"Our goal is to set up construction of offshore production platforms from scratch based on best international practice"

MourmanshelfInfo, 2008, No. 4

1

STG Engineering, an arm of Russia's largest construction company ОАО Stroytransgaz, is Russia's first EPC (engineering, procurement and construction) contractor responsible for the entire cycle of construction of topsides of an off-shore ice-resistant platform for the development of the Yuri Korchagin field in the Caspian Sea. Oil major LUKOIL plans to start production at this offshore field next year. The project will be implemented under a zero discharge principle fully excluding any adverse environmental impact.

STG Engineering Deputy General Director Igor Mitrofanov explains what makes the project unique.

 

STG Engineering

000 STG Engineering is a subsidiary enterprise in the Stroytransgaz group responsible for engineering and procurement of equipment. STG Engineering offers a full range engineering services (including design and procurement of equipment) for the oil & gas and energy sectors.

The company is headquartered in Moscow and has branch offices in Astrakhan, Kiev and Damascus. Design institutes GazNIIproject (Samara) and Kiev-based STG Engineering Kiev and UkrGazNIIproject are also part of the group.

STG Engineering is Russia's only engineering company actively involved both in Russian and international oil & gas projects (Algeria, Syria, Saudi Arabia, Greece, Turkmenistan and UAE). Annual sales of engineering services amount to about $50 million and procurement of equipment brings more than $100 million a year.

Engineering and procurement for Stroytransgaz's international projects (Saudi Aramco, SONATRACH, Dolphin Energy, Syrian Gaz Company) account for about half of STG Engineering's portfolio. The other half is services to Russian customers such as LUKOIL-Nizhnevolzhskneft, GazpromlnvestZa-pad, Samara-Nafta, GazpromTrans-gazUkhta, GazpromTransgaz Samara and others.

Alexander Lavrentiev is general director of STG Engineering.

2 – The Yuri Korchagin field was discovered in 1999–2000 in the northern part of the Caspian Sea at a depth of 12 meters, about 150 kilometers from Astrakhan and some 220 kilometers from Makhachkala. The field will be developed from an ice-resistant fixed platform (LSP-1) fitted with drilling, processing and power supply facilities enabling year-round simultaneous drilling and operation of a well cluster. Another ice resistant fixed platform (LSP-2) will be set up next to LSP-1 to accommodate the crew. It will have living quarters for 120 people and a helipad. The platforms will be bridge-linked. LSP-1 will collect and separate the reservoir content into oil, gas and water. After the treatment, oil will be transported through subsea pipelines to a 30t floating storage unit (FSU). The oil from the FSU will be transported by shuttle tankers with displacement of 5,000 to 7,000t to the port of Makhachkala, where it will be fed into the Transneft pipeline system. For the first three years of production the gas will be re-injected into the reservoir, but in the future it will be transported through a subsea pipeline to lead onshore installations. As the development advances, a floating drilling rig is planned in the vicinity of LSP-1 for drilling of wells. The reservoir content from those wells will be transported to LSP-1. The treated oil – gas will be transported from LSP-1 back to the rig for the re-injection of the gas into the reservoir. In the future, LSP-1 will also receive gas from the Khvalynskoe field. This project is really unique. First, almost all work, starting from the design to the commissioning of the offshore ice- resistant platform, is performed by Russian companies, unlike the offshore platforms which are currently under construction near Sakhalin. Second, it is the Yuri Korchagin field that will be the first one in the Russian sector of the Caspian Sea to be used for integrated development of other offshore fields, tying them to a common transport infrastructure and onshore facilities.

– The offshore ice-resistant platform is a main element of the field development. Tell us about STG Engineering's involvement in its construction.

