Monday, July 2, 2007
An offshore solution to energy supply
July 2, 2007
Petroleum Review
A gigantic concrete structure is rising up on the Spanish coast, across the bay from Gibraltar - but this is not a Spanish effort to emulate the famous rock, writes Jeff Crook. The structure is, in fact, an artificial island. When complete, it will be towed to the northern Adriatic, where it will be submerged in 30 metres of water to act as an offshore LNG terminal - the first of its kind in the world. When brought into operation towards the end of 2008, the offshore terminal will have capacity to store 250,000 cm of LNG and vapourise 8bn cm/y of gas. It will receive around two ship loads of LNG each week from RasGas II in Qatar.
The Adriatic terminal, which is operated by Edison, with partners ExxonMobil and Qatar Petroleum, is now the only LNG terminal under construction in Italy following a major setback at Brindisi. The Brindisi site has been seized in connection with a criminal investigation by the Italian authorities into allegations of improper conduct relating to the authorisation process. However, BG Group reports that it 'has not abandoned the Brindisi project, is actively pursuing release of the site and continues to target first LNG deliveries to the terminal during 2010'.
The problems at Brindisi have focused attention on the challenge that companies face in establishing LNG terminals on the coast. Competition for coastal sites has increased relentlessly as environmental standards continue to tighten. These LNG sites also tend to attract strong opposition from the local population due to the perceived safety risks. To address these problems there is a trend towards building offshore terminals, where LNG ships can discharge at sea, far from coastal communities.
First of its kind
When in operation, the Adriatic terminal will provide mooring facilities and loading arms to allow LNG ships of up to 152,000 cm capacity to be berthed and discharged. The regasification process and auxiliary plants, equipment, control room and living quarters will be placed on top of the gravity base (GBS) structure. It will be connected by a 30-inch gas pipeline to the shore, where gas is fed into the Italian gas transmission system. A logistics base on the Levante Po River will support the terminal operations.
The GBS is being built in an existing dry dock in Campamento in the bay of Algeciras. It measures 180 x 88 x 48 metres and is designed to be buoyant for its tow to the Adriatic. Aker Kvaerner carried out both the front-end and detailed design; Dragados Offshore was awarded contracts for construction, and Arup is performing project management services at the construction site.
The partners awarded a $110mn contract for the LNG tanks to Hyundai Heavy Industries (HHI) in South Korea. The transport of the two tanks presented a challenge due to their 155-metre length. This was addressed by dividing each tank into three sections, with the six sections loaded out on to a heavy lift vessel at the Ulsan yard in December 2006.
After being unloaded from the heavy lift vessel, the tanks were installed side-by-side within the concrete platform structure. When assembled, each tank weighs 4,800 tonnes, and measures 33 metres wide, 28 metres high and 155 metres long. The tanks needed to be designed to withstand internal pressure and the corrosive effects of seawater. HHI says that by using special material, such as 9% nickel steel, the yard can increase durability and maximise the size of tanks while minimising thickness of tanks and total weight. The tanks are protected with high resistance concrete double walls, with inert material (sand) between the two walls.
Once complete, the dock will be flooded and the caisson floated to its final location in 30 metres of water some 17 km offshore Porto Levante, in the northern Adriatic Sea. The pipeline will be buried in the seabed to minimise impact on the environment and maritime activities such as fishing. A gas flow metering station will be located close to the land fall, near the Levante Po River Mouth.
Navigation around the structure will be constantly monitored. Edison says that the terminal will be equipped with the most modern radar tools in order to detect the presence of ships in transit, as well as anti-collision signalling systems. In addition to advanced automation, the terminal will be equipped with advanced safety and security features, including fire-fighting systems, alarms, visual monitoring systems and sophisticated anti-intrusion systems.
There have been several other artificial island proposals, most notably in the Gulf of Mexico, although none is as advanced as the Adriatic scheme. This approach is, however, only suitable for calm and benign sea conditions, such as the Mediterranean, where ships can be moored to fixed offshore structures. An alternative approach, involving a 'submerged turret loading system', can be adopted for deeper and more hostile ocean conditions.
Gulf Gateway
The Gulf Gateway project uses the submerged turret loading concept and was inaugurated in April 2005, when it was not only the first offshore terminal in the world, but also the first new LNG terminal in the US for 20 years, according to its operator Excelerate Energy. The LNG is regasified on specially designed vessels, with gas fed to a pipeline system some 116 miles off the coast of Louisiana. The terminal has a baseload capacity of 500mn cf/d, with a peak capacity of 690mn cf/d.
