Fugro has been awarded a contract by Total E&P Uruguay B.V. to support its drilling campaign offshore Uruguay. The contract provides for ROV and tooling services in the Raya-1 field in 3,400 metres water depth.
Fugro’s FCV4000 ROV recovers the ADCP deployed to monitor subsea currents at the Raya-1 field offshore Uruguay. Photo credit: Fugro
Fugro is supplying two state-of-the-art 200hp FCV 4000D work-class ROV systems and subsea tooling, which are installed on board the Maersk Venturer drilling ship, and a field support vessel.
In addition to specialist tooling tasks, Fugro is performing a range of activities typically required during drilling operations such as bullseye checks, seabed survey, and general cleaning on and around the subsea BOP. Real-time video provided by Fugro and Total telecom network enables Total to observe critical operations from its onshore office should it be needed.
Raya-1 is the deepest well, by water depth, ever to be drilled. “Fugro’s top class intervention tooling is key to supporting Total in this world leading contract,” said Richard Mathieson, Fugro ROV Services Project Manager.
Read how Fugro provides subsea support during deepwater frontier drilling operations.
D3 Consulting, specialist decommissioning and demolition consultants, has been awarded a six figure contract with a major operator, following the successful completion of a decommissioning project with another operator.
The eight month contract started in April 2016 and involves the preparation of materials inventories for 21 platforms in the Southern North Sea, with eight associated subsea installations and pipelines. The work scope includes the quantification of assets with subsequent characterisation and classification of the waste and materials.
The contract win succeeds a successful three month project for a major operator which was completed in June 2016. D3 Consulting developed a waste and materials inventory as part of the planning phase for a decommissioning project in the North Sea.
Martin Bjerregaard, director of D3 Consulting, said: “The team at D3 Consulting has more than 20 years of decommissioning experience, and I’m delighted that our expertise was recognised by two major operators in the industry. Our pragmatic and streamlined approach ensures that we can support these operations with bespoke solutions to facilitate safe, regulatory compliant and cost effective decommissioning works.”
The company will utilise its unique Decommissioning Assurance through Waste kNowledge (DAWN) system - the world’s only information management system for preparing materials inventories and managing waste throughout the decommissioning process. Martin continued: “As market leaders in offshore decommissioning materials inventories, we are typically engaged at the front end planning and engineering phase of decommissioning operations.
“DAWN has been specifically developed for offshore decommissioning and allows regulatory compliance in waste and materials management to be a timely and simple process. Outputs from the system ensure that the right waste information is provided at the right time to the right people, and ultimately provides waste assurance support for the complete decommissioning cycle.”
D3 Consulting is a multi-disciplined consultancy which provides management services for projects within offshore and onshore decommissioning, including nuclear and oil and gas.
Inmarsat (LSE:ISAT.L), a leading provider of global mobile satellite communications, announces at Nor-Fishing 2016 that Fleet Xpress is being extended in Northern Europe, demonstrating a new market-specific commitment for the high-speed broadband service, powered by Global Xpress, that is revolutionizing maritime connectivity.
Launched at the end of March 2016, Inmarsat Maritime’s Fleet Xpress service sets a new standard in broadband maritime communications. It achieves the highest levels of reliable high speed connectivity and exceptional performance across the world’s oceans, as well as facilitating innovative applications to enhance safety, crew welfare and operational efficiency. The extension of Fleet Xpress will reach across the North Sea, Norwegian Sea, Barents Sea and Baltic Sea.
“We prioritized this region as a focus for region-specific roll-out after listening to the needs of our customers,” says Ronald Spithout, President Inmarsat Maritime. “We can now address the specific requirements of the large number of fishing and offshore support vessels in the region with segment specific plans. The new plans will enable fishing companies to realize the power of ‘big data’ and to take advantage of revolutionary new applications that together will maximize vessel performance and help save operational cost. We have a number of fishing vessels in the region, such as the MS Smaragd, that are currently migrating from XpressLink, Inmarsat’s Ku-band service to Fleet Xpress, and will be able to benefit from higher speeds and higher capacity in the region.”
“We also realize there are a great deal of offshore support vessels based in the region with a need to transfer real-time operational data to the oil majors back ashore to help drive efficiencies and save costs.”
Reliable connectivity will also address welfare issue for crews. Commercial fishing crews have a close affinity with mobile technology – on average bringing three devices each on board*. In offshore, the presence or lack of internet often determines crew retention rates.
“Fleet Xpress allows seafarers easy and reliable connectivity,” says Mr. Spithout. “For mariners working in some of the most demanding conditions at sea, links to friends and family are vital, while Internet access alleviates boredom during downtime.”
Fleet Xpress roll-out is proving to be “a game changer for every market we engage with”, Mr. Spithout says. The combination of high-speed connectivity and new capacity, together with applications to support crew welfare and safety, we truly are taking maritime communications to the next level. We are delighted to announce extended coverage of Fleet Xpress across Northern Europe on the first day of Nor-Fishing 2016.”
