Subsea 7 is contracted to install the flowlines for US operator Marathon Oil's Droshky subsea tie-back project later in 2009, with the first pipe welded and spooled out of Port Isabel this year.
About 36 miles (58 kilometres) of eight-inch diameter pipe will be welded, spooled and loaded on to the pipelay construction vessel Seven Oceans for installation offshore.
The dual insulated flowlines will create a pigging loop and tie back the Droshky six-slot subsea manifold to Shell'sBullwinkle fixed production platform. Project work at the spoolbase could be well under way by June.
Subsea 7 commercial director Stuart Cameron says it was a tremendous achievement signing a deal with Marathon for work originating at a spoolbase that at the time had not yet been completed.
However, Cameron believes that while projects may get pushed to the backburner due to declining capital expenditures, the deep-water market in the Gulf of Mexico remains strong for the long term.
“The key at the moment is to ensure that the cost basis going forward is correct,”Cameron says.“We are going through major efforts at the moment to get those costs under control to ensure we can drive the supply chain down and then ultimately we can deliver back to stakeholders, clients and shareholders.
“It's going to be really tough,”he adds.“The more cost we can get out of the system from our supply chain right through the business, the better shape we'll all be in, and that's what we're focused on. We can't cut everything back to the bone and then expect to respond.”
Subsea 7 has laid spooled pipe before in the US Gulf. In 2006, the contractor installed the flowlines for Chevron's Blind Faith deep-water field development with pipe spooled in Scotland. Before that, in 2003 and 2004, Subsea 7 did similar work for Shell and ExxonMobil leasing a competitor's spoolbase.
In 2008, Subsea 7 decided to enter the deep-water pipelay market and invest in a new spoolbase in Port Isabel.
The decision was made easier with the newest arrivals to the fleet, sister vessels Seven Oceans and Seven Seas, which were launched in 2007 and 2008, respectively.
“They were really game-changers that enabled us to look at ultra-deep water, heavy top-tension pipelay capability,”says Cameron.
Seven Oceans, in particular, is intended to stay within the so-called Golden Triangle, shuttlingas needed between the points of deep-water West Africa, Brazil and the Gulf of Mexico.
“The missing piece of the jigsaw since that boat came out has been a spoolbase here in the US Gulf,”says Cameron.
Subsea 7 spent considerable time carrying out due diligence to choose the right site among seven different locations around the US Gulf coast. Eventually, Subsea 7 chose Port Isabel.
“The community wanted us there,”explains North America operations manager Greg Donnelly.“It wasn't us selecting the place and then fighting with various environmental issues.
“The work ethic prevalent locally seems to be fabulous, and the quality of people, the skill sets that we've seen, have reinforced what I thought was that there is a huge, relatively untapped resource of highly skilled and motivated people who are keen to come work for us.”
That talent pool is available in part because of the influence of the Keppel Amfels fabrication yard in Brownsville, Texas, not far from Port Isabel.
For normal, 12-hour operations the spoolbase will employ about 90 people, Donnelly, says.
If the spoolbase gets really busy, Subsea 7 can expand to double shifts, increasing the number of workers by about 40. That is just for one firing line. The base has two firing lines available, so the level of employment could keep ratcheting up until both firing lines are occupied.
“Port Isabel will be the best spoolbase we've got worldwide,”Cameron says, since being the newest it benefits from efficiencies learned from other bases, such as the one at Vigra in Norway.
Subsea 7 has expanded from the days of just 15 employees in Houston looking after remotely operated vehicles to number about 200 people today.“We established ourselves here in 2001,”says Cameron.“Since then, we've grown the business substantially.”
However, today, the future is cloudyas the global recession lingers on.
“The picture is different at the moment, from what it was last year when we pulled the trigger to invest,”says Cameron.“There's no doubt that the quantity of opportunities has gone down in the immediate future.
“There's no doubt there will be a delay to some of the significant projects that are ongoing. Some of the major hub developments that were going to come online in 2010 and 2011, we've seen them move back a year, and sometimes more. There's no doubt that will impact us.”
However, Cameron says he is still seeing small tie-backs come on the market that can use the assets Subsea 7 already has here.
“There are still clients who want to get step-outs done in ultra-deep water,”he says.
