session 6. 21-mar-14 sut-tamu subsea overview

© Endeavor Management 2014

An Overview of Subsea Systems

Photo: Oceaneering

SUT Subsea Awareness – Texas A&M University

March 21, 2014

Presented by Bruce Crager


SUBSEA IS A GROWTH INDUSTRY

• Over the long term, growing hydrocarbon demand coupled with the

depletion of existing onshore and shallow offshore fields will require

further drilling in deeper water and more remote regions

– While discoveries have increased over the past decade, they

continue to fall well short of production by a considerable degree. • According to IEA, 12 billion barrels were discovered in 2011 equating to

only 40% of the oil produced during 2011

– Oil companies are looking for the most impactful projects to add

reserves which are largely located offshore in deeper waters • Deepwater is the primary value creator for the oil & gas industry

• Most analysts expect robust deepwater/subsea activity as long as

Brent pricing remains above $85/bbl

– Brent oil price has averaged $110 over the last 12 months


Leading Indicators for Deepwater Business

• Floating Rig Construction – Record floater orders in 2011/2012 support strong growth through 2015

– Backlog at record levels; dayrates near record levels

• Subsea Equipment Projections – Subsea Tree Awards – strong growth projected through 2016

– SURF activity – strong projected growth to mirror tree awards

– Subsea processing is becoming an accepted technology

• Projected Capex – Quest projects double digit annual increases in Subsea Capex spending during

2013 through 2017

• Emerging Subsea Technology is Supportive to Deepwater Business – For aging fields, moving activities to the seafloor can lead to substantial cost

savings, while many marginal greenfield projects can become economic with the aid of subsea processing


Continued Growth in

Deepwater Oil Supply

• Due to the value creation opportunities in the deepwater, expect an

increasing share of global production to come from the deepwater, from

roughly 7% currently to around 12% BY 2030

Source: Wood Mackenzie

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Deepwater Drilling Expanding Rapidly

• New deepwater basins are being identified at a rapid pace

– Expansion is enabled by the significant additions to the floating rig fleet over the next several years

Source: Wood Mackenzie

New Deepwater Basins : 2012

Deepwater Basins : 2008


Global FPS Hull Awards by Type

Source: Quest Offshore Resources, Inc.


Marlim Field Layout in Brazil

Source: FMC Technologies


Intelligent Completions and Subsea Processing

Would Allow Oil Companies to Optimize the Entire

Subsea Production System

Source: Schlumberger


Global Subsea CAPEX Forecast spending 2013 – 2018e $72.2bn



Global Subsea Tree Awards Momentum Builds



Global Subsea Trees on Stream

by Decade With Average Water Depth



Significant Increase in Umbilical Activity

• Umbilical activity is projected to trend higher over the next 4 years, consistent with the upward trend predicted in subsea trees

• 2013 demand will be driven by South America, Africa and Australia

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Global (Steel Awarded) Global (Steel Unawarded - Mean Case)

Global (Thermoplastic Awarded) Global (Thermoplastic Unawarded - Mean Case)

Global SS Trees (Mean Case)Source: Quest Offshore Resources, Inc.


Worldwide Pipeline Demand 2007 – 2018



SURF CAPEX – Installation 2008 - 2015



Pipeline & Umbilical Installation Methods S-Lay Pipeline Installation

• During S-lay pipeline installation, pipe is eased off the stern of the vessel as the boat moves forward. The pipe is eased off the stern of the vessel as the boat moves forward. The pipe curves downward from the stern through the water until it reaches its final destination on the seafloor. As more pipe is welded in the line and eased off the boat, the pipe forms the shape of an “S” in the water.

Source: Quest Offshore Resources Definition Source: Rigzone


Pipeline Installation Methods J-Lay Pipeline Installation

• J-lay pipeline installation puts less stress on the pipeline by inserting the pipeline in an almost vertical position. Pipe is lifted via a tall tower on the boat, and inserted into the sea. The pipe only curves once in J-lay installation, taking on the shape of a “J” under the water. The reduced stress on the pipe allows J-lay to work in deeper water depths.

