United States Department of the Interior Mi l M tS i Minerals Management Service Pacific OCS Region Regional Operations Technology Assessment Committee (ROTAC) Meeting (ROTAC) Meeting April 14, 2010 Decommissioning Cost Update for Removing Pacific OCS Region Offshore Oil and Gas Facilities, January 2010 Technology Assessment and Research (TA&R) Study #646 Presented by Robert C. Byrd, Ph.D., P.E. Proserv Offshore, Inc.
Decommissioning Cost Update for Removing MMS Pacific OCS Region Offshore Oil and Gas Facilities, January 2010 Technology Assessment and Research (TA&R) Study #646 Presented by Robert C. Byrd, Ph.D., P.E., the Principal Investigator.
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United States Department of the InteriorMi l M t S iMinerals Management Service
D i i i C t E ti t SMMS POCSR Decommissioning Cost Update 2010
Decommissioning Cost Estimate Summary:Cost by PlatformDerrick Barge SelectionDerrick Barge SelectionAssumptionsProject ScenariosProject Management Engineering and PlanningProject Management, Engineering and PlanningPermitting and Regulatory CompliancePlatform PreparationWell Plugging and AbandonmentWell Plugging and AbandonmentConductor RemovalDerrick Barge Mobilization and DemobilizationPlatform RemovalPlatform RemovalPipeline DecommissioningPower Cable RemovalMaterial DisposalMaterial DisposalSite Clearance
D i k B S l tiMMS POCSR Decommissioning Cost Update 2010
Derrick Barge SelectionSelection Factors:
SafetyCrane CapacityLess lifts results in less diver down time and less load in-air time; decreases chance of safety incidentSea-keeping CapabilitiesProper CertificationOffshore Experience and Safety Record
EfficiencyLarge enough crane capacity for planned deck modules and jacket sectionsDo not recommend small piece removal methodDo not recommend small piece removal method
CostShortest Mob/Demob TimeLowest cost DB within crane capacity project parameters while still adhering to above criteria
A tiMMS POCSR Decommissioning Cost Update 2010
AssumptionsCosts are estimated in 2009 U.S. Dollars.Conventional state-of-the-art technology (reverse installation using DB’s) will be used to
l tfremove platforms.A total of six OCS decommissioning projects are projected to be conducted during 2015-2030; all of the POCSR oil and gas platforms (23 facilities) will be removed during this period.During each project a total of 2-6 platforms will be decommissioned using DB’s mobilized from the Gulf of Mexico, North Sea or Asia.Platforms will be completely removed and transported to shore for disposal.Explosives will not be used during the decommissioning processExplosives will not be used during the decommissioning process.For pipelines routed to shore, pipeline segments will be removed from the 200 foot water depth level to the State Tidelands boundary (3 miles from shore); pipeline segments between platforms on the OCS will be decommissioned in place; OCS pipeline segments in greater than 200 feet of ater ill be decommissioned in placein greater than 200 feet of water will be decommissioned in place.Power cables will be completely removed from the OCS to the State Tidelands boundary.No salvage or resale value has been considered for the structures, pipelines or power cables that are removed.
A ti ( t )MMS POCSR Decommissioning Cost Update 2010
Assumptions (cont.)No salvage or resale value has been considered for the structures, pipelines or power cables that are removed.O DB bili ti /d bili ti t i i l d d f h f th i j tOne DB mobilization/demobilization cost is included for each of the six projects.The roundtrip mobilization/demobilization times for derrick barges (DB’s) are: 100 days for a DB having a 500 or 2,000 ton maximum lift capability (DB 500, DB 2000) mobilized from southeast Asia; and 200 days for DB having a 4,000 ton maximum lift capability (DB 4000) mobilized from the Gulf of Mexico or North Sea.The weather contingency downtimes for demolition operations are: 15% for the Point Arguello area, 10% for the Santa Barbara Channel area, and 5% for the South Coast area.No downtime is assumed due to the presence of whales or marine mammals.No downtime is assumed due to the presence of whales or marine mammals.A general contingency (provisional work) of 15% is applied to all phases of the decommissioning process except project management, engineering and planning, permitting and regulatory compliance, and mobilization and demobilization of the DB’s, to cover unanticipated problems and cost overrunscover unanticipated problems and cost overruns.Project Management, Engineering & Planning costs are estimated to be 8% of the total cost of the project excluding costs associated with DB mob/demob, permitting and regulatory compliance, materials disposal, weather and provisional work allowances.
