Product placement
  from: Asian Oil & Gas
  by: Terry Knott
  Friday, June 06, 2008

Designing subsea risers and their associated hardware – components critical to the success of deepwater projects – requires highly skilled engineers. Now, the proliferation of risers has given one leading designer the opportunity to spin off an independent riser products company focused on supplying a complementary service to the industry. Terry Knott digs into the background with 2H Offshore.

If there is any truth in the old adage ‘nothing succeeds like success’, then it is certainly borne out in the rise of 2H Offshore Engineering. Since being set up in 1993 by two engineers who saw an emerging and somewhat specialised need for the design of deepwater risers, the company has gone from strength to strength, having had a hand in most of the industry’s pioneering deepwater projects, including today’s highly demanding ‘mega projects’ involving both catenary and free standing risers – Total’s Girassol, ExxonMobil’s Kizomba and BP’s Thunder Horse developments, to name but some.

The success story would appear to be continuing. Earlier this year, news came that 2H had confirmed a major riser design contract offshore Angola, a multifield development in up to 2500m of water requiring an anticipated 27 free standing single line offset riser (SLOR) systems.

Having taken 2H to a position of arguably being the industry’s leading independent riser engineering company – around 70 qualified and experienced engineers now work in the company’s expanding headquarters in Woking in the UK, with a further 70 in Houston, Rio de Janeiro and Kuala Lumpur -– the time has come to translate this success into providing an additional and complementary service from the Acteon Group, parent company to 2H, as Steve Hatton, co-founder and managing director of 2H, explains.

‘When 2H is engaged on a riser design project, we are able to design the complete riser system from the seabed up – not only the riser pipe but also the associated components, such as joints, connectors, tensioners, buoyancy, coatings and handling tools – and integrate all the packages. If done well, this is a good business with a good margin, and we will continue to expand this service, along with our riser integrity monitoring business.

‘But from the start we’ve always had a desire to supply the hardware content too – the components of the system, the products. By being an independent company offering to engineer, procure and construct (EPC), we believed we had a winning strategy which would allow us to go to the best hardware suppliers to procure the required equipment manufactured on behalf of the client. We’ve had some success in doing this, but not to the degree we had hoped. The reality is that the market we operate in places constraints on what we can do.’

The constraints he refers to centre largely on the fact that the ultimate clients – the operating oil companies – generally want to include the installation of risers into the EPC contracts, thereby shifting the contracting strategy focus toward EPCI and the ‘big boys with the boats’ – the likes of Acergy, Heerema, Saipem, Subsea7 and Technip.

‘We work with these large companies for riser integration on a project by project basis, and they are often our direct clients,’ adds Hatton. ‘But understandably they are very focused on their installation asset – the vessel. Maintaining control of the riser supply process is critical to them as it carries the risk that if the riser is late, their warranty to the oil company is threatened, and the vessel might be put on hold too which clearly carries a cost penalty. Consequently, in such relationships, 2H is asked to engineer the riser, but not procure the hardware.We’ve pushed back against this on occasion, but it doesn’t make for the most comfortable contracting relationship.’

Backed by Acteon Group and motivated by a determination to find a way to grow and diversify the business, 2H set out to find a solution which would enable its designs for riser hardware to reach the market.

‘Selling engineering manhours is relatively low risk but hard work, and training and keeping a large number of high quality people requires constant focus,’ notes Hatton. ‘In today’s market you can lose your assets easily through poaching by other companies. By comparison, supplying hardware is higher risk but can be managed by fewer people, and holds the potential to do business with a much larger turnover – an order of magnitude larger and with greater margins.’

The upshot is that Acteon, spearheaded by 2H’s efforts, has set up a new company named Subsea Riser Products (SRP), to design and supply the industry with just that – a range of new riser products.

Launched in February, SRP, once fully established, will operate independently from 2H, offering a catalogue of riser products to the industry and bidding these to clients looking for solutions to the many ancillary items of hardware that accompany offshore risers.

The products that will underpin the SRP catalogue will initially be those based on existing hardware designs from 2H and other companies in the Acteon Group, notably from Claxton Engineering and UWG in the UK and InterMoor in the USA.

‘We’ve been at the coalface of riser design and system integration for years, and believe we know what is needed and where there are gaps in the market,’ Hatton points out. ‘While we have not been able to use these ideas due to our contractual position, they have been filed away. Now these can be transplanted and become available through SRP, along with other hardware solutions and technology “cherry picked” from around the Acteon Group.’