The new segment specific plans will be announced in Q4 2016.
Fleet Xpress is the maritime service powered by the Global Xpress network – based on Inmarsat’s I-5 generation satellites and the FleetBroadband I-4 satellites. Inmarsat has already announced plans for further Ka-band and L-band service enhancements, after contracting with Airbus at the end of 2015 to build the first two satellites in its sixth-generation I-6 fleet.
Fleet Xpress delivers a unique, fully integrated dual capability of high speed, high capacity services (Global Xpress) together with high reliability safety-level services (FleetBroadband) in a single commercial package which is available across the globe. Fleet Xpress is further enriched by Inmarsat Gateway, a unique service enablement platform designed to provide ship owners, managers and operators with access to a new generation of value-added maritime applications, services and solutions.
Fleet Xpress will be taken to market through Inmarsat’s powerful and committed direct and indirect sales channels. Over 7,500 vessels have already committed to the Fleet Xpress service to date.
DNV GL has welcomed the world’s largest semi-submersible drilling rig into class recently. Ocean Greatwhite is 123 meters long and 78 meters wide and was delivered at Hyundai Heavy Industries in Ulsan, South Korea. Owned by the Houston-based drilling contractor Diamond Offshore, the rig will be chartered to oil major BP and will operate in the Great Australian Bight.
The rig is to be a new design MOSS CS60E high specification state-of- the art semi-submersible drilling unit suitable for operations in harsh environments, which is the first MOSS CS60E and the largest rig in the world.
Ocean Greatwhite is 123 meters long and 78 meters wide and was delivered at Hyundai Heavy Industries in Ulsan, South Korea. Credit: HHI
“The Ocean GreatWhite is a unique rig purposely built for drilling in harsh environments,” said Karl Sellers, SVP Technical Services at Diamond Offshore. “HHI and DNV GL were integral in helping us get this rig to market as we prepare for the drilling project in Australia with BP.”
“We have a strong relationship with both DNV GL and Diamond Offshore – and it is thanks to this good cooperation that the project went so well. We are proud to deliver the first drilling ship of this size and look forward to many more projects on this scale,” Youngseuk Han, Senior Executive Vice President at HHI said. “We will keep moving the boundaries of technology by completing following large-scale and innovative projects.”
“Ocean Greatwhite is capable of operating in depths of up to 3000 meters and can drill down to a depth of 10,670 meters. It represents the state of the art in the semi-submersible sector and we are very pleased to have been asked to contribute our expertise to this project,” says Paal Johansen, Vice President and Regional Director, Americas at DNV GL.
Ocean Greatwhite is also the first new-build rig to receive the DNV GL Integrated Software Dependent Systems (ISDS) notation. ISDS are systems whose performance is dependent on the overall behavior of their integrated software components. DNV GL’s ISDS standard helps owners and operators minimize software integration errors and delays in projects involving complex integrated systems.
The certification ensures that software and integration issues are identified and resolved early on during the project design stages. It also represents a new approach to verification, as it emphasizes a review of the working methods and processes that lead to the delivery the systems, rather than simply focusing on the final review of documents and installations to ensure they meet product requirements.
Industry data suggests that high specification mobile offshore drilling units may experience 30 per cent down-time during their first years of operations, which makes a systematic framework for ensuring that ISDS achieve the required reliability, availability, maintainability and safety essential. “We expect that the operational performance of Ocean Greatwhite will demonstrate how the ISDS notation can contribute to increasing the reliability of the complex systems onboard,” adds Paal Johansen. DNV GL’s ISDS teams in Korea, Norway, and the USA all contributed to the project. DNV GL also provided advisory services to HHI on the integration of the various systems throughout the newbuilding process.
GMC Limited announces the safe and successful installation of a seawater caisson in the North Sea; eight days ahead of schedule.
This is the first installation that has been carried out by the company in the North Sea; with a further two fabricated caissons completed and ready to be installed later this year.
GMC 30” TSA coated caisson being moved. Photo credit: GMC
The TSA coated 30” OD diameter caisson was installed in nine sections using eight sets of GMC’s high fatigue non-rotational caisson connectors. All connections were made up quickly and efficiently first time.
GMC’s handling and installation methodology greatly reduces the installation time over convention installation methods. GMC provided sufficient handling tools to ensure continuous operations were maintained throughout, thereby eliminating delays normally associated in handling caisson operations.
A first for GMC in the UK, this project demonstrates the company’s competence in providing a complete fabricated caisson with connectors, dead weight support, and guide nose cone, all fabricated and coated to the client’s requirements. It also demonstrated the mobilization of tools and competent personnel to carry out the critical ‘make up’ operation in connecting the caisson sections together safely and efficiently in minimal time.
