Preparing for the future

Francis Norman, National Energy Resources Australia, explains how the the Centre of Decomissioning Australia (CODA) will support the country’s increasing offshore decommissioning needs.

Australia’s offshore oil and gas industry is embarking on a potentially US$40 billion decommissioning workload, with around 50% of this work anticipated to commence in the coming decade. The size of the decommissioning workload is considerable: 1700 km of in-field flowlines, 130 static umbilicals, almost 5000 km of export and inter-field pipelines, and 126 flexible risers and dynamic umbilicals. This is alongside 1008 wells to plug and abandon, 11 floating facilities and 57 fixed facilities.

Although the precise dates and end states of this decommissioning activity will only emerge over time, when facilities reach their end of life and reuse and repurposing options are explored, the overall volumes of material speak for themselves, with the total installed offshore infrastructure estimated to weigh almost six million t. The scale and complexity of this work – as well as the new pressures put on different parts of the supply chain – will undoubtedly open up new opportunities both in Australia and internationally if multiple players come together to undertake the work safely, efficiently and in compliance with the regulatory and environmental expectations.

To date, the Australian industry has performed relatively small decommissioning scopes, but as larger volumes of infrastructure now near cessation of production, the demand is expected to rapidly ramp up. While Australian industry currently has the skills and capability to undertake a portion of this coming work, a low level of visibility of the entirety of the future workload has meant it has been difficult to invest in the necessary skills, capacity and facilities at the scale required. As a result, there is a risk the supply of skills and technology (along with necessary facilities and networks) may make delivering on this increasing demand highly challenging, particularly during the next few years.

Additionally, the growth in demand for decommissioning skills and technologies is occurring elsewhere in the Asia Pacific region, as fields there also reach their end of life. This growing demand opens up further valuable opportunities for emerging Australian businesses to be part of regional decommissioning activities, working alongside local companies and sharing skills and insights to ensure all decommissioning work is performed to the highest possible standards and that learnings from each region are shared broadly.

With the immediacy and volume of the Australian decommissioning workload now increasingly apparent, so too is the need for an independent

organisation that can work to bring together all interested and involved parties to address both the challenges and opportunities of decommissioning Australia’s ageing oil and gas infrastructure. Other, more mature international jurisdictions such as the North Sea and Netherlands have each established their own such entities to undertake this task as their workloads grew, but no such organisation previously existed in Australia.

Establishing the Centre of Decommissioning Australia (CODA) Recognising that the decommissioning industry is relatively unprepared for much of the emerging workload, National Energy Resources Australia (NERA) established the Centre of Decommissioning Australia (CODA) to lead a transformational approach to late life planning and decommissioning execution that returns maximum value to Australia. Built on the foundation of collaboration, CODA connects technology innovators, research organisations and governments to support joint projects, knowledge transfer and innovations that help to harness the nation’s decommissioning challenge as an economic, environmental and social opportunity.

CODA works towards the fundamental goal of ensuring that industry is ready to perform decommissioning activities safely, efficiently and in environmentally conscious ways while also pursuing a reduction of decommissioning costs (where possible) and the development and deployment of new and novel technologies. CODA is also working to help industry identify or establish pathways for the optimal recycling and reuse of offshore infrastructure to enable circular economy opportunities and support emerging lowemissions technologies.

Importantly, CODA is focussed on maximising opportunities for the local workforce, service, and technology companies, who will have the opportunity to participate in decommissioning work, increase their workforce and establish themselves in different locations adjacent to much of the work. It is anticipated many of these locations may be in remote or regional Australia, resulting in the growth of long-term opportunities in these communities.

Learning from the experiences of other centres, CODA has been constituted to work as a wholly independent, not-for-profit organisation, supported jointly by the facility operators, the service sector, and government. The Centre’s vision is to connect all the disparate parts of the emerging Australian decommissioning industry, providing visibility of the emerging workload, identifying peer organisations alongside suppliers and clients to the service sector, facilitating independent discussions between industry and those responsible for its regulation, and serving as a vehicle to share best practice and insight.

