“Six of the Best” from Siemens to RioMaking it big in Brazil, a total of six gas compressor-trains, the largest, most powerful andmost complex of their kind, have been installed on two giant FPSO—Floating Production,Storage and Offloading—vessels in Rio de Janeiro. Designed and built at Siemens’ Duisburgplant and due shortly to enter service in Brazil’s newest offshore deepwater oilfields, the compressor modules are a vital component of the huge and technically-challenging US$2.6billion project for state-owned oil major Petrobras.

WEDNESDAY SEPTEMBER 29TH _ WINDY, SLIGHT OVERCAST, 24ºC. MEETING AT SIEMENS OFFICES AT MAUA-JURONG SHIPYARD, NITEROI.SAFETY BRIEFING FROM KBR. ISSUED WITH HELMET, SAFETY GLASSES, OVERALLS, BOOTS. FIRST VISIT TO P43.

THURSDAY SEPTEMBER 30TH _ LOW CLOUD, MIST, INTERMITTENT LIGHT RAIN, OCCASIONAL HEAVY SHOWERS, 18ºC. AT SHIPYARD CHANGE INTOFULL SAFETY GEAR, CLIMB 20 METER ACCESS GANTRY WITH ALL PHOTOGRAPHIC EQUIPMENT TO MAIN DECK OF P43.

FRIDAY OCTOBER 1ST _ LOW CLOUD, MIST, INTERMITTENT LIGHT RAIN IN PM, 22ºC. MEETINGS WITH SIEMENS STAFF ON-SITE; INTERVIEWSWITH SERGIO DELLA LIBERA, TURBOMACHINERY ENGINEER, PETROBRAS. AND ALAN OGUNMUYIWA, KBR MATERIALS & PROCUREMENT MANAGER.

V E N T U R E _ J A N U A R Y 2 0 0 5 _ F O C U S _ 0 7

As traditional global reserves of oil and gas become increas-

ingly exploited, the offshore industry has begun to move

more and more to the development of less accessible fields.

These include deepwater and even ultra-deepwater reservoirs

where water depths can be in excess of 1,500 meters. Where

mature technologies for drilling and production have hitherto

provided cost-effective and economically viable solutions, a

relatively select band of specialist companies is now at the

forefront of technological development. Innovative systems

are now being employed which allow a new generation of

equipment suppliers and oilfield operators to exploit recent

—and frequently far smaller—discoveries at greater subsea

depths, the ‘final frontier’ for offshore hydrocarbon explora-

tion and development.

MEETING THE CHALLENGESince the late 1990s, nearly 12 billion barrels of oil equivalent

have been brought into production from some 79 deepwater

fields by Petrobras and other major international companies

specializing in deepwater operations. The principal areas

of activity are located in offshore West Africa, the Niger Delta,

Asia Pacific, the Gulf of Mexico and offshore Brazil.

As interests first began to be focused on smaller and less

accessible reserves, only the largest and most experienced oil

majors, such as BP, Exxon, Shell and Petrobras had the inno-

vative technical, managerial and financial resources to recover

oil and gas from deep and ultra-deepwater reservoirs. The

part-privatized company Petrobras is Brazil’s largest oil and

natural gas producer, ranking among the heavy-hitters cap-

able of pioneering exploration and production technologies

allowing commercial operation in such challenging conditions

as those encountered in the newest fields on the Brazilian

continental shelf. These new technologies not only include

innovative systems for drilling and well completion, subsea

flowlines and risers, but also for complex floating structures

and anchoring systems.

FLOATING SOLUTIONAmong the many spectacular engineering solutions devel-

oped by the industry, giant floating ‘ship-shaped’ vessels

have become the system of choice for the development of an

increasing number of smaller, deepwater oil and gas fields.

These Floating Production, Storage, and Offloading vessels

or FPSOs replace the fixed production platforms and pipeline

0 8 _ F O C U S V E N T U R E _ J A N U A R Y 2 0 0 5 _ F O C U S _ 0 9

systems which are used to produce and export oil and gas

from shallower fields and which are not technically or com-

mercially viable for smaller, deepwater applications. FPSOs on

the other hand, either in the form of ship-conversions using

existing hulls, or increasingly as new-build vessels, can be

towed out and anchored at the location of the offshore reser-

voir to form a hub for the producing wells in the field. Oil

and gas is piped from the wells to the vessel through subsea

flowlines connected to the FPSO through flexible ‘risers’,

allowing the vessel to separate the gas, process the recovered

crude oil and act as a central storage facility. Oil is subse-

quently exported to overseas markets or domestic onshore

refineries by shuttle tankers, providing a highly flexible

system which can be moved to a new field when production

finally becomes uneconomic and which is able to meet the

needs of a changing market. The gas can either be re-injected

to enhance oil recovery or exported to local markets onshore.

