Brazil’s OSX Gets Credit Line to Develop Huge Shipyard
Brazil’s OSX Holding could receive a credit line of as much as Real 2.7 billion ($1.69 billion) to build one of the largest shipyards in the Americas, following the approval by the Board of Directors of Brazil’s Merchant Marine Fund for the prioritization of financial support for its Açu Shipbuilding Unit (UCN Açu).
The shipyard would be developed in the Açu Superport Industrial Complex, located about 150 km from the Campos Basin in the State of Rio de Janeiro. The shipyard is being jointly developed by OSX Construção Naval S.A., which has a 90% interest, and Korea’s Hyundai Heavy Industries Ltd., which holds the remaining 10% stake. The shipyard will leverage Hyundai’s shipbuilding technology and have an initial quay of 2,400 meters. Further development could expand it to 3,525 meters, enabling it to accommodate up to 11 Floating Production Storage and Offloading (FPSO) vessels.
OSX has already signed a letter of intent for what would be the largest construction crane in the Americas. The 125m high crane will be supplied by Hyundai Samho. It will have a distance between towers of 186 meters and capacity of 1,600 tons to allow the assembly and construction of large blocks and modules. Initially the shipyard will have an output of 180,000 tons of steel.
OSX has an orderbook valued at $4.8 billion, including five FPSOs, with capacities of 80,000 bbl and 100,000 bbl and three Wellhead Platforms (WHPs) for shallow water.
OSX´s chairman Eike Batista said the decision by the Merchant Marine Fund was “a confirmation of the national interest in the realization of the OSX Shipbuilding Unit, which is a decisive instrument so that we, Brazilians, may enjoy the benefits arising from the oil and gas that we have discovered in the offshore basins of our country.”
Malaysia LNG Regasification Project
PGB-Petronas LNG agreement
(Thursday December 2, 2010) PETALING JAYA:
Petronas Gas Bhd (PGB) yesterday signed a heads of agreement with Petroliam Nasional Bhd (Petronas) to develop liquefied natural gas (LNG) regasification facilities and subsequently provide LNG regasification services to Petronas.
PGB told Bursa Malaysia that the project, to be located near Sungai Udang Port, Malacca, would comprise two floating storage units to receive and store LNG, an island jetty and regasification units, and subsea and onshore pipelines to transport the regasified LNG to the Peninsular Gas Utilisation pipeline network.
The regasification facilities will have a maximum send-out capacity of 3.8 million tonnes per annum.
The project is expected to be completed by July 31, 2012.
Source: http://biz.thestar.com.my/news/story.asp?file=/2010/12/2/business/7541503&sec=business
Ultrafiltration and Sulphate Removal – Seawater Treatment in Offshore Angola
VWS Westgarth, a subsidiary of Veolia Water Solutions & Technologies (France), has been awarded a multi-million dollar contract by Daewoo Shipbuilding & Marine Engineering Co. (DSME) for the design, supply and delivery of an Ultrafiltration system and a Sulphate Removal Package (SRP) system. The two treatment units, designed for DSME’s Floating Production Storage and Offloading vessel (FPSO), will be installed in the Cravo-Lirio-Orquidea-Violeta (CLOV) Fields, located Offshore Angola. The project completion is expected in January 2012.
The ultrafiltration and sulphate removal packages will be installed on the FPSO topsides to provide the necessary seawater treatment for subsea well injection. The ultrafiltration unit, which is the pre-treatment step to the SRP, will have a capacity of 66,208 m3/day (391,288 BWPD) and the sulphate removal package will treat 59,496 m3/day (374,230 BWPD).
The fine filtered seawater (nominally 0.01µm) from the ultrafiltration system provides the feed for the sulphate removal package. Ultrafiltration provides a significant weight/footprint reduction and improved water quality compared with multi-media seawater filtration technology.
The SRP removes sulphates and other divalent ions from injection water to enhance oil recovery using Dow Filmtec membranes. The removal of these ions reduces the tendency of barium sulphate and strontium sulphate scale to form in the reservoir, and enhances oil recovery.
Shell LNG Commercial
This commercial explains why the world needs LNG.
Read the other article on Why LNG is the new (black) gold?