But he is quick to stress that 2H and the other companies will be independent of SRP, and must be seen to be so. The riser configurations designed by 2H will not be detailed such that SRP products are favoured – just as now, key components will have a functional specification that must be met, generating a competitive requisition package which enables a client to shop around for the best solution. He believes this balance of independence can be achieved, and points to the fact that the industry already supports several companies which have both engineering and supply sides in their groups without independence being compromised – Genesis and Technip, Intec and Heerema, ODE and Saipem among those that quickly come to mind. His confidence is further bolstered by the fact that several operating companies have already expressed support for the move to set up SRP.

‘Divorcing SRP from 2H is a fundamental and necessary step,’ he emphasises.

Flexible supply

In the move to establish SRP – which is currently based in Woking, in separate offices from 2H – Acteon Group recently acquired a small local engineering company, Precision Engineering Design (PED), which specialises in mechanical designs and the design of machinery to make component parts. PED employees have worked closely with 2H design teams under subcontracts over the years and the two companies are well known to each other. The PED team will transfer to SRP and form the backbone of the new company, bringing their know-how in mechanical design and manufacture to bear on a new product range.

Significantly, SRP will not have its own manufacturing capability, a deliberate part of the equation, says Hatton.

‘An increasingly important requirement in a number of the deepwater regions where the big projects are – for example Brazil and Angola – is the need to exhibit local content in the supply of equipment. Many of the products that are being offered by SRP lend themselves well to local manufacture, and this will be a consideration for any new ideas that come into the company.We don’t want to be tied to one manufacturing base, and this flexibility will also deliver a competitive edge when local supply is a driving factor in the client’s tendering and selection process.’

While SRP is a new name on the block, 2H has already been actively discussing manufacturing options with companies in other countries, for example in Angola, to provide a range of services relevant to riser product fabrication including welding, machining, pressure testing and NDT inspection.

Before delving into the details of 2H’s own concepts for new technology on the riser scene, Hatton makes reference to the good fit SRP will have with other companies in the Acteon Group too. In the UK, among its operations, Claxton Engineering in Great Yarmouth is very active in the supply of drilling risers, tensioning systems, connectors, clamps and a host of other components as part of its catalogue of products to support North Sea drilling. Many such equipment items are owned by Claxton and rented for the duration of a contract. Both Claxton and 2H have innovative designs for these hardware components that will be transferred to SRP, which in turn will offer a design and build service to companies such as Claxton.

Another opportunity where SRP could build on the synergies existing within Acteon resides in InterMoor in the USA. The company is a recognised leader in the design, manufacture and installation of suction piles for mooring lines, built in its facility in Amelia, Louisiana. A version of the suction pile for risers could be designed by SRP and built by InterMoor, for sale into the riser industry.

‘There are several attractive opportunities like these we have identified,’ notes Hatton. ‘But if 2H is in a position of sourcing an item of hardware, we will go to a range of suppliers – if SRP can’t do it, or are not competitive, we’ll go for the best solution elsewhere. There may be a dotted line between 2H and SRP to begin with, but the company will have to develop its own business plan, capability and profitability in due course and stand on its own two feet.’

Injecting innovation

Taking a closer look at the innovative products that 2H will be transferring to SRP suggests that it will not be too long before the company is indeed standing on its own two feet. Hatton identifies three riser components that are already designed and ready to go.

The first of these is a patented design dubbed as Shrink-fit, a flange or other connector which is shrunk onto the end of a pipe joint.

When dealing with very high pressures in drilling risers the conventional way to handle this is to have a BOP at the seabed, enabling the riser up to the surface to be designed for lower pressure. If the riser pipe is made strong enough to take the high pressure, say 10,000psi or more, the joints of riser pipe must be very thickwalled, perhaps 40-70mm, resembling ‘gun barrels’.Welding normal flanges onto these is extremely difficult to ensure acceptable weld properties and fatigue performance.

‘2H has developed a method,’ explains Hatton, ‘whereby thinner walled pipe made from high strength steel – which is not weldable – can be used for the pipe and fitted with the purpose-designed shrink-fit bolted flange to create a lightweight high pressure joint. This means you can more easily take advantage of the benefits offered by a surface BOP, which holds attractions for some of the future shallow and deepwater fields.’

