CSA Ocean Sciences Inc. (CSA), along with team members Oasis and TNO, has been awarded a contract from the Bureau of Ocean Energy Management (BOEM) for the project entitled, “A Parametric Analysis and Sensitivity Study of the Acoustic Propagation for Renewable Energy Sources and Projects” (PASS). The main objective of the PASS study is to standardize modeling approaches for sound propagation from activities associated with offshore renewable energy development for the Atlantic Outer Continental Shelf. More specifically, the project’s aim is three fold: 1) characterize the sensitivity of the sound field to known variability in propagation conditions for wind farm installation activities, including but not limited to pile driving; 2) improve understanding of shallow water propagation characteristics and the sound field caused by pile driving and related activities; and 3) provide a harmonized methodology for estimating the volume of ocean impacted from each activity.
Environmental compliance documents are prepared by BOEM for US offshore renewable energy projects, and underwater acoustic modeling is an integral element of these documents to understand potential acoustic impact on marine life. Acoustic modeling is conducted by different contractors, using a variety of models and approaches, which results in diverse estimations of predicted sound fields, thus, making it difficult to understand to what degree predictions are within acceptable norms.
Ultimately, this study will recommend a consistent underwater acoustic modeling approach and quantify the acoustic impact volume associated with the construction of renewable energy facilities. These results will assist BOEM with unifying, understanding, and validating the range of acoustic modeling results used for compliance documents through determination of the salient environmental parameters that influence predicted acoustic fields and, hence, mitigation needs. Understanding the limits and strengths of the acoustic modeling approaches will increase understanding and lead to harmonization of approaches as well as facilitate a reduction in inconsistency.
For more information about this important study and other CSA services, click here.
McDermott International, Inc. (NYSE:MDR) announces it has acquired the newly built pipelay and construction vessel Amazon to better position the Company for ultra deepwater and SURF projects.
The Amazon. McDermott- ©Kloet
“This is a great opportunity for the Company to expand the technical capabilities of our global fleet and grow in the deepwater and SURF markets and greatly increase our ultra deepwater project coverage,” said David Dickson, President and Chief Executive Officer of McDermott. “Due to current market conditions and the opportunistic nature of the transaction, we were able to acquire what is essentially a new, enabling asset at a fraction of the original build cost.”
McDermott plans to upgrade the vessel to address the ultra deepwater market with a state-of-the-art J-lay system outfitted with the latest vessel technology. In the near term, the Company plans to make minor capital expenditure investments to bring the vessel up to Company standards. As McDermott finalizes its upgrade plans, the Company plans to use the vessel on existing construction and pipelay projects.
Funding for the vessel acquisition has been secured through a sale and leaseback arrangement under which McDermott has control of the vessel in exchange for a daily charter-hire rate. The planned upgrade to the state-of-the-art J-lay system and related financing are expected to be considered in line with market conditions.
Completed in 2014, the Amazon is equipped with 49,514 square feet (4,600 square meters) of deck space complete with two 440-ton (400-tonne) cranes, a service speed of 12 knots and accommodation for up to 200 crew and service staff.
Pharos Offshore have recently completed the development and enhancement of a 2,500m rated SMD-built tracked (or free-flying) jet trencher, which has subsequently been named the UTV400.
The 400hp Trenching ROV (TROV) set the benchmark for cable maintenance scopes when it was first introduced in to the offshore market. Pharos Offshore have now brought the system back in-line with current working practices by modernizing the equipment and doubling the burial capabilities.
The system utilizes high power to provide numerous inspection, repair and maintenance tasks, with the ability to de-bury, cut and recover a multitude of subsea products with enhanced efficiency. Offering a trench capability of 2m max depth, soil dependent, 100kPa max, the UTV400 tool packages, 1.0/ 1.5 and 2.0m, can be changed out at sea depending on project requirements and can work to a minimum jetting speed of 100m/h even in firm seabeds.
Integrated surface feed option for operations from 0 - 20m water depth. The system is capable of performing works from the shore end (5m WD) right through to 2,500m water depth. With further development, and an extensive re-engineering program delivered by Pharos Offshore Group to enhance the systems efficiency, the TROV will now continue to boast its reputation for reliability and performance. The unit has become an essential part of any cable installation or maintenance package due to its small deck requirements and ease of maintenance.
Pharos Offshore are able to offer a project package which includes a Sea State 5 launch and recovery crane, now with greater efficiency and burial ability, the system will go on to perform works for Pharos’ clients across the offshore oil, gas, renewable and telecommunications markets on a global scale.
Pharos Offshore delivers engineering solutions for subsea cable installation, maintenance and repair. We work with clients across the offshore Oil & Gas, Submarine Telecoms and Renewable Power industries. Our in-house expertise includes highly skilled and experienced offshore technical professionals and on-shore engineering management and operational support teams. Pharos Offshore develops subsea cable handling and burial solutions, including vehicle and handling systems, with a proven track record in taking projects from concept design, delivery, testing and on-going support.
Craig International has signed a global agreement with energy major, Shell to provide services for equipment stock resale.
The oilfield procurement specialist recently launched Craig Collaboration to provide companies with the opportunity to reduce wastage and duplication, recoup financial outlay and sell unwanted items which are often sitting in storage, this is considered a radical shift in the approach to procurement in the oil and gas industry.
Craig Collaboration connects companies looking to sell spare equipment with those looking to buy. Oil and gas companies around the world have substantial surplus equipment stock, much of which is sitting in costly storage, and Craig Collaboration will allow them to realize value from this.
Jill MacDonald, joint managing director of Craig International, said: “There is a lot of equipment going unused in the oil and gas industry and it makes sense from a business and environmental point of view to reuse it.
Craig International will provide all Shell’s spare stock across the globe for resale.
“We have developed a system that leads the way in improving efficiency right across the supply chain in the oil and gas industry. Rather than waiting for things to improve, Craig International is delivering inventive approaches and investing in products that make life easier and provide value for clients.”
As well as the ability to buy and sell equipment stock, a further function of the Craig Collaboration approach is that it allows businesses to use the platform as an inventory controller.
