Powering Brazil’s energy bonanza

Huge ships called floating production, storage and offloading (FPSO) vessels have made Brazil’s offshore oil boom possible. Siemens recently signed a deal with shipbuilder MODEC to provide turbines and compressors for the Carioca, the newest vessel set to exploit the country’s rich “pre-salt” reserves.

By Chris Kraul

One of the global energy industry’s most compelling success stories of the new millennium was Brazil’s discovery of up to 50 billion barrels of crude oil lying beneath the ocean floor in its deep Atlantic waters. Since production began in 2009, Brazil’s development of its offshore “pre-salt” reserves has made the South American country the world’s ninth-largest oil producer and has converted it from energy importer to energy exporter.

 

MODEC, a Japan-based shipbuilding company controlled by Mitsubishi, has played a key role in helping the South American nation exploit its rich energy reserves by supplying a critical link in the production chain: floating production, storage and offloading (FPSO) vessels. So far, the company has delivered twelve FPSO vessels to Brazil’s state-controlled oil company Petrobras.

A multitasking ship

Costing up to US$1.8 billion each, FPSOs perform multiple functions by pumping up fluids and natural gas from the subsea reservoirs that lie a mile or more beneath the ocean surface and then separating out the crude and associated gas from water and impurities. The FPSOs then store the hydrocarbons for future transfer to shore via shuttle tankers. The vessels also come equipped with high-power compressors to reinject treated water and CO2 back into the wellhead.

 

MODEC ships are self-sufficient behemoths. They can process up to 180,000 barrels of crude per day and store more than 1.4 million barrels. They are fueled mostly by the associated natural gas that is pumped up along with the crude, obviating the need for huge fuel supplies. Without FPSOs, Brazil’s exploitation of its offshore “pre-salt” region would have been impossible, says MODEC Vice President Puneet Sharma.

 

“They have provided Petrobras with the solution to developing its ultra-deepwater fields,” says Sharma, who is based at the company’s Houston office where he heads the company’s Atlantic Project Development group.

They [the FPSOs] have provided Petrobras with the solution to developing its ultra-deepwater fields.

Puneet Sharma, MODEC Vice President

Maximum power, minimum space

With new FPSOs growing in size – MODEC’s latest vessel is three times larger than its original model unveiled in 1986 – and with designs calling for increasing processing capacity, the vessels’ power plants have taken on an increasingly critical role, and that’s where Siemens comes in. After signing a contract with Petrobras to deliver the giant Carioca FPSO in 2020, MODEC selected Siemens to supply the power generation piece to consist of four SGT-A35 aeroderivative gas turbines, each capable of generating 30 megawatts of electricity.

 

“It’s an engine that has evolved over time to produce more high-density power which you need offshore: the highest amount of power in the smallest amount of space,” says Eric Carlos, Siemens’ Vice President for Americas Oil and Gas in Houston.

 

MODEC’s Sharma says a prime selling point of the Siemens power package, the first that Siemens has sold to MODEC, is that it will be fully integrated with prime recipients of that power: two SGT-A35-driven DATUM CO2 compressor units (also made by Siemens) that will reinject CO2 associated with the crude back into the deep-sea reservoir.

Acquisitions made the deal possible

The MODEC deal was made possible by two Siemens acquisitions that are now bearing fruit in the marketplace. The first was the company’s purchase of Rolls-Royce’s Energy division, followed by its acquisition of Dresser-Rand. The combination made possible Siemens’ design of an integrated power generation-compressor solution occupying the least amount of on-board space.

 

MODEC’s Sharma says the deal with Siemens broke his company’s long-standing custom of using only GE gas turbines. “With its acquisition of Dresser-Rand and Rolls-Royce Energy, we were willing to give Siemens a try,” Sharma says.

 

To achieve economies of scale, FPSOs must operate efficiently and continuously – not just to keep the processed product flowing but also “to limit human servicing visits,” which can be extremely costly because of the ships’ distance from the mainland and transportation expense. That imperative plays to Siemens’ strengths, as efficiency and dependability have long been company hallmarks, Carlos says.

The reliability imperative

“With their topsides filled with processing equipment, the challenge in building FPSOs is their complexity,” Carlos says, adding that the Carioca is being constructed in China with final assembly in Brazil. “How do you deliver it on time, fill it with components that will work reliably for 20 or 25 years under difficult conditions at sea, and at a reasonable cost?” Carlos asks.

 

About 32 MODEC FPSOs are now deployed around the world wherever there is deepwater oil and gas production – from Angola and Australia to Mexico and Vietnam. And after two years of low demand caused by low crude prices, orders have begun to pick up again. Market analyst IHS Markit reports that 50 FPSOs are scheduled for delivery industry-wide through 2022. MODEC and Netherlands-based SGM Offshore, the world’s two leading builders of FPSOs, likely will get the lion’s share of orders.

“Pre-salt” production in its early stages

Some of those anticipated orders likely will come from Petrobras, since the tapping of Brazil’s “pre-salt” riches, a resource province that extends for 800 kilometers along Brazil’s Atlantic coast, is still in its early stages. Some analysts believe Brazil could be producing more than 6 million barrels of oil a day by 2035, more than twice its current output, thanks largely to “pre-salt” wells.

 

Assuming those projections pan out, the market for Siemens’ integrated power and compression packages should continue to grow as well as other Siemens product lines that go on FPSO topsides including water treatment and automation systems, instrumentation systems and electrical controls.

 

“We have won contracts for four FPSOs in the last 18 months, and we have been able to pick up shares in this business,” Carlos says. “The market clearly values our acquisitions of the Rolls-Royce industrial unit and Dresser-Rand, and is excited to see these added to our portfolio,” Carlos says.

2018-11-07

Chris Kraul: Freelance writer, covers Latin America for the Los Angeles Times

Picture credits: Modec International Inc.

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