US Gulf Pipeline Contractor Survey

Pipelay equipment shortage looms as contracts go into 1998 season

1997 survey shows wide range of laying methods, equipment, joining, and burial techniques

E. Kurt Albaugh
Mustang Engineering

As the ocean is ever-changing , so too is the list of offshore pipelay contractors operating and bidding on work in US Gulf of Mexico (GOM) waters. Pipelay contractor vessel capabilities are constantly being upgraded in order to increase their equipment utilization.

In 1996, consolidation of the contractors continued with Global Industries' acquisition of Norman Offshore, and the Horizon Offshore Contractors' (previously HLS Offshore) acquisition of the International Companies and Consulting's pipelay barge, LPC 101.

The consolidation within the industry is expected to continue in 1997 with Global Industries' recently executed letter of intent to acquire certain business operations of Sub Sea International and subsidiaries, which includes pipelaying equipment.

Most of the contractors agree that 1997 will be the best year ever for GOM pipeline installation contractors. Several contractors have predicted an equipment shortage occurring during the 1997 season, which will normally run from late Spring through early Fall.

Deepwater demand

Deepwater pipelay equipment is in the greatest demand, so much that vessels are currently being booked for the 1998 season. The knowledge of both contractor capability for laying a particular pipe size and equipment availability are now becoming critical factors when planning and scheduling offshore pipeline projects.

In order to better understand what equipment is available and which barge has the capability to lay the proposed pipeline, Mustang Engineering developed accompanying graphs which illustrate contractor capabilities. They were developed as tools to assist our engineers and clients in understanding who had the qualifications to perform the pipeline installation work. One graph illustrates which contractor and vessel could lay and/or bury the pipe in a particular water depth and another helps verify whether the potential contractor can install the specified diameter.

These graphs have been merged together in the enclosed poster. The information presented in these graphs was based on information supplied by the participating contractors and compiled by Mustang Engineering and reviewed by the contractors.

The contractors shown on this list are presently working in the Gulf of Mexico and/or are actively bidding for pipelay or burial work. The list focuses on present vessel pipelay capability and includes any planned upgrades to the vessels for the 1997 and 1998 lay seasons. The water depth capability and experience for each vessel or barge has been noted whenever possible on the poster.

Our survey also focused on industry trends and the various pipelay technologies employed, identifying contractor capability using each method. Additionally, we garnered information on new approaches and connection methods used by the participating contractors.

Emerging trends

The emerging trends within the industry appear to be the following:

An influx of equipment from the North Sea which can expand the typical six month season to all-year-round installation capability for deep water installations.
Increased demand for deepwater GOM pipeline installations is attracting major international pipelay contractors to the Gulf of Mexico (Allseas and Saipem).
A potential market exists for coil line pipe installations for shallow and deepwater flowlines and several contractors are gearing up for the anticipated growth.
Contractors are increasing their reel laying capabilities using a portable, modular, or removable reel approach.
Barges and vessels are being upgraded with dynamic positioning (DP) capability for deepwater pipelay operations.
Water depth capability is being increased by boosting tension capability.
Contractors are increasing the performance capability of their burial jet sleds.

1996 performance

In 1996, 10 contractors actively laid 1,511 miles (7,978,997 ft) of line pipe and continuously milled coiled line pipe in the Gulf of Mexico in US waters. Four of these contractors accounted for the 75% of the footage laid.

J.R. McDermott (JRM) laid the most pipe in the Gulf of Mexico (US waters). JRM's fleet of equipment laid 2,333.971 ft of pipe, most of which was 24 in. or larger. The second most prolific contractor for footage laid in 1996 was Global Industries, with 2,025,778 ft. Allseas was third in footage with 847,983 ft. Sub Sea International was fourth with 768,652 ft of pipe laid.

Among the shallow water contractors, Torch laid the most footage with 581,827 ft of pipe. HBH was a close second in footage, with 553,000 ft, however, HBH laid significantly larger diameter pipe than did Torch. Third in footage among the shallow water contractors was Horizon Offshore, with 489,484 ft.

The 1997 survey did not include burial footage, only pipe laid and installation completed in the 1996 calendar year. Each pipe of a bundled or dual lay was treated as separate footage.

Reel lay capability

The most productive way to lay pipe in the Gulf of Mexico is to use vessels or barges with reel lay equipment. According to Global Industries, the reel lay method is 10 times faster than conventional pipelay. Global Industries and JRM both have vessels and equipment which can reel lay in the Gulf of Mexico. Each company has a slightly different approach to reel lay from their barges.

JRM can reel lay from the DB 50, DB 16, and Ocean Builder I using portable reels placed on the deck of their barges. JRM recently upgraded reel lay ability by designing and fabricating a portable 4260 pipe reel. With this reel addition, JRM has three portable reels in stock (two 3242 reels & one 4260 reel). The reels are modular in design, thus allowing the company to perform interchangeable pipe reeling from any of the three vessels.