“Our system will flag if a customer is looking for a piece of kit in Aberdeen which their Dubai business has available,” said Ms. MacDonald. “This eliminates waste and means customers can be fully confident that they are getting best value for their money.
“The system we have developed is unique in its capacity to service the equipment buying and selling requirements of the entire oil and gas industry. Any company can sign up and their surplus equipment will be offered to buyers globally with whom we are in contact regularly.”
Ms. MacDonald added: “With 19 years’ experience, we are harnessing our knowledge, expertise, contacts with buyers and our global buying power to benefit the industry as whole.
“We have generated a great deal of interest in Craig Collaboration since it launched with many well-known operators and drilling companies coming on-board in an easy way for them to increase efficiencies and reduce waste.”
Stuart Hay, appointed as ecommerce inventory coordinator at Craig International, will be the focal point for Shell. Mr. Hay has 18 years of oil and gas procurement experience and has worked across the drilling, engineering and construction, subsea and offshore accommodation sectors. He will be supported in his role by an inventory administrator due to be appointed in the coming weeks.
Craig Collaboration also provides sellers with an analysis of the interest expressed on their surplus equipment, allowing clients to make an informed decision on whether or not to dispose of it.
A division of Craig Group, Craig International is a global market leader in oilfield equipment procurement with bases in Europe, South Africa, Middle-east and North America. The company is set to dominate in other sectors as it expands its reach into downstream oil and gas, petrochemicals and manufacturing markets. Craig International now delivers procurement services for refineries and manufacturing sites in all its key regions around the world.
Fugro has been awarded a contract by Shell/BG Kenya for the execution of a seabed survey to detect natural leakages of hydrocarbons. The seeps survey complements a seismic exploration programme that was completed recently offshore Kenya.
Undertaking a four-week campaign of multibeam data acquisition and precise sampling, Fugro will mobilise its specialised survey vessel, Fugro Discovery, to Kenya in March. Seabed sampling will be carried out using a drop corer and multibeam data will be acquired with the latest deepwater high resolution multibeam echo sounder, installed in a newly designed gondola on the vessel hull.
The project is one of many seeps campaigns completed in the world’s oceans for Shell by Fugro and demonstrates the added value of consistent execution of site works and standardised deliverables. Managed under a joint Fugro-Shell Safety Leadership programme, the project optimises both companies’ expertise in efficient and safe delivery.
Peter Boon, Regional Business Development Manager for Fugro in Africa comments, “Seeps surveys are an important part of Fugro’s site characterisation services and we’re very pleased to reintroduce the Fugro Discovery to African waters, where she will demonstrate the excellent value they represent when exploration budgets are limited. These important seabed surveys support the decision making process for drilling operations, especially in frontier regions like East Africa.”
Olympic Shipping has chosen Kongsberg Maritime’s new K-Walk integrated vessel gangway solution for installation aboard the Multipurpose Offshore Vessel (MPSV), Olympic Orion. Designed to significantly increase efficiency and safety for Walk-to-Work duties, K-Walk will be integrated with the advanced Kongsberg Information Management System (K-IMS) and the existing K-Pos Dynamic Positioning system on board Olympic Orion, which will be upgraded as part of the installation in the latter half of 2017.
Olympic Orion will utilize the innovative K-Walk solution following its launch as part of KONGSBERG’s new Integration Strategy in Fall 2016. The system takes a new approach to increasing productivity and efficiency for Walk-to-Work vessels by improving operability of key systems on board. In addition to full integration with K-IMS to enable mission and route planning for increased service capability within a wind farm, the system interconnects with the DP and a planning station. The system extends vessel availability by increasing the operational weather window.
Through integrated mission planning, automated vessel maneuvering and gangway hook-up, K-Walk introduces a step-change for increasing efficiency and productivity of the Walk-to-Work operations that are integral to Wind Farm Construction and Maintenance projects. While providing a completely safe, motion compensated gangway for the fast transfer of personnel and materials, integration enables more efficient approach and settlement at wind turbines and more effective logistics. The system is activated prior to entering a wind turbine’s safety zone, reducing vessel speed and launching the K-Walk hook up process during approach. Because of the integration with the DP, the gangway is able to move into position while the vessel is still moving, positioning it safely as the vessel arrives on station.
The integration of K-Walk with K-IMS is a unique approach that enables in-depth mission planning, resulting in increased productivity and efficiency by finding the most preferred route for increased service capability within the wind farm. The system will be fully connected with Olympic Orion’s DP system, offering increased operability with a new condition based operator environment, which requires less manpower and has minimal training requirements. The K-Walk solution for Olympic Orion will also improve time for mobility and safety with an integrated lift system for transfer of people and goods, including electric trolleys (under design) for movement of pallets across the gangway. Overall, K-Walk significantly enhances operational time efficiency, which improves productivity with the ability to serve more wind turbines within the same time frame.
“We are very satisfied to select Kongsberg Maritime’s new fully integrated Gangway solution for our MPSV Olympic Orion,” says Bjørn Kvalsund, COO, Olympic Subsea. “We also see a potential to install this integrated Gangway solution on board several of our existing vessels in order to provide W2W services into an expanding and interesting market segment.”
“Olympic Orion embodies the future that we envisioned with the launch of our Integration Strategy last year and we are delighted to work with Olympic Shipping for our cutting-edge new K-Walk solution,”said Stene Førsund, Executive Vice President, Global Sales and Marketing, Kongsberg Maritime. “K-Walk provides Olympic Orion with total oversight of route planning and gangway hook-up operations. It enables better real-time and long-term management decisions, and empowers safer, more predictable, and efficient operations through reduced human interaction and automation based on the deep integration of critical systems on board.”
BOURBON announces its first pipelay contract awarded by Total Gabon for the engineering, procurement, construction and installation of 25 km of 6” rigid pipeline as part of the Hylia Water Injection Project using Zap-Lok® technology. This award reflects BOURBON's capacity to offer integrated services and light turnkey projects to major oil & gas companies.
3D view from Cortez Subsea of Bourbon Evolution 800 with pipelay spread
For the execution of this contract, BOURBON is subcontracting key suppliers, mainly Cortez Subsea, for pipelay equipment and Wood Group for the pipeline design and pipelay engineering. Operations are scheduled to start in Q2 2017 offshore Gabon with an MPSV from the Bourbon Evolution 800 series. ROV services and a PSV, all provided by BOURBON, will also support survey and air diving operations for spool and riser installation.
