Special Report: Su Tu Vang project overcomes tough construction environment

May 4, 2009
The successful Su Tu Vang (Golden Lion) project off Vietnam demonstrates that even during periods of tough industry conditions companies can bring on stream well planned and properly scoped projects safely and efficiently.

The successful Su Tu Vang (Golden Lion) project off Vietnam demonstrates that even during periods of tough industry conditions companies can bring on stream well planned and properly scoped projects safely and efficiently.

Su Tu Vang is the second field development in Block 15-1 off Vietnam.

Cuu Long Joint Operating Co. (CLJOC) began producing Su Tu Vang field on Oct. 14, 2008, 14 days ahead of schedule and under budget. Field start-up coincided with the 10-year anniversary month of CLJOC’s establishment.

CLJOC, established on Oct. 28, 1998, operates Block 15-1. Its coventurers include PetroVietnam Exploration Production Corp. Ltd., 50.00%; ConocoPhillips (UK) Cuu Long Ltd., 23.25%; Korea National Oil Corp., 14.25%; SK Energy Co. Ltd., 9.00%; and Geopetrol Vietnam SA, 3.50%.

Block 15-1 is at the north end of the Cuu Long basin, about 180 km east-southeast of Ho Chi Minh City. Water depths in the block are 35-60 m. Production from Block 15-1 began on Oct. 29, 2003, when CLJOC brought Su Tu Den (Black Lion) field on stream (OGJ, Oct. 20, 2008, p. 41). Cumulative Block 15-1 production was about 123 million bbl of oil at yearend 2008.

Exploration, appraisal

Su Tu Vang field is about 7 km south of the Su Tu Den structure.

CLJOC completed the SV-1X discovery well in the fractured granite basement on Oct. 23, 2001. The next well, SV-2X completed on Sept. 12, 2002, appraised the northeast area of the structure. A third well, SV-3X, drilled in February 2004 near the southwest end of the structure, failed to encounter commercial hydrocarbons.

CLJOC declared Su Tu Vang field commercial on May 7, 2004, with the successful completion of the fourth well, SV-4X.

Concept selection study

CLJOC’s concept selection study in 2004 determined the optimum field development plan.

The study investigated multiple options, including:

  • Expanding the existing floating production, storage, offloading (FPSO) vessel, as originally planned during the Su Tu Den Southwest development.
  • Supplementing or replacing the existing FPSO with additional or larger floating systems.
  • Using a combination of fixed facilities with a floating storage and offloading (FSO) vessel.
  • Using a concrete gravity-based structure (GBS) to meet oil storage requirements.

CLJOC ruled out the FPSO expansion because new field production would likely exceed the expanded FPSO capacity, and the FPSO expansion would require a 90-day field-wide shutdown for heavy lifts and module integration.

The venture also ruled out replacing or supplementing the existing FPSO with additional or larger floating production systems because of the lack of worldwide shipyard capacity.

The GBS concept was dismissed because it could not economically provide the minimum oil storage capacity needed for the relatively shallow water depth in Block 15-1.

The preferred concept was a 12 slot, 18-well central processing platform (CPP) and a SuezMax class FSO. The concept included a float-over deck configuration to mitigate schedule risk and minimize offshore installation and hookup and commissioning (HUC) requirements.

CLJOC sized the facility to support Su Tu Vang field and the future Su Tu Den Northeast development. The design set the facility’s capacity at 100,000 bo/d, 160 MMscfd of lift and export gas, 225,000 b/d of injection water, and 130,000 b/d of produced water.

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The design provided system flexibility by reconfiguring the pipeline network to allow diversion of production from Wellhead Platform A (WHP-A) to the CPP and for routing stabilized oil from the CPP to either the new FSO or the existing FPSO (Fig. 1).

CLJOC will sell excess associated gas to PetroVietnam Gas through a new spur line to the Rang Dong-Bach Ho pipeline system.

Preliminary engineering

CLJOC began preliminary engineering on Jan. 24, 2005, and an integrated team of company and contractor staff completed the work in August 2005.

