Recent and Future

Developments in Facilities Engineering

By

Kenneth E. Arnold

Paragon Engineering Services

July 13, 2004

Paragon Engineering Services, Inc.

• History

• Job of a Production Facility

• Facilities Engineering Today

• Emerging Process Technology

• Project Management Technology

Separator and Tank, Titusville, PASeparator and Tank, Titusville, PA

Oil & Gas Journal(June 24, 1937)

First Test of Horizontal Two Phase Separator, 1940First Test of Horizontal Two Phase Separator, 1940

Offshore Field, 1940sOffshore Field, 1940s

Offshore Platform, 1950sOffshore Platform, 1950s

• After World War II demand for:

– Offshore facilities

– High pressure gas production

– Produced water treating

– Heavy Oil Steam Floods

• Led to:

– More complex facilities

– “Mechanical,” “Facilities” and “Construction” Engineering Departments introduced

Facilities EngineersFacilities Engineers

Facilities Engineering (1950s to 2000)Facilities Engineering (1950s to 2000)

• Money is made by discovering and exploiting reserves

– Reservoir engineering and management are critical

– Surface facilities are a necessary evil

• This means:

– Facilities engineering as recognized specialty didn’t even begin until 1960s

– Recent emphasis on “core competence” led to elimination of facilities training and R&D efforts

• Increased reliance on Engineering Companies to develop and implement design

• But… good corporate citizenship puts emphasis on:

– Safety

– Environment

• Design

– Larger, more complex projects

• Ten years ago – Hundreds of $1MM to $25MM projects

• Now several $500MM – $2B projects

– Facilities cost is becoming a large part of total field development cost

• A $4.2B North Sea Field Development Drilling - $1.0B 23 %

Topsides - $2.0B 47%

Hull - $0.8B 20%

Commissioning

& Operations Support - $0.4B 10%

Facilities Engineering TodayFacilities Engineering Today

• Construction

– Project cycle times significantly impact project profitability

– Construction options limited

– Construction execution plan critical to meeting profitability

Facilities Engineering Facilities Engineering TodayToday

Emerging Process TechnologyEmerging Process Technology

• Improved Separator Internals– Use of CFD– Centrifugal Devices

• Oil and water treating– De-oiling Hydrocyclones– De-watering Hydrocyclones

• Multiphase Technology– Meters– Pumps

• Absorption and Contact Towers– Improved Packing– Co-current Flow in Pipes

• Subsea and Downhole Systems

– Direct Water Injection/Disposal

– Direct Gas Injection

– Reduce Backpressure

• Stranded Gas and Alternatives to Flaring for Associated Gas (Especially Offshore)

– CNG Transportation

– Gas to Methanol

– Gas to Middle Distillates

– Gas to Hydrates

– Gas to Power

Emerging Process Technology (Continued)Emerging Process Technology (Continued)

Analysis of Operating Weights 75,000BOPD-GOMAnalysis of Operating Weights 75,000BOPD-GOM

• Total Equipment Weight 5,832 tons

• Excludes: Deck Structural Weight, Drilling Rig, Future Waterflood

• Savings Possible by Eliminating Need for All:

– HP, IP and LP Gas/Liquid Separation2.6% x 1.5 = 3.9%

– Bulk Oil/Water Separation2.5% x 1.5 = 3.8%

– Oil Treating8.0% x 1.5 = 12.0%

– Produced Water Treating2.2% x 1.5 = 3.3% Total = 23%

Choosing the Proper Technology – Choosing the Proper Technology – Innovative Process TechnologyInnovative Process Technology

• Each has applications and limitations depending on project specifics

• It takes a knowledgeable engineer to apply this known technology correctly

• New technology will help us reduce costs

• There is no “magic bullet” process concept that will results in a significant decrease in facilities costs

• But…. The way in which we manage a project has a potentially large impact on cost

17

Managing Upstream Oil & Gas Producing Assets

World Class Best PracticesCost Asset Growth

Best Practices

Ind. Average

Disasters

-25 0 25 50

-6%

10%

30%

Cost Consistently Better

Ref: Ed Merrow – IPA

Underrun Overrun

18

Managing Upstream Oil & Gas Producing Assets

World Class Best PracticesSchedule SlipRef: Ed Merrow – IPA

4%

10%

37%

Schedule Consistently BetterBest Practices

Ind. Average

Disasters

-25 0 25 50 75

Underrun Overrun

19

Managing Upstream Oil & Gas Producing Assets

World Class Best PracticesSchedule SlipRef: Ed Merrow – IPA

Underrun Overrun

80%

73%

38%

10 35 60 85 110

Operability Consistently BetterBest Practices

Ind. Average

Disasters

Project Management TechnologyProject Management Technology

A Project Requires:

• Basic Concept and Plan of Execution

• Efficient Design– Appropriate Choice of Equipment

– Simplicity

• Procurement Plan– What to Buy

– Where to Buy it From

– Management of Interfaces

– Quality Control

– Expediting

Project Management Technology (Continued)Project Management Technology (Continued)

• Construction Plan• Contractor vs. Owner Supply

• Managing Owner Supply

• Site Management Between Contractors

• Management of Interfaces

• Safety Management

• Quality Control

• Expediting

• Startup and Commissioning Plan• Mechanical Completion

• Instrument Check-out

• Initial Fall of Chemicals, etc.

