FPSOs : NO TWO ALIKE F P S O P AST I SSUES AND T YPICAL C LAIMS Houston Marine Insurance Seminar - September 2012 Ted Miller, Charles Taylor Adjusting.

FPSO’s : NO TWO ALIKE

F P S OPAST ISSUES ANDTYPICAL CLAIMS

Houston Marine Insurance Seminar - September 2012

Ted Miller, Charles Taylor Adjusting – Houston EJM 21 Aug 1022

Review and Discussion Points

1. The early days (80’s): FPSO’s local conversions from existing tanker hulls

2. The condition of some early FPSO Tanker hulls and hull prospects

3. US GOM Fleet

4. Manufacturing issues

5. Mooring line issues

6. Umbilical Issues

7. Flexible Riser issues

8. Hull Issues

9. Topside process system issues

10. Loss of station keeping - major event

11. Repair and remediation costs

12. Wrap up

Zafiro Producer Early FPSO Conversion in Galveston and Portugal

Major ballast tank, bottom and steelwork repairs.Operated Offshore Equatorial Guinea 1996

Jamestown – FPSO Early Production System - Kewit South Texas

Minimal hull repairs, built 1957 41,500 dwt.– heavy scantlings.

Early Production Vessel

Condition of tanker hulls for conversion

Condition of Tanker as FPSO conversion candidate is Critical

Extract :Australian Transport Safety Bureau Findings

The Kirki carried all necessary statutory safety certificates. Safety surveys had been carried out within the schedules required by the relevant international safety conventions. The scheduling of the Kirki's special five-year survey at 22 years, rather than at 20 years, was consistent with the ship's survey program and within the rules covering the frequency of special surveys.

The defects in the life-saving appliances, fire-fighting equipment, cargo equipment and the condition of engine room equipment were so numerous and of such a nature that the Inspector cannot accept that they all developed over a short period of time.

The patching with canvas and the camouflaging of No7 tank lids was a deliberate attempt to mislead any person undertaking a load line survey. It is not possible to determine when the lids were patched, and it might not have been done with the knowledge of the owners or those on board the Kirki on 21 July 1991.

Significant defects should have been observed during surveys by Classification Society; inspections by the Oil Major Vetting and the Vessel managers and operators; and inspections by the Port State Maritime Safety Authority.

The Classification Society was responsible for the issue of statutory certificates on behalf of the Hellenic Republic of Greece. The procedures adopted by the Society during structural surveys failed to identify the areas of localised corrosion. The condition of ballast tanks 13 and 14 together with the number and nature of deficiencies in safety equipment, indicates that a number of surveys over a period of time, including surveys that were conducted under international safety conventions, were not performed effectively.

U S GULF OF MEXICO FLEET

U. S. GULF OF MEXICO FPSO FLEET

Single FPSO Unit Multiple moored FPU’s

US Gulf of Mexico HELIX PRODUCER 1 Converted Ferry – Croatia in 2008

Ship Shaped Floating Production Unit FPU Topsides installed Corpus Christi Texas 2009

Disconnectable Transfer System - DTS Operating Water depth 2,100ft Deployed at Green Canyon 237 Phoenix Field (Ex Typhoon)

US Gulf of Mexico BW Pioneer Converted in China and Singapore in 2010

Originally Double Hull 1992 Tanker

First FPSO – Disconnectable Operating Water depth 8,200 – Ultra Deepwater)

Deployed at Walker Ridge 249 Cascade and Chinook Fields

World Record Polyester Mooring Depth

12 (11+1 spare) lengths x 2.5km long x 800 tonne MBL Polyester Tethers. This is a new world record for continuous lengths of polyester mooring tether. 

MANUFACTURING ISSUES

• Modern analytical tools – get design / specifications right

• Reliant on manufacturers to produce to spec. and codes

• Operators however rely on QA-QC of manufacturers and suppliers

• Onsite inspections by operator essential • Reliance on 3rd party Inspectors • Small issues – catastrophic events

MOORING LINE ISSUES

Many different designs, layouts and materialsMore incidents likely as FPSO systems age

• Chain lines – Steel • Wire Rope lines – Steel • Synthetic fiber rope lines – Polyester • Shackles, Links and Jewelry - Steel

• Relatively few manufacturers of large diameter mooring components worldwide.

Steel Mooring chains and equipment

A chain system is only as good as its weakest link

Catastrophic Failures in Mooring Systems PossiblyPut Floating Structures at Risk

In early 2011, a single point mooring system for a deepwater Gulf of Mexico (GOM) project failed at the chain. Based on the investigation of this event and a review of historical events, BOEMRE is revising and re-issuing Safety Alert #259.