S f C t A l iMMS POCSR Decommissioning Cost Update 2010
Scope of Cost AnalysisCosts Included
Project Management, Engineering and Costs Not Included
Decommissioning of pipelines and PlannningPermitting and Regulatory CompliancePlatform PreparationWell Plugging and Abandonment
powercables on State TidelandsDecommissioning of onshore pipelines and power cablesDecommissioning of associatedWell Plugging and Abandonment
Conductor RemovalMobilization and Demobilization of DB’sPlatform Removal
Decommissioning of associated marine terminals and piersDecommissioning of associated onshore oil and gas processing facilities
Pipeline and Power Cable DecommissioningMaterials DisposalSit Cl
facilitiesThe costs of remediating any potential impacts from shell mounds
Site Clearance Provisional Work and Weather Contingency Factors
Project III Eastern Santa Barbara ChannelProject III – Eastern Santa Barbara ChannelA 1968 188 1,357 1,500 2015-2020 2,000B 1968 190 1,357 1,500 2015-2020 2,000C 1977 192 1,357 1,500 2015-2020 2,000
Habitat 1981 290 3,514 2,550 2015-2020 2,000Project V Santa Barbara Channel/Southern Santa Maria BasinProject V – Santa Barbara Channel/Southern Santa Maria Basin
W ll Pl i d Ab d tMMS POCSR Decommissioning Cost Update 2010
Well Plugging and Abandonment
Well Type (Level of Complexity)Average
Cost/WellLow cost well (3 days to plug and abandon) $96,489
Med low cost well (4 days to plug and abandon) $128,652 Med high cost well (5 days to plug and abandon) $160,815
High cost well (8+ days to plug and abandon) $257,304 Assumptions: 1. Costs do not include cost of conductor removal.2. All costs include shipment and airfare associated with mob/demob of rig-less p / gequipment from GOM.
Well Plugging and AbandonmentMMS POCSR Decommissioning Cost Update 2010
Well Plugging and AbandonmentP&A EQUPMENTLARGE SPREAD
SLICK LINE BOX DBL DRUM UNITSLICK LINE BOXWT. 2500
4' HIGH
E-LINE BOXWT. 25004' HIGH
9'
POWER PACK
3'-6
"
100 BBL TANKWT. 8500
8' HIGH
21'
DBL DRUM UNITWT. 800012' HIGH
W/POWER PACK
10'-6"GAS BUSTER
WT. 45009' HIGH
4'-6"
4'
8'-5
" 5'-6
"
6'
5M GREASEWT. 47005' HIGH
9' - 4'
GARDENER DENVER PUMPWT. 5000
POWER PACK LUBRICATOR BOX
4'-5
" 5M GREASESEAL UNITWT. 2100
5'
3'
POWER PACK WT. 12000
21'
6'
LUBRICATOR BOXWT. 2500
10'
4'
OVERBOARD PUMP
WT. 3500
9'
AIR COMPRESSOR
WT. 40009'
50 BBL BLENDERWT. 4500
9' HIGH
2 BAGSCEMENT
WT. 4000
5' 6"
2 BAGSCEMENT
WT. 4000
5'-6"
2 BAGS
2 BAGSCEMENT
WT. 4000
5'-6"
2 BAGS "'HOSE BASKET
DOG HOUSEWT. 80008' HIGH
-9"
5'-6
"
5'-6
"
5'-6
"
5'-6"'
9WT. 4000
11'
5'-6"CEMENT
WT. 4000
5'-6"
CEMENTWT. 4000
5'-6"
7'-8
HOSE BASKETWT. 50004'-8" HIGH
5'-6"4'-6
"
8'-5"'
8'-
5'-6
"
5'-6
"
Well Plugging and AbandonmentMMS POCSR Decommissioning Cost Update 2010
gg gPlatform Wells to P&A Avg. Well Depth (ft) Rigless P&A Costs
A 52 2,500 $5,239,064B 57 2,500 $5,724,556C 38 2,500 $3,900,336
Total: 748 - $103,092,332Assumptions: 1. Costs do not include cost of conductor removal.2. All costs include shipment and airfare associated with mob/demob of rig-less equipment from GOM
C d t R lMMS POCSR Decommissioning Cost Update 2010
Conductor Removal
Casing Jack Removal MethodCasing Jack Removal Method
