J-Lay, S-Lay, coiled line pipe battle for footage in US Gulf

Technology, method competition developing in deepwater

E. Kurt Albaugh
Mustang Engineering

Welding systems play a key role in pipeline laying speed. (Photo courtesy of Torch, Inc.)

PART II: The following is Part II of a two part series on pipelaying capacity and utilization in the Gulf of Mexico. Part I appears on the pull-out poster immediately preceding this article.

Each US Gulf of Mexico pipeline installation and burial contractor offers different capabilities, different problem solving approaches, different installation methods, and different marketing approaches. Regardless of the differences, offshore operators want the least expensive solution to transport the oil, gas, or oil and gas from point A to point B.

The job of finding the most cost-effective solution belongs to the operator or operator's engineering company. The contractor's job is to provide the most cost effective solution for laying pipe, no matter whether it is rigid pipe, flexible pipe, coiled line pipe, or bundled pipe.

Contractor capabilities change constantly, through renovation and upgrades of their US Gulf of Mexico (GOM) based equipment, building new vessels, acquiring new vessels, or relocating assets to or from the GOM. By understanding contractor capabilities and organizing them into groups, the problem of matching the pipe type (i.e. rigid pipe, flexible pipe, coiled line pipe) with the installation method and then matching the contractor becomes a simpler task.

Contractor groups

The GOM contractors can be grouped into different groups or subgroups: deepwater contractors, shallow water contractors, transition zone contractors, tow method contractors, J-lay contractors, coiled line installation contractors, flexible pipe installation contractors, burial contractors. Because of multi-capability of contractors and vessels there is some overlapping among the groups.

This year's survey of pipelay contractors indicates six deepwater groups which either have equipment in the GOM or are bidding on future jobs scheduled in 1998, 1999, and 2000. The deepwater contractors include Allseas, Brown & Root Energy Services, Cal Dive International, Coflexip Stena Offshore (CSO), Global Industries, Heerema Marine Contractors, J. Ray McDermott, Quantum Offshore Contractors, Saipem, and Stolt Comex Seaway.

The shallow water contractors are Cal Dive International, Diamond Industries, Global Industries, Horizon Offshore Contractors, TransCoastal Marine Services, and Terry Offshore. There are four major transition zone contractors: Broussard Brothers, Crain Brothers, King Fisher Marine Service, and TransCoastal Marine Services. TransCoastal Marine Services owns two companies, HBH and Woodson, which have been known for years as transition zone contractors. The transition zone contractors tend to work in their home areas along the US Gulf Coast.

The contractors which either presently have or will have J-lay capability in the GOM are J. Ray McDermott with the DB-50, Coflexip Stena Offshore with the Flex Installer, Quantum Offshore Contractors with the CSO Constructor and the MJ lay system, Heerema with the module J-lay system on the Balder, Saipem with a modular system on the Maxita, and Saipem with very large capacity J-lay system of the S-7000. A total of six vessels are being marketed with J-lay capability.

In the 1997 survey of contractors, only three contractors (Cal Dive International, and Quality Tubing, and Oceaneering ) pursued the coiled line pipe installation market. However, for the 1998 survey, the number of contractors indicating that they have coiled line installation capability dramatically increased to 13 contractors. It seems that a majority of contractors are promoting this capability in anticipation of the market growth.

Until recently, there has been only one contractor, Baker Pipeline, operating in the GOM which fabricated bundled pipelines for towed installations. By the end of 1998, there will be two new contractors in the GOM: Kværner Baker and Brown & Root. Both companies are now offering turnkey solutions for bundled pipelines using a towed installation approach.

Flexible pipe installation contractors are: Brown & Root Energy Services, Cal Dive International, Global Industries, J. Ray McDermott, Quantum Offshore Contractors, Saipem, Stolt Comex Seaway, Torch, and TransCoastal Marine Services.

The contractors with barges or vessel specially setup for burial work are: Allseas, Ceanic, Global Industries, Horizon Offshore Contractors, Saipem, and TransCoastal Marine Services.

Contractor changes

In 1997 and early 1998, several significant changes have occurred among contractors. In 1997, Global Industries completed the acquisition of Subsea International's pipelay barge. In 1997, TransCoastal Marine Services became the parent company of HBH, CSI Hydrostatic Testers, and Woodson.

Coflexip Stena Offshore and Cal Dive International formed a strategic alliance and created a joint venture company called Quantum Offshore Contractors. Heerema Marine Contractors and J. Ray McDermott separated their business relationship and co-ownership of several vessels. Horizon Offshore Contractors recently became a publicly traded company and will use the money to acquire additional vessels and upgrade vessel capabilities. Don Terry has formed a company called Terry Offshore that will provide offshore construction services including pipeline installations.