“We are very proud of the trust that Total has placed in us for this first pipelay EPCI contract. Such a comprehensive project allows BOURBON and its Gabonese partners to demonstrate our capacity to bring the best integrated services and cost-effective solutions to our clients”, commented Patrick Belenfant, BOURBON’s Senior VP Subsea Services.
Among the market leaders in marine services for offshore oil & gas, BOURBON offers the most demanding oil & gas companies a wide range of marine services, both surface and sub-surface, for offshore oil & gas fields and wind farms. These extensive services rely on a broad range of the latest-generation vessels and the expertise of more than 9,500 skilled employees. Through its 37 operating subsidiaries the group provides local services as close as possible to customers and their operations throughout the world, of the highest standards of service and safety.
BOURBON provides two operating activities (Marine Services and Subsea Services) and also protects the French coastline for the French Navy.
In 2016, BOURBON'S revenue came to €1,102.6 million and as of December 31, 2016, the company operated a fleet of 514 vessels.
Placed by ICB (Industry Classification Benchmark) in the "Oil Services" sector, BOURBON is listed on the Euronext Paris, Compartment B.
* EPCI: Engineering, Procurement, Construction and Installation.
Ulstein and SeaOwls have launched a pioneering heavy-lift jack-up vessel design. The cruciform structural lay-out makes the solution more than 10% lighter than conventional designs. The concept aims to install the next generation 10-12 MW wind turbines in the same time frame as used today for installing 6-8 MW units.
SeaOwls and Ulstein launched SOUL at the Offshore Wind Journal Conference on 7 February 2017. In combination with a high capacity crane, SOUL enables operators to take the next step in developing offshore wind farms.
“The development of this novel jack-up vessel is the logical next step in our strategy to widen our portfolio and become a leading company in supporting the offshore wind industry with more efficient assets”, says Tore Ulstein, deputy CEO at Ulstein Group. “Combining the vast track record in heavy lift vessel designs from our Dutch Ulstein branch with SeaOwls’ experience in jack-up technology, resulted in an innovative jack-up vessel concept based on proven technologies.”
Scaling-up conventional heavy lift jack-up vessel designs proves challenging due to the disproportional weight increase compared to gain in Variable Deck Load (VDL).
“We noticed this created uncertainty with turbine manufacturers, wind farm operators and installation contractors on how to install the future generation wind turbines, as floating vessels are not a viable alternative”, comments Erik Snijders, founder and managing director at Rotterdam based SeaOwls. “So we went back to the optimal jack-up design, a square platform with the legs spaced out as much as possible. Rotating the platform by 45o provided a natural bow shape with two legs and the crane on vessel center line.”
“This seemingly simple twist in the design allowed to make a huge improvement in operational aspects as well,” adds Bram Lambregts, deputy managing director at Ulstein Design & Solutions BV. “With the main crane around the stern leg, optimal main deck reach and over-the-side lifting capabilities is created. And as the hull now houses much larger leg footings, bearing pressures on the seabed are reduced, while the wake of the spud cans does not interfere with the inflow to the propulsion thrusters.”
The SOUL series will come in various sizes, allowing the transport of 3 up to 6 of the 10-12MW wind turbines. Still, all loading and installation operations can be performed without the need of ballast water.
A preview of the SOUL concept has been presented to a select group of industry players, which resulted in valuable and very positive feedback from prospective clients, such as: “One of the most viable new solutions to meet the installation challenges the offshore wind industry is facing.”
Statoil awards Simon Møkster Shipping AS contracts for three emergency response and rescue vessels (ERRV), and Havila Shipping ASA for one ERRV. The contacts have a total value, included options, of NOK 2.7 billion. The vessels will be part of Statoil’s area-wide emergency response on the Norwegian continental shelf (NCS).
The emergency response vessels play an important role in addressing government authorities’ and the company’s own requirements for rescue, hospital, fire-fighting, emergency towing and oil spill preparedness.
Photo credit: Statoil
“Statoil has an extensive emergency preparedness system on the NCS, and through the contracts we have secured four vessels that are tailored to our waters. I look forward to continuing our long-standing and good partnership with Simon Møkster Shipping and Havila Shipping,” says Philippe F. Mathieu, Statoil’s senior vice president for joint operations support.
Long time horizon
The contracts will run for seven years, with five one-year extension options. The three vessels from Simon Møkster Shipping are Stril Poseidon, Stril Merkur and Stril Herkules. Havila Shipping has been awarded a contract for the vessel Havila Troll. Statoil has a total of six ERRV vessels on the NCS, and one vessel currently being upgraded to an adequate relief vessel.
The vessels will cover emergency response services on the NCS together with the 24-hour operations center at Sandsli. In addition, Statoil has five operative SAR helicopters on the NCS.
“Safety and emergency preparedness are top priorities in our operations. Through the new contracts we are well prepared for important emergency response tasks on the NCS in the years to come. The contracted vessels incorporate some of the most sophisticated technologies for emergency response offshore,” says Mathieu.
The area emergency response vessels are fitted with two MOB boats, fire-fighting equipment, minimum 110-tonne towing capacity and an emergency hospital. In addition, the vessels carry oil spill response equipment such as oil booms and skimmers, and storage capacity for oil spill clean-up in accordance with NOFO requirements, in addition to oil dispersing equipment. The vessels also have a stern lifeboat recovery system, and a helipad. In the bid process fuel efficiency has been part of the evaluation criteria.
All contracted vessels have been performing similar tasks for Statoil for many years, and shipping companies and crews are therefore well acquainted with the tasks to be performed.
Emergency response collaboration
Statoil is working closely with several private and public players about the emergency preparedness system on the NCS. Through the Norwegian Clean Seas Association for Operating Companies (NOFO) the company has access to oil spill response resources along the entire coast.
ELA Container Offshore GmbH announced the development of a new offshore container type: a 10 m x 3 m wide, high-cube accommodation container with interior hallway and two cabins. The first 24 containers of this new type have already been built at the premises in Haren, Germany. ELA Offshore managed to deliver all required containers from scratch in only 3 months from project kick-off, including design and development up to turnkey delivery on an offshore converter station in the German North Sea.
