Gudrun enters construction phase

April 1, 2012

Operator Statoil and contractor Aker Solutions jointly hosted an open house in Stavanger recently to review progress on Gudrun – currently the biggest project in Statoil and now ramping up for the construction phase – and share learnings on this and other areas of Norwegian offshore activity. Meg Chesshyre was there.

Statoil’s Gudrun project manager Terje Masdal declares himself ‘very satisfied with the overall progress of the project’, now past the 50% completion mark and with a target start-up date at the beginning of 2014. Statoil has a 75% stake in the licence, and GDF Suez the remaining 25%.

Terje Masdal

The Gudrun project comprises a newbuild platform, export lines to Sleipner A and the power cable from Sleipner A, modifications at Sleipner A and at Kårstø. The jacket, built by Kvaerner Verdal, was installed last summer by Saipem’s S7000, which will also install the topsides next summer.

Predrilling of seven wells, which represents a third of the total investment, is now under way with the West Epsilon. Saipem’s Castoro 7 (ex Acergy Piper)will start pipelay of the gas and oil export lines in May. The vessel is being reactivated having been cold-stacked for three years. Emas’ new cable layer AMC Connector will install the power cable in 2013, its maiden contract being cable lay for Eni on Goliat.

The modifications at Kårstø are to enable the gas terminal to handle light oil from Gudrun. Processing is also required offshore both at Gudrun and Sleipner to wash the salt out of the produced water.

The terminal is not very robust in respect of salt and removal offshore was seen as the cheaper option.

Gudrun, representing a total investment of NKr21 billion, was the first big project after the Statoil/Norsk Hydro merger two years ago. The field was discovered in 1974, the same year as Sleipner, and started as an investment project in Statoil in 2004. It is a very challenging and complex reservoir with three different segments and a lot of faults. It is high pressure/high temperature with limited resources – 150 million boe, which is why it has taken so long to develop. It also needed available capacity in the value chain, as it does not have enough reserves for a standalone development.

The economics were still not very good when Statoil decided to submit the Gudrun PDO. It had a lack of robustness according to the company’s investment requirements, to the extent that when Statoil CEO Helge Lund sanctioned the project he gave it a stretch target to save NKr2 billion, or 10% of the expected value. This required a new mindset, recalls Masdal, no stranger to Statoil brownfield developments having earlier project managed Norne gas export, Gullfaks satellites phase two and, most recently, the Statfjord Late Life project.

Gudrun's 7400r jacket was installed by the S7000 last summer in 109m of water. The 10,000t topsides will be added this summer following installation of Gudrun's 55km 14in diameter gas and 12in diameter oil export lines by the newly reactivated Castoro 7.

‘We needed to change the way of thinking from “what is the best thing we can do”, to “what is good enough for business”, challenging the scope, removing what was not absolutely necessary,’ he explains. Not doubling up on PSVs was one saving, the removal of the heat recovery unit was another.

‘We used the smartness, the competency and the creativity [within Statoil and Aker Solutions] to look into cheap solutions – good-for-business solutions, not what is best for technology.’ As a result, notes Masdal, ‘it is a very positive cost picture for Gudrun. The current cost estimate is in the range of saving NKr2 billion. Another cost saving on Gudrun is a no change philosophy. The amount of changes so far is 2% of the total investment. That is historically low.’

Gudrun is the first project being developed in the Greater Sleipner Area, the so-called ‘Golden Pot’, which includes Dagny, Draupne/Luno, Alfa Sentral, Varg and Johan Sverdrup (formerly Aldous/ Avaldnes) in the Utsira High. According to Masdal, all of these are possible candidates for development through Sleipner A, which will have increasing spare capacity by the end of the decade. There is also space for 1500t of future modules on Gudrun, plus J-tubes and risers for future tie-ins.

Portfolio contract

The Gudrun tie-in is the first call off in Aker Solutions’ two-part ‘portfolio contract’ with Statoil for the Greater Sleipner area modifications. The second part covers early phase studies on the tie-in of future fields starting with Dagny, with options for further work.

Gudrun and the Greater Sleipner area.

The Gudrun contract, which started in summer 2010, is for four years, with two further options of two years each. ‘With the portfolio agreement, Statoil is also looking at synergies for the next call-offs,’ explains Aker Solutions’ engineering manager Sigve Nådland. ‘We are already carrying out a study contract for the tiein of Dagny and have been asked to bid for Draupne/Luno – both separately and in combination with each other – and Dagny, as all the fields are in the same area, potentially targeting the same facilities, the final one being Varg.

Sigve Nadland

Modification work offshore started in April 2011, initially with 50 beds and now increased to 70. ‘It involves considerable advance planning working on a live platform, with hot work and weight limitations, and without disrupting ongoing production,’ says Nådland. ‘It requires installation, operation and maintenance friendly design, building new areas outside the platform and cantilevered on.’

