Presentation on theme: "Alex Iyerusalimskiy, Marine Engineering Lead"— Presentation transcript:
1 Alex Iyerusalimskiy, Marine Engineering Lead Tanker Offtake System for Arctic: Experience and ChallengesAlex Iyerusalimskiy, Marine Engineering LeadThe United States Association for Energy Economics Conference (28 – 31 July 2013)
2 Cautionary StatementThe following presentation includes forward-looking statements. These statements relate to future events, such as anticipated revenues, earnings, business strategies, competitive position or other aspects of our operations or operating results. Actual outcomes and results may differ materially from what is expressed or forecast in such forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict such as oil and gas prices; refining and marketing margins; operational hazards and drilling risks; potential failure to achieve, and potential delays in achieving expected reserves or production levels from existing and future oil and gas development projects; unsuccessful exploratory activities; unexpected cost increases or technical difficulties in constructing, maintaining or modifying company facilities; international monetary conditions and exchange controls; potential liability for remedial actions under existing or future environmental regulations or from pending or future litigation; limited access to capital or significantly higher cost of capital related to illiquidity or uncertainty in the domestic or international financial markets; general domestic and international economic and political conditions, as well as changes in tax, environmental and other laws applicable to ConocoPhillips’ business and other economic, business, competitive and/or regulatory factors affecting ConocoPhillips’ business generally as set forth in ConocoPhillips’ filings with the Securities and Exchange Commission (SEC).
3 IntroductionTwo strong trends in world maritime trade can be highlighted over several decades:Seaborne oil trade is steadily growing (might imply increased risk)Oil spills are continue to decline (encouraging)20120.4 bbl/mbbl1970’s146 bbl/mbbl
4 Introduction Continued Crude oil shipping in the ArcticTanker trade in the Arctic remains just a fraction of overall world tanker operationsAn AMSA study in 2000’s noted over 6,000 ships per year were recorded in the Arctic, but only 200+ were tankersMost shipping traffic in the Arctic is in waters that are either permanently or seasonally ice-freeExceptions include the year-round export of the concentrates from Dudinka and the nickel from Deception BayThis status began to change in 2008 with the opening of the first year-round crude oil export system from Varandey terminal located in the ice-covered part of the Barents SeaNo medium or large oil spill has been recorded in the Arctic ice from tankers
5 Varandey Year-Round Arctic Marine Crude Oil Offtake System A Success StoryVarandey Year-Round Arctic Marine Crude Oil Offtake SystemThe following technical presentation is only intended to provide an example of ConocoPhillips' past experience in Russia.
6 Open Water Tankers to Market Varandey Project OverviewLUKOIL and ConocoPhillips Joint Venture NaryanMarNefteGaz (NMNG)*Approximate seasonal ice boundaryOpen Water Tankers to MarketTransshipment PointMurmanskVarandeySource: Design Challenges for Large Arctic Crude Oil Tanker by A. Iyerusalimskiy and P. Noble. ICETECH 2010*ConocoPhillips is no longer a partner in NMNG Joint Venture
8 Icebreaker Shuttle Tanker: Key Project Element Design BasisEnvironment conditionsDynamic area of first-year pack ice in the extreme years up to 1.5 mThe ridge thickness may reach 9 – 10 mIce drift of various directions at FOIROT up to 1.5 – 2.0 knotsAir temperature as low as -40oC with -45oC as extreme valueWave height at loading point may exceed 4.2 mThe ice transit distance may exceed 250 nautical milesReliable and safe ice transit to ice-free Murmansk year-roundNo icebreaker support on transit routeReliable and safe operations at the FOIROT year-roundIce management and tug assistance at the FOIROT are provided
9 Arctic Design Challenges Common design issues to be addressed for any vessel intended for Arctic operationsDesignBasisTechnicalRequirements,SpecificationIceperformanceIcebreaking concept andpropulsion systemHull form, Resistanceand PoweringWinterizationIce Class and hull strengtheningArctic Features