With the new 33-feet-container, ELA Container Offshore sets a new standard in terms of quality of living and comfortability: A modern and appealing wooden-look for the cabinets and beds, as well as a yacht flooring create more comfort and improve the feel-good factor.
“To come up with the best suitable container type, especially for Offshore Windfarms, we sat together with our customer, DNVGL and German authorities, who are responsible for the German “Arbeitsstättenrichtlinien (ASR)”, to create a new generation of container type”, says Hans Gatzemeier, Managing Director of ELA Container Offshore GmbH.
The new units accord with the regulations of DNVGL-ST-E273 “Portable Offshore Units”, April 2016 and ST-E272 “2.7-2 Offshore Service Modules” Section 3, February 2016. In addition the containers correspond to HSE. All containers have fire detectors, fire extinguishers and emergency escape ways. After connection to the fire fighting-system of the platform as well as the PAGA system, the highest safety standards are guarded.
With the new 33-feet-container, ELA Container Offshore sets a new standard in terms of quality of living and comfortability: A modern and appealing wooden-look for the cabinets and beds, as well as a yacht flooring create more comfort and improve the feel-good factor. Sufficient room space, single sleeper rooms, beds with sizes from L = 2100 mm x W = 1000 mm, ensuite bathrooms, 32” Flatscreen TV, large windows with curtains and very good insulation for high end noise reduction also convinced the German Authorities. They checked everything according to German ASR-Regulations.
The 2-4 pax containers (single or double cabins) provide not only more space per person, but also an inner hallway between the two living cabins, which makes outdoor gangways obsolete. Despite their size and high-end accommodation the containers do not exceed the weight of 9.5 tons.
ELA Offshore managed to deliver all required containers from scratch in only 3 months from project kick-off, including design and development up to turnkey delivery on an offshore converter station in the German North Sea.
Available for sale and rent, the new 33 ft container will add a new standard to the already existing 20 ft ELA Offshore Accommodation Containers. “With the new type we offer more possibilities of accommodating the people working offshore. Depending on quantity of extra accommodations needed and available space on deck, we can provide our clients with the best and most cost effective mobile accommodation solution”, continues Gatzemeier.
ELA Container has already gained diverse experience in the Offshore-Wind and Offshore Oil & Gas Industry. Whether on pontoons, transformer platforms, rigs or supply vessels - ELA Container is the ideal partner, offering tailor-made concepts for all requirements in the form of Living Quarters, Offices, Dining Rooms, Galleys, Laundries, Recreation or Locker Rooms and all types of Carrying Units. ELA Offshore containers are equipped with all the necessary utilities. This guarantees, in combination with all ELA Offshore features, a long service life, functionality and comfort.
The high quality Containers are “Made in Germany” according to German quality standards and possess all necessary certifications such as DNV 2.7-1 / EN 12079-1 or DNV 2.7-3, DNV 2.7-2, based on SOLAS, IMO FSS Code and MLC as well as CSC and are approved from several IACS-companies. In terms of fire resistance, an A60 insulation provides high safety standards. Every container will be checked before delivery. Depending on customer requirements, ELA Offshore Containers are individually customized, immediately operational and are available at short notice.
The main features of ELA offshore accommodations include:
- Flexibility on demand
- One base type with various accommodation solutions
- Easy handling thanks to standard 20 ft High-Cube ISO standard dimensions
- Highest quality standards
Global demand for liquefied natural gas (LNG) reached 265 million tons (MT) in 2016 – enough to supply power to around 500 million homes a year. This included an increase in net LNG imports of 17 MT.
Many expected a strong increase in new LNG supplies would outpace demand growth during 2016. Instead, demand growth kept pace with supply as greater than expected demand in Asia and the Middle East absorbed the increase in supply from Australia, according to Shell’s first LNG Outlook.
Photo credit: Shell
“Global LNG trade demonstrated its flexibility time and again in 2016, responding to shortfalls in national and regional gas supply and to new emerging demand,” said Maarten Wetselaar, Integrated Gas and New Energies Director at Shell. “The outlook for LNG demand is set to grow at twice the rate of gas demand, at 4 to 5% a year between 2015 and 2030.”
China and India – which are set to continue driving a rise in demand – were two of the fastest growing buyers, increasing their imports by a combined 11.9 MT of LNG in 2016. This boosted China’s LNG imports in 2016 to 27 MT and India’s to 20 MT.
Total global LNG demand increased following the addition of six new importing countries since 2015: Colombia, Egypt, Jamaica, Jordan, Pakistan and Poland. They brought the number of LNG importers to 35, up from around 10 at the start of this century.
Egypt, Jordan and Pakistan were among the fastest growing LNG importers in the world in 2016. Due to local shortages in gas supplies, they imported 13.9 MT of LNG in total.
The bulk of growth in LNG exports in 2016 came from Australia, where exports increased by 15 MT to a total of 44.3 MT. It was also a significant year for the USA, after 2.9 MT of LNG was delivered from the Sabine Pass terminal in Louisiana.
LNG prices are expected to continue to be determined by multiple factors, including oil prices, global LNG supply and demand dynamics and the costs of new LNG facilities. In addition, the growth of LNG trade has evolved into helping meet demand when domestic gas markets face supply shortages.
LNG trade also is changing to meet the needs of buyers, including shorter-term and lower-volume contracts with greater degrees of flexibility. Some emerging LNG buyers have more challenging credit ratings than traditional buyers.
While the industry has been flexible in developing new demand, there has been a decrease in final investment decisions for new supply.
Shell believes further investments will need to be made by the industry to meet growing demand, most of which is set to come from Asia, after 2020.
In China, a government target has been set for gas to make up 15% of the country’s energy mix by 2030, up from 5% in 2015. Meanwhile, Southeast Asia is projected to become a net importer of LNG by 2035, a significant transformation for a region which includes Malaysia and Indonesia – currently among the major LNG exporters in the world.
