Nexans has fine tuned its specialized facility at Halden in Norway, after a cable failed to meet the final acceptance test a couple of years ago and had to be remade. Meg Chesshyre visited the plant, which has a full order book and a more than two-year backlog.
“One of the first topics on which we worked significantly was to simplify the plant organization,” explains Vincent Dessale, chief operating officer submarine high voltage, with Nexans. The importance of the qualification process in terms of risk management and assessment of the company’s capabilities is such that this is now a standalone department, instead of being inside the manufacturing area below the plant manager organization.
The addition of a fixed cable way, which can take up to four cables, has increased efficiency, and there is a new building for raw material storage. Process engineering has been examined to improve process control and to maximize asset use. There has also been a focus on the supply chain, reinforcing planning management, to better anticipate planning adjustments and optimize slack.
“We are investing on a regular basis,” adds Frédéric Michelland, senior executive VP high voltage and underwater cables. “The last three years, we have invested in the submarine business the equivalent of about €40 million a year.” It is a constant process and compares with an annual capex for the Nexans organization of €150 million.
“The capital is being directed to strengthen [relieve] some of our bottlenecks into the plant.” The doubling of the capacity of the extrusion tower in 2011, with the addition of a second extrusion line, and increasing the height of the tower to 121m (making it Norway’s tallest building), involved a capital outlay of around €30 million.
“The submarine, high-voltage market currently stands at about €3 billion and is growing fast,” says Michelland. “It is expected to stay a buoyant market at least for the next five years,” he adds.
There are three main elements to the market: grid interconnectors, offshore wind, and the oil and gas business. The grid business represents close to 60% of the overall market, the wind segment slightly less than a third, and the oil and gas portion only 10 to 15%. “Today 80% of the market is in Europe. Tomorrow we expect that percentage to remain more or less the same. The good news is that Europe is our backyard.” Nexans is well placed with a manufacturing facility in Norway.
A major €300 million contract underway at Halden is for one of two subsea cables for Terna’s new highvoltage, direct-current (HVDC) power interconnection between Italy and Montenegro. This is Nexans largest ever subsea cable contract. The HVDC interconnection will be about 415km in length, comprising 393km of subsea cable and 22km of underground cable for the onshore connections. It will be laid to 1200m water depth and will feature two, 500kV, HVDC cables in a bipolar configuration (2 x 500 MW), with one cable supplied by Nexans. Over the last 20 years, Nexans has supplied more than 3000km of HVDC submarine cables manufactured and installed.
Nexans is also carrying out a €200 million turnkey contract to build a 200MW, 101km interconnector between Malta and Sicily with completion expected in 2014. The C/S Skagerrak is laying cable in two campaigns, while the Nexans Capjet (an ROV system) will be cable trenching. Dirk Steinbrink, executive VP high voltage and underwater cables, explains that the project’s workscope is being expanded to offer comprehensive interconnection solutions. The work for the Malta-Sicily interconnector includes: submarine cable supply from Halden, laying and protection, land cables supply and installation, and power station supply and commissioning in Malta. This work is being done by Alsthom under a sub-contract.
A major interconnector in the planning stage is the Statnett, TenneT and KfW NORD.LINK project, which will run between Tonstad (Norway) and Wilster (Germany), a distance of 514km, plus a 55km underground cable route in Germany. The final investment decision is due next year with the goal of having the 1400MW, twincable interconnector operational by 2018.
In the renewables sector, Nexans signed an agreement earlier this year for delivery of 53km of medium-voltage, submarine cables for the Westermost Rough wind farm, off the Holderness coast of Yorkshire. A further 2km of cable will be delivered for the internal platform cabling. Delivery is scheduled to begin in spring 2014. The wind farm will be constructed and subsequently operated by Westermost Rough, a subsidiary of DONG Energy.
This new agreement is the third call-up from a framework agreement concluded with DONG in August 2011 for the delivery of up to 900km of medium-voltage, submarine cables. Previous call-ups were for the West of Duddon Sands wind farm and the Borkum Riffgrund 1 wind farm.
Oil and gas
On the umbilicals side, Nexans has made a breakthrough in the Malaysian offshore sector this year with an order from Persada Engineering for an electro-hydraulic umbilical for Sarawak Shell’s F29 field development project. The 22km umbilical will be installed in 100 m water depth. Nexans is responsible for the supply and transportation of the umbilical, together with accessories as required, in a fast-track, 72-week contract. The F29 umbilical will be manufactured at Halden, the only facility within the group capable of such manufacture.
Nexans has a €45 million contract with Statoil to supply static and dynamic umbilicals for three, fast-track projects on the Norwegian Continental Shelf - Oseberg Delta, Snøhvit (gas), and Smørbukk Sør fields. The Halden plant will manufacture around 42km of static and dynamic umbilicals to Statoil’s new, standardized, umbilical design. The umbilicals will provide hydraulic, data, and fiber optic services for subsea equipment at a 100m water depth for Oseberg, 345m for Snøhvit, and 300m for Smørbukk. Manufacturing is expected to start at Halden next year, with delivery anticipated during 2015.
Nexans also won a €16 million contract with Statoil last year to engineer and supply a 16.5 km subsea power umbilical that will be used to connect the Gullfaks C platform to the new compression facility. Additionally, Nexans has a 10-year global frame agreement in place with BP to supply umbilicals, direct heating systems, accessories and services for various oil and gas projects worldwide. The agreement runs from 2012 to 2022.
A niche offshore market for Nexans is direct electrical heating (DEH). Alternating current transmitted from the DEH cable runs through the steel in the pipe, which heats due to its own electrical resistance. By controlling the current, the pipeline’s inner wall can at all times be maintained above the critical temperature for wax and hydrate formation. Over the past 15-20 years, Nexans has supplied 19 out of the 20 pipelines operating with DEH systems.
A new €25 million offshore order for Halden has come from Subsea 7 for the design and manufacture of a DEH system for the subsea pipelines serving Chevron’s Lianzi oil field development, located in a unitized offshore zone between Congo and Angola, off western Africa. The Lianzi fields tie back to the Benguela Belize Lobito Tomboco (BBLT) platform in Angola Block 14. With a water depth between 390-1,070m, this will be the world’s deepest DEH system. The cables are due for delivery during the summer of 2014.
The contract with Subsea 7 covers the delivery of a complete DEH system, including DEH riser cable, armored feeder cable, a 43km-long piggyback cable, and all associated accessories for connection to the pipeline that will join the Lianzi development project subsea facilities with the BBLT platform. OE