A DEEPER LOOK AT MODULARIZATION IN FACILITIES CONSTRUCTION Stephen Whitfield Oil and Gas Facilities Staff Writer The Eagle Louisiana, a modular capture vessel (MCV), docked at the Marine Well Containment Company s MCV Shore Base in Ingleside, Texas. It was the second MCV designed to help mitigate the potential overflow of hydrocarbons from damaged wellsites. Photo courtesy Marine Well Containment Company.
As the industry looks for ways to lower costs and increase project effciency, owners and operators have increasingly turned to an old standby in developing their projects. Modularization the act of constructing facilities and equipment at offsite fabrication yards affords companies the opportunity to bypass some of the hassles that may arise when doing primary construction work on-site, like the lack of skilled labor, or the physical constraints of an oil field. The process is far from a new one, but in recent years it has become a favorite. Independent Project Analysis (IPA) estimated that, in 2014, 57% of oil and gas projects with budgets of more than USD 15 million used a modular approach on some scope (Marton and Schroth 2015). However, it is not a perfect strategy, and before they fully embrace the modular oil field, companies must weigh its advantages and disadvantages. Is a modular approach really an improvement over a nonmodular approach? What are the effects on a project s schedule and budget? This feature examines the pluses and minuses of modularization, along with a look at how some companies are incorporating a modular approach into new technologies and facility designs. Benefits of Modularization For owners and operators, modularization can make the process of building facilities more manageable in an age of multiwell systems. It allows the companies an opportunity to work around the challenges Matt Halker, founder of Halker Consulting, identified four primary issues that operators face with designing facilities in multiwell sites. First, the geographies are different at each wellsite. Second, the system needs and production goals vary between operators. Third, equipment availability may differ significantly between regions. Fourth, each facilities engineer may approach the design of an individual system in unique and personal ways. For example, an engineer may prefer laying pipe below ground instead of above ground, or may want storage tanks to fill from the bottom instead of the top. The numerous decision points that go into the development of a new field make it diffcult to form a uniform approach to modular facilities design. Certain parts of the oil field are primed for modularization emission control systems, for example, are now mandated by law but it may prove challenging to implement these changes industrywide, he said. To handle these issues, Halker said operators are changing their approach when necessary, taking advantage of modular opportunities in facility designs, equipment purchases, and construction plans. For example, an operator may base a facility design on the size of vessels available in local fabrication yards. Halker said that a lack of industry standards for facilities design has slowed progress toward the full adoption of a modular approach for projects. True modular oil fields will not become commonplace without the development of a regulatory framework that owners and operators can accept. But, though he believes the industry is still far from fully embracing modularization, Halker argued that it is still a key to improving production on projects. These types of systems are great because they offer quick, cost-effective solutions, but they can be challenging because updates and changes aren t always easy when designs are in the hands of a single modular manufacturer, he said. Halker referenced a case study in which his consulting firm worked with an unnamed independent company that was facing rapid expansion of its operations in the western United States. The operator needed a set of facilities standards that could be used at different wells and in different circumstances. It also needed to develop modular equipment designs to allow its facilities to evolve over time, adjusting functional components as needed. This approach, Halker said, would enable the operator to install similar systems at other sites in the future without having to retrain staff on new facilities, or reengineer solutions to problems that had already been solved. The resulting equipment designs and facilities standards led to an overall top-down design for the operator s fields, creating what Halker called a truly onesize-fits-most solution. First, the firm looked at the ways in which site processes worked for the operator and how they would ideally function in a more effcient system. A series of process flow diagrams (PFDs) were created for the operator s existing wellsites and for several sites under development. The PFDs captured the general flow of plant processes and equipment at the sites such as where the oil and gas came from, what the systems did at each stage, and where the resulting products went. With the overview charts in place, a series of piping and instrumentation diagrams for sites were developed, showing the physical sequence of branches, valves, equipment, and instrumentation that would be required for each well to operate at peak effciency. This information allowed improvement in the selection of the proper equipment for each stage and organization of each of the new sites in a manner best suited for frequent reproduction. From that, a modular-based facilities system was engineered that could be used in different applications. Halker said the modular approach allowed the operator to reduce construction costs by minimizing rework requirements. In addition, by knowing which hardware components will work at future sites, the operator was able to purchase equipment in bulk and at fixed prices, which helped to further lower project costs. Challenges in Modularization While it can be an useful strategy for developing a field, modularization is not foolproof. IPA conducted April 2016 Oil and Gas Facilities 11