Forum Energy Technologies, Inc. (NYSE:FET) has announced that as part of a long planned transition its Board of Directors appointed Mr. Prady Iyyanki as President and Chief Executive Officer, effective May 16, 2017. Mr. Iyyanki currently serves as President and Chief Operating Officer. Mr. C. Christopher Gaut, the current Chief Executive Officer, will become Executive Chairman. The Board has also nominated Mr. Iyyanki to stand for election as a director at the 2017 Annual Meeting of Stockholders Meeting in May.
Prady Iyyanki, left and C. Christopher Gaut, right. (Photo: Business Wire)
Cris Gaut commented, “It has been a privilege to serve as Chairman and CEO of Forum since its inception six and a half years ago. Three years ago we brought Prady on board to create a more professional, streamlined, and efficient organization that was capable of becoming a force to be reckoned with in the oilfield manufacturing space. Since then he has proven himself at every turn to be an excellent leader with strong business judgement. I was pleased to recommend this move to our Board, and I look forward to the continued growth and prosperity of the company under Prady’s leadership.”
“I am honored to lead Forum into its next chapter,” said Prady Iyyanki. “Cris successfully set the direction for Forum’s business and financial strategy, led the transition to being a public company and built a firm foundation of trust with our investors and customers. He established Forum as a strong competitor within the oilfield equipment manufacturing sector, and has proven to be an excellent mentor for me and many others. In his new position, he will continue to be actively involved with our larger strategic matters, as well as acquisition and capital markets efforts. I look forward to continuing my strong partnership with Cris.”
Prady joined Forum in 2014 after sixteen years of experience with General Electric (GE) in various senior management roles. He served as President and CEO of GE Genbacher/Gas Engines from 2006 – 2011 and President and CEO of Turbomachinery Equipment from 2011 – 2012. He has a Bachelor of Science in Engineering from Jawaharlal Nehru Technology University, India and a Master of Science in Engineering from South Dakota State University.
Trelleborg’s offshore operation in Skelmersdale in the U.K., has been certified for the design of its Bend Restrictor Reaction Flange under the American Petroleum Institute’s specification for flexible pipe ancillary equipment (API 17L1 Ed. 1 2013). Having acquired the design review certification for the standard bend restrictor element in 2016, Trelleborg’s complete bend restrictor product is now API 17L1 certified.
The certificate was awarded by Lloyds Register EMEA, acting as an independent verification agent. All design verification was completed by conducting a thorough overview of the design philosophies. Andrew Garside, Innovation and Engineering Director from Trelleborg’s offshore operation, says: “The API assessment is a detailed process approved by an independent third party, which put our design of the bend restrictor reaction flange under stringent analysis. Receiving the certification demonstrates the ability of our design team and the performance of our bend restrictors, especially for use in challenging and harsh offshore environments.”
Designed to reduce lead times, the unique concept of Trelleborg’s Bend Restrictor Reaction Flange eliminates the need for welding. This avoids any constraints due to steel grade availability and procurement and, as steel is not used for welding the flange, the overall weight of the product is reduced.
Trelleborg's bend restrictors are used to protect flexible pipelines from over bending and buckling during their installation or operation phase where static loads are generated. The system comprises of interlocking elements that articulate in three dimensions when they are subject to external loads. At a designed radius, the elements mechanically lock to form a semi rigid curved structure that will not bend further. Bend restrictors are of split design to allow easy installation of the restrictor after pipe termination, meaning installation and maintenance is much simpler.
API 17L1 specification was officially released in March 2013 and all the flexible pipe ancillary equipment now supplied to the offshore industry are in compliance with this standard. The specification defines technical requirements for safe, dimensionally and functionally interchangeable flexible pipe ancillary equipment that is designed and manufactured to uniform standards. These industry standards determine the minimum requirements for the design, material selection, manufacture, documentation, testing, marking and packing of flexible pipe ancillary equipment.
Trelleborg’s offshore operation currently holds API certificates for bend restrictors, bend stiffeners, distributed buoyancy modules and Uraduct®.
For additional information visit our API17L Certificate page.
Another Large U.S. Stock Build
Commercial inventories built 11.1 million barrels last week, substantially widening the year-on-year stock excess to 50 million barrels or 3.8%. Crude stocks built 9.5 million barrels to a new record high of 518 million barrels, 45 million barrels higher than the year before and 187 million barrels higher than the same week in 2014. Cushing crude stocks drew 0.7 million barrels. Another large overall crude stock build is forecast for this week’s data, although stocks at Cushing are set to fall. Also expect large major light product stock declines as crude runs fall to their seasonal lows and demand rebounds, helped by the three day weekend.
Call on U.S. Gas Here to Stay
Net shipments to Mexico are on track to modestly increase month-on-month, with volumes inching ~0.1 BCF/D higher. Looking ahead this year, exports will continue to showcase growing strength, as large scale cross-border projects commence service. All told, 2017 balances suggest U.S. exports will increase by an impressive ~0.7 BCF/D year-on-year. Likewise, despite escalating trade rhetoric from both governments, fundamentals continue to foreshadow robust cross-border flows over the medium term.
Price Strength to Continue, as Hydro Reserves below Normal in Southern Europe
Prices are expected to remain supported for March and 2Q, as widely below normal hydro levels across Continental and Southern Europe will spur additional thermal dispatching. While a wider spark spread is the most likely outcome in Italy, we see upsides for the German dark spread – through higher electricity flows to Switzerland/France.
U.S. Ethanol Prices and Margins Bottom
U.S. ethanol prices rebounded to a six-week high the week ending February 13. Manufacturing margins increased from a very low base for the second straight week. D6 RIN prices rose. Only 12 plants were operating in Brazil’s South-Central region and production plummeted. European ethanol prices soared to a 14-month high.
February Corn Planting?
Unseasonably warm temperatures last week brought predictable results as the first social media pictures of farmers planting corn in places as far north as central Illinois were published. More of stunt than substantive given whatever is planted in those areas currently is not insurable; it does speak to a certain anxiousness being displayed by some U.S. producers. Whether that’s just a bit of Spring Fever, a wary eye on current prices, or a combination of the two, the only real work being done at the moment is the laying down of nitrogen in preparation for planting corn later down the road.
