Coming full circle

Elaine Maslin

May 1, 2017

Elaine Maslin reports on a new joint industry project, led by Intecsea, which aims to apply lessons learned to reduce decommissioning costs by building them into the design phase.

Decommissioning project team. OE Staff photo.

If there’s one thing everyone knows about decommissioning, it’s that it costs more than anyone wants to spend and most would rather not have to do it at all.

But, what if some of the cost of removing oil and gas infrastructure could be reduced by making the initial design more decommissioning friendly in the first place? A self-funded industry project is exploring the idea, initially focusing on subsea infrastructure.

The project’s aim is to raise awareness about the functional requirements during decommissioning and the impact on project life cycle costs, as well as providing a tool to translate lessons learned into potential solutions, which could be implemented in future designs.

Stuart Martin, of Ardent, said that the project came about as a chance conversation with Alan Stokes, of Intecsea, and centered upon how their careers had come full circle; from design, installation and commissioning to decommissioning of assets on which they previously worked. “We both concluded that the costs associated with decommissioning could be mitigated by capturing lessons learned and utilizing these in the design phase,” Martin says.

“We found several like-minded people and decided to create our own joint industry project – entirely self-sufficient and funded with shared stewardship of outputs. Subsea assets were chosen as our focus area given the make-up of the team,” he says.

By capturing lessons learned and using these in the design phase (e.g. removing installation aids and then reinstituting them in the decommissioning phase), Stokes and others felt that the costs associated could be mitigated.

“Project teams are getting better at involving operations and maintenance teams in the design process,” Stokes says. “We’re hoping that the decommissioning engineer is brought in as part of the design team.”

As an example of where design could be more cognizant of decommissioning challenges, Stokes mentions the subsea manifolds that must be removed and taken onshore for dismantling. “Removal takes time and effort because the team does not know the weight of mud, etc., holding it down,” Stokes says. “If they had a geotextile membrane underneath, they would have had more surety.”

The industry has recognized the need to consider decommissioning since 1998, as operators have had to submit a decommissioning plan as part of their field development plan. But, how much that influences the design and in how much detail is not clear.

The Intecsea-led industry project – established in August 2016 with input from Ardent, BP, CNRI, DNV-GL, Eni, Jee, Proserv, Premier Oil, Woodside, and Xodus Group – decided to focus its efforts. Instead of looking at everything that could save money, the group first identified what the biggest cost drivers for subsea decommissioning are, drawing on information from Oil & Gas UK’s annual Decommissioning Insight report.

Various elements of the subsea system were looked at and the likely costs involved during decommissioning outlined: owner cost (support costs, etc.), removal and onshore disposal, estimated. These were then put into a traffic light matrix (high-cost activities in red, medium as orange and low as green).

Within each area, details of the issues and possible solutions were then drawn up. Currently, there are 81 guidance notes and it is hoped this will increase, especially in areas where, so-far, less information was available.

The group has created a database, including a list of issues and mitigating actions that could be taken during the design process, both during detailed and concept design phases. Within each, there are considerations for the design engineer, e.g. around pipeline bundles, issues such as return facilities for flushing, having no shears greater than 36in, reducing complexity, the need to raise structures off the seabed for access by cutting and inspection tools.

For riser bases and manifolds, issues include complexity around flushing and isolation. The group has good information on rigid pipelines, removal and flushing and engineering down. Its data on wellheads is “getting there,” but it would like more detail on manifolds and riser bases.

Proving value

Stokes is cognizant that while the suggestions for mitigation are all well and good, there needs to be careful consideration that these don’t then increase complexity or cost, which could negate the point of doing it in the first place. For some operators, having a flushing loop or pigging loop is useful for life-of-field operations, which mean they’re there for decommissioning. But, not all think the same.

Another key awareness is that a business case needs to be made. This in turn means that the cost of decommissioning has to be accounted for as part of the capex budgeting, which isn’t something universally done – and certainly wasn’t in the past.

“A question asked is ‘why should we consider decommissioning during concept design,’” Stokes ponders. “We did a net present value (NPV) assessment on the Clyde field, including the cost of decommissioning. We re-ran it, to see if including decommissioning costs made a difference. If we can reduce the estimated cost of decommissioning, we can make our projects more attractive to senior management.

“On Clyde, just a 25% decommissioning cost reduction could increase NPV by 10%. What would you have to do to the capex in order to get that same 10% increase in NPV? You would need to halve the weight of the structure and there’s no way you could do that. We’re not going to see an easy win, but there’s a target we can go for.

“We now have a database showing how much things cost and as a result we can show what a cost reduction will do to the NPV model.”

Caroline Laurenson, consultant engineer at Xodus, says that adding in decommissioning considerations to the design can be difficult to rationalize, e.g. adding in extra valves and tie-ins, which could allow pipeline cleaning, because both have an additional capital cost and operational maintenance costs. Removing them could save cost, but then it means full depressurization may be needed to apply isolations, which then adds cost and complexity to the decommissioning operations.

But, the guidelines are not just for the greenfield design engineers. It’s also brownfield engineers that need to be cognizant of how their designs will impact decommissioning costs. “The industry needs to be aware of decommissioning throughout the life cycle,” Stokes says.

You are not alone

There are other projects, which are leading in this direction and which could also help engineers in the design process, such as the SUT Salvage and Decommissioning Group (which is set to work with the group), and Wood Group’s Sureflex JIP, which involves flexible pipe manufacturers looking at best practice design, installation and operations, and which is due to publish guidelines later this year. Xodus and the University of Dundee are also modeling skirted subsea structure removal from clay seabeds.

Some operators are also understood to have their own guidelines, but these are not necessarily shared and vary in detail, perhaps just offering guidelines such as lifting points that can be retained or flushing loops.

For the Intecsea-led group, the next task is developing the technical content and hosting environment of the database and making their guidelines available to subsea design engineers.