OIL—BRAZIL’S BURNING ISSUEBrazil is the tenth largest energy consumer in the world and

the third largest in the western

hemisphere, behind the United

States and Canada. The country’s

total energy consumption has

increased significantly in recent

years, growing at an annual rate of

3% between 1992 and 2002. As a

consequence, the Brazilian govern-

ment has sought to boost domestic

oil production as part of its long-

term energy strategy. Although pro-

duction levels are increasing,

imported oil is still needed to meet

domestic demand, in spite of the fact

that the country has the second

largest oil reserves in South

America, with 8.5 billion barrels as of January 2004. Recent

discoveries reported by Petrobras, including an estimated

2.95 billion barrels of heavy oil, are also certain to increase

proved reserves over the next few years. Now, under the

presidency of Luiz Inacio Lula da Silva, elected in October

2002, the government has set a target for self-sufficiency in

oil production by 2006 and has its future sights set on joining

other oil exporting countries, with output eventually reaching

2.3 million barrels per day by 2010. The government’s plans

to become self-sufficient are being led by Petrobras, which

has demonstrated its commitment by issuing a revised strate-

gic plan for 2004–2010, in which the company pledges to

spend US$7.7 billion per year, most of the funding aimed at

boosting domestic oil output.

Two of Brazil’s offshore oil and gas fields, the Barracuda and

the Caratinga, due shortly to enter full production, are located

in the Campos Basin some 180 km northeast of Rio de Janeiro.

Discovered in 1989 and 1994 respectively and named after two

common species of South American fish, the two fields cover

a combined area of 230 square kilometers and will boost the

current pilot output of one million barrels per day by around

30%, providing around 20% of the country’s total production.

Recoverable reserves for Barracuda are estimated at 867 mil-

lion barrels of oil and 10.7 billion cubic meters of gas, while

the more southerly Caratinga field has estimated reserves of

362 million barrels of oil and 4 billion cubic meters of natural

gas.

EPIC UNDERTAKINGTo enable the Barracuda and Caratinga fields to achieve full

production, Petrobras entered into an agreement with US-

based Halliburton Co’s KBR—formerly Kellogg Brown &

Root—and Halliburton Energy Services (HES) business units

to develop the two fields. Under the US$2.6 billion EPIC

(Engineering, Procurement, Installation and Construction)

contract, the largest ever awarded for an offshore project,

Halliburton, the largest oilfield services company in the

world, constructed a total of 55 wells, fabricated and installed

flowlines and risers and undertook the construction and

installation of the two FPSOs, which form the hubs on which

the entire gas and oilfield development is based.

As well as receiving oil from the 22 producing wells, large

volumes of natural gas also flow from the subsea reservoirs.

Specialist process equipment based on three very large com-

pressor-trains designed, engineered, supplied and installed by

Siemens, is employed on each FPSO to cool the gas, remove all

traces of seawater and oil and increase gas pressure. Around

80% of the compressed and dried gas is re-injected back into

the oilfield reservoirs as ‘gas-lift’ to push more gas and the

viscous, heavy crude oil—about API 21—out of the producing

wells. The remaining 20% is fed from the Siemens process

modules through gas export risers and an undersea pipeline

to a remote fixed platform, PNA-1, where it joins the main gas

transportation pipeline and is piped onshore to join the

Brazilian gas network.

FROM CRUDE CARRIER TO SOPHISTICATED SYSTEMThe Barracuda field will use the Petrobras P43, an ex-super-

tanker or ‘VLCC’ (Very Large Crude Carrier) formerly owned

by the Stena shipping line and originally named the Stena

Continent. Her sistership, the Petrobras P48, an almost iden-

tical vessel previously operating as the Stena Concordia, will

form a similar hub for the Caratinga field. Converted at the

Jurong shipyard in Singapore, the two enormous vessels,

minus all their original machinery including engines, rud-

ders, steering gear and topsides, were reduced to a series of

huge oil storage tanks with a capacity of 2 million barrels

within a modern double-hull construction. In an epic 4-week

voyage, the gutted vessels were towed from Singapore 10,000

nautical miles to the outskirts of Rio de Janeiro. Work on the

P43 was carried out at the Maua Jurong yard at Niteroi, and

the P48 was constructed at the BrasFels yard at Angra dos

Reis. The mainly locally-recruited KBR workforce, together

with a large number of specialist sub-contractors and suppli-

ers, totaling around 4,700 people, subsequently undertook

the massive construction and conver-

sion program, fitting out the two ves-

sels. Complex prefabricated modules

creating the on-board production fa-

cility on each vessel were lifted into

position and integrated with the hun-

dreds of kilometers of piping, pres-

sure-vessels, pumps, valves and the

mass of vital supporting structural

steelwork, ancillary systems and con-

trols to form the completed topsides.