The GMC solution eliminates the need for offshore welding of caissons, and provides the client with a safe and efficient fabrication and installation service that delivers considerable cost savings, whilst also extending the life of ageing assets.
Subsea 7 S.A. (Oslo Børs: SUBC, ADR: SUBCY) announces the acquisition of Swagelining Limited, the subsea industry's leading polymer lining technologist, to further expand existing polymer pipeline technology interests.
Subsea 7 and Swagelining Limited have cooperated together as a successful partnership, designing and installing in excess of 150km of reeled and bundled polyethylene (PE) lined water injection flowlines in the North Sea, for a number of operators and developments.
Thomas Sunde, Subsea 7 VP Technology, commented: "Building upon a long-term strategic objective to provide more cost-effective solutions, Subsea 7 and Swagelining have a shared vision of the potential that polymer lining could have in future subsea engineering and construction projects, with a focus on extending the application of polymer lined flowlines.
"The acquisition of Swagelining Limited will enable Subsea 7 to enhance its flowline and riser technology portfolios, and supports Subsea 7's commitment to develop and apply technologies that reduce cost, enhance production and extend field life."
Aqueos Corporation, a leading subsea service provide for the offshore oil and gas sectors of the Gulf of Mexico and the Pacific West Coast announces it has entered into a new credit facility with WNB Specialty Finance, a division of Woodforest National Bank.
The new facility includes a term loan, which was used to refinance several of Aqueos Corporation's key offshore assets as well as providing an increase in the revolving credit facility. "Our new credit facility allows us to lower our capital cost by consolidating our term debt, while also providing increased liquidity and financial flexibility by increasing our revolving credit line," comments Brad Parro, Chief Financial Officer.
Ted Roche, President & CEO, comments, "Our ability to close on this new credit facility, in this current market, is a testament to the reputation and strong management team Aqueos has built up over the past 16 years. Further, the additional liquidity and financial flexibility provided by this refinancing will make us well positioned to capitalize on opportunities when the market recovers."
Aqueos Corporation, with offices in Broussard, LA and Ventura, CA, provides marine construction and specialty subsea services, including a complete range of commercial diving, remotely operated vehicles (ROV's) and vessel-related services primarily to the offshore oil and gas markets.
Kongsberg Maritime has been awarded significant offshore EPC contracts with China Merchants Heavy Industries (CMHI). The contracts, worth more than NOK 520 million, cover deliveries to two semi-submersible heavy lift & accommodation vessels; OOS Serooskerke and OOS Walcheren, to be built at CMHI (Jiangsu) in Haimen, China for Serooskerke Shipco BV / Walcheren Shipco BV in the Netherlands.
The vessels covered by the new Kongsberg Maritime contracts are based on similar design to the OOS Greta. Photo credit: Kongsberg Maritime
Kongsberg Maritime together with its wholly owned subsidiary Kongsberg Maritime Engineering (KME) will execute the project. KME will provide all engineering, procurement and project management while Kongsberg Maritime will supply a ‘full picture’ system delivery. The vessels are based on a similar design to the OOS Greta (pictured) currently operating for Petrobras in Brazil. Due to the heavy lift capability, the vessels are well positioned to enter the de-commissioning market of offshore production platforms worldwide.
The contracts include supply and integration of the electrical, telecom and integrated control systems, project management, interface management and engineering services at all stages. In addition, a significant technology scope of supply includes; switchboards, frequency converters, automation, navigation & DP systems, radio and satellite communications, networking and on board entertainment, safety technology and monitoring systems such as the advanced environmental monitoring system. The engineering and construction phase is estimated to be three years for the first vessel and the delivery of the second vessel will be nine months later.
“We are very pleased that we can supply a tailor made EIT (Electrical, Instrument and Telecom) solution for the yard and owner with a large scope of both in-house and procured technology,” says Egil Haugsdal, President, Kongsberg Maritime.
The current market conditions are challenging, the competition is strong and we are very pleased to have secured these contracts. It is a clear demonstration of our capabilities in this field and the project will keep employees engaged both in Norway and China,” says Haugsdal.
ABB has launched a new arctic course for deck officers in response to strong demand from the ice-going vessel segment. The course has been developed in cooperation with customers and will provide deep understanding of the operational principles of diesel-electric Azipod vessels, taking into account vessel safety, environmental and economical requirements and operational efficiency and maintenance needs when operating in arctic conditions.
“Demand from the ice going segment for ABB’s solutions has been strong for some time,” said Juha Koskela, Managing Director of ABB’s Marine and Ports business unit. “By combining ABB’s expertise with the needs of the customer, we have set a new benchmark for arctic training.”
Juha Koskela, Managing Director, ABB Marine and Ports
The course will build on the company’s long history of working with ice class vessels, ABB delivered the first electric propulsion system to an icebreaker in 1939. Azipod propulsion has also gained a strong foothold in the segment and has recently expanded its reach to ice class passenger vessels.
