Offshore Northern Europe Shell Chooses Floating Units For Central N. Sea Projects

The Ansuria FPSO takes shape at the AMEC Process & Energy Ltd. yard, Tyneside, U.K. Shown clockwise from upper left: the lower turret assembly with the turret cylinder (foreground); turret manifold decks prior to installation; installation of process equipment; topsides.

As new fields awaiting development tend to become smaller, as oil prices remain flat, and as reserves are exploited in ever more-remote and deep waters, so interest in floating production systems is growing.

The Shell Group has long experience of floating production, storage, and offtake (FPSO) facilities, subsea development equipment, and other related technologies such as flexible risers.

The first Shell FPSO was installed in Castellon field in the Mediterranean Sea in 1977. Since then FPSO systems have been installed in many areas of the world and have evolved as safe and environmentally sound installations which can confidently be employed in ever more-demanding areas.

FPSO evolution

Early FPSOs were relatively simple oil processing facilities with uncluttered decks. The Castellon FPSO was a 60,000 dwt converted tanker installed offshore Spain to produce oil from a single well.

The Tazerka FPSO, installed 56 km offshore Tunisia in 1982, was a 210,000 dwt converted tanker designed to produce around 10,000 b/d of oil from eight relatively low-pressure wells.

Since then designs have evolved, and confidence in the FPSO has increased. For example, as the development of swivels has progressed, gas evacuation is now feasible.

The latest generation FPSO is a much more-complex facility, based on a purpose-built vessel for longer life, with gas processing, gas export or reinjection, water injection, and chemical treatment.

Sophisticated safety analysis techniques are now available to take into account the impact of this increasing complexity.

North Sea status

The mature North Sea increasingly requires an integrated, flexible, and rapid approach to new developments.

Discoveries are often smaller, more complex, and more geographically spread, and development scenarios range from short duration well tests for data gathering to traditional full-field-life developments.

Assessing reservoir performance may require a substantial appraisal program, which is sometimes difficult to justify.

By using an FPSO to perform simultaneous appraisal and development, such fields can be developed more quickly and with much-reduced exposure to economic risk.

Once the reservoir is drained the FPSO can be redeployed to another marginal prospect. However, as with any stand-alone concept, the FPSO must compete with the well-proven subsea satellite development alternative, tied back to an existing host platform.

Exciting developments in subsea technology are under way which will substantially increase the suitability of satellite developments.

There is little logic in pursuing mobility for its own sake, and optimum use must still be made of alternative development concepts and emerging spare capacity in existing facilities.

Nevertheless, the ability to redeploy a substantial element of the development costs to any one of a number of prospects has the potential to increase flexibility and reduce downside risk.

Provided this benefit is established, the FPSO concept will provide its contribution to the efficient and continuing development of the maturing North Sea province.

FPSOs in Shell Expro

Shell U.K. Exploration & Production (Shell Expro), operating in the U.K. on behalf of Shell U.K. Ltd. and Esso Exploration & Production U.K. Ltd., installed the first permanently moored tanker in the central North Sea in 1981.

This was the Fulmar floating storage unit (FSU), a 210,000 dwt converted tanker and sister ship to the Tazerka FPSO. The Fulmar FSU had no processing facilities but was a vital step in establishing the FPSO as a viable option in the North Sea.

Shell Expro's first FPSO, the Anasuria, is due to produce oil later this year from three central North Sea fields: Teal, Teal South, and Guillemot A. Operated by Shell Expro on behalf of Shell/Esso, Anasuria is a purpose-built 134,000 dwt vessel with an oil storage capacity of 850,000 bbl.

The vessel is turret-moored with 360 weathervaning capability and is designed to be permanently moored in 90 m of water.

At full capacity, the Anasuria can process 70,000 b/d gross of liquids, with up to 30 MMcfd of associated gas processing and compression, 60,000 b/d produced water treatment, and 85,000 b/d water injection.

Oil will be exported via shuttle tankers while associated gas will be exported via a 13 km subsea pipeline to the Fulmar gas line operated by Shell Expro.

Curlew plans

Shell Expro is also the license operator for the Curlew B and D fields, which are undersaturated oil and gas/gas condensate reservoirs.

Curlew, located on Block 29/7 in the central North Sea, is relatively remote from existing infrastructure.

More reservoir information, which can only be gathered during initial production, is needed to establish the full potential of the Curlew fields.

As a result the fields will be developed with a second FPSO, due for installation at Curlew in 1997.

The Curlew FPSO will be a converted 100,000 dwt tanker with storage capacity for 560,000 bbl of oil. The facility will be designed for a throughput of around 50,000 b/d of hydrocarbon liquids and 110 MMcfd of gas.

As with the Anasuria, oil will be exported via shuttle tankers and gas will be exported via a line connected to the Fulmar gas line.

