Asian Contractors Forum (ACF) Quarterly Newsletter for 2017 3Q

Date: Jul 2017
Welcome from the Executive Committee

It is hard to believe that more than 3 months have flown by since we had our inaugural ACF forum and networking event. Once again, we appreciated all the corporate members and individuals who attended the event. We also like to thank all the members for their continued support.

Although low oil price continues to cast a shadow over all of us in the oil & gas industry, we have seen signs of market stabilizing. There are quite a few exciting and spirit boosting news for the offshore industry – Husky sanctioned West White Rose project and announced new discovery in the White Rose field, ExxonMobil moves ahead with Liza project offshore Guyana, and BP T&T greenlighted the Angelin gas project. For downstream, things continue to be busy as Taiwanese company Formosa continues to develop its $9.4 billion petrochemical plant in Louisiana, permitting on a proposed $1.8bn methanol plant by Northwest Innovation Works move forward, and Chinese Yuhuang chemical started the construction on its Louisiana methanol plant.

However, more projects are waiting to be sanctioned and move forward. The industry continues to call for collaboration and partnerships to find economical solutions. ACF is here to provide that platform. We welcome more companies to get involved and become our members.

Industry Happening

Two permits approved for Kalama Methanol Project

KALAMA – The Washington Department of Ecology has approved a shoreline permit and granted water quality certification tied to a proposed project to manufacture and export methanol at the Port of Kalama. These are two in a series of required permits from local, state and federal agencies needed to move the proposal forward.

Shandong Yuhuang Petrochemical started construction of Methanol plant

Yuhuang Chemical has begun construction on a 1.8 million mt/year methanol plant that the company expects to start in the fourth quarter of 2019, the company said.

ExxonMobil FID Liza project

Integrated energy giant ExxonMobil Corporation has made its final investment decision (FID) regarding the first phase development of the Liza field located off the coast of Guyana, among the largest oil finds of the past decade.

Husky moves forward for White Rose project

Husky confirmed plans to build the first-ever wellhead platform for the province's offshore, with the West White Rose expansion being described as the largest oil and gas production project to move forward in Canada this year, with a project cost of $2.2 billion before first oil in 2022.

BP go ahead for Angelin offshore gas project

The oil company said that the project will feature the construction of a new platform – BPTT’s 15th offshore production facility – 60 kilometers off the south-east coast of Trinidad in water-depth of approximately 65 meters. 

Wison Engineering won an EPFC Contract from Formosa Plastics in Texas

Wison Engineering Services Co. Ltd. ("Wison Engineering") (SEHK Stock Code: 2236), one of the leading chemical engineering, procurement and construction ("EPC") management service providers in China, announced that its non-wholly owned affiliated company, Wison Engineering (China) Limited, has been awarded an EPFC (engineering, procurement, fabrication and construction) contract for one section of Low Density Polyethylene (LDPE) project in Texas by Formosa Plastics Corporation, U.S.A. ("Formosa Plastics").

Member News & Case Study

Provided by Executive Corporate Member: TechnipFMC

Yamal Project – fabricating the world’s largest modularized project

Located in the estuary of the Ob River in the Russian Arctic, a region normally ice-bound for nine months of the year, the Yamal LNG megaproject is the largest modularized fabrication project ever undertaken. The project will produce an estimated 1.2 trillion cubic meters of gas from the South Tambey field, one of the world’s largest gas discoveries.

The project owners are JSC Yamal LNG, a joint venture of Novatek, Total, CNPC, and Silk Road Fund.

Yamgaz, a joint venture led by TechnipFMC that also includes JGC and Chiyoda, is executing the Yamal project for the JSC Yamal LNG consortium. The plant is being built in three phases, each featuring a 5.5 MTPA process train. The first LNG train is expected to start up in the third or fourth quarter of 2017, with the second and third trains slated to come online in 2018 and 2019, respectively. The Yamal plant will produce a total of 16.5 MTPA of LNG, along with up to 1.2 MTPA of gas condensate, for the Asia-Pacific and European markets.

Due to the site’s isolation and extreme climatic conditions, Yamgaz opted for a modular construction approach, contracting with 10 Asian fabrication yards. This method has significantly reduced assembly man-hours and accelerated the overall construction schedule and delivered cost savings. Completed modules were shipped to Russia via the Suez Canal and the Bering Strait.

In the project planning phase, the Yamgaz JV performed an extensive evaluation of Asian fabrication yard capabilities, including comprehensive site, quality, and safety audits, to qualify 10 suitable fabrication yards. Yamgaz JV subsequently awarded most of the fabrication work to Chinese fabricators and a large percentage of the equipment and materials to Chinese suppliers.

Key Project Metrics

  • Unrivaled scale of modularization
  • 142 modules, some weighing over 7,000 short tons, and 363 site-preassembled piperacks
  • Total weight of 480,000 tonnes
  • 10 module fabrication yards in Asia: seven in China and three in Indonesia
  • Nine steel structure fabrication yards in Russia
  • A fleet of 20 heavy transportation vessels
  • 60,000 piles driven into the site permafrost
  • More than 50 million man-hours achieved with no lost-time incidents across all fabrication yards
  • Lowest Russian site temperature: minus 57 degrees C

Yamal Module Fabrication Yards

China

  • PJOE Penglai — about 121,000 short tons of modules fabricated
  • COOEC Qingdao — about 136,000 tonnes of modules fabricated
  • Sinopacific Qidong — 70,000 tonnes of SPPs and STT (Steel Structure Transition) fabricated
  • LBT Zhangjiagang — 24,000 tonnes of SPPS fabricated
  • CPOE Qingdao — 14,000 tonnes of SPPs and modules fabricated
  • BOMESC Tianjin — about 37,000 tonnes of modules fabricated
  • QMW Qingdao — six modules totaling 12,000 tonnes

Indonesia

  • Siemens Batam — about 40,000 tonnes of substations fabricated
  • SMOE Batam — about 8,100 tonnes of modules fabricated
  • McDermott PTMI Batam — about 20,000 tonnes of substations fabricated

Key Project HSE Performance Indicators

Excellent health, safety, and environmental performance is a critical requirement for both Yamgaz and Yamal. Delivering on this HSE promise is a significant task at the scale of the Yamal LNG project, which is spread out among 10 Chinese and Indonesian fabrication yards. As the Yamgaz JV leader, TechnipFMC implemented worldclass HSE practices at all Yamal Asian Yards, conducting more than 575,000 hours of HSE training and emphasizing the subject at some 1,500 management and leadership visits.

The results speak for themselves: more than 50 million man-hours expended across 10 fabrication yards with no long-time incidents.

Project Management and Control

A major contributor to Yamal’s success is efficient mobilization and integration of the Yamgaz fabrication site management teams, along with adoption of TechnipFMC’s proprietary EasyPlant project fabrication management software suite.

The user-friendly, integrated functions of EasyPlant provide a quick and easy understanding of project status at a detailed functional discipline level, which allowed the Chinese fabrication yard teams to quickly embrace the software.

Conclusions

In the current market, the Yamal LNG megaproject exemplifies what can be achieved with an enlightened operator, skilled EPC contractor team, and Chinese fabrication and equipment sourcing. Chinese fabricators have proved that they can deliver international levels of fabrication, quality, and safety while achieving substantial cost savings.

The onshore construction market has been one of the first to capitalize on the potential of Chinese fabrication, and offshore is the next target. Chinese fabrication capabilities have proven to be a worthy option to bring value to operators.

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