Partnering for success
-- FROM THE FULL PICTURE MAGAZINE -- Expectations are high for BW Offshore's latest Floating Production, Storage and Offloading (FPSO) unit. BW Joko Tole is not only the company's first FPSO project completely run from Singapore, it's also the first time that key parts of the Automation, Control, Engineering and Telecom (ACET) package have been subcontracted to another company. This requires close cooperation with all partners.
The Full Picture magazine was invited onboard BW Joko Tole, which is currently being converted at Sembawang Shipyard in Singapore. So far merely an empty hull, the interior of the vessel is starting to take shape, and by June the first topside systems, including an E-House supplied by Kongsberg, will be installed. After completion during the first quarter of next year, the FPSO is contracted to operate until 2022 in the Terang Sirasun Batur (TSB) fields in Indonesia, which marks another first for the company.
"This is BW Offshore's first FPSO contract in Indonesia. It was signed in June last year with Kangean Energy Indonesia (KEI), which is an Indonesian company with primarily Japanese owners. There are several stakeholders in this project as the FPSO needs to fulfil all Indonesian statutory requirements and fly the Indonesian flag. It also needs class approval by both the Indonesian classification society Biro Klasifikasi Indonesia (BKI) and by the American Bureau of Shipping (ABS). The project is subject to a lot of attention since Indonesia really needs the gas that we are going to produce," explains Rolf Normann, Project Manager for the TSB FPSO project for BW Offshore.
Choosing to go for a conversion rather than a newbuilding is the result of both time and cost considerations. Building a completely new FPSO often takes too long to meet the delivery time. However, getting hold of a used vessel in prime condition overnight is not always straightforward. Just as BW Offshore was signing the TSB contract, the Aframax tanker BW Genie was on its last voyage to Singapore. Just a few weeks after the contract was signed, the vessel was purchased, cleaned out and ready for its 12-month upgrade at Sembawang.
During its 25 years in the industry, BW Offshore has grown to become one of the world's leading global providers of floating production services to the oil and gas industry. With the acquisition of Prosafe Production in 2010, the company currently has a fleet of 15 FPSOs and two FSOs. This makes it the second largest contractor of its kind in the world.
"In the past few years, BW Offshore has gone from being a quite small company to employing approximately 1,900 people. At the same time, we have developed from being a pure projectoriented business to becoming a matrix organisation, meaning that we are now able to run several FPSO projects simultaneously and bring in the best competence from across our organisation for each specific project. This will increase the capability, quality and efficiency of our operations," continues Normann.
One result of this organisational change is closeness to the client. Represented in all the major oil regions worldwide, BW Offshore recently built up its capacity in Singapore to count about 250 employees. The TSB project relies on these new local resources.
"Although we mainly use a local team for this project, we frequently exchange key resources and expertise between our offices in Oslo and Singapore," says Normann.
Building up the company's resources in Singapore reflects an outlook for increasing demand for oil and gas related services in this region. Market forecasts clearly show that there will be a higher demand for new FPSOs in the years to come.
"Traditionally, single hull tankers have been used for converted FPSOs, and there are not many of them left in the world. This means that there will be an increase in newbuilding activity for FPSOs in the near future. In addition, modern tanker design is typically more optimised using stronger, thinner and less steel and is therefore considered more environmentally friendly," explains Normann.
Go for quality
Technically, there should be few challenges ahead for the TSB project team because the FPSO is of moderate size with a storage capacity of 200,000 barrels, a fluids capacity of 7,000 barrels a day and a compression capacity of 340 million standard cubic feet per day of gas. Some of the excitement lies in the fact that this is the first time BW Offshore has chosen to leave the main parts of the ACET engineering to someone else. Just as BW Offshore was looking for suppliers for the TSB project, Kongsberg was building up its engineering department and won the bid.
"We spent a lot of time talking to vendors a year before we even knew if we had won the project. When choosing vendors, we look at the totality of what they can offer, such as quality, price and experience. The package delivery for this project is quite complicated, so we don't just choose the less expensive option. Selecting Kongsberg as a vendor for this project was a result of an overall evaluation," says Scott Bendiksen, Deputy Project Manager at BW Offshore.
A first in Singapore
This is also the first time Kongsberg is delivering an engineering project completely run from Singapore. The delivery is an Engineering, Procurement and Construction (EPC) contract for the ACET-package, meaning that Kongsberg will do everything from designing the installation and procuring the necessary materials to constructing parts of it, either by itself or with the help of subcontractors. This also involves carrying the risk for the schedule as well as budget.
"This is the first time we have chosen an EPC contract model for the ACET scope in one of our FPSOs. Usually we shop around for various parts from a number of vendors and put it together ourselves at the shipyard. This time, we've let someone else provide the ACET-package for us. If this succeeds, we are very likely to continue using this contracting model when doing these types of projects in the future," says Normann.
A strong team
More specifically, Kongsberg Maritime's delivery includes design, engineering, manufacturing, testing and supply of all materials, equipment, accessories and tools required for the complete integrated automation control, E-House, electrical hardware and telecommunication systems. The E-House is scheduled for delivery in the beginning of June and is critical for further deliveries. To be closer to the client, Kongsberg built up an experienced FPSO team in Singapore for this particular project.
"We have a good team, and so far we have met our deadlines," says Michael Warner, Engineering Manager for the TSB project at Kongsberg. "There are many phases in a project like this with many subcontractors. When the subsystems come in, it gets really busy with several processes going on simultaneously. This demands a lot from our team."
Closeness is key
Kongsberg Maritime now has an office of 127 employees in Singapore, covering its entire product range, and engineering is a large part of this. For the TSB project, this means closer connections with the client and the possibility of a strong partnership between Kongsberg Maritime and BW Offshore during the busy months ahead.
"The fact that Kongsberg is around when we are running the project in Singapore is essential to such a complex delivery containing a number of interfaces. It would have been very challenging to use a vendor placed only in Norway for a project like this. Closeness is important, and so far we've had excellent cooperation and partnership throughout the process," concludes Normann.