Separate contracts, mini-jackets keep costs low for Cameroon project
A West Africa project team was able to reduce time and save about $3 million on the Akono and Erong North developments off Cameroon by unconventionally breaking the project into separate contracts, using small contractors, and installing a small minimal platform.
Partners on the field are the operator, Pecten Cameroon (Shell USA subsidiary), SNH (Cameroon State Oil Company, and Elf Serepca (Elf Exploration Production subsidiary). Paragon Engineering Services performed project management, engineering, and procurement. Akono is in the Rio del Rey area. The project scope was expanded later to include the similar Erong North development. Strategies employed by Paragon to reduce time and costs on the field include:
- Instead of using a traditional approach, the team broke out separate contracts for fabrication, transportation, and installation.
- Small fabricators were used, saving money on fabrication of the jackets and decks. Small fabricators were able to work on the jacket because a unique mini-jacket design was used.
- Instead of traditional barge-and-tug arrangements, smaller, less expensive container ships and a project ship were used for transportation.
- Instead of derrick/lay barges with lift capacities of more than 1,000 tons, a smaller barge was used to install the jackets. For the decks, the same barge was used, instead of a more expensive drilling rig.
- A new mini-jacket design (VEST) resulted in significant savings, compared with the cost of a full jacket. This mini-jacket was modified for use at both locations.
Development description
Each development includes a single tripod satellite well protector platform with test and lift gas equipment, a deck structure with rectangular cellar and main decks, and a single two-to-three-mile production pipeline connection to existing production gathering infrastructure in the Rio del Rey area. Each development is designed to process 8,000 b/d of liquids and 3.4 MMcf/d of gas and differ only in water depth (73 ft for Akono and 46 ft for Erong North), pipeline diameter, and length.
To ensure adequate examination of options, the team did not award the major contracts until required by the project schedule. In particular, the contracts for transportation and installation were awarded late in the project cycle in order to exploit market niches. This strategy entailed some risks, since it involved certain vendors' performing new types of work for the first time. These risks were evaluated as part of the vendor selection process, and each task was monitored closely by project personnel.
Akono bid package
The original Akono development bid package included platform fabrication, equipment installation, outfitting, platform transportation from the US Gulf Coast to West Africa, and platform and pipeline installation. Depending on their capabilities, contractors were invited to bid on some or all of the parts of the package. Six of the 11 responding bidders were fabricators. The remainder were installation contractors, some of which had fabrication capabilities.
Turnkey contracts are commonly used for West African projects. For this project, however, the team found that substantial cost savings could be gained by dividing the work among several contractors. The lowest turnkey bid was $7.505 million for platform fabrication/outfitting, transportation, and installation.
In comparison, the lowest fabrication/outfitting bid ($1.208 million), combined with the lowest transportation bid ($0.977 million), and the lowest installation bid ($3.674 million), totaled $5.859 million. The difference of $1.646 million represented a 22% cost savings.
Mini-jacket concept
A "mini-jacket" is a jacket that extends several feet below the water line and does not reach to the mudline. These structures have been used since the 1950s for offshore platforms and other marine structures. For Pecten's project, use of the mini-jacket eliminated the need for the very large mud mats that would normally be required by the poorly consolidated bottom and avoided complications inherent in the poorly defined water/soil interface.
Paragon's proprietary mini-jacket design is called VEST (very economical structural template). Unlike other mini-jackets, the design can be installed easily, using one piece of marine installation equipment instead of two. Paragon has applied for a patent for the design. The use of the mini-jacket concept resulted in the following additional advantages:
- Modification of the design for the second site, Erong North, and reduced jacket fabrication tonnage
- Use of small less-costly fabrication contractor who could build the mini-jacket and deck, but not a larger full-water-depth jacket
- Use of small container ships to transport the structures instead of the expensive barge/ tug method
- The ability to use an installation contractor with a limited-lift-capacity barge.
When the addition of the Erong North platform was approved, Akono design had been completed, but the production parameters were such that the Akono facilities and deck design could be used without modifications. Meanwhile, even though the Akono site water depth is 73 ft and the Erong North site water depth is 46 ft, re-use of the VEST concept for Erong North required re-esign of only the piles, caisson, and conductors.
The jackets were identical. In short, due to the flexibility of the design and the similarities between the facilities, the Akono design/bid/ award cycle of four months (two months of work plus a two-month delay) was reduced to three weeks for Erong North.
Fabrication
Akono platform fabrication and outfitting was bid in late fall 1997, when traditional platform fabrication yards were very busy and prices were high. The Akono and Erong North VEST mini-jackets each weighed only 52 short tons. In contrast, a traditional full-water-depth jacket for the Akono site would have weighed an estimated 130 short tons, while a traditional full-water-depth jacket for the Erong North site would have weighed an estimated 83 short tons.
The small size of the mini-jacket enabled the team to consider using small fabricators that had fabricated large skids similar to decks, but had never fabricated a jacket. For the jacket portion of the bids, the unit prices were $2,565/ton for the successful smaller fabricator and $4,340/ ton for the lowest-priced traditional jacket and deck fabricator. The lower tonnage and reduced unit prices combined to produce a savings of over $665,000. In addition, the same small fabricator was also used for the fabrication and outfitting of the decks. This choice resulted in additional savings of $590,000, compared to the cost of using a traditional medium-sized fabricator.
Transportation
Several transportation options were investigated, including traditional vessels. The small container ships were substantially less expensive than alternatives and were used to transport the jackets and associated items. To meet the requirements of the drilling, fabrication and installation schedules, two jacket voyages were required instead of the one originally envisioned.
The container ships, M/V Star and M/V Sava Hill, were loaded dockside at the fabrication contractor's yard and discharged offshore Cameroon directly to the derrick barge. The piles, conductors, and boat landings were placed in the cargo holds of the ships, and the jackets and conductors were placed on top of each ship's deck.
A container ship was initially identified for the transport of the decks as well. At the time of deck transport, however, a dramatic change in market conditions occurred, and the cost for a project ship was reduced by over 40%.
Therefore, the total cost for the transportation of the decks using the project ship, including loadout and tiedown, was less than that for the container ship option. The decks were both transported on a single project ship, M/V Caribbean Intrepid. This ship was loaded at the fabrication contractor's yard and discharged offshore directly to the derrick barge.
Even with the extra jacket voyage, the total jacket and deck transportation cost for the Akono and Erong North platforms was $1,127,663. This number compares to an estimated cost for two barge-and-tug voyages of $2,629,800, representing a savings of $1,502,137. Meanwhile, since the ships traveled at 10-12 knots, compared to 5- 6 knots for traditional barges and tugs, transit time was reduced from 46 to 26 days. This improvement permitted additional flexibility in project planning, including an allowance of more time in the fabrication yard to perform precommissioning work. The additional work reduced the time and cost of the offshore commissioning work in Cameroon.
Installation
The initial installation bids were very high, due to use of large derrick/lay barges with lift capacities over 1,000 tons. For the Akono and Erong North projects, the heaviest jacket lift was 45 short tons, and the heaviest deck lift was 153 short tons. The project team found that inexpensive installation vessels were available and capable of installing the jackets and piling, but not the heavier deck.
For the decks, the team evaluated the use of the High Island VII drilling rig. This rig was scheduled to drill the production well at each site during the fall 1998 and winter 1999. The project team determined that installation of the decks with High Island VII was technically and commercially feasible. The team developing the deck installation included representatives of Global Marine, Tidewater, and Matthews-Daniel (Global Marine's insurance surveyors). In the end, the decks were installed not by the High Island VII, but by the small derrick/lay barge that installed the jackets and pipelines. The cost savings associated with the use of the smaller derrick/lay barge was estimated at $290,000.
Jacket installation took place during the most severe weather season offshore Cameroon. Waves of 8-10 ft and strong tidal currents were reported several times during installation. Still, a total weather downtime of 10 hours was caused by heavy rains, not waves and currents.
