OIL, GAS & SHIPPING IN THE ARCTIC AND ICE-AFFECTED REGIONS
Boost for Arctic exploration
www.frontierenergy.info SUMMER 2016
Icebreakers Powering through
LNG Carbon capture
Radar technology Ice defence systems
Polar Code Best practice
Oil spill technology Collaborative approach
Ice class tourism
Saving lives in the Arctic
NEWS • RESEARCH • SHIPPING • TECHNOLOGY • TRAINING
C E T A U S IS
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OIL, GAS & SHIPPING IN THE ARCTIC AND ICE-AFFECTED REGIONS
Boost for Arctic exploration
www.frontierenergy.info SUMMER 2016
IN THIS ISSUE Powering through
Radar technology Polar Code Best practice
Oil spill technology Collaborative approach
Ice defence systems
Ice class tourism
06 RUSSIA Undeterred by international sanctions, low oil prices and other challenges, Moscow is looking at ways to boost investment in the far north
Saving lives in the Arctic
NEWS • RESEARCH • SHIPPING • TECHNOLOGY • TRAINING
C AT UE S IS
08 RUSSIA The flagship Yamal LNG project is scheduled to commence first shipments of gas during 2017, another milestone for the region
On the cover Ice breaker cuts through ice in Antarctica
10 ICEBREAKERS A grand new fleet of icebreakers now under construction is set to dominate the icy landscapes of the Arctic Circle in the coming decades
12 ICEBREAKERS The high demand for new icebreakers has led to a flurry of technological advances driving ice ship innovation
14 POLAR CODE Charting the progress of the Arctic Council Best Practice Information Forum and how it can assist with the implementation of the Polar Code next year
16 ARCTIC VESSELS The race to control the ice-bound waters around the Arctic is dependent on building and running effective fleets of ice-breakers and ice class vessels. Arto Uuskallio, of Aker Arctic looks back at history to see how Canada and the USA are having to play catchup
18 ARCTIC VESSELS Companies exploring offshore North-East Greenland must deal with one of the most hostile environments faced by the upstream industry. Here Wouter Anink, Project Manager Vessels of GustoMSC considers four rig designs suitable for such an assignment
04 NEWS Arctic Council ratifies pollution agreement; Polarcus targets Norwegian Barents Sea project; Uncertainty remains over the Northern Sea Route; Canada launches 2016 Arctic Survey; Ice-class Explorer AUV heads for Antarctica; US, Nordic nations issue Arctic statement
32 INSIGHT New luxury cruise ships on order will provide polar passengers with more adventurerich itineraries in the emerging Arctic
20 LNG How Statoil is upgrading carbon capture facilities on a project that has already collected over 4 million tonnes of potentially harmful gases
22 SURVIVAL RESEARCH A look at the work of ABS and its partners in assessing lifeboat and life raft survivability in cold northern seas
24 OIL SPILL TECHNOLOGY How the Joint Industry Programme is bringing Cover Photo: Shutterstock
industry together to collaborate and improve the ability to counter oil spills
26 RADAR TECHNOLOGY A look at the sigma S6 Ice Defence system that will to allow ships to better manage their way through the ice hazards of the Arctic
28 POLAR CRUISING The historic voyage of the Crystal Serenity cruise liner through the North West Passage marks an important early test for the new Polar Code regulations
30 EVENTS A look ahead to some of the most important industry events coming up covering the frontier Arctic energy and shipping industries www.frontierenergy.info SUMMER 2016 01
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FRAM* “Without understating the challenges, these remain exciting times in the emergence of the Arctic region as a place for science, shipping, energy and other responsible development”
www.frontierenergy.info Editor Martin Clark email@example.com Editor in Chief Bruce McMichael Canadian Correspondent Andrew Safer Publisher Stephen Habermel firstname.lastname@example.org Design & Layout In The Shed www.in-theshed.co.uk © 2016 All material strictly copyright, all rights to editorial content are reserved. Reproduction without permission from the publisher is prohibited. The views expressed in Frontier Energy do not always represent those of the publishers. Every care is taken in compiling the contents, but the publishers assume no responsibility for any damage, loss. The publisher, Renaissance Media, assumes no responsibility, or liability for unsolicited material, nor responsibility for the content of any advertisement, particularly infringements of copyrights, trademarks, intellectual property rights and patents, nor liability for misrepresentations, false or misleading statements and illustrations. These are the sole responsibility of the advertiser. Printed in the UK. ISSN 2047-3702 Published by Renaissance Media Ltd, c/o Maynard Heady LLP, Matrix House, 12-16 Lionel Road, Canvey Island, Essex SS8 9DE. Registered in England & Wales. Company number 5850675.
There remains much going on in the opening of the Arctic region, despite the roster of factors sided against it. Even in the face of such great adversity - a background of low oil prices, tough economics and operating conditions, environmental challenges - there is still plenty of appetite for this frontier territory, though it remains patchy from region to region at present. In the Barents Sea there is strong interest in oil and gas exploration concessions, following the success of Norway’s 23rd licensing round which saw companies queuing up to drill in new, previously unavailable, locations. Russia too is keen to continue with its own Arctic oil push, both in the Barents Sea and in other icy climates. And, while drilling off Alaska has stalled following Shell’s disappointing Chukchi Sea well last year, as well as mounting environmental pressures, both the US and Canada remain captivated by the immense potential of the under-explored far north. These regions each pose varied and unique hurdles for upstream operators including a myriad of rapidly changeable ice and harsh weather conditions, although there are many commonalities too. Engineering teams in all of these locations face a glut of similar problems that accompany the harsher, darker and most of all, colder operational conditions. In all cases, it requires the application and adaption of new state-of-the-art technologies, as well as - perhaps most important of all - all time high expectations for safe and sustainable operations. Given the remoteness, extreme cold and the absence of any other infrastructure, nor indeed much shipping traffic in the vicinity, this is a place where oil and gas companies cannot put a foot wrong. And the signs thus far are that industry is taking a very responsible stance when it comes to moving forward. These are still early days when it comes to unlocking the potential of the Arctic region, and in a way that is responsible and sustainable, and slowly is the only way that any long-term development will take place. Nonetheless, the roll-out of a grand new fleet of modern icebreaker ships suggests that countries with an interest in the region - and here Russia is far and ahead in the lead - are willing to take such an approach. It means the real story of the Arctic will unfold over the coming decades, rather than the next few months. Sharing experiences and learning from others is also crucial in such a complex and challenging environment. The evolution of best practice standards for the Arctic, both in official and industry settings, is also vital to making sure things are done right. The introduction of the Polar Code early next year is another step forward for shipping activities in the region. And, with more oil and gas projects coming on stream or with drilling underway on new prospects, notably in Norway and Russia, there is plenty of food for thought for industry experts to ponder. Without understating the challenges, these remain exciting times in the emergence of the Arctic region as a place for science, shipping, energy and other responsible development.
Martin Clark, Editor
Fram is not only the Norwegian word for ‘Forward’, it is also the name of the one of the first ice-strengthened and most famous polar exploration vessels of the late 1800s and early twentieth century. It was captained by Norwegian explorer, Fridtjof Nansen, a Norwegian explorer, scientist, diplomat, humanitarian and Nobel Peace Prize laureate. Sharing his polar travel experiences with fellow adventurers and scientists, his technology innovations in equipment and clothing influenced a generation of subsequent Arctic and Antarctic expeditions. The word encapsulates what we aim to bring you with the magazine – a forward looking guide to the future of oil, gas and shipping activities in the Arctic and other ice-affected regions while keeping environmental protection and safety at the heart of operations.
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2.5 million tonnes
Plans to cut CO2 on the Norwegian continental shelf by 2030 compared with 2020
Eventual total projected capacity at Yamal LNG plant in Russia
Uncertainty remains over the Northern Sea Route Arctic Council: united against pollution
Arctic Council ratifies pollution agreement The formal ratification process has been completed on the ‘Agreement on Cooperation on Marine Oil Pollution Preparedness and Response in the Arctic’, by the Arctic Council, first signed by ministers of the eight Arctic states in 2013. Member countries have already completed one key exercise - a communications initiative - hosted by Canada in 2014, under the agreement. A second exercise is ongoing under the leadership of the US. In September 2015, the US hosted a workshop at its Coast Guard headquarters to prepare for the second exercise. It addressed the identification of the highest-risk Arctic spill scenarios, and reviewed lessons learned from the 2014 Canadian-led exercise. In June 2016, a tabletop exercise was also held in Montreal, Canada, alongside the first EPPR (The Emergency Prevention, Preparedness and Response Working Group) meeting of the year. Among other benefits, the June 2016 exercise was an opportunity for participants to develop working relationships with their counterparts in other federal, state and local agencies across the Arctic Council. Further exercises are planned for the chairmanship of Finland (2017-2019). The Arctic Council also announced that the Arctic ERMA (Environmental Response Management Application) GIS mapping platform, designed to assist in oil spill response by providing a common operating picture of all response assets in theatre and threatened environmental resources, is now live.
A new report, ‘The Opening of the Northern Sea Routes: The Implications for Global Shipping and for Canada’s Relations with Asia’ casts serious doubt on whether Arctic sea routes will provide a realistic alternative to shippers anytime soon. Changing environmental conditions across the northern reaches of Canada and melting sea ice across the countries Arctic region has seen international shippers become increasingly optimistic about opening up of the so-called the Northwest Passage to regular trade. However, the report from the University of Calgary’s School of Public Policy, written by Hugh Stephens, casts doubt that shipping will become common place anytime soon. “Shipping may be more possible through the Northwest Passage than it was in the past, but it will not be consistently unobstructed,” says the report. According to the report, yearly fluctuations in ice coverage which are normal - will make it difficult to establish a reliable route. The analysis concludes that even if the retreat of sea ice persists, the route across Northern Canada may still not be consistently ice-free for many more years, if ever. “The challenges of ice combined with Arctic weather conditions may well mean that any shipping through the passage is slower than expected,” Stephens added. “Other complicating factors include uncharted or poorly charted sea lanes and the difficulty in securing insurance for Arctic shipping.” The report also points to a lack of infrastructure in Canada’s Arctic and the expansion of the traditional routes - the Panama and Suez canals have each recently invested in expansions as roadblocks to establishing a reliable new shipping channel.
Polarcus targets Norwegian Barents Sea project Polarcus Nadia, an ice-class seismic vessel, has been deployed by seismic company Polarcus after it received a letter of intent for an XArray seismic project in the Norwegian-Barents Sea for an undisclosed client. The survey, commencing in August 2016, after required authorisation has been obtained, will run for approximately four weeks. This extends the Polarcus North West Europe campaign and replaces the previously announced project in Morocco which will no longer be acquired by the company, a Polarcus statement read. Seismic shoot: the Polarcus Nadia
04 SUMMER 2016 www.frontierenergy.info
Duration of Statoil’s extended exploration drilling programme offshore Newfoundland targeting the Bay du Nord project and the Flemish Pass Basin
wells drilled in the Flemish Pass Basin offshore Newfoundland across an area of 30,000 sq km
water speed of Rosatomflot tug boat, The PUR, now assisting on the Yamal LNG project
100,000 bpd Peak production from Norway’s Goliat field
When the Trans-Alaska Pipeline opened
Statoil sells stake in the Edvard Grieg field for increased shareholding in Lundin Petroleum
Depth of recent Eni Norge exploration well, Aurelia, drilled in PL 226, about 80 km east of the Skrugard discovery and 250 km north of Hammerfest
Sources: Statoil, Lundin, Novatek, Yamal LNG, Rosatom, Eni Norge, Total
Canada launches 2016 Arctic Survey Canada’s 2016 Arctic expedition is underway to collect scientific information to support the country’s submission on the extended continental shelf in the Arctic Ocean. This year’s survey is a collaborative effort with Sweden, with Danish scientists also participating in the research. The Canadian icebreaker CCGS Louis S. St-Laurent left the port of Dartmouth at the end of July for Tromsø, Norway, to take on board personnel from Natural Resources Canada’s Geological Survey of Canada, Fisheries and Oceans Canada’s Canadian Hydrographic Service and Global Affairs Canada ahead of its expedition to the Arctic Ocean. The Canadian Hydrographic Servive also undertook a seabed-mapping expedition under the Atlantic Ocean Research Alliance during the voyage between Canada and Norway. Jim Carr, Minister of Natural Resources, said the work “is vital to improving our collective knowledge of the Arctic and supporting the science that enables sound, evidence-based decisions.” After the expedition, Canadian researchers aboard the CCGS Louis S. St-Laurent will go on to collect data in the Canada Basin, in the western Arctic Ocean, as part of a scientific collaboration with colleagues from the United States.