The investigation determined that a 6 ¾-inch diameter, 862-pound chain link in the tether chain had fractured and separated near its butt weld. Analysis of the fracture indicated that the chain link had a weld repair and the fracture initiated in the middle of the weld. Three links of the 24-link tether chain were found to have weld repairs.

Mooring Line Failure - 2

Brittle fracture caused by reversible temper

embrittlement (RTE) during shackle heat treatment

Tear in steel wire line sheathing

g

FPSO Sheathed steel wire rope Mooring Line

Installation vessel deployment line damaged HDPE

coating on mooring line, exposing wire

• Can the cathodic protection reserve cope over life cycle - No Cost

• Can local repair be carried out – Minimal cost

• Must the rope to be replaced. – • Very expensive repair.

Polyester Mooring Ropes

9 “Diameter Polyester outer sheath Main Strands 8 triple 1-1/2 “ 4RH Lay and 4LH Lay

Main Strands 8 triple 1-1/2 “ 4RH Lay and 4LH Lay

Strand Ends being Prepared for Splicing Strand Ends being Prepared for Splicing

Strand ends being prepared for splicing Eye to Link

Other mooring line Issues

Chain to Rope Transition Link misassembly which caused damage to one link and line: Are the other 9 links and lines “damaged” if their links wrongly assembled?

Deepwater and Ultra DW - Lead Time for replacement components Very limited manufactures, propriety information, installation spread availability, unique designs, new engineering for repair procedures, timing and logistics

Umbilical Issues

Damage due to design detail and unexpected delay

Flexible Risers and flowlines.

Flexible Manufacture

Carcass formation > Sheath extrusion (twice) > Pressure armouring > Flexible in carousel < Insulating & taping < Axial armouring

Flexible Risers and flowlines.

• .

Pressure Armor Pitch -

Handling or operational errors can cause unlock and Failure

Leak• Leak Detection – Line or end fitting

Pressure Armour Pitch - Errors cause unlock & failure

39 RISER CORROSSION

Hull Issues

• External Hull Sacrificial - Anode Loss in Transit

• Paint peeling on side shell – Damage or Warranty

• Ship Hull Bilge keel damage Cause under investigation

• Sterntube seals leaking – Damage or maintenance issue

Topside Industrial Process Systems

• Gas Turbine Gas generator blade - Accelerated Corrosion• Flare Tower insulation loss – manufacturing defect • Blade keeper parting FPSO off India – OEM Facility in

USA • Multiple Gas Turbines to OEM in Houston• Compressor module FPSO North Sea - although built and

installed as module repairs required entire compression unit to be removed – Massive increase in repair cost

Gas Turbine – Gas generator blade damage

• Hot corrosion caused by combination of sodium & sulphur

• Sulphur from high sulphur diesel

• Sodium from seawater – air intakes ingest spray.

• Question on other units :

• Aggressive deposits form before blade material corrodes

• Is contamination damage &/or is dismantling, cleaning, rebuilding &

retesting covered ??

Fire on gas compression module

Entire unit has to be removed for repairs

• Loss of Station keeping

• FPSO with central turret / drag chain system

• FPSO thruster operation is required to maintain heading

• Multiple risers umbilicals / flowlines

• Failure of heading / station keeping & mooring systems

• Brief electrical power failure

• Excursion beyond dynamic riser & umbilical operating limits

First FPSO Full Field Development ‘Gryphon’ North Sea 1993

Loss of Station keeping - Major Event

• Extensive damage to risers, subsea facilities and turret

• Extended repair period due to specialist equipment

• FPSO has to be removed to drydock for repairs

• Field restoration expensive

• Very large LOPI Claim - well in excess of the Physical Damage

Costs - Construction Examples

• Flexible Riser Failure 9,000,000 - 25,000,000• Mooring Line Failures 17,000,000 - 52,000,000• Turret Weld Failures 12,000,000• Bilge Keel Cracks 20,000,000• Thruster Seal Failure 12,000,000• Fire Main Leaks 6,000,000• Turbine Corrosion 5,000,000• Anode Failures 10,000,000

Costs - Operating Examples

• Loss of Submerged Mooring Buoy 2,000,000LOPI 100,000,000

• Loss of Station Keeping 300,000,000LOPI 500,000,000

• Fire in Gas Compression Module 20,000,000LOPI 150,000,000

• Failure of Quick Disconnect Turret 25,000,000LOPI 250,000,000

WRAP UP