Conoco alliance plans shuttle tankers for FPSO operations in Gulf of Mexico


Sam Fletcher
OGJ Online


HOUSTON, May 10 -- Conoco Inc., Houston, formed an alliance with two shipbuilding firms in Alabama and Korea to plan the design and construction of the first shuttle tankers that would qualify to transport oil from a future floating production, storage, and offloading system (FPSO) in the deepest waters of the Gulf of Mexico, officials said Thursday.

Conoco this week established a new wholly owned affiliate, Seahorse Shuttling and Technology LLC, for that purpose. Seahorse subsequently joined with Alabama Shipyard of Mobile, Ala., and Samsung Heavy Industries of Korea to develop plans for US-built double-hull shuttle tankers that could be ready for service in 2004.

Conoco and Samsung have already completed an extensive conceptual design for a new tanker classification, designated as the Gulf of Mexico Maximum Cargo (GOMAX) shuttle tanker. It's a double-hulled, dynamically positioned vessel with a capacity of more than 550,000 bbl of oil that will meet the 40-ft draft restrictions of most US ports along the Gulf.

The US Coast Guard requires that tankers operating in US waters be double-hulled. But Conoco was the first oil company to begin building only double-hull vessels as an environmental safety measure, even before federal requirements were established. "We don't use anything but double-hull tankers," Conoco spokesman Carlton Adams told OGJ Online.

Because the proposed shuttle tankers will be operating solely within US waters, transferring their oil cargoes to US ports, they must conform to the Jones Act requirements that they be US flagged, US crewed, and built in the US.

There are no deepwater shuttle tankers that can meet those qualifications at present, said Alabama Shipyard officials.

Conoco has a long working relationship with Samsung industries, which built all of the oil company's international tankers and the two drillships in which it has part interest. "Together, we have developed some innovative technology," said Adams. "But we needed a US shipyard to build these vessels. Alabama Shipyard said they liked what we were doing, so they joined in."

Alabama Shipyard officials previously have been pushing the concept of an articulated tug barge as the best means for shuttling oil from FPSOs in the gulf. Unlike the conventional integrated tug barge, the articulated system has a "hinged" connection that allows for fore and aft pitch.

Because it has a crew of seven, compared to as many as 27 aboard a shuttle tanker, the articulated tug barge represents a considerable savings in operating costs, said shipyard officials.

But Conoco plans to use tankers that have proven so reliable in the past, Adams said.

"This alliance brings together three key ingredients: Conoco's experience as a shuttle tanker operator, the eagerness of the Alabama Shipyard to build this new class of tanker, and the world-class ship design capability of Samsung Heavy Industries," said Bob Lindsay, president of the new Seahorse affiliate.

"These vessels will provide Seahorse a competitive advantage in moving crude from deepwater Gulf of Mexico discoveries to US refineries," he said.

Officials of the US Minerals Management Service are still reviewing a preliminary environmental impact statement as the first step to possible approval of FPSOs in US waters. Conoco officials say they are confident that MMS approval is imminent, and they want to be in a position to deploy shuttle tankers to the gulf as soon as possible.

FPSOs, along with floating storage and offloading vessels (FSOs), have long been used in other offshore markets. But no operator has yet applied for MMS approval for such a system in US waters.

That's because offshore operators along the gulf's mature Outer Continental Shelf have previously benefited from the massive infrastructure of gathering systems and pipelines to transport their oil and gas production to shore. Now that operators are pushing out into deeper waters beyond that pipeline network, however, they are beginning to look at FPSOs as an alternative means of getting those deepwater projects into production more quickly.

At the Offshore Technology Conference in Houston last week, Deborah Cranswick, senior environmental scientist with the MMS regional office in New Orleans, noted that "direct shuttle loading" from FPSOs or super-tankers "is a proven technology."

The environmental impact statement now under review by MMS officials says FPSOs and shuttle tankers pose no more threat to environmental safety than the production systems and pipelines that have long operated safely in the gulf and other US waters.

That study is based on a "hypothetical, generic FPSO" that is a ship-shaped, double-hulled vessel that authorities consider to be "typical of what might be used in the Gulf of Mexico" in water depths of more than 200 meters.

That stereotypical vessel would be capable of producing some 3,000 b/d of oil, with as much as 1 million bbl held in the vessel's 12 separate storage compartments until offloaded, said government officials.

Such a vessel also would likely produce some 3 MMcfd of natural gas that would be piped directly ashore, said government officials.

There was also talk at OTC about possible development of vessels capable of shuttling cargoes of compressed natural gas to shore from deepwater FPSOs. However, a shuttle tanker for compressed gas is "not more than just a thought at present," said Cranswick.

Contact Sam Fletcher at Samf@OGJonline.com

Related Articles

BG’s 2015 budget ‘significantly lower than 2014’

02/03/2015 BG Group plans capital expenditures on a cash basis of $6-7 billion in 2015, a range it says is “significantly lower than 2014” due to “a lower oil...