Carr: Arctic knowledge ‘vital’
Ice-class Explorer AUV heads for Antarctica A new underwater robot that will help scientists answer important questions about the Antarctic is due to arrive in Tasmania in early 2017, through a contract awarded to International Submarine Engineering (ISE). Capable of diving to depths of 5,000 metres and travelling over 100 kilometres under metres of thick ice, the ‘Explorer’ class autonomous underwater vehicle (AUV) will be programmed to collect data on various research missions. The AUV is funded by the Antarctic Gateway Partnership - a $24 million Special Research Initiative of the Australian Research Council that aims to provide new insights into the role of Antarctica and the Southern Ocean in the global climate system - and by the Australian Maritime College (AMC), a specialist institute of the University of Tasmania. “The Explorer is engineered for deployment in challenging, under-ice conditions. At seven metres long and weighing around two tonnes, its duration is exceptional and can travel over 140 km (or for 24 hours) without needing to be re-charged,” said AUV co-ordinator Peter King. “It’s also highly customisable, and the engineering team will fit it with a full suite of instruments, including a tool for collecting samples from below thick ice-shelves.”
US, Nordic nations issue Arctic statement US President Obama and the leaders of the five Nordic nations Norway, Sweden, Finland, Denmark and Iceland held high level talks in Washington recently covering areas ranging from exploration in the Arctic to climate change and regional security. A joint statement said that the Arctic is a “globally unique region” that is especially vulnerable to climate change but poised for new development that could have ripple effects. It is also home to indigenous peoples with important local knowledge and whose rights must be respected, the statement said. It added that the group remains “committed to the pursuit of international and national climate change goals. We will work towards the highest global standards, best international practice, and a precautionary approach, when considering new and existing commercial activities in the Arctic, including oil and gas operations.”
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Investment: Moscow is keen to upgrade its Arctic infrastructure
Russia looks to stimulus to boost Arctic oil search
hese are challenging times for the energy industry, after an oil price slide that has rocked producers the world over. But the pain is no more acute than in Russia, with an impact that is now being felt on its Arctic aspirations. The country’s over reliance on oil and gas sales - which account for around half of state revenues - means revenue flow has been hit hard in recent years. The imposition of UN sanctions over the Ukraine crisis has further compounded the problem, making it difficult or impossible for western firms to fully engage, especially on complex - and costly - upstream projects in the far north. Nonetheless, Moscow certainly predicts a long-term future in the Arctic, an area it sees as integral to its economic and political wellbeing going forward. President Vladimir Putin has long flagged his ambitions for the region, in terms of economic development in areas ranging from natural resources to shipping. The country has lodged an application with the UN for exclusive control over 1.2 million square kilometres of the Arctic sea shelf, a claim it says its borne out by scientific data. The problems in pursuing this agenda are many, however. In 2015, Russia was the world’s second-largest producer of petroleum and natural gas, and the oil and natural gas sector accounted for approximately 8% of
06 SUMMER 2016 www.frontierenergy.info
Russia’s gross domestic product (GDP), according to IHS Markit. However, in conjunction with both lower oil prices and international sanctions, Russia has recently experienced five consecutive quarters of decline in GDP, representing the country’s deepest economic downturn since 2008-09. Russia’s economy is still projected to contract in 2016, although at a lower rate of minus 1%, according to Oxford Economics. The US Energy Information Administration (EIA) also recently highlighted the fall in economic activity in the country by measuring the decline in the amount of remittances from foreigners working in Russia. This has impacted not only Russia, but periphery states too. “The Russian economy, already weakened by the imposition of Ukrainerelated sanctions by the United States and the European Union, has been further damaged by low crude oil prices since the end of 2014,” the EIA commented in an August briefing note. “While consumers in many countries are benefiting from lower oil prices, declines in Russian economic activity are also having an adverse effect on economic growth in many neighbouring countries by reducing remittances from migrant populations working in Russia.” It means Putin and his officials are facing some hard truths as they seek to
develop a frontier oil territory that is challenging at the best of times. As well as the high costs involved, the possible environmental impact, remote logistics, and the call for technology that may only be available from western firms, it is seeking to grow a sector struggling with commerciality at every level. It has promoted a series of stimulus measures, including a 3.5% tax rebate rate for spending on Arctic shelf exploration projects. “We analysed several approaches, including special rates that were proposed for geological exploration projects and profit rate rebates that could reduce profit taxes by 1.5 to 3.5 times,” Deputy Prime Minister Alexander Khloponin told RIA Novosti. “Moreover, we specifically considered a 1.5 rebate rate for seismic exploration and geophysics projects, which are not very expensive, and proposed a 3.5% rebate rate for drilling, especially deepwater drilling in the Arctic.” The government was only considering tax rebate rates as an exploration benefit, he said. Khloponin also commented on Rosneft’s initiative that incentive mineral tax rates for offshore Arctic oilfields be reduced from 5% to 1%. “If the proposed reduction of the mineral tax rate is approved, where will the government find the money for Arctic exploration projects and a large number of onshore exploration
Undeterred by international sections, low oil prices, and an industry more interested in survival than expansion, Moscow is searching for ways to help its energy companies thrive in the tough Arctic environment
The Arctic Gate facility, which has a capacity of 8.5 million tonnes per year, provides access for Russia’s Arctic-sourced crude to both European and Drilling for oil: Incentives on offer for exploration Asian markets. Gazprom Neft, under the gaze of Putin, loaded projects? Should we cut back on our its first tanker with crude from the exploration activities?” he asked. “On the Novoportovskoye field at the end of other hand, we need to make the necessary calculations, which the ministries of finance, May, allowing year-round shipments, and to help Moscow maintain its recordnatural resources, energy and economic high oil production. First discovered in development make for our companies.” 1964, the field’s distance from transport According to Wood Mackenzie research infrastructure meant development did there are signs of greater resilience among not commence until 2012, when pilot western oil firms, as they adapt to the low development by Gazprom Neft saw oil price environment. It says 56 companies deliveries commence by road transport. studied will achieve cash flow neutrality The company aims to produce 100 million at an average oil price of around US$50 tonnes of oil per year, or 2 million barrels a barrel Brent in 2016, underlining the per day (bpd), by 2020, helping keep industry’s “strong survival reflex”. “This Russian oil production at a post-Soviet is some achievement given the majority record of more than 10 million bpd. needed over US$90 a barrel in 2014,” Russia routinely contests the title of the says Tom Ellacott, senior vice president world’s top oil seller with Saudi Arabia of corporate research at Wood Mac. “A but is being tested with oil production growing list of companies will even be free declining fast at cash flow neutral mature fields. It below US$40 a means Russian barrel in 2016.” The companies need to company highlights Nonetheless, Moscow tap new regions, dramatically certainly predicts a longsuch as the Arctic tighter cash flow term future in the Arctic, and East Siberia, management across to sustain output, the board, although an area it sees as integral to even in the face this has come at a its economic and political of such a testing cost as deep cuts to wellbeing going forward economic and capital investment political climate. have damaged Moscow plans to growth prospects. increase oil production to 540 million The 56 companies covered in the research have cut 2016 E&P spend by 49% or $230 tonnes, or 10.8 million bpd, or more this year, from 534 million tonnes in 2015. billion relative to 2014 levels. As well as the Novoportovskoye field, This does not mean incentives will be other new, large greenfield projects are enough to drive forward Russia’s big expected to come onstream throughout Arctic plans. Until the political winds 2016, including Rosneft’s Suzun, shift and there is rapprochement with Lukoil’s Filanovsky and Messoyakha, the west, as well as a notable uptick in jointly developed by Gazprom Neft oil prices, it will remain extremely tough and Rosneft. Gas giant Gazprom, for Moscow to realise the extent of its which controls Gazprom Neft, said regional ambitions. Still, some progress the Novoportovskoye field - one of the in the field is being made. President Putin largest oil and gas condensate deposits in ceremoniously opened the Arctic Gate marine oil terminal in the Yamal peninsula the Yamal peninsula - would produce 6.3 million tonnes (126,000 bpd) of crude on May 25, for instance, a milestone in oil in 2018. Gazprom Neft estimates the roll-out of more port infrastructure.
the field’s oil reserves at more than 250 million tonnes of oil and gas condensate as well as more than 320 billion cubic metres of natural gas. The company’s head Alexander Dyukov said his firm has invested 186 billion roubles ($2.8 billion) in the field. Investments in the Novoportovskoye field, the Arctic Gate and other terminals, mean that Russia’s high northern coast is now exporting almost as much crude oil as Libya, highlighting the emerging significance of this region. Another terminal, Lukoil’s Varandey site, on the Barents Sea coast, began exporting crude in 2008; it has a capacity to handle 12 million tonnes of oil a year, about 240,000 bpd. Combined, all these terminals handled 230,000 bpd in the second quarter of 2016, according to Bloomberg, and the flow has almost doubled from 130,000 barrels as recently as January last year. It shows Russia means business. As well as new upstream oil and gas infrastructure, it is rolling out a whole series of other projects and investments to open up its Arctic territory, notably a huge fleet of ice breaker vessels. These are being lined up not only for work in the energy sector but also in realising the nation’s vision for the region in areas ranging from defence and security, to shipping and science. Russia’s Defense Ministry has also suggested building several gas storage sites across the Arctic to support Russian military bases in more remote areas. Defense Minister Sergei Shoigu said at a government meeting that the Ministry was building military bases in the Arctic on Sredny Island, the Franz Josef archipelago, the New Siberian Islands and Wrangel Island, underscoring a need for associated gas storage sites, according to Russian media outlet TASS. It also highlights the collaborative approach Russia is taking in order to meet the challenges of working under such challenging circumstances. Whether new financial incentives will help persuade others to take part in this Arctic push is another matter, but there’s no denying this is an area poised for more growth in the coming years. For now, Russia’s Arctic crude production represents just a fraction of national output, but this ratio will grow as the numbers keep rising, and as mature fields elsewhere in the country dry up.
www.frontierenergy.info SUMMER 2016 07
Remoteness: logistical challenges
Turning on the taps: Yamal LNG will launch in 2017
YAMAL LNG START-UP DRAWS CLOSE
ith a 2017 start-up date just around the corner, all eyes are on the Yamal LNG scheme as final touches are made to the giant gas export project in the Kara Sea, inside the Arctic Circle. If Norway’s mighty Goliat oil project launch was the one to watch in 2016 - it commenced production earlier this year, although behind schedule - next year it will surely be Russia’s Yamal LNG. Located on Russia’s northern Yamal peninsula, it groups Russia’s Novatek (50.1%), in partnership with Total of France (20%) and China’s CNPC (20%) and Silk Road Fund (9.9%). The three train LNG project will eventually deliver a capacity production of 16.5 million tonnes a year, drawing gas from the huge South Tambeyskoye field. It is a landmark project in every sense. The LNG will be shipped out of Sabetta port using a fleet of new 170,000m3 LNG carriers. Shipments will be made to Asia via the Northern Sea Route during the summer months resulting in substantially reduced delivery times when compared to transit via traditional routes, as well as cutting fuel consumption and ship fuel emissions. It is a technical and engineering feat of some proportion, with teams working during the winter by spotlight in -40°C temperatures. Then there is the array of financing, political and environmental challenges facing the multinational consortium. Yet still Yamal LNG moves forward. While full capacity production is not expected for another five years, until around 2021, it will nonetheless be a big test of Russia’s abilities to deliver such a complex - and costly - project. Estimated to cost in the region of $27 billion, financing the scheme has been a big headache for all concerned in the wake of sanctions over the Ukraine crisis, which effectively dried up any dollar-based lending.