The 5-day course is held in cooperation with Aboa Mare training center in Turku, Finland. Training consists of discussions, lessons and full mission bridge simulator exercises. Topics of the lessons vary from Azipod vessel operation and propulsion system behavior in all conditions to resource management and bridge communication. After the course the crew will be able to fully utilize the flexibility of the propulsion system, identify potential malfunctions of the propulsion system and cope with them without sacrificing vessel safety. The new course will complement the portfolio of 35 different courses offered by the Marine Academy.
Captain Takashi Saito, Marine Manager from MOL LNG Transport took the new course and said, “The training was way beyond my expectations. We look forward to sending other seafarers to expand their knowledge of polar conditions.”
Micael Vuorio, Training Manager at Aboa Mare said “We are pleased to continue our cooperation with ABB on designing the best courses available at the market. Aboa Mare provides a diversified training portfolio, including training according to the Polar Code, as well as training for Baltic ice conditions and this expertise is also included in to ABB´s new training course.”
High Light Product Stocks Weigh on Refining MarginsAlthough the lows are already past, oil prices are stuck in a $40-50/Bbl range for now. The market is not yet worried about creating supply with the current large stock surplus, but that surplus will drop in 2H16 and 2017. Ultimately this will drive prices over $60/Bbl to create supply to cover global oil demand growth. Softer refinery margins may prompt some trimming of discretionary runs this autumn as refiners are walking a delicate balance between gasoline vs. distillate yields and runs levels. European gasoline yields will likely trend lower than last year, while distillate yields will trend higher. Gasoline, diesel, and jet stocks are at/above historical range, but they will trend lower. Product markets will shift from gasoline toward distillate. HFO supply is lower with reduced Russian production helping to support cracks.
Since the start of August, the natural gas market has endured a rapid bout of speculative selling, driving the prompt month NYMEX contract down by more than ~8% to ~$2.60/MMBtu. Moreover, entering Friday, the market had registered an impressive streak of six consecutive negative sessions, the first such occasion since 2014. Certainly, recent trading has begun to take on a rather bearish hue, as prices effortlessly (with volume) sliced through key moving averages this week, while breaching ~$2.60/MMBtu, near the low end of the trading range in place since June.
Warmer-than-normal weather led to solid gains in On-peak prices in nearly all markets in July as loads increased by 2.5% (9.6 aGW) from the prior year in the East and 3.3% (1.7 aGW) in ERCOT. The return of more normal winter heating demand coupled with challenges for growing supply pose upside price risks for natural gas and coal. Prices will move higher in CY 2017 and 2018 as gas and coal prices rebound but implied gas heat rates are mostly weaker. Weakness in 2017 reflects loss of market share to coal and renewables and incremental gas-fired capacity.
Volatility in coal pricing was on full display this week, with daily swings of more than $1.00/mt occurring for the three major forward curves. The market moved decidedly higher this week, with gains on the order of $4.00 - $6.00/mt, offsetting the declines observed in the previous week. Stronger oil prices, constructive data in China, and some modest disruptions in the supply chain (weather- and labor-related) all served to drive prices higher this week. A flurry of data from China were released this week which was on balance considerably bullish for the market. This was led by a 4.4% year-on-year increase in thermal generation which was a confirmation of PIRA's Spotlight last week. The Spotlight noted that hot weather would likely push loads up enough to offset the strength in hydro generation.
CCA prices continued the upward trend, pushing above the Auction Reserve Price. This is not being driven by robust market activity, as weak volumes and a first-time-ever year-on-year loss in open interest suggests players are staying on the sidelines. The re-offering of unsold consigned allowances raises the auction quantity in August and will require a higher bidding volume to clear. PIRA again expects the auction to be undersubscribed – though a strong undersubscription could prove bullish for longer term balances. It will also take strong undersubscription of the November auction for market supply for CP2 compliance to be impacted. California power generator data through 2Q are showing emissions strongly down year-on-year, in line with expectations. All eyes are on the legislative front this month, with SB 32 facing hard negotiations for passage.
In July, year-on-year growth in Chinese industrial production decelerated slightly from June. The manufacturing sector stayed resilient, but the mining sector recorded a large year-on-year drop in output. There were both positive and negative signals about the industrial sector outlook in the latest data. Encouraging developments included recent sequential movements in the producer price index and a moderate depreciation in the country’s currency. On the negative side, business investment is apparently losing steam rapidly. PIRA’s overall assessment is that Chinese manufacturing activity will prove resilient and support global economic growth.
Output increased to 1,029 MB/D the week ending August 5, the second highest on record. Stocks drew by 143 thousand barrels to 2.46 million barrels, cancelling most of the build that occurred during the previous week.
