ultra-deepwater production and need for shuttle tankers in the gulf of mexico
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Ultra-Deepwater Production and Need for Shuttle Tankers in the Gulf of Mexico. Presentation by Jim McCaul at the 6 th Annual Deepwater Technologies & Development Conference September 11, 2001. International Maritime Associates, Inc. — Washington, DC, USA — Tel: 202-333-8501 - PowerPoint PPT PresentationTRANSCRIPT
Ultra-Deepwater Production and Need forShuttle Tankers in the Gulf of Mexico
International Maritime Associates, Inc. — Washington, DC, USA — Tel: 202-333-8501Fax: 202-333-8504 — E-mail: [email protected] — Website: www.imastudies.com
Presentation by Jim McCaul at the 6th Annual Deepwater Technologies & Development Conference
September 11, 2001
Ultra-Deepwater Gulf of Mexico
Source: IMA, Shuttle Tankers Required in the Gulf of Mexico Through 2010, Spring 2001
Ultra-Deepwater Leases in the Gulf of Mexico
Source: IMA, Shuttle Tankers Required in the Gulf of Mexico Through 2010, Spring 2001
Ultra-Deepwater Sites Producing or Being Developed in the Gulf of Mexico
Crazy Horsebeing developed
Atlantisbeing developed
Mad Dogbeing developed
Devil's Towerbeing developed
Na Kikabeing developed
Horn Mt.being developed
Hoover/Dianaproducing
Mensaproducing
Source: IMA, Shuttle Tankers Required in the Gulf of Mexico Through 2010, Spring 2001
Priority Development Sites inUltra-Deepwater
Source: IMA, Shuttle Tankers Required in the Gulf of Mexico Through 2010, Spring 2001
Area
TotalNumber of
Priority Sites Sites Now inDevelopment
Sites Drilledor With
Drill Plan
UndrilledPriority
Sites
Alaminos Canyon 25 0 7 18
Amery Terrace 2 0 0 2
Atwater Valley 23 0 10 13
DeSoto Canyon 5 0 0 5
Garden Banks 3 0 2 1
Green Canyon 15 2 9 4
Keathley Canyon 26 0 4 22
Mississippi Canyon 36 4 22 10
Walker Ridge 35 0 11 24
Total 170 6 65 99
Site contains at least one block for whichthe operator bid $1 million or more
Deepwater Oil and Gas Pipelinesin the Gulf of Mexico
Source: MMS
Pipeline Unfriendly Area in theGulf of Mexico
Area of VeryIrregular Seabed
Source: IMA, Shuttle Tankers Required in the Gulf of Mexico Through 2010, Spring 2001
Potential Infrastructure Connections forUltra-Deepwater Fields
Source: IMA, Shuttle Tankers Required in the Gulf of Mexico Through 2010, Spring 2001
AtlantisMad Dog
Crazy Horse
Na Kika
Horn Mt.
Hoover/Diana
BrutusGenesisAuger
Mars Ursa
Distance from Infrastructure and Seabed Characteristics of Ultra-Deepwater Development Sites
(excludes five host sites)
Source: IMA, Shuttle Tankers Required in the Gulf of Mexico Through 2010, Spring 2001
13
9
42
17
25
16
22 22
1718
0
10
20
30
Smooth Seabed
Rough Seabed
Miles from Infrastructure
No.
