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SPECIAL REPORT

Innovations on Complete Joint Integrity Assurance Solutions for Offshore Oil and Gas Operations Best Industry Practices of a Joint Integrity Assurance Programme Life in a Cold Economic Climate Tomorrow’s Energy Needs from Today’s Productive Resources Safety and Risk Joint Integrity Means Process Efficiency and Safety

Sponsored by

Published by Global Business Media


SPECIAL REPORT: INNOVATIONS IN COMPLETE JOINT INTEGRITY ASSURANCE SOLUTIONS FOR OFFSHORE OIL AND GAS OPERATIONS

SPECIAL REPORT

Innovations on Complete Joint Integrity Assurance Solutions for Offshore Oil and Gas Operations Best Industry Practices of a Joint Integrity Assurance Programmeme Life in a Cold Economic Climate

Contents

Tomorrow’s Energy Needs from Today’s Productive Resources Safety and Risk Joint Integrity Means Process Efficiency and Safety

Foreword 2 John Hancock, Editor

Best Industry Practices of a 3 Joint Integrity Assurance Programme Chris Tudor, Senior Technical Services Manager and Paul Holland, Global Tech – Services Leader, Technical Services, Hydratight Sponsored by

Published by Global Business Media

Published by Global Business Media Global Business Media Limited 62 The Street Ashtead Surrey KT21 1AT United Kingdom Switchboard: +44 (0)1737 850 939 Fax: +44 (0)1737 851 952 Email: info@globalbusinessmedia.org Website: www.globalbusinessmedia.org Publisher Kevin Bell Editor John Hancock Business Development Director Marie-Anne Brooks Senior Project Manager Steve Banks Advertising Executives Michael McCarthy Abigail Coombes Production Manager Paul Davies For further information visit: www.globalbusinessmedia.org The opinions and views expressed in the editorial content in this publication are those of the authors alone and do not necessarily represent the views of any organisation with which they may be associated. Material in advertisements and promotional features may be considered to represent the views of the advertisers and promoters. The views and opinions expressed in this publication do not necessarily express the views of the Publishers or the Editor. While every care has been taken in the preparation of this publication, neither the Publishers nor the Editor are responsible for such opinions and views or for any inaccuracies in the articles.

© 2015. The entire contents of this publication are protected by copyright. Full details are available from the Publishers. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical photocopying, recording or otherwise, without the prior permission of the copyright owner.

Introduction Background New Standards Structure of a JIA Programme Best Practice: Essential Elements of Joint Integrity Trends in Joint Integrity Conclusion

Life in a Cold Economic Climate

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John Hancock, Editor

Making the Future Pay as Well as the Past Extending the Working Life of Offshore Assets Life Extension Requires Monitoring and Management of Asset Integrity No Compromising Standards

Tomorrow’s Energy Needs from 10 Today’s Productive Resources Peter Dunwell, Correspondent

Making the Future Pay as Well as the Past Extending the Working Life of Offshore Assets Life Extension Requires Monitoring and Management of Asset Integrity No Compromising Standards

Safety and Risk

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Francis Slade, Staff Writer

The Importance of Safety Related Processes and Systems Risk – A Management Priority Working in the Harsh Light of Hostile Scrutiny Working for Continual Improvement

Joint Integrity Means Process Efficiency and Safety 14 John Hancock, Editor

Prevention is Better than Cure Joint Management Programmes and Best Practice Weak Joints Lead to Hydrocarbon Releases It’s Also About Preventing Losses

References 16

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SPECIAL REPORT: INNOVATIONS IN COMPLETE JOINT INTEGRITY ASSURANCE SOLUTIONS FOR OFFSHORE OIL AND GAS OPERATIONS

Foreword I

N ANY human endeavour, thinking ahead can

through strict procedures, but the bolted joint, while

confer significant advantage on the person or

effectively performing the exact same task, has not

organization that, through considering possible

been subject to the same tests and checks.

future problems and how they might be avoided,

The second piece looks at the broader market and

puts them ahead of the game. That can be true

economic background against which all activities

from the highest level strategic considerations

in offshore oil and gas have to be considered, i.e.

to the joints in pipework. There’s no denying

the current low price for oil and how, while some

that the environment in which offshore oil and

will succumb to the pressure, others will embrace

gas installations operate are hostile to most

the opportunity for making changes for long-term

components but, where there is a joint, there will

benefit. Next, Peter Dunwell considers the growing

be an additional level of vulnerability from possible

phenomenon of field life extension and what it means

ingress of corrosive elements (salt water, the

for equipment that has to operate well beyond its

product being carried) or as a result of movement

planned working life.

and from the general stresses of a working process.

Francis Slade then considers risk management

With joints, if those risks can be identified and

and safety, and what methodologies might best be

understood, then a programme can be instigated

employed to achieve the one and secure the other.

to manage and maintain the joint so that a risk can

Again, thinking ahead will always make both easier

never become a threat.

and provide evidence of good process should an

The opening article in this Special Report by Paul

incident ever arise. Finally we consider where joint

Holland of Hydratight looks at the importance of

integrity fits into the risk and safety matrix, why it should

maintaining leak free performance from bolted joints

be managed and how it can be managed.

in hydrocarbon processing facilities throughout their operational life and examines the current trends and

Joints might not be glamorous but neglect in their management can be catastrophic.

best industry practices that deliver a true bolted joint integrity assurance programme from first fabrication to final de-commission. The article points out that the welded joint has, in the past, been quality assured

John Hancock Editor

John Hancock joined as Editor of Offshore Reports in early 2012. A journalist for more than 25 years, John has written and edited articles and papers on a range of engineering, support services and technology topics as well as for key events in the sector. Subjects have included aero-engineering, flight operations, auto-engineering and electronics, high value manufacturing, testing, aviation IT, materials engineering, weapons research, supply chain, logistics and naval engineering.

