The Good Oil on Kupe

Development of the Kupe Gas and Condensate Field off Taranaki, due to start producing by mid-2009, is not only going according to schedule, but has also introduced a major innovation to local industry and broken a world efficiency record. The gas field is in the offshore Taranaki Basin approximately 30 kilometres off the coast and in water depth of about 25 metres. Discovered by New Zealand Oil and Gas Ltd (NZOG) in 1986, Australian Origin Energy develops and operates Kupe on behalf of the Joint Venture participants Origin Energy Resources (Kupe) Ltd with 50 percent share; Genesis Power Limited with 31 percent; NZOG with 15 percent; and Mitsui E & P (New Zealand) Limited with four percent. The field has approximately 254PJ of reserves and, over the next 20 years, is expected to supply 15 percent of New Zealand’s current gas demand, produce LPG and produce nearly 15 million barrels of light oil. NZOG opened the reserve in 1986 with the drilling of the Kupe South-1 exploration well (KS-1). Next came the Kupe South-2 (KS-2) well in 1987, and the Kupe South-3 wells and 3a sidetrack (KS-3), drilled in 1988. These three wells form the basis for the Kupe Central Field Area (CFA) development. The primary reservoir of the CFA is the Palaeocene Farewell Formation. KS-2 and KS-3 encountered a stratified hydrocarbon reservoir with a significant oil column underlying a thick natural gas column. There are other potential prospects in the Kupe mining permit area, which may add to the longer-term picture on reserves in future. The big picture In September 2006 Origin awarded global construction specialist Technip the contract for the overall development of the project. The contract will be executed in an alliance arrangement, with executives from Origin Energy Limited and Technip leading a team sourced from both companies. It comprises the design, engineering, procurement, installation, construction, pre-commissioning and commissioning of an unmanned wellhead platform capable of supporting six wellheads and future satellites; a 12-inch multiphase pipeline to shore and an umbilical from the platform to shore; a horizontal, directionally drilled shore crossing; onshore processing facilities; an export pipeline for sales quality natural gas; and loading bays for LPG and condensate. The project kicked off officially on 14 October 2006, when local iwi blessed it, and road works and site preparation for the onshore production station began. The wellheads and platform ENSCO Oceanics International won the contract to install the project’s wellhead platform jacket and topsides and drill three wells to a vertical depth of 3400 metres each. The drilling rig ENSCO 107 arrived in Taranaki in October 2007 to do the job. The platform has six well conductors, one inside each leg and two others within the platform. It will be unmanned and remotely controlled from the production station. It has a heli-deck for operational visits, and the platform and pipeline to shore’s design allows for tie-in of satellite fields. The pipeline and shore crossing Technip’s Apache pipe laying vessel finished laying the pipeline and umbilical between the platform and the Hawera production station in mid-February this year. According to Origin, the way this was performed is a first for New Zealand. Usually pipes are welded together onboard a ship or barge and then laid off the back of the vessel. In this instance, subcontractor McConnell Dowell Constructors Limited manufactured three 10 kilometre lengths from 12-metre length pipes in Picton. The Apache picked up the three lengths from Picton and laid the 30 kilometre-long 12-inch pipeline and umbilical on the seabed. The pipeline stays stable through a combination of rock, armouring, self weight and trenching. The Apache allowed the pipeline to be reeled off the back of the ship easily with much less risk of weather downtime. The pipeline was laid without delays. The umbilical contains a 33KV power cable, an embedded fibre optic communication cable, and three 75mm pipelines to take pour point depressant, MEG, and corrosion inhibitor to the platform. Approximately two kilometres of the pipeline and umbilical run through two tunnels drilled under the coastal cliffs, to connect with the production plant 800 metres back from the cliff top. Drilling contractor Drilltec finished the tunnels, performed by horizontal directional drilling, in late 2007. Origin says the Drilltec contractors broke a world record with this work. It is the longest shore approach ever completed through horizontal directional drilling with forward thrust installation of the pipe. The drilling was also very accurate. Both the umbilical and main pipeline sub-sea exit points were within metres of their target, 2.2 kilometres offshore. The vessel Pompeii laid a rock mattress along the seabed immediately before the tunnels for the pipeline and umbilical to rest on. The mattress smoothes out the undulations caused by boulders in the area and adds stability to the pipeline and umbilical. The production plant The production plant, located 12 kilometres west of Hawera, will process the incoming gas to meet planned production