of
Site
s
Segmentation of Development Sites by Distance toInfrastructure and Seabed Conditions
Source: IMA, Shuttle Tankers Required in the Gulf of Mexico Through 2010, Spring 2001
Layout of the 108,000 dwt Shuttle TankerNordic Savonita
Source: IMA, Shuttle Tankers Required in the Gulf of Mexico Through 2010, Spring 2001
Characteristics of Four RecentlyDelivered Shuttle Tankers
Source: IMA, Shuttle Tankers Required in the Gulf of Mexico Through 2010, Spring 2001
Capex for Recent Shuttle Tankers
Source: IMA, Shuttle Tankers Required in the Gulf of Mexico Through 2010, Spring 2001
Jones Act Restrictions
• U.S. law requires that ships used in domestic trade be built in the U.S., crewed by U.S. citizens and owned by U.S. citizens
• The floating production unit is a point on the U.S. OCS and transportation from that point to another point in the U.S. is domestic trade
• As a result, shuttle tankers built for use in the Gulf of Mexico will be at least twice the international price
U.S. Shipbuilders Capable of Building Shuttle Tankers
Primary Contenders• Avondale — could be tied up with Navy amphibious ships and Alaskan
tankers• NASSCO — but busy with Alaskan tankers, several ro/ro ships and a
possible order for a new class of 12 Navy ships• Kvaerner Philadelphia — new yard, good facilities but inexperienced• Alabama Shipyard — tied to Samsung and Conoco for shuttle tankers• Bender/Tampa — long shot
Could, But Not Interested• Ingalls — Navy shipbuilding the core business• Newport News — ditto
Refinery Restrictions
• Most refineries on the Gulf Coast are limited to receiving ships with maximum draft of 40 feet
• Given this constraint, a shuttle tanker with 550,000 to 700,000 barrels can be employed in the trade
• A larger tanker could be used if LOOP were the discharge point — but designing a ship for LOOP would limit the flexibility of using the ship
Characteristics of the Four FieldsSelected for Shuttle Tanker vs. Pipeline
Cost Comparison
Source: IMA, Shuttle Tankers Required in the Gulf of Mexico Through 2010, Spring 2001
Transport Options from the Four Fieldsto the Citgo Refinery in Lake Charles
• Option 1 — Direct shuttle tanker transport
• Option 2 — Shuttle tanker via LOOP
• Option 3 — Delivery by pipeline via existing infrastructure
Option 1 — Direct Shuttle Tanker Transport to the Citgo Refinery in Lake Charles
Source: IMA, Shuttle Tankers Required in the Gulf of Mexico Through 2010, Spring 2001
GB 949
GC 845
WR 633
AT 113
Citgo Refinery
Shuttle Tanker
Option 2 — Shuttle Tanker Via LOOP to the Citgo Refinery in Lake Charles
Source: IMA, Shuttle Tankers Required in the Gulf of Mexico Through 2010, Spring 2001
Option 3 — Delivery by Pipeline Via Existing Infrastructure to the Citgo Refinery
Source: IMA, Shuttle Tankers Required in the Gulf of Mexico Through 2010, Spring 2001
GB 949
GC 845
WR 633
AT 113
Ursa
GenesisAuger
Clovelly
Citgo Refinery
Existing Pipeline
New Pipeline
Comparative Transport Cost fromAtwater Valley 113 to Lake Charles Via
Pipeline and Shuttle Tanker
$0.59
$0.79
$0.68
$0.60
$0.75
$0.54 $0.52
$0.00
$0.20
$0.40
$0.60
$0.80
$1.00 - - New Pipeline - - - - - Shuttle Tanker - - -
Source: IMA, Shuttle Tankers Required in the Gulf of Mexico Through 2010, Spring 2001
($ in net present value cost per barrel)
Breakeven Distance to InfrastructureDepends On
• Seabed terrain — rough or smooth
• Discounts that can be negotiated on connecting pipeline tariffs
• Shuttle tanker capex
• Cost of capital
Breakeven Distance from Infrastructure Assuming(1) a 60% Discount on Connecting Pipeline Tariff and
(2) Shuttle Tanker Capex of $105 Million
Miles to Infrastructure
PV
Lif
e of
Fie
ld T
rans
por t
Co s
t( $
pe r
ba r
r el)
0 10 20 30 40 50 60 70 80 90 100$0.00
$0.20
$0.40
$0.60
$0.80
$1.00
$1.20
Pipeline
Shuttle Tanker
RS
Source: IMA, Shuttle Tankers Required in the Gulf of Mexico Through 2010, Spring 2001
Breakeven Distance from Infrastructure Assuming(1) a 60% Discount on Connecting Pipeline Tariff and
(2) Shuttle Tanker Capex of $125 Million
Source: IMA, Shuttle Tankers Required in the Gulf of Mexico Through 2010, Spring 2001
Miles to Infrastructure
PV
Lif
e of
Fie
ld T
rans
por t
Co s
t( $
pe r
ba r
r el)
0 10 20 30 40 50 60 70 80 90 100$0.00
$0.20
$0.40
$0.60
$0.80
$1.00
$1.20
Pipeline
Shuttle Tanker
RS
Comparison of Shuttle Tanker Financing Options
Source: IMA, Shuttle Tankers Required in the Gulf of Mexico Through 2010, Spring 2001
Option
Direct Purchase: Field operatororders shuttle tanker(s) for itsaccount, utilizing its own capitalresources
Purchase by Partnership: Fieldoperators form a partnership tobuy and operate shuttle tankers,similar to MSRC or LOOP
Long-term Charter: Fieldoperator gives long-term charterto ship operator, who in turncontracts for shuttle tanker(s)
Contracts of Affreightment:Ship operator gets long-term con-tract(s) of affreightment from oneor several field operators andleverages the COA to obtainfinancing for building shuttletankers
Title XI Guarantee: MarAdguarantees the financing to buildshuttle tankers, enabling the ship-owner to obtain 25-yr. financingat low interest by investing12½% equity