Rainfall amounts of 1.5 to 8 inches late last week, mostly in the western Belt, have proven to be a God-send for some but a headache for others. At this point the rains will have a minimal effect on corn, although some late-planted acres will benefit with better kernel fill. However, the effect on soybeans can be dramatic as August through mid-September is a critical time.
Asian LPG markets were the worst performers among the three key regions last week. The physical market remains largely oversupplied, with cargoes arriving from both the East and West routes from the US Gulf Coast on top of the steady flow of Arab Gulf originated cargoes which are increasingly focused almost entirely upon Asia as an outlet. Cash propane cargoes arriving in the Far East in September were called $4 lower near $280/MT while the corresponding physical butane stems were unchanged near $295.
This past week’s EIA data showed U.S. commercial stocks increasing 2.5 million barrels, roughly split 50/50 between crude and products. Expected crude stock declines have not materialized as crude imports have stayed exceptionally high, and even Cushing crude inventories increased 1.2 million barrels last week. Product demand has continued to be strong, led by gasoline. For next week’s EIA data, PIRA sees lower crude imports and finally a sizable crude stock draw of 480 MB/D with Cushing crude stocks declining 110 MB/D. Gasoline stocks continue to decline, helped by stronger exports (+170 MB/D) and lower imports (-260 MB/D), while distillate stocks build modestly.
Estimating the price of supply contracts is always a moving target, especially now, as a growing number of these contracts are shifting their indexing from oil to gas. Traditional contract gas deals are generally a series of lagged rolling oil prices, and the data is further lagged, but we are seeing new opportunities to access more information. In particular, gas supply contracts are becoming more exposed to spot gas, while oil moves into more a broader role. Is greater spot price exposure in gas supply contract coming with longer or shorter lags?
The number of days in each month with positive spark spreads – both at peak and base – has been increasing in Germany. The rebound in API#2 coal prices, hovering at a two year high, is also leading to this outcome, but the reduction in nuclear generation in France has contributed as well. Higher gas storage levels in several European markets create further downside risks for gas prices at a time when power needs to move up for seasonal reasons (solar starts moving lower, while demand starts recovering).
The Massachusetts Solar renewable credit markets, SREC I and SREC II, are managed to limit the extent of any oversupply. The annual Solar Clearinghouse Auction serves as a price support point, while the Alternative Compliance Payment level (ACP) serves as an upper bound. Tightness in the SREC I market for 2015 and 2016 has pushed pricing to ACP levels, while SREC II prices are currently tied to the auction price level. However, increasing compliance obligations going forward will work to eliminate the SREC II surplus, with deficits possible beginning in 2018. Recent emergency regulations are allowing new solar build to continue beyond the original cap/target. Also, new legislation raised MA net metering caps and calls for development of a successor solar program.
Global equities were higher on the week, with strength coming from the various international indices that are tracked. All such indices bested performance in the U.S. where energy led all the tracking indices, higher by 1.7%. Retail also outperformed. Banking was the laggard and moved lower.
Ethanol prices bottom the week ending August 5. It’s just a pause before the decline continues. RIN prices were sharply lower.
It’s impossible to argue with the advanced state of this year’s corn crop when compared to historical averages. What can be argued is the effect of a hot June on some of the corn crop, which was not reflected in the August WASDE as no husks were harmed in the compilation of said report. The effect of August heat on kernel fill also has yet to be determined and will be a big deal given the record weight expected.
Global oil supply disruptions currently stand at 5 MMB/D, and how quickly these outages return is critical to oil markets at this juncture. In our view, the potential for the return of disrupted oil is limited. Production gains are possible out of Nigeria, Libya, and Yemen in the very near future. But we do not expect increases from any of these countries to exceed 100 or 200 MB/D, and security risks will remain high. Meanwhile, political and security situations in Iraq, Neutral Zone, Venezuela, Syria, and South Sudan show no signs of improvement. Also, a recent uptick in violence in Nigeria and northern Iraq/Kurdistan suggests growing risk of more disruptions. PIRA’s end-July Reference Case may be understating global oil supply disruptions by 200-300 MB/D in 4Q16.
Crude runs continued their rise following the winding down of maintenance. Crude imports dropped sufficiently for crude stocks to draw 2.5 MMBbls. Finished product stocks built 1.4 MMBbls, largely due to higher naphtha stocks and a seasonal kero build. Gasoline demand was helped by the Mountain Day holiday impact. Refining margins have been poor and have been getting worse.
Japan’s announcement of an inquiry into the legality of destination restriction clauses and its possible agreement on all its contracted volumes would pave the way for Japanese buyers to play a much more active role in the global LNG traded market, much as we have seen with key European buyers following the easement of destination restrictions in 2004. It is likely to help other regional buyers of LNG as well. This could deliver a fatal blow to the integrated value chain as we know it.