J-lay capability

In anticipation of future deepwater pipelines scheduled for installation in 1999, 2000, and 2001, the deepwater contractors are designing or building modular J-lay systems for their vessels. According to Pat McKinney, Marine Estimating Manager for J. Ray McDermott, "The pipelay method of the future is J-lay for deepwater pipelines, because too much tension is required for S-lay. The deepest pipeline installation to date using the J-lay method was in 2,960 ft water depth. The installation was performed by J. Ray McDermott using the DB50 for one of Shell's Mars field pipelines.

The J-lay systems are being designed, built or upgraded today are modular systems which can be installed or removed rather quickly and without costly modification to the derrick barge or MSV. This modular approach will enable the contractor's asset to increase utilization by providing more functional capability for their vessel.

J. Ray McDermott is presently upgrading its pipelaying capacity of its J-lay equipment system on the DB-50 in preparation of deepwater installation requirements of Shell Deepwater Development Systems' prospective Macaroni, Ursa, Europa, Brutus/Glider and Na Kika pipeline and flowline projects.

First use of the upgraded J-lay system is scheduled for Shell's Ursa project to lay a pipeline in 3,950 ft of water which will be new world record using the J-lay approach. Structural modifications and reinforcements are being made to the DB-50 to accommodate the newly modified J-lay system. The modifications to the J-lay system will allow McDermott to perform pipe-in-pipe installations, and allow larger diameter pipe up to 20-in. in deeper water. Modifications to the J-lay tower will allow faster lowering of the pipe during winter weather.

Coflexip Stena Offshore (CSO) is presently designing and fabricating a new modular J-lay system for installation on the CSO Constructor. The system consists of a modular handling system, automated welding station, and pipelay tensioning system. The J-lay system is being fabricated in Aberdeen, Scotland. It will be installed on the CSO Constructor in Louisiana and mobilized to California for a pipeline installation. The vessel, along with the modular J-lay system, with return from California ready for work in the GOM later in 1998.

Skipper Strong of Quantum Offshore Contractors explains: "What is unique about the system is its greater adaptability to various vessels and portability from one port to another port. It will be able to J-lay 4-in. through 14-in. in up to 5,000 ft of water using a CRC Evans automatic welding system." The system, according to Skipper, can be "rigged up and pipe loaded out in a maximum time of seven days." The CSO's modular J-lay system will ultrasonically inspect each weld and electronically record the information on a CD.

John Reed of Heerema, explains: "there seems to be a lot of interest by operators towards one contractor to perform multi-functions or an alliance group approach." By having lifting and pipelay capabilities within one vessel the contractors are adapting to the current preference of the operators. Reeds adds that "multi-function capability brings efficiency into the installation scope." This efficiency reduces installation costs. For this reason, Heerema has decided to upgrade and re-install a J-lay system on the Balder for a major deepwater project in the GOM in 1999.

In general, the J-lay approach allows pipelines to be installed in deeper water than with S-lay approach, however the lay rates can be slower because concurrent activities at the weld cannot be performed. Typically, J-lay systems have only one station from which welding and inspections is preformed. This setup forces all activities to be critical path activities. Each of the activities is in series and not parallel.

Each contractor addresses this productivity issue for J-lay operations. McDermott prewelds four joints together onshore and brings the pipe in racks. CSO's approach to improve productivity is to substitute ultrasonic inspection for x-ray inspection. Heerema's approach is to preweld six joints of pipe on shore and bring the pipe to the vessel in racks.

Coiled line pipe

In 1997, Cal Dive International and Quality Tubing, a manufacturer of continuously milled pipe, continued with their formal alliance to provide capability for installing continuously manufactured carbon steel line for flowlines and pipelines for water deeper than 50 ft in the GOM. Quality Tubing is also a installation contractor. They install and bury coiled line pipe using their equipment and technical personnel to install from subcontractors barges or liftboats for water depths less than 50 ft.

In 1997, Cal Dive installed a total of 102,000 ft of 3-1/2-in. OD coiled line pipe, compared to only 38,596 ft of coiled line pipe in 1996. This represents a 264% increase in footage from 1996 to 1997. A significant milestone was their laying of 64,000 ft of 3-1/2-in. OD coiled line pipe functioning as a flowline from subsea tree to riser in 525 ft of water from the Uncle John for Bluewater/ATP. This is believed to be a water depth record for installing coiled line pipe in the GOM.

