Materials and long-lead items are only two of the challenges offshore yards must juggle. Regulations and their impact on operators also keep fabricators on their toes. Jennifer Pallanich calls on Kiewit Offshore Services to see how the Gulf of Mexico yard is navigating the world of long-lead items and new materials while responding to post-Macondo safety environment.
The way ahead looked promising for Ingleside, Texas-based Kiewit Offshore Services (KOS) back in March 2010. The company had previously seen the sailout of the 22,000 ton hull for Shell’s deepwater Gulf of Mexico Perdido field (OE September 2008) and in 2009 the mating of the topsides it had built for Exmar’s on-spec Opti-Ex with the semisubmersible hull that LLOG ultimately purchased for the Who Dat field in the deepwater Gulf of Mexico (OE July). Other projects were ongoing at the time, notes KOS president Fuat Sezer, and the future was bright. ‘We were really excited last year, in March, when the administration opened up the eastern coast for drilling,’ he says. The subsequent month, Transocean’s Deepwater Horizon semi exploded in 5000ft of water while drilling at BP’s Macondo prospect in the Gulf of Mexico. ‘All those things went on hold,’ he adds regarding the opening up of new leasing areas on the country’s continental shelf. At the time, the yard had already booked significant work for projects destined to be sanctioned, Sezer says. ‘We got lucky they weren’t impacted,’ he says. ‘The oil companies went ahead with the awards.’ In the interim however, drilling permits were delayed by months and months.
‘We will see the impacts of that in the future because there will be a gap,’ Sezer warns. ‘Right now the oil companies are getting their permits. Then they will drill what they’re supposed to be drilling for these projects.’ The halt in activity is likely to translate into only one thing, he figures. But ‘I hope I’m wrong’ about the gap, he says.
Right now, KOS has ‘approximately 50,000 tons of new starting topsides work,’ Sezer says. That includes two topsides of 25,000 tons, as well as lift, set and integration onto hulls in early 2013. There’s also a 10,000 ton deck and a 20,000 ton jacket due for delivery in mid-2012. Driving through the yard in mid-July, as tropical storm Don was spinning its way through the Gulf of Mexico, it was possible to see a number of client trailers, including those for Jack/St Malo fabrication complex, Big Foot, Mars B topsides fabrication and Exmar Opti-Ex, that dot the entryway.
With ‘most of these projects, we are pushing the grade of the steel to a level that only a limited number of steel mills in the world can manufacture,’ Sezer says. The type of steel in question is up to 80ksi and is being used to control weight, he adds. The steel characteristics offer higher strength and weldability. Steel strength demands have grown from 50ksi steel 15 years ago to 60ksi five years ago to 70ksi and 80ksi just recently, says Sezer. ‘These are sophisticated materials,’ he adds. ‘Not everybody can make steel in that fashion.’ The steels are ‘not being domestically manufactured, period’, he says, so KOS is working to maintain a good relationship with European and Japanese steel mills that produce the high-strength steel.
The evolution in steel is requiring a similar evolution in welding products. ‘The plate is there, but the weld consumable is a bit behind in meeting the requirements,’ he adds.
Beyond that, Sezer notes, the planning for any large project must take into consideration long-lead items like valves and certain pieces of equipment. The sheer number of large projects taking place around the world is consuming the world capacity for valves, he says, so it is necessary to order those in advance to meet project schedules.
As KOS VP Jeffrey Gordon notes, the valves can take from a couple of months to a year before they are delivered, based on the size and grade needed. The certificate of origin also comes into play, he adds.
For a yard like KOS, Sezer says, there exists the possibility for diversification to address the uncertainty that has arisen in the region regarding the delay in permitting for the Gulf of Mexico. Then again he adds, the company – with roots back to 1884 – has a long history of building for the oil & gas industry, having entered the offshore business in 1984. The industry has changed a bit in the nearly 30 years since, he says, notably on the safety front.
He cites recordable incidents from the mid-1980s, which would compare quite poorly with the incident rates of the yard today. ‘If I compared that with now . . . then I would say we should be having a recordable accident every day. But things change. Maybe those things were acceptable at that time,’ he says.
He says the yard brought its LTI rates under control in the late 1980s and concentrated on hemming up its safety record in terms of overall recordable incidents during the 1990s and 2000s.
‘We kept on having accidents. We convinced ourselves – that is, the management – that it is possible to not have accidents. Once we had the message, we spread it across our craft employees,’ Sezer says. ‘We had to get the shift in their minds.’
He says engaging employees at a personal level has made all the difference. The yard has also employed a somewhat unsettling visual campaign aimed at preventing accidents. A few years ago, KOS began placing quite graphic billboards around the grounds, each showing the results of accidents that could happen in any fabrication setting: mostly hand and finger injuries.
In 2004, the company tallied over 1000 eye-related first-aid cases. In 2010, the number reached 65, and ‘we think we can totally eliminate the eye issues’ that require dispensary or flushing, Sezer says. Part of the company’s solution was to focus on the Occupational Safety & Health Administration’s approved eye protectors. ‘There are hundreds and hundreds of these things,’ he says. ‘People like to wear cool-looking ones, Harley Davidson ones and all that.’ But the problem was not all of the safety glasses worked for all people.
One by one, KOS tested each of these safety glasses to find the ones that eliminated the most risk, that is the ones that fit the face, cover the eyebrows and provide full coverage on the sides based on an individual’s facial features. Fewer than 10 frames were ultimately approved for the yard.
‘Now, starting from 2010 going forward, we’ve got the recordables under control, we are concentrating on the first aids,’ Sezer says. ‘Nobody gets hurt. Not even a paper cut.’
Right the first time
Rework is an issue that plagued the yard some years back. Sezer says about six years ago the yard was spending about $2 or $3 per manhour for rework. Tracking numbers – manhours, material dollars and total cost – became a priority at KOS.
‘We wanted to understand how much we were spending for rework. Then once we understood how much we were spending, we started publishing that information to our employees so they could understand,’ he says. These numbers are posted monthly throughout the yard, in much the same way as KOS posts its safety record in the yard. ‘We model quality after our safety program.’
Rework is often due to an engineering mistake, cutting materials at the wrong interval, incorrect calculations, dimensional issues and welding issues. For instance, says contracts manager Roy DeBolt, welders should not accept a piece for welding if the dimensions are not right; doing so could lead to tolerance issues later. Sezer says the focus on minimizing rework has brought the yard’s rate down, with last year’s rate ringing up at $0.12/manhour. The goal for 2011 is $0.10/manhour.
‘We treat a quality incident much like we treat a safety incident,’ DeBolt says. Any quality incident over $10,000 results in root cause analysis. The biggest gains, he adds, come from informing employees about how much it’s costing and making them think ‘Who is my customer?’ OE
Since 2004, Kiewit's Heavy Lift Device (HLD)- capacity tested to lift 13,000 tons- has helped intergrate deepwater hulls and topsides in its protected waters. The booms were originally designed to carry 15,000 tons, and upgrades would enable the unit to handle the whole 15,000 tons for which it's rated. KOS president Fuat Sezer says the yard could install "a little sister" next to the HLD should the market demand it.