The team developed the typical preliminary engineering deliverables but also dedicated significant effort to identify long-lead equipment and primary structural steel requirements. This helped mitigate schedule downside by preplanning critical activities requiring immediate action at the start of detailed engineering.

Following preliminary engineering, CLJOC developed and issued the engineering, procurement, construction, and installation (EPCI) bid packages for the CPP and pipelines. Three qualified bidders participated in the process.

After an extended bid period and subsequent clarification meetings, CLJOC selected and recommended a single bidder to the Block 15-1 coventurers.

Contract strategy

CLJOC’s general philosophy is to develop fit-for-purpose strategies for each major contract, with the objective of assigning risk to the party best positioned to manage that risk.

For the CPP/pipelines EPCI contract, the project used a virtual integrated team with J. Ray McDermott Asia Pacific (JRMAP) staff holding the lead positions and CLJOC discipline engineers participating on the team.

For the FSO, CLJOC structured the contract as a turnkey arrangement that covered tanker modifications, turret, risers, and vessel transportation and installation. Vessel operation is under a time-charter party agreement. CLJOC monitored the design and fabrication progress with a small oversight team during work in the shipyard.

Project execution

The Block 15-1 management committee approved CLJOC’s bid award recommendation and awarded the CPP/pipelines EPCI contract to JRMAP on Mar. 9, 2006. The CLJOC management team charged the project team with the following goals:

  • Execute the project with zero lost workday cases (LWCs) and a target total recordable injury rate (TRIR) of less than 0.50.
  • Achieve first oil by Oct. 28, 2008.
  • Complete the project within 10% of the authorized budget.
  • Design the facility to ramp up to full capacity within 90 days of first oil.
  • Achieve a long-term direct operating efficiency of at least 92%.

    The CLJOC project team mobilized in early March 2006 to JRMAP’s Singapore office to commence detailed engineering and procurement activities.

Deck and jacket fabrication began on Sept. 15, 2006, at JRMAP’s Batam, Indonesia, yard. The yard installed a new skidway for the Su Tu Vang deck fabrication.

JRMAP subcontracted fabrication of the 12-slot template and CPP flare boom to Petroleum Technical Services Co. (PTSC) of Vung Tau, Vietnam.

The project team’s greatest challenge involved the living quarters and central control room-switchgear building contract. The work scope was not completed by the original subcontractor and CLJOC moved the work to the Batam yard, where JRMAP and CLJOC successfully completed the work without affecting the project schedule.

Load out from the Batam, Indonesia yard of the 3,945-tonne, 8-pile central processing platform took place during July 2008 (Fig. 2).
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Tow-out of the 3,945 tonne, 8-pile jacket was on July 27, 2008 (Fig. 2), with jacket installation finishing on Sept. 3, 2008.

The construction contractor completed all deck fabrication and precommissioning activities on the 15,150-tonne CPP deck before its sail-away from Batam in August 2008 (Fig. 3).
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The 15,150-tonne CPP deck sailed from Batam on Aug. 25, 2008 (Fig. 3). All deck fabrication and precommissioning activities were complete at sail-away, minimizing the cost and time associated with the offshore HUC.

A float-over operation in September 2008 placed the CPP deck on top of the jacket (Fig. 4).
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The deck float-over took place on Sept. 5, and deck installation finished on Sept. 18, 2008 (Fig. 4).

At peak activity, the offshore installation, hookup, and commissioning work involved more than 25 vessels and 1,100 personnel.

CLJOC awarded the FSO as a turnkey contract to Tanker Pacific Management (Singapore) Pte. Ltd. on Nov. 8, 2006. Engineering and procurement activities continued into July 2007.

Vessel conversion began in January 2008 and finished in September 2008. The FSO Queens- way sailed from the Singapore Jurong Shipyard on Sept. 10, 2008, and installation work finished on Nov. 25, 2008.

Project safety

The Su Tu Vang project achieved a LWC rate of 0.11 and a TRIR of 0.20 incidents/200,000 man-hr on a total exposure of more than 11 million man-hr, exceeding the TRIR target of 0.50.