Siemens to supply topside solutions for FPSO in Brazil
Erlangen, Germany – Siemens Energy has been awarded several contracts for the supply of topside solutions including power generation, water injection and power distribution packages for a Brazilian FPSO (Floating, Production, Storage and Offloading) project. Purchaser for the power generators and power distribution systems is Singapore-based Jurong Shipyard Pte Ltd. and Wasco through its subsidiary Gas Services International Pte Ltd for the water injection package. The FPSO is scheduled to start operation in early summer 2012 and will produce from the Tiro and Sidon fields located in the south Santos basin off the coast of Brazil.
Jurong Shipyard has been contracted by the Norwegian company Teekay Petrojarl Production AS to carry out the necessary modifications to the FPSO Cidade de Itajai (previously FPSO ARCII). Teekay will operate the FPSO on a contract with Petrobras. Siemens’ scope of supply for the vessel encompasses two SGT-400 power generation units, the sulfate removal unit (SRU) and an E-house. The E-house contains the medium- and low-voltage switchgear units, transformers, the variable-frequency drives and the associated facilities for power management in a purpose designed, ventilated container. It weighs approximately 420 tons, is 13 meters long, 13 meters wide and 15 meters high.
The FPSO will also be equipped with water injection facilities in order to boost oil recovery from the reservoirs. Siemens will supply the key elements for this system in skid format, including the sulfate removal membrane, SRU feed pumps, chemical cleaning and reverse osmosis. The water injection system will be designed to handle 638 cubic meters per hour. The FPSO Cidade de Itajai will have a production capacity of 80,000 barrels/day of oil and a storage capacity of approximately 650,000 barrels.
"By supplying topside solutions for FPSOs we are reducing interfaces and can support our customers to increase reliability in project execution and system operations," said Tom Blades, CEO of Siemens Energy Oil and Gas Division.
Why LNG is the new (black) gold?
There’s an old joke among oil drillers: "We didn’t hit oil, but at least we didn’t hit gas".
Just 10 years ago, gas was an irritating, near-worthless by-product of oil production. Now an oilman’s job depends on it.
There are two main reasons for this incredible change. First, what’s left of the world’s oil reserves rest mainly in the hands of national oil companies like Saudi Aramco and Petrobras of Brazil.
Major oil producers like Chevron and ExxonMobil are chasing gas because they can’t get their hands on any more oil.
What’s more, it’s now much less expensive to transport, to the point here gas is now a real substitute for oil. The switch to LNG is on.
But what really accelerated the pace of change was the advent of Liquefied Natural Gas, or LNG.
Prior to this development, gas had to be transported through huge, and hugely expensive, pipelines. Only those projects close to customers or existing pipelines made economic sense. LNG did away with all that.
Through a process known as liquefaction, gas is chilled into LNG, occupying a volume just 1/600th of its gaseous state. This small fact changed the face of the industry.
Where once large and expensive pipeline networks were required to transport gas point-to-point, now ships deliver it anywhere in the world.
Nevertheless, it’s still a complex process. Once LNG reaches its destination, it has to be turned back into its gaseous state – a process somewhat unimaginatively known as regasification – and transported conventionally via pipelines to end users.
At both ends of the LNG chain, nature and technology collide. And the costs of that battle aren’t cheap.
The supply glut
LNG prices are traditionally linked to the oil price. In days when oil fetched $US20 a barrel this quirk was seen to benefit buyers of gas. Today, with oil prices at over $US100 a barrel, it’s a boon to gas producers.
Producers have responded by scrambling to increase output. There’s now every sign of a global glut of LNG.
Qatar is home to the world’s largest gas fields, where enough oil and condensate by-product lowers the effective cost of gas production to almost zero. Cost-free cargoes of Qatari LNG thus ply the world’s oceans, holding prices down.
In Australia, new capacity worth nearly 60 million tonnes per annum (mtpa), has already been committed. With coal seam gas reserves yet to come on stream, that figure is likely to grow.
The shale gas revolution in the US will also have an impact, turning what might have been an importer of LNG into a possible exporter.
And shale and coal seam gas discoveries that have transformed the North American gas market may also occur in new markets like China, India and Brazil. If that occurs, some of the world’s largest potential markets may not need to import LNG at all.
A glut of LNG over the next few years appears likely. Indeed, we’ve been warning of this possibility.