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SPECIAL REPORT: INNOVATIONS IN COMPLETE JOINT INTEGRITY ASSURANCE SOLUTIONS FOR OFFSHORE OIL AND GAS OPERATIONS

Best Industry Practices of a Joint Integrity Assurance Programme Chris Tudor, Senior Technical Services Manager and Paul Holland, Global Tech – Services Leader, Technical Services, Hydratight Discover joint integrity assurance current trends and best industry practices to improve safety and prevent leaks

Introduction The safe operation of a hydrocarbon processing facility is paramount. Facility owners are committed to protecting their employees, assets and the environment from the contents of the process at all times. Safe containment of the process is dependent on many components functioning correctly not least the bolted flanged joint. Maintaining leak free performance from bolted joints throughout their operational life requires management thought and planning from the outset of a projects’ life, preferably beginning during the FEED stage. Project life, in reality, will often exceed the specified design life. Whilst it may be difficult to define precisely the operational issues in years to come, it is possible, at the outset, to specify the management tools and procedures to be used to collect, track, monitor, assure and so determine maintenance strategies to meet the joint security needs in terms of safety and environmental performance at all times. The purpose of this article is to summarize current trends and best industry practices that deliver a true bolted joint integrity assurance programme from first fabrication through to final de-commission. These best practices also take account of many of the current local legislative frameworks and so ensure compliance.

Background Bolted flange joints can be surprisingly complex and, by their very design, have a tendency to fail if not diligently managed. Introducing a robust Joint Integrity Assurance programme (JIAP) based on current best guidance and practice will avoid costly and possible life threatening events from occurring.

Examples abound of joints that failed in service, costing their owners millions in lost production. In one example, a carbon steel gasket was fitted to a stainless steel hub connector resulting in severe galvanic corrosion, release of gas, ignition, and the loss of the facility. In another example, following the integrity test, the duct tape used for sniffing was left in place causing a micro climate around the bolts leading to corrosion, bolt failure, a major release of sour gas and very nearly the evacuation of the nearby town! Fortunately, in both examples, no injuries were reported. These, other examples, and numerous studies, when causation is identified, lead to the conclusion that resultant leaks could have been avoided had a robust joint integrity programme been implemented. The complexity of the bolted joint has come increasingly to the fore of those responsible for financing, insuring, regulating, constructing and maintaining new or existing oil, gas or petrochemical processing facilities. Management teams have ruled leaks at any time are no longer acceptable. No matter what the facility’s purpose, it will be constructed using a combination of welded and bolted joints. Hitherto, the weld has been quality assured through the implementation of strict procedures for every aspect of the weld completion process. But not so the bolted joint, even though it performs the exact same task – pressure containment – and arguably has a more demanding requirement, since the bolted joint has to be capable of being taken apart and re-made on numerous occasions over the life of the facility (see figure 1). The approach of treating the bolted joint in the same manner as a weld was given a huge boost in 2013 with ASME PCC-1 endorsing this approach. WWW.OFFSHORETECHNOLOGYREPORTS.COM | 3


SPECIAL REPORT: INNOVATIONS IN COMPLETE JOINT INTEGRITY ASSURANCE SOLUTIONS FOR OFFSHORE OIL AND GAS OPERATIONS

Examples abound of joints that failed in service, costing their owners millions in lost production FIG.1

Joint Integrity best practices, if employed from the outset, will meet corporate objectives, comply with local regulations and minimize lifetime costs, simplify maintenance and mitigate the risk of an unwelcome event. In summary, no leaks are acceptable, all leaks are avoidable and can be eliminated through implementation of a well thought out and managed joint integrity programme that assures the bolted joint in the same way as a welded joint.

New Standards Engineering codes and standards match flange, bolt sizing, and material selection with pressure, media, temperature, make an allowance for corrosion and a methodology for calculating the minimum bolt load to seal. Beyond these parameters, historically, there had been little guidance on how to maximize joint security and mitigate leakage. In 2013 this changed, principally with the publication of ASME’s PCC1 – Guidelines for Pressure Boundary Bolted Flange Joint Assembly. PCC1 provides guidance on the components required for an effective JIA programme as well as establishing through Appendix A an ASME training and qualification standard for bolted joint assembly personnel. Since the ASME codes are specified at facilities on a global scale, it is expected these Guidelines will be consulted by many owners and operators. Taken holistically, the bolted joint is now to be assembled and qualified on the basis of its criticality to the facility’s safety and process security. Not that ASME is alone in addressing joint security. Europe’s CEN continues to publish standards that ensure compliance with the Pressure Equipment Directive (PED), the Integrated Pollution Prevention and Control Directive (IPPC) and the Industrial Emission Directive (2010.) The EN1591 series of standards between them prescribe a flange design, bolt load, gasket performance, and technician 4 | WWW.OFFSHORETECHNOLOGYREPORTS.COM

competency which, if all met, will result in acceptable and compliant leak tightness.

