10.2 FABRICATION AND CONSTRUCTION
Steel Supply
Steel supply to the Offshore Oil and Gas market for fabrication and construction is a
key driver in this sphere of activity. Without steel there is no fabrication and
construction industry.
Fabrication and Construction
Given a supply of steel plates to the required specifications and sizes, the process of
fabrication and construction is split into two defined activities, leading to delivery of a
final product.
Fabrication can be defined as the manufacture of steel components to the correct size
and quality, whilst construction (or assembly) is the assembly of components to form
a structure that will be used in an offshore or onshore environment, located in a
remote site.
Fabrication brings together:
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Steel plate or sections
Work shop tools for making the components
Skilled labour to cut, weld and operate the machines to deliver a quality
product
In support of the fabrication endeavour, certain other services are provided that add
value to the chain of events:
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Provision of workshop drawings that take cognizance of the machinery
available and specify step by step manufacturing requirements.
The provision of inspection services to check and monitor the component
criteria versus the specification requirements. In addition, the coding
requirements of personnel to meet the specification requirements.
Provision of consumables and small tools that are used in the manufacturing
process. (welding rods, gasses, cutting discs etc.)
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Construction (or assembly) on the other hand, takes the components produced by the
fabricator and assembles these components into a finished structure. In support of
this activity, construction depends upon:
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A level clear site with quayside frontage
Cranes of various varieties and lifting capacity
Scaffolding to reach workfaces at height
Construction tools and consumables
Skilled labour that can assemble and integrate the components into a
completed structure
Support from a detailed engineering entity that details the temporary works
to support the permanent construction activity
Inspection service to code (qualify) the labour force
Inspection service at the workface and the completed structure
Quite clearly, fabrication and construction are different phases although they are
integral in producing the finished product. The common thread however, is the supply
of steel. Without steel, whether sourced locally or internationally, there can be no
fabrication or construction industry.
Assembly of Jacket Structure at Saldanha Bay
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Modifications and Conversions of FPSO’s
Wet Quayside Modifications are modifications that can be made to the hull and the
topsides without the need for a dry-dock facility. This is the way the Glas Dowr was
done at A Berth.
Dry quayside or Conversion means modifications to the hull which will require drydocking facilities to expose the hull, implement the modifications, paint and certify
before release for wet quayside modifications.
The key element missing from our facilities in the Western Cape is to have a
sufficiently large dry dock to accommodate VLCC's for the conversions of FPSO's. It
appears that if we really want to be hub for West Africa, dry-docking facilities must be
provided to entice operators to use Western Cape as base. Naturally, a dry-dock is a
large investment and requires sustainable business. The use of the dry-dock would be
primarily for offshore oil and gas vessels supplemented by general cargo and
container vessels.
Logistics
In the competitive world, the logistics and costs associated with moving steel plates or
sections from a producing plant to a fabricator; and from a fabricator to a constructor
are debilitating.
The ideal scenario is to have the steel producing plant feeding the fabricator, who then
feeds the constructor, all in close proximity to each other. This perfect scenario does
exist at a few locations around the world, making them the most competitive in a tough
market.
Scenario in South Africa for Structures
In South Africa, the vast majority of heavy industry is situated in the Gauteng region
supported by a constant flow of business from the mining sector. There is a much
smaller industry in Durban that is fast disappearing. Cape Town and Durban both
have ship repair facilities. The ship repair businesses are considered to be "ship
panel beaters" if compared to the skills and art required for the fabrication of offshore
structures.
Steel producers are also situated in the Gauteng region.
Due to their size, offshore structures must be assembled at the coast on a site having
quayside facilities. As a result the ideal scenario in which all resource needs are close
to hand cannot be achieved and a compromise solution must be sought.
Compromise Solution for Structures
The compromise solution in South Africa which is not cost effective is:
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Steel supply from the steel producers must be located in Gauteng.
Fabrication of components must be done in the Gauteng region.
The fabricated components must be transported to the coastal construction
(or assembly) site, incurring major additional cost.
Assembly of the structure is then carried out at a coastal site ready for loadout and sail-away.
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This need for compromise has resulted in contracts being lost due to noncompetitiveness and should only be tolerated until a source of steel and fabrication
facilities are available at a coastal location.
Hurdles to Success
As South Africa and the Western Cape are competing with other regions and
countries for its share of the offshore market, clients are looking at competitive
solutions for their developments.
In order for South African industry to succeed in securing these projects, certain basic
services must be met. Without these basic services, there is a slim chance for South
Africa or the Western Cape to participate. These are:
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The supply of steel to the correct specification and quality at a competitive price at
the coastal area. Although Iscor produced the steel for Mossgas and other
developments to offshore specifications as a “once off” basis, it is anticipated that
they will not change their production run to accommodate the offshore needs.
Discussions at higher level must be conducted with Iscor to gauge their willingness
to support the Offshore Industry. Steel can be imported at a competitive rate from
overseas, but because of transport costs and time delays this could contribute to
the clients looking elsewhere for this service.
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An integral part of offshore structures is the fabrication of components required for
jackets, TLP’s etc., as nominated in the schedule attached. Discussions have
been held with identified fabricators in an effort to engender interest in the
Offshore Industry. Without fabricators, there is no possibility of South Africa being
able to service the fabrication and construction of offshore structures.
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Once the components have been fabricated, an assembly/construction contractor
must be appointed to assemble the fabricated items into an integrated structure.
Discussions are being held with industry to establish the interest in participating in
the Oil and Gas Industry.
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Skills’ training of the labour force is essential to make a success of an offshore
project. The skills that were developed from the Mossgas Project and the
Intershore Project have now dissipated. An essential part is to train the labour in
welding, scaffolding and various trades that are essential to the offshore industry.
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The provision of a dry-dock for conversions of FPSO’s
Actions Required for Final Report
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The price of steel from Iscor is pegged artificially at an international level. This
aspect has to be addressed by Iscor to make our fabricators more competitive.
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On the training front, funds have to be allocated for training of our skilled workers.
This is particularly relevant to welders, boilermakers, fitters and scaffolders.
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The Saldanha site has not been maintained and needs upgrading/enlarging for
use in the offshore industry. Brackets and bolts have corroded on the skid beams
where the jackets or tripods have to be assembled. The special timber has been
removed on which the structure is positioned.
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The accommodation on the Saldanha site has to be upgraded so that the skilled
workers can be accommodated on site.
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The channel that was dredged from the Saldanha site to the open sea has now
partially silted up.
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Investigate the location of a dry-dock, investment cost, operator and a business
plan.
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