By Andrew Cavenagh
Two and a half years and £10m after it abandoned an attempt to dump the 14,500 tonne Brent Spar in the Atlantic Ocean, Shell has a new plan to dismantle the structure at an inshore Norwegian location and re-use most of the steel in the construction of a quay for roll-on roll-off ferries further along the coast.
While the experience of the past two years seems certain to change the way Shell goes about making such decisions, the outcome is unlikely to set any other meaningful precedents for offshore decommissioning.
Greenpeace, whose members occupied the Spar at sea in the summer of 1995 to stop the dumping operation, predictably claimed that it would. The organisation said the decision was a landmark that would pave the way for a permanent and total ban on the sea disposal of redundant offshore installations in favour of re-use or recycling.
However, despite its decision, Shell – and other big North Sea oil companies – say deep-sea disposal should not be ruled out for future decommissioning. The industry advocates a case-by-case approach for the removal of the large steel and concrete platforms in the North Sea, and warns of the dangers of imposing blanket constraints now that could eliminate the best solution to a future problem.
‘Society is well advised to make sure we are not falling into generic solutions,’ said Heinz Rothermund, the managing director of Shell UK Exploration and Production.
The environment ministers of the 15 signatory states to the Oslo and Paris (Ospar) conventions on sea dumping are expected to agree a new framework for offshore installations in July, and the UK and Norwegian governments will almost certainly oppose moves to make the present moratorium permanent.
Shell stresses the one-off nature of the Brent Spar – that the floating storage tank is a wholly different structure to the big steel and concrete production platforms that will be the focus of future debate and that it was consequently suitable for re-use in a way others will not be. The 29m diameter of its main steel hull made it viable to slice it into sections to form the caissons for the quay at Mekjarvik. The smaller diameter steel tubes in platform jackets could not be recycled at anything approaching economic cost.
‘It’s a unique re-use solution for a unique structure,’ said Rothermund.
The oil company’s extensive examination of disposal options for the Spar over the last two years have also shown that onshore solutions can involve significantly greater technical and safety risks. Shell rejected four of the seven shortlisted proposals – for which the companies involved were paid £250,000 – because they involved an unacceptably high risk of structural failure, even collapse.
‘Let’s say we were uncomfortable with the stress levels they were using,’ said Eric Faulds, Shell Expro’s decommissioning manager.
The choice of the proposal put forward by the Anglo-Norwegian Wood-GMC venture over the sea-disposal option was also influenced by substantial increases in the anticipated cost of sea disposal since 1995. Faulds said the £4.7m fee for towing it to the original disposal site would probably rise to between £17m and £20m if the company were to try to pursue the option now.
This is because it would take at least two years to carry out the consultation exercise now required under the Ospar regulations and to undertake further necessary site surveys. There would also be additional storage, maintenance and project management bills. The integrity of cathodic protection on the Spar’s hull might also not last that long. ‘We would have to seriously look into its capability.’
The contracting venture’s bid price of £21.5m (which will rise to a total cost of £23m-£26m) was no longer that much higher, and it offered a more rapid solution. Wood-GMC would have to meet the construction timetable of the Mekjarvik quay, which will be built with or without caissons from the Spar, and is scheduled for completion in 1999. By contrast, Faulds said deep-sea disposal could not happen before 2001. ‘We concluded that the additional costs were acceptable.’
The Mekjarvik timetable imposes a time limit on Shell’s preferred option. The project still requires the approval of the UK and Norwegian governments, and Shell must then select a site to carry out the dismantling and secure the necessary consents. This all needs to be done in time to allow preparatory work to begin this summer and cutting-up of the hull to start in September.
If this schedule cannot be met, Faulds said Shell would have to go back to one of the other proposals. ‘They’re still on the table.’