By Captain Lafi Al-Murtaji - Team Leader Port Operations
Population growth and economic prosperity have contributed to significant energy consumption and the last century has seen an unprecedented increase in global energy demand. Fossil fuels have been the source of more than 90% of energy-generating needs, leading countries to extend the exploration and production to offshore fields. Suddenly, the demarcation of international maritime borders in special economic zones became crucial, even leading to occasional disputes and conflicts between some States on maritime boundaries and overlapping waters.
The development of offshore oil & gas production has lead to new innovations in the shipping industry to develop many types of vessels to access and service this new sector. We will focus through this article on a few of such vessels that play a vital and prominent role in changing the world's offshore gas and oil fields maps. Such vessels enabled the States to increase their reserves by participating in all processes from exploration, production, storage, and export. Starting from the upstream to the downstream sectors in offshore locations, we will dive deeper into the technicality of the Drilling ships, FPSOs, FLNGs, and FSRU Vessels.
1. Drilling Ships
The first drilling in a freshwater lake took place way back in 1859 in California, USA. A land rig was taken over a wooden jetty and used for drilling a well in water. Another 80 years later, the first true “offshore drilling barge" drilled a well in 15 ft of water off Louisiana, USA, in 1947. Over the decades, huge modifications and technological development have progressively enabled them to drill in waters as deep as 3,000 m. Countries like the USA, Norway, Russia, Saudi Arabia, the UK, and many more are now engaged in offshore drilling.
These vessels vary from the shallow water barge type drilling vessels to jack-up barges, catamaran vessels, semi-submersible, completely submersible, and drilling ships. The drilling ships look like a normal tanker, however, can easily be distinguished by two features, namely the Drilling Derrick and the Helipad. An unseen but essential unique feature is also the Moon Pool, which is an opening under the main hull of the ship, allowing the exploring, drilling, and maintenance equipment to be lowered or retrieved without worrying about the weather outside.
The deepwater drilling vessels are held in place by two methods – anchoring or Dynamic Positioning System (DP2). The barge type of vessels which typically work up to 300 to 400 m depths are moored in a location with 6 up to 12 anchors.
Once the depths become too deep, i.e., 600 to 3,000m depths the deepwater drilling ships depend on Dynamic Positioning (DP) systems, or very complex submerged spiral anchoring systems. The DP relies on several thrusters located on the fore, aft, and mid sections of the ships and controlled by on-board computers and sensors, to maintain the position without using anchors. The ship's position is established through signals from DGPS (Differential Global Positioning System) or RadaScan or light submerged taught wires. Any change of position is immediately measured by the vessel's computers and corrected by giving signals to the thrusters, which are constantly in the operational mode. These ships are also fitted with ship's movement dampening gyro systems to compensate for movement due to speed & direction of the wind, waves, swell & currents. Since the drilling ships are attached to drilling equipment thousands of meters underneath sea level, holding them in location, without moving is an essential part of the success of drilling operation.
It is known that the average cost of offshore rigs is equal to 15 to 20 times the average cost of land rigs. The cost of building an offshore drilling rig for oil and gas exploration is estimated at between $650 million to $1.2 billion, depending on the rig's size and type.
2. Floating Production, Storage and Offloading (FPSO) Vessels
Once a well is drilled, the drilling ship moves to another location and the wellhead is taken over by the Floating Production, Storage and Offloading (FPSO) vessels. These vessels are very complex megastructures performing the functions of a unified floating Gathering Center, Booster Station, Tank-farm, SBM, accommodation, and heliport – all in one facility. FPSO vessels were a technological breakthrough in the oil and gas industry. The number of FPSOs has increased by 33% over the last ten years. They have become one of the primary oil and gas extraction facilities from shallow, deep, and ultra-deepwater fields.
In these integrated maritime facilities every equipment for production, water separation, gas and oil processing, water injection, gas compression, crude oil storage, and export via pipelines or directly to the available oil tankers are fitted. In some cases, the gas is transported to the coast via the pipeline or re-injected into the field to boost production. All these activities need a large crew component, working under harsh conditions.
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FPSOs are fitted with similar systems for positioning as the Drilling ships, such as the Dynamic Positioning (DP2) systems or anchors, depending on the depth of the water below the ship. The mooring system, when fitted, is placed in the front of the vessel, which allows the vessel to rotate freely and best respond to the prevailing weather, wind, and ocean currents.
FPSO vessels proved to be very versatile facilities, providing a lot of freedom and diversity in terms of exploration and production, enabling them to be operated in remote areas at a lower cost compared to traditional oil and gas production and storage methods.
The advantages of FPSOs include reduced time factor of a project compared to building an oil platform, onshore permanent structures such as pipelines, gathering centers, ports, buildings, etc. Readily convertible from reasonably priced oil tankers (VLCC) within a short span of about 1½ year. Availability for renting from the market, instead of investing in buying and converting one. Capable of moving on their own power, because the tanker's engines retained onboard. Thus, FPSOs can easily react to market forces, and increase or decrease in numbers, unlike the land-based fixed assets, which take years to build and finance.