Global Industries owns and operates the Chickasaw, the only dedicated reel lay barge operating in the Gulf of Mexico. This vessel can spool and lay over 19 miles of continuous 6-in. pipe and 4 miles of 12 3/4-in. pipe. Global Industries will add additional reel lay capability to its fleet of equipment when a removable reel is installed aboard the Hercules in 1998. The Hercules will be able to spool 84 miles of 6 5/8-in. pipe, 26 miles of 12 3/4-in. pipe, and 12 miles of 18-in. pipe.

J-lay capability

Presently, there are only two vessels operating in the Gulf of Mexico that are capable of J-laying pipe - JRM's DB 50 and Cal Dive International's Uncle John. In 1996, the DB 50 J-laid 146,256 ft of 14 in. pipe and 146,256 ft of 18-in. pipe. The Uncle John recently added a Dreco welded frame derrick which allows it to J-Lay conventional pipe up to 6 in. in diameter.

Saipem is presently designing a J-lay system for their DP vessel Maxita. Their J-Lay system, available in the spring of 1998, will allow the vessel to align itself into the prevailing weather.

Transocean Drilling reported that it has investigated using its drillships Discover Seven Seas and Discover 534 to J-Lay pipeline. Since deepwater drillships are currently commanding high dayrates, however, it is unlikely that they would utilize their vessels for pipelay operations.

Vessel upgrades

The majority of contractors have recently upgraded or expect to upgrade their vessels in anticipation of planned pipeline projects in the Gulf of Mexico. Both the shallow water and deepwater contractors are improving their capability in order to be competitive in their respective niche. For example, JRM and Global Industries are upgrading their equipment to increase their deep water capabilities. This translates into the ability to handle larger diameter pipe in deeper water.

JRM recently completed the conversion of the DB16 into a dynamically positioned vessel (DP) by adding 4 fixed-pitch fully azimuthing thrusters, along with an ABS Class II DP system with differential global positioning (DGPS) and accounting sensing capability. These upgrades will allow pipelay operation in deeper waters.

Global Industries' Hercules derrick barge is being converted (Phase I) from a derrick barge to a derrick/pipelay DP vessel. The vessel is scheduled to be available in third quarter of 1997. On the drawing board is a Phase II conversion of the Hercules to a reel lay barge with a high capacity removable reel. Global plans to complete the conversion by the third quarter of 1998.

HBH intends to add a 36 ft by 36 ft heliport and a pipe conveyor system on their BH-400 pipelay barge. Torch is upgrading both of their pipelay barges - Big Shane and Little Shane. Engineering and planning is being done to extend Big Shane's pipelay depth from 300 ft to 400 ft of water by increasing the tensioner capacity to 60,000 lbs. A fixed stinger is also scheduled to be installed in 1997. A 30,000 lb tensioning system and a seven-point mooring system will be installed on the Little Shane by mid-summer, so that it will increase the water depth operating limit from 30 ft to 100 ft.

Milled coiled line pipe

In 1996, Cal Dive International and Quality Tubing formed a formal alliance to provide capability to install continuously manufactured carbon steel line in deeper waters in the Gulf of Mexico. As a result of their joint efforts, a total of 38,596 ft of 3 1/2-in. OD coiled line pipe was laid from the DPDSV Witch Queen, using 6,500-ft capacity reels for 3 1/2-in. OD line pipe on three separate installations. Lay speeds reached as high as 1,000 ft/hour and water depths ranged from 40 ft to 240 ft.

For water depths less than 50 feet, Quality Tubing contracts liftboats, barges, and workboats to enable them to lay continuously milled line pipe using their equipment and personnel. In 1996, Quality Tubing laid 164,696 ft of 2-in., 2 1/2-in., and 3 1/2-in. coiled line pipe in the Gulf of Mexico.

In 1992, the first continuously manufactured carbon steel coiled line pipe was produced and installed by Quality Tubing in 80 ft of water in the Gulf of Mexico as a gas injection line. The installation technique utilized a 160 class jackup.

Coiled line pipe installation accounted for 2.5% of the total pipeline footage installed offshore in the Gulf of Mexico.

Competition is heating up with Oceaneering International's entrance into the Gulf of Mexico coiled line pipe installation market for oil and gas flowlines in shallow and deep water using DP vessels. Oceaneering and Precision Tube Technology have an informal alliance to pursue Gulf of Mexico coiled line pipe installations.

For the 1997 installation season, they will be offering coiled line pipe installations using the Ocean Service and Ocean Project vessels. Oceaneering has designed and commissioned a coiled tubing flowline installation system, which consists of a 28-ft diameter, 250-ton capacity reel and stand with a regenerative hydraulic deployment system.