BP trims capital budget by $4-6 billion

02/03/2015 BP PLC plans an organic capital expenditure of $20 billion in 2015, down from the previous guidance $24-26 billion. Total organic capital expenditu...

IHS sees second-half end of US output surge

02/03/2015

Expectations are moderating about growth of oil production in the US this year.

Gazprom Neft starts shale oil production in western Siberian field

02/03/2015 JSC Gazprom Neft reported start of shale oil production from the Bazhenov formation during tests of two wells in southern Priobskoye field in centr...

Anadarko reports 2014 loss, remains upbeat about Wattenberg

02/03/2015 Anadarko Petroleum Corp. announced a 2014 net loss of $1.75 billion, or $3.47/share diluted, including a net loss of $4.05 billion associated with ...

CNOOC cuts capital budget, starts production from Jinzhou 9-3

02/03/2015 CNOOC Ltd. is slashing its capital budget for 2015 by 26-35% to $11.25-12.86 billion compared with last year’s budget. Capital expenditures for exp...

MARKET WATCH: NYMEX crude oil stays positive on lower rig count

02/03/2015 Oil prices on the New York and London markets closed higher Feb. 2 on positive momentum generated by a falling US rig count, suggesting cuts in pro...

Obama’s proposed fiscal 2016 budget recycles oil tax increases

02/02/2015 US President Barack Obama has proposed his federal budget for fiscal 2016 that he said was designed to help a beleaguered middle class take advanta...

Tight oil price test

02/02/2015 The basic job for Oil & Gas Journal writers is to pick the right words and put them in the right order, which is often harder to do than it mig...
White Papers

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by

The impact of aging infrastructure in process manufacturing industries

Process manufacturing companies in the oil and gas, utilities, chemicals and natural resource industri...
Sponsored by

What is System Level Thermo-Fluid Analysis?

This paper will explain some of the fundamentals of System Level Thermo-Fluid Analysis and demonstrate...

Accurate Thermo-Fluid Simulation in Real Time Environments

The crux of any task undertaken in System Level Thermo-Fluid Analysis is striking a balance between ti...

6 ways for Energy, Chemical and Oil and Gas Companies to Avert the Impending Workforce Crisis

As many as half of the skilled workers in energy, chemical and oil & gas industries are quickly he...
Sponsored by
Available Webcasts

On Demand

Global LNG: Adjusting to New Realities

Fri, Mar 20, 2015

Oil & Gas Journal’s March 20, 2015, webcast will look at how global LNG trade will be affected over the next 12-24 months by falling crude oil prices and changing patterns and pressures of demand. Will US LNG production play a role in balancing markets? Or will it add to a growing global oversupply of LNG for markets remote from easier natural gas supply? Will new buyers with marginal credit, smaller requirements, or great need for flexibility begin to look attractive to suppliers? How will high-cost, mega-projects in Australia respond to new construction cost trends?

register:WEBCAST


US Midstream at a Crossroads

Fri, Mar 6, 2015

Oil & Gas Journal’s Mar. 6, 2015, webcast will focus on US midstream companies at an inflection point in their development in response to more than 6 years shale oil and gas production growth. Major infrastructure—gas plants, gathering systems, and takeaway pipelines—have been built. Major fractionation hubs have expanded. Given the radically changed pricing environment since mid-2014, where do processors go from here? What is the fate of large projects caught in mid-development? How to producers and processors cooperate to ensure a sustainable and profitable future? This event will serve to set the discussion table for the annual GPA Convention in San Antonio, Apr. 13-16, 2015.

This event is sponsored by Leidos Engineering.

register:WEBCAST


The Future of US Refining

Fri, Feb 6, 2015

Oil & Gas Journal’s Feb. 6, 2015, webcast will focus on the future of US refining as various forces this year conspire to pull the industry in different directions. Lower oil prices generally reduce feedstock costs, but they have also lowered refiners’ returns, as 2015 begins with refined products priced at lows not seen in years. If lower per-barrel crude prices dampen production of lighter crudes among shale plays, what will happen to refiners’ plans to export more barrels of lighter crudes? And as always, refiners will be affected by government regulations, particularly those that suppress demand, increase costs, or limit access to markets or supply.

register:WEBCAST


Oil & Gas Journal’s Forecast & Review/Worldwide Pipeline Construction 2015

Fri, Jan 30, 2015

The  Forecast & Review/Worldwide Pipeline Construction 2015 Webcast will address Oil & Gas Journal’s outlooks for the oil market and pipeline construction in a year of turbulence. Based on two annual special reports, the webcast will be presented by OGJ Editor Bob Tippee and OGJ Managing Editor-Technology Chris Smith.
The Forecast & Review portion of the webcast will identify forces underlying the collapse in crude oil prices and assess prospects for changes essential to recovery—all in the context of geopolitical pressures buffeting the market.

register:WEBCAST


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected