Subsea tie-backs to shore facilities
One of the most talked-about develop-ments in the world is Ormen Lange in the Norwegian Sea. Production of the giant gas field's 375 bcm of reserves is expected to continue for up to 40 years, but great technical challenges first have to be overcome to bring it onstream and keep it producing. Including the cost of a pipeline link to Sleipner in the North Sea, and a new pipeline to the UK, the project is expected to cost NKr 55 billion.
The Troll C platform, part of Hydro's success story in developing the Troll oil reserves.
The development of Ormen Lange is being operated by Norsk Hydro, which discovered the field in 1997. Norske Shell will operate the production phase, due to begin in October 2007. Last December, Hydro announced on behalf of the licensees – the others are BP, ExxonMobil, Petoro, and Statoil – that the field would be developed with subsea facilities tied back directly some 100 km to a processing plant onshore.
This solution was chosen over the alternative of a processing platform on the field. Both options were developed to the same level of engineering, and the subsea option was evaluated as being the most economic and reliable, says Tore Torvund, executive vice president of Hydro Oil and Energy. The major concerns faced by the subsea concept are wells at 1,100-m water depth, pipelines crossing the area of the Storegga slide, with its rough terrain and steep inclines, and flow assurance in the face of a seabed temperature below zero.
Ormen Lange is the latest in a series of challenging subsea projects undertaken by Hydro, and provides a good illustration of the way technology moves ahead, Torvund says. In the late 1980s, Hydro proposed the Troll Oseberg Gas Injection project, which involved subsea wells on the Troll field delivering gas 50 km to Oseberg to be injected into the reservoir. TOGI was at the frontier of what could be done, and according to some sceptics could not be done.
Tore Torvund, executive vice president, Hydro Oil and Energy.
In a similar fashion Hydro's proposal to develop the thin oil layers in the Troll field using subsea wells and horizontal drilling also drew criticism. Now Troll oil production is running at 400,000 b/d, making the field the largest oil producer in the Norwegian sector, Torvund points out.
Perhaps because of the technological achievements of the last decade or so, and perhaps also because of the impressive degree of experience that the license group brings to the project, questions have not been raised about the licensees' ability to find successful solutions for Ormen Lange. As it happens, the chosen solution is one that relies largely on proven technology and redundancy. Flow assurance, for example, will be achieved through chemical injection, and there will be two multiphase export pipelines to shore.
But another key question is whether the project can be delivered on time and within budget. The industry went through a bad time in Norway and elsewhere in the late 1990s as budgets were missed and projects delivered late, Torvund says.
Since then, industry has learned to get a tighter grip on projects, and not to try to go too fast. Oil companies now take a more disciplined approach to looking after their investments. Engineering is cheap compared with welding, says Torvund, so it makes sense to bring the engineering work to a high degree of completion before construction begins. The new approach is bearing fruit: Grane, the company's latest project, is proceeding towards start-up in October on time and, at NKr 15.5 billion, NKr 1 billion below budget.
The Ormen Lange licensees have been able to agree on what work should be completed before moving on to a new stage, and the various milestones have been met without big discussions, Torvund says. He is confident that the group will present a good quality plan for development and operation to the Norwegian authorities when this milestone comes up in September.