Source: Quest Offshore Resources

Definition Source: Rigzone


Pipeline & Umbilical Installation Methods

• Reel barges contain a vertical or horizontal reel that the pipe is wrapped around. Reel barges are able to install both smaller diameter pipe and flexible pipe. Horizontal reel barges perform S-lay installation, while vertical reel barges can perform both S-lay and J-lay pipeline installation. Reel pipe is lifted from the dock to the vessel, and the pipe is simply rolled out as installation is performed.


Reel Lay Pipeline Installation


Pipeline Installation Methods

• Tow-in installation is when the pipe is suspended in

the water via bouyancy modules, and one or two tug

boats tow the pipe into place. Once on location, the

bouyancy modules are removed or flooded with

water, and the pipe floats to the seafloor.


Tow-in Pipeline Installation


Market Summary: Subsea spending is growing

• Oil and gas recovery has over the last century gradually spread from land via coastal areas to deep sea.

• The continuous technology development has made it cost efficient to recover all from deeper reserves, in deeper waters and further from shore.

• Investment in subsea installations is in many cases lower than a platform solution, and this is the reason why subsea solutions are expected to see a rapid growth in the coming years.

• There is extensive offshore activity on all continents.

– Main established geo markets are the North Sea, the Gulf of Mexico, Brazil, West Africa and South East Asia.

– Other market include East Mediterranean, Canada, Sakhalin area, Indian subcontinent and the Arabian Gulf.


Overview of Subsea Processing

Source: FMC Technologies


Types of Subsea Processing

• Subsea Boosting (including pumping)

• Subsea Raw Water Injection

• Subsea Separation and Processing

– Includes HIPPS (High Integrity Pressure

Protection Systems)

• Subsea Gas Compression


Benefits of Subsea Processing

• Increase a well’s recovery rate to enhance

project economics (greenfield and brownfield)

• Moves “boosting and processing” to the seafloor

from the surface (platform or floating production

system topside)

• Reduce topside weight

• Can allow production from subsea to shore


Slow Acceptance of Subsea Processing

• Oil and gas industry typically requires 30 years

for new concept to reach 50% market penetration

• Much of the worlds’ offshore production is still

produced to fixed platforms in less than 1,000 ft

of water

• Oil company and service company R&D

programs have been reduced over the years

(mergers as well as market downturns)


Most Likely Subsea Processing Opportunities

• Deepwater - Generally in excess of 2000 ft

• Large Subsea Developments - Usually producing to

a floating production system

• Major Oil Companies who have already tried

subsea processing

• Geographic areas having the above criteria

–Expected to be Brazil, GoM, W. Africa and North

Sea


Subsea Processing Market Has Been Largely

Dominated by Brazil, West Africa, and

Norway

Source: INTERTECSEA , Morgan Stanley Research


Subsea Processing Around the World:

Projects That Have Been Awarded

or Highly Talked About

Source: INTERTECSEA , Morgan Stanley Research; in this chart pilots refer to a number

of first technology installation installed on a relatively small scale


Drivers for Subsea Boosting Technology

• Reservoir Advantages

– Increase ultimate recovery by lowering abandonment pressure

–Enable oil recovery from low pressure reservoirs

–Enable oil recovery for low quality fluids

–Enable oil recovery where otherwise not possible

– Increase drainage area per well Source: INTERTECSEA - Worley Parsons Group & Offshore Magazine



• Production Advantages

– Increase production rate by reducing the flowing

wellhead pressure

– Dampen slug flows to host topsides and possibly

reduce process upsets

– Reduce OPEX by reducing recovery time (shorten

life of the field)

