PSA Orders Equinor to Overhaul Risk Management After FPSO Debacle
The Petroleum Safety Authority Norway (PSA) has issued a report on its investigation into Equinor's challenges with the construction of the future FPSO for its Johan Castberg field. The floating production, storage and offloading (FPSO) facility is being built by Singaporean yard Sembcorp Marine, and the project has been dogged by serious issues with weld quality. In a statement, PSA said that serious breaches of Norwegian regulations have been identified and Equinor has been issued with an order requiring changes to its quality-control processes.
Johan Castberg is located in the Barents Sea to the northwest of Hammerfest, above the Arctic Circle, and it will be developed with an FPSO. Equinor issued a contract for the construction of the hull and living quarters to Sembcorp in late 2017.
The PSA learned of welding problems in construction during the first half of 2020 of weld-quality errors in the Johan Castberg FPSO hull. The improper welding requires a 100 percent re-inspection of the vessel's welds and extensive repair and rework.
PSA launched an investigation into how the problem unfolded and was allowed to persist, and it identified multiple challenges.
First, Sembcorp Marine is primarily a repair yard, not a new construction yard, and it was the first time that Equinor had worked with Sembcorp on a newbuilding project. The contract specified that fabrication and assembly should take place at Sembcorp's Tuas Boulevard Yard, but during the first construction year, fabrication of the living quarters and some of the hull modules was transferred to three other locations.
Second, Equinor’s follow-up and oversight effort was carried out with a lean project organization, even though Equinor was aware of "quality, capacity and expertise challenges" at Sembcorp. Once work was under way, Sembcorp focused on achieving construction milestones and kept the project timeline on track.
Fundamentally, PSA said, "welding expertise and quality control at SCM were inadequate." Equinor didn't manage this issue early enough, according to PSA, and allegedly did not ensure full implementation of the project’s governing inspection and test plan. Several known and identified risks were left unresolved over a long period, and the seriousness of some of these risks increased.
As a result, welding repairs will delay the FPSO's completion by about a year, and PSA believes that some deficiencies are now permanently baked into the facility's structure.
"Inspection and repair cannot compensate for inadequate welding expertise. Full inspection of all welds is impractical, nor is it technically feasible for inspection to identify reliably all defects which might be present. Where details and areas are accessible for inspection and repair, some increase will be experienced in the expected need for maintenance and repair. Inaccessible details and areas will have a lower structural reliability than would have been the case if the welding had been done by competent personnel," wrote PSA.
As a remedial measure, PSA has ordered Equinor to review and improve its systems for identifying risk and managing suppliers. It has issued a deadline of October 1 for the overhaul.