Structure of a JIA Programme The overarching objective of the programme is to treat the bolted joint as though it were a weld, mimicking the same quality assurance requirements so that the owner can be confident of a right-first-time approach that will drive a leak-free outcome, both during testing and throughout operations. Much like other programmes, irrespective of industry or objective, the programme structure will contain documents defining: •M  anagement – Define the objective, assign resources, manage and monitor against agreed deliverables and timescales •P  rocess – Organize resources, set assurance criteria, define who does what and when to meet the objectives, including competency requirements • Task – Define how things are to be done Historically, procedures for assembling and tightening bolted joints have focused on the tools required (management), how the tools are to be used (task) and a ‘standardized’ set of torque values and creation of a paper record confirming the joint has been tightened (process.) As the number of leaks and related incidents rose, the need to better manage and control joint security was highlighted leading to further controls including specifying lubricant, technician competency, temporary joint identification and some form of joint tracking (often using a spreadsheet). (See figure 2) With the introduction of these improvements and a clear visible reduction in leaks, thought was given to devising joint integrity programmes that could track joint status on a permanent basis. Drivers include a relentless focus on safety, multiple sites for construction, limited access in some territories to qualified personnel, increases in project size, costs and poor reliability of using a ‘test and fix’ approach and sheer quantity of


SPECIAL REPORT: INNOVATIONS IN COMPLETE JOINT INTEGRITY ASSURANCE SOLUTIONS FOR OFFSHORE OIL AND GAS OPERATIONS

FIG.2 JOINT INTEGRITY IS A JOURNEY – WE ALL WALK THE PATH

joints (200,000+) leading to negative impact on budgets and schedules.

Best Practice: Essential Elements of Joint Integrity Joint integrity programmes have been successfully implemented since 2000. During the past 15 years programme owners and users have refined the elements described below to suit their individual project or facility needs. However, the core eight essential elements considered necessary for establishing a successful programme remain unchanged. As with any management process, it will adapt to the facility’s needs and be subject to continuous improvement. The eight elements are described below and taken together form a framework that can be adopted at the project’s outset, i.e. during initial fabrication and, if maintained, will serve throughout the life of the facility. Ownership An owner for the programme must be appointed. The owner needs to assume the role of Subject Matter Expert (SME) and be responsible for documenting, implementing and rolling out the programme. The SME will take responsibility for all technical and process aspects of the programme and be the principal liaising point between internal and external stakeholders with an interest in securing the programme’s objectives. Technology and Best Practices Understanding bolt/joint behaviour and the technologies used in joint integrity is vital; this greatly aids drawing up good procedures and ensuring the appropriate understanding is disseminated across the entire organization. Joint integrity technologies should be studied holistically so that procedures reflect the lifecycle of the facility. For example, specifications

and procedures need to ensure all joints are sealed at the first attempt but then also what measures need be taken for them to remain safe and sealed until planned maintenance can be scheduled. This is often in reality a far longer period than first envisaged, so measures such as environmental protection and live bolt renewal need to be considered. Equally, it is vital that best practices are adopted. Bolted joints can be complex. Consulting Practices suggest conducting a gap analysis to benchmark what a facility already has in place to what is proven in similar technical or operational fields, makes eminent good sense. Several industry organizations including ASME, API, CEN, and Energy Institute have publications that can be consulted for guidance as can best in class service companies with a proven focus on joint integrity. Assess criticality and set rules Service conditions between joints can be very different as can the technologies and assurance requirements to operate leak free. By assigning each joint a criticality and conducting a physical survey when possible, the appropriate resources, competencies and technologies can be selected to match the local and wider risks posed by the joint. Thought also needs to be given to the boundary between the elements to be owned and/or executed by the operator and those that will be contracted out at the earliest opportunity. Balancing risk and cost is crucial for a successful outcome both technically and financially. Training and Competence Human error in one form or another is the most common cause of joint failure. Training in itself is not sufficient. Knowledge, understanding and experience gained should be verified so that competency can be proven. WWW.OFFSHORETECHNOLOGYREPORTS.COM | 5


SPECIAL REPORT: INNOVATIONS IN COMPLETE JOINT INTEGRITY ASSURANCE SOLUTIONS FOR OFFSHORE OIL AND GAS OPERATIONS

Human error in one form or another is the most common cause of joint failure. Training in itself is not sufficient. Knowledge, understanding and experience gained should be verified so that competency can be proven

A standard for competency should be required before work can commence (or indeed, external contractors are appointed.) Performance requirements in terms of knowledge and skills are included in publications such as ASME PPC1 and EN1591-4. Local industry groups such as the ECITB in the UK independently verify through accreditation that performance standards are being correctly trained and examined and that sufficient experience is being gained before an individual is certified as competent. All internal and external staff concerned with a successful outcome from the joint integrity programme need to have at least had the objectives and their role in the programme properly explained. Records, Data Management and Tagging Recording all the activities associated with each facility joint permanently has many benefits: joint integrity is far more certain, historical data is available in the event of an incident, traceability is assured and records will meet all legislative guidance or rules. Each record should be created, stored, and updated in a permanent flange data management system which should link with the facility joint design and piping specifications and specified bolt load/stress and torque requirements or the approved calculation methodology. A protocol needs to be agreed so that each joint can be assigned a permanent tag number, which is commonly linked to its line number. (See figure 3). Inspection – (you get what you inspect, not what you expect) Because of the complexity of the bolted joint, inspection of bolted joints, which is at the heart of a QA/QC process, should be an integral activity as part of an assurance plan to ensure the integrity of bolted joints. Joints need inspection when first disassembled and again when being reassembled; the

FIG.3

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technologies to be used need assessment and specifying. Any and all ambiguities or deviations to mandated procedures need recognition, reporting and resolving. Inspection staff need good judgement, a solid grounding in the fundamentals of bolting and full awareness of the facility requirements so that support can be given to the bolting technicians. The management process must address inspection, establishing when joints are to be inspected, what and how is to be inspected and how inspection data is to be recorded and tracked. It is becoming increasingly common to separate execution from inspection and joint data tracking. More commonly known as a Compliance contract, the contractor is responsible for overseeing and ensuring all mandated JI procedures are adhered to by the Execution contractor and that every joint’s assembly and tightening has been competently carried out and inspected. The resultant database provides a sound platform for the owner’s integrity team to inherit and build out from as the facility goes into production. Leak Management No matter how well designed and executed the joint integrity programme, it is a possible for a leak to occur, albeit highly unlikely. A management process to deal with leaks is therefore necessary. The process must capture the requisite data, set down the investigation and learning process and make sure the appropriate corrective actions are taken and monitored. Analysis, Learning and Improvement Process improvement reviews should be regularly scheduled, at least every two years, to be attended by management and users (internal and external if appropriate.) Joint data, commissioning reports, test data and any recorded incidents should be examined and analysed for process and technology improvements. Users should be


