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Copyright 2002, Offshore Technology Conference

This paper was prepared for presentation at the 2002 Offshore Technology Conference held inHouston, Texas U.S.A., 6–9 May 2002.

This paper was selected for presentation by the OTC Program Committee following review ofinformation contained in an abstract submitted by the author(s). Contents of the paper, aspresented, have not been reviewed by the Offshore Technology Conference and are subject tocorrection by the author(s). The material, as presented, does not necessarily reflect anyposition of the Offshore Technology Conference or its officers. Electronic reproduction,distribution, or storage of any part of this paper for commercial purposes without the writtenconsent of the Offshore Technology Conference is prohibited. Permission to reproduce in printis restricted to an abstract of not more than 300 words; illustrations may not be copied. Theabstract must contain conspicuous acknowledgment of where and by whom the paper waspresented.

Figure A-1 FPSO producing on Girassol site

Abstract

While the history of floating production storage andoffloading (FPSO) is paved with record cost overruns anddelays, through the description of the Girassol FPSO project,this paper presents the ways and means used by the Operator –TotalFinaElf - to manage the successful development of theworld’s largest deepwater FPSO installed in the Girassol field,offshore Angola.

The Operator, in developing the FPSO, employed parallelengineering, functional specifications and an earlyinvolvement of the industry with an original contractingstrategy in order to achieve the Girassol field development inless than six years from discovery to first oil setting a newstandard for the Industry.

The FPSO described here is now the only visible facility ofthis pioneering project for the offshore industry (Figure A-1).

Introduction

Discovered in April 1996, the Girassol field developmentwas sanctioned two years later in July 1998 based on a subsea

production scenario associated with a large FPSO, having thefollowing main characteristics:♦ Oil storage: 2,000,000b/d♦ Oil Production: 200,000b/d♦ Liquids treatment: 300,000b/d♦ Produced water treatment: 180,000b/d♦ Water Injection: 390,000b/d at 150 bar♦ Seawater Sulfate Removal : 400,000b/d < 40 mg/l♦ Gas injection: 8,000,000Sm3/d at 285 bar

On December 4, 2001 the world’s largest FPSO producedfirst oil from subsea wells through a subsea production system(SPS) and umbilical flowlines and riser towers (UFL) from the1,400m water depth at the Girassol field.

Sailaway of the FPSO from the construction yard in SouthKorea occurred at the end of March 2001 at a level ofcompletion and commissioning never achieved before for aproduction unit of such complexity. The completion, just 33months after the award of a contract based on functionalspecifications, constituted a new benchmark for futureFPSO’s. The hull construction subcontract was performed in19 months and the construction of the 25,000tonnes topsidessubcontract was done in 21 months.

The initial “fast-track” approach of the Girassoldevelopment required the FPSO execution to face thefollowing challenges :

♦ Parallel reservoir engineering and surface facilitiesdevelopment;

♦ Interface data issues due to different schedule in designdevelopment between UFL and FPSO;

♦ Management of significant design data changes inthroughput and treatment capacity during contractexecution;

Additional challenges to the FPSO development camefrom the following adverse events which occured during thecourse of the project execution:

♦ Very buoyant shipyard market;♦ Reallocation of topsides construction and integration site.

From the first months after discovery, the Girassol FPSOdevelopment history described here presents how the Operator

OTC 14172

Girassol: The FPSO Presentation and ChallengesPierre Bang / TotalFinaElf

2 PIERRE BANG OTC 14172

and its Contractors, through the contracting strategy, the mainarchitectural choices and project execution, faced thesechallenges and managed the successful FPSO development,crowned by first oil 41 months after project sanction.

The FPSO and Loading buoy description

Hull

The Girassol FPSO hull is a double-hull design - with sideballast tanks over the full length of the cargo tanks, two foreand two aft peak ballast tanks, and single bottom - with thefollowing main characteristics and capacities (in m3 at 98%):

♦ L x B x D : 300m x 59.6m x 30.5m♦ Scantling draught : 23.3m♦ Summer draught : 22.8m♦ Summer freeboard : 7.8m♦ Displacement : 396,288 tons♦ Dead weight : 345,010 tons♦ Block coefficient : 0.944♦ Camber : 0.5m♦ Bilge radius : 0♦ 12 Cargo Oil Tanks : 326,318m3

♦ 2 Slop Tanks : 19,893m3 ♦ 12 Ballast Tanks : 124,055m3

♦ 5 Diesel Oil Tanks (1) : 10,254 m3

♦ 2 Methanol Tanks : 3,040m3

♦ 4 Fresh Water Tanks : 1,041m3

♦ 2 Bilge Tanks : 166m3

(1) 2 storage, 1 service,1 settling and 1 overflow tanks

Main tanks are equally distributed portside and starboard side.Cofferdams are installed between methanol and cargo tanks,and between machinery space and cargo tanks. Cathodicprotection of the hull is performed by sacrificial anodes in thetanks. All ballast tanks are painted and the hull exterior isprotected by impressed current.

Accommodation and life saving

The living quarters provide accommodation for 140persons into eight executive cabins, twelve single bed cabins,sixty double bed cabins.