EUA prices are rising in August as ongoing auction volumes are seasonally cut. The cancellation of several Common auctions late in the month and French nuclear outages also support prices. Bearish signals may soon return, including higher auction supply, and a lack of policy developments. However, the correlation between EUAs and both Brent oil and NBP gas, which kept prices above €5 after this year’s first dramatic but short-lived price drop (in January) is rising again. With prices for both oil and gas still expected to rise in the balance of 2016, this correlation may serve to support higher EUA prices following the second major drop of the year.
The S&P 500 extended its move into record territory on Thursday and then eased slightly on Friday. Volatility moved lower, while high yield debt and emerging market debt indices generally moved higher. The dollar was slightly weaker, but it strengthened against the British pound. The total commodity index was fractionally changed on the week, while energy gained.
Saudi Arabia's still has a financial cushion to weather the current price environment, though that cushion is diminishing and its sustainability is not endless. Perhaps this is behind the recent price supportive statement from the Saudi Oil Minister given earlier price weakness. The decline in Saudi foreign exchange reserves continues, now down $176 billion from its peak or almost 24%. At today's prices, further declines are occurring, probably about $8-16 billion per month. Saudi's vulnerability to prices at today's level or lower has increased significantly since the last time reserves were drawn down during the financial crisis.
The sharp decline in the price of domestic natural gas in the first half of the current fiscal year is likely to lead to a saving in the Indian government’s subsidy outgo on urea by up to Rs.9,000 crore ($1.34-billion) in 2016-17. According to official estimates, the 20% price cut on domestically produced gas for the April-September period and the renegotiated price of imported LNG from Qatar’s RasGas Co. Ltd has reduced the price of pooled gas available to fertilizer factories by nearly a third from a year ago. However, should the price of domestic fertilizer be lowered, the subsidy could reverse track.
Last winter was extremely mild because of a record breaking El Niño. U.S. and Europe lost a combined 270 MB/D of middle distillate heating fuel demand. This upcoming winter will be influenced by the dramatic shift from El Niño to La Niña, which should lead to a substantial increase in heating fuel demand compared to last winter.
The condensate market East of Suez was generally balanced to long from 2014 through mid-2016, but with new condensate splitters starting up in 2016/17, the market looks poised to be short of condensate supplies. Furthermore, with U.S. condensate production flat to down for now, incremental condensate from the U.S. will not be available to help balance East of Suez markets unless it were displaced from current uses. While condensate prices are well correlated with naphtha cracks and naphtha cracks are affected by a number of factors (e.g., petrochemical margins, alternative steam cracker feed economics), the tightening of the East of Suez condensate market should give support to higher condensate prices and should directionally help naphtha cracks (all else being equal).
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.
The Songa Enabler drilling rig has started drilling a new injection well for CO2 gas on the Snøhvit field off the coast of Hammerfest. Next a production well will be drilled for replenishment of gas for Hammerfest LNG.
On Friday 29 July the new Cat D Songa Enabler drilling rig started drilling on the Snøhvit field in the Barents Sea off the coast of Hammerfest. Arriving from the yard in South Korea the rig has started its first assignment on the NCS. Photo credit: Statoil
Snøhvit is still the only LNG project in the world capturing and storing CO2 separated from the well stream in a dedicated formation offshore.
So far more than four million tons of CO2 from Snøhvit have been stored. The stored CO2 is being monitored in order to ensure that it does not mix with the main producing reservoir. A new CO2 injection well is now required.
After the new CO2 injector is installed, the rig will move on to drill the first new production well at Snøhvit since the field came on stream in 2007. The drilling campaign is planned to last until Christmas.
The CO2 solution project was established in 2013 in order to build and install a new CO2 injection well, replacing the original injector that over time would leak CO2 into the gas reservoir on the Snøhvit field.
Hammerfest LNG needed replenishment of gas in order to maintain the high production and capacity utilization at the plant, while ensuring sustainable CO2 storage. This project is therefore important to Statoil,” says Geir Owren, asset owner representative for the project.
In the summer of 2015 an extensive marine campaign was performed. Pipelines and a template for the CO2 project were installed and tied in to the existing subsea facility on the Snøhvit field. The new subsea facility was built and installed without injuries and well within the budget of NOK 2.5 billion.
The distance to the Barents Sea presents extra challenges with regard to mobilization and sailing time, which requires careful planning, thorough preparations and close cooperation with the suppliers. We are pleased both with the equipment suppliers and marine operations, which resulted in successful project implementation,” says project leader Sveinung Øvretveit.
The next big development step for Hammerfest LNG is the development of the Askeladd field, which is part of the plan for development and operation of the Snøhvit license. It is expected to come on stream in 2020/2021. This development step will help ensure full utilization of the capacity at Hammerfest LNG.
Brazil is set to lead the global offshore oil and gas industry in terms of planned projects, with a staggering total of 40 developments scheduled to start operations by 2025, out of an anticipated total of 236 worldwide, according to research and consulting firm GlobalData.