But over the longer term, demand for LNG should easily catch up and perhaps even exceed new capacity.
Growing demand for LNG
The world’s biggest and hungriest energy consumers have barely embarked on their conversion to gas.
In 2005 China had no re-gasification terminals at all. Today, there are six in various forms of development. Each will be able to process millions of tonnes of LNG each year. Currently, Chinese LNG imports are less than 6mtpa. In 15 years’ time, they’re forecast to increase 10-fold. India, Brazil, South Africa, Vietnam and others are constructing new terminals to import LNG.
Overall, demand is expected to grow 15mtpa for the foreseeable future. That’s the equivalent of a new North West Shelf every year.
With Qatar indicating it has reached its supply limit – volumes are not expected to exceed 77mpta for some years – Australian producers are well placed to fill that supply shortfall.
The switch to gas is already on. Developing countries are increasingly seeing LNG, not oil, coal or renewables, as the primary solution to their growing energy demands. Investors take note: this is a sector that will offer rich pickings for investors.
Special Note: This article contains general investment advice only (under AFSL 282288).
Nathan Bell is research director of The Intelligent Investor.
Source: http://www.smh.com.au/business/why-lng-is-the-new-black-gold-20110418-1dl0e.html#ixzz1LonAVpWH
Insituform Technologies Announces New Joint Ventures with Wasco Energy
Insituform Technologies Inc. (Nasdaq Global Select Market: INSU) announced April 25 the creation of two joint ventures with Wasco Energy Ltd. Wasco, a subsidiary of Wah Seong Corporation Berhad, is based in Kuala Lumpur, Malaysia, and is widely recognized as the world’s second largest provider of pipe coating, insulation and protection services to the oil and gas industries.
The first joint venture, Bayou Wasco Insulation Technologies LLC, which will be based in New Iberia, Louisiana, was organized to provide offshore insulation services, primarily to customers in the United States, the Gulf of Mexico, Central America and the Caribbean. The joint venture, which is owned 51 percent by Insituform and 49 percent by Wasco, combines Wasco’s expertise in the insulation market with the operational, sales and logistics capabilities of The Bayou Companies LLC, a subsidiary of Insituform. Bayou Wasco Insulation will provide energy customers a full complement of thermal insulation coating services for offshore flow assurance including poly-urethane foam and syntactic poly-propylene. The facilities are expected to be operational by the early 2012.
The second joint venture, which will be known as WCU Corrosion Technologies Pte. Ltd., will be based in Singapore and provide the product and service offerings of Corrpro Companies and United Pipeline Systems, each an Insituform subsidiary, throughout Asia. Corrpro Companies offers a comprehensive line of fully-integrated corrosion protection products and services primarily in North America, Europe and the Middle East. United Pipeline Systems is a global leader in providing high-density polyethylene (HDPE) lining systems for internal pipeline protection including United’s proprietary Tite Liner and Safetyliner product and service offerings. WCU Corrosion Technologies, which will be owned 51 percent by Wasco and 49 percent by Insituform, combines the product and service offerings of Corrpro Companies and United Pipeline Systems with the operational, sales and logistics capabilities of Wasco in Asia. The joint venture is expected to immediately begin marketing its products and services.
Insituform president and CEO J. Joseph Burgess said, “Wasco’s technical expertise in the insulation market complements Bayou’s long-standing expertise and relationships in the coatings industry. In addition, Bayou’s strategic location in the Port of Iberia, Louisiana brings tremendous opportunity to the joint venture to market and ship insulation orders throughout the Gulf and to Central America and the Caribbean. We are confident that these joint ventures will strengthen and expand our energy and mining platform in these important growth markets. With deeper offshore drilling, the market for high-quality thermal insulation is expanding rapidly. These new businesses will allow us to serve our existing customers operating in the United States, the Gulf of Mexico, Central America and the Caribbean with an expanded insulation offering and also provide an expanded product offering to Wasco’s customers in Asia.”
Wasco deputy managing director Giancarlo Maccagno said, “Wasco is excited to partner with Insituform and its family of energy and mining companies to bring the Tite Liner technology to Asia. In addition, Corrpro’s expertise as a leader in the cathodic protection industry further augments our existing business. Wasco is pleased to partner with Bayou Companies to provide Wasco’s insulation solutions to customers in the United States, the Gulf of Mexico, Central America and the Caribbean. Wasco will immediately begin marketing these solutions to our customers.”