Support and safety systems are designed for 180 peopleincluding visitors.

The FPSO is equipped with:♦ Three totally enclosed motor driven freefall lifeboats

(60 persons each) located on the aft part of the bargewith smoke and gas-free access from theaccommodation’s muster area;

♦ Two davit type totally enclosed motor driven lifeboats(32 persons each) located on the forward part of thevessel port and starboard sides;

♦ Two fast evacuation systems equipped with inflatablelife rafts located aft and forward.

Topsides

General lay out

The general layout of the topsides is governed by safetyconsiderations with the most hazardous equipment beingarranged away from the accommodation area (Figures A-2 andA-3). The topsides comprises a main process deck located 7mabove the hull’s upper deck and main systems arranged onthree additional secondary levels.

Figure A-2 Topsides view taken from flare

Living Quarters

Power Generation

E&Ibuilding

OilTreatment

Manifolds

LP/MP Comp HP

Compression

FlareMetering

Water InjectionSulfate Removal

Methanol

Prod. Water Export

Uti

litie

s Future Manifolds FutureE l. Comp

South North

EssentialGenerators

Figure A-3 Topsides general lay out

OTC 14172 GIRASSOL: THE FPSO PRESENTATION AND CHALLENGES 3

Topsides General process brief description

The FPSO is designed for the following main functions:♦ Wellstream processing and oil stabilization and

treatment of produced water;♦ Gas dehydration and compression, gas-lift for the

flowline risers and re-injection of produced gas forreservoir pressure maintenance;

♦ Seawater sulfate removal and water injection forreservoir pressure maintenance and flooding;

♦ Storage of stabilized oil, oil metering and offloadingof produced oil to export tankers;

♦ Chemical and methanol injection;♦ Monitoring and operation of the wells and the subsea

system from a central distributed control system♦ Utility systems

The sparing philosophy and equipment selection has beenperformed in line with reliability, availability andmaintainability (RAM) studies completed during thedesign development of the barge in order to achieve thefollowing availability targets for main functions:♦ Oil production and treatment: 98%♦ Gas Injection and gas-lift: 97%♦ Water Injection: 95%♦ Offloading: 1 failure out of 300 offloading

sea waterlifting

WaterInjection

Cooling

SulfateRemoval

To waterInjection

wells

Wateroverboard

to sea

Sea Water

Oil storage

lifting

Offloadingbooster pumps

oil

To exporttanker

Separation

GasCompression

“fuel gas”System

ProducedMechanical

power

ProducedElectrical

power

ProducedHeatingpower

Wateroverboard

To gasinjector wellsand Gas-lift

Oil fromproducing

wells

gas

Figure A-4 Simplified process description

Sea Water Treatment:

Seawater is taken at 90m below the surface in order tomaintain a seawater temperature of between 13°C and 20°C tomaximize sulfate removal membrane performance and coolingefficiency.

The main seawater lifting system comprises five by 25%electric motor driven submerged lift pumps each sized for2,300m3/h. The lifted water is divided so that half each flowsinto the cooling and sulfate removal systems.

The power requirement of the cooling system is 85,000kWand is obtained by means of an indirect cooling glycol/watersystem associated with a fresh water loop (23°C => 40°C)with a capacity of 90,000kW. Hot seawater is dumped overboard.

Prior to flowing into the eight 50,000b/d sulfate removalunits, seawater passes through several stages of filtration andtreatment: coarse (100 µm), multimedia (5 µm and SiltDensity Index lower than 5), deoxygenation (<30ppb) in two-stage vacuum de-aeration columns, seawater booster pumpsand final cartridge filtration (0.5 µm).

The sulfate removal plant is sized to achieve removal ofsulfate below 40mg/l for 2,860mg/l inlet at a total watertreatment volume recovery rate of 75%.

Treated seawater is pressurized by the three HP waterinjection pumps (capacity: 860m3/h each), up to 150 bar, anddirected to water injection wells.

The remaining (70 m3/h) of the treated seawater is used aswash water for the desalters

Oil Treatment:

The wellhead fluid is treated onboard the FPSO through asingle three stage train with gas, oil and water separation at thefollowing pressures (Figure A-5):

- 1st stage : 20 to 30 bar a.- 2nd stage : 6 to 6.5 bar a.- 3rd stage : 1.5 bar a.Oil, with a maximum water content of 5% vol, is then sent

to the two-stage single train electrostatic desalters installed toreduce the salt content to lower than 60mg/l.

A test separator, designed for 50,000b/d flowrate andoperating pressure ranging from 7-30 bar, is installed for wellproduction monitoring.

Oil heating (65°C) between first and second stageseparators is required to achieve a suitable temperature at thedesalting stage and cope with the following specifications:basic sediment and water: 0.5% vol, Reid Vapor Pressure:10psi.

After desalting, oil is cooled to 45°C before storage in the12 crude oil tanks. It is lifted by hydraulically driven cargopumps to the metering unit and directed to export tankersthrough the offloading booster pump system at the loadingbuoy or directly to the tandem offloading system if the buoy isunavailable.

