After years of tough market conditions, owners of heavy-lift vessels are turning to new sectors in search of lucrative contracts
Engineering contractors and heavy-lifting vessel owners are now beginning to secure new contracts for platform installation and subsea projects. However, tough market conditions since 2014 have led these companies to turn to alternative sectors – notably offshore decommissioning and renewables – for contract work.
Demand for the installation of fixed platforms is likely to come largely from shallow water oil and gas projects over long term. Deepwater field developments will create opportunities for subsea work and the installation of floating units. Projects in both categories were announced in H2 2018, providing opportunities for heavy lift and construction vessels.
In terms of fixed platforms, the Middle East region continues to provide opportunities for platform construction and installation, particularly on field redevelopment projects; opportunities in south east Asia and Mexico will follow.
Deepwater platform installation projects are also in operation in Brazil, US Gulf of Mexico, West Africa and areas offshore India, Indonesia and northern Europe.
Elsewhere, heavy lift and offshore construction engineering companies and vessel owners are turning their attention to decommissioning projects, particularly in northern Europe.
In the last six months of 2018, engineering contractor and vessel owner McDermott was busy securing contracts for projects in India, Mexico, the Middle East and the US Gulf.
McDermott president and chief executive David Dickson noted that the company had encountered robust contract booking in an “improving macro environment”. This included onshore and offshore projects such as a US$700M contract forming part of India’s Oil & Natural Gas Corp (ONGC)’s DWN-98/2 project in the Krishna Godavari basin.
This colossal deepwater project will involve the installation of 34 subsea well manifolds and trees, plus subsea umbilicals, risers and flowlines (SURF) in water depths ranging from 300 m to 3,200 m. For this project, Baker Hughes will supply the subsea hardware and McDermott will bring its specialised fleet of pipelay and construction vessels.
During 2020-2021, McDermott will transport and install SURF and subsea production systems using its installation assets Derrick Barge 30, North Ocean 105 and Lay Vessel 108.
Other deepwater contract awards of note for McDermott include Shell’s Great White Frio development in the Alaminos Canyon area of the US Gulf of Mexico. This will require the installation of subsea umbilicals and flowlines in Q2 and Q3 2019. For another project in the region, McDermott will install umbilicals and flowlines on Anadarko Petroleum’s Lucius field in the Keathley Canyon area.
On the fixed platform installation side of heavy lift, McDermott has installed the largest platform to be constructed in Mexico for a decade. McDermott built the PB-Abkatun-A2 platform for state-run energy group Pemex at its fabrication yard in Altamira, Tamaulipas, Mexico.
This platform, which weighed more than 15,000 tonnes, left the yard in November 2018 for installation on the Abkatun field, in Mexico’s Bay of Campeche. McDermott used its Amazon, Derrick Barge 50 and Intermac 650vessels for the installation work in 38 m of water.
McDermott is also heavily involved in platform construction and installation in Saudi Arabia, which continues to produce high levels of employment for fabrication yards and vessel operators. McDermott worked on the Safaniya phases 5 and 6 projects in 2018, installing platforms, pipelines, umbilicals and cables. It is also installing 13 platform jackets on another Saudi Aramco project and working on the Bul Hanine and Sasref projects in the region.
North Sea developments
In the North Sea, McDermott is involved in the fabrication and installation of Denmark’s largest offshore project for a generation. In October, McDermott started construction of the Tyra Redevelopment platforms in Batam, Indonesia. For offshore operator Total, McDermott will assemble seven topside structures, six connecting bridges and six jacket extensions. These are scheduled to be installed in 2020 and 2021, 225 km west of Esbjerg, Denmark.
Allseas’ heavy lift and construction vessel Pioneering Spirit will be installing two huge platform topsides on Equinor’s Johan Sverdrup field development in Norway, during 2019. It is scheduled to install the 26,000-tonne P1 processing platform topsides and the 18,000-tonne living quarters platform topsides during Q2 and Q3 of this year.
The P1 processing platform topsides were delivered to Equinor by Samsung Heavy Industries in December 2018. Production from the first phase of this project is scheduled to commence in Q4 2019. Construction of a second phase of development at Johan Sverdrup began in December 2018; this will include a new P2 processing platform jacket and topsides that will be installed in 2021, for first production in 2022.
In 2018, Allseas’ twin-hull Pioneering Spirit set a new record for the fastest installation in a single lift offshore. It installed the 22,000-tonne Johan Sverdrup drilling platform topsides in June 2018 using a motion-compensated lift system, with beams to accurately position the topsides on an eight-legged steel jacket.
During Q3 and Q4 2018, Pioneering Spirit laid the offshore section of the TurkStream pipeline between Russia and Turkey in the Black Sea. This pipeline is expected to become operational at the end of 2019.
Subsea 7 gained a contract in December from Shell for the Shearwater-Fulmar gas line re-plumbing project in the UK North Sea. This will involve installation of a 37-km pipeline, rigid riser and associated subsea structures.