rates and the main gas transmission system’s specification, and will separate out the condensate and liquid petroleum gas (LPG). Auckland-based mechanical engineering firm Robt. Stone, the main mechanical fabrication and site construction and installation provider, started work on the plant in September last year. The company is owned by Australian Tenix Alliance, a member of the Tenix Group. Robt. Stone general manager Craig Brydon says the contract brief covers fabricating, delivering and installing eight pipe-rack modules; installing 34,000 metres of piping and 90 tonne of pipe supports; the onsite fabrication of eight steel process tanks; and all painting, fire protection, including applying intumescent paint, and insulation on the production plant. The company commissioned Auckland subcontractor Graysons Engineering Ltd in October 2007 to make the structural steel pipe rack. Brydon says these are some of the largest structural steel modules ever fabricated in New Zealand. Each module weighs up to 150 tonne and is eight metres wide x 10 metres high x 210 metres in total length. In total, 840 tonne of structural steel and 350 tonne of pipe spooling are going into the eight modules. Graysons made each module in a top and bottom section, each section weighing around 75 tonne. Tranzcar Heavy Haulage then road freighted half a module per truck to New Plymouth via a special route that could accommodate the wide load. In New Plymouth, Robt. Stone fabricated and installed all the pipe work into the pre-fabricated structural pipe rack modules. On completion of this work each module was individually transported to the Kupe site, where a 260-tonne capacity crane was used to lift each top module into place. At the time of writing in March, modules One, Two, Three, and Six were in place on site and Robt. Stone was in the process of connecting the modules together. Modules Four and Five were getting their final touches in the New Plymouth workshop. Grayson’s was painting and fireproofing Module Seven and manufacturing Module Eight in Auckland. Installing the piping and pipe supports also required some fancy footwork. Eighty-five of the 100-strong Robt. Stone New Plymouth tradesmen team recently started work on the project. Brydon expects the job to be completed by early 2009. Robt. Stone engaged subcontractors Stork Cooperheat, M&I and SGS from New Plymouth to carry-out the non-destructive testing and statutory inspection work respectively. The quality control subcontracting team numbers around ten. Robt. Stone started work on the on-site fabrication of the eight steel process tanks in late February. The tanks range from six metres to 15 metres in diameter and are up to 12 metres high. Brydon says the work will be completed by the end of July. In the operational plant, pipeline specification gas will go into the main gas transmission system. Condensate will be shipped by truck to Port Taranaki for sale to refineries in New Zealand and overseas, while LPG will be shipped by truck to the local New Zealand market. Given Taranaki’s strong weather and sea conditions, the Robt. Stone team also had to construct a purpose-built outdoor facility with portable shed to provide shelter during rainy day work. Protection is paramount Rain is, however, not the only element the project infrastructure has to guard against. Robt. Stone is also responsible for managing coatings, fire protection, including applying intumescent paint, and insulation on the production plant. Altex Coatings and Akzo Nobel are jointly contracted to supply protective coatings for the new production plant. The Taranaki service provider subcontractor is TBS Coatings. TBS Coatings New Plymouth projects manager Chris Kleinsman says the Kupe project is a “really big one” – not only for Taranaki, but also the whole country. The 20 tradesmen allocated to the project complete coatings pre-work in TBS Coatings’ Bell Block factory, just north of New Plymouth. They apply industrial coatings on all locally fabricated structural steel and piping prior to pre-assembly at the Robt. Stone workshop and transportation to the production station. Work is completed by both conventional spray and high-pressure airless spray. “The coatings specifications are developed to ensure that the plant is protected for its design life. Our job is to put selective coatings on selective areas of plant, depending on operating temperatures and environments to protect it against corrosion and fire,” says Kleinsman. Work began in October last year and TBS Coatings expects the majority of pre-coatings to be completed in the factory by November this year. As the structural and piping is installed on site, a touch-up team will mobilise to the site to repair welding and installation damage. Says Kleinsman: “The Kupe Alliance is running a tight ship, they expect top performance, and they need to ensure pre-fabrication schedules are met. This is what engineering is all about…it’s great to be part of this project. “TBS Coatings was built from the Taranaki petrochemical industry and companies like ours are tailor-made for projects like Kupe.”

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