A hot oil system is available to wash tanks, maintain storedoil above 40°C, preheat the flow lines and risers before startup, and increase production temperature by mixing hot deadoil and live oil.

Four 33% oil heating booster pumps are installed to allowhot oil circulation at a global maximum flow rate of 350m3/hin riser and production loops.

Produced water from the separation and desalting units issent to deoiling hydrocyclones - medium (MP) or highpressure (HP) - and to a degassing drum to reduce the oilcontent in water to 20-40ppm before being dumped to sea.

An open drain system is connected to slop tanks anddrainage water is discharged overboard after treatment with anoil content <15ppm.


Figure A-5 FPSO main process flow scheme

Gas Treatment:

Flashed-off gas from the separation train is compressed,dried and used as fuel gas and lift gas with the remaining gasre-injected in the reservoir. The gas compression systemincludes a low pressure (LP)/medium pressure (MP) two-stagecentrifugal electric compressor train and two HP three-stagecentrifugal compressors of 4,000,000Sm3/d output each drivenby Frame 5 gas turbines. At first inter-stage (56-73 bar a), gasis dehydrated at an H2O dew point specification of–16°C at 55 bar a in two-train tri-ethylene glycol (TEG)contactor (1 per compression train, TEG regeneration beingcommon for both trains) to prevent hydrate formation in thesubsea gas-lift risers and in the gas injection risers. Gas-lift istaken of from the second inter-stage (157-177 bar a) at amaximum rate of 3,000,000Sm3/d from both trains cooled to90-120°C and routed to gas-lift risers at the production riserfoot. Excess gas above the required gas-lift requirements iscompressed in the third stage to 286/290 bar cooled to 70°Cand re-injected in the reservoir via gas injection risers.

Raw fuel gas (1,000,000Sm3/d) is taken off either upstreamof the HP gas compression at first stage separation ordownstream of the dehydration column at first stage HPcompression.

Fuel gas is treated and split into two streams: HP fuel gas

feeds the Frame 5 turbo generators to produce electrical powerand the Frame 5 turbines to produce mechanical power todrive the HP compressors and LP fuel gas feeds mainly inertgas generators, glycol regeneration and flare pilots.

The FPSO is equipped with a 95m high vertical flare witha LP flare tip and 2 HP tulip-type sonic flare tips.

Power Generation and hot water

The power generation system is comprised of three heavyduty Frame 5 turbo generators (TG) each with an ISO(International Standard Organization) power of 26.4MW(15°C); two essential diesel generators, each of 2MW; and anemergency diesel generator of 2MW, located in theaccommodation area at hull deck level. The voltages selectedare 11KV, 3.3 KV, 400 V and 230V at 50 Hz.

The electrical power demand is 40MW (two TG) whichincreases to 50MW during offloading (three TG).

The three turbo generators are dual fuel (diesel and gas)types and are fitted each with a waste heat recovery unit(WHRU) developing 31MW capacity. A pressurized mineralwater loop which feeds all facility heaters, is heated in theWHRU - from 90°C to 150°C with gas and from 120°C to175°C with diesel fuel - by turbine exhaust gas.

Station keeping system:

The FPSO is a spread-moored unit with 16 mooring lines

6 baDS302

1.5 ba / 65°CDS303

GX301A/B/C

DS305 DS306 stabilised oilto cargo tanks

FPSO - Process Flow Scheme

DS501

EC501KX501

to DS303

EC502

KX502

DS502

to DS303

CW

EC302

to DS302

EC511A/B

DS511A/B

KY511A/B EC512A/B

DS512A/B Common

TEGregen.

CA601A/B

DS514A/B

KY512A/B EC513A/B

DS513A/B

KY513A/B

hot water

EC301

EC516A/B

To InjectionWells

EC514

To Gas-liftManifold

condensates

condensates

water

20 / 30 ba 40°C

DS301

Water

GX401A/B

GX303A/B

to DS302

HP compression

M

MP compressionLP compression

9 ba / 65°C

Oil heater

Desalters

Crude oil cooler

45°C

Gas dehydration

56 / 73 ba157 / 177 ba 290 ba

desulfatationEC303

CW CWCW CW

CW

CW

from Production Manifold

21 / 31 ba 40°C

DS304

water

from TestManifold

Test Separator

To LP flare

designed through API RP 2 SK code to maintain a maximum


displacement of 5% of water depth in intact conditions and 8%one line broken. Each line is designed with the followingconfiguration: suction anchor (L x Ø = 17.3 m x 4.5 m),bottom studless chain R3 (650 m x 120 mm), sheathed spiralstrand wire (1775 m x 120/125 mm), top studless chain R4(200 m x 105 mm).

Offloading system and Loading Buoy:

The offloading system is comprised of:♦ a main system made up of two 16in steel export lines

to a CALM buoy 19m dia (Figure A-6) located 1.6kmfrom the FPSO bow. Offloading tankers ofopportunity operate at a maximum rate of 6,000m3/hwith submerged cargo pumps (two per cargo tank eachx 650m3/h) and booster pumps (3 x 2,000m3/h); and

♦ a back-up tandem offloading system which uses a 24inflexible hose at a maximum rate of 8,000m3/h withcargo pumps only.