Coiled line pipe installed in 1996 accounted for 2.43% of the total pipeline footage installed in state and federal waters in the Gulf of Mexico. In 1997, the market share for coiled line pipe increased to 3.24%. The market share for coiled pipe should increase each year for the next several years. Berry Herring of Quality Tubing, a manufacturer of continously milled pipe, states that their goal is "not to develop new markets, but to capture existing markets."

Coiled line pipe is generating interest among operators and contractors. In 1997, only Cal Dive International, Quality Tubing, and Oceaneering were actively promoting and selling their capability to install coiled line pipe offshore in state and federal water. During this year's survey, Torch, Transcoastal Marine Services, Crain Brothers, Global Industries, Brown & Root, and Coflexip Stena Offshore are all marketing specific vessels with coiled line pipe capability.

Oceaneering is presently building two new DP multi support vessels (MSVs) for deepwater coiled line pipe installation, ROV support, and diving support. They are named the Ocean Intervention I and Ocean Intervention II. The vessels will have sufficient deck space and deck load to carry three 250-ton reels. This capacity will allow 20 miles of 4.5-in. coiled line pipe to be continuously installed with a single mobilization.

A J-lay tensioning system, when incorporated, will enable the Ocean Intervention I or II to install flowlines in water depths greater than 5,000 ft of water. The reel system will produce 520,000 ft-lbs of torque at the reel rim, which will allow retrieval of the coiled line pipe if necessary. The Ocean Intervention I is scheduled to be delivered in late June or early July of 1998, and the Ocean Intervention II will available in mid-January of 1998.

As more contractors promote their capability to install coiled line pipe, more operators will consider it as an alternative to rigid or flexible pipe. According to Berry Herring of Quality Tubing, "people are becoming aware of its capability and performance history." Herring comments that "we know that there is a significant savings in using coiled line pipe, we just have to prove it to the customers." He adds: "Coiled line pipe is not cheaper than rigid pipe, but the install price is cheaper." Coiled line pipe can be installed in 1/10 of the time of rigid pipe and with smaller and less expansive equipment. According to Herring, "a 25-30% savings normally can be achieved in the final installed price." He adds: "Coiled line pipe is absolutely less expensive than rigid pipe in sizes up to 4-in."

However, for several bids, Herring admits that although they were less expensive, coiled line pipe was technically eliminated because it didn't have the required on bottom stability that the customers required. This is one of the present limitations of coiled line pipe.

Herring believes that "coiled line pipe is fit for purpose for state waters, because of the modular ability of the installation technique. It is perfect for infield flowlines. Its core business application is for jumper lines (in-field flow lines) from well to the transmission pipeline or to a gathering point."

As a manufacturer, Quality Tubing's immediate goal for 1998 is to produce a heavier wall pipe to improve on-bottom stability and to improve corrison allowance. Herring predicts the usage of 6-5/8-in. tubing offshore in 1999. Either Quality Tubing and/or Precision Tube Technology will be supplying 6-5/8-in. coiled line in 1999, if the market supports the volume required to upgrade the pipe mills.

Deepwater challenges

One of the challenges of deepwater production in the GOM is low temperatures (near 40°F), which promote hydrate formation problems in both oil and gas production flowlines and pipelines. The low temperatures also contribute to paraffin problems in crude oil pipelines and flowlines. In response to these technical problems several contractors and engineering companies are now bringing their technical expertise and knowledge to the GOM in anticipation of the deepwater projects scheduled in 1998, 1999, and 2000.

Contractors, service companies, and engineering companies are offering solutions to these deepwater temperature problems. Some of the prominent solutions for controlling product temperature are pipe-in-pipe, bundled pipe, insulated pipe, and deepwater pipe burial solutions.

Thermotite of Norway is offering a thermal insulation approach. British Steel of Northants UK is marketing its Hydrotherm pipe-in-pipe system approach for HP/HT and deepwater pipeline thermal insulation. For GOM projects, British Steel is working closely with Mentor Project Engineering of Houston to assist with pipe-in-pipe solutions as well as bundled pipe projects. British Steel has developed a sliding sleeve technology for continuously laying pipe-in-pipe for the S-lay and J-lay modes.

Towed methods

The 1998 survey was expanded to include contractors who install or are setting up facilities for fabrication and launching pipelines in the GOM using the towed approach. Only two contractors - Kværner Baker and Brown & Root - were included in the survey because they have and will offer towed pipeline installations in the GOM in 1998.

The towed pipelines installation method is commonly used when several pipelines, and/or umbilicals are bundled together in a casing pipe.