U.S. Economy Is Picking Up Pace, but Should Be Doing Better
Since the November election, key U.S. confidence indicators have surged higher, and this has been very positive for the growth outlook. But the key issue now is whether activity data will track stronger confidence. So far, available data were somewhat disappointing for consumer spending and housing; and we are still waiting for relevant activity data to be released for manufacturing output and business investment. Available data suggested that Chinese people’s spending spirits remained strong in January. In Japan, the latest GDP data contained both positives and negatives.
Parliament Votes on Phase IV, EUAs Stable on High Coal Gen
The Feb 15th full EU Parliament vote on post-2020 EU ETS market reforms was a key long-term policy signal, with focus now shifting to talks in the EU Council. Near-term power sector EU Allowance (EUA) demand has been strong, with coal-fired generation supported by colder weather, declining non-thermal generation, and a widening spread to gas prices. However, this has mostly kept EUA prices stable. PIRA expects EUA prices to stay flat prior to a compliance-related rise in April. EUAs could move lower as higher power sector EUA demand winds down, but productive post-2020 reform talks in the EU Council remains a key bullish wildcard.
Coal Market Rethinking the Pace of a Downward Adjustment
Despite a downward drift in the first half of the week, seaborne coal prices closed on Friday modestly above prior-week levels. The upward momentum seems to have been spawned by an impending meeting between China’s major coal producers and industry groups. The market seems to have been taken somewhat off guard by the impending return of the working day cap at Chinese coal mines on April 1, although PIRA has consistently stated the cap would go back into force on that date for several months. The market still is on a structurally downward trend, with the end of peak seasonal demand closing in. However, PIRA believes that pockets of strength remain, particularly as the European gas market is looking to have less coal-to-gas substitution, and Chinese imports could experience significant upside after 1Q17.
Japanese Runs Rise to Cyclical Highs, Demand Largely Absorbs
Japanese crude runs again moved higher and set a new cyclical high. Crude imports increased and more than covered the run rise, thus building crude stocks 1.8 million barrels. Finished product demand fell back and major product stocks built about 0.5 million barrels. Gasoline demand rose but higher yield and lower exports helped stocks build. Gasoil demand was lower. Yield rose and refinery output was higher, and stocks built. Kerosene demand fell back and seen as within seasonal norms. The inventory draw rate slowed further from 148 MB/D to 95 MB/D. Refining margins were again higher on the week. Levels remain healthy.
2016 European Supply Price Stack
All the available trade data for last year has finally arrived and a clear and interesting interplay in European supplies nicely shows just how much relying on spot LNG supplies can increase volatility and make Europe vulnerable during periods of high global demand. As a measure of this vulnerability, we take a look at how pipeline supply prices compared against LNG and hub pricing – as well as how individual suppliers compared. From digging into the numbers, the most interesting takeaway is how pipeline supplies became such a crucial source of affordable gas by the end of the year, especially as LNG supplies quickly dwindled. Additionally, despite headlines talking about gas convergence, there is still an incredible range of pricing just within Europe alone.
Stocks Increased to a 46-week High
The week ending February 13, U.S. ethanol inventories built for the sixth straight week, increasing by 415 thousand barrels to a 46-week high 22.5 million barrels. Nearly all of the build occurred in the Gulf Coast region, which is the primary hub for U.S. exports. Domestic ethanol production dropped 15 MB/D to a still-high 1,040 MB/D. Ethanol-blended gasoline manufacture tumbled to 8,462 MB/D from 8,685 MB/D, erasing most of the gain from the prior week.
USDA Outlook Forum on Tap
The USDA long-term projections (LTP), released on Feb 16 in anticipation of the Outlook Forum, offered little to no change from the so-called “early release” around the election. Corn acreage for 2017 remained at 90.0 million acres, soybeans at 85.5 million, while wheat came in at 48.5 million. Total acreage for all major field crops is expected to reach 248.9 million acres, down 5.2 million from 2016. Total acreage, including CRP, which is down 300K in 2017 to 23.5 million, came in at 272.4 million, down 5.5 million from last year.
PJM 2020/2021 Capacity Auction: Lighter Loads, Weighing Heavy!
Another bout of large downward revisions to load forecasts has wiped out any optimism we had with the move to 100% Capacity Performance (CP) construct for the forthcoming 2020/2021 capacity auction. That, combined with continued expectation of new entry, leads PIRA to expect the RTO auction to clear at $90-$100/MW-day for the CP product (weaker year-on-year). The EMAAC and COMED LDAs should continue to clear higher than the RTO, though EMAAC could be under pressure too. DAYTON LDA could also clear higher if the proposed retirements go through. These weaker RTO level results could continue in the subsequent auction (2021/2022) as there looks to be room for another downward load forecast revision.
S&P 500 Sets New Record
The S&P 500 set another record this past week. Other indicators were more mixed. Volatility increased slightly, while emerging market debt (EMB) was slightly lower. High yield debt, however, posted solid gains with the overall market. Despite weakening energy prices, currencies of many of the commodity producers still appear to be strengthening. On the commodity front, total, energy, and ex-energy all fell, but precious metals gained.
Asian Demand Growth: Demand Growth Accelerates Further
PIRA's latest update of major country Asian product demand indicates that year-on-year growth continues to accelerate. Data actuals cover the three-month period Nov-Jan. for China and India, while Japan, Taiwan, and Korea pick up data Oct-Dec. Versus the assessment last month, stronger growth in China, along with minor improvement in Japan and Taiwan, more than offset a slowdown in India’s demand growth. Chinese economic data continues to show renewed acceleration on a host of fronts, with trade data for January picking up notably, particularly on the import front. Loan issuance for January was also recently reported as strong.
Degree Day Meltdown
The February gas-weighted heating degree day (GWHDD) tally has been slashed once more — a seemingly daily occurrence. Now, the projected monthly GWHDD total stands at ~595, or ~25% milder than normal. Understandably, such a degree-day meltdown has been influencing the market’s expectations for March. Recent price action suggests that some players have already thrown in the towel on winter with Henry Hub cash prices trading below the psychological $3/MMBtu mark since last Friday, and brushing against $2.80/MMBtu yesterday. PIRA’s forthcoming Gas Forecast Monthly, to be released next week, will highlight the range of possibilities on demand/storage if such a mild pattern extends into next month, or if there is one last bout of chill. As noted in last week’s edition, the less constructive fundamentals at play already caused us to downwardly adjust our price outlook for March and April. The extension of such loose fundamentals to close the heating season could cause an additional reassessment for 2Q17 prices.
