Why reeling operations will be critical to the FPSO sector’s success
13 June 2023
The oil and gas sector will be indispensable in the midst of energy security and affordability challenges. But with continued pressure to manage costs, how can it maximise new opportunities in a way that is both safe and commercially sustainable?
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With a chronic lack of investment and challenges in the supply chain, the sector is heading in an uncertain direction. Now, still nervously navigating a new normal, forces beyond its control mean it faces dramatic cost pressures. In 2023 alone, we’re seeing rising costs by as much as 10% due to labour uncertainties, raw-materials inflation, and growing supply chain prices.1
New tenders are feeling the pinch. While there is a significant growth in orders for new floating production storage and offloading vessels (FPSOs), the new normal is expensive. For example, spiraling operating expenditures with rising steel prices are impacted by unprecedented energy costs, while supply chain costs are seeing support vessels reaching over €50,000 per day all included.
What can FPSO owners and operators do? They are under intense pressure to deliver the energy we need while driving down costs at every possible point. One option is to cut corners with cheaper, less effective equipment. However, this is only passing the buck later down the line. What may look cheap today fails to appreciate lifecycle costs, which means costs will emerge due to poor lifecycle performance.
This problem is quickly emerging in reeling hoses. FPSO operators will feel these costs acutely in reeling operations early in their installation. The cost of dismantling one marine hose line after three years for an intermediate testing interval can rise to more than €1.5 million, taking into account the cost of disassembly and replacement of the line to be tested, testing, scrapping and replacement of hoses that do not meet the GMPHOM09 testing requirements, not considering the costs for day-to-day maintenance required on a less premium product. This figure does not consider the cost of the second line that FPSO operators need to use to maintain operations while testing the initial one.
There's no doubt that FPSOs face great challenges and opportunities. There is tremendous potential for FPSO expansion to meet the demand for significant energy security and affordability, as seen with an order book including larger, more complex units capable of 250,000 barrels per day.
That demand is driving FPSOs into new fields, with the deepwater sector experiencing a sustained period of growth. However, these fields are riskier operating environments with weather hazards, acute knowledge gaps, and the risk of spiraling project management costs, making it vital that operators have the right products and partners to hand.
This growing market demand combined with challenging and complex regions means that an already under pressure industry could be stretched further. More than ever, we need to be aware of quality, performance and safety issues that could emerge as an Achilles’ Heel for the industry, with costly – or potentially dangerous consequences for not taking these seriously.
Future proof your FPSO
FPSO operations are a crucial part of growing markets such as the Brazilian energy sector – earning the title of the “FPSO capital” with more than 50 vessels in action since 2005. According to an analysis from Rystad Energy, Brazil has been the leading market for FPSO projects in recent years, accounting for just over one-third of FPSO awards between 2017 and 2024. Moreover, the demand for FPSOs is expected to increase again after a slowdown due to COVID-19, as Brazil has an estimated undiscovered resource base of up to 24 billion barrels.2
The offshore oil and gas sector is moving into deeper, more complex, and remote fields. Situated in deepwater and ultra-deepwater environments, especially with no existing infrastructure and spiraling total development and operational costs, FPSOs must be conscious of severe weather conditions, which can strain fluid transfer operations.
FPSOs are effective development solutions for these fields, allowing the vessel unrestricted 360 degree rotation known colloquially as “weathervane,” instead of fixed piled structures. This ability to move is vital in environments where the waves are unpredictable and come from all directions, as in Brazil, putting stress and strain on the FPSO’s equipment, including reeling hoses. Not only does this increase movement and therefore wear on the hose, but it also increases safety risks, resulting in costly downtime with increasing labour and material costs.
However, the biggest immediate impact comes in installation and operability, restricting an asset's operational flexibility and mobility. Planning to replace a hose more frequently – and incurring the high costs of hose replacements several more times throughout a project – greatly impacts whole-life project costs.
Not only is this a highly expensive, labour intensive and wasteful process, but it also encourages buyers to treat hoses as simple commodities. This approach might lead to users mix-and-matching hoses from different suppliers, bought at different times, which could further exacerbate wear and tear and further increase the need for maintenance.
It is imperative that selecting a proven hose across its lifecycle for oil transfer is a crucial part of FPSO operations. The costs for failing to do so can be dramatic, reaching over €1.5 million throughout its lifecycle for unnecessary testing, replacements, and requalification. Yet, why then, when it comes to some of the most impactful FPSO equipment decisions, are oil producers unable to benefit from leading technology from no fault of their own?