08 SUMMER 2016 www.frontierenergy.info
In the end, the Yamal LNG partners turned to Chinese banks to support the scheme, on top of any soft loans from Moscow, which remains a staunch supporter of the venture. The financing allowed China’s Silk Road Fund to participate as an equity partner. At the end of June, Yamal LNG reported that it had withdrawn a first tranche of financing, worth 0.45 billion euros, provided by the China Development Bank and the Export-Import Bank of China under loan agreements signed in April this year. “The financing from the Chinese banks is part of the project finance package totaling the equivalent of $18.4 billion, of which more than $4.6 billion has already been withdrawn,” a Yamal LNG statement read at the time. If the partners were looking for signs of encouragement, though, there are plenty of reasons to remain upbeat about the scheme’s prospects despite the immense challenges faced. A Novatek executive commented recently that the LNG project has now contracted to sell 100% of its future output, another big milestone. “We are fully financed throughout the rest of the project and 100% sold on LNG,” Novatek deputy chairman Mark Gyetvay said at an industry conference, quoted by Platts newswire. That still leaves a lot of work to do on the ground, however, with train one only two-thirds complete by mid-2016. It means project start-up is unlikely to take place until the latter half of 2017. Still, Gyetvay also reported that work on the three-train project was around 50% complete, while pricing was “very competitive”, raising hopes in the longterm viability of the gas export plant. This is in no small part down to the abundant gas resource on its doorstep, the enormous South Tambeyskoye field. Gyetvay, again cited by Platts, said gas
feedstock cost was just $0.40/Mcf ($0.38/ MMBtu), with total production cost “a little under” $3/Mcf. Underlining the mood of confidence, he also commented on the possibility of Novatek building a brand new LNG facility on the nearby Gydan Peninsula to the east of Yamal. At a time of depressed oil and gas prices, a subdued outlook for the world economy, and a wide spectrum of ‘challenges’ - from climate change and opposition to Arctic development, to political opposition over Ukraine - it paints a positive picture as Yamal LNG nears the home straight. The mood has caught on at Gazprom too, with its chief executive Alexey Miller, keen to progress the Baltic LNG project, at the port of Ust-Luga, with a view to a start-up by the year-end 2021. Gazprom has spent months courting prospective backers and suppliers for the 10 mta project, which could expand to 15m tpa, and is ready to offer equity in the scheme. Whether there is scope for another project remains to be seen but, in the meantime, Yamal LNG powers forward. It has been an important source of work for a lot of key industry players. In June, ABB said it had been hired to power the ice-going LNG carriers for the scheme, to carry gas from Siberia to markets in Europe and Asia. ABB landed the contract to supply electrical power and propulsion systems - to include turbochargers, generators, switchboards, transformers, electric drives, propulsion control and Azipod propulsion units - for the first of 16 carriers. The new building ship programme was awarded to South Korea’s Daewoo Shipbuilding and Marine Engineering. Teekay, in partnership with China LNG Shipping, was also contracted for another six LNG ships in a separate order in 2014.
Photos: Gazprom, DSME
Russia’s flagship liquefied natural gas project, Yamal LNG, is scheduled to commence first shipments in 2017, another milestone in the development of the country’s frontier Arctic oil and gas industry
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Russia is rolling out a huge icebreaker fleet
The US wants to accelerate investment
Powering through the Arctic ice A grand new fleet of icebreakers now under construction in Russian shipyards and elsewhere is set to dominate the icy landscape of the Arctic Circle in the coming decades, steering a path for the energy sector and other industries
or many years a neglected area, as oil companies chased riches in deepwater hotspots elsewhere around the globe, the Arctic has now piqued the interest of the energy industry as one of the last untapped frontier destinations. It has resulted in a boom in demand for state-of-the-art icebreakers to open access to this challenging but beautiful region. The promise of securing a share of these lucrative resources - USGS estimates that the Arctic contains a huge chunk of the yet-to-be-discovered reserves in the world - is a big attraction to industry, even in the face of such difficult operating conditions and the era of low oil prices. This is also against a backdrop of the geopolitical tug-of-war being played out between the likes of the USA, Canada, Europe and Russia. Moscow especially has firmly set its sights on developing this frontier territory for defence and security reasons, as well as economic ones. Other non-Arctic countries, such as the UK, China and Japan, are also seeking to make a footprint in the polar regions. As well as oil and gas, interest from scientists, environmentalists, and other industry sectors - from fishing to tourism - has also fuelled the growth in demand for icebreaker vessels. Russia is clearly in the lead on the premise that the Arctic will be one of the most strategically important regions of the 21st century. Existing and vessels 10 SUMMER 2016 www.frontierenergy.info
now under construction will give it a fleet of dozens of icebreakers within a few years, far and ahead above any other country. In contrast, the US Coast Guard only recently committed to another new-build vessel - which is expected to enter service in the 2020s - to add to its existing pair of icebreakers.
Bigger, better In the summer, Russia held a ceremony at the Baltic Shipyard in St Petersburg for the float out of some of its new nuclearpowered icebreakers, which it claims will be the world’s biggest and most powerful. It is the only country to have nuclearpowered icebreakers. The Arktika is one of a series of similar LK-60 class vessels currently on the production line. Scheduled to enter service in December 2017, it will be used to escort Russian tankers ferrying oil and gas from out of the Yamal Peninsula and on to markets in the Asia-Pacific region. Other same class vessels include the Ural and the Sibir. At the naming ceremony for the Ural vessel in July, Rosatom executive Sergey Kirienko said Russia is now in ‘serial production’ of a new generation of nuclear icebreakers. His colleague, Rosatomflot’s general director, Vyacheslav Ruksha, said the new icebreakers will play a crucial role in the development of the country’s
grand hydrocarbon projects in the Arctic. “The launch of the Ural is an important step in the development of the Arctic infrastructure of the future,” he said. Measuring around 173 metres in length and 34 metres wide, the Arktika vessel is designed to power through ice up to three metres thick. With a crew of 75 people and its own helicopter for ice reconnaissance, the ship can carry up to 33,000 tonnes. Russia is rolling out various icebreaker programmes and different class vessles to meet its requirements. Illustrating the scale of development, the Russian ice-class support vessel, Murman, will be placed on permanent duty to safeguard production at the Prirazlomnaya rig, in the Pechora Sea, 60 km from the shore. Murman is a multipurpose vessel, registered in Murmansk and carrying a Russian flag, and designed for icebreaking operations in ice up to 1.5 metres thick, as well as firefighting duties and oil spill response activities. It has a length of 87.75 metres, a beam of 19.1 metres and draft of 6.52 metres. Gennady Lubin, director general of Gazpromneft Shelf, which operates the Prirazlomnoye oilfield, said its deployment was in response to the rise in output from the field. “The number of wells built at the oil field and the volume of oil shipments is increasing. Deployment of the Murman will help us maintain safe production and shipment of raw hydrocarbons”.
New fleet: Delivering more power
Russia’s interest in icebreakers does not end with the oil and gas industry, however. Moscow has designated the development of its Arctic territory a priority and is keen to assert its growing presence in the area, on all levels, which has pushed up military activity in the area. The Russian navy recently placed orders for two more Arctic patrol boats capable of breaking through ice up to 1.5 metres thick. Delivery of these new vessels, to be built at the Admiralty yard in St Petersburg, is set for the fourth quarter of 2020. The commissioned vessels will take on a range of duties, including port and tug operations, but also come packed with serious firepower underlining Moscow’s military ambitions for the region. According to military analysts at Jane’s, the “concept image released by the MoD showed the vessel armed with a mediumcalibre main gun on the foredeck (likely an A-190 100 mm naval gun), a helicopter deck and hangar, and two aft payload bays each fitted with a containerised missile launch system (akin to the Club-K system offered for export) armed with four
erectable launch tubes - presumably for either Club anti-ship or Kalibr-NK landattack missiles. Although billed as patrol boats, this level of armament makes them better armed than many corvettes.” Other yards keeping busy with work on Russia’s massive icebreaker and patrol rollout besides St Petersburg and the Admiralty yard, include the Vyborg Shipyard JSC, one of the largest shipbuilding companies in the north-western region of Russia.
More to come Russia’s activity has prompted calls among senior US officials for Washington be more ambitious with the country’s icebreaker programme. Writing in the US’ Navy Times, Republican Duncan Hunter said the need to invest in more ice ships was urgent and paramount. “The time to make decisions is right now.” The operational US polar icebreaking fleet currently consists
Arctech delivers Sakhalin fleet Finland’s polar ship expert Arctech is currently building a series of four icebreaking multipurpose supply vessels for Russia’s largest shipping company Sovcomflot. The first vessel in the series got water under the keel for the first time on June 30. At the same time, the second vessel in the series was floated and moved in order to give way for the keel block of the third vessel. “The vessel launched today is a forerunner in many fields. It is in all respects top of the line in the world, and it will operate in demanding tasks in the Sakhalin region,” said Esko Mustamaki, managing director of Arctech’s Helsinki Shipyard. The vessels will serve across the Sakhalin-2 energy sites, and perform icebreaking duties, as well as transporting supplies and people between land bases and production platforms and protecting the rigs from the impact of ice in the Sea of Okhotsk. The oil and gas fields are operated by Sakhalin Energy Investment Company Ltd. Arctech has overall responsibility of the design, hull assembly, outfitting, testing and commissioning of the ships, which each measure 100 metres in length and 21 metres in breadth. Photos:
Inside Arctech’s Helsinki yard
of one heavy polar icebreaker, Polar Star, and one medium polar icebreaker, Healy. In addition to the Polar Star, the Coast Guard has a second heavy polar icebreaker, Polar Sea although it suffered an engine casualty in 2010 and has been non-operational since then. Polar Star and Polar Sea entered service in 1976 and 1978, respectively, and are now at the end of their originally intended 30-year service lives. The total acquisition cost of a new state-of-the-art ship has not been officially estimated but is thought to be roughly $1 billion, including design costs. It’s a lot of money to raise, but with Moscow already firmly ahead, it could start to be a priority spend for decision-makers. Expect a lot more to come in the roll out of new icebreakers in the coming years.
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Sea trials: The Polaris icebreaker
drives ice ship innovation The high demand for new icebreakers has led to a flurry of technological advancements as the industry seeks to master and overcome the multiple and variable challenges of the Arctic
ith Moscow powering ahead with its new fleet of civil and military icebreakers, including its enormous nuclear-powered vessels, others are keen to benefit from the advances in technology. The country’s Arktika vessel, for instance, is more than 60 feet longer than the largest existing icebreaker,
Russia’s 50 Let Pobedy, while its two on board reactors boast 60 megawatts of propulsion power, enough to power a small country. The new fleet raises the game in terms of size and power. But lessons are being learned across the board as other countries start to roll out their own plans. China, for instance, keen to explore new shipping routes along the north as well as assert its rising international profile, is similarly looking to develop a its own nuclear icebreakers. China National Nuclear Corp (CNNC) and China State Shipbuilding Corp (CSSC) recently signed a pact to work together which could pave the way for the country’s first nuclear-powered vessel.
Shipyards are pioneering new technology advances
12 SUMMER 2016 www.frontierenergy.info
LNG power But other innovations are taking place in the area of power and propulsion as well. In June, the design and technical features of Finland’s newest icebreaker, Polaris, were presented at an industry gathering in Helsinki. It is hailed as the most environmentally friendly dieselelectric icebreaker ever built. Polaris will be powered by Wärtsilä dual-fuel engines capable of operating on both liquefied natural gas (LNG) and low sulphur diesel fuel, believed to be a first of a kind, and which significantly reduces its emissions. The special hull form and propulsion arrangement are also intended to minimise ice resistance and maximise the icebreaking capacity of the vessel. The Polaris will conduct icebreaking operations and assisting of other vessels in ice conditions in the Baltic Sea when it enters service next year. Currently on sea trials, it is also able to perform oil spill response operations, emergency towing and rescue operations at open sea all year round. Wärtsilä says its track record in dualfuel engine technology and the impressive power output per cylinder of the engines was a key factor in the original award of the contract. The company’s scope of supply consists of one 8-cylinder Wärtsilä 20DF, two 9-cylinder Wärtsilä 34DF, and two 12-cylinder Wärtsilä 34DF engines. It also has a five-year maintenance agreement for all engines and generators including spare parts, remote online support, monitoring and training services.
