Why Standardize Subsea?
Upstream Intelligence recently caught up with DNV-GL’s expert standardization JIP leaders to get the latest updates on the industry drive towards greater equipment and documentation simplification.
Subsea production systems are an integral part of FPSO and other floater-based field developments, and for new tie-ins to old installations. It is 15 years since Hydro (now Statoil) moved the game on and placed a machine called the Troll Pilot on the seabed of the Norwegian continental shelf, and used it to remove water from the wellstream and reinject up to 38,000 barrels of produced water a day into a low-pressure aquifer.
The remarkable success of that system demonstrated to the industry not only that subsea production was possible, but that it had the potential to change the way fields were developed. This year, the first dry gas compression system was installed at Statoil's Åsgard field, where it will allow the recovery of an extra 280 million barrels of oil equivalents.
In the near future, deepwater wells are going to require even more complex subsea equipment. In the more distant future, we may see what Statoil calls the "subsea factory": automated production entirely located on the seabed, piping oil and gas directly to shore.
The last years' increased cost focus, while being an integral part of common offshore field developments, has meant that we need to reassess what counts as best practice in the manufacture and employment of subsea equipment. To this end the industry has begun a series of joint industry projects (JIPs) to set guidelines and recommended practices in five areas: re-engineering, workovers, component catalogues, compliance with established standards and standardized documentation. A sixth JIP, into specifications for forgings, has already resulted in a new recommended practice.
The overall aim, of course, is to cut cost, lead time and uncertainty and thereby help the subsea industry to stay competitive. The need is obvious when one considers that a single project may have as many as 80,000 associated documents.
To find out how this work is advancing, we talked to three of the people who are helping to oversee the process for DNV GL, a global technical adviser to the oil & gas industry, headquartered in Oslo, which is leading some of the JIPs. Those interviewed included; Bjørn Søgård, Segment Director - Subsea and Floating Production, Tore Kuhnle, Principal Researcher and Bente Leinum, Senior Principal Consultant.
What are the JIPs trying to achieve?
Bjørn Søgård, the segment director for subsea, says the standardization discussion began three years ago, when it centred on making identical parts. This, he says, was too narrow: "Standardization to us and to other industries is about more than that. If you're just making identical parts and you're having different work processes and documents, then you are not completely standardizing."
Rather than standardization, suppliers such as FMC Technologies tailor make their subsea equipment according to what the end customer wants. As a result it will produce equipment with one specification for Total and another for Statoil, even though the equipment is doing the same thing. This bespoke style of manufacture makes for elevated costs and extended lead times, and it is this that the process is intended to tackle. "What it all boils down to is creating predictability throughout the supply chain. If you look at the car industry, they make a number of different versions of a standard car, and the user manual covers all the versions. But if it's made with different work processes and materials, it ruins the whole standardization principle."
"A lack of trust"
According to Søgård, oil and gas is still struggling to grasp this principle. He says the reason is "a lack of governance and a lack of trust". He says: "When you go into your local shop and buy milk and cheese you are doing that with confidence that someone has approved that dairy to produce that. But that trust is lacking in our industry and that is where all the problems arise."
What this means is that operators are overly concerned with the basic components that make up the equipment, rather than concentrating on more fruitful areas, such as how equipment can be configured. This issue has now been partly tackled with the publication of the Recommended Practice (RP) for Steel Forgings for Subsea Applications, following a two year JIP.
The aim of a JIP is to reach a consensus among interested parties. The way it works is that up to 30 representatives from around the world gather for a series of meetings and workshops over the course of at least a year, each of which is controlled by a steering committee. Once the steering committee believes it has a consensus, it produces a draft of the RP, and this is scrutinized by DNV GL, the workshop participants and a draft released for input from the wider industry, before being published as an official document.
Bente Leinum, a senior principal engineer at DNV GL, is the project manager for the Subsea Documentation JIP, a process that has been under way since January 2014, and with the aim of launching a DNV GL Recommended in May-June 2016.