Bringing standards up to speed with technology
Each region has its own specific set of standards for reeling operations. In the North Sea for instance, there are rigorous requirements for the type of hoses used with only submarine catenary configurations permitted due to its severe weather conditions. The North Sea is notorious for its severe conditions, particularly in the deep-water sector, making it impractical to use floating hoses. In fact, a submarine hose incorporated into a catenary system would provide greater stability in harsh weather conditions compared to a floating line.
In some regions, such as Brazil, current standards are based on a traditional dichotomy of a hose being either a 'single carcass' or 'double carcass' construction with unstable floating hoses common. This contradiction is a binary standard that goes back decades, borne out of convenience in very different circumstances.
Not all hoses are created equal
In areas with significant expansion of FPSOs, such as Brazil, we could consider current standards outdated. For instance, product quality has improved in critical operations such as reeling hoses, while standards fail to keep up. When FPSOs need to deliver more with less, you must invest in products that offer flexibility, reliability, and long service life. We need standards that encourage the uptake of safer and proven technologies that will benefit the industry.
Reeling hoses are vital to these operations; and the industry must recognize designs that are most effective for reeling options: a dual carcass. This design combines flexibility with strength, long life, and is lighter than a double carcass; it can also occupy the same storage reel as a double carcass hose, if not smaller reels, saving valuable space. A dual carcass can conduct transfer over longer distances without increasing weight, which impacts ease of recovery.
One of the first considerations for a reeling hose is that it must be proven safe. After safety, long service life is vital to ensuring reliability and avoiding unnecessary maintenance. In contrast to standard reeling hoses, dual carcass hoses use a nippleless hose design. On a nippleless hose, there are no large, stiff metal connectors; the metal connectors are kept far more compact than in a nipple-design hose with integrated bending stiffeners.
This unique design feature means less stress is put on the hose, reducing stress corrosion and fatigue, and reducing the possibility of a kink occurring in the hose – which would render a hose unusable and require immediate replacement. It also means there is no need for gaskets at each connection, which reduces the pressure exerted on the hose, increasing its resilience and making installation simpler and less costly. Meanwhile, the dual carcass design fully embeds the continuous rubber inner liner into the flanges and gasket caps to protect caps from seawater corrosion, a major challenge facing FPSOs.
The service life and maintenance interval of reeling hoses on the market varies quite dramatically. Most have a serviceable life between three and five years while others have a minimum maintenance free service life of seven years.
Better technology, better regulation
It's worth considering why there has yet to be a significant increase in orders for dual carcass hoses in the industry. Despite the potential for financial losses due to missed production hours and unnecessary risk with the challenging process of changing reeling hoses, there is a concerning trend towards prioritising the upfront cost over quality and a lack of awareness about quality's role in the overall lifecycle performance of assets.
Reeling operations are one such area where quality performance can reduce costs over the project’s lifecycle. As an industry, we must seize the initiative, and take a lifecycle approach that prioritises premium quality with proven results today. Not only does this drive down costs but it also reduces supply chain CO2 emissions associated with scrapping equipment and avoidable maintenance operations. In fact, taking a holistic approach to choosing the right product can reduce operating expenditure, improve safety, and boost the safe lifecycle of assets of up to eight years.
However, we need positive, proactive regulation that encourages the uptake of safer, proven and premium products. Oil transfer for reeling operations on FPSOs is an example of an important gap between potential and actual performance perpetuated by standards that are no longer in pace with technology. The solution that operators in challenging environments need is here – but it requires lateral thinking from regulators and industry bodies to fully take advantage of it.
Jonathan Petit, Trelleborg Fluid Handling Solutions
Current standards do not recognise the most effective designs for reeling options. These current standards ultimately expose the industry to more risk with poor-quality hoses increasing the risk of injury or leak. While it could be cheaper initially, strategies based on shorter lifecycles will increase bills and require replacements sooner than a premium, proven solution.
It’s time for the industry to address this challenge head-on and strengthen current standards that rectify one of the sector’s most pressing Achilles’ Heels today.
About the author:
Jonathan Petit is a mechanical engineer with over 12 years of experience in the field of fluid handling and oil transfer in marine environment. He is currently the Oil & Marine Hoses Manager for Trelleborg Fluid Handling Solutions. In this role, Jonathan oversees product development, technical support, and customer relations for the company's oil and marine hose transfer solutions, specifically looking at crude oil, seawater intake, LPG, chemical and customised oil hoses. Jonathan has a background in mechanical engineering with degrees from INSA Lyon - Institut National des Sciences Appliquées de Lyon and the Université de Lyon.
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