More than 150 engineers based in Stavanger, Bergen and Mumbai are working on the Gudrun project. The majority of the work is being carried out in Stavanger, but there is a specialist riser group of eight to 10 engineers based in Bergen, and about 20 based in Mumbai, concentrating on particular packages such as the freshwater and H2S packages. The engineering is now 60% finished and has delivered well so far, says Nådland.

With platform crane capacity limited to 40t, lifting operations require intensive planning and the use of specialist climbing crews. Lifting restrictions were imposed above certain sea states, and these certainly had to be applied at times last year when the area bore the brunt of some particularly hostile weather, reports Nådland. Some 750t of new permanent equipment is being prefabricated at Egersund. The main offshore installation work on Sleipner will start this April.

According to Nådland, a common project execution model developed by Aker Solutions over the past 15 years and being updated and improved all the time based on experience from previous projects is proving invaluable on Gudrun. The main objective is to ensure consistent project execution, predictability, transparency, and continuous improvement – or, as Nådland puts it, ‘doing the right things right at the right time and in the right sequence’.

MMO market

The maintenance, modifications and operations market has grown significantly in the last five to six years with Aker Solutions’ revenues in the sector doubling to over NKr8 billion in that time, reports Tore Sjursen, the group’s EVP MMO. With typical life of field investment portfolios amounting to three to five times the initial capex, MMO has become one of the largest of Aker’s nine business areas, representing 33% of the company’s NKr46 billion total order backlog and 27% of its NKr34.1 billion revenue.

‘It is a huge market and driven by the high oil prices,’ declares Sjursen. ‘All this brownfield activity is carried out without stopping production. One client likened it to “conducting brain surgery on a patient while the patient is still awake”.

‘Typically our market consists of a set of term contracts which are basically frame agreements available for callouts,’ explains Sjursen. These range from operational services, sometimes just manpower related, to provision of engineering services and at the other end of the scale the large EPCI modification contracts such as the Statfjord Late Life project, recently completed for Statoil, which turned over close to NKr5 billion over five and a half years.

Sleipner A infrastructure will have increasing spare capacity by the end of the decade.

Statoil is Aker’s largest client and a major source of MMO projects as field lives are extended, one example being Snorre 2040. Landmark project references on the Norwegian Continental Shelf include the Valhall gas lift project for BP, a NKr140 million contract, Statoil’s Gudrun tie-in at Sleipner (NKr900 million), the complex drilling upgrade on Oseberg B for Statoil (NKr1.2 billion) and Draugen produced water re-injection for Shell (NKr250 million). Aker Solutions also has a significant project portfolio on the UKCS.

‘I think we are the only contractor with a significant presence on both sides of the border,’ notes Sjursen.

The company has been positioning itself for the decommissioning market, but it has yet to materialise, he says. ‘At the moment the trend in both Norway and on the UKCS is that the installed base is growing, not declining, and will continue to grow for a number of years. It is hard to see that we won’t be busy here for another 50-60 years – another generation,’ he notes, adding that this was an important point to make in terms of recruiting personnel.

He concludes that the general feedback from clients is that brownfield projects have a very good return and are very profitable. “Basically we have a very positive outlook on this market.”

Aker Solutions personnel working on early Sleipner A modifications in preparation for the Gudrun tie-in had to contend with some hostile storms last year. inset above: The platform in gentler times.

‘Subsea factory’

Bjørn Kåre Viken, Statoil SVP subsea & marine technology, highlighted the need for a subsea standard catalogue. He sees it as a means of accelerating production and reducing cost.

According to Viken, subsea equipment needs to be standardised to meet fast-track project schedule requirements, provide configurable bare bone to high functionality solutions, cost effective to enable development of marginal fields, based on proven technology to reduce project risk and comply with technical requirements. He adds that standardisation offers increased flexibility and cost efficiency and is an efficient measure to increase oil recovery.

Statoil is taking subsea technology longer, deeper, colder. ‘The number of pieces in the puzzle is being reduced,’ says Viken, who foresees development of a ‘subsea factory’ by 2020. With its declared ambition to exceed 2.5 million boe in 2020, Statoil has this year increased its R&D budget significantly in order to put more effort into innovation.

Taking up the theme of standardisation from the supplier’s standpoint, Svenn Ivar Fure, Aker Solutions’ SVP strategy & technology, acknowledges it as a key part of the drive to reduce costs for smaller fields. ‘Volume reduces unit costs – 15 trees rather than two – as does discipline, choosing between ‘nice to have’ and ‘need to have’, he says, adding: ‘Standardisation enables industrialisation leading to fewer product changes, buying in bulk – often prior to the project, and more efficient production.

Standard tools reduce installation and intervention costs, and can follow the rig and be used across multiple projects, says Fure. Adapters and access for third parties enable cross vendor operations. Since standardisation enables more projects, he believes oil companies and the supplier industry have a shared agenda here. ‘Standard installation and intervention systems reduce costs and delivery time with the result that marginal projects are converted from opportunities to projects,’ he concludes. OE

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