[Norway] Johan Castberg FPSO

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escveritas
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[Norway] Johan Castberg FPSO

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SEMBCORP MARINE AND STATOIL SIGN FPSO EPC CONTRACT

Sembcorp Marine in December 2017 secured a US$490 million contract from Statoil Petroleum AS on the turnkey Engineering, Procurement and Construction (EPC) of Hull and Living Quarters for a newbuild floating production, storage and offloading vessel (FPSO).

To be deployed at the Johan Castberg field development in the Barents Sea, about 240km from Hammerfest, Norway, the FPSO will have a hull approximately 55m wide and 295m long.

It will be self-contained for harsh-environment operations, with living quarters accommodating up to 140 personnel.

The project is scheduled for completion in the first quarter of 2020
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Re: Johan Castberg FPSO

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Order to Equinor following investigation of the Johan Castberg project

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The Petroleum Safety Authority Norway (PSA) has now completed its investigation of the reasons for the challenges faced in constructing hull and equipment for the Johan Castberg FPSO. Serious breaches of the regulations have been identified, and Equinor has been issued with an order.

Johan Castberg lies in the Barents Sea, 240 kilometres north-west of Hammerfest. The field is being developed with a floating production, storage and offloading (FPSO) facility and subsea templates tied back to this. The planned date for coming on stream in the original plan for development and operation (PDO) was the fourth quarter of 2022. Operator Equinor awarded the contract to build the hull with integrated living quarters to Singapore’s Sembcorp Marine (SCM) in November 2017.

Investigation

The PSA became aware in the first half of 2020 of weld-quality errors in the Johan Castberg FPSO hull. Extensive repair work is required.

An investigation was launched by the PSA to identify the reasons for the challenges in constructing the hull and equipment. This is also intended to contribute to learning lessons for future field developments.

Causes

A number of causes for these challenges have been identified by the investigation.
  • SCM was a new fabrication contractor for Equinor
The operator had not previously used SCM for newbuilding of offshore production facilities. This yard’s experience was primarily with ship repair.
  • Changes in construction sites
The contract specified that fabrication and assembly should take place at the Tuas Boulevard Yard. During the first construction year, fabrication of the living quarters and some of the hull modules was transferred to three other yards.
  • Project organisation
Equinor’s follow-up of the construction contract rested on a desire for a lean project organisation, although the company was aware of the quality, capacity and expertise challenges at SCM.
  • Concentration on project progress
SCM underestimated the scope of front-end engineering design (Feed), but milestones were nevertheless maintained.
  • Follow-up of expertise and quality
Welding expertise and quality control at SCM were inadequate. Equinor failed to get to grips with this problem early enough, and the project’s governing inspection and test plan was not complied with.
  • Risk management and reduction
Several identified risks remained unresolved over a long period, and the seriousness of some increased during the project period. Quality challenges related to welding and consequent delays were initially escalated out of the project and into enterprise risk in connection with the Covid-19 pandemic.

Actual and potential consequences

Actual consequences
The quality challenges meant that the scope of inspecting hull welds increased to 100 per cent, and associated repairs will delay completion by about a year. The project now expected to come on stream in the fourth quarter of 2023, with a consequential reduction in present value as a result of delayed earnings.

Potential consequences
Inspection and repair cannot compensate for inadequate welding expertise. Full inspection of all welds is impractical, nor is it technically feasible for inspection to identify reliably all defects which might be present. Where details and areas are accessible for inspection and repair, some increase will be experienced in the expected need for maintenance and repair. Inaccessible details and areas will have a lower structural reliability than would have been the case if the welding had been done by competent personnel.

Nonconformities and improvement points

The investigation has identified four nonconformities related to
  • risk reduction
  • management of project execution
  • qualification and follow-up of the contractor
  • application of experience in dimensioning own follow-up.
Two improvement points have also been identified, related to
  • information to the licensees
  • verification of fatigue analyses.
Order

The PSA’s investigation has identified serious breaches of the regulations, and it has therefore issued Equinor with the following order.

Pursuant to section 69 of the framework regulations on administrative decisions, see sections 4 and 12 of the management regulations on risk reduction and planning respectively and section 18 of the framework regulations on qualification and follow-up of other participants, we order Equinor to review its systems for identifying risk in critical deliveries and for dimensioning its follow-up of suppliers to its projects, and to implement the necessary measures. See sections 8.1.1, 8.1.2 and 8.1.3 in the report.

The deadline for compliance with the order is 1 October 2021. We must be informed when the order has been complied with.
escveritas
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Re: Johan Castberg FPSO

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Delivery of Johan Castberg FPSO Project by Sembcorp Marine to Equinor for Completion in Norway
Sembcorp Marine completes construction of FPSO hull and living quarters for sailaway and dry transport from Singapore to Norway

Johan Castberg is designed and build to FPSO hull main specifications; Norwegian and PSA regulatory requirements; Norsoks and DNV Class Rules; winterisation and other stringent ocean data prerequisites for uninterrupted operation in the Barents Sea



Singapore, 17 February 2022 – Sembcorp Marine is pleased to announce the completion of the Johan Castberg FPSO (Floating, Production, Storage and Offloading) vessel and its delivery to Equinor. The FPSO has set off to Norway. Sembcorp Marine’s scope of work for the Johan Castberg FPSO vessel comprises the construction of the hull and living quarters.

Johan Castberg is designed to FPSO hull main specifications, including Norsoks and DNV Class Rules, with improved design concept and engineering logic embracing work environment and technical safety requirements, winterisation and other ocean data prerequisites. Johan Castberg, Sembcorp Marine’s first EPC newbuild FPSO, also met the stringent requirements of the Norwegian and PSA (Petroleum Safety Authority) regulatory requirements.

The Johan Castberg FPSO project also attained laudable safety achievements of “Target Zero”, “Zero Harm” and “Safety Starts with Me” goals and recorded 38 million man-hours without serious incidents. The cumulative Total Recordable Incident Rate (TRIR) stands at 0.16, one of the lowest ever recorded for a newbuild project.

Upon final completion in Norway, the FPSO is scheduled for deployment at the Johan Castberg field in the Barents Sea, about 240km from Hammerfest, Norway. The FPSO hull is built to be self-contained for harsh-environment operation, with living quarters accommodating up to 140 personnel onboard.

Mr Wang Zijian, Sembcorp Marine Head of Operations, said: “We would like to thank Equinor for entrusting the Johan Castberg project to Sembcorp Marine. In the last two years, both Team Equinor and Team Sembmarine worked under extreme challenges brought on by the COVID-19 pandemic. Yet both teams remained determined to keep the project going. We witnessed great teamwork and collaboration, open dialogue and close partnership to achieve today’s on-schedule delivery and sailaway, without compromise to high HSEQ (Health, Safety, Environment and Quality) standards and rigorous verification processes.”
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