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Interview

with Odd Strømsnes, Managing Director, Technip Norge

02.10.2012 / Energyboardroom

Statoil recently issued Technip with a letter of intent for the Aasta Hansteen spar project – the first spar platform on the Norwegian Continental Shelf and the largest spar platform ever built – how does this award affect the relationship between Technip and Statoil?

The Aasta Hansteen spar project was a very important award for Technip and in my opinion demonstrates the fact that Statoil now increasingly regards Technip as a supplier capable of supporting them across a much wider range of technical fields. Traditionally Technip was more seen by Statoil in Norway as a SURF and subsea provider and with the Aasta Hansteen bid Technip has managed to secure a state-of-the-art floating platform project. In essence, I would say that Statoil is starting to see Technip in a new light.

Moreover Statoil do express their major ambitions in their international expansion and I believe they are increasingly relying on companies like Technip with already a large international foot print. Norway could therefore be a stepping stone for greater collaboration on a global level.

How challenging was the process of convincing Statoil that the spar platform would be the way forward?

We would probably not have secured the Aasta Hansteen project had it not been for all the technical and conceptual work we performed in the past. There was a lot of background work which led up to this project.

The Norwegian continental shelf has several floaters, either a ship-shaped FPSO or traditional semi-submersibles. In some locations in Norway Technip has challenged the use of semi-submersibles, offering our spar platforms as an alternative. Although the Norwegian market is forward-looking, it does take a certain amount of time to introduce a new product of this magnitude into operations.

Technip has therefore been trying for some time to promote spar platforms with Statoil and with Aasta Hansteen we finally found an ideal location. The water at the field is deep enough and therefore ideal for a spar project and in the evolution of technology I believe the spar platform makes sense for Norway in the long-run.

We offered a competitve price and product; backed up by a good execution model which included a cooperation with Hyundai Heavy Industries for manufacture. Another significant factor is that Technip has a fantastic track record in spar platforms having delivered 14 of the world’s 17 spar platforms to date.

What do you see as the technical challenges of this project?

Because this will be the world’s largest spar platform, that in itself presents certain challenges. It is around 200m high and spans close to 50m in diameter which takes this platform into new thresholds of production size.

The NORSOK regulations add a new dimension to this project which we have not seen before in terms of Spar platform delivery.

Obviously the marine operations part of the project, making the platform ready for topside mating and transportation will also be an interesting challenge.

Norway is seen as a global hub for innovative oil and gas technologies. What role do Norwegian oil companies play in promoting the development of these technologies?

Statoil has been quite brave in many instances in promoting new technologies. If you do not have the major oil companies which are willing to take risks and try out new technologies there will simply be less technological progression in the market. One of the big differences between the Norwegian and UK sectors is that Norwegian operators have generally been gutsier in trying out new technologies. And some of these new technologies has also been the pre-requisite for investment decision.

Norway can be viewed as the home of subsea technology, what does it mean for Technip as a subsea specialist to be in this market?

From a subsea perspective, what Technip does in Norway in some areas is quite advanced compared to other regions. Technip has its various centers of competency across the world and in this office we have a very strong welding and materials understanding, both hyperbaric and on land.

One of the experiences of Technip in Norway is in hot tapping operations – essentially going into live producing well streams either with divers or diverless systems, welding a branch pipe to the existing gas pipeline, mounting a large ball valve and penetrating the existing gas line at full pressure and temperature. Hot tapping is something new, -especially remotely based, and fast growing for the industry in Norway. It allows for tie-ins from new fields to existing pipeline infrastructure and saves a lot of capital which would otherwise be invested in export pipelines from these new fields. In addition, companies save money by not having to close down production on the existing field in order to connect the new field.

One of the flagship projects in Norway at the moment is Statoil’s Asgard gas compression project. Together with Statoil Technip has successfully performed the hot tapping operation on this project and the unique aspect of our work on there is that it is the world’s first retrofit T diverless hot-tapping operation. As with many old fields there was no pre-installed T junction for a potential tie-in. The operation therefore involves welding a T piece onto the existing pipeline remotely at a water depth of close to 300m. This is one of several technical areas in which we are strong in Norway, and our applied expertise in this area adds value to Technip overall.

Statoil, ENI and others are now pushing North and deeper into Norway’s third petroleum province which represents many new challenges. How is Technip adapting to this trend?

Technip has already been involved in these Northern projects for a long time having performed all the SURF operations for Statoil’s Snøhvit field in 2005. Now we are performing all the subsea SURF work for ENI on their Goliat field. Technip therefore knows this area very well and how to operate safely and efficiently. No doubt, it is a more risky environment and the distances from the logistics centers makes these projects even more challenging. The Arctic region is also a very sensitive area and we have to be extremely careful in how we operate there.

Actually in terms of the summer season, the weather conditions are actually better than in the North Sea but from September onwards the conditions become severe and you need to have ships and people who understand the weather conditions of the area. There are polar lows which suddenly appear and when you are laying a pipeline or umbilical you need a two to three day clear window – these operational decisions are tough to make and it is imperative that the local competence at the site is high.

An added challenge is the fact that we have limited infrastructure to support our ships in this region. These Arctic operations therefore affect our investment decisions regarding the type of vessels we use. For these developments you need ships with high transit speeds capable of taking a lot of products, so we are investing in new assets and ships which will enable Technip to work on these developments in an even more efficient way.

The competencies we are developing in Norway are not exclusively for the Norwegian Continental Shelf. Technip had also hoped that the Shtokman development would go ahead as Technip would have been in a good position given our Arctic expertise in this region and the SURF operations would have been run out of the Norway office. We will see if other projects start to materialize in the North Western Russian arctic seas.

Helge Lund has referred to the “revitalization of the Norwegian Continental Shelf”. How do you see Technip capitalizing on this opportunity in the years ahead?

The Norwegian the SURF market used to be around four to six billion NOK (USD 700 million to one billion) and is now heading towards 20 billion NOK (USD 3.4 billion). There has been a huge increase in activity and this will continue for years to come. Technip offers competencies and assets which correspond well with what the NCS needs in the coming years. Many tie-backs projects, some will require hot tapping, and the new Barents Sea projects which will need subsea developments will provide a lot of work opportunities for Technip. I also see floating platform projects contributing to our growth in the market. Overall, I am extremely optimistic about the future of Technip in Norway. We need to grow in accordance with the market growth and do what we have been doing – maintaining our market shares and strengthening our technical capabilities.

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