3 – The customer of all work related to the development of the Yuri Korchagin field, including LSP-1, is 000 Lukoil-Nizhnevolzhskneft. 000 Lukoil–VolgogradNIPIneft is the general designer, while RR–MNP group is the general contractor. In 2006 we signed an EPC contract with Lukoil. The scope of the contract includes development of detailed design and as-build documentation and procurement and management of construction of the production and power supply facilities of LSP-1.

STG Engineering has broad experience in construction of the most sophisticated engineering facilities and connection and installation of equipment, and other work. To date we have fully assembled the power complex, separators, manifolds for receipt and separation of reservoir content, and high – and low-pressure compressors. We have procured equipment for a chemical laboratory.

– What is the current status of the overall LSP construction?

– The ice deflector on LSP-1 was installed in 2006. Construction of the topside and assembly of major systems and equipment began last year. Some 850 specialists are currently involved in the work. LSP-1 consists of 7 modules each weighing up to 800 tons.

The modules (drilling module, reservoir content pretreatment module, turbine generator module, etc) are built separately. The prefabrication takes place at a plant, following which the modules are installed on the platform in Astrakhan. Overall, the work is on schedule and almost 80 percent of the necessary equipment has already been installed. The completion of the installation is expected next February. After the precommissio-ning, which is due to be completed in the end of May, the platform will be taken to the sea and fixed at the site. The commissioning is scheduled for late 2009.

– The platform will operate in a southern Caspian Sea. Why does it have to be ice-resistant?

Offshore ice-resistant fixed platform LSP-1 will consist of a double-deck rectangular topside supported by six cylindrical legs installed on two pontoons. The stability of LSP-1 on the seabed will be ensured by a pile foundation made of 14 piles driven into the ground along the external edges of the pontoons.

The platform measures 95.5x72.2m and is 90m high. It weighs 15,500 tons. LSP-1 will have drilling, process and energy units and marine equipment totaling over 2,000 pieces.

The drilling unit is capable of drilling 33 wells up to 7,400 meters deep.

Four gas turbine generators will be installed on LSP-1 to supply electricity for the drilling and process units and for the living quarters on LSP-2. LSP-1 will be equipped with water supply, fire extinguishing, heating, ventilation and air-conditioning systems. LSP-1 will also have a special laboratory to control the quality of oil and gas ready for transportation.

– The Yuri Korchagin field is situated in the freezing zone of the Caspian; therefore, the platform will be fitted with protection from ice formations that may damage internal structural elements and drill string shaft risers. Special ice guards will be installed on drill strings along the perimeter of the platform. The ice guards will be heated to avoid congelation with the surrounding floating ice.

4 – An important part of any oil & gas field development project, especially offshore, is compliance with environmental regulations. How is this issue addressed in this case?

– The construction and subsequent operation of this oil & gas production facility is based on a zero discharge principle. This means that no waste including domestic waste, is discharged to the sea. All waste will be transported ashore for disposal. Under this approach even rain water must be handled as waste as it can wash drill dust off the drilling unit to the sea. Compact piping layout ensures the minimum length of pipeline systems and the movement of process stream without crossings and returnings. This makes the process control system much simpler and reduces the possibility of an operator's error.

During the field development, an environmental monitoring system will assess efficiency of environmental measures and identify any unpredicted impacts. The impact on the Caspian environment will be minimal because of strict compliance with all environmental regulations.

– Does your company have any plans to participate in construction of offshore installations for other projects?

– Construction of offshore platforms in Russia is a new market, which means there is room for our development. The platform for the Yuri Korchagin field is the first offshore production platform to have been designed and that is now being built by Russian companies. Our goal is to use best international practice to organize the entire cycle of construction of offshore platforms from the beginning, that is, from the feasibility study to the launching of manufactured platforms.

I am confident that successful implementation of this first project will be the key to leadership in this sector in the future. Our company and other Russian contractors involved in LSP-l's manufacture will gain invaluable experience implementing turn key, off-shore oilfield construction projects. This will strengthen Russia's role in the design and construction of sophisticated offshore installations and facilities as a whole.