Let’s set the scene. Life in the oil and gas industry is extremely interesting right now. Whilst energy demand in the medium term is relatively robust – driven by population and GDP growth, oil prices have slumped.
This is in part driven by slow demand in 2014, down significantly from prevailing growth rates prior to 2008-09 and also structural and cyclical factors holding growth down such as weaker-than-expected economic recovery. On the supply side of the equation, the cost of oil and gas extraction has also been increasing – ‘exponentially’ to quote a number of energy companies. Combined with a tightening of financial markets and reduced oil prices, it means energy companies are increasing their scrutiny of development projects in a bid to reach new benchmarks in commercial performance. In short, they’re keen to secure ‘the biggest bang for their buck’.
This brings me closer to home. At Tata Steel we've long executed a strategy to provide clients with 'total project solutions' for oil and gas development projects. The aim of this strategy is to provide clients with a reduction in the ‘total cost of ownership’ of their project. Innovation has played a big part in the success of that strategy. For instance, we’ve developed steel for pipelines that can withstand collapse at water depths even James Cameron would shudder at.
I believe our strategy is even more valid in today’s market conditions where cost-effectiveness is king. And one way of providing customers with the biggest bang for their buck is to utilise welded pipe solutions rather than pricier seamless pipe. We’ve got a strong track record in welded pipe – but we’re also entering new territory to deliver value for our customers.
‘SURF’ is setting a challenge
Welded pipelines can provide a reduction in the total cost of ownership in the growing Subsea Umbilicals, Risers and Flowlines (SURF) market. This market is typified by short subsea tie-backs which are often installed using the reel lay method. This can be a relatively cost-effective installation solution over short to medium pipeline distances.
Tata Steel already has considerable experience in providing innovative welded pipelines in smaller diameters for reel lay application. The challenge lies in larger diameters. That’s because an increased wall thickness is needed for reeling - to prevent the pipeline buckling when going on, or coming off, the reel. At 16 inches (406.4mm) diameter, the wall thickness required to prevent a pipeline buckle would be over 20mm.
Historically, seamless pipe has been the only solution where increased wall thickness is required for reel lay. But welded pipelines are an attractive proposition for customers on the hunt for cost-effectiveness. That’s because welded pipelines have superior tolerances both in the wall of the pipeline and in the roundness of the pipe. This can:
- reduce costs through a saving in materials
- increase productivity on the lay barge due to better fit-up for welding
The upshot is that we’re now looking at how we could provide our clients with a 16" diameter welded pipe in thicknesses beyond 25.4mm for reeling applications.
How are we meeting the challenge?
Our UOE pipe mill in Hartlepool, UK is one of only a few in the world able to produce pipes down to 16 inch diameter. Ten years ago we also supplied two 18 inch diameter pipelines for reel lay in the Gulf of Mexico. With this as our starting point, we’ve already set about some innovative modifications in the pipe mill to produce thicker wall pipe in 16 inch diameter. So far, we’ve achieved an increase to 25.4mm in 16 inch wall thickness - sufficient for one of the world's largest Oil Companies to execute a major pipeline replacement in the UK North Sea late last year.
We’re now taking this a stage further and examining thickness in 16 inch up to 30mm.. This will be useful in both the reel lay and thick wall deep water markets. Our customers are extremely interested in these developments as they see a way to secure a highly technical and valuable solution which represents a reduction in the total cost of ownership when compared with seamless pipe.
We’re continuing the hunt for innovative solutions that will help our customers extract oil and gas in challenging environments around the globe.
The author is the Energy & Sustainability Manager within Tata Steel’s Energy & Power sector. Barry has a multi-product focus for steel applications in oil & gas, power generation and renewables markets, and over 20 years commercial experience in the steel and energy industries.