Paragon estimated that innovations saved the client more than $3 million, compared to the cost of fabricating, transporting, and installing a traditional full-water-depth platform.
Acknowledgement
This article is a summary of a paper presented at Offshore West Africa 1999 Conference & Exhibition, held in Abidjan, Côte d'Ivoire. Authorship included L. Asplin of Pecten Producing Company in Houston (Retired).
Paragon would like to thank Pecten Cameroon Company, Elf Serepca, and SNH for per mission to publish.
Mini-jacket facilitates offshore installation
Paragon Engineering claims its VEST (very economical structural template) structure can cut project costs by 20% in water depths up to about 125 feet. Because the VEST mini-jacket structural frame does not extend to the mud line, an operator assumes several cost and schedule benefits:
- Less steel is necessary for fabrication
- Associated structures, such as mud mats, are eliminated because the mini-jacket is caisson-supported during pile installation
- Expensive barge transportation and lift barges are not necessary because of the reduced jacket weight
- Project schedules are often shortened because many local fabricators can construct the jacket structure with jacket legs that are only 25 ft long.
Because the mini-jacket does not rest on the ocean floor, it is not necessary to know the exact water depth to begin engineering design. The design is easily adapted to a range of water depths, giving operators increased flexibility for design, fabrication, installation and re-use.
The mini-jacket has a caisson, positioned at the center of the mini-jacket. The height of the mini-jacket typically extends 15 ft above the water line and 10 ft below the water line, leaving no structural framing to rest on the seafloor. During pile installation, the weight of the mini-jacket is entirely supported by the caisson instead of being held by a lift vessel. The caisson can be either pre-existing in the field or specifically installed for this purpose. In instances where a caisson does not exist at a site, a caisson is installed in a conventional manner using a lift vessel or a drilling rig.
The design's structural frame includes pile sleeves in the corners and a caisson sleeve located at its center. During installation, the mini-jacket is lifted and lowered so that its caisson sleeve slides over the caisson. The caisson sleeve preferably has weight-bearing plates or a similar means for engaging the caisson at its top. The weight-bearing plates rest on the top of the caisson, transferring the weight of the mini-jacket to the caisson.
With the VEST mini-jacket resting on the caisson, the piles are driven through the pile sleeves of the mini-jacket and the piles are connected to the pile sleeves. The deck is then installed on the piles. After the installation is completed, the wells may be drilled through the caisson and conductor slots.
Mud mats
Contributing to the overall cost savings is the elimination of large, flat, rigid plates, known as mud mats, that support conventional jackets during installation. In instances where a conventional jacket is used to support a well, it is common to affix several mud mats to the bottom of the jacket to prevent the heavy structure from sinking into the ocean floor. The mud mats rest on the seafloor, supporting the weight of the jacket until the piles are installed.
The mud mats temporarily distribute the weight of the jacket and prevent it from sinking into the floor until the piles are installed and connected to the pile sleeves. Once the piles are installed and connected to the jacket, the jacket weight is supported by the piles and the mud mats become redundant.
The size of the mud mats required depends on the soil conditions at the ocean floor. In instances where the ocean floor is soft, the mud mats required are enormous in size and weight. In instances where the soil is extremely soft, in addition to large mud mats, a lift vessel is required to hold the conventional jacket to keep it from sinking and to keep it level while piles are installed.
Because of the relatively high cost of providing any piece of equipment offshore, installation of a jacket using a caisson without the extended use of jackup construction platform or large mud mats is certainly advantageous.
The mini-jacket concept also is applicable in mudslide areas, where mud at the ocean bottom moves. If a conventional jacket that extends to the ocean bottom is used, the mudslide can generate large forces on the conventional jacket. In such cases, the conventional jacket must be stronger, with piles driven deeper to tie it to the ocean floor. The mini-jacket, however, avoids the large mudslide forces, thereby allowing a lighter structure. Paragon is applying for a patent for the mini-jacket.