SPECIAL REPORT: INNOVATIONS IN COMPLETE JOINT INTEGRITY ASSURANCE SOLUTIONS FOR OFFSHORE OIL AND GAS OPERATIONS

FIG.4

consulted for views on process ease of use and suggested changes. Joint test data can be reviewed to compare actual measured leak rates on a historical basis; worsening values may suggest degradation of the flanges, improvements may suggest improved gasketry or belter adherence to procedure.

Trends in Joint Integrity Beyond specifying and employing a joint integrity programme based on the essential elements described above, there are several aspects that are being more carefully thought through. These include reviews of lubricant, calculation of bolt load, and inter alia torque values, to reflect the required gasket sealing stress – which, after all, is key to joint security, permanent record keeping and tracking all joint activities and planning for flange maintenance in rudimentary form. Lubricant has been elevated in importance so that besides having a known friction factor (based on local site temperatures) when calculating torque values, operators look to choose a lubricant which matches process conditions and materials of construction and will aid disassembly so saving time and cost and eliminating safety concerns by preventing rogue methods being used to remove galled nuts. Focus on bolt load is driven by recognition of the importance of the optimizing gasket sealing stresses as operators strive to lengthen operational cycles between shutdowns. For joints that operate at temperature, as exist commonly in refineries, this prerequisite adds to the focus and can impinge on the assembly and tightening procedure as well as the calculation itself. Permanent activity tracking is driven by the need for better records, the need to simplify and speed up joint intervention planning (i.e. building work packs) and planning for long term flange maintenance. Also through traceability, should a leak develop, subsequent investigations are accurately informed.

Over the lifecycle of a facility, particularly those offshore or near the coast, flanges, and particularly their bolts/nuts, can become severely corroded. Bolts/nuts need to be treated as consumables and a programme of replacement constructed as part of the JIA programme. No technology currently exists that can reliably estimate the bolt load capacity of a corroded bolt, so a plan has to be developed to renew the bolts/nuts, effectively treating these items as consumables. This can be done as part of a shutdown, but increasingly, with constraints on expenditure, lowering production rates, shortening of shutdowns, bolt renewal campaigns are executed while the facility is in production. Technologies which are independently prequalified are now emerging that permit the safe renewal of flange bolts whilst in operation. (See figure 4).

Conclusion Introducing a joint integrity management programme with mandated process and procedures is crucial for eliminating leaks and so maintaining a safe facility. Whilst, ideally, the programme should be in place before construction begins, whenever it is introduced, benefits will accrue: expenditure will balance with risk, leaks will be eliminated, schedules will be met and all joint activities will be recorded for posterity, so meeting all corporate and legislative requirements.

Contact Hydratight Bentley Road South Darlaston, West Midlands WS10 8LQ United Kingdom Tel: +44 (0)121 505 0600 jointintegrityenquiries@hydratight.com www.hydratight.com WWW.OFFSHORETECHNOLOGYREPORTS.COM | 7


SPECIAL REPORT: INNOVATIONS IN COMPLETE JOINT INTEGRITY ASSURANCE SOLUTIONS FOR OFFSHORE OIL AND GAS OPERATIONS

Life in a Cold Economic Climate John Hancock, Editor The new world order must manage with very low oil prices: will offshore operators be able to adapt their operations to fit with the new reality?

This price drop has been all the more shocking for the speed at which it has occurred and the height from which prices have fallen. As recently as June 2014, Brent crude had reached a peak price of $115.19 a barrel from which it has fallen by well over 50% in just one year

T

HERE’S NO doubt that among the many challenges that always face offshore oil and gas operators, the current price of oil is going to require more than a little lateral thinking to create a profitable sector within the cost constraints of a low price. And that will have to be achieved without compromising any of the environmental, safety and quality factors that are hallmarks of today’s successful offshore operation. On August 19th 2015, at the time of writing this paper, The International Energy Agency revealed that US reserve stocks of oil had risen by 2.6 million barrels in the preceding month. That, combined with the continuing slowdown in the Chinese economy (the world’s second largest oil user) and ongoing high levels of production from countries such as Saudi Arabia, pushed the price of a barrel of Brent crude down to below $47.

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This price drop has been all the more shocking for the speed at which it has occurred and the height from which prices have fallen. As recently as June 2014, Brent crude had reached a peak price of $115.19 a barrel from which it has fallen by well over 50% in just one year. That has had significant negative impact on producer nations who have little in the way of financial reserves or industrial/ services strength to fall back on. It has also made the exploitation of more difficult and costlier-to-access reserves, such as those located under the ocean, less viable. Oil prices at current levels will certainly affect offshore developments and production. As G. Allen Brooks explained in the May 2015 Maritime Executive article, ‘Will Offshore Exploration Fall Victim to Low Oil Prices?’1 companies… must balance multiple considerations: finding new oil and gas reserves, growing production, sustaining their organizations and continuing to reward


SPECIAL REPORT: INNOVATIONS IN COMPLETE JOINT INTEGRITY ASSURANCE SOLUTIONS FOR OFFSHORE OIL AND GAS OPERATIONS

shareholders. With oil prices having been cut in half, cash flows are sharply reduced.” Also, as formerly embargoed reserves come back on stream from Iran, whose sales policy will be geared to rebuild national financial strength rather than maximize price, the outlook remains challenging on most cost fronts.