Also in December, Subsea 7 announced it had secured a SURF contract from BP for the Manuel project in the US Gulf of Mexico. This will involve the installation of flowlines, a steel catenary riser and all associated subsea structures to link this gas field to the Na Kika production facility. It is anticipated that the offshore construction work will commence in Q4 2019.
Rival group, Saipem, secured a deepwater construction project in December 2018 for subsea systems and pipelines for the Zohr project in Egypt. This US$1.2Bn project will involve a fleet of vessels including:
Heavy-lift vessel S7000
Ultra-deep water pipelayer Castorone
Subsea field development ship FDS
Subsea construction vessels Normand Maximus and S3000
Pipelayer Castoro Sei
Multipurpose vessels Normand Cutter, and Far Samson
These vessels will be installing systems from January 2019 to the middle of 2020. Also during Q4 2018, Saipem secured US$400M in offshore engineering contracts, including on the Absheron field in the Caspian Sea, on the Tolmount gas project in the southern North Sea and platform maintenance in the Republic of Congo.
In response to recent contract awards, Saipem chief executive Stefano Cao said there were “signs of a turnaround compared to recent years, supported by good visibility in commercial opportunities”, particularly in offshore engineering and construction.
TechnipFMC also gained a subsea engineering contract in Q4 2018, for ExxonMobil’s Liza Phase 2 project, offshore Guyana. This will involve construction and installation of 30 deepwater well systems, eight manifolds and associated controls and tie-in equipment. TechnipFMC expects revenues from subsea projects in 2019 to be in the range of US$5.4Bn to US$5.7Bn.
Telford Offshore secured a contract in November 2018 from Indonesian contractor Timas Suplindo to supply Telford 25 for three months work on the Terang Sirasun Batur phase two development. This multi-purpose construction vessel is chartered to install subsea structures and lay flexible pipelines and umbilicals on this project. This will be achieved through the vessel’s 800-tonne heave-compensated main crane.
Brokers at Fearnley Offshore Supply said Q4 2018 was “uplifting, as the abovementioned companies have booking tonnage for future offshore campaigns as final investment decisions were announced.”
Fearnley also noted: “[There has been] a further strengthening in rate levels for specialised tonnage. We are encouraged by the fact that more term contracts now are for multi-year firm periods and not just seasonal work, as has been the trend in recent years.”
Is decom the future?
Clearly decommissioning will play a major role in the future activities of many heavy-lift operators, likely at the expense of their traditional activities. One such operator, Heerema Marine Contractors (HMC), has now formed consortia to secure decommissioning work in the North Sea. It gained two major contracts involving heavy lifting on projects in the UK sector in September and October 2018.
HMC will work with AF Gruppen to decommission, remove and dispose of the Dunlin Alpha topside for Fairfield Betula. It is anticipated that more than 20,000 tonnes of platform topsides will need to be removed and disposed of in the period of 2021-2024.
vElsewhere, HMC and AF Offshore Decom were awarded a contract from Marathon Oil for the decommissioning, removal and disposal of the Brae Bravo platform, comprising the topsides, flare jacket and bridge and the main platform jacket.
A rival to HMC’s consortia, Offshore Decommissioning Services (ODS), has revealed plans to build a UK-flagged semi-submersible heavy-lift vessel called Moonraker 1. This is designed as a six-column stabilised, self-propelled vessel, with dual-fuel propulsion and the ability to conduct single lifts of topsides up to 30,000 tonnes and jackets up to 12,000 tonnes.
Moonraker 1 will have an overall length of 150 m, a width of 114 m and a maximum operational displacement of 105,000 tonnes. It will have a slot within the deck 90 m in length and 64 m in width and 12 support beams of 2,500 tonnes each, that could be hydraulically deployed with integral heave compensation for topside lifts. There will also be 12 linear winches of 1,000 tonnes each for jacket lifts in water depths up to 250 m.
Moonraker 1 will have dual-fuel power and propulsion, with eight V-type main engines rated 8,848 kW at 720 rpm. These will be located in four enginerooms and will drive AC generators. There will also be a dual-fuel engine rated at 800 kW at 1,800 rpm for emergency power. To provide enough fuel for operations, there will be storage for 4,000 m3 of LNG and 1,800 m3 of fuel oil.
These will be able to power eight 4,500 kW variable speed, fixed pitch and fully azimuthing, underwater demountable thrusters, two on each pontoon extremity. There will be a dynamic positioning (DP) system rated as DP3, with at least five positioning reference units. ODS expects Moonraker 1 to be delivered in Q2 2021.
Meanwhile, Shell has submitted to the UK authorities a draft decommissioning programme for its Goldeneye platform and pipelines in the North Sea. It intends to remove the platform jacket and topsides for recycling. The gas pipelines will be trenched, buried and decommissioned in situ, while the umbilical, surface-laid mattresses and stabilisation features will be recovered to shore.