Rankin beds in for NWS hub role
  from: Asian Oil & Gas
  by: David Morgan
  Thursday, August 24, 2006

If you're hoping for a spare bed on Woodside's 22-year old North Rankin platform dream on. With platform drilling currently under way, a raft of life extension and associated field developments in the offing and its ongoing 'regional hub' status now assured, all 145 of the platform's beds are occupied and look set to stay that way for some years to come. David Morgan reviews current activity and future plans on the North West Shelf.

Woodside is one of six equal partners in the North West Shelf Venture - the others being BHP Billiton, BP, Chevron, Japan Australia LNG and Shell - and it is variously described within the Perthheadquartered company as its 'backbone' or 'heartbeat'. The North West Shelf (NWS) accounts for some 75% of Woodside's revenues, last year alone generating overall project revenues in excess A$10 billion and in turn contributing A$1.2 billion in royalties and taxes to federal and state coffers.

And with global LNG markets setting the pace, and China's Guangdong terminal having recently joined the NWS Venture's traditionally Japanese and Korean customer base, the race is on to bring forth matching additional gas supplies from the Woodside project pipeline. Some of these projects, for example phase one of the A$900 million Perseus gas/condensate field development and the A$1.6 billion Angel project, which will include the NWS' third fixed platform, are already committed and advancing rapidly.

But there are plenty of other business capture opportunities in the pipeline and, with Woodside having contracted the Ocean Bounty and Sedco 703 semis for NWS work following a three-year exploration drilling hiatus, the chances are this list will be longer still by year-end.

The pace at which onshore gas demand is currently pulling offshore projects forward can be seen in the anticipated doubling of the capacity of the NWS gas plant near Karratha in little more than five years. For more than a decade after the 1991 start-up of its first three trains, the plant's LNG production capacity remained 7.5 million tonnes per annum (mtpa). Today that figure is nearly 12mtpa and by the end of 2008, following last year's go-ahead for a A$2 billion fifth train, it will rise to 16mtpa.

Woodside's North Rankin platform, brought onstream in 125m of water in 1984, played a pivotal role in opening up the North West Shelf resource and is now set to do likewise as the hub for upcoming developments in the area. Shrugging off well-documented piling problems at the installation stage attributed to the region's tricky calcareous soils, the first NWS fixed platform - it was joined by Goodwyn about 23km to the southwest in 1995 - has performed admirably well over its first 22 years. And life extension plans now taking shape envisage Rankin continuing in that successful vein for another 30 years.

'We pride ourselves on some very high reliability on Rankin,' enthused Dr Jack Hamilton, looking back over his stint as Woodside's director, North West Shelf Ventures [he left the company mid-June to become InterOil's president - see 'Appointments', page 52]. 'Despite its age the platform still runs with an uptime, including planned and unplanned, well in excess of 98%.' Facilities were recently added for remote monitoring of these performance levels, which Hamilton attributed to 'very close attention to maintenance and very strong planning functions'.

Even the substantial onboard integration work associated with the installation of the second NWS trunkline - a hugely successful project in its own right which came in A$113 million under budget and ahead of schedule and late last year won Australia's coveted Sir William Hudson Award for engineering excellence - left Rankin unfazed. 'With its offshore and onshore components, that 72-hour shutdown was certainly the most complex we had ever managed, but it was done without missing a beat,' said Hamilton.

Significant ongoing work is expected on Rankin for the next five years, with the conscious decision having now been taken that Rankin will stay at the hub of NWS operations and remain so to 2035. Spending on Rankin life extension is expected to be around A$300 million over the next 3-4 years, probably approaching A$1 billion over the next ten years and embracing a whole series of investments to enable Rankin to fulfil its hub role.

First up is work associated with the NWS Venture's new Angel production platform to the east, which will have three subsea wells tied back to Rankin via a new 50km subsea pipeline. About A$150 million of the anticipated A$1.6 billion Angel programme spend is allocated to rebuilding the Rankin control room, upgrading its control systems and improving power generation reliability, some of which Woodside planned to do anyway and some because Angel has now entered the equation.