The company’s latest report* states that the UK and the US follow Brazil, with 29 and 21 planned projects respectively. Key offshore planned projects around the world are expected to contribute an incremental 6.8 million barrels of oil per day in 2025, and 36.3 billion cubic feet per day of natural gas.
Matthew Jurecky, GlobalData’s Head of Oil & Gas Research and Consulting, explains: “The offshore commercial reserves in Brazil are second only to Russia, Iran, and Mozambique. GlobalData’s analysis shows there are an estimated 13.3 billion barrels of commercially recoverable reserves from announced projects in offshore Brazil. To put this in perspective, planned offshore projects in Norway, United States, United Kingdom and Nigeria total 12.9 billion barrels of commercially recoverable reserves altogether.”
While National Iranian Oil Company is expected to lead in terms of production volumes, Petroleo Brasileiro S.A (Petrobras) will lead globally in terms project count, with 35 planned, of which 34 are crude and one is natural gas. Petroleos Mexicanos and Chevron Corporation occupy second and third places with nine and eight projects planned, respectively.
In GlobalData’s Brazil-focused webinar, Adrian Lara, GlobalData’s Senior Upstream Analyst covering the Americas, explains: “Brazil’s pre-salt was a game-changer which the government tried to protect, but after being hit by political and corruption scandals on top of economic recession, a clear opportunity has emerged where international oil companies can play a more central role in a more balanced regulatory environment – but the political trade-offs to allow this will be challenging.”
GlobalData’s report also states that in terms of proposed capital expenditure, US$871.7 billion is estimated to be spent bringing planned offshore projects online globally, of which US$500.5 billion is expected to be spent between 2016 and 2025. Brazil will also lead in this regard, with capital investment of US $116.2 billion over the forecast period. Petrobras will have the highest share of spending among companies in the global offshore oil and gas industry, and is expected to spend US$90.9 billion on key planned projects over the next 10 years.
Meeting all requirements regarding quality, safety and the environment, Damen Shipyards Antalya has secured comprehensive ISO 9001, ISO 14001 and OHSAS 18001 certification. This achievement coincides with a period of rapid expansion that has seen the addition of three new production halls within the space of two years.
“These certifications confirm the quality of our production processes,” comments Damen Shipyards Antalya Managing Director Auke van der Zee. “They also show our commitment to safe and clean working practices. It is this dedication to quality that our customers expect from Damen.”
Photo courtesy: Damen Shipyards
Moreover, the yard attained these valuable endorsements of quality within a period of six months; the shortest amount of time a company in Turkey has achieved this.
Damen Shipyards Antalya opened in 2013 after the purchase of the Cyrus yard by Damen Shipyards Group. Since then the yard has continued to develop and build vessels up to 35 meters in length. Despite being best known for specialising in composite vessel construction, Damen Shipyards Antalya added steel and aluminium vessel fabrication to its list of capabilities last year with the addition of two new production halls. Production subsequently increased: the three sites delivered 54 ships in 2015 (an increase of more than 20 compared to the previous year).
Importantly, this rise in production was accompanied by an increasing number of vessel types under production. “The diversity of vessels that we build here is shown best by the fact that there are currently seven different types of ships in the water here,” highlights Van der Zee.
These vessels include Damen’s Stan Pilot 1505, Stan Pilot 1605, Stan Patrol 1605, Interceptor 1503, Interceptor 1102, Fast Crew Supplier 5009 and the Search and Rescue Vessel 1906. Furthermore, the yard is also equipped to build various examples from Damen’s Public Transport range.
The yard’s expansion continued this year too with the inauguration of a fourth production hall. "With this new building location, we have further expanded our capacity for steel and aluminium vessel construction,” says Van der Zee. “We can now build an even wider range of vessels, including larger ferries and Fast Yacht Support vessels.
“If you look at how much we have achieved in such a short time, I'm very curious to see what we will accomplish over the next three and a half years.”
Record levels of drilling and production – particularly in the US – were fundamental factors in the downturn that swept across the oil and gas industry over the last 18 months. Much of the crude oversupply has been sent into storage – either at refining bases, storage hubs, strategic reserves or moored in crude carriers.
Such is the scale of the crude flows that oil prices routinely track movements in inventories at the world’s largest storage and trading hubs. EIA data shows US crude oil stocks hit peak levels of 543 million barrels (excluding the strategic petroleum reserve) in late April, which has since contracted to 523 mmbbls (week ending 29th July).
US storage draws since April have resulted in an uptick in refinery utilization, rising from 89.7% to over ~93% by the end of July. Much of this spike in utilization is due to the summer driving season – typically resulting in a marked increase in gasoline consumption. This has been a feature of the US downstream sector for a number of years, however, current utilization at US refineries is markedly lower than the peak seen in 2015 (96.1% in late July-early August).
It may be surprising that US refinery utilization is down on the same point last year – given the sheer volume of cheap feedstock available – yet, it is not altogether unexpected.
