OCS Study BOEM 2019-070 Coastal Marine Institute The Offshore Pipeline Construction Industry and Activity Modeling in the US Gulf of Mexico U.S. Department of the Interior Cooperative Agreement Bureau of Ocean Energy Management Coastal Marine Institute Gulf of Mexico OCS Region Louisiana State University OCS Study BOEM 2019-070 Coastal Marine Institute The Offshore Pipeline Construction Industry and Activity Modeling in the US Gulf of Mexico Authors Mark J. Kaiser Siddhartha Narra October 2019 Prepared under BOEM Cooperative Agreement M14AC00024 by Louisiana State University Coastal Marine Institute Baton Rouge, Louisiana 70803 Published by U.S. Department of the Interior Cooperative Agreement Bureau of Ocean Energy Management Coastal Marine Institute Gulf of Mexico OCS Region Louisiana State University DISCLAIMER Study concept, oversight, and funding were provided by the US Department of the Interior, Bureau of Ocean Energy Management, Environmental Studies Program, Washington, DC, under Agreement Number M14AC00024. This report has been technically reviewed by BOEM and it has been approved for publication. The views and conclusions contained in this document are those of the authors and should not be interpreted as representing the opinions or policies of the US Government, nor does mention of trade names or commercial products constitute endorsement or recommendation for use. REPORT AVAILABILITY To download a PDF file of this report, go to the US Department of the Interior, Bureau of Ocean Energy Management Data and Information Systems webpage (http://www.boem.gov/Environmental-Studies- EnvData/), click on the link for the Environmental Studies Program Information System (ESPIS), and search on 2019-070. The report is also available at the National Technical Reports Library at https://ntrl.ntis.gov/NTRL/. CITATION Kaiser MJ, Narra S (Louisiana State University). 2019. The offshore pipeline construction industry and activity modeling in the US Gulf of Mexico. New Orleans (LA): US Dept. of the Interior, Bureau of Ocean Energy Management, Gulf of Mexico OCS Region. OCS Study BOEM 2019-070. Agreement No.: M14AC00024. 417 p. ABOUT THE COVER McDermott’s DB16 performs installation work for Pemex in the Bay of Campache. (Photo: Business Wire.) Abstract This report examines the Gulf of Mexico pipeline construction industry and empirical data describing pipeline activity levels, correlations among pipeline activity and system attributes, and construction and decommissioning costs. Background information on flow assurance, field development, and pipeline routing describes the primary factors that impact the amount and types of installed pipeline in the region. The offshore construction service industry is reviewed and the basic techniques used in pipeline installation and vessel fleets are described. Pipelay contractors, business models, strategies and risk factors in the sector are outlined. The regulatory framework governing Outer Continental Shelf oil and gas pipelines is described, and the determination of tariff rates for regulated gas pipelines are illustrated. Gulf of Mexico pipeline construction and decommissioning costs are evaluated using public data sources. The report concludes with an empirical review of pipeline activity data and the development of correlations to consolidate activity trends. i Contents Abstract .................................................................................................................................................................. i List of Figures .................................................................................................................................................... viii List of Tables ...................................................................................................................................................... xiv Abbreviations and Acronyms ........................................................................................................................... xvi Summary............................................................................................................................................................. xix Report Organization ......................................................................................................................................... xx Data Sources ............................................................................................................................................. xxii Part One. Background ........................................................................................................................................ 23 Chapter 1. Offshore Development Records circa 2017 ................................................................................... 24 1.1. Offshore Production .................................................................................................................................. 24 1.2. Capital Expenditures ................................................................................................................................. 24 1.3. Deepwater Infrastructure ........................................................................................................................... 25 1.4. World Records Circa 2017 ........................................................................................................................ 26 1.4.1. Longest and Deepest Wells ............................................................................................................... 26 1.4.2. Largest Pipeline Networks ................................................................................................................. 26 1.4.3. Most Northern, Most Southern Fields ................................................................................................ 26 1.4.4. Deepest Pipelines .............................................................................................................................. 26 1.4.5. Longest Pipelines .............................................................................................................................. 27 1.4.6. Longest and Deepest Tiebacks ......................................................................................................... 27 1.4.7. Most Difficult Wells ............................................................................................................................ 28 1.4.8. Most Difficult Pipeline Projects .......................................................................................................... 28 1.4.9. Best Pipeline Construction Cost Data ................................................................................................ 28 Chapter 2. Flow Assurance Issues .................................................................................................................... 30 2.1. Production System Components ............................................................................................................... 30 2.1.1. Pipelines ............................................................................................................................................ 30 2.1.2. Wells .................................................................................................................................................. 31 2.1.3. Umbilicals .......................................................................................................................................... 31 2.1.4. Risers ................................................................................................................................................ 31 2.2. Flow Assurance ......................................................................................................................................... 32 2.2.1. Flow Patterns ..................................................................................................................................... 32 2.2.2. Operational Requirements ................................................................................................................. 32 2.2.3. Oil and Gas Systems ......................................................................................................................... 32 2.3. Oil Phase Diagram .................................................................................................................................... 33 2.4 Hydrocarbon Components ......................................................................................................................... 33 2.4.1. Hydrates ............................................................................................................................................ 33 2.4.2. Waxes ............................................................................................................................................... 33 2.4.3. Asphaltenes ....................................................................................................................................... 34 2.4.4. Resins ............................................................................................................................................... 34 2.4.5. SARA Analysis .................................................................................................................................. 34 2.5 Hydrate Management Techniques ............................................................................................................