OTC: Conoco initiates Gulf of Mexico shuttle tanker design

A Conoco Inc. subsidiary has completed the functional design of a 550,000 bbl capacity, shuttle tanker for transporting crude oil from deepwater Gulf of Mexico fields to shore. The shuttle will be able to enter most ports on the gulf, ushering in a new era for US deepwater production. The design initiative was unveiled at the Offshore Technology Conference in Houston this week.

May 7, 2002

3 min read

By OGJ editors

HOUSTON, May 7 -- Seahorse Shuttling & Technology LLC, a wholly owned unit of Conoco Inc., has completed the functional design of a new tanker for shuttling crude oil from the deepwater Gulf of Mexico to shore.
The design initiative was unveiled at the Offshore Technology Conference in Houston this week.

The first of the shuttle tankers could be operational in the Gulf of Mexico by 2005, Conoco said.

The new shuttle will have a capacity of 550,000 bbl of crude oil. With a 40-ft draft, the shuttle tanker will be able to enter most ports on the US Gulf of Mexico, ushering in a new era for US deepwater production.

The new era began last December when the US Minerals Management Service approved in principle the use of shuttle tankers and floating production, storage, and offloading vessels for crude oil production and transportation in the central and western deepwater Gulf of Mexico (OGJ Online, Jan. 2, 2002). Use of such vessels will enable the production of crude oil from deepwater areas currently inaccessible by pipelines.

Oil production from the deepwater Gulf of Mexico is increasing rapidly&151;by 24% in 2001 from 2000, according to MMS Regional Director Chris Oynes. An estimated 570 million bbl of oil was produced in 2001 from all of the Gulf of Mexico, up from 522 million bbl in 2000.

"Interest from potential customers has increased dramatically since the MMS issued its environmental impact study," said Matthew Prichard, vice-president of marketing and commercial development for Seahorse. "We believe US-built shuttle tankers will compete favorably with pipelines as oil and natural gas discoveries move into the deeper water depths in the Gulf of Mexico, where pipeline construction is costly and operations are more difficult."

The shuttle tanker design is the result of a shipbuilding alliance of Conoco, Alabama Shipyard of Mobile, Ala., and Samsung Shipbuilding & Heavy Industries of South Korea. Wartsila, Rolls Royce, ABB, and Kongsberg Simrad are among the marine equipment suppliers.

Designed by Samsung specifically for production at Alabama Shipyard, the new shuttle tankers would meet the Jones Act requirement that vessels operating totally in US waters be constructed in the US. The American Bureau of Shipping would serve as the vessel's classification society.

"A major challenge of producing new crude oil discoveries in the deepwater Gulf of Mexico has been developing efficient means of transportation to US refineries," said Antonio Valdes, manager of Conoco Marine. "The?tanker design meets this challenge?."