TOWERING ACHIEVEMENTThis massive, 18,000 tonne, multi-

story, deck-mounted construction is

in effect a large factory with its own

independent power plant providing a generating capacity of

nearly 90 megawatt (MW), enough for a small city, together

with accommodation and recreation facilities for 150 people.

And it towers at least as high again as the 22-meter height of

the deck from the waterline. The flare stack at the stern of

each FPSO soars 100 meters above the deck and in the far

distance, 337 meters away at the bow, a helideck provides a

view encompassing the 55-meter width across the deck. The

American Bureau of Shipping-certified double hulls of the

vessels themselves, each the size of an entire city block and

housing the cavernous oil storage tanks, plunge another 21

meters below water, but even before a drop of oil is pumped

aboard, these leviathans each tip the scales at more than

70,000 tonnes.

“WE WERE ABLE TO MANAGE THE PROJECT,

INCLUDING ALL LOCAL CONTENT, WITH

VIRTUALLY NO DELAYS AT ALL. ALTHOUGH IT

HAS BEEN BY FAR THE BIGGEST CONTRACT

WE HAVE EVER HANDLED, OUR WORKFORCE

ON BOTH SIDES OF THE ATLANTIC HAS BEEN

TOTALLY MOTIVATED, NOT LEAST THROUGH

THE EFFORTS OF OUR MANAGEMENT TEAM

HERE IN BRAZIL, ALLOWING US TO DELIVER

THE COMPLETE PACKAGE WITHIN THE

SHORTEST POSSIBLE PERIOD OF TIME AND

WITHIN BUDGET.”

One slip and 60 million dollars and more than three years

work could have ended up in the sea!” said project manager

Hans-Ulrich Keil. “I needn’t have worried,” he continued, “it

all went perfectly—first time—exactly as planned.”

TYING IT DOWNSlated to be in full production by the end of 2004, the FPSOs

will be moored some 12.7 kilometers apart in the Barracuda

and Caratinga fields, each vessel using state-of-the-art DICAS

(Differentiated Compliance Anchoring System) taut leg spread

mooring technology developed by KBR's specialist mooring

team. Believed to be the strongest of its kind in the world, it

consists of no fewer than eighteen individual anchor-lines,

five lines radiating either side of the bow and two groups of

four at the stern, comprising 210 mm diameter polyester

ropes and chains up to 1,800 meters long with a total weight

of 1,200 tonnes. These are secured to computer-controlled

winches, which enable the vessels to remain on station, with-

out undue strain on either the vessels or the anchor lines, no

matter what sea-states are encountered.

As project manager for the largest single engineering under-

taking ever handled by Siemens’ Duisburg-based business

unit, Hans-Ulrich Keil has had an awesome responsibility for

the Barracuda/Caratinga project. This has included leading a

small team of engineering managers and senior staff, based

6,000 miles from their production center in Germany, who

have had to supervise a locally-recruited workforce of up to

600 people during construction of the ‘mini-modules’. First

visiting the Niteroi site in March 2001, Keil has so far made

more than 20 separate week-long trips, clocking-up a distance

in the air equivalent to the distance between the earth and

the moon! In addition to creating a specialist team of Siemens

engineering managers to oversee the project to completion,

there has also been the special need to form a close working

relationship with local Brazilian partners in order to complete

vital elements of the total system-build, such as the main steel

fabrication and integration of the coolers and scrubbers on

each gas process ‘mini-module’.

Yet despite the vast size, scope and complexity of this techni-

cally-groundbreaking project, Hans-Ulrich Keil and his team,

including Site Manager Michael Jungnitz, Carlos Schneider,

Compressors Director, Oil & Gas and Service Manager Stephan

Rosenast, have steered their part of the giant Petrobras

project to a highly successful conclusion for their customer,

Halliburton’s KBR division.