• Purge

• Closeout

Developing Project Management TechnologyDeveloping Project Management Technology

• 1980s Engineering – Emphasis on Developing Training Materials and Automating Selection and Sizing of Equipment– Facilities Bookware Series (tutorials and sizing programs)– “Typical Facility Concept” (logic diagrams and standard P&ID modules)

• 1980s Design– AutoCAD – 2D

• 1990’s Engineering – Emphasis on Cost Estimating and Material Control– Automatic Time Entry and Billing– Estimating Tools and Databases– EMAC Procurement and Tracking Systems

• 1990s Design– PDMS

1.0

0.9

0.8

0.7

1 2 3 4

(AutoCAD)•

(PDMS)

(PDMS)

(PDMS)

Drafting

Engineering

• •

•

Project Management Emphasis TodayProject Management Emphasis Today

• Integration of Work Processes

– ISO Certification• Codify work processes• Assure consistency• Audit

– Full implementation of PDMS as design tool for all disciplines– Link in Engineering Work Processes (VPE)– Link in Smart P&ID (VPID)– Link in procurement and material control (VPRM)

• More efficient design

• Use design models for more effective human factors, operability and maintainability reviews

Project Management-The FutureProject Management-The Future

• Utilize work processes, standards, “typicals” to automate and reduce engineering man-hours/ton.

• Link multiple locations: design, fabrication, operations, maintenance. Take advantage of knowledge where it is.

• Use database to help schedule maintenance, reduce operating costs and manage change.

• Create a real time life cycle database.

ConclusionsConclusions

• We’ve come along way

• There are exciting new technologies becoming available

• We have to use them wisely

• New process technologies will surely help reduce costs and increase capabilities

• Large impacts are possible by applying developing project management technologies

How Does SPE Help Keep Facilities How Does SPE Help Keep Facilities Technology CurrentTechnology Current

• Publications

• Conferences and Symposia

• Forum Series

• Applied Technology Workshops

• Technical Interest Groups

Types of MeetingsTypes of Meetings

• Annual Technical Conference and Exhibition (ATCE) –F & C Programming Committee

• Regional Meetings & Symposia – Region plans and manages under SPE Meetings Policy. Held periodically

• Applied Technology Workshop (ATW) –Limited attendance focused on latest applications of a specific technology. One or two days with no formal papers.

• Forum Series –Brings together experts on specific topics to focus on future aspects. Usually one week with no formal papers

• Section Meeting –Held on periodic basis for benefit of section members. Often scheduled for lunch or dinner.

• Joint Meeting –Offshore Technology Conference

Future ProgrammingFuture Programming

• Facilities and Construction Committee

• Local Chapter Facility Study Group

• Facilities and Construction Volunteer Database

Future ProgrammingFuture Programming

• Join SPE– www.SPE.org

• Choose facilities and construction technical discipline

• Work with local section to develop F & C programming

• Work with Local Section to encourage more F & C membership – operators, vendors, consultants and contractors

• Volunteer to help with SPEI programming – Email me your interests Karnold@paraengr.com

• List your interests (Level 2 of TIL) and your expertise (Level 3 of TIL)

1. Process Systems and Equipment - 22 Sub-Categories

2. Gas Utilization - 3 Sub-Categories

3. Measurement and Control - 6 Sub-Categories

4. Electrical Systems - 9 Sub-Categories

5. Pipelines and Piping Design - 6 Sub-Categories

SPE’s Technical Interest ListSPE’s Technical Interest List

6. Material and Corrosion - 5 Sub-Categories

7. Solids Handling and Control - 5 Sub-Categories

8. Platforms and Floating Systems - 13 Sub-Categories

9. Subsea Systems - 5 Sub-Categories

10. Facilities Operations - 7 Sub-Categories

11. Facilities and ConstructionProject Management - 7 Sub-Categories

SPE’s Technical Interest ListSPE’s Technical Interest List

• The Facilities and Construction specialty is important

• This is a field that is growing in importance and complexity

• SPE has programming in place to help F & C engineers

• SPE wants to expand this programming

ConclusionsConclusions