– Offset high friction pressure losses in flowline due

to fluid viscosity

– Offset elevation high pressure loss

Source: INTERTECSEA - Worley Parsons Group & Offshore Magazine



• Facilities Advantages

–Extend subsea tieback distance range for a

field

–Reduce CAPEX on topsides equipment and

pipelines



Green Field Subsea Boosting

LOF Boosting - Unconstrained


Illustration is Courtesy of BHP Billiton


Brown Field Subsea Boosting

LOF Boosting -Constrained


Illustration is Courtesy of BHP Billiton


Subsea Boosting Projects To Date

Source: INTERTECSEA , Morgan Stanley Research: note, some projects shared by two

manufacturers, in which case each was attributed half a project


Drivers for Subsea Water Injection

• Eliminate topsides water injection handling

equipment

• Eliminate water injection flowlines



Subsea Seawater Injection and Treatment



Drivers for Subsea Separation

• Minimize topsides water handling

• Hydrate control by removing fluids from gas stream

• Increase hydrocarbon production volume

• Decrease total boost system power requirements

• Accelerate and/or increase recovery

• Improve flow management and flow assurance

• Reduce CAPEX on topsides processing equipment and flowlines

• Reduce chemical treatment costs

• Improve economics of the field with low GOR, high viscosity and low permeability



Subsea Separation Projects Have Been

Awarded at a Pace of About 1 Per Year

Source: INTERTECSEA , Morgan Stanley Research: note, some projects shared by two

manufacturers, in which case each was attributed half a project


Subsea Separation Types

Gravity Separation Systems



Subsea Separation Systems Market Share

of Eight Installed/Qualified Systems


Subsea Separation System photo source: FMC Technologies.


Drivers for Subsea Compression Technology

• Increase subsea tieback range for a field

• Improve flow assurance issues

• Eliminate the need for a fixed or floating offshore

platform

• Enabler - without the technology the field could not be

economically and/or technically developed --(i.e. gas

subsea tieback – under the ice in the arctic regions) Source: INTERTECSEA - Worley Parsons Group & Offshore Magazine



Subsea Gas Compression Worldwide Survey – Subsea Processing


Subsea Compression Projects Have Longer Step-Out

Distances and Benefit When Reservoir Pressure

Becomes Too Low to Carry the Gas Across

Source: INTERTECSEA , Morgan Stanley Research


Subsea Power and Transmission Technology


Subsea HV Multi Circuit Breaker 60 MVA Subsea Transformer


Market Potential for Subsea Processing

(Based on award dates)

• Current estimates of $400 million in 2012

($200 million hardware and $200 million installation)

• Estimates of $2.6 billion in 2015

($11.3 billion each)

• Estimates of $8.1 billion in 2020

($4.1 billion each)

Source: Morgan Stanley Research


More Information Available

• Subsea Processing Poster :

– CLICK: Offshore Map Posters - Subsea Boosting 2013

– URL: http://www.offshore-mag.com/content/dam/offshore/maps-

posters/SubseaBoosting-022113.pdf

• Subsea Processing Videos :

– CLICK: The Best of Subsea Processing Videos on “You Tube”

– URL: http://www.offshore-mag.com/content/dam/offshore/print-

articles/Volume%2073/07/SS-PROCESSING-MAR-2013.pdf

http://www.offshore-mag.com/content/dam/offshore/maps-posters/SubseaBoosting-022113.pdf













http://silverdownloads.com/file-viewer/?si=www.free-power-point-templates.com&gclid=CPPFtJ-_l7kCFfFj7Aod7HYAOA

http://www.offshore-mag.com/content/dam/offshore/print-articles/Volume 73/07/SS-PROCESSING-MAR-2013.pdf














Other Information Resources



Subsea Processing Conclusions

• Subsea processing has been very slow to be

accepted by industry, but is now a huge growth

market

• While there are a few key suppliers, these are

supported by a number of other high tech

companies

• A few key Customers will lead, but others will follow

as the industry accepts the technology


Summary

• Subsea is a growing subset of the offshore oil and gas industry

and offers excellent career opportunities. These include:

– Field architecture planning and systems design

– Hardware design and manufacturing

– Installation activities, including vessel design and operation

– Project management and offshore project supervision

– Operators (oil and gas companies), especially those who are

continually pushing the envelope using subsea

• Subsea is still a relatively young industry and will be a significant

industry segment for the future, especially for deepwater.

• The demand for new personnel to enter the subsea industry is

excellent for the foreseeable future


[email protected]

session 6. 21-mar-14 sut-tamu subsea overview

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