Though the Shrink-fit concept is new to the market, it has already been earmarked to make its debut in drilling operations to be carried in the North Sea next year. According to 2H, the pipes will be manufactured in France, the flange will come from Italy, and the shrink fitting will take place in Sheffield in the UK. A second application for Shrink-fit could soon follow for another North Sea drilling riser.

The manufacturing process also lends itself well to taper and tension joints – the joint sections at the top and bottom of risers that are tapered in order to control stresses and meet strength and fatigue requirements. Currently taper joints, typically 10-12m long, are machined from solid bar, including the flanges at each end. This is a costly process, involving complex heat treatment and machining. If Shrink-fit flanges are used, the cost is reduced by being able to start with a much smaller diameter forging as the flanges can be added to the tapered joint afterwards.

‘This is precisely the type of hardware design and supply process that will in future be controlled by SRP,’ explains Hatton. ‘Shrink-fit will be in the SRP catalogue. Riser joints made in this way will be more competitive than the welded approach. In some applications the technology could be the enabler for the entire riser system.’

The second new idea moving from 2H to SRP is another patented concept known as Link-Latch, which has already reached the prototype testing stage. The device is an articulated latch which can be located at the bottom of a free standing riser to attach it to the pile at the seabed, while permitting some movement between pile and riser. According to Hatton, the current hardware solutions available for this duty are quite sophisticated designs employing elastomeric flexible elements, designed for very high loads, with high price tags and lead times to delivery of 18 months or more.

‘In reality the loads experienced at the base of a SLOR are relatively small, say around 150t, and deflections are not large, perhaps up to 16°,’ observes Hatton. ‘We have come up with a design that is more suited to these requirements, which is much simpler, cheaper, and easy to manufacture in many locations around the industry, for example in Angola.’

Essentially Link-Latch consists of two oversized chain links contained in a two-part housing joined by a bellows. The housing is designed to stab into a receptacle on the riser base and automatically lock, with a secondary mechanical lock also being applied – the links permit multidirectional movement, surrounded by the bellows. 2H believes the compact design also offers better technical performance than existing devices, and is fully instrumented to provide data on tension, wear rates, angles and motions and fatigue summation. The company has conducted extensive calculations on the design and its components – the Link-Latch is rated for a 200t operational load and 2000t proof load, giving a very adequate safety margin – and has completed small scale testing.

Link-Latch is currently being made ready for testing on the full scale, using a prototype manufactured by Shepcote Engineering in Sheffield based on two 134mm diameter links of Ramnäs chain each about a metre in length. The latch will be put through its paces in a £250,000 purpose-designed test rig to simulate 20 years’ wear in a two-month trial. 2H is currently in talks with operators for funding of the exercise. If the results are positive, the short lead time to manufacture Link-Latch could make it a contender for several upcoming projects, says Hatton, with the units being supplied through SRP.

The third trademarked product is another articulated joint, Trunnion- Latch, this time of higher capacity for attaching a buoyancy aircan to the top of a free standing riser. For this, 2H is supplying to SRP the design for a trunnion connection based on the longproven proprietary Orkot propeller shaft bearing used in the marine and shipping industries on large ships. For application in subsea risers, the 2H-designed joint, which comprises water-lubricated PTFE bearings, is compact – about 1.6m high and weighing 3t – with a 1000t axial operating load capacity and the ability to deflect up to 25°. Simple design and construction allows the Trunnion-Latch to be manufactured from readily available plate and bar stock materials reducing lead times and offering flexible manufacturing routes.

Hatton points to the fact that Orkot bearings are already used in similar applications on the Kizomba A/B project, and highlights the advantage in local manufacture offered by the design.

‘You could argue that it’s a bit of an agricultural solution compared to current elastomeric designs but it is fit for purpose, quick to manufacture and can be made in-country.’

The combination of cost, schedule and local content, not only in this joint but in all subsea riser product solutions, are what he sees will be a major factor in helping to get SRP off the ground.

‘Clients come to 2H and ask which is the best subsea riser solution for their projects. They explain the schedules, the risks and their preferences, and these vary greatly. But they all say they want to get the schedule and cost down. The new products and technology available through SRP will help them do this.’

If Hatton is right, it should only be a matter of time to test if the old ‘success’ adage has also rubbed off on SRP. AOG

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