The 28 ft reel is designed to install 69,400 ft of 3 1/2-in. by 0.25-in. wall coiled line pipe, or 43,700 ft of 4 1/2-in. by 0.25-in. wall pipe.

Initially, the vessels will have capability to lay coiled line pipe in water depths up to 1,500 ft of water. Oceaneering plans to augment the reelstand with a specially designed tensioner systems and other equipment which will permit departure angles close to vertical (J-lay) and installation in water depths greater than 1,500 feet of water.

Oceaneering plans to build a new DP intervention vessel, named the Ocean Intervention, for deepwater coiled line pipe installation with 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 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 vessel is scheduled to be available by summer of 1998.

Pipe burial capability

Pipeline contractor's in the US Gulf are preparing for record activity in 1998

The chart identifies which vessels can lay only, bury only, lay or bury, and lay and bury simultaneously. Typically, each company has developed and perfected their own burial sled design. Each of the deepwater contractors has one bury barge in their fleet of equipment dedicated to burial.

A new burial contractor in the Gulf of Mexico is Lafayette, Louisiana-based CSI Hydrostatic Testers. They are introducing a new pipe burial approach - pipe burial from the stern end of workboats with high volume jetting equipment. Their approach is 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. This approach should help contractors to increase their pipelay footage during the regular season.

The company recently purchased a multi-mode DP construction vessel, the M/V Discovery, which was recently demobilized from burying 10-in. and 12-in. bundle pipelines in West Africa and is working on burial projects in the Gulf of Mexico. The company also owns the M/V Sea Level 21 which is outfitted with a jetting system handled from the stern end of the vessel.

Mechanical connectors

Pipelay contractors, drilling contractors, mechanical contractor manufacturers, and oil and gas companies have been jointly and independently investigating the technical and economic aspects of using mechanical connectors as an alternative to, or in combination with, welded pipe joints.

In order to be economically viable, the additional cost of using mechanical connectors must be offset by the cost savings related to reduced installation times and increases in productivity. The only true test to determine if it is economical to use mechanical connectors is to solicit bids for both welded and mechanically connected pipe. The pipelay contractors bids can be used to benchmark the cost difference.

Diamond Services' pipelay barge, LB5, installed 2.4 miles of dual 3-in. and 4-in. offshore pipelines in 1994 using Jetair's patented positive seal coupling system. Since then, no other pipelines have been installed using a mechanical connector approach. Subsea International has also had experience laying pipe with mechanical connectors.

Welding methods

The majority of contractors use manual stick welding for welding offshore, however four contractors on the survey list have automatic welding capability. Allseas' vessels - Soltaire and Lorelay - both have automatic welding capability. Subsea's 323 barge has automatic welding capability, and J. R. JRM has portable automatic pulsed gas metal arc welding (PGMAW) machines that can moved among the lay barges. Saipem uses their Passo welding system, which is a fully mechanized proprietary MIG/MAG welding system, on the Castoro Otto, Seamac I, Castoro SEI, and Maxita barges.

In the spring of 1995, JRM designed and fabricated the automatic welding system (AWS), a third generation system combining state-of-art technologies in welding, control systems and computer controls for pipe ranging in size from 24 in. up to 60 in.. The system is used in conjunction with conventional pipe facing machines and internal lineup clamps. It was first used on a 24-in. oil pipeline on the Shell Mars project. JRM utilizes pulse gas metal arc welding (PGMAW) in a 2G position during J-Lay operations from the DB50.

International contractors

Allseas, an international pipelay contractor entered the Gulf Mexico pipelay market in 1995. The firm has been successful with deepwater pipelay installations. In 1996, Allseas's Lorelay installed 15 miles of 12-in. pipeline for Shell's Mensa Field in 5,397 ft water depths, a GOM and world record.

Allseas now seasonally brings the Lorelay into the Gulf of Mexico from the North Sea because of the region's demand for deepwater pipeline installations. Allseas is already bidding their new vessel - Solitaire - for 1998 pipeline installations. The Solitaire will be available for pipelay work in the summer of 1997.

Another major international contractor who is trying to enter the GOM market is Saipem. Since 1996, Saipem has been actively bidding pipelay and bury barges for GOM projects..

AUTHOR

E. Kurt Albaugh, PEis 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 23 years.

Information accuracy

In assembling the information on pipelaying companies and equipment specifications and experience for the table accompany this article, every attempt has been to made to locate all the offshore pipelay and pipe burial contractors operating offshore in the US Gulf of Mexico and not to exclude any contractor.

The author and Mustang Engineering are making no guarantee this list includes everyone. The author and Mustang Engineering also have been careful to summarize the capability and experience of each contractor as well as possible by being a neutral party and integrator of information. They have collected information from company brochures, personal interviews, phone interviews, and contractor-supplied information.