Operators in the Gulf of Mexico continue to evolve every possible mechanism capable of extracting the region’s rich resources to adapt to challenging field development and operational conditions. Helix Energy Solutions is about to launch the first ship-shaped, disconnectable, dynamically positioned (DP), floating production unit in the GoM. The vessel will be used to exploit marginal deepwater oil and gas prospects.
The company also is managing a separate set of challenges at the installation site, where it continues to clear wreckage of theTyphoon TLP. Helix’s floating production unit (FPU), Helix Producer I (HPI), will be installed on the old Typhoon field, renamed Phoenix, in Green Canyon block 237 in 640 m (2,100 ft) of water.
In thisOffshore exclusive report, Helix Executive Vice President and COO Bart Heijermans discusses the decision behind the concept selection and the investment’s upside potential.
Typhoon re-development
Helix’s subsidiary ERT acquired the Typhoon mini-basin in August 2006. The acquisition included a 100% working interest in the Typhoon oil field (Green Canyon blocks 236 and 237), the Boris oil field (Green Canyon block 282), and the Little Burn oil field (Green Canyon block 238) from Chevron, BHP Billiton, and Noble Energy.
“What was intriguing about Typhoon was that is was a field with proven reserves that previously produced prior to Hurricane Rita damaging the field’s TLP,” Heijermans explains. The field produced about 16,000 boe/d from two Typhoon wells and two Boris wells before they were shutin.
Helix acquired the Typhoon mini-basin in August 2006. It comprises nine blocks.
TheTyphoon TLP was destroyed during Hurricane Rita in September 2005. It was detached from its moorings and was flipped upside down. When this happened, its flexible risers and steel catenary risers were severed and dropped to the seafloor. But, miraculously, all of the active subsea wells remained intact and unharmed, Helix says.
The company still has some clean-up to do.
“Some of the work left to be done on the old Typhoon field is flush and remove the flowlines and risers still on site and remove some debris on the seafloor from the TLP,” Heijermans says. A portion of the floating production unit was reefed 100 mi (161 km) north of the field.
In 2005, BHP Billiton had drilled a well on the Little Burn field just north of the Boris location. The well was ready for completion with expected production similar to Boris. Chevron also had drilled and completed an additional well on the Typhoon field, which flow tested at 7,800 b/d of oil.
“So, with Little Burn and this Chevron well we saw the basin’s potential,” Heijermans says. Helix plans to bring online six previously drilled wells on Typhoon, Boris, and Little Burn at about 30,000 boe/d in 3Q 2008.
The company also acquired the following prospects from BHP Billiton and Chevron: Balvenie (Green Canyon block 253), Tornado (Green Canyon blocks 280 and 281), and Kissy Suzuki (Green Canyon blocks 325 and 326). Two of the prospects likely will be drilled with the Helix-owned and operatedQ4000.
“When we bring the first wells online, we’ll have spare capacity with our floater designed to handle 45,000 b/d of oil, so we can bring on the acquired prospects and others gradually to keep production stable for several years,” Heijermans says.
This project fits in well with the company’s strategic business model, according to Helix, in that it serves as the operator of the field and it can use its in-house fleet of vessels to perform the construction and installation work.
“One of the good things about this project is that we control everything ourselves,” Heijermans explains. “We can install the flowlines, flexible risers, and turret, also called the Disconnectable Transfer System (DTS), with our own deepwater vessels; perform all the subsea construction work; re-connect the new facility to the existing export pipelines; re-complete and drill new wells; basically we carry out the entire re-development with our own equipment.”
Rendering ofHelix Producer I’s side-mounted Disconnectable Transfer System (DTS). It comprises a Multi-bore Quick Disconnect Connector (QCDC) for suspending the buoy and risers while connected, a production swivel stack for transferring fluids from the risers to the onboard processing plant, and a buoy to support the risers after disconnection.
“Depending on the success of the exploration wells around Typhoon, theHPI could remain on location for at least five years,” he says. “After the wells in the basin have ceased producing, we’ll look to relocate the vessel to another field that we own in the GoM, or to an international location.”
Concept selection, investment upside
Helix looked at a number of floating production solutions to develop Phoenix. At the end of the day, the decision came down to field development economics and the investment upside potential, Heijermans explains.
“Two years ago, the company was looking at a small semi that it could redeploy,” he says. “But, at the end of the day, the cost of the semi made it difficult to justify for a marginal deepwater field development like Phoenix. The cost of redeploying the semi is less that relocating a TLP or spar, but still it’s pretty significant. The final concept we looked at was converting an aframax-size tanker into an FPSO, but the cost was also too high.”
Helix Producer I is under construction at the Viktor Lenac Shipyard in Rijeka, Croatia. Construction of the hull is expected to be completed by the end of 2007.
The cost to insure was a problem as well. “After hurricanes Katrina and Rita hit the GoM, the cost to insure most deepwater platforms went through the roof; some companies couldn’t even get insurance,” Heijermans says.
“If you have to be self-insured and you take the risk, it’s better to get out of the way when a hurricane goes through the GoM,” he says. “So, that’s what we like about this disconnectable DP FPU. When a hurricane is approaching, we can disconnect, flush the flowlines, leave, and then return when it’s safe. You don’t need helicopters to take people to shore because the crew stays onboard. And, the downtime can be used for maintenance work.”
