Hydro's giant Ormen Lange project is currently Europe's biggest gas development. Due on stream in 2007, the field will be linked to the UK via the world's longest subsea gas pipeline, and will supply the UK with up to 20 percent of its total gas requirement.
In October 2007, gas will begin to flow through the process plant at Nyhamna on the Møre coast of Norway, marking the start of operations in Europe's largest current gas development. The project stands out for its plethora of first-time achievements, not least in bringing gas directly to shore in multi-phase flow pipelines from subsea wells in waters up to 1,000 m deep Norway's deepest offshore field to date.
"This is one of the world's most challenging offshore developments," says Einar Kilde, Hydro's vice president and offshore project manager for Ormen Lange. "Using production equipment located in water depths of 1,000 metres, we will raise the gas and transport it from Nyhamna all the way to the UK through the world's longest subsea pipeline, the Langeled."
Some 21 billion m3 a year of natural gas will be produced at peak from the field's 24 wells, boosting Norway's gas export capacity by 25 percent. Most of this gas will be transported through the new Langeled pipeline (1,200 km) to Easington in the UK. "In Ormen Lange, we have a very robust project based on large gas reserves around 400 billion m3. When the gas arrives onshore, it must be treated, turned around and redirected to the UK through the Langeled pipeline, and that is where the Nyhamna processing plant will act as the hub for the field development," says Kilde.
Subsea-to-land concept
In selecting the offshore field development solution, Hydro opted for a novel subsea-to-land concept. Explains Kilde, "Developing Ormen Lange represents a major challenge with the combination of deep waters, extremely rough seabed conditions, long tie-back distance and demanding weather conditions.
Consequently, we evaluated a range of solutions ranging from a relatively novel subsea-to-land concept (subsea wells tied back to the onshore terminal) to more traditional deepwater concepts involving an offshore processing facility with wet and dry wells like a SPAR, tension leg platform or semi-submersible rig. After reviewing all the technical and commercial aspects, we opted for the subsea-to-land solution."
Commenting on DNV's role in the project, DNV Consulting director Remi Eriksen says that DNV assisted in selecting the offshore field development solution through combining DNV's risk management tools with technology qualification services and other relevant specialist services.
Risk-based approach
Says Eriksen, "The approach used included a risk-based gas deliverability model, which was developed during the concept evaluation phase and FEED (Front-End Engineering Design) phase to assist in concept selection and concept optimisation. The model estimated the gas volumes that would be delivered from Nyhamna on a yearly basis and the maintenance and intervention costs associated with producing these volumes. All failures and incidents which would result in loss of production relative to specified market demand were included. Also, a strategy on how to manage the IMR (Inspection, Maintenance and Repair) activities was developed."
According to Eriksen, the economics of deepwater developments are different from those of shelf developments both the stakes and risks are higher. Until recently, it was common to evaluate deepwater ventures based on projections of Capital Expenditures (CAPEX) and Operational Expenditures (OPEX), without a proportional amount of effort to assess the magnitude of the cost associated with system failures and unplanned events Risk Expenditures (RISKEX).
"The project demonstrated how modern risk techniques can facilitate the decision-making process in deepwater developments," says Eriksen and adds "The value of including RISKEX in the decision-making process in deepwater developments is apparent as larger amounts of money are invested, which rely on future high revenue streams. Furthermore, deepwater developments rely on new technology which has yet to be field proven. Risk techniques allow the implications of system failures and unplanned events to be incorporated into business evaluations to arrive at the best alternative."
Cost savings
One of the project's main results showed the potential cost savings related to focusing attention on critical areas and improving solutions and concepts where the potential value-yield is highest. A second advantage of the risk techniques used is that enhancement opportunities are discovered during the conceptual design phase rather than later in the development when the cost of changes is much higher.
"It is generally acknowledged that operational experience provided by respected specialists within a team has larger impact on a decision process than a study done by an external party," says Kilde. "With this in mind, Hydro decided to have DNV specialists integrated in the project team to involve multidisciplinary expertise and to build confidence in the results generated. This approach turned out to be a success, allowing the gas deliverability analysis to become a ëreal-time' decision basis."
The Ormen Lange project is currently in the detail engineering and execution phase. The Nyhamna site has now been prepared and work on pipes, underground pipelines and the casting of foundations for the process plant is well under way. Work started on laying the pipelines from Nyhamna a few months ago. Subsea installations were lowered onto the field seabed this summer while the work of preparing the seabed continues.
On schedule
In June and July, the first 33 km of the 130-km-long, 30" diameter gas pipelines that are to bring the gas from the Ormen Lange field into the process plant at Nyhamna were laid, along with the first 33 km of the 42" diameter Langeled pipe, which will finally bring the treated gas to cookers and power stations in the UK. Control cables and pipes for transporting anti-freeze to the subsea facility will be entrenched in the seabed next year.
"The schedule for the Ormen Lange project is tight in all phases, but we are confident that we have the right people and the right tools to carry out this job successfully," says Kilde. "We will be ready in 2007."