady offshore oil & gas industry,” said Rune Haukom, VP Global Customer Support – Offshore and Chairman of Kongsberg Maritime South Africa. “By being present with our own facility, we will be better positioned to support local industry across the entire Sub-Saharan Africa region and be part of the growth that Operation Phakisa is expected to generate.”
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