New orders These advances are set to continue as interest in new icebreaker builds gathers pace, both among Arctic nations states and non-Arctic countries. The UK government sanctioned a new icebreaker earlier this year, for example, a 130 metres long vessel that will boast a helipad, cranes, laboratories, and have the ability to deploy various other ocean survey and sampling gear. The vessel is expected to enter service in 2019 to support scientists in the Antarctic and the Arctic. Among the latest ships to be placed on order is a new icebreaker Research and Supply Vessel (RSV) for the Australian Antarctic Division (AAD) of the Department of the Environment, to be built by DMS Maritime, a unit of Serco. Replacing the existing vessel, Aurora Australis, the new icebreaker will be faster, larger, stronger and offer increased endurance than its predecessor. The vessel will supply Antarctic research stations with cargo, equipment and personnel, and as a research ship, it will also have extensive laboratory facilities on board. The vessel is expected to accommodate 34 DMS Maritime crew and up to 116 AAD scientific personnel, and has the ability to embark up to four helicopters, two landing craft and a dedicated science tender. It is expected to be 156 metres in length and with 23,400 tonnes displacement. New Zealand also recently placed an order with Hyundai Heavy Industries for an icecapable naval tanker for the New Zealand Defence Force, as part of an increased emphasis on the countryâ€™s strategic interests in Antarctica and the Southern Ocean. Hyundai and Daewoo Shipbuilding & Marine Engineering, both listed on the Korean stock exchange, were shortlisted last year for the contract to replace the 30-year-old tanker HMNZS Endeavour, which is due to retire in 2018. The new vessel is scheduled for delivery in 2020 and will replace the 30-yearold tanker HMNZS Endeavour.
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Oil industry: Stepping up its interest
BEST PRACTICE Michael Kingston charts the progress of the proposed Arctic Council Best Practice Information Forum and how it can assist with the implementation of the Polar Code next year
Collaboration: Big oil requires teamwork
14 SUMMER 2016 www.frontierenergy.info
BREAKTHROUGH I n view of the impending implementation of the Polar Code in January 2017 there is a requirement to educate all concerned about its provisions and the required data to be relied upon, including operators, flag states, insurers, financial markets, and port state control. In order to do this effectively, a proposal for a Best Practice Information Forum to be set up to achieve this has been made to the Arctic Councilâ€™s Protection of the Arctic Marine Environment Working Group (PAME). The Proposal was tabled at PAMEâ€™s Jan/ Feb meeting in Stockholm. Previously in FE, we have commented that we would wait with interest to see how the Arctic Council receive the formal suggestion but noted that under the US Arctic Council Chairmanship, which lasts for two years (until April 2017), navigational safety is the number one focus, and there is hope that this suggestion may be prioritised. The argument that was put forward in Stockholm earlier this year is that the Polar Code is an example of what we can
achieve before a major disaster occurs but it will only be as good as we make it through education and enforcement and that we all have a duty to assist in that process. It is important that all concerned are aware of the rules so that a third party or a rogue operator does not bring the house down for everyone in a sensitive place like the Arctic.
Access to information In Stockholm the case was put that we need the forum to focus on the inputs that will determine the worst case scenario that may occur which need to be explained in the Polar Waters Operation Manual, inputs such as hydrographic data, meteorology, crew training, communication, ice charting etc. Were we to get the best standards for these inputs, this would equate to navigational safety, and it will help to educate all the decision makers in the stages of the process about the best standards in those areas: operators, flag states, insurers, financial institutions, and port state control. All parties will be invited to participate
in a meeting on an annual basis to explain the latest developments in their area. Additionally, it is suggested that they would automatically update a website with the best standards as and when they are produced. Each participant would be responsible for gathering the latest developments in their area of expertise on a cross-jurisdictional basis and for updating the forum. Northern lights: Protecting the Arctic The ultimate aim being that everyone would know where A collaborative effort to go to get the best information, and so on, on a continual basis, or at least PAME unanimously backed further where to find out how to make productive investigation about this proposal and further enquiries. work is currently being carried out by We need to know what the best their Expert Shipping Group in relation information is at any point in time and to this forum and further discussions will currently that knowledge is lacking in take place at their next meeting in the the various decision making stages of the State of Maine this September. process: operators, flag state, insurers, The hope is that the proposal will then financiers, and port state control. Put be recommended to the senior Arctic simply, people do not know where to get ambassadors from each Arctic state with reliable information. a recommendation to each country’s
Clearly this is a great opportunity for the Arctic Council to show how they are working with industry and the International Maritime Organisation
minister for states that it be established. Clearly this is a great opportunity for the Arctic Council to show how they are working with industry and the International Maritime Organisation (IMO), and it is refreshing to see the leadership being shown by PAME and representatives from other Arctic Council groups that are involved. It is also noteworthy that at an important meeting of several of the NGO’s (such as the World Wildlife Fund, the Pisces Foundation, Pacific Environment, the
Wildlife Conservation Society, Ocean Conservatory, the Oak Foundation and Climateworks) regarding Arctic shipping in Seattle previously, they too unanimously agreed with this proposal in principal. This meeting was organised and facilitated by the Gordon and Betty Moore Foundation and the work that they are doing and supporting is commendable.
Important timing There is a possibility with a supreme effort that such a forum could be established in time for the handover of the Arctic Council Chairmanship from the US to Finland in April 2017. Of course, the Polar Code comes into force on January 1, 2017 so this effort is timely and extremely important. A further update will follow as matters progress, but it is great to see such cross-jurisdictional collaboration across the Arctic working that also includes governments, industry, NGO’s, the indigenous community and other players which will help to promote the correct behavioural atmosphere in relation to marine operations, the impact of which can extend to operations not covered by the Polar Code at present, such as fishing and leisure craft.
Michael Kingston is a partner in DWF LLP’s Marine Trade & Energy Group in London and was awarded Lloyd’s List Global Maritime Lawyer of the Year 2014- 2015 and the United States Coast Guard Challenge Coin in July 2015 for his work on Arctic risk and the Polar Code. He has been representing the International Union of Marine Insurance in relation to the finalisation of the Polar Code. For further information contact Michael.firstname.lastname@example.org In the chair: Finland takes over the Arctic Council next year
www.frontierenergy.info SUMMER 2016 15
An Polar class supply vessel cuts through first year ice
TAKING THE LONG VIEW
ON ICE CLASS VESSELS Russia already boasts the world’s largest icebreaker vessel fleet and is actively renewing it despite having more icebreakers than the US and Canada combined. Arto Uuskallio, of Aker Arctic, looks back at the history and at how Canada and the US are planning to catchup
ussia dominates the icebreaker market, particularly in designing, commissioning and building the vessels. This dominance did not happen overnight but is a result of decades, with an occasional hiatus, of focusing on the economic activity in the Arctic region and then developing vessels capable of operating in these environments, namely high ice class cargo vessels. The North American shipping, military and upstream oil and gas industry is working hard to understand how the so-called ‘icebreaker gap’ between Canada and the US, and Russia has arisen and how to close the gap. For example, one expert report from 2015, ‘The Coast Guard Polar Icebreaker Modernization: Background and Issues for Congress’, suggests that the US would require at least six new, heavy icebreakers in the coming years to keep in touch with industry demand, not least for the burgeoning leisure and tourism cruise sector. 16 SUMMER 2016 www.frontierenergy.info
Sailing North Hull and propulsion technology used across the ice class cargo fleet is developing steadily and is significantly more robust and advanced than seen in previous decades. Advances in material technology, electronics and design have also allowed the development of fresh, innovative and efficient designs across hull and propulsion technology. This is now available to ship designers and builders. Russia has for decades sought ways and means to utilise its far North territory and vast range of natural resources including hydrocarbons, metals and minerals and marine life. In 1970, the country’s target on the Northern Sea Route (NSR) was set on year round navigation and by 1978, the first year-round route was initiated between Dudinka on Yenisey River, and the strategically important seaport of Murmansk. This development was related to the successful development Norilsk industrial complex, made up of nickel and nonferrous metals production. In wintertime, transportation was achieved with icebreaker escorted cargo vessels. Since the 1970s the Northern Sea Route (NSR)
Photos: Aker Arctic
Helsinki-based Arctic Express
Canada also has both age- and capability-related issues with its icebreaker fleet. While Canada has more icebreakers in operation than the US, they are nearing the end of their service life and a majority are lacking the capacity to operate in the high Arctic, a much more severe environment than perhaps found in Canada’s ice-affected St Lawrence Seaway. The acquisition process currently being debated by industry and government in both countries currently falls short of meeting predicted demand over at least the next decade. At the same time, Russia is actively and consistently renewing its already extensive icebreaker fleet, despite the fact that it controls and operates a larger fleet than US and Canada combined. So, why is this important? This shift in policy did not happen overnight, but is rather a long-term policy development based on historical precedence, experience and economic drivers. The increased economic activity in and around the Arctic and especially the need for vessels capable of supporting this activity – namely, ice class cargo vessels are part of a long-term trend.
A bulk carrier cutting a path through pre-cut ice
has also been used as an important supply line supporting development of Russia’s oil and gas industry as its pushes further north towards the pole.
Arctic history Decades of active support through the Soviet Union-era for the Arctic industrialization resulted in a comprehensive fleet of ice-strengthened cargo vessels together with the supporting icebreaker fleet, which were built in the late 1970s and 80s. Among the vessels built during that era were the SA-15 multi-purpose vessels built in Finland (19 in total) and the only nuclearpowered cargo vessel, NV Sevmorput, which started operation in 1988. During the same time only one high ice class cargo vessel was built. It was designed to serve the mining sector working across in the Canadian Arctic archipelago, to bring in supplies and equipment and exporting ore from mining operations such as Polaris and Nanisivik. While the cargo vessels for the Soviet Arctic were assisted by icebreaker the MV Arctic was intended to navigate the ice on her own. The requirement of being able to pass through the St. Lawrence Seaway reduced her beam to 22.9 m. This also resulted in an unsually high length/beam ratio, which reduced the manoeuvring capability of the vessel. In 1986 she was upgraded with higher ice class and revised bow design. NSR activity peaked in 1987 and, following the collapse of the pre-Russian Federation Soviet system, and shipping activity across the Arctic areas collapsed. There were no big new Arctic projects developed by either the Canadian or Russian government during the 1990s, and consequently there were no new Arctic-capable cargo vessels built during that period. However, technical research and development did not stop, particularly in Russia. High power ice strengthened azimuthing thrusters were introduced making it possible to create a new generation of Arctic cargo vessel: for example, the Double Acting Ship (DASvessel), which can go stern ahead in difficult
ice conditions. First cargo vessels were tested with azimuthing thrusters in the 1990s. A conversion of shaft line tankers MT Uikku and MT Lunni to accommodate one 11.4 mega watt (MV) Azipod unit was completed in 1993 and 1994 respectively). In 1997 MT Uikku was the first western cargo vessel to navigate the complete NSR. Open water performance started to play a more important role in the icebreaking vessel design and more efficient icebreaking bow forms were developed. New projects started to materialize in the early 2000s, supported by both Canadian and Russian government and industry with both regions reporting new vessels delivered and commissioned by 2006. While a Russian Norilsk Nickel vessel first utilised the DA principle in the Arctic with a single 13 MW Azipod unit, Canada continued with the MV Arctic’s well proven concept with bow optimized for icebreaking and a single ducted CP propeller - this time only with 21.7 MW power. Both vessels were intended to operate without icebreaker assistance. Russian gas company Novatek started developing the Yamal LNG project in early 2010s. This prepared the ground for the biggest ice-breaking cargo vessels in the world. The 172,000 cubic meter double acting LNG carriers are in a class of their own with a total length of 299 m, beam 50 m and 45 MW total propulsion power. At the same time an oil export project started in the same area Gazpromneft’s Novy Port project, where six 42,000 dwt shuttle tankers were ordered from South Korea shipyards. All of the above mentioned Russian projects include also one or more supporting icebreakers for the harbour or offshore terminal. In addition to icebreakers the Yamal-LNG project includes two 50,000 dwt condensate carriers and two 24,500 dwt heavy module carriers. During the same time, when there was high activity in the Russian Arctic, one sister vessel for Umiak I was ordered for the Canadian Royalties' Nunavik Nickel Project mine and the vessel was accordingly named Nunavik. It also became the first cargo vessel to navigate the Northwest Passage without icebreaker assistance.