Better Worse Cost Index 1.25 1.20 1.15 1.10 1.05 1.00 0.95 0.90 0.85 Cost Competitiveness Differences Are Slight 75% Mean 25% Nonmodular Low Modular High Modular Better Worse Schedule Index 1.40 1.35 1.30 1.25 1.20 1.15 1.10 1.05 1.00 0.95 0.90 Schedule Competitiveness No Difference 75% Mean 25% Nonmodular Low Modular High Modular Fig. 1 Minimal cost and schedule competitiveness differences were seen between modular and nonmodular projects. Source: Marton and Schroth (2015). a study on the effectiveness of modular construction strategies in which it examined approximately 800 projects that used modules, skids, and preassembled units designed and fabricated as separate components that could have reasonably been constructed in a nonmodular fashion. The performance of these projects was compared to the performance of projects that employed what it called a stick-built construction approach, in which most building happens at the project site. The study showed that modularization may not achieve the objectives with which it is commonly associated such as reduced cost, shorter construction schedules, and improved project safety. Modularization was shown to lower construction hours in the field, which Marton and Schroth (2015) said may be beneficial to projects where site congestion or labor availability is an issue. However, nonmodular projects tended to have little difference in schedule length and were generally more cost-effective than projects with low or high modularization. The authors noted that the average cost-effectiveness and execution duration of modular projects is not better than stick-built projects, and the variance in these outcomes is very large (Fig. 1). Regardless of the challenges, Marton and Schroth concluded that modularization was popular among project teams. The study showed that 49% of the project teams examined chose a modular approach to help improve the productivity of their workforces by moving construction to a shop, while 32% claimed that the ability to replicate multiple installations of a similar design at a fabrication yard helped contain costs. Other reasons cited in the study were the alleviation of local labor availability issues and congested site conditions. Marton and Schroth argued that project execution planning is key to successful implementation of a modular construction strategy. They said the decision on whether to employ modularization and the extent to which modules should be used must be made early in the project s life cycle, preferably before front-end engineering design. The most successful projects chose the modular strategy when engineering was less than 7% complete, had consistently better measures of front-end loading at authorization, used constructability reviews more often, and implemented better controls. A strict controls plan may also help operators monitor the activities related to their modular projects in fabrication yards. Marton and Schroth cited an example of workers being reassigned to another project when a change is made in a modular plan. Such shifting between projects may have a significant effect on a module's delivery schedule. Modular Gas-to-Liquids As growing global energy demands have led to the development of new oil and gas fields, the demand for ecofriendly solutions has also been increasing in stranded and associated-gas fields. The delivery of stranded and associated gas is generally considered an uneconomical move for operators because of the remoteness from potential markets and the lack of economic transportation, infrastructure, and gas-to-liquid (GTL) conversion technology (OTC 26098). With that in mind, Daewoo Shipbuilding and Marine Engineering (DSME), a large shipbuilding company based in South Korea that has built floating, production, storage, and offoading (FPSO) units for operators such as Chevron and Total, has looked into new solutions for developing such fields. One of those solutions is an offshore modular GTL facility. Such a facility differs from a traditional FPSO in that it makes synthetic crude using a chemical conversion process, while also using associated gas and stranded gas as raw material. 12 Oil and Gas Facilities April 2016
Fischer-Tropsch reactor Tail gas separation Product treatment Additional upper deck Sulfur removal Pre-reformer Selective catalytic reduction reformer Additional upper deck Process flow Natural gas Syngas Fischer-Tropsch product Flare tower Upper deck Fischer-Tropsch synthesis module Upper deck Reforming module Materialhandling bay Lay down Living quarters Offloading Fig. 2 The conceptual plot plan of DSME s modular GTL facility with an oil FPSO unit shows a topside area similar to Total s CLOV FPSO. Source: OTC 26098. The key design elements DSME considered in adding onshore GTL facilities to a modular FPSO were the compactness of design, robustness to marine motion, self-suffciency, safety, economic viability, and technology readiness. In paper OTC 26098, the authors argued that the compactness of design and suitability for a multilayer arrangement is important, as process and utility facilities and equipment