It’s Not All Bad News, Especially in the Long-Term Of course, all the news is not bad. Even if growing efficiency and ‘green’ policies in developed economies result in falling demand, any efficiency growth in developing and emerging economies is likely to be exceeded by long-term demands of economic growth and burgeoning populations. In the paper ‘Global Trends in Oil & Gas Markets to 2025’2 LUKOIL predicts; “…a number of trends will support oil prices in the medium term.” continuing to list some of those growth factors as… • Population growth, urbanization; • Motorization in Asia; • Growing costs of exploration and production; • OPEC policy; • Dollar depreciation. This is by no means a one-way bet and the LUKOIL paper also lists a number of challenges faced by the oil market. But it would be reckless for anyone to predict that energy (i.e. oil) prices will remain low for ever. Demographic predictions suggest that the world’s population will grow by more than 1.1 billion people between 2010 and 2025 of which 1 billion will be added to the urban consumer class as growing populations also migrate from rural, low energy consumption areas to cities where their expectations of ‘things to own’ and consumption of energy will rise exponentially. Growing populations around the world with continually rising expectations, combined with the finite nature of hydrocarbon resources point to a long term sustainable price.

Some Can Afford To Invest Today In Order To Be Ready For Tomorrow In the short-term, consumers and manufacturers can appreciate the relief to their finances offered

by falling fuel prices and that, in turn, can stimulate economic growth. Also, energy giants such as Shell, with new extraction programmes in the Arctic and BP with massive life extension programmes in the North Sea are investing enormous sums with an eye to the future when sheer weight of population and the demand it generates must push prices back onto an upward trajectory. They can afford to rely on the profits from their downstream operations, such as refining and marketing, which have enjoyed five-fold improvements in profitability, to offset any fall in returns from upstream exploration and exploitation activities. Meanwhile, smaller operators across the sector with more reliance on one part of the process have to look to every available means to optimize the value of their operations and remain viable through a difficult period.

Managing Reality Will Mean Being Better At Managing Everything There will be a number of strategies employed by offshore operators to streamline their businesses and bring the cost of operating their very expensive equipment in its very challenging environment down to levels that will be sustainable in the light of current prices. Among them will be a drive to introduce techniques that can optimize productivity and, in that group of actions, improving the management of joint integrity to reduce leakages as well as avoid unexpected equipment failure when joints have not been properly assembled and/or maintained, should be high on a manager’s list. The underlying need will be to reduce costs without reducing any other factors and that will require a lot of rethinking of approaches that, while they might have been acceptable with oil priced at over $100 a barrel, cannot be sustained by prices below $50 a barrel. Like any businesses, offshore oil and gas operators will need to go through their operation with a fine tooth comb to identify any savings that can be achieved. In that context, minimizing leaks, effecting repairs and maintenance in-situ and better managing the less glamorous but most essential parts such as joints will be essential.

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SPECIAL REPORT: INNOVATIONS IN COMPLETE JOINT INTEGRITY ASSURANCE SOLUTIONS FOR OFFSHORE OIL AND GAS OPERATIONS

Tomorrow’s Energy Needs from Today’s Productive Resources Peter Dunwell, Correspondent Current fields might have a lot of life in them yet.

Researchers at Edinburgh’s HeriotWatt University have highlighted technologies that could add decades to the lifespan of oil reserves in the North Sea

T

HAT THERE is a future for offshore and marine operations can be gauged from articles like ‘Oil and gas contractors may have a long-term future in the UK North Sea, shows report’3 – Contractor Calculator’s February 2015 appraisal of Oil & Gas UK’s Activity Survey 2015. But having a future is one thing; having the means to get value from that future is something else. In his article above, John Hancock refers to investment programmes recently announced by two of the energy giants, Shell and BP. Those investments differ in one crucial way. Shell’s Arctic investment will be into largely new operations whereas BP will be investing in the extended life of its North Sea assets: life extension is a key consideration in the UK’s (and world’s) drive to maximize returns from North Sea (and other offshore) energy reserves. While technologies such as fracking and various low carbon generation systems will no doubt one day provide most of the world’s energy needs, the BBC, in September 20144, reported that researchers at Edinburgh’s Heriot-Watt University have highlighted technologies that “could add decades to the lifespan of oil reserves in the North Sea.” As the BBC report explained, “[The research team] had made a breakthrough in developing clean and cheap methods to maximize extraction from existing fields… [which] could be a game changer for the industry and [could help] reverse the decline in North Sea production.” It is believed that at least half of the original oil remains in North Sea reservoirs so anything that can access those reserves will be good, but operators must ensure the best management and condition of every component, including joints in the various pipe systems that will be needed.

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Extending the Working Life of Offshore Assets As a background to field life extension, it’s worth first thinking about what are the normal life stages for an offshore oil and gas field. Atlantic Canada Offshore5 identifies four stages in the life of an offshore oil and gas field: exploration (locating the resources), development (planning and construction), production (when every technology to optimize productivity will need to be employed) and decommissioning (closing the installations and safely removing any infrastructure). Cairn Energy6 explains the life-cycle as a process over more than 30 years and consisting of eight stages plus the final stage of decommissioning:1. Due diligence; 2. Prequalification; 3. Exploration, seismic survey; 4. Site survey; 5. Exploration drilling; 6. Appraisal drilling; 7. Development; 8. Production; 9. Decommissioning. On either of the above scales, it is the production stage where operators have the potential to maximize return and improve cost effectiveness using technologies that can optimize all production, improve low rate production and improve later well stability. Those latter cases are most likely to occur in an older field where the underlying pressure in the reservoir has fallen as the product has been extracted. That, in turn, is increasingly the case as field and asset life is extended to extract the maximum return from investments and assets that probably cannot be re-used and whose value therefore needs to be leveraged to the greatest possible extent. Given the costs associated even with