It is difficult to compare the icebreaking performance of the vessels and in particular, how well the hull and propulsion is performing in ice, but it would be interesting to understand, how efficient the new ice-breaking technology is compared to the more traditional methods. A suitable comparison could be Nunavik with the Novy Port tankers (or a Yamal-LNG condensate carrier). All these vessels sail with approximately 22 MW power. Another comparison could be towards the heavy module carriers Audax and Pugnax, which both have 24 MW shaft line propulsion. The traditional vessels have 1.5 m level ice-breaking capability at 3 knots and the comparison vessels equal or exceed this. However the Novy Port tankers are considerably larger vessels with over 30% higher dwt and almost 28% larger beam (26.6 m – 34.0 m). Comparisons with other vessels, performance results are similar. The same ice-breaking capability can be achieved with a vessel, which has over 60% bigger beam (26.6 - 43 metres) with only 2MW additional power. Ultimately, the more industrial activity increases across the Russian Arctic, the more high ice class cargo vessels are required, while additional projects also create a need for additional supply bespoke icebreakers and harbour and terminal icebreakers. In addition to this Russia has strengthened the icebreaker fleet with government ordered vessels to support the Northern Sea Route traffic and operations in regular harbours in the Arctic area. Also, Russian shipowners have been active in adopting new technology in their cargo vessel designs - as well as in icebreaker designs, while in Canada the high ice class cargo vessels have been based on hull and propulsion solutions that were developed from the mid-1970s to mid 1980s. Most importantly, harnessing the latest technology in the design of ice-breaking cargo vessels will enable more cargo with the same power and reach to benefit from greater engine and hull design efficiencies, which leads to reduced fuel consumption and lower emissions, a positive result for companies seeking to operate in the environmentally sensitive waters of the Arctic seas. www.frontierenergy.info SUMMER 2016 17
The NanuQ can be run year round in up to 4m of multi-year ice
GREENLAND’S OFFSHORE CHALLENGES Hydrocarbon reservoirs offshore North-East Greenland are found in one of the most challenging environments in the world. Operators seeking to unlock the reservoirs will have to handle short to non-existent open water seasons and large amounts of multi-year ice transported directly down from the North Pole. Here Wouter Anink, Project Manager Vessels, from the Netherland-based GustoMSC, discusses the suitability of four different rig designs that could be used to release these reserves
everal prospective license blocks in the offshore North-Eastern Greenland territory have been defined by the country’s state Bureau of Minerals and Petroleum (BMP) and are found in the Kanumas exploration and exploitation licensing area, roughly between 76deg N and 78deg N and 7deg W and 17deg W. Water depth in this area ranges between 200 and 500 meters and the sea is mostly ice-covered. The ice sheet usually opens up in July or August and normally returns in September or October. To complicate matters for those exploring for hydrocarbons, this opening up does not occur every year, with the Kanumas North area suffering from this phenomena more than Kanumas South. This water depth range requires a floating platform to operate successfully during the
The P10,000 can work in water depths of 12,000ft and has dual activity derrick
18 SUMMER 2016 www.frontierenergy.info
exploration phase. Additionally, the presence of ice and the low ambient temperatures requires designs to have or include ice strengthening of the hull and winterization for low temperature protection.
Qualifying designs The GustoMSC-designed Arctic turret moored drillship, NanuQ (also known as NanuQ 5,000 TM) has been purposefully designed for operating in these harsh conditions, while winterised versions of the Magellan and P10,000 deep water drillship designs and harsh environment semi-submersible design the OCEAN1600-HE also offer possibilities during the open water season. NanuQ is a fully enclosed Arctic drillship design with a hull that meets the requirements of one of the heaviest ice classes, the Polar Class (PC) 2. Station keeping is provided by a 16-point turret mooring system and a DP2 Class dynamic positioning system. This allows the design to operate in managed ice of up to 2 m in thickness and in ambient temperatures going down to -55deg C. The other drillship designs and the semisubmersible designs (Magellan, P10,000 and OCEAN 1600-HE) have been developed
for open water conditions. To allow them to drill offshore North-East Greenland during the summer season at least a certain degree of winterization and ice strengthening is needed to combat ambient temperatures that may drop to -25˚C during the nights and summer ice incursions.
Fit for purpose To fit them for the purpose, 7th generation Magellan Class and the 6th generation P10,000 drillship designs would typically need to meet PC-6 requirements. This allows for summer and autumn operation in medium first year ice which may include old ice inclusions. For redundancy purposes the hull structure would best be designed according to a heavier ice class. Ice strengthening of the OCEAN1600-HE semi-submersible design would need to be suitable for transit purposes as a semisubmersible is not expected to be drilling in ice infested waters. For this task, a PC-6 ice class would suffice. Furthermore, protection against the low ambient temperatures would be addressed by adapting the winterisation requirements following from DNV-GL’s Winterized Cold (-15˚C) notation that means amongst others, extra heating is needed for living quarters, tank heating and heat tracing of exposed equipment. For protection of personnel working on open decks wind walls and spot heating would be envisaged as a minimum. Besides the required winterization and ice strengthening, the station keeping
system also needs to be tailored to support the envisaged operational profile. For station keeping in the Kanumas water depth range, considering likely ice incursions, a 10-point spread mooring system would be added to the deep water drillship designs. For drilling in deep open water conditions those designs are already fitted with a DP3 Class dynamic positioning system. Concerning the semisubmersible design, a spread mooring system is already part of the standard design ensuring the required station keeping capabilities. As it is highly unlikely to find a drilling unit that is able to operate in the Kanumas license area year around in an economically feasible way, due consideration needs to be given to offseason activities.
NanuQ offers at least 120 (Kanumas North) to 150 (Kanumas South) workable days per year. The winterized and ice strengthened versions of Magellan and P10,000 offer up to almost two months with workable days in the most favorable years (Kanumas South) and close to zero workable days in het worst years in spread
The Ocean1600-HE semi-submersible can operate in extreme environments in water depths up to 3,000m
Off-season possibilities Although the main question to be answered is how the performance of the four designs compares in the considered North-East Greenland’s Kanumas area, off-season possibilities are an essential part of the evaluation of the overall economics. With respect to the off-season possibilities the mooring systems and winterization make the units very attractive for drilling in relatively shallow waters and low ambient temperatures as for example found in the Barents Sea and in the northern North Sea. Both regions are found in the vicinity of North-East Greenland, which means that transit time is taken out of the equation to a significant extend by limiting the travel time to a single week in the worst case. Of course more distant sites could also act as off-season alternative, but obviously planning and feasibility become more challenging if the distance grows. The Gulf of Mexico is one candidate that can be reached through the Atlantic Basin within two to three weeks, without the need for taking a northern route, or locks and canal passages and therefore seems worth considering for this purpose. So, how will this work in practice? We know that the Kanumas area is challenging and we have defined candidate rig designs, the necessary modifications and a handful of example off season locations. Now let’s take a quick look at the performance of each of the designs. Results from an analysis based on available historical ice data for the Kanumas license area show that the
moored operation. If the spread mooring system would be replaced by a modular turret with the same holding capacity as the spread mooring, the maximum number of workable time increases to two months in most years (Kanumas South), at the cost of a modular turret and it’s technical and operational challenges. The semi-submersible design provides up to 25 workable days in the more favorable years.
The mooring system offers all designs capabilities in shallower waters of the Barents Sea and North Sea and all show high uptime figures if we look at motional behavior. The semi-submersible outperforms the ship shaped units in the harsher wave climates. The uptime figures in the Gulf of Mexico are equally high for all but in deeper waters, say beyond 1,500 m the NanuQ could benefit from an upgrade of the dynamic positioning system to a DP3 Class. So, unlocking the North-East Greenland offshore reservoirs with the winterized and ice classed open water drill rigs, such as Magellan, P10,000 and OCEAN1600-HE will be a slow process and drilling a single well could take several years. Alternatively, the dedicated Arctic turret moored drill ship, NanuQ, offers more capability and less ice window dependency that enables drilling of one or two wells per season. Finally off-season usage on a close range offers significant time and planning advantages, improving the economic feasibility of a campaign and benefiting from the strong points of a North-East Greenland capable unit; being its shallow water drilling capability or its harsh environment abilities.
Inspired by OTC paper 27437 © Offshore Technology Conference. GustoMSC will be at booth 1002 at ATC 2016 in St John’s, Newfoundland and Labrador. October 24 – 26. www.arctictechnologyconference.org
Typical ice-class modifications for a vessel to work in North East Greenland water
www.frontierenergy.info SUMMER 2016 19
Hammerfest LNG plant at Melkøya
Permanent reservoir monitoring
Snøhvit carbon capture and storage boost
Work is underway by Statoil to boost carbon capture and storage at the giant Norwegian gas field that supplies the Hammerfest LNG plant in the Arctic Circle
producing reservoir. CCS allows CO2 to be permanently “Hammerfest LNG needed stored and not released into the atmosphere, and is therefore an important replenishment of gas in order to maintain the high production and capacity contributor in preventing climate change. utilisation at the plant, while ensuring Hammerfest is still the only LNG sustainable CO2 storage,” said Geir project in the world capturing and Owren, asset owner storing CO2 representative for separated from the project. “This the well stream Hammerfest is still the project is therefore in a dedicated only LNG project in the important to formation offshore, Statoil.” underlining its world capturing and storing The CO2 uniqueness. CO2 separated from the solution project Operator Statoil was established in continues to well stream in a dedicated 2013 in order to upgrade the CO2 formation offshore, build and install a facilities to ensure underlining its uniqueness new CO2 injection the site performs at well, replacing the its optimum level, original injector now drilling a new injection well for CO2 gas on the Snøhvit that over time would leak CO2 into the gas reservoir on the upstream field. field using the Cat D Songa Enabler In the summer of 2015 Statoil rig. It is the rig’s first assignment on the performed an extensive marine campaign. Norwegian Continental Pipelines and a template for the CO2 Shelf (NCS) after project were later installed and tied in to arriving from a South the existing subsea facility on the Snøhvit Korean shipyard. field, with the new subsea infrastructure After the latest CO2 costing NOK 2.5 billion ($306 million). injector is installed, the It marks the latest milestone for Statoil rig will move to drill the and the reality of carbon capture and first new production well storage in the Arctic. The next big project at Snøhvit since the field for Hammerfest LNG is the development came on stream almost a of the Askeladd field, which forms a part decade ago in a drilling of the forward plan for the development campaign that will run until Christmas. The stored and operation of the Snøhvit licence. It is expected to come on stream by around CO2 is being monitored 2020, again to help ensure full capacity in order to ensure it does Arctic Princess leaving port utilisation of the plant. not mix with the main
20 SUMMER 2016 www.frontierenergy.info
Photos: Statoil - Harald Pettersen, Statoil - Allan Klo
ammerfest LNG made history in 2007 when it became the first operational liquefied natural gas (LNG) plant within the Arctic Circle. Located on the northern tip of Norway, the single train facility produces 4.3 million tonnes per year for European and other international markets, drawing gas from the Snøhvit field in the Barents Sea, off the coast of Hammerfest. Natural gas is transported via a 145 km pipeline to shore and to a cooling plant on Melkøya island. Naturally, the groundbreaking scheme included an array of technology firsts, including a complex carbon capture and storage (CCS) project which has now stored in excess of four million tonnes of CO2. The Snøhvit gas contains 5-6% CO2, which freezes to a solid (so-called ‘dry ice’) at temperatures higher than that of natural gas. This is why it is removed from the gas before it is cooled to LNG.
