Petroleum News: Spar system chosen for Perdido project

Technip lands major contract for ‘ultra-deepwater’ oil development project in Alaminos Canyon; three discoveries to be tied back

Ray Tyson
For Petroleum News
Week of December 10, 2006

Shell Offshore has awarded a major contract to French oilfield services company Technip to provide engineering, procurement and construction of a spar hull and mooring system for what could be the first oil production from the highly acclaimed Lower Tertiary play in “ultra-deepwater” Gulf of Mexico. The contract amount was not disclosed.

The so-called Perdido Regional Host Project, to be located in Alaminos Canyon about 200 miles south of Freeport, Texas, will consist of three discoveries tied back to a central production facility or spar anchored in 8,000 feet of water. The spar would replace the Gulf’s traditional semi-submersible production platform.

“Following the worst hurricane season on record in the Gulf of Mexico, the existing offshore spar production facilities have proven their robust design, and confirmed the spar’s unique features and benefits even during extreme hurricane conditions,” Technip said.

First production estimated at 2010

First production from Perdido is expected around 2010, with the facility capable of handling 130,000 barrels of oil equivalent per day. It would be the deepest spar production in the world and the first DVA or direct vertical access, which Technip said would reduce drilling cost, simplify well workovers and facilitate access to subsea equipment.
The Perdido Regional Host Project would be the 14th spar delivered by Technip. It also would be in a water depth that is nearly a half-mile deeper than any other spar in the world.

The common processing hub would be on Alaminos Canyon Block 857 near the Great White discovery. The facility is being designed to gather process and export production within a 30-mile radius of the hub, which in addition to Great White currently includes the Tobago and Silvertip discoveries.

Great White is owned 33.34 percent by Shell, 33.33 percent by Chevron, and 33.33 percent by BP. Tobago is owned 32.5 percent by Shell, 57.5 percent by Chevron and 10 percent by Canada’s Nexen. Silvertip is owned 40 percent by Shell and 60 percent by Chevron.

The Perdido Regional Host Project itself is jointly owned by Shell (35 percent), Chevron (37.5 percent) and BP (27.5 percent). Shell will serve as project operator.

Overall management from Technip’s Houston center

“This regional concept will also reduce the number and size of the facilities and operations in this challenging frontier area, resulting in a lower environmental impact than would otherwise be achieved,” Technip said.

Technip’s operations and engineering center in Houston, Texas, will provide the overall project management, and the global engineering for the hull and mooring system, as well as engineering and procurement support for the riser tensioner system. The detailed hull design and fabrication will be carried out by Technip’s yard in Pori, Finland.

Plans to develop the Alaminos Canyon discoveries were announced after positive results from a crucial Lower Tertiary production test on the Jack discovery in Walker Ridge were released in September.

The test not only proved up the prolific nature of the Lower Tertiary horizon, but it helped confirm a huge geological trend extending several hundred miles from Walker Ridge westward through Keathley and Alaminos canyons. The trend is thought to hold billions of barrels of oil in dozens of individual prospects.

In addition to the Shell group in Alaminos Canyon, 50-50 partners Devon Energy and Brazil’s Petrobras have announced plans to develop the Lower Tertiary Cascade discovery in Walker Ridge. The duo is hoping for a 2009 production startup.

Of the 19 exploratory wells drilled thus far by various companies along the Gulf of Mexico’s Lower Tertiary trend, a dozen have resulted in potential commercial discoveries and eight were declared non-commercial.

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