Additionally, an enormous advantage came with the FPSO's capability of storing huge quantities of oil and gas, which increases the economic viability of the fields. The largest FPSO vessel “Egina" has a storage capacity of 2.3 million barrels. While the offload vessel has gone to discharge the previous load, the crude product is continuously loaded and stored onboard, ready to be offloaded when the daughter's vessel returns.
Finally, the safety factor on FPSOs is improved through their quick capability to disconnect from the pipelines and oil wells and move into safer waters, in case of severe weather conditions. Such flexibility also made them more viable for marginal oil fields or those, which were at a great distance from the coast-line compared to the traditional infrastructure.
Presently about 215 FPSOs are operational in the world, averagely costing between 800 million to 1 billion US$. The cost of specialized deep-sea FPSOs may go much higher.
3. Floating Liquefied Natural Gas (FLNG) Vessels
Demand for Natural gas, which is fast emerging as the preferred fossil fuel of the future, is on the rise. It is the cleanest and cheapest energy source to extract compared to all other hydrocarbons. This is leading the oil companies to extend their exploration to offshore locations. Until a decade ago, it was difficult to extract gas from the offshore fields, due to constraints in all aspects - geographic, technical, environmental, and economic. Due to difficulty in transportation, the natural gas markets were historically totally local.
The FLNG vessels have again come to the forefront in making offshore production and transportations become a feasible source. FLNG vessels are stationed over the natural gas fields to produce gas, process, and purify the impurities through the liquefaction process, thus making previously distant, inaccessible, and deep locations also economically viable.
Natural gas consists of 95% methane and a 5% proportion of ethane, propane, and butane. It also contains yet smaller quantities of water, carbon dioxide, nitrogen, oxygen, some sulfur compounds, dust, acid gases, and helium.
FLNG gives a huge saving of capital and operating costs by eliminating the need for installation of pipelines, pressure units, and a gas plant processing, dredging, port construction, etc., thus also reducing the impact on the maritime and coastal environment. These vessels also have great flexibility to operate, relocate or suspend their activities quickly, with relatively low effort and at a fraction of the cost of other infrastructural options.
These ships use conventional floating hoses or the submerged turret boy system for loading. There is the least involvement from tugs and other support vessels for turret buoys, thus reducing the OPEX costs.
Liquefaction of LNG is the best method to remove the unnecessary components by cooling it to -162°C (-260°F), which results in reducing its volume by 600 times compared to its gaseous state. This process also makes it easy for storage and transportation in large quantities over long distances to various parts of the world. Thus just one ship can carry enough LNG to meet 5% of average daily natural gas demand in the US, which is equivalent to heating 43,000+ homes for a year.
The (FLNG) & (FPSO) are very similar in functionality and have similar advantages over fixed land-based plants, thus providing new business opportunities for the developed world, developing countries, and even areas where conflicts may make pipelines impractical.
The maritime regions of Australia are the most in-demand for FLNG vessels and up to 40 projects are underway in other parts of the world. It is expected that by 2022, another 22 ships will be operational across oceans and seas off the coasts of Canada, China, West Africa, Brazil, the West Coast of America, and South Asian islands.
4. Floating Storage and Regasification Units (FSRU)
We may call the Floating Storage and Regasification Units (FSRU) the downstream component of the LNG production and transportation chain. The FLNG vessel compresses and liquefies the LNG, whereas the FSRU loads the liquid, transports, and discharges the LNG after regasification through the plant onboard – from -162°C (-260°F) to atmosphere temperature, directly into the shore gas network.
Most of the FSRU's in service are primarily LNG carriers with a cargo capacity in the range of 180,000m3. They are versatile, being fitted with both, the liquefaction as well as regasification plants, which makes them extremely versatile to adapt to any type of activity, whenever needed. They are capable of supplying more than 600 million cubic feet of gas per day providing fast and convenient access to gas supplies.
A new FSRU's can be built at almost half the cost as well as in half the time of building an on-shore plant. Further, the project of converting an LNG vessel into floating storage and regasification unit can take as little as just 5-7 months. FSRU's are also very versatile in their function – from being used as a floating gas regasification station, or a floating storage unit, or as a conventional LNG vessel.
The State of Kuwait is a pioneer in the Oil and Gas industry in the Middle East. Kuwait Petroleum Corporation (KPC) made an impact when they first introduced the FSRU's technology to supply Kuwait's electric power stations with natural gas through Mina Al- Ahmadi in the year 2009, replacing the crude as the fuel. This has contributed significantly to increasing revenue from the increased sale of crude oil at the same time providing reliable and environmentally friendly power.
The shipping industry in offshore exploration and production has now come of age. Other GCC countries have already made significant progress in the offshore sector, by expanding their businesses in countries like Brazil, Mexico, and others in Africa, which are technologically under-developed.
With strong experience already available in the Arab countries in the oil and gas sector, both on land and offshore, it is time to expand our offshore business and collaborate with other countries to engage in different locations beyond our borders.