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A lifeboat is lowered into the Arctic water for the exercise
RESEARCH SAVING LIVES IN ARCTIC SEAS
Arctic research provides clarification for Polar Code requirements. Katie Aylward of ABS shares recent findings from lifeboat and life raft survivability studies
Interpreting the Polar Code The International Maritime Organisation’s (IMO’s) International Code for Ships Operating in Polar Waters (Polar Code) enters into force January 1, 2017, bringing with it a broad spectrum of binding regulations. Among these are elements of ship safety, equipment, design and construction, and operations 22 SUMMER 2016 www.frontierenergy.info
and manning for vessels operating in polar waters. Of particular interest to those involved in the Svalbard exercise is Chapter 8 of the Polar Code, which provides regulations for lifesaving appliances and arrangements providing for safe escape, evacuation and survival. Industry has raised questions about the correct interpretation and application of these new requirements. Because the IMO Polar Code is new, there is no historical experience to draw on for answers to questions that become particularly challenging in an exacting operational environment. One of the requirements states that passengers and crew shall be equipped to enable survival for a minimum of five days while waiting for rescue. Another requirement indicates that ‘adequate’ thermal protection shall be provided for all persons on board. The goal of the research carried out in Svalbard was to study and interpret the Polar Code requirements and to determine the industry’s state of readiness to comply. While the research comprised three phases that examined all aspects of SAR operations in the Arctic, the findings shared here are confined to lifeboat and life raft survivability.
Real-life scenarios Participants in this exercise included research team members and Norwegian Coast Guard personnel, representing a relatively healthy and fit study population, who entered into real-life scenarios to test their ability to survive in a lifeboat and life raft in polar waters for up to 24 hours. The group of 22 participants in a 55-person lifeboat and 20 participants in a 25-person life raft were randomly assigned to wear different levels of thermal protection, including insulated and uninsulated immersion suits, neoprene immersion suits and thermal life jackets. The goal was to determine how long the protective equipment was effective. A level of ineffectiveness was determined to be reached when: • Hands and feet were numb, or the participant experienced shivering • The participant was unable to complete a simple physical test (unscrewing a bolt) • Other participants noticed changes in physical appearance. When any of these criteria were met, the ship’s doctor carried out wellness checks as each participant left the survival craft. Weather conditions were nearly
Photos: University of Stavanger, ABS
ow long can a person survive in the Arctic in a lifeboat or life raft? Will survival equipment function as needed in polar conditions? How will the Arctic environment impact search and rescue (SAR) operations? In an attempt to answer these questions, American Bureau of Shipping (ABS) joined the University of Stavanger and other participants in an SAR research exercise near Svalbard, Norway, in April 2016 as part of a joint effort among Norwegian and Canadian academic institutions, Norwegian industry, Norwegian Armed Forces, the Norwegian Coast Guard and lifesaving equipment manufacturers. The goal was to advance the understanding of and evaluate the risks associated with increased vessel activity in Arctic waters and how typical SAR operations could be impacted.
Research participants in the life raft paddle to the ice edge
perfect during the test, with sunny skies, virtually no wind or waves, an average air temperature of -13ºC (8.6ºF) and a water temperature of -1ºC (30.2ºF).
Thermal protection research outcomes The type of thermal protection significantly impacted the length of time participants were able to remain in the survival craft. Participants wearing thermal life jackets were among the first to leave the study, followed by those wearing neoprene immersion suits and uninsulated immersion suits. The last to leave were those wearing immersion suits that were fully insulated. One of the limitations of the thermal life jackets is that they provide thermal protection only to the core and upper body and offer no protection to the feet, legs, or hands. While the neoprene immersion suit appeared to function well in the lifeboat, it met with less success in the life raft, where some participants were damp from opening the entranceways. Once the neoprene suit got wet, it failed to provide sufficient protection. Not surprisingly, the insulated immersion suits performed best because they provide whole-body thermal protection. Participants wearing the insulated suits lasted the longest time, but only three were able to complete 24 hours in the lifeboat. Two of the people wearing insulated immersion suits remained in the life raft for approximately 18 hours. Preliminary conclusions suggest insulated immersion suits should be a requirement for vessels operating in Arctic environments because they provide the best thermal protection for this type of environment.
Survival craft capacity Another interesting finding that came out of this study is the posted persons on board (POB) capacity on survival craft. Because there were only 22 people assigned to the 55-person lifeboat, the boat was not near capacity. However, 20 participants could barely fit in the 25-person life raft. Findings from lifeboat capacity studies in both the Gulf of Mexico and Atlantic Canada show that it is not unusual for the posted maximum capacity to be an overestimation.
In the case of the Arctic study, participants were wearing bulky personal protective equipment (i.e., immersion suits, life jacket, boots, gloves, etc.), which increased the space needed ABS Human Factors Specialist Katie Aylward looks out at the Arctic waters after concluding the search for each person on the life and rescue research exercise raft. Because the life raft was provisioned with a large bag of survival supplies (food, water, flares, etc.), the entire middle section of Recommendations and the life raft was not available for use by remaining work personnel. Even with a healthy group of While a number of questions cannot participants, there was not enough room be answered with certainty at this point, for 20 people. results indicate that even with a healthy In reality, in Arctic conditions, there group of participants and excellent could be even more safety equipment weather conditions, the risks during SAR in the life raft, including survival kits operations are very serious. If conditions such as tents, warm clothes, flashlights had been more severe, the results and cooking equipment, all of which could have been considerably different would require additional space. Based particularly for the life raft due to the on existing research including the recent possibility of seasickness, water entering Svalbard study, the POB capacity for the life raft and a colder environment. survival craft, including both lifeboats Primary findings suggest industry may and life rafts, should be re-evaluated. find it difficult to meet Polar Code requirements for surviving for at least five Carbon dioxide level concerns days in polar waters. The results of the Svalbard study Another important issue identified in the study was the poor air quality in both indicate further research is needed in the the life raft and lifeboat. Previous research following areas: • Lifeboat and life raft performance identified carbon dioxide (CO2) levels as in harsher weather conditions for longer a concern in lifeboats. For safety reasons, periods of time portable oxygen (O2) metres were used • The adequacy of thermal protection in each craft. Every 20 to 30 minutes, the after exposure to water O2 meter alarm sounded in both crafts, • Testing of additional life-saving indicating required ventilation, which equipment in ice and polar waters took the form of opening entranceways • Air quality and ventilation of lifeboats or hatches. Each time a craft was vented and life rafts the temperature within the survival craft • POB capacity for lifeboats and life rafts dropped noticeably. • Similar study in controlled conditions Today, survival craft are not required (lab setting) to have an O2 or CO2 alarm. Without an alarm occupants may not be aware of the need to periodically circulate fresh air A full report on this research exercise, through the survival craft. Since many of available to the public in the fall of 2016, will the initial symptoms of overexposure to contain detailed results with input from all of CO2 – including increased respiration, the research team members. The results will headache, sweating, increased heart rate help industry meet Polar Code requirements and blood pressure and hyperventilation for escape, evacuation and survival. – are difficult to distinguish from shock Participating and contributing to this and stress, it would be possible for a world-class Arctic research has provided potentially deadly situation to develop in the opportunity for ABS to support a relatively short span of time. Existing research efforts on human element research and conclusions from this study considerations in the Arctic and will indicate that all survival craft should provide input for future updates to the existing ABS Guide for Vessels Operating in be equipped with a way to measure air Low Temperature Environments. quality, or alternatively that ventilation options should be explored. www.frontierenergy.info SUMMER 2016 23
OIL SPILL TECHNOLOGY
Ice core collected from mesocosms frozen into the ice at Svea, Norway being prepared for field analysis and storage
A COLLABORATIVE APPROACH TO OIL SPILLS
24 SUMMER 2016 www.frontierenergy.info
he oil and gas industry has made significant oil spill response advances through more than 90 years of Arctic operations. Moreover, the industry has funded and conducted research to improve oil spill response technologies and methodologies with industry, government, academia, and stakeholders jointly involved for more than 50 years. To build on this existing research and continue improving the technologies and methodologies for Arctic oil spill response a Joint Industry Programme (JIP) charged with undertaking targeted research projects in identified priority areas was formed. Officially launched in 2012, the JIP is sponsored by nine international oil and gas companies (BP, Chevron, ConocoPhillips, Eni, ExxonMobil, North Caspian Operating Company (NCOC), Shell, Statoil and Total). Members work collaboratively to create international research programmes to further enhance industry knowledge and capabilities in the area of Arctic oil spill response, advance Arctic oil spill response strategies and equipment, and increase understanding of the potential impacts of oil and oil spill response methods on the marine environment.
Phase 1 Programme Since 2012, the JIP has engaged the world’s foremost experts on oil spill response, development, and operations from across industry, academia, and independent scientific institutions to perform scientific research. The core research themes cover Dispersants, Environmental Effects, Trajectory Modelling, Remote Sensing, Mechanical Recovery, and In Situ Burning (ISB). As the largest programme dedicated to this area of research, investigations have involved a combination of experimental studies, synthesising existing data leading to recommendations for improved practice, development of improved operational methods for response, and field experiments to verify the results of research. Projects in progress range across dispersant effectiveness testing, modelling the fate of dispersed oil in ice, assessing the environmental effects of an Arctic oil spill, advancing modelling trajectory capabilities in ice, mapping of oil in darkness, low visibility, in or under ice, and expanding the opportunity window for ISB response operations. From 2012 to 2015, technical
Photos: Akvaplan-niva & International Research Institute of Stavanger
Collaborative projects like the current Joint Industry Programme – a grouping of nine of the world’s biggest oil companies - have been the hallmark of the industry’s oil spill response research in the Arctic region. By Joseph Mullin
OIL SPILL TECHNOLOGY
assessments and state of knowledge reviews have been completed for the six research areas. The 17 reports completed so far, which identify and summarise the state of knowledge and regulatory status for using dispersants, remote sensing and ISB in the Arctic, add to the significant volume of current industry knowledge, and continue to build a comprehensive picture of existing state-of-the-art Arctic oil spill response technologies. These reports have been published and are available on the JIP website (www.Arcticresponsetechnology.org). With the publication of these 17 research reports, Phase One of the programme is now complete. This initial phase identified specifically targeted research projects to improve industry capabilities and coordination in the area of Arctic oil spill response.
Phase 2 Programme With the completion of Phase 1, activities to finalise the programme are actively underway, encompassing modelling studies, laboratory and mesoscale basin testing and field experiments. Research in 2016 includes dispersant effectiveness testing with ice, completion of tools to support Arctic Net Environmental Benefit Analysis (NEBA), increasing the accuracy of oil spill trajectory models, development of a guide to oil spill detection in ice covered waters, evaluation of sensors to detect oil in and under ice, development and testing of an integrated herder delivery and ignition system, and field experiments with herders and ISB offshore Norway. Special emphasis is focused on gaining knowledge for the development of an Arctic NEBA tool to support operational decision-making for oil spill response strategy in the Arctic.
