Senior Staff Writer
HOUSTON, May 6 -- Over the coming years, the oil and gas industry will have to keep an open line of communication with national agencies such as the US Coast Guard and the US Minerals Management Service in order to successfully develop a safe and reliable transportation infrastructure for the onshore delivery of crude oil and natural gas from the deepwater Gulf of Mexico.
The MMS's recent approval of the use of floating production, storage, and offloading vessels in the central and western gulf has spurred industry players to prepare themselves for what is shaping up as a cost-effective alternative to deepwater pipeline systems.
These were among the conclusions that emerged May 6 from a panel discussion held at the Offshore Technology Conference in Houston. The panel comprised executives from oil and gas companies currently operating in the deepwater gulf as well as executives from oil and gas service companies that will design and build FPSOs and shuttle tankers for use in the gulf.
Also sitting on the panel were members of the MMS and USCG, both of which will oversee the safe operation and deployment of such vessels.
Discussions about the use of FPSO s in the gulf began in earnest in 1996, but it wasn't until 1997 that these discussions "starting taking shape," recalled Chris Oynes, US MMS regional director, Gulf of Mexico and Atlantic region.
The final programmatic environmental impact statement (EIS) for FPSO use in the gulf was released in January 2001, Oynes noted, and the record of decision (ROD) was completed in 2001.
The ROD allows FPSOs in the gulf, with one exception, Oynes said, explaining that they will not be permitted in the US Coast Guard's Lightering Prohibitive area for a period of 2 years.
"The EIS and ROD were significant, proactive achievements," said Mike Bell, vice-president, Unocal Deepwater USA. And both of these agreements "significantly reduced schedule uncertainties," Bell stated.
They also yielded significant clarification for an FPSO-based development, he said. FPSOs will be vital in deepwater gulf development projects by reducing cycle time, decreasing a company's capital expenditure costs, and offering more easily expandable facilities.
FPSOs have been used to develop fields in other areas of the world since the 1970s, mainly in the North Sea, off Brazil, off Southeast Asia and China, the Mediterranean Sea, off Australia, and off West Africa, MMS reported.
Currently, about 70 such vessels are either in operation or under construction worldwide, MMS said.
Currently, there is no formal application before the MMS or USCG regarding the use of an FPSO in the gulf, although there are "rumors that people are close" to doing so, Oynes said.
Remaining issues, next steps
Some of the remaining issues concerning the use of FPSOs in the gulf include offshore loading and issues surrounding the actual FPSO development concept, Bell said.
Also, continued effort and interaction between agencies and industry need to clarify and promote: shuttle tanker design and operating practices, FPSO and shuttle interfaces and operational practices, and shuttle tanker market evolution, Bell noted.
FPSOs offer the "only viable solution for smaller oil fields," said Allan Millmaker, business development manager for Bluewater Offshore Production Systems (USA) Inc., Houston.
Bluewater owns and operates five FPSOs operating in the North Sea, off China, and elsewhere. Millmaker noted that most of his company's experience has been obtained in demanding environments and in areas with intricate regulatory regimes.
Bluewater also was the first company to use a closed-flare system on an FPSO, Millmaker said.
The key advantages to using FPSOs in development schemes, Millmaker said, are mainly economic. The adaptability and reusability of the vessels only add to this savings, he said.
And, when considering natural gas delivery, new technologies are taking shape with regard to gas-to-liquids schemes and the design and implementation of compressed natural gas vessels.
The regulatory issue is another hurdle left for operating companies to surmount, said Robert Lindsay, CEO, Seahorse Shuttling & Technology LLC, Houston.
The company was established as a new wholly owned affiliate of Conoco Inc. (OGJ, May 28, 2001, p. 9). Seahorse is an alliance between Conoco and two shipbuilding firms—Alabama Shipyard, Mobile, Ala., and South Korea's Samsung Heavy Industries—to design and construct the first shuttle tankers that would qualify for use in the gulf.
To help bridge the gap between industry and regulatory agencies during 2001, Conoco worked with USCG to expose the agency to the current regime of shuttle tanker operations in the North Sea, Lindsay explained.
And Conoco will continue to work with USCG to develop shuttle tanker operations guidelines, establish minimum manning and training requirements, and assess any warranted oil spill response capabilities, Lindsay said.
Seahorse has completed the design of a new tanker, Gomax 550, for shuttling crude from the deepwater gulf to shore. The tanker, with a 40-ft draft, will be capable of transporting 550,000 bbl of crude oil and will be able to enter most ports in the gulf.
Regarding regulation, it will be important for industry and regulators alike to "know what the rules of the game are before making any important decisions," said Rear Adm. Paul Pluta, USCG assistant commandant for marine safety and environmental production.
FPSO and shuttle tanker development will likely take a path similar to the one that tension leg platforms followed a decade ago, Pluta said.
New concepts will include synthetic mooring lines, to be used for weight-saving reasons, and aluminum quarters, for safety and, again, for weight-saving reasons, Pluta noted.
Also, there are many questions yet to be answered before safe operations can take place, Pluta noted. These include how vapors will be collected, how tankers will be loaded, and how evacuation of vessels will be conducted.
"We won't dictate how you do it, but we need to have it done safely," Pluta said.
Regardless, Pluta said that the USCG is "confident that FPSOs can be operated safely in the Gulf of Mexico."
Contact Steven Poruban at [email protected].