SPECIAL REPORT: INNOVATIONS IN COMPLETE JOINT INTEGRITY ASSURANCE SOLUTIONS FOR OFFSHORE OIL AND GAS OPERATIONS

used in offshore oil and gas are engineered to standards high enough to survive inherently hostile and mechanically stressful environments: even when their planned life is completed, they remain structurally sound. However, given that people’s lives will depend upon that remaining the case, there is a strong requirement to properly manage life extended installations and equipment. When extending field life, it is important to put in place a monitoring programme to ensure that operators not only have the most up-to-the-minute reports of production conditions but that a range of conditions in the system can be monitored. That process would certainly include proper joint integrity management.

No Compromising Standards extending field and asset life and the probable need to reduce break-even points for any operation, it will prove economic to employ whatever technology might increase production, including reducing any loss from leaks and if any of these technologies can be further improved by using digital, intelligent methodologies, so much the better.

Life Extension Requires Monitoring and Management of Asset Integrity The Journal of Petroleum Technology summed up the challenge7, “More than half of the offshore oil and gas installations in the UK Sector of the North Sea have been operating for at least 20 years. Most assets are approaching or operating beyond their original design intent.” To support continuing efficient and safe operation, equipment in life-extended fields will need stringent and detailed levels of monitoring and management to ensure continuing operating efficiency and structural integrity. Life extension is not, in itself, a cost free or even a low cost option and so anything that will contribute to enhanced production from the field or through the installation will almost certainly be cost effective. And, of course, there is no purpose in extending a field’s working life unless that can be achieved profitably, so factors such as joint integrity will be very important in achieving that end. A life extension programme operates a field, its installations and infrastructure beyond their planned working life; a challenge mitigated because most equipment and installations

Life extension has become such an important factor in optimizing the profitability of fields even when oil prices are high; properly managed it will be a critical contributor to profitability in times of low prices such as is the current experience. But that proper management must be integral to any life extension programme. In light of this importance, DNV, the international certification body and classification society for risk management, has published a number of advisory steps and processes covering each stage of a life extension programme under the title ‘Helping offshore assets age gracefully’8 by Anupam Ghosal. As this document explains, “Operating ageing assets and infrastructure past their design lives to maintain production volumes poses certain challenges, but is possible with a rigorous approach to assessing the integrity and remaining lives of the assets and careful consideration of the risks involved”. Even at times of lower returns, maintenance cannot be neglected9. As the UK Health and Safety Executive (HSE) puts it: “The offshore oil and gas industry in the UK Continental Shelf (UKCS) is a mature production area. Much of the offshore infrastructure is at, or has exceeded, its intended design life. During the 1990s low oil prices and initiatives to reduce costs led to a reduction in the offshore workforce. This in turn led to reductions in levels of maintenance and, as a result, an overall decline in the integrity of fabric, structures, plant and systems. The harsh operating environment on the UKCS has exacerbated the rate of degradation.” In the current climate of low prices, smarter and better planned processes will be required to ensure that management of equipment integrity is not compromised by any efforts to reduce costs. WWW.OFFSHORETECHNOLOGYREPORTS.COM | 11


SPECIAL REPORT: INNOVATIONS IN COMPLETE JOINT INTEGRITY ASSURANCE SOLUTIONS FOR OFFSHORE OIL AND GAS OPERATIONS

Safety and Risk Francis Slade, Staff Writer Safety first is always correct and understanding risk can inform and enhance such a policy

Oil and gas, like aviation, has safety processes integral to every operation. Understanding the risks and hazards can enable operators to take sensible precautions and build systems and procedures to enhance safety in

The Importance of Safety Related Processes and Systems

normal circumstances

‘Health and Safety’ and ‘Risk Management’ seem almost too sensible to warrant debate and should be ‘givens’ in any production programme; they are two of the most important concepts in any business and that would certainly be true for offshore oil and gas operations. However, while health and safety, and risk management inform one set of management priorities, other performance and profit related factors weigh in on the other side of the equation. Given the exceptionally arduous environments (weather, movement, hazardous materials and substances) in which most platforms operate, they and the components of which they comprise are subject to considerable wear and tear. Their condition, performance and safety can be compromised as structures and systems that worked well at the outset become progressively more worn and less effective. The way to maximize safety is first by ensuring that component build and assembly quality is to the highest standards in the first place and then, with properly planned and vigilantly

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executed management of their continuing integrity in operation. Risks and hazards could be said to be integral to the operation of offshore oil and gas extraction processes: “The nature of their operation – extraction of volatile substances sometimes under extreme pressure in a hostile environment – means risk; accidents and tragedies occur regularly.”10 Because of this, oil and gas, like aviation, has safety processes integral to every operation. Understanding the risks and hazards can enable operators to take sensible precautions and build systems and procedures to enhance safety in normal circumstances. ‘Rig Safety’ is a priority for any operator of an offshore platform. But some areas in any structure will be more dangerous than others, so an internationally recognised zoning standard, BS EN 60079/10, has been devised for installations where combustible gases, vapours or mists are likely to be present. This is especially applicable to oil and gas installations.11 •Z  one 0 Where an explosive atmosphere is usually present.


SPECIAL REPORT: INNOVATIONS IN COMPLETE JOINT INTEGRITY ASSURANCE SOLUTIONS FOR OFFSHORE OIL AND GAS OPERATIONS

•Z  one 1 Where an explosive atmosphere is likely to occur occasionally. •Z  one 2 Where an explosive atmosphere is not likely to occur or will persist for a short period only.

