Ongoing innovation is critical to drive the pipeline industry forward and ensure the development of new designs and materials that meet requirements for safer, smarter and greener operations.
However, a recent industry benchmark report from DNV GL based on research among over 900 senior oil and gas professionals, shows that pipeline related innovation is prioritised by only 4% of these said professionals. Further, nearly one in five oil and gas companies (18%) do not have a strategy in place to maintain innovation.
Despite a lack of focus on long-term innovation, there are positive signals that the industry sees the potential for collaboration to drive innovation in a cost-constrained environment. The most common strategy for maintaining innovation with lower budgets is to increase collaboration with other industry players (45%). In today’s oil price climate, standardisation is also important for the industry as a way to drive cost-efficiency while enabling flexibility in design.
DNV GL’s industry outlook research revealed that six in 10 (61%) respondents agree that operators will increasingly push to standardise their delivery globally, up from 55% in 2015 and 52% in 2014. Yet, despite this enthusiasm for standardisation, there is still a lack of governance and a degree of conservatism in the industry that impede the process of standardisation.
Joint innovation and smart standardisation are critical to reduce over conservatism in industry codes, and to strip back additional requirements imposed by various companies on top of the codes’ requirements. The industry needs to get the balance right on when to trust and when it is necessary for a company addition, keeping in mind the cost implication for the industry of adding on top of agreed standards. Trust needs to be built through improved co-operation, with all parties pulling together in the right direction.
Industry wide standardisation will not only help reduce costs, it will also increase predictability for the supply chain, reducing lead-times. Over the years, DNV GL has facilitated a vast number of industry collaborations, capturing best practice into flexible industry standards, allowing innovation to evolve within safe and cost-effective frameworks.
The pipeline standard DNV-OS-F101 is an example of what industry collaboration can achieve, regardless of the peaks and troughs in oil price. It provided firm guidance for design, construction and operation, and has been used for many high profile projects, such as the North Sea’s Langeled and Polarled; Australia’s Wheatstone and Ichthys; and South Stream, Black Sea. It has been translated to Russian and is used as the governing Russian standard for offshore pipelines. All pipelines on the Norwegian Continental Shelf, including both flowlines and trunklines have been designed to comply with the standard. On the other side of the globe, national standards in Australia specify that the safety, design, materials, fabrication, installation, testing, commissioning, operation, maintenance and abandonment of submarine pipeline systems must be in accordance with DNV-OS-F101.
Due to close collaboration between DNV GL and the pipeline industry, the standard is developing further to meet and address new technical demands in the industry over the decades. The DNV GL Pipeline Committee is one example of this collaboration, where 30 leading companies in the industry meet twice a year to discuss challenges and priorities.
The company has recently launched two JIPs. The ‘Affordable composites for the oil and gas industry JIP’, which aims to reduce the cost of qualifying composite components for subsea use by replacing large-scale tests with certification by simulation.
The driver for the ‘New material solutions for flowlines JIP’ is to explore cost savings by use of high frequency welded/submerged arc welded (HFW/SAW) pipes. Within the envelope of production parameters, these may be a very attractive alternative to the traditional seamless pipes, due to their lower cost and shorter delivery time. If successful, it is estimated that the two JIPs could deliver a combined saving of between US$6 - 8 million in pipeline material cost for a typical 30 km flowline.
Challenging over-conservatism within existing design standards is part of the success of DNV-OS-F101 and associated RPs. In 2012, the company funded, developed and shared with the industry a new pipeline concept, X-Stream, which targets cost reduction for deepwater gas pipelines.
Developments in the standard are tested in a global network of laboratories and test centres. For example, the company conducts large and full-scale testing of pipeline materials at its Spadeadam Testing and Research Centre, such as the properties of fluids or the use of novel materials that require testing of materials. Spadeadam conducts full-scale fatigue and burst tests and has a unique capability in being able to conduct full-scale fracture propagation experiments with steel transmission pipelines ranging from 36 - 52 in. dia. The fracture propagation test facilities are each over 300 m in length to ensure correct decompression behaviour within the central 100 m test section.
The delay and cancellation of a number of high profile oil and gas field developments is testament to the challenge currently facing the oil and gas industry to reduce cost and improve efficiency. Limiting capital expenditure (CAPEX) and operating expenditure (OPEX) for pipeline projects has become an essential project goal.
Against this backdrop, standardisation has become even more critical for the industry, since it enables flexibility in design. This optimisation results in cost-efficiency while maintaining an acceptable safety level. According to Jostein Breivik, Chief Engineer Pipeline and Transport Technology, Statoil ASA: “Continuous development and improvement of DNV GL’s pipeline standards have paved the way for cost-efficient offshore pipeline systems – a key contributor to value creation in Statoil’s successful development and safe operation of pipeline networks.”
While the industry is understandably preoccupied with generating shorter term value, it is important that decision makers across the sector keep an eye on where longer term value and efficiency gains can be made. Collaboration is key here. Finding solutions in a neutral setting to develop industry standards and adopting them wholeheartedly will enable innovation while safely reducing costs.
Written by Kristian Markegaard and Ali Mirzaee-Sisan at DNV GL - Oil & Gas, and edited from published article by Stephanie Roker
Read the article online at: https://www.worldpipelines.com/special-reports/06052016/prioritising-pipeline-standardisation/