Global progress so far The JIP’s work has highlighted the large body of existing knowledge supporting industry preparedness with a wide range of viable oil spill response technologies in the presence of ice in open water beyond mechanical recovery. More specifically, the work of the JIP has provided critical information in support of dispersants use in ice-covered marine environments and will provide peer-reviewed publications that provide information to help define the conditions where dispersants can be successfully used in the Arctic, together with peer-reviewed publications showing that effectively
dispersed oil can remain dispersed even with the low turbulence conditions often found under ice. The JIP Sampling of mesocosms frozen into the ice at Svea, Norway work has to measure the sensitivity and resiliency of sea ice communities improved the knowledge together affords access to a wider range base for using NEBA in Arctic oil spill of technical expertise and experience. response decision making, and successfully Uniting efforts and knowledge in this created a structure (ARCAT/NEBA tool) JIP increases opportunities to develop that makes available the vast amount of and test oil spill response technologies data relevant for Arctic NEBA to response and methodologies, conduct large-scale decision makers, regulators and scientists field experiments, and raises awareness and increases the transparency of the of existing industry oil spill response Arctic NEBA process. The introduction capabilities in the Arctic region. of the ARCAT concept to the ‘response To further improve industry’s ability to community’ and demonstration of respond as effectively as possible, there deployment possibilities through execution are future needs that require addressing; of a set of case studies (including creation of these include the approval to do field a web interface and presentation material) trials in the Arctic in ice conditions and has been ground breaking. JIP sponsored work on the development the ability to create regulations that of dynamic sea ice models has enabled the allow for the use of all the tools in the toolbox, including herders, dispersants development of a Discrete Element (DE) and controlled burning. Of utmost model for the marginal ice zone (MIZ) importance is the need for collaboration and a continuous model using an Elastobetween regulators, industry, academia, Brittle (EB) rheology for the pack ice. manufacturers, local communities and The development of a modelling tool that other stakeholders to advance knowledge, predicts the potential for a dispersed oil plume to resurface and reform a new slick including traditional knowledge, to ensure an effective response strategy. under the ice is another key achievement. The industry has a role to play in Research has also validated that helping countries in Arctic jurisdictions many remote sensing systems originally understand the benefits of having a developed for the ‘oil on open water regulatory process in place to approve scenario’ can be used effectively in a the use of all of these response methods broad range of ice and environmental and technologies. As such, the results conditions that would be experienced of studies will be published in peerin the Arctic. The work with herders is reviewed journals, and materials have contributing to the development of an been developed for the benefit of the integrated herder delivery and ignition system with airborne functionality testing wider audience interested in Arctic in a helicopter. Education and promotion oil spill response, including NGOs, policymakers and members of the of the JIP’s activities is also a key environmental community. function of JIP work.
Collaborative approach The JIP is due to be completed at the end of 2016 with a final report out to regulators and key stakeholders to be made during the International Oil Spill Conference next year, in May 2017, in California. Collaborative projects such as the current JIP have been the hallmark of the industry’s oil spill response research. Advancing oil spill response is a key area where the oil and gas industry collaborates; believing that working
Joseph Mullin has over 40 years of scientific research and programme management experience in the areas of marine science, oceanography, and oil spill response. Following his retirement from the US government, he was hired as the programme manager for the Arctic JIP. He has authored or co-authored more than 170 scientific papers, technical publications, and journal articles. Visit: www.ArcticResponseTechnology.org
www.frontierenergy.info SUMMER 2016 25
marine ice defence systems Brian Johnston of radar experts Rutter outlines the companyâ€™s latest industry innovation, the sigma S6 Ice Defence system, to allow ships to better manage their way through the ice hazards of the Arctic
ver the past 20 years, technological advances have provided mariners, who travel to the Arctic and Antarctic to work in these areas, the capability to plan and operate in sea ice and alongside icebergs. This has been spearheaded by improved sensors for detection and monitoring of marine hazards. One of the original sensors, the marine radar, improved rudimentary detection of navigational hazards that could not be discovered otherwise. The challenge was how to extend and improve that sensor capability adapting it for both glacial ice detection as well as sea ice management. This requirement was the genesis of the sigma S6 Ice Navigator. Developed for oil operators working on the east of Canada, the sigma S6 was designed to provide enriched signal processing to detect and track very small targets, such as the bergy bits and growlers, that float through the offshore oil fields during the winter and spring ice season. These ice fragments are extremely dangerous to vessels and offshore platforms as they hide in heavy sea clutter and prove to be a difficult detection challenge to standard radar systems.
Built for purpose The Rutter sigma S6 Ice Navigator radar system was the first built-for-purpose ice radar, having been developed in the early 1990s for the first Canadian East Coast offshore oil field, Hibernia, to provide 26 SUMMER 2016 www.frontierenergy.info
sigma S6 Ice Navigator high resolution radar image of pack ice
enhanced ice detection and sea ice imaging. to implement the most significant Three generations of radar processing new capabilities since the sigma S6 hardware and dozens of software releases Ice Navigator was first released. This have been the result, refining the systemâ€™s revolution required the development of imaging and new image and tracking, adding signal processing capabilities algorithms to such as oil spill extract more realThe automatic outlining detection, small time information and drift tracking of target surveillance for areas of both ice pans and ice and wave and heavier sea ice surface current concentrations. floes will provide a new measurement. These advances strategic level of sea ice This investment will create new management capability has resulted in the capabilities for sigma S6 platform the sigma S6 Ice and led to hundreds Navigator but it of systems bring will also result in deployed across the industry. a new sigma S6 Ice Radar product - the In 2015, the company embarked on a sigma S6 Ice Defence system - targeted for new research and development project those users whose responsibilities include
Another challenge for standard radar is the detection of icebergs embedded in pack ice. Icebergs, due to irregular geometry, are difficult targets to detect for standard radars because they can have a low radar profile for their size
upstream to break-up ice floes and large ice pans is a huge cost and risk that requires close supervision. The automatic outlining and tracking of these features by the sigma S6 Ice Defence system will sigma S6 Ice Navigator radar image showing automatic detection of iceberg in pack ice provide a vital tool to ice observers and Radar imagery collected during ArcticNet/Statoil Canada research expedition on CCGS Amundsen bridge crew that monitor and deal with April 2015 with support from Petroleum Research Newfoundland & Labrador, used with permission these high risk sea ice structures. The sigma S6 Ice Defence system will a huge risk and are actively managed. having to actively manage sea ice and also offer near range ice drift prediction, The sigma S6 Ice Navigator and sigma icebergs. The first release of these features providing prediction information on and systems will appear in late 2016 with S6 Ice Defence systems will also be able future position, speed and direction of to identify and mark open water leads a subsequent release in 2017. icebergs, bergy bits and growlers. Bergy within an ice floe. The most obvious bits and growlers pose additional hazard benefit of the enhanced identification of New capabilities to navigation compared to the obvious open water leads means safer navigation These new capabilities will include hazard due to larger icebergs, as they are decisions. However, an additional the automatic detection and outlining often more difficult to detect in higher benefit is during oil spill operations in of ice ridges; to detect and highlight ice sea states and can easily create hull and sea ice, where the optimal deployment ridges in ice fields. Ice pressure ridges propulsion system damage. of equipment and personnel is improved pose a significant navigational hazard To ensure users have greater access because of better situational awareness. and can easily damage a vesselâ€™s hull. to sigma S6 data, in early 2016 Rutter This is especially true at night or in low Sea ice management released its new Geospatial Data visibility conditions. The detection and Abstraction Library (GDAL) interface, outlining of the ridge by the sigma S6 Specifically targeted towards the named sigma S6 Connect, that uses Ice Navigator and sigma S6 Ice Defence sigma S6 Ice Defence system for sea open standards for data types and systems, showing its location and extents, ice management, there are additional interface protocols to simplify and boost can offer a tremendous advantage to a capabilities. The automatic outlining and vessel underway and allows the ridges to drift tracking of both ice pans and ice floes data access. With a standard network connection, the data can be easily be more easily avoided and monitored. will provide a new strategic level of sea Another challenge for standard radar is accessed from any server via the sigma ice management capability. For offshore the detection of icebergs S6 Connect interface embedded in pack ice. and import the data into Icebergs, due to irregular command and control The sigma S6 Ice Navigator and sigma S6 Ice Defence geometry, are difficult and GIS systems for ice targets to detect for systems will now be able to identify and notify mariners or oil spill management standard radars because operations or security and offshore operators of icebergs when they are they can have a low applications. embedded in pack ice. This new feature will be of radar profile for their These new capabilities size. The sigma S6 Ice significant interest to offshore platforms where the presence will take the minimum Navigator and sigma S6 of icebergs is a huge risk and are actively managed requirements for an ice Ice Defence systems will radar to a new level, now be able to identify and will increase the and notify mariners and confidence of the users and operators, offshore operators of icebergs when they operators with rigs and FPSOâ€™s in areas knowing they have an improved are embedded in pack ice. This new feature of sea ice, one of the most intensive areas understanding of the active sea ice will be of significant interest to offshore of ice management is tracking dynamic platforms where the presence of icebergs is sea ice conditions. The directing of vessels conditions around them. www.frontierenergy.info SUMMER 2016 27
Polar voyage: the vessel in Antarctica
Learning lessons from history
eattle Airport was an interesting 2014 was Sir John Franklin’s ship HMS place to be on August 11, 2016, Erebus discovered. The second ship, HMS as I awaited a flight back to Terror, captained by an Irishman, Francis London after attending a best practices Crozier, is still missing. workshop on the impending Polar The Franklin mission failed because Code with some of the world’s leading of the harsh environment and extreme environmental organisations. As I waited conditions. Whilst ice has been melting in the Delta Airlines queue, Japanese at record levels, and technology has tourists were checking in for a flight to advanced, that does not negate the Anchorage, Alaska to join the Crystal difficulties. It is therefore important the Cruises vessel Crystal Serenity for her excitement of history does not distract voyage from Anchorage to New York. both the Crystal Serenity passengers and This was no ordinary cruise they were her operators from the seriousness and joining, however. The Crystal Serenity is by far the largest cruise ship ever to sail the North West Passage carrying almost 1,700 passengers and crew. Prices have been reported to range from $30,000 to $156,000 per passenger for the 28-day voyage. The transit is truly historic. The passage was only first transited in 1906 by Norwegian Roald Amundsen taking three years to do so. In the 19th Century the search for the passage was the ‘Holy Grail’ of the exploration world. For years, the British sought to conquer the route, most notably the ‘Barrow Boys’ who were a string of explorers commissioned by Sir John Barrow, Permanent Secretary of the British Admiralty. The Barrow Strait in the Canadian Arctic, as well as Point Barrow and the city of Barrow in Alaska, are named after him as well as many places in London. The quest famously culminated in disaster in 1845 during the Franklin Expedition with the loss of both expedition ships which disappeared and all on board perished. Only in Pioneering: North West Passage breakthrough 28 SUMMER 2016 www.frontierenergy.info
magnitude of the risks involved. As I looked at the passengers in Seattle my mind flashed back to a talk I gave in London on April 10, 2015 for the British Insurance Law Association: ‘The Finalisation of the Polar Code: the Concerns and Contribution of the Insurance Industry’. I had chosen April 10 deliberately as it was the 103rd anniversary of the RMS Titanic leaving Southampton. The disaster occurred in the early hours of April 15, 1912. In the talk, I stated: “103 years ago today – if we were in the business of travelling to the United States, we would have boarded the Titanic in Southampton to great fanfare and excitement. We would think that we were in the safe hands of operators who knew what they were doing. At this exact time we would be enjoying lunch in the dining rooms of the great ship a few hours out of Southampton heading towards Cherbourg, happy in the thought that the ‘unsinkable’ ship would get us to our destination so that we could go on about our business in the US. However, in reality, we were in a pre-disaster phase, where total disregard for safety would cause the loss of 1,517 lives resulting in the introduction of the first Safety of Life at Sea Convention, and ultimately the development of the International Maritime Organisation itself.” I went on to say that, “I emphasise pre-disaster phase, because so often it is a disaster that raises the questions about the sense of some of the practices that lead to the disaster. So often we look back and realise that standards were incorrect, that
Photos: Crystal Cruises
The historic voyage of the Crystal Serenity cruise liner through the North West Passage marks an important early test for the new Polar Code regulations. By Michael Kingston
common sense did not prevail, and that human beings and the consequences of their actions were allowed to play too large a part in those disasters”. I further added: “In August 2016 it is planned to take the Crystal Serenity through the North West Passage with 1,000 passengers on board. Sir John Franklin is revered in history as a hero in glorious defeat. However, 75-year-old Captain Anders Backman, who is one of the most experienced ice captains in the world, and who has worked closely with the insurance industry in the development of the Polar Code says: “In my world Franklin does not deserve to be treated like a hero, I would prefer to call him being regardless of other peoples’ lives”. Bearing these comments in mind, and thinking also of the peril we would be in 103 years ago today as we approach Cherbourg on the Titanic in ‘pre-disaster phase’, in the absence of any salvage equipment or any ports, the owners of cruise liner Crystal Serenity, I would personally say, will need to do a lot of work to demonstrate how they would prepare a Polar Waters Operation Manual.” Under the Polar Code, which does not come into effect until January 1, 2017, it is necessary for operators to hold a Polar Waters Operation Manual that explains that they have a plan to deal with a worst case scenario in the conditions that may be encountered. Only then can an operator obtain a Polar Ship Certificate. The operator must demonstrate: 1. Search and rescue capability, including a total loss of the vessel; 2. That equipment and crew are fit for purpose in the difficult conditions; and 3. They must make reference to an ice regime methodology that shows how their ship will deal with the ice in the area that is being contemplated and that methodology must be explained in their Polar Ship Certificate which will be issued by the Flag State where their ship is registered. It is fair to say, and has been well publicised by Crystal Cruises, that they have been involved in intense preplanning, liaising with the US Coastguard and the Canadian authorities. There is simply no room for error in such a transit with so many people on board in such a remote area. They will be supported by a Canadian ice breaker and are also in contract to be accompanied by the British Antarctic Survey vessel, RRS Ernest Shackleton which obviously is a back up plan for the transfer of passengers in the event of a loss of the Crystal Serenity in the middle of the Passage.