Although relatively straightforward structurally, Angel, unusually both for Woodside and for a platform this size, is designed to operate in normally unmanned mode. Expected to be fully operational by Q4 2008 in 80m of water, the new platform will have drying and dehydration facilities but power and control will come from Rankin. Hydrocarbons will be produced through one processing unit with a capacity of up to 800mmscf/d and up to 50,000b/d of condensate. Angel's 7000 metric tonne (t) topside will sit on a 7500t jacket secured by eight drilled and grouted, piled foundations, each weighing more than 3000t. (In July, J Ray McDermott landed the US$200 million contract for Angel's substructure and pipelay installation.) Drilling of the three production wells is scheduled between Q3 2006 and Q2 2007.

Angel will have one of the largest and most complex process systems yet employed on a normally unmanned platform. Woodside will be looking to develop a campaign of intervention to try and build an uptime of greater than 96% with periodic campaign maintenance. In the early days one or two people will probably stay onboard, but the plan is to take them off and, using the limited accommodation there for short bursts, get it down to a monthly one-week maintenance cycle after a couple of years.

Another activity occupying a good deal of Woodside's attention at present - with a view to arriving at the financial investment decision (FID) late next year - is the long-mooted Rankin sister platform. North Rankin B (NRB) was originally seen as a second production platform but will instead be a compression platform, bridge-linked to NRA. Woodside, currently engaged in the concept selection process and studying compressor configurations, is now contemplating an end-2011 start-up for NRB. The topside floatover technique was pioneered in Australian waters and is now pretty well commonplace in the world's more benign offshore operating provinces. NRB is earmarked for floatover too and at 20,000t-plus will come close to the record for platform tonnages installed this way.

Meanwhile, the drilling of three extended reach wells from Rankin under the Perseus 1B project should be complete around September/October this year, facilitating development of the southern end of the Perseus field, a 1996 discovery with estimated reserves of more than 280bcm, around 6km away. A bigger sister project aimed at developing the northern end of the field, and known as Perseus over Goodwyn, is targeted for completion mid-2007. This involves four subsea wells tied back to the Goodwyn platform where the gas will undergo preliminary treatment before being piped to shore via Rankin and the second trunkline. Those two projects will almost see Perseus out, save for maybe two or three more wells under Perseus 1C currently envisaged for late 2007.

Close to completion on the Goodwyn platform, now out of gas recycle mode, is the modification of one of its trains to operate in low pressure mode. This too has been a major challenge for an operating platform, with Hamilton declaring: 'We've kept the platform up at 98% onstream time despite a significant reconfiguring of the train in the workscope, and it's all been done safely.' A short shutdown in May took care of most of the remaining work on Goodwyn. All that remains now is some tidying up in terms of Goodwyn/Rankin interface issues in readiness for late 4Q project completion.

Another prominent gas target in Woodside's opportunity portfolio is the Western Flank, under which the remainder of the NWS resource southwest of Goodwyn would be developed in three project phases at a total cost in excess of A$1 billion. The initial A$700-800 million phase, provisionally scheduled for completion around mid-2009, would see a pipeline extending out to the southwest and the development of between three and seven subsea wells.

The total planned activity programme around these committed projects and some of the production opportunities adds up to a spend close to A$10 billion - A$8 billion offshore and A$2 billion onshore - between now and NRB's anticipated end-2011 completion.

Oil in the balance
Although gas has inevitably dominated its activities in recent years, Woodside's attempts to 'shift the balance a little bit', in Jack Hamilton's words, have had a measure of success both on the North West Shelf and further afield. And in pursuit of this oil the company is developing world-class floating and subsea production expertise.

FPSO-type production facilities have become a particularly strong suit and by the end of this year Woodside will have four such vessels in service - Cossack Pioneer which arrived on the North West Shelf back in 1995, the Northern Endeavour (at work in the Timor Sea since 1999), Chinguetti, which started up offshore Mauritania this February and Nganhurra, due onstream at Enfield, Australia's deepest water oilfield yet, in Q4 this year - with a fifth - Vincent, in 1100ft of water off North West Cape in the Carnarvon Basin - already sanctioned for an expected 2008 start-up at an estimated first-phase cost of A$1 billion. Additionally, the company has a 50% nonoperating stake in another Australian FPSO-based development, BHP Petroleum's Stybarrow.

