Tanker Offtake System for Arctic: Experience and Challenges Alex Iyerusalimskiy, Marine Engineering Lead The United States Association for Energy Economics Conference (28 – 31 July 2013) Cautionary Statement The following presentation includes forward-looking statements. These statements relate to future events, such as anticipated revenues, earnings, business strategies, competitive position or other aspects of our operations or operating results. Actual outcomes and results may differ materially from what is expressed or forecast in such forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict such as oil and gas prices; refining and marketing margins; operational hazards and drilling risks; potential failure to achieve, and potential delays in achieving expected reserves or production levels from existing and future oil and gas development projects; unsuccessful exploratory activities; unexpected cost increases or technical difficulties in constructing, maintaining or modifying company facilities; international monetary conditions and exchange controls; potential liability for remedial actions under existing or future environmental regulations or from pending or future litigation; limited access to capital or significantly higher cost of capital related to illiquidity or uncertainty in the domestic or international financial markets; general domestic and international economic and political conditions, as well as changes in tax, environmental and other laws applicable to ConocoPhillips’ business and other economic, business, competitive and/or regulatory factors affecting ConocoPhillips’ business generally as set forth in ConocoPhillips’ filings with the Securities and Exchange Commission (SEC). 2 Introduction Two strong trends in world maritime trade can be highlighted over several decades: Seaborne oil trade is steadily growing (might imply increased risk) Oil spills are continue to decline (encouraging) 1970’s 146 bbl/mbbl 3 2012 0.4 bbl/mbbl Introduction Continued 4 4 A Success Story Varandey Year-Round Arctic Marine Crude Oil Offtake System The following technical presentation is only intended to provide an example of ConocoPhillips' past experience in Russia. 5 Varandey Project Overview LUKOIL and ConocoPhillips Joint Venture NaryanMarNefteGaz (NMNG)* Approximate seasonal ice boundary Open Water Tankers to Market Transshipment Point Murmansk Varandey Source: Design Challenges for Large Arctic Crude Oil Tanker by A. Iyerusalimskiy and P. Noble. ICETECH 2010 *ConocoPhillips is no longer a partner in NMNG Joint Venture 6 Varandey Project Overview: Key Components Arctic Shuttle Tanker BLS 7 FOIROT FSO Icebreaker Shuttle Tanker: Key Project Element Design Basis Environment conditions Dynamic area of first-year pack ice in the extreme years up to 1.5 m The ridge thickness may reach 9 – 10 m Ice drift of various directions at FOIROT up to 1.5 – 2.0 knots Air temperature as low as -40oC with -45oC as extreme value Wave height at loading point may exceed 4.2 m The ice transit distance may exceed 250 nautical miles Reliable and safe ice transit to ice-free Murmansk year-round No icebreaker support on transit route Reliable and safe operations at the FOIROT year-round Ice management and tug assistance at the FOIROT are provided 8 Arctic Design Challenges Common design issues to be addressed for any vessel intended for Arctic operations Design Basis Technical Requirements, Specification Arctic Features Ice performance Icebreaking concept and propulsion system Hull form, Resistance and Powering Winterization Ice Class and hull strengthening 9 Varandey-Specific Arctic Design Challenges Maneuverability Ice pressure Backing performance There was no precedent for an icebreaking crude oil tanker of this size No icebreaker support Design Work on schedule 10 No trafficability data No full-scale performance data Very limited full-scale Ice loads data Ice Performance and Hull Form 11 Load case Design Ballast Comments Ahead 2.8 knots 3 knots Astern 2.95 knots 3.4 knots 1.5 m level ice + 20 cm of snow Propulsion and Power ARC 6 Required • 23 MW+ 12 Initial Ice Model Test • 17 MW Specified and Class Approved Power • 20 MW • Ice Q = 1.5 bollard Q Propulsion, Power and Rules Rules on ice class selection need to be validated for large ships Arc 6: Ramming is not allowed Arc 7: Ramming is allowed Eliminating the necessity of backing and ramming provides the opportunity to lower the ice class from Arc 7 down to Arc 6 without compromising safety, but rather increasing it 13 Ice Class and Hull Strengthening The azimuthing propulsion concept improves maneuverability and provides good steering ability while going astern Increased use of backing and Icebreaking astern in ice Changed the icebreaking pattern around the hull Most classification societies have not yet fully adopted changes reflecting this new icebreaking technique Russ ian M aritim e Re giste r o f Shipp ing LU 6 Ice Clas s Re quirem ents A c tiv e ic e b r e a k in g a n d h ig h lo a d s z o n e Podded C-I B -I B-II A I-I B-III M ost s tre n g th e n e d re g io n A-I AI-III Specifi catio n Ice Stre ngthenin g Requ ireme nts C o n v e n tio n a l A-I AI-I AI -II I 14 B-I AI-I B -II AI-III B-III A-I+ Least s tre n g th e n e d re g io n TU R N IN G D IR EC TIO N Varandey Icebreaking Tanker: State of the Art 15 Double hull, twin screw icebreaker tanker is the largest vessel for Arctic today Ice performance equal or exceeds most of modern non-nuclear icebreakers Utilizes bi-directional concept: equal icebreaking ahead and astern New Technology: AZIPODs; Ice Loads Monitoring System Length Overall 257.0 m Length b.p. 234.7 m Beam 34.0 m Design draft 14.0 m Deadweight/Displacement 71254/92047 MT Open water trial speed 15.8 knots at 15.7 MW shaft power Icebreaking capability at 3 kn 1.5 m of ice + 20 cm of snow Propulsion system Diesel-electric, 2 X Azimuthal Units Total installed power 27,300 kW Propulsion power 2 X 10,000 kW Cargo oil tank capabilities (approx.) 85,000 m3 RS Class KM, *ARC6, 2AUT1 “OIL TANKER” (ESP) Effective Ice Loads Monitoring System Purpose: Risk mitigation and safety of ice navigation Potential operational cost reductions Validation of the criteria and requirements to be used for new Arctic ship Validation of ice stress monitoring system concept Ice loads statistics collection and operational data analysis System Bridge Monitor System developed by ConocoPhillips ABS Samsung Heavy Industry 16 Source: The Interim Results of Long-term Ice Loads Monitoring on the Large Arctic Tanker by A. Iyerusalimskiy at.al. POAC 2011 Ice Loads Monitoring System Maximum Bow Pressure Area Curve and Force 10 Pressure_B123934 Pressure_B130813 Force_B224959 Force_B124524 Force_B123934 Force_B130813 Limiting Pressure Max Force Pressure (MPa) 2.536 MN Max Force 1 0.1 0.1 1 10 Area (m^2) 17 100 Varandey Experience and Learning Three 70,000 DWT Arctic tankers have been delivered by SHI shipyard in 2008-2009 and chartered by NMNG First crude oil lifted on June 08, 2008 (five-year operation) Never missed the cargo (Some offloading delays at FOIROT) Over 500 crude oil lifts performed (over 250 MM bbl) No icebreaker escort ever required for transit, but ice management is used at offloading terminal The vessel meets specification requirements, but operational performance significantly exceed predictions 18 120 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 0 Percentage of maximum distance of the year, % 100 80 60 40 20 0 Jan Feb Mar Apr May Jun 19 Jul Speed, knots Varandey Experience and Learning: Average Transit Speeds Aug Sep Oct Nov Dec Average winter Severe winter Speed, Severe winter Speed, Actual. Laden Speed Average winter Varandey: Lessons Learned The challenges and the lessons of the Varandey project could be projected on the design process and operations of other large ships built for a similar purpose Several factors found crucial for Arctic Tanker Offtake System development: Vessel concept should be developed at the early stage of the project State of the art icebreaker tanker requires advanced training of the ship drivers and engineering crew Near real time ice information for transit planning greatly mitigates the risk and improves the efficiency Learning ice regime, currents, tides and other local factors specific to offloading locations is necessary 20 Conclusions and Thank You 21