The main system is designed for Suezmax type export tankerswith a maximum mass of 400,000t and the tandem offloadingis based on export tankers with a maximum mass of250,000t.

The loading buoy has a taut-leg mooring system using ninelegs displayed in three groups and made of polyester rope.Each mooring line comprises a suction anchor (L x Ø = 17.3mx 4.5m), bottom studless chain R3 (300m x 84mm), polyesterrope (1,600m/1,900m x 145mm), top studless chain R3 (150mx 84mm).

The export lines which are within UFL scope aresubmerged approximately 340m below the surface one abovethe other with buoyancy modules. Each line is made up of aW-shape arch and fitted with flex joints at the FPSO andloading buoy ends.

Figure A-6 Loading buoy during instalation on siteSafety in the Design

TotalFinaElf’s technological risk management policy wasimplemented with a systematic identification of hazardsrelated to FPSO operations. Related risk reducing measureswere incorporated into the design with the general goal to tendtowards a residual risk As Low As Reasonably Practicable(ALARP) for the protection of human life, the environmentimpact and the safeguarding of assets.

Environment Impact Assessment and Concept SafetyEvaluation Studies were performed during the design :♦ Hazard identification (HAZID)♦ Hazard and Operability (HAZOP)♦ Fire and explosion risk analysis (FERA)♦ Fire risk analysis (FRA)♦ 3-D explosion analysis♦ UFL-Risers: loss of containment♦ Escape Evacuation &Rescue analysis (EE&R)♦ Dropped Object Studies♦ Collision♦ Deluge reliability…♦ Quantitative Risk Analysis (QRA)

A s s e t d a m a g e r i s k s ( b e f o r e i m p l e m e n t a t i o n o f r i s k r e d u c t i o n m e a s u r e s )

1 , 0 E - 0 6 1 , 0 E - 0 5 1 , 0 E - 0 4 1 , 0 E - 0 3 1 , 0 E - 0 2 1 , 0 E - 0 1

A n n u a l f r e q u e n c y

Sev

erity

cat

egor

y

Al l cases

Sea su r face poo l f i re

Jet f i resCargo tank exp los ion

Co l l i s ions

E x p l o s i o n sF i r e & e x p l o s i o n i n M R & L Q

D r o p p e d o b j e c t

He l i cop te r c rash

Cat

astro

phic

Maj

orS

igni

fican

tM

inor

I I I

II

I

Quantitative Risk Assessment resultsQuantitative Risk Assessment resultsAsset damage risks (after implementation of risk reduction measures)

1,0E-06 1,0E-05 1,0E-04 1,0E-03 1,0E-02 1,0E-01

Annual frequency

SeverityCategory

All cases

Catastrophic

Major

Significant

Minor

I

II

III

Figure A-7 QRA results before and after Risk reducing measures

Active fire protection is installed with four diesel pumps- 2,200m3/hr each - located at the four corners of the barge:♦ deluge+ foam on topside & all cargo tank area♦ deluge on chains & life boats areas & escape ways♦ water curtains♦ monitors for sea pool fire♦ FM200 (technical rooms) & CO2 ( engine hoods)♦ Field Assistance Vessel

Passive Fire Protection is installed on:♦ risers I-tubes, flare and topside structures♦ fire walls on buildings


Class Notations

13/3 (1)•Offshore Service Barge: Production / Oil Storage (FPSO) Deep Sea Girassol Field (ANGOLA)•MACH (for machinery systems)•AUTO (for automation of safety systems)•POSA (for station-keeping: mooring & anchors…)•ALM (for lifting appliances)•LSA (for life-saving appliances)•HEL (for helideck)•IG (for inert gas system)

FPSO execution: How and why we did it

FPSO Contracting

The Girassol field development was separated into fourdevelopment packages as shown in figure A-8: FPSO, UFL,SPS and drilling.

The FPSO package included engineering, procurement,construction, transportation, installation and mooring, hook-upto risers, umbilicals and export lines and assistance forcommissioning of the FPSO and loading buoy.

Figure A-8 Field Development packages split

It was decided at a very early stage of the project, based onexperience of the numerous interfaces that need to be handledin such large projects, to award a single contract for the FPSOpackage.

It was also noticed that no single contractor was capable ofhandling this project alone as an EPCI (engineering,procurement, construction and installation) contract.

A pre-qualification process, describing the required skillsto qualify for the Call For Tender (CFT) for the FPSOpackage, was launched in May 1997, one year after discovery,in order to allow contractor organizations to form consortia orjoint ventures. The main skills required were projectmanagement, engineering, naval architecture, hull design andfabrication, mooring design, topsides fabrication and

integration and marine operations. Six consortia werequalified.

Due to the goal of a stretched schedule and to allow a costeffectiveness approach from the industry, a two stage CFT waslaunched for the FPSO with several alternatives available inorder to secure the best business solution to cope with projectuncertainties and goals.