Risk – A Management Priority Alongside safety systems, risk management is integral to any offshore operation. Summing up the importance of risk management, ‘Offshore Oil and Gas in the UK’, Geoffrey Maitland’s review of the regulatory regime commissioned by the UK Government concluded12, “The exploitation of offshore hydrocarbon resources in often hostile environments is, by its very nature, a hazardous activity with the potential to cost lives and cause environmental damage. In a society which values the economic and social benefits of the product of that activity, it will fall to the industry and the regulatory authorities to ensure an acceptable balance between the risks and rewards it presents.” The first step in risk management is to understand the risks involved and the greatest risk on an offshore oil or gas installation arises when a combustible atmosphere is exposed to heat or sparks. Therefore, a key feature for any operational offshore environment, is that it should be able to avoid that risk by keeping the two risk elements apart. Although that should really be three as the so-called ‘fire triangle’ identifies three elements for a fire: a hazardous vapour, oxygen and an ignition source (heat or fire). Unfortunately, on an offshore platform, quite a few pieces of equipment have the potential to generate sparks so any system or process that works to prevent the accidental leaking of combustible fluids and vapours from the process into the wider environment will contribute positively to safety as well as to profitability.

Working in the Harsh Light of Hostile Scrutiny All of the above would be important at any time but, in times of price/cost pressure, they become more important than ever, if that is possible. These days, there are plenty of organizations whose agenda would be well-served by any lapse in installation integrity or, even more, by the consequences of any resulting failure. Greenpeace13, for instance, maintains an Energydesk from which we are told that, “The low oil price could increase the risk of environmental accidents in offshore drilling by forcing contractors to cut costs, according to a risk management expert...” The article continues to quote Professor Robert Bea of University of California,

HYDRATIGHT 3413

Berkley: “Experience has demonstrated that ‘cost cutting’ can result in undesirable reductions in the protections that are needed to be ‘safe’.” Poor attention to safety related procedures can be much more expensive than simply the loss of production while a problem is resolved.

Working for Continual Improvement The importance of this issue can be gauged by the fact that, in March 2012, Oil & Gas UK reported on a special seminar on ‘Hydrocarbon Release’, highlighting leak reduction successes. Sponsored by Endeavour Energy and jointly organized by Step Change in Safety and Oil & Gas UK, the seminar showcased the industry’s collective work towards its target of reducing the number of hydrocarbon releases. At the seminar, Geoff Holmes, co-chair of Step Change in Safety’s Asset Integrity Steering Group, said: “Hydrocarbon releases are precursors to major incidents, therefore reducing – or eliminating – this risk is an absolute priority. We deliberately set the bar high when, in 2010, we committed to reducing the number of hydrocarbon releases by 50%. We have already seen a reduction when HSE published their offshore safety statistics last summer but we know there is still a lot of work to do if we are going to meet this target. “Events like this are vital because they reinforce commitment to the cause and provide another platform to widely share good practices and encourage their adoption across the UK oil and gas industry.”

WWW.OFFSHORETECHNOLOGYREPORTS.COM | 13


SPECIAL REPORT: INNOVATIONS IN COMPLETE JOINT INTEGRITY ASSURANCE SOLUTIONS FOR OFFSHORE OIL AND GAS OPERATIONS

Joint Integrity Means Process Efficiency and Safety John Hancock, Editor

Historically, the management of boltedjoint flanges has been subject to limited guidance … despite the fact that bolted joints are used in the same types of process conditions and under the same pressures as welded joints

Prevention is Better than Cure Given the challenges referred to in previous articles, there must be procedures to ensure the safest possible management of any failure or emergency in an offshore oil and gas operation. However, prevention is always the best procedure. No system is perfect and no item of equipment can be completely failsafe: but working, as offshore oil and gas producers do, on the front line of technology capability and in the most challenging environment, there can never be any room for complacency where safety is concerned. That’s why the management of joint integrity is so important: if short-termism is a risk, so is cost complacency. Even when prices start to recover from their present low levels, the producers in the best positions will be those who have invested in technologies to improve the longterm efficiency of all producing fields and optimize the productivity; even of older fields. Bolted joints can loosen for a number of reasons. The Welding Institute14 explains that, “Fatigue failure of bolted joints can result from either cracking or self-loosening and can be prevented by appropriate design and fabrication methods. Fatigue design rules for bolted joints are available in a number of Standards.” As Hydratight15 explains, “Bolted joints can leak.” continuing to note that, in recent years, investigations by the process industries have highlighted the seriousness and importance of preventing leakage: For example, UK HSE found that on average 243 leaks occurred per year offshore for the period 1992-2002, 17% of which occurred from bolted joints.

Joint Management Programmes and Best Practice Putting this together with issues highlighted in earlier articles, life extension and integrity management, the UK oil and gas industry has a programme of measures, as Oil & Gas UK16 put it, to come together to tackle offshore safety issues head-on. Working through offshore safety initiative 14 | WWW.OFFSHORETECHNOLOGYREPORTS.COM

‘Step Change in Safety’, the programme’s first action has been to tackle hydrocarbon releases. In doing that, operators will have to focus clearly on joint integrity management. Inspectioneering17 published a 2014 article entitled ‘Best Practices of a Joint Integrity Programme’ opening with, “Joint integrity programmes (JIP) should be an integral part of every refinery, petrochemical, production, or other industrial-complex facility operations. This article advises and outlines deliberate, sequential steps to take when creating processes and procedures as they relate to flange joint integrity. It discusses new standards and the best practices available for companies needing to standardize their joint integrity management systems, or for those who need to implement a joint integrity management process from the ground up.” The article also noted that, while welded joints have long been subject to a high degree of regulation, “Historically, the management of bolted-joint flanges has been subject to limited guidance … despite the fact that bolted joints are used in the same types of process conditions and under the same pressures as welded joints… recent events have illustrated the need for new processes and procedures, which apply similar management practices to bolted joints as welded joints.” James Walker Group18 further explains the need for positive joint integrity processes: “… offshore oil and gas platforms have evolved over time. Old equipment is updated or replaced and new equipment added... Frequently, the result is a tangle of pipe-work and equipment from different manufacturers – and even different eras – bolted together. For an Asset Manager, ensuring that all of these bolted joints remain intact and leak-free can be a nightmare.”