This submerged turret loading concept involves minimal offshore construction in comparison to the Adriatic scheme, so these terminals can be implemented far more rapidly. However, one major drawback is that the Gulf Gateway can only be used by specialised vessels, equipped with turret/swivel to dock to the buoy and onboard facilities for vapourising the LNG. These ships are very expensive ($290mn each) and few have so far been built. Another drawback is that the terminals do not have LNG storage capability, so gas must be fed directly into the onshore distribution system.
The ships are moored to a single point mooring system developed and supplied by the Norwegian company APL. This system is widely used for oil and gas developments in harsh environmental conditions, such as typhoon prone areas of the South China Sea. Anchor lines and flexible flowlines are connected to a buoy, which floats 30 metres below the surface when not in use. When mooring, the buoy is pulled to connect to a 'turret'; this is a steel structure that is able to turn on bearings within the ship's hull. The turret enables the ship to 'weathervane' around the mooring, and thus ensures that a vessel can ride out a storm with the minimum of motion. As the mooring lines radiate out in all directions, they apply steady force to hold the vessel on station. Station-keeping and orientation are also aided by thrusters. A 'swivel stack' within the turret provides continuous fluid/electrical flow paths as the vessel turns. Fluids can then flow, via the buoy, to pipelines on the seafloor.
The robustness of the concept was demonstrated when hurricane Katrina left a swathe of wrecked offshore facilities in the Gulf of Mexico before causing devastation in New Orleans. The hurricane passed within 200 miles of Gulf Gateway on 29 August 2005, creating turbulent sea conditions with waves heights five to six metres high. However, this was 'well below the 100-year design and operational limits for the deepwater port', according to Excelerate Energy. Rather than closing down the facility, output was actually stepped up at Gulf Gateway in order to compensate for loss of production from other Gulf of Mexico facilities.
Future prospects
LNG imports currently account for a very small proportion of US gas consumption, with just five terminals currently operational, according to the Federal Energy Regulatory Commission (FERC). However, these imports could grow very rapidly as there were 43 firm proposals and the potential for 63 new terminals as of February 2007. Three of the approved proposals are for new terminals in Mexico and two in Canada.
While most proposals involve onshore construction, five proposals have been approved by Marad/US Coastguard for offshore terminals in the US, while another offshore scheme has been approved in Mexico.
Excelerate Energy is constructing the Northeast Gateway in Massachusetts Bay, also using the submerged turret loading concept. This will have an average output of 400mn cf/d, with peak capacity of 800mn cf/d. It will be located around 21 km south-east of Gloucester and is due onstream in 2Q2007. The company currently has a fleet of three 138,000 cm regasification vessels, with a fourth 159,000 cm vessel due to join the fleet in 2008.
The Neptune terminal, operated by Suez LNG, also involves the submerged turret loading concept and should be operational in 2009. The average send-out capacity of each SRV (shuttle and regasification vessel) will be 400mn cf/d, with a peak capacity of approximately 750mn cf/d. This terminal will supplement Suez LNG's existing onshore LNG terminal in Everett.
The Neptune LNG facility will be located approximately 16 km south of the city of Gloucester and 35 km north-east of Boston in 80 metres water depth. Samsung Heavy Industries received an order for the two 145,000 cm capacity vessels for this project at a cost of $290mn each. These diesel-electric ships will be operated by a joint venture between Hoegh LNG and Mitsui OSK lines.
ChevronTexaco has, meanwhile, proposed schemes for the Port Pelican discharge LNG terminals based on concrete gravity platforms, with a similar scheme proposed for Baja, across the border in Mexico. Front-end design was carried out by Aker Kvaerner and both these schemes have received approval from their respective authorities - although little progress has subsequently been reported. Shell's Gulf Landing project also has approval.
McMoRan is pursuing plans to develop the Main Pass Energy Hub, which will be used both for receipt and for storage of natural gas. This has also received Marad/US Coastguard approval. The plan involves using existing platforms that were formerly used for sulphur mining. The platforms are located 38 miles east of Venice, Louisiana, in 210 ft of water. The terminal would initially have capacity to handle 1bn cf/d of natural gas. Additional investments are being considered to develop cavern storage for 28bn cf of natural gas in the large salt dome structure at this site. This would permit delivery of up to 2.5bn cf/d of gas.
In addition to the offshore terminals described previously, a further 19 onshore LNG terminals have been approved by FERC in the US. However, there is uncertainty about how many of these will actually be completed. In a speech in October 2006, John Hofmeister, President of Shell Oil, said: 'We've seen a number of plans shelved for re-gas terminals in recent months. This year alone (2006) about six have been shelved. Next year some more could be shelved.'
The expansion of LNG imports into the US will, nevertheless, have enormous implications for the worldwide LNG market, which is already expanding at an exponential rate. So the terminal construction programme will be watched with great interest by the industry.