The first stage of the CFT, launched in July 1997, wasintended to secure the hull. It would compare newbuild versusconverted steel hulls and evaluate fabrication alternatives to aconventional shipyard, such as might be used for a concretehull. The worldwide shipyard market was very buoyant, slotsavailable in shipyards were very few and speculative. Withouta firm slot the project could have been delayed from severalmonths to more than a year.

The consortia were given the opportunity to develop theirbest business solution based on functional specifications of theFPSO hull systems and accommodation, and from a projectbasis for design and preliminary functional guidelines for thetopsides. Provisions had to be made for future developmentsand an outline of key areas with a robust and/or flexibleapproach required to cope with potential growth from ongoingreservoir studies and the UFL and SPS design competition.

In the meantime, detailed functional specifications weredeveloped by the Operator to be delivered during the secondstep of the FPSO CFT.

This first stage, confirmed from the industry and byinternal studies, was that a converted steel hull for the required20-year design life was neither cheaper or could be executedfaster than a fit-for-purpose newbuild hull. The concretesolution was not only more expensive, but was hampered bydifficulties to obtaining a gas-tight fit of the cargo tanks. Theamount of reinforced steel necessary for a concrete hull of thissize – 40,000 tons - was almost equivalent to the overallweight of the steel hull options.

This first stage was also intended to shortlist consortiawhich had a firm commitment for a shipyard slot compatiblewith project schedule. It was understood that slot reservationfees would be reimbursed by the Operator up to an agreedamount. On this basis, three consortia were selected to enterthe second stage of the CFT in September 1997.

Final tenders were received in November 1997, evaluatedand clarified in the same month. The FPSO evaluation groupissued recommendations in mid-December 1997 for internalapproval and subsequent endorsement by partners and theNational Oil Company.

Normally six months would be required for a CFT of thismagnitude from issue to recommendation and another four tosix months to obtain internal, partner and National OilCompany approvals and project sanction. In order to avoidlosing momentum during the internal evaluation and approvalprocess period - except for tender clarification it is usually aninefficient period of time for contractors - it was decided togrant each of the two eliminated consortia a lump sum amountto cover the cost of the FEED studies and deliverablesrequired to develop their best business proposals from thefunctional specifications in order to meet the aggressiveproject schedule targets.


The cost of such studies is being part of the consortia’scommercial proposals and consequently granted to thesuccessful bidder. This solution was also selected in order tobe able to select any of the proposed consortia depending onthe final approval by the National Oil Company.

During the period from November 1997 to early February1998, the three consortia performed FEED studies. FromFebruary 1998 to contract award, engineering studies werepursued by a limited core team from the recommendedconsortium with special focus on long lead items, hull andaccommodation definition and design of robust interfaces withrisers on a maximum reimbursible basis. The FPSO contractwas awarded at project sanction in July 1998, 12 months afterthe start of the FPSO CFT, to immediate project mobilizationand the full commitment of the winning consortium.

FPSO Contract

The FPSO contracting strategy was developed bearing inmind that there were still a certain number of uncertainties onthe topsides design data, throughputs and functions. The UFLand FPSO interfaces were not completely settled due to theinteraction of the floater and riser motions on one hand, andthe loading buoy and export lines on the other, but also thetremendous engineering effort remaining to be performed onthe innovative concepts selected for UFL.

It was obvious that no contractor could take the risk to bida reasonable lump sum and an acceptable schedule on thisbasis. There was also an issue, though, that Companyexposure to cost and schedule extension claims would be veryhigh on a lump sum contract based on available projectdefinition. Project members were also very reluctant to go fora strict Alliance-type contract.

It was therefore decided to combine within the samecontract:♦ a lump sum for parts of the scope already well identified

with low level of uncertainty or not subject to significantmodifications, such as project management, hull andaccommodation and offshore installation; and

♦ a target price, associated with a ‘risk-and-reward’ (R&R)mechanism, for the parts of the works subject tomodification and uncertainties, such as engineering andprocurement, topsides construction and integration to thehull, transportation to the Site and FPSO and loading buoyinterfaces with UFL and SPS packages.

The target price remuneration philosophy was based onreimbursement of audited direct costs and an R&R Mechanismassociated with a contractor’s fee deemed to cover contractor’sprofit over target price works, corporate overheads, headoffices costs, personnel training and research anddevelopment.

The FPSO contract was developed with two mechanismsfor revision of the target price:♦ Fundamental changes from instructions or significant

changes issued by the Operator which alter the contractualscope of work. Fundamental changes induce a variation ofthe contractor’s fee proportional to the value of thevariation costs based on contractual unit rates andadditional quantities. This mechanism has allowedevaluation of the two main Basis for Design revisionswhich occurred during contract execution.

♦ A mechanism for firming up the target price to coverdesign development and potential optimizations leading toquantity evolutions within the contractual scope of workwhich could occur until September 30, 1998 seen as thedate for completion of basic engineering of the topsides.The mechanism aimed to establish incentives to increasethe contractor’s fee in design optimization leading totarget price reduction, but to set limitations on thecontractor’s fee in the event of significant increase inquantities at the end of basic engineering as result of bidunder-estimation. At the end of the firming-up period, therevised target price was therefore the new reference point(Figure A-9).