Source: http://www.trenchlessonline.com/index/webapp-stories-action?id=1769
BW Offshore: The Most Advanced FPSOs in Brazil
The abundance of deepwater O&G prospects, combined with the lack of oil transportation infrastructure in Brazil, has increasingly favored FPSOs as a production solution. Petrobras presently has more than 25 FPSOs in operation and this number is expected to double during the next decade. BW Offshore is a leader in FPSOs and FPSO operations. Although it has been quoting for jobs in Brazil for some years, the company finally established a local office in 2008. BW Offshore currently has three FPSOs operating in the Brazilian offshore and has another one slated to be delivered by the end of the year. The Rio de Janeiro office is headed by General Manager Jon Harald Kilde M.S.c., who shared with Maritime Reporter´s correspondent in Brazil, Claudio Paschoa, the company’s strategy and outlook.
Brazil Operations History
Jon Harald Kilde first came to Brazil in 1988 to work for Petrobras through Brasnord. Thereafter he returned a few time to Brazil on business trips but only moved again to Brazil in 1999. Over the years he has built a good and lasting business relationship with Petrobras executives, also learning how to do business in Brazil, having experienced various phases of growth in the Brazilian O&G market. In 2008 he returned to live in Brazil in order to negotiate contracts for BW Offshore and set up the company´s main office in the country.
According to Kilde, “Only one month after opening the Rio de Janeiro office, we were awarded the contract operate the FPSO BW Cidade de São Vicente (BW CdSV) at the Tupi (now re-named Lula) pre-salt field by Petrobras, it was a very good start”. The FPSO will operate as a long term testing facility for the pre-salt reservoirs, starting with the TUPI cluster and changing location annually.
The fact that BW Offshore was capable of delivering the BW CdSV in a record time of 11 months permitted Petrobras to fulfill its promise to the Brazilian government of producing oil from the pre-salt reservoirs within one year. This accomplishment placed BW Offshore in a position for future contracts with Petrobras, as a preffered FPSO supplier. The importance of the first oil in Tupi on May 1, 2009 to the Brazilian government, was illustrated by the enthusiastic celebration led by then Brazilian President Luis Inacio “Lula” da Silva and highlights the importance given to the pre-salt discoveries throughout Brazil.“The customer relationship with Petrobras is excellent, which helps in the pursuit of further projects in and outside Brazil” says Kilde. He also emphasized the importance given by Petrobras to continuity, especially concerning the executives they have contact and negotiate with.
Could you tell us what changes have occurred in BW Offshore since mid 2010?
The main changes were the sale of our technology research division APL to National Oilwell Varco and our buy out of our direct competitor, Prosafe.
How did these changes influence the company?
The changes influenced a lot of things here in Brazil, for example, Prosafe was double our size in Brazil, so now we have 250 employees and three FPSOs operating in Brazil, with another one due to arrive by the end of the year (The Papa-Terra FPSO).
So which FPSOs are operating in Brazil?
There is the Cidade de São Vicente FPSO, which was the first to work the pre-salt and was at the Tupi field EWT. There is the Polvo FPSO contracted to Devon. The Cidade de São Mateus FPSO which is working the Camarupim field for Petrobras. We are expecting the Papa Terra FPSO to be delivered from the shipyard where it is being built in Singapore, by the end of the year. It will be operating the Papa Terra field in the Campos Basin.
What about the BW Pioneer FPSO that was contracted by Petrobras for the Cascade & Chinook field at the GOM?
It is very close to begin production. The plan is to begin production by the end of next week (late March). It will be the first FPSO on the American side of the GOM, we already have a large FPSO operating on the Mexican side (the largest FPSO in the world), therefore with the BW Pioneer starting operations we will have the only two FPSOs operating at the GOM.
How many FPSOs does BW Offshore have operating in West Africa?
Many! Our total in Africa is 13 or 14 FPSOs in operation.
How did the acquisition of Prosafe affect BW Offshore´s earnings?
With Prosafe we now have a truly global reach, for you to have an idea… we have a back log of $8 billion. The forecast is for us to have yearly earnings of around $400 million dollars.