The multiple pipelines can be insulated in the casing pipe. S-lay or J-lay installations are not practical methods for internally bundled pipelines because the high weight per foot. For the tow pipeline installation method, "size and weight don't brother us," explains Jim Baker, Owner and President of Baker Pipeline. "Once in the water, the targeted negative weight is 7-10 lbs/ft."

Baker Pipelines and Kværner R. J. Brown have set up a Texas limited liability company (L.L.C.) named Kværner Baker L.L.C. to provide design, fabrication, and tow installation capabilities for bundled pipelines. Baker Pipeline has 14 miles of beach near Matagorda Peninsula south of Bay City, Texas for fabrication of bundled pipelines which will be towed to the site.

Kværner R. J. Brown provides the engineering and project management expertise for the joint venture company. According to Jim Baker of Baker Pipeline, "There have been 14 bottom tow installations in the GOM since 1986. Kværner R.J. Brown and Baker Pipeline have designed and built all of them."

Brown & Root is planning to bring bundled pipeline and tow-out solutions and technology from the North Sea to the Gulf of Mexico for ultra-deep water projects. They have identified several candidate sites for their fabrication and launch base. Brown & Root uses a mid-level tow approach, versus Kværner Barker's on-bottom tow technique.

Brown & Root recently developed a docking tow head which minimizes the number of connections made subsea, when connecting towed pipeline connections together or a pipeline to subsea tree.

Pipe burial capability

This year's pipelay contractor poster (preceding pull-out survey) attempts to show the burial capability of contractors by listing or noting the water depth ranges for burial only and the diameter ranges for pipe burial, both of which can be different for laying of pipe. These subtle differences are important when trying to identify specific barges that can perform the work.

Vessels identified can lay pipe only, bury pipe only, lay or bury, and lay and bury simultaneously using a color code system. Typically, each company has developed and perfected their own burial sled design. According to David Hebert of Broussard Brothers: "We have remodeled our jet sled five times in the past 12 years. Now, we have a lightweight jet sled that can jet from 2-in. to 30-in.

Global Industries acquired the patented "Mud Bug" during the acquisition of the Norman Offshore barges, and is now using this burial technology on other Global Industries barges.

In 1997, CSI Hydrostatic Testers of Lafayette, Louisiana, a subsidiary of TransCoastal Marine Services, introduced a new pipe burial approach - pipe burial from the stern end of the Discovery, a 270-ft-long MSV (multi-service support) vessel with high volume jetting equipment. Their approach has been to provide burial capability as a subcontractor to pipelay contractors, so the contractor's pipelay equipment can focus on pipelay operations and not burial operations. Their approach was quite successful because they buried 235,376 ft of pipe in 1997.

Ceanic Corporation was recently awarded a contract by Shell to provide a ROV deepwater jetting system to facilitate burial of pipelines in 2,000-3,000 ft water depths. The system is a 3rd generation jetting system, which is being built by Perry TriTech and scheduled to commence work in December of 1998. Ceanic presently plans to use their newly acquired Ceanic Legend, a DP RSV as the support vessel for performing the deepwater burial work.

Experience

For 1998, the number one problem for the offshore pipeline and subsea construction industry is finding or maintaining qualified and experienced people. Several of the contractors shared opinions about the problem.

According to David Hebert of Broussard Brothers: "The key to any good operation is to use the same people year in and year out. Good personnel is matter of training and keeping them long enough so they understand exactly how the company operates. It takes a long time to get 25-30 hands to operate efficiently a shift on a lay barge." By keeping good people it is easier to maintain a good safety record. Hebert said that "if you don't have a good safety record, it is hard to survive in the downturn."

Skipper Strong of Quantum Offshore Contractors points out that "the shortage of experience and technically oriented personnel is driving the operators to one-stop shopping and the results are alliances."

Thad "Bo" Smith agrees. "In the 1970s, the cycles lasted long enough to develop the people. That is what has to happen today. The cycle has to be long enough so that people can have a career. In today's market, you have to develop your own people."

William Fulthorpe, General Manager for Sales and Business Development points out that "The increased work load has been falling on the shoulders of those who have been in the industry for 8-10 years. At CSO, we have an average of 10 years of experience, then suddenly there is a big gap between the experienced and the new-to-the-industry, with 0-2 years experience."

Author

E. Kurt Albaugh, PE is a Senior Consulting Engineer at Mustang Engineering. He specializes in economic, cost and feasibility studies for offshore and onshore field developments. He holds a BSCE from Youngstown State University and a MCE from Rice University. He has been involved in the offshore industry for 24 years and has authored or co-authored 15 articles and prepared 3 technical posters.