The future of the Gulf of Mexico lies in the deep shelf and the deepwater. Transporting oil to shore from deep shelf discoveries is relatively easy using the vast pipeline system already in place, but the technology and economics of transporting oil from a deepwater field via pipeline may become difficult to justify when shuttle tankers are an option.
Reserves, for example, in deep, remote areas of the Western Gulf's Alaminos Canyon or in Walker Ridge in the Central Gulf, may be developed faster and more economically using shuttle tankers.
"Shuttle tankers open up the possibility to have a stand alone development earlier," Peter Lovie, American Shuttle Tankers' vice president, said. "Once a pipeline goes in – and it is a big investment – it is in the ground, committed. You can't pick up a pipeline and move it somewhere else where business is better. With tankers it doesn't matter where in the Gulf of Mexico the best business is, the tankers can be redirected."
In addition, he notes, oil that comes from platforms through pipelines commonly flows directly to a specific refinery. Operators are limited to that one route, but a tanker can go anywhere and can change destinations at any time. Tankers allow oil companies to shop for the best price. They also allow for freedom from quality banks.
Currently, oil from one field would go into a pipeline and oil from another field would go into the same the pipeline and it co-mingles. So you can't get full value for your "good stuff." With tankers, you don't have that problem.
The Navion Scandia shuttle tanker loading in the North Sea.
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Executing the plan
Lovie makes a good argument for shuttle tankers in the GoM, but how will he make it happen?
Skaugen PetroTrans of Houston and Teekay Navion Shuttle Tankers of Stavanger, Norway, own American Shuttle Tankers (AST). Teekay Navion Shuttle Tankers operates 41 tankers in the North Sea, where shuttle tankers have been working for over 20 years. AST wants to adapt its North Sea operations for the GoM.
Shuttle tankers mostly work in conjunction with FPSOs in the North Sea. Though the Minerals Management Service approved the operation of shuttle tankers and FPSOs in the Gulf in December 2001, there are no FPSOs working there today. Deepwater developments in the Gulf are completed using spars, tension leg platforms, and semisubmersibles. AST developed the Separate Storage Shuttling (S-S-S) system to work with these existing floating production systems.
S-S-S allows these floating platforms without storage to produce to a dynamically positioned storage vessel stationed adjacent to the platform. A shuttle tanker will load and transport the oil from the storage unit.
AST will use existing storage vessels from its North Sea shuttle tanker fleet. The company can use a non-US storage vessel in the US Gulf because it is only storing oil, not delivering it to a US port. The cost is low because the storage vessels do not have to comply with the Jones Act and are not moored to the bottom, which is costly in deepwater.
But what really allows AST to enter the market quickly with its shuttle tankering, Lovie says, is its agreement with Seabulk Tankers Inc. Seabulk has existing Jones Act vessels that are suitable for conversion to shuttle tanker service.
Shuttle tankers transport oil on the water's surface, Lovie points out. It makes no difference how much water is under the keel. When the water depth reaches 1-2 mi deep, pipelines become very difficult and expensive.
"There is a certain point where one will win over the other," Lovie said, "but the debate is going to be which combinations of depth and remoteness make it most competitive for pipelines or for shuttle tankers."