What can you tell us about the APL sale?
The APL sale was really a win-win situation as now APL is owned by a business that has its same characteristics, such as mechanical and hydraulic technology, with a global infrastructure for these kinds of products and services. I think it will be good for them. They will have a bigger market.
We are a now a bigger company with Prosafe coming aboard but we still have technological agreements with APL, so I see the sale as a win-win for my company.
How do you see the business possibilities for your company in Brazil in the near future?
Brazil looks like it will become the largest FPSO market in the world and we want to participate. However, we need to evaluate the business prospects here in relation to other alternatives. Our preference would be for a more selective market in the future. One person might say that business is better here and another say that it is better elsewhere, but the final decision comes from our board of directors. My job in Brazil is to show the business possibilities here. For example, projects with Petrobras are long term solid contracts but all the demands, such as local content, makes things more complex. As a new and bigger company, after the acquisition of Prosafe, we definitely have a financial base strong enough to take on large projects. We still need to see what the future holds.
We had to decline the last Petrobras tender as we already have four ongoing international projects and we are in the midst of integrating the companies. I explained this to Petrobras and they understood. Now we are preparing ourselves for future tenders.
How do you see the prospects for the worldwide FPSO market?
The FPSO market is also growing worldwide but no other region is growing more than Brazil. It´s looking good, we have good prospects in major production areas such as Asia, Africa and the GOM, in the North Sea we also have prospects. In terms of quantity of FPSOs in demand, the forecast is very good for the next five to 10 years.
Which are the main challenges you face in Brazil? Do you still face major challenges in securing a specialized workforce or are things better now?
Unfortunately the problem with local workforce is even worse. Here in Brazil the local content demand and lack of resources, such as specialized workers and local manufacturing capacity makes for a complicated combination. You can demand local content but if these resources are not available it makes things very complicated. That´s why we are seeing a steep upward spiral in the O&G industry salaries, in Brazil. I have never seen anything like it. There are indexes for salary increases, but what is happening in the industry today is a salary rise way beyond the highest index figures.
How do you deal with this local content problem?
Concerning local content, thank God we have three FPSOs operating at the same time in Brazil, which means we have a good base of Brazilian workers. But we are seeing that to guarantee the future in term of offshore workforce, we need to train them since school, we can´t just fight for workers with other companies and try to take their workers, as they will just go and try to take workers from us later. You need to create new candidates and this will need to be done early, from when candidates begin technical school. We are forming partnerships with technical schools in various places. There is one project being negotiated with a school in Vitória, capital of the state of Espirito Santo, which looks promising and we are also looking at technical schools in Rio de Janeiro, in the city of Macaé. This is the first option, there are other alternatives but this is what we are doing now.
What new technologies are you working on?
We are working on an FLNG project, we believe this market will happen but not immediately because of various aspects concerning the gas market and also concerning technical aspects of the project, we are investing in the technologies involved and we believe in this market and that it will grow in Brazil too.
We have also done projects with extreme technologies, for example the FPSO on the Mexican side of the GOM is the largest in the world. The FPSO in the American side of the GOM is in the deepest water at 2,700 meters.
We have these technologies and now we want to be building on the technologies we already have, constantly looking for new things. In order to secure a definite profit it is better to work on continuity. We will always work with new technologies but our focus now is to give continuity to the technologies we already have.
Which are your main clients in Brazil and worldwide?
Well, I told you about of $8 billion backlog. 35% of this total is from Petrobras, which means that Petrobras is much bigger than any other client for us. Next in line comes Apache with 11%.
What about the OSX 1 FPSO?
Last year when we spoke, I commented on the possibility of working on this project and now we are doing this project for OSX. It isn´t really a conversion, it was a new built FPSO, originally built for a company called Nexus, which invested and speculated in the FPSO market by making this generic project. When we bought APL in 2007, we were in a good position, as APL owned 50% of Nexus. What happened is that OSX basically bought the FPSO from the bank but with our technology aboard we got the contracts to adequate this new FPSO for the first OGX field, called Waimea. The FPSO is being fitted out in Singapore and will be completed in a few months, then it will sail to Brazil. It is a project where we are doing the engineering and project modifications but they will operate it.
How do you work with equipment suppliers here in Brazil?
