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began to recede as a result of the oil price supply vessel in the GoM.”

New designs crash. When the economics recover, or possibly Shell contracted the Harvey Energy, “The level of offshore activity has even before then, some new pipelay ves- a 302ft offshore supply vessel to carry dropped signifcantly,” Sano says. “This sel designs could be brought to the mar- equipment, drilling hardware, fuids has impacted the offshore support vessel ket. “I think we will probably see more and other supplies to Shell’s deepwa-

Pipelines feet, such as pipelay vessels, because pipelay vessels designed specifcally to ter operations in the GoM. The Harvey many of the oil companies’ projects have work in harsh environments,” Sano says. Energy sets an example for future pipelay been put on hold or signifcantly moved “For example, Shell has proposed a vessels, with its three dual-fuel Wärtsilä to the right.” drilling program in the Arctic that will engines that can be powered by 99%

Arnstein Eknes, special ships segment need pipelines to fow well production LNG fuel and can be operated for nearly director for DNV GL, agrees. to midstream facilities,” he says. “But, seven days before refueling. “The oil prices will have the effect currently, there are no harsh environment “If used in pipelay vessels, LNG fuel that many new or planned offshore felds pipelay vessels. I think that is some- could enhance fuel effciencies, reduce with a high break-even level will be thing we will probably see in the future, costs and abide by new sulfur and delayed or put on hold,” he says. “The because subsea pipelines make sense, to nitrogen oxide emissions regulations situation today is that the backlog for keep the lines away from ice formations necessitated in the North American companies engaged with planned subsea and bad weather.” Emission Control Area,” Sano says. “LNG activities is quite good for this year, then Another new development is the produces less emissions. It also is cleaner very much weakening next year. Many inclusion of liquefed natural gas (LNG) as it burns inside an engine, so it helps of the EPC companies utilizing pipelay as vessel fuel. “This is a new focus for to lower maintenance costs. Diesel and vessels are reducing their manning to the industry,” Sano says. “ABS has been other liquid fuels leave behind residual adapt to a reduced cost and activity involved with LNG as fuel for OSVs for particulate matter in the engine that level, hence making it more likely that more than fve years now. In fact, earlier causes contamination of the lube oil and the market for newbuild vessels will this year, Harvey Gulf International abrasives that wear down the cylinder remain weak.” Marine introduced the frst LNG-fueled liners over time.”

But, the technical challenge will be to refuel LNG-powered pipelay vessels off-

Pipelay market outlook shore. “There will need to be some type

Audrey Leon spoke with Infeld Systems’ analysts of LNG bunker barge that is capable of

James Hall and Wei Liu to get the bigger picture.

delivering LNG fuel offshore,” Sano says.

According to Infeld Systems, the ofshore pipeline installation market over the next “The lack of bunkering vessels can 12 months will be challenging. Infeld has revised down its three-year forecast for explain why 16 out of 17 offshore vessels pipeline installation capex by approximately 25% as the market downturn tightened. presently fueled by LNG are operating in

Spending for the period is now anticipated to be about 10% lower than the 2012-14 the North Sea where they now have good period, sitting at some US$45 billion.

and close access to LNG bunker terminals

The operators hurt the most during the downturn have been the tier two- and three onshore,” Eknes says. “Without a proper vessel players, Infeld says, while larger vessel operators have opted to make reduc- market within a region for a bunker tions in workers and business segments. Subsea 7 announced in May it would cut its vessel, a pipelay operator will need to global workforce by 2500, and cut 11 of 39 vessels from its global feet. Technip fol- build alliances with the LNG distributor lowed in June saying it would reduce its global workforce by 6000 and sell two of its directly in order to safeguard own bunker vessels. In July, Saipem followed suit implementing $1.4 million cost-cutting program supply. Technically, this is fully possible. that will downsize operations in Brazil and Canada, scrap fve vessels, and reduce

The key question will be if the players 8800 employees through 2017.

fnd it commercially attractive to lead the

Hall and Liu say that Africa will drive pipelay demand growth, however, risks remain race knowing that the full beneft will if low oil prices end up pushing back large scale projects in Angola, Egypt, and Nigeria. come when you have at least two bunker

Additionally, Infeld expects moderate growth in Latin America due to a few gas suppliers available. This is why we do export projects in Brazil and Mexico. Although, by the end of the decade, Australasia a lot of scenario building together with demand will be led by expansion of the Darwin LNG projects, the pair say. North operators and ship designers assessing

America, according to Hall and Liu, will likely see pipelay demand shrink in the coming the long term economics of different fuel years as shallow water activity in the Gulf of Mexico has been negatively afected by alternatives.” the onshore shale boom.

Due to high sanction costs and signifcant capex reductions, Infeld sees European

Diesel-electric engines pipelay activity through 2015-17 will be moderate, with an annual installation of

Another effcient technology is diesel- 1200km. The pair say this is a 50% drop from forecasts a year ago.

electric engines. “These can be used to

However, it’s not all bad news, Infeld expects that some recovery will be felt in 2H provide the right level of power to the 2017, although a 6-12 month lag will experienced by the pipelay feet.

vessel when it needs it, which results in

Hall and Liu say that during the coming two years (2015-16) global pipeline instal- more effcient operations,” Sano says.

lation is anticipated to average 8035km per annum, 33% lower than forecast a year

Earlier vessel designs had a direct- ago. Major delays or cancellations within the coming 12-18 months include the Russia- drive diesel engine powering the propul-

Bulgaria-Romania South Stream trunk line, the Algeria-Sardinia- Piombino pipeline sion. With a diesel-electric design, all of project through Algeria to Italy. The Shah Deniz BW project in Azerbaijan and the the propulsion is electric. As a result, the

Callantsoog (Balgzand) - Bacton (BBL) development in Netherlands. • engines can produce energy as effciently

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