Project personnel completed 2006 and 2007 with no LWCs but incurred six LWCs in 2008. JRMAP and its subcontractors suffered three incidents during fabrication. Tanker Pacific and its subcontractors had two incidents in the Jurong shipyard during vessel conversion and a third during offshore installation.

CLJOC established both a proactive safety monitoring program and a safety incentive program at the start of the project, and yard oversight and supervision increased after the first incident in early 2008.

Initial operations

First oil flowed from the Su Tu Vang CPP on Oct. 14, 2008, 14 days ahead of the sanction schedule. The final project cost is forecast to be about 1.8% under the authorized budget. Production ramped up to facility capacity 44 days after first oil. Facility direct operating efficiency progressively improved after start-up and exceeded 98% in January and February 2009.

The project successfully achieved the schedule, budget, start-up, and reliability goals set by the CLJOC management team.

Best practices

The CLJOC project team successfully executed the Su Tu Vang project during a period of unprecedented cost escalation and resource constraints. This period had steel costs nearly doubling, fabrication facilities heavily booked, substantial shortages of qualified manpower, and significant backlogs among industry equipment suppliers.

The following five best practices were key elements for successfully completing the Su Tu Vang project:

1. Fit-for-purpose contract strategy. CLJOC’s contract strategy attempted to place risk with the party best able to manage that risk. This contributed to lower costs, reduced schedule slippage, improved facility reliability, and enhanced alignment of interests between contractor and owner.

2. Deck float-over concept. CLJOC performed a decision and risk analysis exercise to determine the best deck design concept. The analysis considered such factors as well accessibility, simultaneous operations downtime, rapid ramp-up of production, and a balance between onshore and offshore HUC activities.

The ability to shift costly offshore work to the lower cost onshore fabrication site was a key driver in the decision to use a float-over system. This allowed for completing fully the entire deck before its departure from the fabrication yard.

3. Subsea template with predrilled wells. CLJOC removed the existing 4-slot template installed during field appraisal and replaced it with a larger 18-well template. The 18 well-12 slot design allowed for the reuse of two appraisal wells as development wells, thereby, reducing costs. Four additional wells, predrilled and mud line suspended during facilities fabrication, provided six wells available for tieback immediately after deck installation. This allowed rapid production ramp-up soon after facility commissioning.

4. FSO lease structure. CLJOC determined the FSO size and commercial structure by balancing lease costs against production constraints caused by storage limitations during the monsoon season. The Block 15-1 production plateau duration was a key factor in this analysis. Consequently, CLJOC structured the FSO lease with an initial 5-year term and five optional 1-year lease extensions, preserving the flexibility to capitalize on potential future production upside.

5. Operations staff integration into the project team. CLJOC seconded its operations personnel into the project team from the start of preliminary engineering. They provided key input from design development through commissioning and hand-over. The mechanical completion and commissioning process served as a training and familiarization period for many of the operations personnel.

Acknowledgments

The authors thank the management of Cuu Long Joint Operating Co., PetroVietnam, PetroVietnam Exploration & Production, ConocoPhillips (UK) Cuu Long Ltd., Korea National Oil Corp., SK Energy, and Geopetrol SA for their support and permission to publish this article.

The authors

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C.A. (Carl) Robertson ([email protected]) is seconded to CLJOC by ConocoPhillips, with responsibility for concept selection and economic analysis of new developments in Block 15-1. He was topside engineering manager for Su Tu Den field development. Robertson began his career in 1988 with ARCO Oil & Gas Co. and joined Conoco in 1990. Robertson holds a BS and an MS in chemical engineering from Oklahoma State University. He is a registered professional chemical engineer in Oklahoma and Alaska.

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C.J. (Chris) Wall is seconded by ConocoPhillips to CLJOC as deputy development manager with project management responsibility for the Block 15-1 development. He is also a major project manager with ConocoPhillips. Wall began his career in 1972 with Conoco (UK) Ltd.

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Cu Xuan Bao was seconded to CLJOC by PetroVietnam as development manager. He now serves as general manager of the Truong Son Joint Operating Co. in Ho Chi Minh City. Bao holds a PhD in petroleum engineering from the Institute of Petroleum and Chemistry at Baku, Azerbaijan.