Enfield, in which Woodside has a 60% stake, is targeting about 100,000b/d production, Chinguetti (Woodside 47%) around 75,000b/d and Vincent (Woodside 60%) about 100,000b/d. With production from its Laminaria field in decline, the combination of these assets will add much-needed lustre to Woodside's recoverable oil reserves chart. They will also have the benefit of Woodside's hardwon, accumulated experience with its first two FPSO developments over the years.

According to Hamilton, the newbuild Northern Endeavour has delivered 'exceptional reliability, in the first quartile of benchmarking' in its remote Laminaria field location in the Timor Sea (AOG Jan/Feb 2000). Closer to home, the long-serving and much modified Cossack Pioneer, producing the Wanaea-Cossack and neighbouring Lambert-Hermes fields, continues to defy all projections as to its likely retirement date. Given its chequered early history - process issues obliged Woodside to take the vessel out of service for a major retrofit back in 1999 - Cossack Pioneer qualifies at best for an 'average' benchmark in today's overall reckoning of comparative FPSO performance and reliability. Recent production levels of the order of 120,000- 130,000b/d paint a rosier picture, however.

When Cossack Pioneer was put into service 2P reserves of 245 million barrels were expected; by the end of last year it had produced 320 million barrels and there was still believed to be some 225 million barrels to go.

With Laminaria's output through Northern Endeavour now down to around 20,000b/d compared with its 180,000b/d peak, Woodside admits that opex is now a 'very strong feature' of this FPSO activity and reckons it has already taken almost 50% of the routine operating cost out of Northern Endeavour.

Cossack Pioneer on the other hand is actually still running at or near full and the company sees things staying that way probably through to 2009. So at the moment the accent is on managing Cossack Pioneer's costs sharply but still on the basis of maintaining reliability; the question of actually sacrificing reliability for cost benefit in a trade-off has yet to arise. At Laminaria, on the Northern Endeavour, however, those 'considered trade-offs' are being made because of the capacity catch-up.

Recent studies undertaken by Woodside are expected to yield a decision in 3Q this year on Cossack Pioneer's likely life extension requirements. Modifications are already under way to accommodate gas compression/gas lift around the Hermes field. In addition, some 'two to three years of infill opportunity' are anticipated in the vicinity of Wanaea- Cossack. Field life at Cossack is going out to at least 2019 and the company is working out its strategies for running out to that duration.

Woodside's resumption of exploration drilling this year follows in the wake of a 3D seismic shoot which, for a few weeks at least in 2003 until the intervention of Chevron's Gorgon project, lay claim to being the southern hemisphere's largest. With the aid of the drill bit, Woodside now has its sights set on moving a mix of both gas and oil prospects into its regional production opportunities portfolio. The latter already includes a potential 60-80 million barrels recoverable NWS Western Flank oil development around the Dixon discovery, where appraisal drilling got under way in May in preparation for what is seen as a 'make or break' development decision. It will likely be joined by others this year as NWS prospects such as Pemberton and Persephone, both gas, and Homer East (oil), take their turn in the E&P crosshairs.

Set for subsea
One recent organisational consequence of Woodside's growing mix of production facilities at home and abroad has been the creation of a specialist subsea function within the company.

On the North West Shelf, the company currently has seven subsea wells but that figure is expected to climb above 23 by around 2012. Woodside has a frame agreement with FMC Technologies for the supply of trees, an arrangement which is reported to be working well and offers plenty of upcoming scope.

The recent reorganisation, bringing together subsea engineering expertise previously scattered throughout the company, is 'all about looking forward and recognising the benefits of pulling it together as a discipline', explains Woodside. 'With the amount of subsea production we'll be operating, in association with FPSOs and fixed platforms, this is becoming a core activity for and we need to focus on it.' AOG

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