Water injection is not likely to be necessary, so no hardware will be installed initially, though space will be provided on the facility.

As licensee, Shell Expro will be responsible for the reservoir and drilling and maintenance of the wells.

In the deeper waters west of the Shetland Islands, Shell and license operator BP Exploration Operating Co. Ltd. are developing the Foinaven and Schiehallion fields.

The FPSO is well-suited to deepwater operations, and both these fields will use FPSOs. The Foinaven FPSO will be owned and operated by the contractor, while the Schiehallion FPSO will be operated by BP on behalf of the owners, BP and Shell.

Further developments

Faced by new challenges, the industry is responding with a wide range of new technology developments and techniques.

Potential developments in dynamic risers may help to extend the use of FPSOs for use with high temperatures and aggressive fluids and for deployment in even deeper waters.

More-compact swivel designs are also being pursued, an area of FPSO design which possibly is least mature.

Progress has also been made in designing more-compact equipment and in eliminating bulky facilities such as metering or injection-water treatment equipment. This is applicable to a wide range of facilities.

FPSO market

Like a drilling rig, an FPSO is a movable, readily marketable asset. Its potential for rapid deployment and redeployment means it can provide a business opportunity to owners and contractors alike.

Large oil companies will continue to acknowledge the benefit of owning and operating production facilities themselves, particularly when FPSOs are applied to larger fields or a significant portfolio of smaller prospects is awaiting development.

The contracting industry, on the other hand, is also reacting to this market opportunity by speculative building. Oil companies are increasingly acknowledging this market with contracts for provision of services. Typically, this is occurring in prospects where limited field life or reservoir uncertainty raises the importance of rapid field development with the ability to limit the downside exposure.

However, financing of speculative building remains a constraint for the contract industry, with banks adopting a prudent approach to residual value until secondary applications are realized.

In shouldering increased risk, the owner or contractor is naturally concerned to ensure that his facility is not only technically robust but also cost-effective.

The oil company needs to examine carefully the technical specification to remove unnecessary, nonfunctional requirements. It also needs to ensure that the facility meets its Health & Safety Executive standards.

Shell Expro is seeking to address these issues in a selective and responsible manner, recognizing that it cannot rely solely on a functional specification to guarantee the necessary levels of safety and integrity.

Justification for nonfunctional requirements would normally be related to safety requirements or environmental targets.

In turn, the decision to employ a functional specification for any element must be supported by proper controls and must be based on a detailed evaluation of the implications and a thorough understanding of combined tanker and production operations.

As the industry explores the boundaries of cost-effective but robust designs, it should remain aware of the "license to operate" it has obtained. A pollution incident with any FPSO will have an impact on the reputation of the industry as a whole.

Ownership is no longer the sole realm of the oil company. In such a market, future FPSOs-whether contractor or oil company-owned-must not only be marketable, fit for purpose for a range of potential users, and functionally specified, but also safe and environmentally friendly.

Future trends

Today, most installations on the U.K. continental shelf are owned and operated by oil companies. However, as the FPSO market develops, owner/operatorship need not necessarily remain the norm.

Increasingly marginal and uncertain reservoirs, as forecast for many future prospects in the mature provinces of the North Sea, will provide rewarding opportunities for FPSOs.

For new provinces such as the Atlantic Margin, the market is more difficult to forecast, although in principle deeper waters, remoteness, and lack of infrastructure would appear to present opportunities for FPSOs.

Contracting arrangements in the case of leased vessels need to acknowledge the impact of field-life economics.

Growth of the industry will be inhibited, for example, if the contractor owner/operatorship implies accelerated abandonment of a reservoir due to the higher fixed operating costs towards the end of a field's life.

While there is growing confidence in the successful deployment of FPSOs, the best way of integrating topsides and vessel remains a challenge.

Future installations not only will have to comply with statutory provisions with regard to health, safety, and protection of the environment but must also improve on the current state of the art, if possible.

The FPSO concept, on the other hand, removes many difficulties inherent in decommissioning fixed facilities.

The FPSO is likely to be increasingly employed in places where gas has traditionally been difficult to deal with because of remoteness from infrastructure, for example.

Environmentally beneficial FPSO concepts will be better able to compete with satellite tie-back systems and thus ensure that FPSOs remain a welcome addition to the arsenal of development options.

The Author

Robert Weener is development director of Shell U.K. Exploration & Production, appointed to the post in August 1993. He is responsible for definition and development planning for new fields, joint ventures, acquisitions, and Shell's Nelson field interests.

Weener holds an MSc degree in experimental physics from the University of Groningen, Netherlands. He joined Shell International in 1976 and was subsequently posted to Nederlandse Aardolie Maatschappij, initially as a wellsite petroleum engineer and later as a reservoir engineer. He later held positions with Shell affiliates in Oman, Syria, and Norway.

Copyright 1996 Oil & Gas Journal. All Rights Reserved.