The first work undertaken by CODA, alongside a number of operators, was commissioning the production of a decommissioning liability report. This report, which for the first time shows the size and shape of the upcoming workload, has become the baseline document for describing the volume and immediacy of Australian decommissioning.1, 2 CODA is now building on this report by generating follow-up work that is helping to highlight global best practice for the planning and execution of decommissioning work, setting out a technology roadmap that highlights opportunities to deploy emerging or proven equipment elsewhere in Australia, and identifying opportunities for recycling and disposal of decommissioned and removed offshore infrastructure. To provide guidance and strategic insight to its operations, CODA recently appointed a sixperson supervisory committee.3 This committee comprises two senior representatives from both the operator community and the service sectors, as

Figure 1. Australian offshore oil and gas decommissioning liability by asset typology. Figure 2. Australian offshore oil and gas decommissioning liability timeline.

Figure 3. Australia’s offshore oil and gas inventory.

well as two independent representatives with significant decommissioning expertise. This committee is helping CODA to shape its strategic future, prioritise activities, and plan to deliver the greatest value. Having access to this network of experts allows CODA to accelerate much of its activity and ensures it can focus on the most pressing and critical needs of the sector.

CODA continues to engage across the entire supply chain, gaining insights from large, medium and small businesses, technology companies and engineering companies. These discussions enable CODA to best understand and serve the needs of as many parts of this cohort as possible. Similarly, CODA has ongoing discussions with parts of the Australian government at state, territory and federal levels. Governments are a significant participant in the future of decommissioning and are providing valuable guidance and insight to support CODA’s future plans.

CODA has also established relationships with many of the other international decommissioning organisations and those working in related fields. This network of similarly minded communities has a strong focus on ensuring decommissioning activity in their own regions is undertaken to the highest possible standards and with the best achievable outcomes. Sharing insights and views across this network will help all regions grow and move forward as quickly as possible.

Next steps in planning for the decommissioning workload As CODA moves into 2022, it has a number of key priority actions to pursue. The Centre is looking to establish several best practice working groups to investigate opportunities to significantly enhance current approaches, codify best practice, and identify how different categories of decommissioned equipment such as flexible pipelines, umbilicals, platforms and fixed pipelines will need to be evaluated to determine their decommissioned end state. CODA is also beginning to develop an online decommissioning capability directory to showcase all of the Australian businesses involved in decommissioning activity. This directory will allow businesses for the first time to connect to one another more rapidly and be more easily found by potential clients and suppliers alike. An evaluation of the nation’s capability is also showing there is a need to identify and equip coastal ports and hubs where decommissioning activity can take place. While there are a number of such locations, the low level of activity to date means having the right facilities in the best locations with all of the required functionality has not previously been a priority. CODA is working with industry and government to support the identification, and in some instances the establishment, of these facilities. Once in place, these will become the heart of much of the disposal work required when decommissioned facilities are removed.

Oil and gas decommissioning is not limited to offshore infrastructure. There is a significant inventory of onshore wells and equipment that will begin to be decommissioned over the coming years. This onshore work is as much a part of CODA’s focus as is the offshore scope. As many of the skills and services are immediately transferable between offshore and onshore, learnings from one can be immediately transferred to the other, and both will depend on much of the same disposal industry to remove and recycle equipment. As such, CODA is including onshore work in its current and future planning.

Meeting Australia’s future decommissioning needs In the coming years and decades, the volumes of Australian decommissioning activity are anticipated to increase significantly. This work will create opportunities for established companies to grow, new companies to emerge and a significant additional volume of material to be put into growing recycling value chains as the need to safely recycle or dispose of removed equipment also increases. Like any new industrial activity, however, careful planning and broad cooperation and sharing of knowledge will ensure that it is undertaken safely and generates the best possible value for the Australian economy. As an independent and trusted connector, CODA has a critical role to play in the growth of this industry and is working hard to meet the needs of industry as it coalesces around the challenge.

References

1. https://www.nera.org.au/Publications-and-insights/Attachment?Action=Do wnload&Attachment_id=358 2. https://www.nera.org.au/coda-projects 3. https://www.nera.org.au/CODA-Supervisory-Committee