Wednesday 5 April 2017

Aker Solutions is touting the economic benefits of its electrified technology for subsea production systems and associated equipment as it is engaged in a cost-cutting contest with rivals such as heavyweight Technip FMC to target increasing field development work off Norway.

Fully electric control systems are already in operation on the giant Aasgard subsea compression unit delivered earlier by Aker Solutions to boost recovery at the Statoil-operated field in the Norwegian Sea but the local contractor now aims to widen its delivery scope, while also working on a smaller, standardised facility for more generic field application.

“The future is all-electric. This means a higher level of flexibility, lower capital expenditure, and higher reliability and availability of subsea systems,” Aker Solutions’ product manager for all-electric subsea solutions Einar Winther-Larssen said at a presentation as part of the Subsea Valley event in Oslo this week.

Adopting electrified solutions on subsea facilities - powered either from shore or a floating surface facility - means less topsides equipment, reduces the size of connecting umbilicals, while also making christmas trees smaller and lighter and eliminating the need for hydraulic distribution, he said.

As a result, he estimated the costs of a subsea production system can be cut by around 10%, in addition to a 40% cost reduction on the umbilicals element.

The ground-breaking subsea electrification initiative is part of an effort by the contractor to cut system costs to offer more competitive solutions due to the intense industry focus on reducing capex levels on new field projects to make them commercial in a low oil price environment.

“Our main focus is on optimisation of subsea technology to cut costs and do things more efficiently,” Winther-Larssen said.

Another key part of this cost-cutting effort is standardisation of subsea equipment that can be deployed across deep-water, harsh-environment and high-pressure/high-temperature environments, as well as in remote Arctic waters in the Barents Sea with long step-out distances.

Aker Solutions is now working on a smaller subsea compression unit that is about half the size of the 2500-tonne, 75-metre long Aasgard facility, which is considered by Statoil as a precursor to a subsea factory facilitating remote-controlled hydrocarbon processing and production on the seabed.

This would reduce the size, weight and cost of such a system by around 50%, according to the engineer.

“We have seen we can do things a lot more efficiently through an enhanced understanding of the functionality of a subsea compression system,” he said.

Aker Solutions is also working on other subsea electrical technology such as the now qualified PowerJump unit developed with BakerHughes and a multi-booster set to be launched in September after qualification testing, while it is developing digitalisation solutions such as FieldKeeper to monitor data from subsea equipment.

The contractor estimates an all-electric subsea production system could be implemented within three years as players such as Statoil and Total look at using the innovative technology.

Lundin Petroleum’s facility manager for the under-development Alta-Gohta project, Tom Wideroe, said the Swedish operator is looking to use an all-electric subsea solution at the Barents field, in combination with a direct-current fiber optic telecom cable, to cut capex.

It is also seen as a relevant cost-saving solution for economic subsea tiebacks to existing infrastructure that have proliferated for development of new fields off Norway such as Statoil’s Trestakk, which has now been given the official green light.

Despite low oil prices of around $50 a barrel, competitor TechnipFMC sees “an amazing level of activity among operators that want to launch projects” as project costs have been cut through more simplified concepts and lower contractor pricing, its managing director for Norway, Ann Christin Andersen, said at the same event.

The number of field investment decisions off Norway is set to double this year to 10 compared with 2016, with projects such as VNG’s proposed Pil & Bue tieback and Statoil’s Johan Castberg set to be brought to fruition.

Andersen said there has been a supplier-led effort to achieve cost reductions through measures such as system simplification, standardisation and more efficient system integration as operators hand the initiative to contractors to come up with more economic field solutions.

She said savings can be achieved through improved product integration such as between the subsea production system and umbilicals, risers and flowlines to eliminate interfaces from different suppliers.

This has resulted in a “significant gains” in cost reductions and lead times, with per-barrel costs cut by around 30% on an industry-wide basis.

The average cost per barrel for new field developments has been reduced from $82 to $58 over the past three years following a 60% drop in oil prices since 2014, while Statoil has brought down the break-even level for the first phase of its under-development Johan Sverdrup field off Norway to less than $20 per barrel.

TechnipFMC will deliver the subsea production system and associated infrastructure for Trestakk - on which costs have been cut by around 50% - under the first such integrated fabrication and installation award for the newly merged contractor.

Andersen said this marked a breakthrough for its new contracting model and the US-French player now is carrying out several front-end engineering and design studies for similar integrated work, having also secured an award for Shell’s Kaikias deep-water project in the US Gulf of Mexico.

However, she warned that “suppliers are selling at prices that are not sustainable” and TechnipFMC is pushing to speed up cost reductions on its subsea systems to enable it to make money on committed projects.

Aker Solutions, meanwhile, is also pursuing further industry alliances to widen and integrate its product offering, having already teamed up with Subsea 7 under a framework pact with Anglo-Norwegian independent Aker BP.