Keeping the Faith—Delivering the Goods

V E N T U R E _ J A N U A R Y 2 0 0 5 _ F O C U S _ 1 1

SIEMENS’ MAGNIFICENT ‘MINIS’The US$60 million contract awarded in January 2001 to

Demag Delaval, immediately prior to its incorporation into

Siemens, for a total of six gas process modules was the high-

est value ever won by the company, exceeding previous typical

awards by a factor of six. In engineering terms the very large

custom-designed systems were by far the largest, highest-

powered and most complex of their kind ever built by the

company. Powered by variable speed electric drives, the multi-

stage turbo-compressor trains were fabricated and tested at

Siemens’ Duisburg plant in Germany, shipped to the Niteroi

shipyard in Rio and integrated with piping, coolers, gas-

scrubbers, associated equipment and control systems as skid-

mounted ‘mini-modules’. They were

lifted by one of the world’s biggest

floating cranes and mounted one on

top of another on bearing-pads

within a massive steel framework,

each the size of a large commercial

building, standing 25 meters high,

26 meters long and 9 meters wide

and weighing in at a massive 450

tonnes apiece. “It was rather excit-

ing, seeing the finished product be-

ing swung out over the harbor and

into its final position on the deck.

V E N T U R E _ J A N U A R Y 2 0 0 5 _ F A C E S _ 1 3

Despite their size, the compressor trains and equip-

ment have not sprung any unpleasant surprises

during extensive shore-based functional testing of

the complex plant and systems, or its installation

on board the FPSOs. Alan Ogunmuyiwa, Senior

Procurement and Materials Manager for Siemens’

customer, Halliburton’s KBR is not slow to comment

that “We have had absolutely no internal problems

‘interfacing’ with the company. Back at the start

of the project Demag Delaval already had a great

reputation and we have of course had dealings with

Siemens for more than 25 years.” He continued:

“We regard their products as having really good

quality. Our only ‘complaint’ is that when it comes to

the nitty-gritty of negotiations, they are among the

toughest people that we have to deal with, although

after all, that’s exactly how it should be!” “I also have

to say that, yes, we’ve had some significant problems

with both quality and delivery, particularly from

some locally-based suppliers, but Siemens have been

one of the very few companies who have delivered

compressors on time and to our full specifications.”

Alan Ogunmuyiwa,Senior Procurement and Materials Manager for Halliburton’s KBR

1 2 _ F A C E S

As the ‘ultimate’ customer and end-

user, the requirements of Petrobras

are of course paramount. “We have

been working with Siemens for

very many years and have devel-

oped a high degree of trust,”

says Sergio Della Libera,

Petrobras’ Turbomachinery

Engineer for the Barracuda

and Caratinga Project. “For a

critical project like this, it is

vital that the equipment has

the highest possible levels of

both reliability and availability. It

is simply not possible to shut the

operation down for unscheduled

maintenance.” “Equipment and sys-

tems supplied by Siemens over many

years, including plant in operation on many

of our older offshore platforms, has given

excellent performance and is still performing

well, so we have every confidence that the

latest process units will be a complete suc-

cess.” Which has to be a fairly resounding

vote of confidence, in anyone’s terms.

Sergio Della Libera,Petrobras’ Turbomachinery Engineerfor the Barracuda and Caratinga Project

“Dependable solutions”

“Perfect interfacing”

V E N T U R E _ J A N U A R Y 2 0 0 5 M O N I T O R _ 1 5

The ESSENTials of CHPWith energy prices rising, there is growing interest in fuel-efficientsolutions like CHP. But what’s in it for the customer?

A field in the middle of a petrochemical facility near Antwerp,

Belgium, is the footprint for one of Siemens’ latest power

projects, involving the construction of a combined heat and

power (CHP) plant powered by two SGT-800 gas turbines.

Project customer is the Dutch-based utility, Essent, market

leader in the supply of sustainable energy in the Netherlands.

“For environmental and business reasons, it is company

policy to utilize high-efficiency energy technologies wherever

possible,” says Mr. Aad Atteveld, General Manager, Projects,

at Essent Energie. CHP, which currently accounts for around

a quarter of Essent’s electrical generating capacity, was the

obvious choice for this plant also.

SELECTING THE SITECo-generation of heat and power achieves a number of eco-

nomic and ecological goals. Since heat, unlike power, cannot

be transported economically over long distances, an essential

factor for Essent developing a CHP project was to find a local,

long-term customer for the heat. This heat customer would be

INEOS Oxide, a subsidiary of INEOS, a global manufacturer of

specialty and intermediate chemicals. Located in the world’s

second largest petrochemical zone, on the left bank of the

River Scheldt, just across the river from Antwerp’s historic city

center, the INEOS Oxide plant is claimed to be the largest and

most cost-efficient ethylene oxide plant in Europe. The site

also hosts eight third-party chemical manufacturers, around

half of which are supplied with steam by INEOS.