Helix plans to use this vessel as a floating production unit for at least 20 years. If, for some reason, the vessel cannot be redeployed, the company has the option to remove all production modules and flare boom from the deck, store them, and use the vessel as a normal construction asset to support reeled pipelay, deepwater trenching, or ROV work.
“From a downside risk mitigation point of view, if we don’t have a redeployment opportunity, we don’t have an asset sitting cold-stacked,” Heijermans says. “We like these DP ship-shaped floating production units because they’re easy to redeploy, the cost is relatively low, it can disconnect for a hurricane, and it can be used as a construction vessel, if it doesn’t have a redeployment production contract.”
Helix also got some positive feedback from the MMS on the use of this ship-shaped floating production concept, especially with the disconnectable feature to avoid hurricanes.
“TheHPI concept without storage, with export pipelines, is an easy transition into FPSOs, a stepping-stone into the big deepwater FPSOs,” Heijermans says.
FPU conversion
Helix is converting an old train ferry into a modern, DP-floating production unit for development of Phoenix. The ferry,M/F Karl, was being converted into the construction vessel, Kommandor 5000, when it was acquired.
The train ferryKarl is being converted into a ship-shaped floating production unit. After conversion, the vessel will measure 161 m (528 ft) long by 29 m (95 ft) wide.
“This vessel was offered to us several times as a construction vessel,” Heijermans says. Before the ferry entered conversion, it was cold-stacked in Nakskov, Denmark for six years.
Conversion of the ferry started in July 2006 at the Viktor Lenac Shipyard in Reijeka, Croatia under the direction of a company named NTD. The conversion scope includes adding full-length sponsons on each side of the vessel for additional deck space and payload capacity, thrusters and controls for the DP-2 system, and upgrading the living quarters. After conversion, the vessel will measure 161 m (528 ft) long by 29 m (95 ft) wide.
Helix and its partner, Danish company Kommandor Rømø A/S, formed a 50/50 joint venture company, Kommandor Llc., which will own the converted construction vessel and lease it to Helix who will convert it at a Gulf Coast fabrication yard into theHPI FPU.
The vessel will be fitted with 3,500 tons (3,180 metric tons) of topside production modules with capacity to handle 45,000 b/d of oil, 70 MMcf/d of gas, and 50,000 b/d of water. Engineering of the production equipment is under way at Houston-based Oil Field Development Engineering Llc.
The aft deck is undergoing structural stiffening to prepare it for the addition of production modules when it arrives at the Gulf Coast fabrication yard. View is from the rear of the accommodations toward the stern of the vessel.
Production will flow from subsea wells to the FPU for processing via two new 6-in. (152-mm) flexible risers connected to a side-mounted DTS, which consists of five risers, umbilicals, swivel stack and buoy system. Processed production will transfer through the DTS and two new 6-in. (152 mm) flexible risers connected to the existing export pipelines owned by Enterprise Products Partners LP.
The DTS comprises a Multi-bore Quick Disconnect Connector (QCDC) for suspending the buoy and risers while connected, a production swivel stack for transferring fluids from the risers to the onboard processing plant, and a buoy to support the risers after disconnection.
When the vessel disconnects, the DTS submerges 150 ft (46 m) deep. For re-connection, the riser/buoy is retrieved by a winch and pulled into the QCDC. Using its DP system, the FPU can freely weathervane around the DTS. Based on an independent thruster capability study, according to Helix, the FPU can maintain station during 95% or better of combined weather events, including the loop current.
The DTS is being supplied by Flexible Engineered Solution (FES) out of Newcastle, UK. The company has designed and built similar DTS’s including the ones used on theCrystal Ocean and Woolybutt FPSO’s.
Heijermans says a controlled disconnect for hurricanes could take around 12-24 hours, after flushing the flowlines and lowering the buoy. An emergency disconnect could happen in as little as 1 minute.
Conversion of the FPU hull is expected to be completed by the end of this year. The vessel then will transit to the UK where it will have its DTS system installed. The FPU will arrive at the Gulf Coast fabrication yard in early 2008 for integration with its production modules.
Total cost to Helix for the ferry acquisition and conversion, including the addition of the DTS and production modules is about $140 million.
“It would not have been cost-effective to build a new spar, TLP, or semi for this field,” Heijermans explains. “It would have cost around $250-300 million, and the cost to relocate such a platform would be much higher than theHPI.”
First production from Phoenix is expected in the second half of 2008.
“After we’re done with Phoenix, and if no modifications to the vessel are required, we could have the vessel disconnected, redeployed and producing in 3 months time, with pre-laid pipelines,” Heijermans says.
Helix worked with the MMS and the US Coast Guard to get approval for the concept, and Lloyd’s Register is classing the vessel.
Future
Helix doesn’t plan to stop here. The company envisions adding to its redeployable production fleet in the future.
“I would expect that in around five years time we will have three or more of these redeployable-type facilities; one might be based in Southeast Asia, one in the GoM; and the other in a different location,” Heijermans says. “There are a lot of 10-30 MMbbl fields around that need these types of facilities.”
The company already has bought a tanker from the Australian Navy that had worked in the first Gulf War as a refueling tanker, to be converted into their second redeployable floating production unit, likely for use in the Southeast Asia region.