10 Varandey-Specific Arctic Design Challenges NotrafficabilitydataManeuverabilityThere was noprecedentfor an icebreakingcrude oil tankerof this sizeNo icebreakersupportNo full-scaleperformancedataIcepressureDesignBackingperformanceVery limitedfull-scaleIce loads dataWork onschedule
11 Ice Performance and Hull Form Load caseDesignBallastCommentsAhead2.8 knots3 knots1.5 m levelice + 20 cmof snowAstern2.95 knots3.4 knots
12 Specified and Class Approved Power Propulsion and PowerARC 6 Required23 MW+Initial Ice Model Test17 MWSpecified and Class Approved Power20 MWIce Q = 1.5 bollard Q
13 Propulsion, Power and Rules Rules on ice class selection need to be validated for large shipsArc 6: Ramming is not allowedArc 7: Ramming is allowedEliminating the necessity of backing and ramming provides the opportunity to lower the ice class from Arc 7 down to Arc 6 without compromising safety, but rather increasing it
14 Ice Class and Hull Strengthening The azimuthing propulsion concept improves maneuverability and provides good steering ability while going asternIncreased use of backing and Icebreaking astern in iceChanged the icebreaking pattern around the hullMost classification societies have not yet fully adopted changes reflecting this new icebreaking technique
15 Varandey Icebreaking Tanker: State of the Art Double hull, twin screw icebreaker tanker is the largest vessel for Arctic todayIce performance equal or exceeds most of modern non-nuclear icebreakersUtilizes bi-directional concept: equal icebreaking ahead and asternNew Technology: AZIPODs; Ice Loads Monitoring SystemLength Overall257.0 mLength b.p.234.7 mBeam34.0 mDesign draft14.0 mDeadweight/Displacement71254/92047 MTOpen water trial speed15.8 knots at 15.7 MW shaft powerIcebreaking capability at 3 kn1.5 m of ice + 20 cm of snowPropulsion systemDiesel-electric, 2 X Azimuthal UnitsTotal installed power27,300 kWPropulsion power2 X 10,000 kWCargo oil tank capabilities (approx.)85,000 m3RS ClassKM, *ARC6, 2AUT1 “OIL TANKER” (ESP)
16 Effective Ice Loads Monitoring System Purpose:Risk mitigation and safety of ice navigationPotential operational cost reductionsValidation of the criteria and requirements to be used for new Arctic shipValidation of ice stress monitoring system conceptIce loads statistics collection and operational data analysisSystem developed byConocoPhillipsABSSamsung Heavy IndustrySystem Bridge MonitorSource: The Interim Results of Long-term Ice Loads Monitoring on the Large Arctic Tanker by A. Iyerusalimskiy at.al. POAC 2011
18 Varandey Experience and Learning Three 70,000 DWT Arctic tankers have been delivered by SHI shipyard in and chartered by NMNGFirst crude oil lifted on June 08, 2008 (five-year operation)Never missed the cargo (Some offloading delays at FOIROT)Over 500 crude oil lifts performed (over 250 MM bbl)No icebreaker escort ever required for transit, but ice management is used at offloading terminalThe vessel meets specification requirements, but operational performance significantly exceed predictions
19 Varandey Experience and Learning: Average Transit Speeds
20 Varandey: Lessons Learned The challenges and the lessons of the Varandey project could be projected on the design process and operations of other large ships built for a similar purposeSeveral factors found crucial for Arctic Tanker Offtake System development:Vessel concept should be developed at the early stage of the projectState of the art icebreaker tanker requires advanced training of the ship drivers and engineering crewNear real time ice information for transit planning greatly mitigates the risk and improves the efficiencyLearning ice regime, currents, tides and other local factors specific to offloading locations is necessary
21 Conclusions and Thank You Is there enough evidence to say that Arctic crude oil tanker offtake is reliable, safe and economically viable?Perhaps, too early for definite conclusions either wayExperience with Varanday marine crude oil export system demonstrates a well-designed, maintained and operated vessel can provide safe and reliable year-round transport through Arctic ice of south-eastern Barents Sea"