FOUR ESSENTIAL FACTORSWhen selecting their CHP plant, Essent based their decision

on four essential success factors. Firstly, the plant’s life-cycle

costs (capital cost, fuel cost and maintenance cost) must be

low to ensure the economic viability of the project. Secondly,

since the CHP plant was to supply all the heat required by

INEOS, a high level of plant availability was critical. Thirdly,

the plant must be sufficiently operationally flexible to

respond to Essent’s changing needs for steam and, more par-

ticularly, power. Finally, it must have low atmospheric emis-

sions. An industrial plant from Siemens was the solution.

COMBINED CYCLE GIVES RELIABILITYThe chosen plant is powered by two natural-gas fired 43.6

megawatt (MW) SGT-800 gas turbines, the largest model in

the Siemens industrial gas turbine range. Exhaust heat from

the gas turbines will be fed into heat recovery steam genera-

tors to produce steam to satisfy INEOS’ requirement, the sur-

plus passing through a steam turbine to generate additional

power, if required. This combined cycle arrangement gives

the benefit of additional plant flexibility and a higher power-

to-heat ratio.

The solution is ingenious. The SGT-800 has been

optimized for CHP and combined-cycle duty and

can be started up in only a few minutes. It is de-

signed for high reliability, with a focus on sim-

plicity and robustness. Choosing two mid-range

gas turbines instead of one larger turbine auto-

matically heightens availability, since it reduces

the likelihood of the whole plant being rendered

unavailable. To secure steam availability, Essent has

also taken over two of INEOS’ existing boilers at the site for

emergency back-up.

MINIMIZING ENVIRONMENTAL IMPACTTwo heat recovery steam generators (HRSG’s) retrieve heat

from the exhaust gases to produce steam for the single-casing

axial SST-400 50 MW steam turbine, also of Siemens manu-

facture. The main heat input comes from the gas turbine

exhaust, but each HRSG is also equipped with a 40 MW sup-

plementary firing system to increase steam production and

plant flexibility. The fuel burned will be a mixture of natural

gas and waste gases from the petrochemical site, thus

enabling INEOS to minimize its environmental impact. For

combustion air, exhaust gas from the gas turbine will be used.

Since the exhaust gas is very hot, combustion efficiency is

improved and the risk of material stresses in the HRSG is

reduced. The SGT-800 gas turbine in itself is equipped with a

3rd generation DLE (Dry Low Emissions) combustion system,

which, by eliminating the need for water injection, reduces

emissions without reducing efficiency.

MAXIMIZING FLEXIBILITYWhen the CHP plant is taken into service, Essent will supply

steam to INEOS, along with demineralized water. All the

power will be sold by Essent into the grid. The maximum net

electrical output will be 132 MW, at least twice the level of

demand expected from the petrochemical site. “The possibility

of making power sales into the Belgian grid was a major factor

in our decision to develop this project,” says Mr. Atteveld. The

possibility of exporting power to the grid opens up another

income stream for the plant operator, and strengthens the

economics of the project. It also means that the electrical out-

put of the CHP plant need not be restricted to local site needs.

With its two gas turbines, steam turbine with full condens-

ing or steam extraction capability and supplementary firing

of the HRSG’s, plus a rapid start-up/shutdown capability,

the Essent CHP plant has maximum operational flexibility.

Steam and power output will be controlled separately.

Steam output will be set locally according to site demand.

Power output will be determined from Essent’s offices in

’s-Hertogenbosch, the Netherlands, enabling Essent to adjust

the electrical output as prices change on the Belgian power

market.

This flexible plant will be able to run at near full electrical

output with very little process steam production i.e., as a

combined-cycle power plant, should this operation mode be

required.

EMPHASIZING SAFETY Since the plant is being built in the middle of a petrochemical

site, the construction project has to be carried out to the most

rigorous standards of safety.

“The high level of integration of the CHP plant with the

chemical production process, as well as the location of the

power plant in the center of an established petrochemical site,

mean that there are a number of stringent requirements to be

met with regard to safety in this construction project,” says

Mr. Atteveld. The large number of production facilities on site

also has an impact on project management, since it is impera-

tive, that certain works be carried out at particular times to

prevent unplanned shutdowns of the manufacturing process-

es on site.

WIN-WINThe engineers are not letting the grass grow under their feet.

Civil works began on site in August 2004, and the completed

plant is scheduled for handover at the end of 2005.

Essent will then be the proud owner of a highly efficient

CHP plant capable of meeting its requirements for low-cost

energy production, high availability, operational flexibility

and low emissions and have a long-term customer for the

plant’s heat output. INEOS in turn will have a reliable, on-site

source of heat and power without major capital investment,

as well as a productive outlet for some of its waste gases.

It’s a win-win situation from the word go. What more

could Siemens want for its customers and its customers’

customers?

1 4 _ M O N I T O R