Pyrenees plum puts new pairing on the map
  from: Offshore Engineer
  by: David Morgan
  Wednesday, April 09, 2008

One of the more audacious assaults on the market domination of the ‘Big Three’ installers of subsea umbilicals, risers and flowlines (Surf) came recently with the unexpected pairing of flexpipe manufacturer Wellstream and vessel owner Sea Trucks. Their Seastream JV offering has plenty of hard-headed offshore industry logic behind it and, as David Morgan reports, has already beaten the big boys to a plum Australian ‘supply and install’ contract.

The launch of Seastream, a non-incorporated joint venture to provide global flexible pipe based Surf installation capabilities utilising Sea Trucks’ latest Jascon newbuild vessel fleet, was announced early June. Gordon Chapman, CEO of UK-headquartered Wellstream International, described it as ‘a unique joint venture which enhances our business portfolio’. Sea Trucks president Jacques Roomans, whose company was among West Africa’s early oilfield/marine services pioneers in the late 1970s, said the new JV would ‘continue to challenge existing contracting practices’, adding: ‘We want to ensure that we engage the customer to find the optimal technical solution which is most cost effective.’

Within a month, the two were also celebrating the JV’s maiden contract awards, from BHP Billiton for the Pyrenees development offshore Western Australia (OE last month). This development covers three separate fields – Crosby, Ravensworth and Stickle – all to be tied back to a Modec-supplied FPSO in water depths of 250m.

Worth over £100 million in total, these contracts cover the supply of approximately 60 normalised km of flexible risers and flowlines, scheduled for delivery in 4Q 2008, and associated installation work. The latter will be undertaken by Seastream, with responsibility for the installation and pre-commissioning of the complete subsea system including the FPSO turret and moorings, subsea manifolds, mid-water arches, flowlines and risers, umbilicals with associated flying leads, and tie-ins to the pre-installed tree flow bases.

Most of this offshore installation work will be undertaken by the new DP3 pipelay/hook-up vessel Jascon 25, scheduled for delivery in April 2008 – the first of five new vessels commissioned by Sea Trucks for delivery between 2008 and 2010.

For the most part these vessels will be based on the design of the Jascon 5, a construction barge whose offshore functionality in the field more than compensated for the absence of classically sleek, ship-shape lines. Indeed, so impressed was one of its first customers, the Iranian Offshore & Engineering Company (IOEC), that it bought the vessel and retained Sea Trucks’ services for its crewing and procurement services (OE August 2006).

A key new ingredient in the newbuilds will be the addition of a fully modularised pipelay suite to facilitate the interchangeability of rigid S-lay and flex-reel equipment as project requirements dictate.

‘In principle, we will be able to do both rigid and flexible pipe in one project,’ points out Sea Trucks marketing manager Corrie van Kessel. ‘This is a quite unique strategy,’ she adds. ‘It will be a very good thing for the Surf market and for Seastream because it’s not a matter of exclusivity between our two companies. We go on a project basis, and obviously the vessels are also suitable to do lots of other things.’

The new vessels will also have all the hallmarks of the successful Jascon 5 design in terms of significant deck space and accommodation and big craneage. ‘The cranes onboard Jascon 25 and sister ship Jascon 34 will be able to handle 800t at 30m, not common in vessels of this type,’ adds von Kessel. ‘The bow on the 25 and 34 is more shaped, but many of the learnings of Jascon 5 have been fed back into the design of the newbuilds. The combination of all these features will provide a true multi-task platform to execute major projects.

‘With the deck space available on our vessels we think we can keep them in an area without having to mobilise that often, unlike dedicated reel-laying or S-laying vessels,’ she adds. ‘Those vessels will typically travel at 12-13 knots, whereas the Sea Trucks vessels will not achieve such high speeds, so we’re very much aware that we will have to establish some sort of regional network for our vessels.

‘Wellstream will bring in their specialist knowledge and equipment on the pipelay side and that is what we are working on now – integrating that equipment in time for the first installation project in 1Q 2009.

‘We really think that with this concept Seastream has enormous potential over the next few years,’ adds von Kessel. ‘And we have had a very, very good reaction from the market itself.’

The Seastream strategy

The Seastream partners have now started building up their first project office in Perth,Western Australia, where Wellstream has maintained an office for the past five years. Globally, Seastream activities will be centred in Houston, and supported from Sea Trucks’ new marine base in the UAE, where Sea Trucks is in the process of establishing its main offshore contracting base at its portside location in the Hamriyah Free Trade Zone.

A familiar name among the principal architects of the Seastream strategy is that of Kevin Wood. Now senior vice president, business strategy, with Sea Trucks and based in Dubai, he was for many years a stalwart of Stena, then CSO, where he became a corporate VP on the Paris-based executive team, responsible for the US, European and Asia Pacific markets, prior to the merger with Technip.