RISK AND REWARD MECHANISMRISK AND REWARD MECHANISMCONTRACTOR ’SCONTRACTOR ’SFEEFEE

EFFECTIVE PRICE OF WORKSEFFECTIVE PRICE OF WORKSCOVERED BY TARGET PRICECOVERED BY TARGET PRICE

REVISEDREVISEDCONTRACTCONTRACT

FEEFEE

INCENTIVEINCENTIVEPAYMENTPAYMENT

REVISEDREVISEDTARGET PRICETARGET PRICE

(RTP)(RTP)

SLOPE : 1/2 COMPANY 1/2SLOPE : 1/2 COMPANY 1/2CONTRACTORCONTRACTOR

REDUCED FEEREDUCED FEE

Figure A-9 FPSO contract Risk and reward mechanism

The principle during execution was to share costs overrunsand benefits 50/50 between the Operator and the Contractorwhen comparing the effective direct audited costs with theRevised Target Price giving Operator and Contractor commonand equivalent incentives to beat the target (Figures A-9 andA-10).

ACTUAL COST

COST PAID

TARGET PRICE

FEE

FINAL COST

DIRECT COSTAudited

DIRECT COST + FEE

TARGET PRICE CONTRACT PORTION

Figure A-10 FPSO contract Cost paid vs actual


Main Architectural choices and Drivers

Our main architectural choices for the FPSO other thanthose governed by health, safety and environment andoperations were driven mainly by uncertainties linked to thetopsides definition, the interfaces with the risers, shipyards’records on FPSO projects and flow assurance considerations.

Hull design

The Operator decided prior to starting the pre-qualificationexercise to have a minimal number of functions in the hull inorder to avoid problems encountered on previous FPSOprojects. Poor records in carryover work from shipyards andtheir poor performance on compliance with offshore standardswere recorded.

This strategy was also supported by the need to order thehull early in the process despite limited topsides study work.

Operator requirement was for a hull with a ‘robust design’to accommodate topsides design uncertainties and shaped to fitalternative topsides concepts with a large payload capacity andavailable spare area for future evolution.

The main driver in developing the specifications andrequirements for the hull was to limit its scope to shipyardcore expertise, mainly steel structure, accommodations andutilities, cargo and storage system - oil, water, diesel andmethanol- slop tanks and associated oily water treatment, andballast system. The Contractor’s best business solution wasbased on this strategy and even expanded with the cargopiping integrated below the topsides deck in the ‘IntegratedTopsides Deck’ (ID) concept which was initially expected tobe skidded onto the hull deck in a single piece. This allowed abetter management of interfaces between the topsides and hull.

Utilization of shipyard building practices was foundacceptable as potential consequences were mitigated by thereduction in the hull scope with some added complexitytransferred to the topsides.

The hull was one project amongst many others at theshipyard with 60 ships delivered per year, ie more than oneship per week. It was clear that drydock dates and durationcould not be changed, leaving reduced or no flexibility toaccommodate possible changes. Items which might affect thelength of dock occupancy were not negotiable.

The following requirements were negotiated andincorporated in the ‘shipyard/builder’ specification:

• Vendor’s list was amended in view of commonalitieswith topsides and increase of western suppliers;

• IEC compliance was obtained for hull electricalcomponents;

• General accommodation arrangement was designedand performed as per Operator requirements.

• Ballast piping and flanges were provided as perAmerican National standards Institute (ANSI)standards and the Operator’s general specifications forglass reinforced plastic (GRP) piping.

• Utility piping flanges within the hull andaccommodation accepted per KS/JIS instead of ANSIbut KS/JIS flanges standardized to JIS 10K tominimize spare parts requirements.

• Piping interfaces to topsides accepted by means ofANSI flanges (Total number of openings on hull upperdeck : 748)

“Robust” interfaces with topsides and risers

Hull-Risers interface

Figure A-11 Risers interfaces: external beams each sideOne of the main areas of concern in making an early

commitment on the hull to a shipyard with no flexibility toincorporate changes was having to include the interface withthe risers when the final concept - flexibles or riser towers -was not confirmed and remained at an early designdevelopment stage.

The loads and global display of both solutions were quitedifferent, leading to a significant difference in hull internalstructural reinforcements. It was decided to design the hull‘sinternal structure for the ‘worst case scenario’ and design andbuild four beams on each side of the hull (See Figure A-11)which would allow for the installation of the final supportsoutside the drydock in the integration yard two years later:

♦ Upper and lower riser support beams♦ Upper and lower riser protector beams

Following specification was given to shipyard :♦ Depth, height and length of beams♦ Horizontal and vertical loads♦ Torsion moments

Hull-Topsides interface

Figure A-12 Hull deck with 5m spacing T-beams supports


transverse bulkheads, T-beams (See Figure A-12) wereforeseen on each bulkhead to be utilized as supports for thetopsides and to allow flexibility in designing topsides:

v 48 T-beams across the deck, each 50m long, displayedwith a 5m interval on transversal bulkheads;

♦ Web: h x t :500mm (in Center Line) x 56mm♦ Flange: b x t : 550mm x 34mm♦ Vertical / Longitudinal loads specified for each beam♦ Max tolerances given for loads (80mm)

Integrated Deck (ID)

Figure A-13 Integrated deck concept and interface with hull

The Integrated Deck (ID) concept: a 7m high modulesupport frame (MSF) with spacing of ID frames of 10m, wasdesigned to be assembled on a 180m unique deck on thequayside. The ID bottom part was utilized as a pipe rack forcargo piping and for the main topsides piping which could rununder the topsides equipment. The ID top part was designed tosupporting topsides equipment.