Weak Joints Lead to Hydrocarbon Releases The Energy Institute publishes ‘Guidelines for the management of the integrity of bolted joints for pressurised systems’19 which states:


SPECIAL REPORT: INNOVATIONS IN COMPLETE JOINT INTEGRITY ASSURANCE SOLUTIONS FOR OFFSHORE OIL AND GAS OPERATIONS

HYDRATIGHT 3570

“A bolted joint is one of many critical components of a pressurised system... leakage or failure of a bolted joint can have potentially catastrophic consequences.” The paper continues to highlight the value of the active management of the integrity of bolted joints. The Energy Industries Council (EIC) agrees in its paper ‘An Introduction to Bolted Joint Integrity’20, “Loss of containment can be catastrophic and negatively impact brand image, facilities, employees and the environment. Unplanned shutdowns at hydrocarbon processing facilities regular feature in the news; and globally, reports of major fires exceed, on average one a week. It is unquestionably true that all leaks cost the industry but it is also true that all leaks are preventable. The bolted joint plays a critical role in assuring the integrity of process plant and structures in industries as diverse as Offshore Oil & Gas.” It couldn’t be put more plainly than that and that also rounds up this article inasmuch as we have focused on a relatively unnoticed and usually hidden feature of any offshore oil and gas installation but, hopefully, shown how

important it is to the success of the business. The way joints are assembled and maintained is one of the more important processes in any offshore structure and infrastructure.

It’s Also About Preventing Losses However, with all that has been covered above, the reader should not come away from this Report with the impression that bolt integrity is a net cost to the operation. As well as minimizing the risk of disaster, properly managed flanged bolted joints can improve performance of a system by reducing loss from leaks. Some of the techniques employed, such as hot bolting or tightening a flange in situ, can avoid shutdowns in carefully controlled circumstances and have proved very useful in cases such as where old bolts have corroded and have to be replaced but, where full shut-down and removal would not be practical. All-in-all, joint integrity contributes to most of the key business indicators used to manage the safe profitable operation of an offshore oil and gas installation.

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SPECIAL REPORT: INNOVATIONS IN COMPLETE JOINT INTEGRITY ASSURANCE SOLUTIONS FOR OFFSHORE OIL AND GAS OPERATIONS

References: 1

1 The Maritime Executive http://maritime-executive.com/magazine/will-offshore-exploration-fall-victim-to-low-oil-prices

2

LUKOIL ‘Global Trends in Oil & Gas Markets to 2025’ http://www.lukoil.com/materials/doc/documents/Global_trends_to_2025.pdf

3

Contractor Calculator http://www.contractorcalculator.co.uk/oil_gas_contractors_long_future_north_sea_report_486910_news.aspx

4

BBC http://www.bbc.co.uk/news/uk-scotland-edinburgh-east-fife-29342142

5

Atlantic Canada’s Offshore Oil and Gas Industry http://atlanticcanadaoffshore.ca/offshore-oil-gas-lifecycle/

6

Cairn Energy http://www.cairnenergy.com/index.asp?pageid=554

7

The Journal of Petroleum Technology

http://www.mydigitalpublication.com/article/Offshore+Oil+and+Gas+Installation%E2%80%94Aging+and+Life+Extension/951953/0/article.html 8

DNV http://www.dnv.com/industry/oil_gas/publications/updates/oil_and_gas_update/2013/02_2013/helping_offshore_assets_age_gracefully.asp

9

HSE Key Programme 3, Asset Integrity Programme – download from http://www.hse.gov.uk/offshore/kp3.pdf

10

Wikipedia http://en.wikipedia.org/wiki/Oil_platform

11

Hazardous area zones http://www.hse.gov.uk/fireandexplosion/zoning.pdf

12

Offshore Oil and Gas in the UK

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/48252/3875-offshore-oil-gas-uk-ind-rev.pdf 13

Greenpeace http://energydesk.greenpeace.org/2015/03/23/risk-of-oil-drilling-disasters/

14

The Welding Institute

http://www.twi-global.com/technical-knowledge/faqs/structural-integrity-faqs/faq-are-there-any-fatigue-design-rules-for-bolted-joints/ 15

Hydratight http://www.joint-integrity.com/Content/documents/ht-jims-e-06-08-hydratight-jims-brochure-uk.pdf

16

Oil & Gas UK http://www.oilandgasuk.co.uk/industryunitedonmajorsafetyissues.cfm

17

Inspectioneering https://inspectioneering.com/journal/2014-04-16/3873/best-practices-of-a-joint-inte

18

James Walker https://www.jameswalker.biz/docs/jwgroup/jip.pdf

19

The Energy Institute http://www.wellheadservices.net/techdocs/guidance_on_bolted_joints.pdf

20

Energy Industries Council (EIC) ‘An Introduction to Bolted Joint Integrity’ http://www.the-eic.com/TrainingDetail.aspx?eventId=728&dateid=1213 s

16 | WWW.OFFSHORETECHNOLOGYREPORTS.COM


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