Before moving up the corporate ranks he was very much a general manager of business on the ground in Asia and later for the Australian business, the Clough Stena JV and subsequently the CSO Australian business which revolved around the (then) new CSO flexible pipe factory in Perth. During those 15 or so years, he was to experience at first hand the growth of what was really a diving and DSV based business into something much larger, which required a far greater quality/quantity of engineering and project management skill than the original North Sea style diving business had demanded.

These are Kevin Wood’s thoughts on the provenance of the Seastream strategy and where he sees it going from here.

‘Today’s major Surf installation companies evolved during the 1990s from their origins as diving companies. They began to take on larger and more complex marine construction tasks such as FPSO moorings installations and related Surf installation, and this work was taking them way beyond the North Sea where their main fleet resources and project management teams were based to deliver the bulk of the company’s revenues and utilisation.

‘So, they began to work internationally with strong locally based JV partners, who were usually not from the subsea business but were in fact seeking to enter that market. These partners would provide much of the project management and engineering resource. The individuals assigned to such projects may have spent their careers in mining, bridge building or the like.

‘This meant fresh minds began looking at subsea installation problems in a nonclassical way and I believe this “zero based” engineering approach enabled us to perform significant offshore construction tasks using a small and rather basic DSV as the key installation spread. In remote markets such as Australia it was never an option to charter a heavy lift vessel for a single lift, an alternative method had to be found.

‘We were very successful with this and looking back we did achieve a great deal using comparatively small vessels as the only construction spread. If you think about it, a typical small-sized FPSO uses about 10-15,000t of subsea equipment in the form of moorings, flexibles, anchors, piles, manifolds and so forth, and to get all that in the right place using a former DSV with a 100t crane is quite an achievement.

‘However, it became clear that the market needed to move on. This was not only driven by the emergence of the true “deepwater” market requiring much larger tensions and ever larger quantities and weights of equipment, but also by the recognition that the process of performing such work from vessels designed for something much less was becoming marginal both operationally and in safety terms. It was also clear that if one could size up the installation equipment, there were considerable savings available or profits to be retained. ‘Most of the new business we were looking at, say, five or six years ago was in remote parts of the world and logistical costs were a very large part of the overall cost of installation. For example, it can often take longer to re-load a vessel with flexibles, sail from and back to site etc, than it takes to lay the same flexibles at the site.

‘I began to look at this in terms of possible vessel conversions. The basic requirements were to have a large free deck space, and a large crane, with DP. In 90% of this emerging market, weather conditions were not a major driver. However, such vessels were likely to cost well in excess of US$80 million to build and as the market at that time was not as it is today, there was a sensitivity factor which had to apply when looking at introducing new tonnage. This commercial factor was more compelling when you considered that in these emerging remote markets, utilisation demand was not constant or year round. Typically you would see “one and a half” projects every two years in markets like the North West Shelf, or indeed,West Africa.

‘This demand has increased today but I would say it is still not uniform or constant. So, when promoting the idea of significant capex for such new ships, one had to look also at utilization. Transiting around the globe is really a last resort. First, it is very unrewarding; at best you would earn your dayrate alone, and often a competitor vessel would be already “in market” and able to compete far more aggressively. Indeed, in most remote markets, and Asia Pacific in particular, you had to position your vessel and leave it there to manage schedule slippage and to meet the commercial demands.

‘In the original business model in this emerging Surf market utilizing DSV style vessels it was possible to “trade down” such vessels into the simple diving market to gain utilization when the ships were not working on premium Surf projects. This at least paid to retain the vessel in market. However, when contemplating this new tonnage, a different type of utilization needed to be found to retain these more expensive and newer/larger ships in market.

‘The obvious trading territory was to look at the “conventional” pipelay and construction market. This involved laying steel pipelines, normally concrete coated, at continental shelf depths of typically 100m, usually in benign sea conditions. The work involves nothing very demanding and the technology and assets generally employed for it have not moved on much since the late 1970s.

‘As we studied this market, we began to model up the possibility of combining rigid S-lay systems with the basic deck, DP and crane layouts of “jumbo” Surf vessels, and we could see that it was possible to combine the two markets very effectively. The conventional pipelay market was a high volume market, albeit with lower profit potential.We also identified that certain projects could be optimized by using a combination of rigid and flexible flowlines, and such a mix might be possible if only one main construction vessel was being mobilized to site, rather than two.