The large area involved would have allowed this topsidesto be fabricated as a ground-built facility. After skidding, theintegrated main beams would have been divided to separatethe ID into three main parts to provide the flexibility requireddue to the steel hull hogging and sagging behavior.

ID AdvantagesSeveral advantages were seen for this concept, based on

the anticipated evolution of the topsides definition and provedto be effective:♦ Separation of design schedules for topsides and hull

allowed for changes to the topsides rather than impactingon the hull while the ‘Basis for Design’ was evolving dueto further reservoir engineering: This was possible byadding a frame to the ID between existing frames in areaswhere weight increase from the topsides was inducingloads exceeding the values given for the hull T-beamswith the ID 10m framing. This design has allowed for thetransfer of the interfaces between topsides packages andsupporting structure at the level of the ID and thus tofreeze at an earlier stage the interfaces with the hull deck.This has proven to be effective as the topsides weightincreased by around 30% from the initial estimate - as aresult of the inclusion of revisions two and three of the‘Basis for Design’ and the initial under-estimationadjustment - without impacting the hull.

♦ Allowed flexibility in the topsides design,procurement and construction due to the large areainvolved. Very few packages were ordered with mostof the vessels and equipment delivered “naked” andthey arrived earlier than expected at the constructionyard.

ID drawbacks

The ID concept also has some drawbacks. It has a heavystructural weight, a complex structural behavior on a flexiblesteel hull and it would be a complicated operation to load itout as a single unit which had to be engineered in detail.Known back-up solutions were available, such as transferringthe ID in pieces as performed for N’Kossa concrete FloatingProduction Unit, TotalFinaElf‘s earlier West African project.

Finally, very few construction yards in the world arecapable of the construction of such a large topsides.

ID final setup

The final set-up was to lift the ID MSF’s 10 modulesonboard the hull deck (See figure A-14) and build the topsideson this MSF in a more “piecemeal” manner by assemblingonboard hull instead of quayside equipment and outfittedstructures with a weight limit varying from 350 to a maximumof 700 tons (See Figures A-14 and A- 15).

Integrated deck modules installation

Figure A-14 ID 10 modules installation

Turbo generators and E&IBuilding

Figure A-15 Piecemeal erection on ID onboard hull

To take advantage of the 5m spacing of the hull’s


Flow Assurance Drivers and consequence on FPSO Design

Sulfate Formation risk

A high strontium and barium content (around 230mg/l)was measured in reservoir water samples. Normal seawatercontains around 2,800mg/l of sulfate and the requirement forseawater for injection was exposing the project to a severe riskof barium sulfate scale deposition in the producing wellbore.Conventional scale inhibitor squeeze treatments were notfound reliable nor cost effective due to the remote network of“daisy-chained” wells, high reservoir permeability and longperforation intervals. Removing sulfate from the seawater toachieve a maximum residual content of 40mg/l by using aselective nano-filtration membrane process was identified asthe only reliable solution to mitigate the risk and was thereforeselected. This risk led to design and fabrication on the GirassolFPSO of the offshore industry’s largest water sulfate removalplant.

Hydrate formation and Wax deposition risks:

A hydrate formation temperature of 20°C was establishedas the standard to cover all operation conditions. With only thehydrostatic pressure in the flowlines, the well fluids is atambient seabed temperature (4°C) within the hydrateformation domain. This led to gas dehydration requirements,thermal insulation, methanol injection facilities, hot oilcirculation and a high heating demand on the FPSO.

The wax appearance temperature is estimated at 39°Cleading to a requirement for the oil to remain above 40°C, forroundtrip pigging capability and hot oil circulation for theflowlines and export lines and tank washing.

FPSO Construction

Hull

The functional requirements for hull and accommodationwere endorsed and developed by the Contractor. Detaildesign, procurement, construction and onboard testing wasperformed by the shipyard under the Contractor’s supervision.Operator supervision was limited to a site representative withmissions and audits performed by Operator specialists onrequest.

A small Operator operations team was involved duringonboard testing, as the plan was to perform the completecommissioning of the FPSO at the integration yard. Hullconstruction took 11 months and the challenging target todesign and build this hull and accommodation unit in 19months from contract award was achieved by the Koreanshipyard in an excellent cooperative spirit and with anexcellent safety record.

Lost Time Incident Frequency Rate = LTI’s x 1.000 000 /spent man-hours = 0.65

Hull undocking

Figure A-16 Hull leaving dry-dock in HHI shipyard in south Korea

Topsides

One of most important Operator requirement at the bidstage was to have a central engineering organization located ina single location.

