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

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