Refining margins which were routinely reaching levels not seen since 2012, are now back to $3-4/bbl due to a saturated products market. Consequently, incentives to delay routine maintenance and sustain high utilization have evaporated.
Early indications from DW’s soon to be released World Downstream Maintenance Market Forecast suggest that this may provide opportunities for those involved in MMO activities. However, consumers at the pumps are not likely to see further falls in prices without large scale storage draws. Fundamentally, operators of refineries must balance the allure of cheap feedstock with the risks of an over-saturated products market.
Matt Adams, Douglas-Westwood London
SeaRobotics Corporation (SeaRobotics) has delivered the USV 2.5, an autonomous 2.5 meter unmanned surface vehicle (USV) to the Center for Marine Science and Technology at North Carolina State University. The USV, built by SeaRobotics, was funded by an award from the National Science Foundation’s Marine Lab Facilities Program. Given the diverse capabilities of the USV, it will be utilized as both an experiential-based teaching tool and to conduct basic and applied research in lake, river, estuary and costal environments.
The USV 2.5 is equipped with an extensive suite of scientific instrumentation that will provide users with a wide variety of data. This instrumentation includes side-scanning and bathymetric sonars, a high-frequency sub-bottom seismic system, an acoustic Doppler current profiler, and sensors that record the temperature and conductivity of the waters being surveyed. In addition, the USV 2.5 measures the concentration of Chlorophyll-a and dissolved organic matter in surface waters.
This system leverages SeaRobotics’ extensive expertise and history delivering USVs for high precision bathymetry, water quality analysis, hydrographic survey, and many other applications. The USV was delivered with a fully integrated Edgetech 6205 multi-beam echo-sounder, motion reference unit, dual antenna RTK GPS, sound velocity probe, and HYPACK software.
“For a 2.5 meter USV, the system offers a broad range instrumentation, with the flexibility to swap sensing payloads based on the demands of the mission,” stated Don Darling, President of SeaRobotics Corporation.
“The USV will be used for seabed and water column mapping critical to an improved understanding of various marine and aquatic processes, including ecosystems dynamics, water quality, and shoreline stability,” stated Del Bohnenstiehl, principal investigator on the NSF project. Del Bohnenstiehl further stated, “The interdisciplinary toolkit provided by this platform is unique within the academic community and additional commercial off-the-shelf sensors, including water-samplers, spectrometers and passive acoustic arrays can be integrated as needed.”
Protea is already well known globally for delivering high quality offshore and marine lifting and mechanical handling equipment including cranes, winches and launch and recovery systems – well heavy lift cargo cranes is about to get the same treatment!
With its extensive knowledge of handling operations and in-house design capabilities, Protea is fully committed to developing new products and solutions that provide its customers with ‘State of the Art’, cost effective and efficient equipment which add value to their operational requirements and ultimately the bottom line!
Image courtesy: Protea
Currently Protea engineers are developing an ‘all new’ cargo crane that will set new standards in heavy lift cargo crane technology and performance. The ‘all electric’ crane is constructed from ultra high strength steel and will be available in a range of sizes from 60t to 500t (even higher upon client request).
“The combination of high strength steel and the electric drive system allows our customers to benefit from significant improvements in operational efficiency” highlighted Graham Manning, Protea Global Sales Manager. “Firstly, the weight savings of up to the 40% when compared with standard cargo cranes translate directly into increased vessel cargo carrying capacity. Secondly, the environmental benefits of the ‘all electric’ drive system with VFD not only improves cargo handling times it reduces energy consumption by around 20% and thirdly by being ‘all electric’ it eliminates hydraulic oil and therefore the possibility of oil leaks!
Combined with a host of other innovative design features such as a reduction in minimum crane radius to give increased deck space, panoramic cabin design for improved operator visibility and reduced maintenance activities, the new crane is expected to provide a ‘Step Change’ in heavy lift cargo crane design.
Protea is planning to test the first unit at its ‘World Class’ manufacturing and testing facilities in Southern Poland next year. A full update of the crane development programme will be available at CIPPE 2016 in Shanghai from 23rd – 25th August (Hall W1, Stand W1376), ONS 2016 in Stavanger from 29th Aug to 1st Sept (Stand 446, hall 4), SMM 2016 in Hamburg (Stand 108, Hall B6) from Sept 6th to Sept 9th and Offshore Marintec Russia in St Petersburg (Hall H) from 4th – 7th October.
Graham also commented that “We are looking to discussing this game changing crane, capturing any feedback and welcoming existing and potentially new customers this Autumn”.
Offshore Source keeps you updated with relevant information concerning the Offshore Energy Sector.
Any views or opinions represented on this website belong solely to the author and do not represent those of the people, institutions or organizations that Offshore Source or collaborators may or may not have been associated with in a professional or personal capacity, unless explicitly stated.