The operator established during the engineering of theFPSO a team of 50 engineers to ensure that functionalrequirements and Operator standards were incorporated intothe design. They were also to monitor and influencecontractor and subcontractors’ performance during the basicand detail engineering and the equipment procurement of theFPSO (Around 1,000,000 man-hours with 500 personnel atpeak).

An important re-bid exercise was performed at the end ofthe basic engineering to take into account the increased sizefor the topsides. Both the Operator and Contractor had toselect the most cost effective and optimal location for topsidesconstruction. The initial plans to build the topsides in Francewere compared with the CFT exercise and the companysupported the contractor’s final recommendation to relocatethe topsides fabrication to South Korea near to the hullconstruction site.

During construction, an integrated team from both theOperator and the contractor was set up to manage andsupervise, under the contractor’s responsibility, the worksperformed by the topsides subcontractor. This proved to be avery efficient way for both the Operator and the contractor toensure construction conformity with the design and Operatorspecifications.

The Operator personnel held 12 positions in the integratedteam organization for construction supervision in a ‘one monthon, one month off’ rotation basis.

It was a tremendous effort to enable the FPSO to sail awayfrom Korea on March 30, 2001. It took only 21 months fromconstruction subcontract award to build and integrate the hulland commission the 25,000 tonnes topsides.

It was a significant achievement by the Koreansubcontractor, contractor and company personnel to completesuch a complex facility


Figure A-17 Topsides construction in HHI offshore division

FPSO Commissioning

An extensive commissioning program for the FPSO,managed by the company, was performed in Korea by a largeteam of company operations personnel with assistance fromthe contractor, the topsides construction subcontractor and thevendors. Within the integrated team, the mechanicalcompletion and commissioning manager was from theOperator. One important consideration was to integrate withinthe commissioning team personnel from the constructionsubcontractor at key levels under each system leader in orderto interface with the Korean construction team.

Commissioning began in July 2000 with the hull and wasperformed in parallel with construction activities untilsailaway from Korea. The Operator personnel held 50positions in the commissioning organization on a ‘one monthon, one month off’ rotation basis.

Safety records during Construction and Commissioning

The Operator, contractor and construction subcontractordeveloped a Work Permit System based on the company’sHSE policy. It allowed the team to manage the execution ofconstruction and commissioning activities in parallel,employing around 2,000 Koreans and people from 12different nationalities. Around 50 Work Permits were issuedper day.

The influence of safety has been a constant challenge forthe Operator. With the active support of the constructionsubcontractor and the contractor’s management, the teamachieved outstanding safety records during the project.

Lost Time Incident Frequency Rate = LTI’s x 1.000 000 /spent man-hours = 0.41.

TowThe tow from Korea to the Girassol field via the cape of

good hope was performed by three of the world’s largest tugsand lasted three months. The tow was manned by contractorand Operator operations personnel to allow them familiarizethemselves with the facility and to complete a number ofminor loop tests remaining at departure.

Offshore Integration

FPSO arrived on site on July 10, 2001. Offshoreintegration activities with the subsea systems were performeduntil the start-up of production on December 4, 2001.

Final Cost and Schedule

FPSO Overall schedule

TOPSIDES ENG/PROC

1998 1999 2000 2001

HULL ENG/PROC/FAB

COMMISSIONING

CONTRACT AWARD

TOW

TOPSIDES FAB

FIRST OIL

INTEGRATION & S.U.

Figure A-18 FPSO “as performed” Overall Schedule

The total FPSO and loading buoy contract totaledUS$920mn. The FPSO project has been executed below thecontract figure as the audited direct cost was below the revisedtarget price.

Main Contractors and subcontractors

The FPSO development was executed through more than300 purchase orders and 50 main subcontracts placed by themain contractor throughout the world.

♦ FPSO Main Contractor: Mar Profundo Girassol (MPG)joint venture 50/50 between Stolt Offshore and BouyguesOffshore

♦ Topsides construction subcontractor: Hyundai HeavyIndustries Offshore and Engineering division

♦ Hull subcontractor: Hyundai Heavy Industries Shipyarddivision

♦ Loading buoy: Single Buoy Moorings♦ Integrated Deck structure: J. Ray McDermott East Inc.♦ Turbo generators and gas compressors: Nuovo Pignone♦ Seawater treatment and sulfate removal: US Filters♦ Engineering subcontractors: Sofresid and Technip♦ Classification Society: Bureau Veritas

Conclusion

The Girassol FPSO was born from functional requirementsand, with the early involvement of the industry, an innovativebusiness solution was selected to cope with the projectconstraints.

Considering the specific challenges the project had to face,the FPSO development would have never been successfulwithout the specific contract established to create a commongoal for contractor and operator (win-win), competence ofpersonnel dedicated to the works, and excellent cooperation


companies.Projects of similar magnitude are ongoing or maybe started

soon with different setups. Their costs and the associated risksare huge for oil companies and countries. Our main intentionis that the Girassol FPSO story related here helps countriesand companies and their contractors to improve theperformance outlined in order to better serve the offshoreindustry.

within the teams and their respective management from parent

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