‘However, pretty much everyone else in the strongly developing Surf and deepwater segments had made strategy decisions leading, quite logically, to the dedication of efforts and capex into the deepwater pipelay market. Furthermore, the marine engineering culture which prevailed at the time was evolving from the more typical North Sea ship-style designs rather than the relatively crude barge-shaped designs which were ideal for the “Hybrid” vessel plan. Any attempt to build a ship-shaped vessel with dimensions and capacities required by the hybrid design would mean the cost exploded and the business plan was bust.’

Parallel thinking

Quite by chance, Sea Trucks, whom Kevin Wood would subsequently join, had been thinking along parallel lines while progressing the design and construction of its Jascon 5 newbuild.

‘This vessel was designed really from the perspective of a contractor wishing to build a state-of-the-art vessel to tackle the conventional pipelay and construction market, for which little if any new tonnage had been built for at least 15 years. The original idea was to produce a new and efficient version of the classical pipelay/derrick barge. However, Sea Trucks’ decision to make the vessel DP3 meant it had a great potential to work in the Surf market, and even support deepwater projects, perhaps as a secondary spread.

‘Jascon 5 was a milestone vessel in the industry. She has a very large working deck, capable of installing say 15 flexible pipe reels in a laying configuration. She has accommodation for over 350 personnel in modern and comfortable conditions. The 800t crane, whilst not subsea capable, is able to overboard heavy subsea lifts and submerge below surface to then connect the lift to a deepwater winch. In addition to these basic features, the vessel is DP3 and has a rigid pipelay capacity from 4in-48in using the accompanying stinger, which can be raised or lowered and does not need disconnection for transits.

‘This vessel was delivered in 2002 and was an immediate success. The vessel has been fully utilised and offers tremendous market flexibility. It is important to stress that this flexibility comes at a relatively modest price whereby the vessel is easily able to compete with the very old and perhaps now endangered fleet of anchored pipelay barges. The fact she lays rigid pipe on DP helps with efficiency and cost reduction both by removing the need for anchoring assistance vessels, and because she can rapidly reposition and relocate around the field to initiate, abandon, perform riser installations, handle pipe crossings and so on.’

Looking forward

According to Kevin Wood, the availability of five major spreads with such capacities and performance capability obviously constitutes a fleet capability with international ambitions.

‘In our business model, transit time on long ocean voyages is an economically unproductive use of such assets,’ he explains. ‘Additionally we believe that schedule interface issues arise which either cost the customer, or reduce profit potential.We believe our vessels have the capability to multi-role between the Surf market, the conventional rigid pipelay market, the general field construction and maintenance market (in both deep and shallow water) and the offshore accommodation market, particularly in deepwater locations.

‘Consequently we are planning to permanently locate vessels into individual market areas with the intention of building a long-term presence in the main geographical areas where we see the best potential. At present, such target markets include Australia and Southeast Asia, India and the Middle East,West Africa, Brazil and the Gulf of Mexico.

‘We are able to offer a new and exciting business plan, propelled by a very significant fleet of new vessels with specifications that, to many people on the ground in our segment of the business, make a great deal of sense and are indeed long overdue (see panel).We do not underestimate the task ahead but we are of the view that our vessel specifications will offer a far higher degree of “technical certainty” in comparison to either the ageing fleet of DSV-derived Surf vessels, or, the even more ancient fleet of anchored pipelay and construction barges. These new tools cannot replace strong project management and engineering skills, but they will certainly help remove the need for marginal engineering and construction practices which we feel still prevail in many markets today due to the use of vessels which were not designed for the tasks at hand.’ OE

Vessel specs

Specifications for the latest newbuild additions to the Jascon vessel fleet, all of them being built by Sea Trucks using shipyard facilities in China and Southeast Asia, range in size from a length of around 120m to 160m.

Pipelay, crane and accommodation sizes vary but, in addition to DP3, these are some of the common features running through the fleet:

A working deck which extends beneath the accommodation superstructure, or twin working decks, enabling permanent installation of heavy and fixed rigid pipelay equipment in such a way as the working deck aft of the accommodation superstructure remains clear, or can be cleared temporarily with minimal cost and in short time.

Comfortable, well serviced accommodation for at least 350 people with appropriate mess and office facilities.

A main crane of not less than 300t, upgradable in most cases by way of designed strengthening of the hulls to accommodate either larger cranes or possibly J lay facilities. Maximum crane capacity as planned is 1600t. Certain vessels will also have deepwater cranes suitable for ¨C3000m with heave compensation. Additional auxiliary cranes will be provided.

Interchangeable stingers, with one deepwater stinger to be delivered.

A+R winches suitedto general subsea applications. ¡ñ Interchangeable davits.

Rigid pipelay capability in the 4in-48in diameter range. Lay tension will vary according to target market and tensioners will be vessel interchangeable. The largest vessel, Jascon 18, will have a deepwater stinger option and is considered ideally suited for projects where export lines run from moderately deepwater manifold locations to shore.

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