Asset integrity and life extension: Key themes at SNS

April 15, 2013

Elaine Maslin reports on the Southern North Sea 2013 Conference, organized by East of England Group

With a large fleet of often unmanned and aging platforms, operators in the predominantly gas producing Southern North Sea (SNS) are having to face asset integrity issues head on.

It is a complex task. Declining production and rising operational costs need to be balanced with maintaining infrastructure and its integrity while hunting for additional reserves and infill opportunities.

It is not all about decline either. There has recently been renewed optimism in the potential for material new finds in the SNS - despite being the most mature area of the North Sea.

Last year the development of the Cygnus field was sanctioned. Cygnus is the largest find in the SNS in 25 years and will include five jackets when it comes onstream in 2015, contributing 5% of the UK’s production.

Bill Cattanach, head of the Pilot secretariat, part of the UK Government’s Department of Energy and Climate Change, said: “There is still a lot of opportunity in the SNS. There are six new developments in the medium term. We’ve still got 15% of the remaining UKCS reserves here. It is very mature, but we’re still seeing new projects coming forward like Cygnus.

Delivered in May 2011, the SWIFT10 independent-leg, cantilever jackup rig is now drilling off the Netherlands for NAM, a joint venture of Shell and ExxonMobil, under a 5-year contract.

However, speaking at the Southern North Sea Conference 2013, he added: “There are challenges. Wells are starting to lose pressure, water is starting to come in to wells and I think another issue is ensuring that we can a find more innovative ways to get better contact between the well string and hydrocarbon sands. If we’re successful in doing that, we will see the life of the SNS being extended considerably.”

Perenco is the largest operator in the UK SNS, with 18 fields, 30 platforms, 210 wells (16 subsea), 1600km of subsea pipe work, and the Bacton Gas Terminal. Tie-backs and marginal fields are becoming increasingly important for future production, making maintaining existing infrastructure crucial, said John Sewell, Perenco UK operations manager. However, some of this existing infrastructure is around 40 years old and past its intended life span.

“I firmly believe there are another 20-30 years left in the SNS, if not beyond,” he said. “We have assets that are 40 years old and we want them to carry on for another 15-20 years. This does add costs. Integrity management in the SNS is about looking after a large number of assets, many unmanned, which makes the job harder.”

Glycol desalination unit at Shell’s Bacton Gas Terminal.

ONEgas, which has 90 producing fields and 50 jackets across the UK and Dutch sectors of the SNS, produces 200,000boe/d.

Ante Frens, ONEgas asset manager for Shell, said to extend life production and cost are key.

“We stop producing when the revenues start hitting the cost line,” he said. “So how do we extend field life? One, beating down cost and, two, increasing volumes.”

Consideration of asset management has led Shell to gradually reduce the scale of its assets offshore in the SNS over the years. In the early years large platforms with manned processing were built – “big plants, big wells.” But this has evolved into unmanned platforms, including monopoles and even some structures without helidecks, as well as subsea tie-backs - reducing the spread of assets needing maintenance right from day one.

For the existing assets, Shell’s strategy is also reducing what is infield, said Frens. “What we are doing more is actually taking kit away. It is something we learned onshore. It is called decomplexing. Up-time is better because the more kit there is, the more it breaks down (and), the more leaks you have. Taking stuff off is often a better idea than trying to fix it.”

An example was on one of its Dutch systems, operated by NAM (a joint venture between Shell and ExxonMobil), with 16 platforms, multiple satellites and 30MM cu m/d of processing capacity.

Facilities across a complex of linked platforms are being removed as part of the ONEcal project, in a joint development area operated by NAM with partners Oranje-Nassau Energie, NUON, Wintershall and EBN, including dehydration and compression systems.

In their place, a field-wide process automation system is being introduced. This will enable the de-manning of all but one platform in the group (K14-FA-1) remaining manned.

“We don’t need all of it but we need to maintain all of it,” said Frens. “So what we are going to do is take a whole bunch of it away. We are taking the pressure off, the dehydration, big glycol systems. As a result, you can take the people off. As a result, you can take the gas detection away for large parts, as a result etc.”

Shell is doing the same in the UK SNS sector, but here a new glycol desalination unit onshore is also helping unlock previously closed in gas fields (see story, page 61).

To beat down costs, ONEgas also decided that it was unnecessary to use large costly drilling units in the shallow and more benign SNS. Through NAM, it commissioned a new joint venture rig operator to have a new unit built specifically for use in the SNS. The Swift 10, operated by Swift Drilling, a Van Es Group and Fabricom Oil & Gas joint venture, was launched in 2011. It has automated pipe handling, reduced crane movements, and requires just 50-60 people on board to run it, making operations on the SNS’ smaller fields more economic.

“There is no one ever on the drill floor, it is completely automated,” said Frens. “It is a way to get cheaper, faster holes in the southern North Sea. These innovations are necessary to get more volumes out of the SNS and this is how we are going to extend the lifetime. It’s is what Shell is excited about and why we want to stay here.”

GDF Suez E&P UK, which is behind the Cygnus find, also agrees that securing cheaper rates for drilling new wells is crucial to the future of the SNS.

Pierre Girard, area development manager E&P, said: “The size of the remaining operations means we need cost efficient drilling and development solutions.”

Standardization of developments would help, he said. But another challenge is access to infrastructure for small fields. In the Dutch sector it takes three months for an operator to respond with full “sensible” terms and conditions, said Girard. In the UK it can take months. Having existing infrastructure in place, to tie smaller finds back to, was also important. This makes life extension projects and asset integrity crucial, he said.

However, to maintain integrity, firms need to carry out regular inspections, which can be costly, said Sewell, of Perenco, especially with dozens of unmanned installations to look after.

“Inspection activity is key to asset integrity, but it is expensive and time consuming, especially when you have to build scaffolding or put people on ropes,” said Sewell. “One of the appeals to industry is – is there another way of doing it? Are there remote facilities we can use to do this integrity inspection work?” Mick Bowery, business development manager offshore projects and operations at service firms Petrofac, suggested inspection activities should reflect where a field is in its life.

“What is the point of a five yearly inspection on equipment if COP (cease of production) is in four years?” he said. “The strategy needs to be revised. It is the same for repairing or replacing equipment and process simplification. Also, how can we use equipment on more than one asset? We’re looking at federal contracts, sharing equipment across assets on almost a pay as you go basis.”

However, while operators are by definition managing these assets, it is more often than not service providers like Petrofac that come to carry out the extension or maintenance work, from dealing with corrosion or collision problems to subsidence or extension and modification projects.

Rowan Patterson, business development manager at Claxton Engineer, said to do this it was crucial for suppliers to have access to adequate records of a facility – of the original structure as well as any modifications made and changes to the safety case.

“We have seen in the past many places or platforms that had very few records at all and that involves a lot of additional work when it comes to modification and extending the life of an asset,” he said.

Tim Walsh, senior vice president global asset integrity, Lloyds Register, also said supply chain policies needed to be aligned to the aim of the particular asset. He also said the industry could learn from other sectors where complete asset management systems and plans were more commonplace, such as in the utility and transport sectors. These looked at life extension and future uses - such as gas storage solutions in the SNS - early on, he said.

“Future gas storage plans should be part of an asset management plan, for example,” said Walsh. “A strong asset management plan will reflect a strong business performance but it needs to be joined up,” he added. OE

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