Heading for higher ground

August 9, 2010

Having enjoyed the occasional taste of EPC responsibility in recent years, Van Oord Offshore is looking for much more of the same. Although perhaps best known for its rock installation muscle as a subcontractor to the likes of Saipem and Allseas, the company is now intent on leveraging the in-house engineering expertise that for decades has quietly underpinned its offshore foundation and pipeline protection work.

Since becoming area director offshore at the company's Gorinchem headquarters five years ago, Joep Athmer has been keen to explore alternative contractual possibilities, having engaged in partnering and other innovative contract forms while serving as Van Oord's UK managing director during the previous four years. There was a good deal of nearshore pipeline and sea outfall construction activity in the UK at the time and Van Oord became heavily involved, turning lump sum contracts into frame agreements and in the process, as Athmer puts it, becoming ‘the UK Environment Agency's partner'.

On the offshore side, however, with business booming the company seemed largely content to maintain the subcontractor status quo. Van Oord had always prided itself on the strength of its offshore engineering capability, but it was meant for internal purposes only.

‘Our offshore strategy is to gradually become a dedicated EPC main contractor ourselves,' he says. ‘Instead of pulling a pipeline to the shore we want to cover the whole shallow water section, taking responsibility for pipelay and for example offshore loading buoys (SPM systems) under the contractual framework, including also surety maintenance at the end to ensure full design compliance.

‘Working purely in a subcontractor role you never have the ability to really understand what the ultimate client wants, your specific design expertise never comes to surface and you're always the party that's at the end of the line.'

Early encouragement to start optimising the company's working methods and take a step up the contracting ladder came from several operators a few years back. For work off Sakhalin Island, Van Oord was asked on a couple of occasions to work more directly with the operator. Today, either directly with the client, in joint venture with a major contractor or in partnership with specialist subsea engineering firms such as IntecSea and JP Kenny, Van Oord is busy spreading the word about its EPC expertise and expanding that side of the organisation to ensure wider recognition of its main contractor credentials.

Athmer says Van Oord will be selective in seeking EPC responsibility, targeting only jobs deemed to be a good fit. It will pick and choose, rather like it has done in the platform installation market through the years. ‘Every couple of years or so a good job comes along in that market segment and we'll step in,' explains Athmer. ‘It depends on the circumstances and the client, and the key words here are added value. A platform installation job without any dredging or rock installation is not for us.'

Sporadic they may be, but Van Oord's platform installation track record is no less impressive for that. The company's credits in this market include Malampaya in the Philippines, the Moliqpak set down at Sakhalin, Ekofisk in the North Sea and ballasting works for Hibernia's ice-resistant GBS offshore Newfoundland.

Subsea rock installation remains the company's major suit, however. Van Oord anticipates being able to add a third major DP2 flexible fallpipe vessel, Stornes, to its fleet soon. Stornes, with an impressive load carrying capacity of 27,000t, is expected to be ready to start operating at the end of the year.

Athmer says the hold up in this vessel's arrival coincided fortuitously with a slight dip in this market segment. ‘We bought it at a very good market moment,' he adds. ‘I'm convinced it will be a very efficient vessel and a cost price winner'.

As with Nordnes and Tertnes, Van Oord's existing fallpipe vessels, the new addition will alternate as a bulk carrier on a seasonal basis. Stornes is 175m long and 26m wide, with an operating draft of 10.67m and fully loaded transit speed of 14.7 knots. Athmer says Stornes will have a Van Oord-patented fallpipe system rated for precision rock placement in water depths up to 2000m.

With their next-generation fallpipe vessels, the company's competitors are also proclaiming greater water depth capabilities but Van Oord is questioning whether the perceived market at that extended water depth has the critical mass to sustain the heavy investment a completely new deepwater delivery method would require.

‘People install rocks in or around pipelines for protection against fishing, anchors, containers, erosion and so on,' Athmer points out. ‘You have to be careful not to invest an awful lot of money for a relatively very small market segment, because you will carry that investment around with you for many years and it could make the vessel less competitive. Also you have to bear in mind the possible emergence over time of new or improved technologies – as was the case with pipe-in-pipe, for example – that will make pipelines stronger and therefore also have a bearing on our business.'

Athmer says Van Oord is currently finalising a study into future worldwide pipeline locations and water depths, and is keeping an open mind on its conclusions and implications for fallpipe technology. ‘We have some ideas already and would again do it differently to our competitors because we have always been innovators in this field. If that is necessary then we can do it. But we will not be rushed into it.' OE

Global spread
Van Oord has been venturing into the wider offshore world from its North Sea home base for years, achieving an early market breakthrough on Australia's North West Shelf in the early 1980s when its Rocky Giant vessel – since retired – handled pipeline protection and stabilisation work on the first North Rankin line.

This quick sampling of recent or current contracts illustrates how geographically and climatically diverse the company's offshore operations have now become.

On the Baydaratskaya Bay Crossing project on Russia's inhospitable Yamal Peninsula, Van Oord Offshore has just begun its third ice-restricted season of trenching and backfilling work associated with development of Gazprom's Bovanenkovskoye gas field, deploying the trailing suction hopper dredgers Vox Máxima, Utrecht and Geopotes 15.

In Fujairah in the United Arab Emirates, the company recently completed an EPC subcontract for offshore works – installation of three pipelines and three Bluewater-supplied single point mooring systems – associated with the Abu Dhabi Crude Oil Pipeline (ADCOP) project. The pipelines, totalling 13km in length, needed trenching and backfilling.

For the Pluto project off Western Australia, Van Oord performed shore crossing preparation and backfilling for operator Woodside and later executed the LNG pipeline shore pull for client Allseas.

Closer to home, in difficult soil conditions off Ireland's County Mayo coast, Van Oord successfully completed a technically and environmentally challenging nearshore contract for Shell EP Ireland, involving trenching and backfilling and pipe pull operations for the Corrib gas field development.

Van Oord has also been busy reinforcing its international network in recent months. Its Perth office under Pitrik van de Wal recently relocated to larger premises in anticipation of further business growth offshore Australia. And during OTC this May it opened a new Houston office headed by former Heerema and Bluewater hand Jos Wellink, who is tasked with getting closer to the major oil companies and bolstering Van Oord Offshore's business development capabilities worldwide.



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