She says the aim of the JIP is to come up with a recommended practice giving a minimum set of documentation requirements for all major subsea components. Increased predictability will improve industry practices; helping operators, contractors and suppliers to better understand and manage subsea documentation, and benefit from reduced lead time, less documentation, a sharing paradigm, increased awareness, transparency and improved quality, "but what is really important is that various players in the industry are loyal to the agreed guidelines; what we see very often is that you have all these individual requirements from individuals in the various companies that guidelines are meant to avoid or reduce". Statoil is already trialling the recommendations in the first draft of the RP on the Johan Sverdrup field.
How well do competitors co-operate?
The number of parties in a JIP depends on the subject. For a large one, such as that dealing with documentation, there are about 20 companies involved. The main players are the operators, who are the ones with most to gain from standardization, and their participation is conditional on their main suppliers also being present.
Søgård says: "One of the operators that joined the JIP said it was on condition the suppliers was also present. The reason was that you can create the best practice in the world but it won’t get you anywhere if nobody can deliver according to it. So, hearing the other parties' pain and gain is really valuable, and they wouldn’t necessarily be aware of it in a contractual setting because everyone has their side to defend."
The JIP is also valuable for competing suppliers, who are prevented by competition law – as well as the law of the jungle – from discussing their development projects with each other. For them the JIP provides a neutral venue where they can have conversations they couldn’t have anywhere else.
It may be the case that one supplier believes that it has a competitive advantage and is reluctant to reveal aspects of its design or work process; however, it has happened that these are spontaneously resolved.
In other cases, equipment that contains intellectual property may never be standardized – Tore Kuhnle, principal researcher with DNV GL, gives the example of swirl-inducers in subsea separators, which exemplify "the art of the process engineer", but the casing around it, how it is connected at each end, and its pressure performance can all be standardized regardless.
Intellectual property presents a problem when it covers a common element – Søgård gives the example of the horizontal tree, which was patented by Cameron in 1992 and was "a terrible block for many, many years". And in the case of wet-mate electrical connectors, where three or four firms dominate the industry, it is a problem if standardization favours one of them in some way.
Søgård says: "The effects of standards are industry-wide, and so they can reduce transaction costs. It's up to the individual player to do what they can in their internal processes and R&D department to make them as efficient as possible and still meet the international standard."
Looking to the future: subsea factories
The possibility of setting standards for subsea factories of the kind envisaged by Statoil is still in the future. Subsea processing must prove to be cost efficient in order to be seen as an attractive solution. At the same time, subsea processing will be an enabler for increased oil recovery. The suppliers are making gradual progress with solving technical issues - Siemens has just tested a pressure-compensated variable speed drive (VSD), for example - and according to Kuhnle, who has recently produced a report on the subject the ability to build a factory in reasonably shallow coastal water is “almost there”.
A DNV GL joint industry project (JIP) is being initiated to work towards standardisation of subsea processing. The objective of the JIP is to reduce cost in a lifetime perspective by giving a guideline for subsea processing modules and interfaces that are efficient, reliable and within limits for effective installation and retrieval. The outset for the JIP is subsea processing systems in the wider sense, including marine operations. The first step will be to define a Functional Description for subsea pumping and a specific plan for standardisation for subsea pumping. Phase 2 will continue with subsea separation and injection and subsea compression. The outcome of the JIP will be a guideline and DNV GL Recommended Practice for industry use.
What next for the subsea industry?
Major JIPs such as DNV-GL's work on subsea standardization stand to shake up relationships at every level of the offshore value chain. This is because the growing complexity of subsea systems is starting to have an ever increasing impact on an operators ability to effectively monitor, inspect and repair affected systems. Moreover, the challenges of designing and employing original equipment in even deeper water will only restrict further an operators ability to respond to fatigue and failure efficiently.
In the Gulf of Mexico, where ultra-deepwater production is just over the horizon, such JIPs could not be any more important.
For this reason, the 3rd Annual Subsea Integrity Conference 2015 (Oct 5-6, Houston TX) couldn't take place at a better time.
Key industry leaders from DNV-GL, Anadarko, Shell, Chevron, Hess, Total, Aker Solutions, Forsys Subsea and many more are already involved in the GOMs largest subsea dedicated forum to date.
Please get in touch with the team directly if you have any questions at +44 (0) 207 375 7565 or email firstname.lastname@example.org