In the Papa terra project, for example, we made a joint venture with Quip that is making modules in Brazil while we are making the modules outside Brazil.
We have two teams working with suppliers, one for technical support, which works with a listing of companies specialized in offshore construction and various other services. The other team works with supplies, buying supplies from companies in Brazil, as 85% of our supplies need to be bought in Brazil.
For now, we are not building new FPSOs in Brazil. We are open to it but for now we have no plans to build in Brazil. Our relation with Quip is very good and for now we are happy with them building in Brazil while we build in the foreign market.
For new projects we will have to see the alternatives. There is still need for more development from EPC suppliers in Brazil, for processing plants for example. These need more development to compete internationally. Some areas of manufacture are competitive here in Brazil, but many areas still need more development in order to be competitive.
Who are your main competitors in Brazil?
Definitely SBM and Modec, other than these there is Teekay and Saipem. We are in third in size in Brazil, with SBM in first and Modec second, other companies only have one FPSO in operation in Brazil.
How are you rated in the world FPSO market?
It depends on how you define it. In size, we are officially second but if we count FPSOs in operation we are in first place but we still consider ourselves second, as SBM has more business related to FPSOs. Our goal is to become number one in the world.
What do you think of the Petrobras initiative to build FPSO at the Rio Grande Shipyard in south Brazil?
I think they will definitely make them with international quality. The problems will be with costs and deadlines. In reality, Brazil will have to choose between maintaining the production goals or maintaining the local content policy. It will be impossible to maintain both, it´s impossible with this 75% local content requirement.
There is no flexibility with this policy but at some point they will have to choose. I see no problem with this because Brazil has the opportunity to develop what is possible, to choose which areas it wants to develop. I think there should be more focus in education. You can build shipyards and many other things but in reality school, starting from lower school, is being developed too slowly. The salaries currently offered to teachers in Brazil are incompatible with serious growth goals.
Do you think there are Brazilian companies capable of competitively building FPSOs locally?
Yes, yes, our partner Quip is a possibility, maybe not in the short run, but there are various companies capable, Odebrecht is another example. These 8 FPSOs to be built in Brazil from new hulls by GVA and Engevix, will give us a good idea of their capabilities. There is also OSX, which has bought two hulls for conversion and their shipyard is also being built. Their idea is to do the conversion and everything else in Brazil, we will see in time. I think that the 19 FPSOs that Eike Batista says he plans to build will also be incompatible with building everything in Brazil. For this reason, I believe that it will be a good opportunity for construction in Brazil and also making the most of the advantages offered by foreign shipyards where there are shorter delivery times and lower prices. I think a combination of these would be best.
How do you see the growth in the O&G market in Brazil for the next decade?
I think that says it all! In the next decade, up to 2020, to triple local production to over 6 billion barrels/year is a bonanza! I hope that the growth will be good and that it will not be like the gold rush, where things go crazy, people try to take personal advantage of the situation and lack of resources that can cause a spiral which will not help anyone. In a spiral like this, while the market is growing too quickly, Brazil would not have a competitive industry. I think that the long term goal must be that Brazil wants to have a competitive industry. As it is today with too many privileges given through local content, will not help at all. There should be local content, but always looking to be competitive internationally and this combination is very difficult to make.
Company History
BW Offshore was incorporated in Bermuda on June 7th 2005 in order to capitalize on the growing demand for FPSOs. The company is a provider of FPSOs and FSOs through operational lease agreements as well as an EPCI (Engineering, Procurement, Commissioning, Installation), contractor of turret mooring systems and offshore terminals. The floating production division of the company has assets operating in the offshore waters of Brazil, Malaysia, Russia, WA and on both sides of the GOM.
BW Offshore has been a pioneer in many respects. It was the first company to operate an LPG FPSO with its operations in Angola. Later the company has converted and installed the first and only Arctic Oil FSO. In 2007, BW Offshore delivered the world’s largest converted FPSO, with the biggest throughput capacity of any FPSO. Finally BW Offshore is now operating the first FPSO in the American side of the GOM, with the BW pioneer.
(As published in the April 2011 edition of Maritime Reporter & Engineering News)
Source: http://www.marinelink.com/news/offshore-advanced-brazil338129.aspx
Please leave your comment here..