Global Equities Continue to Post Broad Gains
More record highs were set this past week. The U.S. market moved to new record highs with the strongest performing sectors being banking, industrials, and technology. Energy was a poor performer, down -1.8%. Internationally, many of the tracking indices moved higher, but lagged the performance in the U.S. Doing the best internationally were Latin America and Europe, while Japan was down modestly.
Canadian LPG Stocks Fall
Canadian propane inventories declined 3.2 MMB in January to a low 4.3 million barrels. Stocks were 1.2 MMB below where they began February in 2016. As essentially all US imports originate in Canada, low stocks there indicate that the current high rate of imports is not sustainable. Meanwhile Canadian butane stocks fell 1 MMB to 2.8 million barrels, near last year’s levels.
February Weather: U.S. and Europe Warm; Japan Cold
At mid-month, February looks to be 7% warmer than the 10-year normal for the three major OECD markets with oil-heat demand weaker than normal by 365 MB/D. The three major regions are roughly 13% warmer on a 30-year-normal basis.
Will Japan’s Losing Streak on Demand Continue as LNG Contracts Build?
Coming off of a second consecutive year of demand losses, Japan is set for a massive influx in newly contracted LNG over the coming two years. By PIRA estimates, the volume will far exceed Japanese demand and buyers will be pushing unwanted volume back in the market or not lift it at all.
Will the U.S. Continue to Dominate Global Shale Oil Production?
In spite of significant shale oil resources outside the U.S., the U.S. is likely to continue to dominate production for the next 20 years, even if conditions for successful shale oil development significantly improve abroad. Non-U.S. shale represents 78% of global resources but accounts for only 10% of current global shale liquids production. As conditions to develop shale resources outside the U.S. improve over time, PIRA forecasts a significant increase in non-U.S. shale production by 2035. Faster improvement in conditions abroad (e.g. fiscal terms, equipment to drill/frack, regulatory process, access to technology, etc.) is possible but the U.S. with its vast resources and very favorable conditions is likely to continue to dominate shale production for the next 20 years.
India’s Gas Price Expected to Rise
India’s domestic natural gas price is set to rise by 8% for the six months period beginning April 2017, in line with the trends in the global benchmark prices. The increase in gas price will push up prices of automobile fuel compressed natural gas (CNG), cooking fuel piped natural gas (PNG), prices of power produced from gas-based plants and bring relief for upstream companies including the state run explorer Oil and Natural Gas Corp. (ONGC) as well as gas distributers like Indraprastha Gas Limited (IGL).
DAPL to Rebalance North Dakota Crude Supply
The Dakota Access pipeline (DAPL) received final approval from the U.S. Army Corps of Engineers. The 470 MB/D pipeline running from North Dakota to Patoka, Illinois, is expected to be completed in the next few weeks, with line fill occurring in April and May, and full start-up likely in late May or June. At Patoka, the DAPL line will connect to ETP’s Energy Transfer Crude Oil (ETCO) pipeline, which terminates in Nederland, Texas. The combined system, known as the Bakken pipeline, will supply light sweet Bakken crude from North Dakota to Midwest refineries with connections to Patoka, as well as to Gulf Coast refineries connected to Nederland.
Pearl GTL down Most of 1Q2017?
The Shell-operated Pear GTL (gas to liquids) complex in Qatar could be offline for approximately two months in 1Q2017, perhaps longer, as mechanical problems with the plant are repaired. The problem started in late December 2016 when Shell announced the plant was being operated at 50% of capacity. The plant is currently shut in. The GTL project has a capacity of 260 MB/D (120 MB/D gas liquids and 140 MB/D GTL). However, due to lack of a market for ethane, the effective capacity is 230 MB/D since 30 MB/D of ethane extraction is not being utilized.
The information above is part of PIRA Energy Group's weekly Energy Market Recap - which alerts readers to PIRA’s current analysis of energy markets around the world as well as the key economic and political factors driving those markets.
Brazil and Tanzania are two countries at very different stages of oil and gas development – Brazil is a well-established powerhouse, reeling from a recent corruption scandal, while Tanzania is at the early stage of development after a series of promising discoveries by majors including Shell and Statoil. Both, however, are currently struggling with the same thing – local content. The degree and depth with which a local government is involved in developing and steering a project varies globally but getting the balance right is vital. Too low and the country may not be able to maximize the impact of oil and gas; too high or restrictive, and companies will be deterred from investing.
Brazilian NOC Petrobras has struggled with local content for many years, with the Replicant project a clear example of this. In 2010, Engevix signed a contract with Petrobras to supply eight FPSOs with identical designs. However, long-term delays and a chronic lack of financing has meant that only three of the hulls have been completed – three years behind schedule. Much of the additional work has been transferred to China, undermining the intentions of local content.
This is likely to have influenced Petrobras’ decision to apply for special dispensation for its Libra and Sepia FPSOs. Re-issued tenders for the units indicate 27% local content levels for some of the topside equipment and no local content for the hull – far lower than the 70% usually required. However, tendering activities were brought to a halt due to an injunction by Sinaval who have claimed that no consultation has taken place between Petrobras and local players. This dispute has played out on the wider political stage as well, with rumored delays to the large upcoming bid round, due to no agreement being put in place over the extent of reforms to local content regulation.
Tanzania is also struggling with local content regulations, with leading operators voicing concerns at a recent stakeholders’ consultation meeting over the impact the 2015 Petroleum Act will have on developments ahead of a draft 2017 Regulation. Currently, a local content program has to be submitted before any development plans, detailing local employment and training operators will have to provide quarterly updates on the implementation of local content.
The issues being experienced in these two countries are not unique, and local content will remain a contentious and difficult issue for governments around the world for the foreseeable future – especially for operators beginning to move into new frontier areas. However, the question remains whether ensuring that local content requirements are met will compromise the drive for cost reductions and efficient project completions.