D i k B M bili ti d D bili tiMMS POCSR Decommissioning Cost Update 2010Derrick Barge Mobilization and Demobilization
ProjectDB Lift
CapabilityMob/Demob Cost Calculation
Cost Per Platform
Project I 500 ton $ 156,000 x 100 days x 90% / 2 platforms $7,020,000
Project II 2,000 ton $ 204,000 x 100 days x 90% / 4 platforms $4,590,000
Project III 2,000 ton $ 204,000 x 100 days x 90% / 6 platforms $3,060,000
Project IV 2,000 ton $ 204,000 x 100 days x 90% / 3 platforms $6,120,000
Project V 4,000 ton $252,000 x 200 days x 90% / 5 platforms $9,072,000
Project VI 4,000 ton $252,000 x 200 days x 90% / 3 platforms $15,120,000
500 ton and 2000 ton DBs are assumed to be mobilized from Asia with a 100 day two-way mob/demob time4000 ton DBs are assumed to be mobilized from Gulf of Mexico4000 ton DBs are assumed to be mobilized from Gulf of Mexico or North Sea with a 200 day two-way mob/demob timeDerrick Barge Mobilization & Demobilization rates estimated as 90% of normal operating ratesp g
Pl tf R lMMS POCSR Decommissioning Cost Update 2010
Platform Removal
Topside Removal
Removed in one piece or sectioned into modules small
h (40 50% f f llenough (40-50% of full crane capacity) for the DB crane to remove safely and efficiently
Transport modules to shore via cargo barge
Pl tf R lMMS POCSR Decommissioning Cost Update 2010
Platform Removal
Jacket and Pile RemovalAbrasively sever piles 15ft below mudline
Removed in one piece or cut into sections small enough (40-50% of full crane capacity) for the DB crane to remove safelythe DB crane to remove safely and efficiently
Total - - 84.7 $13,463,257*Data represents combined length and cost of both cables
M t i l Di lMMS POCSR Decommissioning Cost Update 2010
Materials Disposal
Schnitzer Steel - Portland, ORFight a 0 5 kn counter flow currentFight a 0.5 kn counter flow currentSuperfund Site
SA Recycling -LA/Long Beach FacilitiesLA/Long Beach Facilities
Nearest LocationBest Option from a liability standpoint
Baja Penninsula MexicoBaja Penninsula, MexicoTravel with 0.5 kn currentCheaper, but more liability and no guarantee of availabilityguarantee of availability
Reefing options not considered for this study due to current political atmosphere
M t i l Di lMMS POCSR Decommissioning Cost Update 2010
Materials Disposal
StructuresLarge Scale Capacity FacilityProcessing and Disposal at LA / Long Beach Facilities$384 per ton
Conductors, Pipelines and Power CablesSmall Scale Capacity FacilityTruck and Dispose of Inland Near B k fi ld CABakersfield, CA$123 per ton
C t P t b C tMMS POCSR Decommissioning Cost Update 2010
Cost Percentage by Category
ConclusionsConclusionsCosts have increased ~20% since 2004Cost inflation ~4%/yearApproximately $363 MM of total cost, ~29%, come from Platform Removal.Approximately $160 MM of total cost, 15% f M b/D b t~15%, comes from Mob/Demob cost.
Approximately $152 MM of total cost, 12% f Di l t~12%, come from Disposal cost.
Opportunities Exist for Cost Saving
Questions/Discussion
Cost Summary by PlatformMMS POCSR Decommissioning Cost Update 2010
PlatformDecommissioning Cost
(2009 Dollars)
Platform A $25,595,019 Platform B $30,548,957 Platform C $23 683 643Platform C $23,683,643
Edith $29,178,537 Ellen $35,919,110 Elly $21,360,859