must fit into the overall topside and hull space. The total equipment weight, weight distribution, and center of gravity are critical, and the process equipment must operate under vessel motion. For example, the columns and reactors with a liquid-free surface, such as a Fischer-Tropsch reactor, may be influenced by inertia and inclination effects. The utilities in a modular facility are supplied onboard the FPSO, and all maintenance services are performed while the vessel is on station. The confined spaces and compact process layout for offshore application increase the risk from fire and the potential for explosions, so the location of hazardous equipment on the topside and in the hull must not be anywhere near inhabited areas, and it is equally important to separate oxidants from combustible material. Fig. 2 shows the preliminary plot plan of a modular GTL facility with an oil FPSO. The topside area of the modular facility is similar to gas export modules that DSME recently built for the Total CLOV FPSO offshore Angola. The required capacity of the storage facility is similar to that of a general oil FPSO, approximately 240 000 m 3 (1.5 million bbl) of crude oil and GTL synthetic crude. The hull section would also be similar to that of an oil FPSO. The crude/synthetic mixture would have similar storage and handling characteristics as the crude oil itself. The synthetic crude from the Fischer-Tropsch reactor would be sent directly to a cargo storage tank and mixed with crude oil in the hull. Based on a crude oil price of USD 60/bbl, DSME concluded that a modular GTL facility processing 5,000 BOPD would show an internal rate of return of 10%, and the payback time would be at least 10 years. At USD 80/bbl, the internal rate of return would move up to 19%, and the payback time would be 7.6 years. Modular Capture Vessels Recently, modularization has helped companies respond to safety concerns. Marine Well Containment Company (MWCC), a consortium of 10 major energy firms (Anadarko, Apache, BHP Billiton, BP, Chevron, ConocoPhillips, ExxonMobil, Hess, Shell, and Statoil) based in Houston, developed the first modular capture vessels (MCVs) to help mitigate the negative effects of a lost well. Built in response to the Deepwater Horizon incident, the MCVs are part of the company s overall interim containment system, which was launched 5 years ago in the US Gulf of Mexico. So far, MWCC has delivered two completed MCVs. The Eagle Texas was finalized in August 2013, and the Eagle Louisiana was completed in March 2014. The MCVs are modified tanker vessels that have been converted to hold the required process fluids from damaged subsea wells. They are designed to respond to 14 Oil and Gas Facilities April 2016
cap-and-flow scenarios where well conditions require the flow of fluids from a well to a capture vessel instead of the capping of fluids at the wellhead. Each MCV can process up to 50,000 BLPD and has a storage capacity of 700,000 bbl of liquid. The two MCVs have similar specifications and are outfitted with processing equipment that enables gas/liquid separation, liquid storage, and gas handling at the well incident site. A noticeable difference is that the Eagle Texas houses an additional module that manages the chemicals used in the umbilical, and a control system that operates a subsea containment assembly unit through the umbilical. A crucial safety element found in the vessels is the riser turret module (RTM), which connects the subsea equipment to the vessel s topside processing equipment. The RTM includes emergency disconnect capabilities and safety devices that provide the main barriers between the vessel and the subsea well. In the event of an emergency disconnect, the shutdown valves are closed, power to the umbilical and the turret buoy is shut down and disconnected from the RTM, and the turret buoy is lowered into the water. This disconnects the vessel from the subsea equipment. The disconnect process takes approximately 90 seconds to complete. The vessels also have dynamic positioning systems that allow them to be quickly put into operation. They can maintain a fixed position and heading with expected external forces such as wind, waves, and current by five thrusters four azimuth thrusters and one bow tunnel thruster and a controllable pitch propeller on their main engine. The positioning system allows the vessels to rotate 360 around the RTM s turntable, helping them maintain a geostatic position and ensuring that the connected umbilical and flexible flowlines are not subjected to twisting. Should a containment incident occur, the vessels are mobilized to MWCC s MCV Shore Base in Ingleside, Texas, to be outfitted with processing equipment that has been assembled into modules (10 for Eagle Texas and nine for Eagle Louisiana) to facilitate more effcient transportation, lifting, and installation from the dockside onto the vessels. OGF For Further Reading OTC 26098 GTL FPSO & Modular GTL as Potential Solutions for Developing Offshore Oil & Gas Fields by H. Kwon, D. Choi, and Y. Moon, DSME et al. SPE 173619 Improving Oil and Gas Well Performance With Modular Facilities Design by M. Halker, Halker Consulting. Marton, A. and Schroth, J. 2015. The Lure of Modular Construction: Assessing the Advantages and Risks, http://www.ipaglobal.com/the-lure-of-modularconstruction-assessing-the-advantages-and-risks (accessed 16 March 2016). SOPs That Operators Will Actually Want To Use A Guide to Writing Effective SOPs Get your copy today and fi nd out how standard operating procedures should be written for the Oil & Gas Industry. www.gateinc.com/sops