Ben Wilby, Douglas-Westwood London
BHP Billiton announced on February 9, that the Board has approved expenditure of US$2.2 billion for its share of the development of the Mad Dog Phase 2 project in the Gulf of Mexico.
BHP Billiton holds a 23.9 per cent participating interest in the Mad Dog field. BP, the operator, holds a 60.5 per cent participating interest, and Union Oil Company of California, an affiliate of Chevron U.S.A. Inc., holds the remaining 15.6 per cent participating interest. During the fourth quarter of 2016, BP sanctioned the Mad Dog Phase 2 project.
Mad Dog Phase 2, located in the Green Canyon area in the Deepwater Gulf of Mexico, is a southern and southwestern extension of the existing Mad Dog field. The project includes a new floating production facility with the capacity to produce up to 140,000 gross barrels of crude oil per day from up to 14 production wells. Production is expected to begin in the 2022 financial year.
Steve Pastor, BHP Billiton President Operations Petroleum, said “Mad Dog Phase 2 is one of the largest, discovered and undeveloped resources in the Gulf of Mexico, one of BHP Billiton’s preferred conventional deep-water basins. It offers an attractive investment opportunity for BHP Billiton and aligns with our strategic objective to build our conventional portfolio through the development of large, long-life, high-quality resources.”
Leading international energy logistics provider Peterson has signed a teaming partnership agreement with Port Cameron LLC, to develop a state-of-the-art port and supply base facility in the Gulf of Mexico. Peterson will provide logistics consultancy services to support the planning and initial development of Port Cameron, a 500-acre deepwater staging port situated in Cameron, Louisiana, serving the Gulf of Mexico.
Under the agreement, Peterson will have the option to lease up to 1.2 million square feet of space in Port Cameron Logistic Center and will also serve as port manager. In this role, Peterson will provide operational support and port management, including supporting Port Cameron with strategic development.
Erwin Kooij, CEO, Peterson Offshore Group commented: “This agreement demonstrates Peterson’s commitment to working with key partners to extend our operations in the region and we look forward to supporting Port Cameron to develop a state-of-the-art port to serve industry in the Gulf of Mexico.
“As well as international best practice, we bring a solid understanding of processes and systems to optimize port and supply base operations; essential at a time when the industry is looking to improve efficiency and reduce costs.
“Being involved from start-up gives us the opportunity to share our learning and experience gained over many years of managing port and supply base operations in major strategic energy locations around the world.”
Bud Viator, Chairman of Port Cameron Executive Committee, added: “We are very excited about this new partnership and believe it will be mutually beneficial to both parties. Peterson’s knowledge of integrated logistics services for the energy industry will lend itself to Port Cameron establishing itself as a premiere shore based intermodal port.”
“Port Cameron presents energy operators and service companies in the Gulf with a tremendous opportunity to position their business in a premier deepwater oil and gas port, centrally located to conveniently serve offshore installations in the region,” explains Ted Falgout, Executive Director for Port Cameron.
Upon completion, Port Cameron will be the largest private energy services facility on the Gulf Coast, with more than 21,000 linear feet of bulkhead lots on dredged slips of 500-feet and 700-feet wide and dredged depths of 33 feet.
Fugro has secured its continued utilisation of high performance offshore IRM vessel, REM Etive, and has finalised a purchase agreement at conditions significantly more beneficial than a renewed charter agreement, with owner Solstad. The move supports a portfolio of IRM contracts being executed by Fugro in the Asia Pacific region and is expected to strengthen the company’s position in relation to future subsea inspection business in the area.
Suited to a wide range of offshore operations, REM Etive has been operating in Southeast Asian waters for Fugro under a charter agreement since 2007 and is mobilised with a comprehensive range of Fugro equipment for specialised subsea inspection and field support projects. Retaining the benefits of the vessel’s assured performance and notable versatility will result in seamless project execution and provide the continuity that is essential in operational management.
“We are excited to secure the REM Etive and to continue her deployment for our clients in the APAC region,” said Mark Heine, Divisional Director Marine and member of Fugro’s Board of Management. “With three multi-year IRM contracts already in place, two of which were awarded in recent weeks, this vessel is the best fit with our fleet to enable us to continue our delivery excellence and efficient performance in subsea IRM projects.”
REM Etive is a field proven design and has recorded many hours of safe operation with very high up time in a wide range of weather conditions. The 93-metre vessel is a significant element in the delivery of services from Fugro’s marine asset integrity business line. Together with Fugro’s highly experienced personnel, she is capable of supporting a comprehensive range of services throughout the lifecycle of a subsea development.
Oceaneering International, Inc. (“Oceaneering”) (NYSE:OII) announced that Roderick A. Larson, who currently serves as Oceaneering’s President, has been designated to succeed M. Kevin McEvoy as Chief Executive Officer (“CEO”), immediately following Oceaneering’s 2017 Annual Meeting of Shareholders, which is scheduled to be held on May 5, 2017.
John R. Huff, nonexecutive Chairman of Oceaneering, said, “After 38 years of dedicated service to Oceaneering in numerous positions, Kevin has led the company with skill and integrity, continuing to drive safety and positioning us for growth and change. The board and all of Oceaneering are proud of the accomplishments Kevin has achieved during his tenure.”
M. Kevin McEvoy
Mr. McEvoy said, “I am very pleased to turn over the CEO role to Rod. Rod is a proven leader who has the experience and track record of delivering results. I know we can count on Rod’s direction, supported by a strong management team, to maintain focus and momentum on Oceaneering’s strategy of providing services and products that facilitate deepwater exploration and production.”
Mr. Larson has served as President since February 2015 and is expected to continue in that role as CEO. He previously served as Senior Vice President and Chief Operating Officer from May 2012 to February 2015. Prior to joining Oceaneering, Mr. Larson was with Baker Hughes Incorporated for more than 20 years, where he held various positions, including serving as President of Latin America. He currently serves on the board of Newpark Resources, Inc.
Mr. McEvoy will continue serving on Oceaneering’s board as a Class III Director until at least May 2019. It is anticipated that Mr. Larson will join Oceaneering’s board concurrent with his appointment as President and CEO.