On deck: Room with a view
Anything less in planning would not comply with adequate pre-planning under the Polar Code and would, after January 1, 2017 result in the failure to obtain a Polar Ship Certificate - in theory - if the rules are applied correctly. And applying the rules correctly is critical. Education about the Polar Code is now a priority so that the rules are applied correctly by operators, flag states, insurers, financial institutions and port state control. The reality at the moment is that there is a lack of understanding. For insurers, who have a big role to play in the implementation of the Code, hull and machinery underwriters currently exclude voyages above 70N under the Lloyd’s Institute Hull Clauses because of the dangers and difficulties involved. The Nordic Plan in Scandinavia contains similar exclusions, and P&I Club rules do not allow vessels to travel ‘outside normal trading patterns’. Therefore, owners have to consult all insurers for Arctic operations. So, if the process works as it should, insurers will need to look in detail at the Polar Waters Operation Manual to see what it is the operator is intending to do, what crew are on board and what mitigating provisions have been put in place for emergency situations. Having made my comments on April 10, 2015, it is important that I explain the inclusive contribution of Crystal Cruises and the world’s cruise line industry in helping to finalise the Polar Code. Whilst I have not seen the pre-planning for this voyage and cannot comment on it specifically Crystal Cruises have engaged responsibly with the authorities and with recognised ice navigators. They participated in an important workshop organised by the cruise line industry in June 2015 regarding the interpretation of the Polar Code, for example. The cruise industry has also played a full part in the finalisation of the Polar Code. This is comforting because, according to the US Coastguard 200,000 passengers crossed into the Arctic on cruise ships in 2015
alone, and the cruise industry, prior to the new rules that are coming into effect, has been a matter of concern for many. Crystal Cruises it has been reported is already taking reservations for a 2017 transit. Before looking to the second trip, it is important for Crystal Cruises to first harness for themselves and the cruise line industry the enormous win-win situation that they are in. Their voyage is in effect a showcase for the hypothetical application of the Polar Code. They need to educate everyone about how they have prepared to show what responsible pre-planning is. Hopefully the conditions will be in accordance with pre-planning and everyone has the trip of a lifetime through the North West Passage. But if unexpected conditions arise they need to also show what a responsible operator they and their industry are in allowing the experienced and trained crew that are on board to be able to say “no, this is not safe, we do not go through”. And commercial pressure must play no role in that on board decision making process. Either way - going through or not - if this happens the historic application of the Polar Code in theory is the most important lesson to learn in this voyage. They and their passengers will be playing an enormous role in the protection of the Arctic marine environment and Safety of Life at Sea for future activity. A clear understanding of the rules and adherence to best practice will help to keep out rogue operators, and preserve the area that the passengers have paid so much to see. It does seem Crystal Cruises have gone to great lengths. But the proof will be in the pudding. As the famous Irish and British politician Edmund Bourke famously said: “Those who do not understand history are doomed to repeat it.”
Michael Kingston is a partner in DWF LLP’s Marine Trade & Energy Group.
www.frontierenergy.info SUMMER 2016 29
Arctic Technology Conference 2016 (ATC 2016) October 24 – 26, 2016 St. John’s Convention Centre, Newfoundland & Labrador, Canada The Arctic Technology Conference (ATC) is one of the main calendar highlights for Arctic industry professionals in 2016. Supported through the OTC’s network of renowned scientific and professional societies , the ATC provides a worldwide platform for collaboration with industry colleagues, vendors and academia about the challenges and solutions for the Arctic regions. The City of St. John’s, Newfoundland and Labrador hosts this year’s event and provides an ideal staging and proving ground for Arcticrelated research and offers the global Arctic industry a strategic North Atlantic base of operations on international shipping lanes and northern sea routes. The event will draw together delegates from around the world for a joint conference and exhibition, and a series of technical sessions. Among the many conference themes are: Providing Logistics Solutions for Remote Oil and Gas Operations; The Future of Arctic Engineering Education: Needs, Challenges and Opportunities; and Insurance & Legal Aspects of Projects in Covered Waters. The event also includes the prestigious Arctic Technology Distinguished Achievement Awards. Big event sponsors include Shell, Newfoundland and Labrador, and the Research and Development Corporation of Newfoundland and Labrador. Register now and be at the forefront of Arctic exploration and production. Learn from industry experts to explore the complex environmental, physical and regulatory challenges and opportunities of the Arctic arena. www.arctictechnologyconference.org
Offshore Northern Seas August 29 – September1, 2016 Stavanger Forum, Stavanger, Norway www.ons.no/2016 NordArc2016 September 5, 2016 Helsinki, Finland The Prime Minister’s Office of Finland will organise a Nordic seminar Arctic Expertise in Nordic Cooperation (NordArc2016) at the House of the Estates. www.uarctic.org/news/2016/6/ nordarc2016 SMM September 6 – 9, 2016 Hamburg Messe und Congress, Hamburg, Germany Contact: SMM Tel: +49 40 3569 0 www.smm-hamburg.com Petroleum & Arctic 2016 September 7 – 8, 2016 UiT (Norges arktiske universitet) Tromsø, Norway Contact: Mariam Winther, Norwegian Petroleum Society Tel: +47 22 13 18 16 www.npf.no Arctic Shipping EU 9th Summit September 21 – 22, 2016 London Demonstrating practical solutions from Arctic shipping experiences. www.wplgroup.com/aci/event/ arctic-shipping-summit-europe/ Arctic Shipping Forum North America October 4 – 6, 2016 Montreal, Canada A major conference with a range of topics from Arctic policy and regional strategy; new ship and propulsion designs and an update on the Polar Code. https://maritime.knect365.com/ arctic-shipping-na
Arctic Technology Conference October 24 – 26, 2016 St John’s, Newfoundland and Labrador ATC 2016 will be held on the east coats of Canada and is comprised of 14 technical societies and organisations all collaborating to present the world’s most comprehensive Arctic event. REGISTRATION IS NOW OPEN! www.arctictechnologyconference.org Danish Maritime Fair October 25 – 27, 2016 The Train Workshop, Copenhagen, Denmark Contact: Danish Maritime Fair Tel: +45 7020 4155 email@example.com www.danishmaritimefair.dk Ocean Energy Europe 2016 November 8 – 9, 2016 The Egg, Brussels, Belgium Ocean Energy Europe Tel: +32 2 400 10 40 firstname.lastname@example.org www.oceanenergy-europe.eu Offshore & Deep Sea Mining December, 2016 London, UK Shaping the deep sea mining sector - influencing policy, advancing technology, and developing economic viability. https://maritime.knect365.com/ offshore-deep-sea-mining/ Arctic Frontiers January 22 – 27, 2017 Tromso, Norway Arctic Frontiers is an international arena on sustainable development in the Arctic. The conference addresses the management of opportunities and challenges to achieve viable economic growth with societal and environmental sustainability. www.arcticfrontiers.com
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The world’s most focused and comprehensive Arctic event. St. John’s, Newfoundland and Labrador 24-26 October 2016 St. John’s Convention Centre ArcticTechnologyConference.org
Attend the only Arctic event backed by the combined reach and credibility of 14 of the world’s top engineering and scientific organizations and built with expertise representing every discipline.
INSIGHT Norwegian shipping and cruising firm Hurtigruten is looking to roll out up to four new ice-class expedition ships for the Arctic and Antarctica region
Ice class: opening up polar tourism
Ice class tourism New luxury cruise ships on order will provide polar passengers with adventurerich itineraries and activities, from climbing and kayaking to whale and sea eagle safaris…as well as simply gazing at the breathtaking scenery
Wildlife: Arctic wonders
f there was any lingering doubt that touring the Arctic was appeal of visiting the polar regions. Hurtigruten’s current now a growing holiday trend, then the multi-million dollar explorer ship MS Fram already operates in the Antarctic, as well investments being made in a new fleet of cruise liners as near the Spitsbergen islands and Greenland. Later this year, designed specifically for the region will put paid to that. another vessel, the MS Midnatsol, will also operate in Antarctic Norwegian shipping and cruising firm Hurtigruten is looking waters. The MS Spitsbergen also recently joined the group’s to roll out up to four new ice-class expedition ships for the Arctic polar fleet along the Norwegian coast, and will operate in the and Antarctica regions to cater Antarctic next summer. for this growing niche market. As well as maximum It recently signed a contract comfort for tourists on board, Consoles, levers and software interfaces for two vessels to be built at the new Hurtigruten fleet will have a common look and feel, Kleven Verft in Ulsteinvik, will feature state-of-the-art Norway, with an option for a innovation, utilising new resulting in a more comfortable, clutterfurther two vessels. It marks environmental technology on free and ultimately more safe and one of the largest orders in board and for the propulsion efficient working environment for the ship builder Kleven’s history. systems. In addition to The cruisers have been the innovative ship design captain and his team on the bridge designed by Rolls-Royce in with a wave piercing bow, collaboration with Norwegian Rolls-Royce will supply yacht designer, Espen Øino, and will be customised for an integrated package of technology and equipment for the expedition travel, expressly to ply ice-prone waters, as well as vessels. Among the deliveries will be the Rolls-Royce Unified sailing the Norwegian coast. The first of the 140 metre vessels Bridge, which represents a complete redesign of the ship bridge is to be delivered in July 2018, with the next following in July environment. Consoles, levers and software interfaces will 2019. The new builds will carry 600-passengers each. have a common look and feel, resulting in a more comfortable, The cruise liners will ‘turn heads’, according to Hurtigruten’s clutter-free and ultimately more safe and efficient working chief executive, Daniel Skjeldam. environment for the captain and his team on the bridge. “The ships soon about to take shape in the docks of Kleven Not that the passengers will get to see any of that. Still, for will be striking,” he said. “They will attract interest to both those who work in the polar regions in other industries, such as the Norwegian ship building industry and to Hurtigruten as a the energy sector, fishing, or on a scientific installation, it’s a nice leading player within the field of explorer tourism.” aspiration to one day be able to enjoy the view from the deck of The new fleet underscores its confidence and the growing a luxury liner. 32 SUMMER 2016 www.frontierenergy.info
A proven staging ground for Arctic-like conditions with all the amenities of a modern, world-class location. From our industry success in the safe and sustainable development of natural resources in harsh environments, and our mature supply and service industry, to our world-leading expertise in ice detection, surveillance and management, we are pushing the boundaries in Arctic and cold-ocean exploration. Our extensive infrastructure and research and development capacity and our expertise in Arctic-like conditions have fostered two national centres of excellence in Arctic development. We are home to a world-renowned cluster of technology companies and have the industry experience, expertise and infrastructure to support developments in the energy, mining and fishing industries. In Newfoundland and Labrador the Arctic comes to us... we turn harsh environment challenges into advantages.
Frontier Energy is all about oil, gas and shipping in harsh, ice-affected conditions, both on and offshore, with a focus on the Arctic regio...