FLOATING PRODUCTION Asgard alliance target is NKr2.3 billion for world's largest production ship
Separate oil and gas facilities to handle prodution
for Sm rbukk, Sm rbukk S r, Midgard
Nick Terdre
Contributing Editor - Norway
Mid-Norway's mighty Asgard project is likely to dominate the development scene on the Norwegian continental shelf until the turn of the century.
Although still in its early stages, the project has generated its novelties, most notably the decision by joint operators Statoil and Saga Petroleum to install separate facilities to produce the 775MM bbl of oil and 232 bcm of gas in the three fields that compose Asgard: Sm rbukk, Sm rbukk S r, and Midgard.
Oil will be produced on a production ship which will be the world's largest. The vessel will have the capacity to process around 190,000 b/d of oil and 15-16 million cm/d of gas from some 60 wells, with storage for 950,000 bbl of oil.
It will be 276 meters long and 45.4m wide with a draught of 26.6m. The vessel is due to be installed on the field in early June 1998 and should be ready for first oil the following August.
For perhaps the first time in the offshore sector, a semisubmersible platform will be used as a dedicated gas processing facility.
Floater capacities
The steel-hulled unit, which will have the capacity to process 38 million cm/d of gas for export and 7 million cm/d for injection, is due onstream in 2000.
While the operators have yet to decide the precise form of the gas platform project, they have opted for an alliance, or integrated team, to deliver the production ship. This is an unusual step in Norway, where contracting strategy is more likely to involve large-scale turnkey projects.
There are only two precedents, according to Bjorn Roeland, one of Aker Engineering's representatives on the Asgard production ship team: these were Statoil's Sleipner West wellhead platform alliance, and Phillips' Ekofisk 2/4-X wellhead platform alliance.
Asgard's subsea arrangements will include some 60 wells on 16 templates on the three fields, tied back to the two production facilities by a complex of flowlines.
With 190,000b/d process capacity and 950,000 bbl storage, the Asgard production ship will be the world's largest.
Work contracts
Work required to bring the Asgard production ship to fruition has been parceled out in a number of main contracts. The basis for the alliance is a coordination agreement providing an integrated framework for the performance of these contracts.
Main orders are:
- Aker Engineering and ABB - engineering and topsides procurement (NKr140 million)
- Maritime Tentech - engineering and delivery of hull, with fabrication subcontracted to Hitachi (NKr1.52 billion)
- Aker Stord - topside/hull assembly and hook-up (NKr300 million)
- Aker Elektro - electrical systems for both oil and gas facilities (NKr175 million).
These sums represent the total contract value at the time of award last January. Within the next nine months they are likely to more than double, as the integrated team undertakes procurement of the topsides facilities.
Increased influence
The traditional relationship whereby the clients' representatives occupy positions of authority and the contractors' representatives subordinate positions has been scrapped. Instead, the integrated team is headed by a contractor representative, Aker Engineering's Haakon Sannum.
Each company has also contributed at least one of the heads of the various work-groups: the engineering group is headed by an ABB staffer; procurement by Statoil; the hull/turret by Maritime Tentech; topsides construction and assembly by Aker Stord; electric's by Aker Elektro; commissioning/completion by Statoil; and project control and services by Aker Engineering.
Overall coordination of the work is in the hands of an operator team headed by a Saga man that also liaises closely with the project's subsea, gas center and asset management groups.
"Here we have the bones for a very efficient decision making process," says Roeland. "It's our ambition to get rid of the old paper mill of changes. In fact, we intend to get rid of paper altogether: we will use an electronic information base and means of communications."
He foresees the alliance approach yielding particular benefits on the large topsides packages. This is because the basis for competitive bidding will be driven by the input of the construction/commissioning/ operation capability that is gathered under the one roof of the integrated organization.
Performance targets have been set, with rewards and penalties for above-target and below-target performance respectively. A target price of some NKr2.3 billion is set for the ship at present.
Prior to Aker Elektro's recent inclusion in the alliance, rewards or penalties were to be distributed as follows: Statoil/Saga 50%; ABB 12.5%; Aker 25%; and Maritime Tentech 12.5%. Aker's share will rise somewhat when Aker Elektro is included in the equation: the new shares were due to be decided last month.
However, a cap has been put on the contractors' potential losses. If costs over-run in excess of NKr200 million, it will be the clients' responsibility to keep the contractor group working at rates which cover their costs but provide no profit margin.
Norne experience
An important reference for the project is the Norne production ship, itself the world's largest prior to Asgard. A valuable exchange of experience has taken place between the two teams, Roeland points out. Two key players, Maritime Tentech and Aker Stord, are involved in both projects, which should work to Asgard's advantage.
But it was thought beneficial to expand Maritime Tentech's role on Asgard. Here it has complete responsibility for supervision of the hull fabrication and delivery, in addition to the detailed design which was where its responsibility ended on Norne.
Other changes have been made, based on the Norne experience. Engineering of the turret is being performed as a single task, but construction will be split into the ship part and the process part, and may be executed at different locations. On Norne the engineering was also split but construction was performed under a single contract.
When the Asgard project is implemented and the production vessel is in the early stages of its estimated 20-year field life, it will bear an interesting comparison with Norne. The latter, which has not been run as an alliance, is well on the way to achieving substantial reductions in both costs and time, thus setting tough standards for the Asgard team to emulate.
But Roeland is confident that the Asgard team can also deliver a performance well above target levels. "With a mere 31 months from the establishment of the alliance to first oil, and with the radical new integrated execution model, aiming at exceptional cooperation and performance, we could end up setting new standards for a Norwegian project."
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