Pioneering Spirit Could Save Decom Industry $12 Billion
Allsea’s single lift vessel Pioneering Spirit could cut the projected costs of North Sea decommissioning by $12 billion, according to Douglas-Westwood.
The vessel, built largely for the decommissioning market, is the world’s largest vessel in terms of its gross tonnage, 403,342gt, its breadth, 123.75m (406 feet), and its displacement, 900,000 tons. The 382m (1,250 feet) vessel has a maximum lift of 48,000 tons, and is expected to be used to lift the 24,000 ton Brent Delta topside, something that no other vessel could achieve in a single lift.
Douglas-Westwood’s new publication the North Sea Decommissioning Market Forecast 2016-2040 provides detailed analysis of the amount of infrastructure that needs to be removed in the North Sea over the next 25 years and the associated expenditure. The forecast splits cost into two different scenarios, one which assumes that decommissioning will continue to be carried out using current methods and heavy lift vessels, while the other (Scenario 2) assesses the potential impact that the Pioneering Spirit and other single lift vessels (SLVs) that follow it could have on the forecast.
Overall, Scenario 2 could offer major cost savings of around $12 billion, but only if it is accepted by the industry. DW forecasts Scenario 1 expenditure of around $82 billion compared to $70 billion in Scenario 2.
Author, Ben Wilby, commented, “The potential impact of utilizing SLVs is huge, with costs savings that will equate to billions of pounds. This is because it will be possible to complete offshore work in one trip, as opposed to the time consuming reverse installation method that pushes costs up. This will all depend on how successful Allseas’ Pioneering Spirit SLV is.
“In the U.K. over the 2019-2026 period, we will see the removal of 144 platforms – 51 percent of all platform removals in the U.K. over the forecast period. The U.K. will retain a high level of spend to 2040, accounting for well over 50 percent of the market in both scenarios. Spend will reach almost $51 billion in Scenario 1 and $44 billion in Scenario 2.
“The low oil price environment and age of platforms in the U.K. are the main drivers of activity. Operators pushed small fields long past their intended life when oil prices were high, which required life extension techniques that no longer make economic sense. Due to the lack of significant improvement (to pre-2014 levels) expected in the oil price over the next five years, operators will instead cease production and begin decommissioning preparations. This will start earliest in the U.K., with Norwegian decommissioning activity peaking after 2030.”
Research Director and Editor, Steve Robertson, further commented, “Denmark will also contribute to spend over the forecast, though it will differ from that of the U.K. and Norway owing to the much smaller volume of infrastructure to be decommissioned. Spend in Denmark will reach $4.8 billion in Scenario 1 and $3.9 billion in Scenario 2.
“The decommissioning of North Sea infrastructure presents a sizable opportunity for the specialist decommissioning firms that can work in the harsh environment offshore and can also handle the essential requirements from operators to complete decommissioning projects in a safe and cost effective manner.”