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South African companies support establishment of world-class facilities

Posted: 18 May 2006

The rising international demand for oil and gas as energy sources has focused attention on Africa as a future significant provider of these commodities.

The development of the sub-sea oil and gas fields requires skills and technological innovation, and South African companies are stepping up to the plate to contribute to the expansion of African offshore fields.

MAN Ferrostaal – which has offset obligations to South Africa – recently announced its intention to construct offshore oil and gas fabrication facilities in Saldanha and repair, refurbishment and service facilities in Cape Town.

Dr Matthias Mitscherlich, chairman of the giant multinational, made the announcement at the Oil Africa Conference and Exhibition at the end of March this year. Total value of the investment will be R1.7 billion, of which the initial MAN Ferrostaal portion will be R220 million.

The project will see the refurbishment of the old Mossgas fabrication site at Saldanha Bay which was the facility used to fabricate and construct the 14 500 tonne fixed leg platform jacket for the FA Platform Project located off Mossel Bay, South Africa, and the simultaneous development of the A Berth in Cape Town harbour.

This will create a world-class repair and fabrication facility and employment for many locals. The facilities will be operated by major local companies whose credentials and capabilities match those required by MAN Ferrostaal, established in a due diligence process. The local partner is Atlantis Marine Projects, which embarked on a detailed feasibility study in conjunction with MAN Ferrostaal during 2003.

Operational and technology partners are Grinaker-LTA M&E and DCD-DORBYL Heavy Engineering for the offshore oil and gas fabrication yard in Saldanha Bay and DCD-DORBYL Marine, SA Five Engineering and Globe Engineering for the service and refurbishment hub in Cape Town. Partners were selected according to their experience appropriate to the scope of the work at each site.

Site construction will take place over 10 months and the Saldanha fabrication facility will be operational in the second quarter of next year.

The capex will provide for quayside refurbishment and the erection of specialist workshops, fabrication facilities and associated infrastructure to ensure an internationally accredited and dedicated environment from which the technology partners in this venture can operate.

 “The establishment of these world class facilities will open a new chapter in the African landscape, whereby the industrial infrastructure and technological capacity of South Africa can be channeled through to support the growing West and Southern African offshore oil and gas fleets,” comments Brian Blackbeard, Atlantis Marine Projects.

With the international demand for new platforms ranging from fixed to floating structures, the existing fabrication yards around the globe are already working to capacity, with six year order books and cannot increase product supply.

Similarly, the shipbuilding industry is also experiencing an upswing, so these yards can also not satisfy the demand. The oil majors and rig operators that need to expand their oil and gas production capacities are faced with either limited equipment supply or long lead times before they would be able to increase production.

In addition to this backlog, the average age of West African offshore platforms is 26 years, with many of the exploration platforms requiring extensive upgrades to be able to operate in the new deep-water concessions.

In terms of routine class survey and maintenance requirements, the production and exploration days lost at current premium day rates due to long towing times to reach the repair facilities in the Gulf, Dubai or South East Asia make the establishment of a fully fledged repair and refurbishment hub in the Port of Cape Town almost essential.

Saldanha Operation
“The decision to establish a fabrication yard at Saldanha Bay was made on the basis of the purpose-built Mossgas facility which had been left idle for some years. We will reconstitute it into a world-class assembly and construction facility outfitted with workshops, paint and blast, pile welding lines, assembly hall and supporting infrastructure,” explains Blackbeard.

Grinaker-LTA M&E will be mobilised onto the site after the facility has been completed.

In order to provide immediate heavy fabrication capacity, DCD-DORBYL Heavy Engineering will carry out pre-fabrication at its Vereeniging facility and transport sections by road to Saldanha for Grinaker-LTA M&E to complete assembly on site and load out. “By adopting this methodology, we will be able to provide an immediate capacity to respond to current demand,” says Sias Booysen, DCD-DORBYL Heavy Engineering.

Grinaker-LTA M&E’s entry into the upstream oil and gas fabrication market five years ago in Nigeria provides it with an invaluable track record for this project. Current and completed jobs with oil majors include Exxon Mobil, Chevron, Total and Shell as well as engineering companies and OEMs including Technip, FMC and Veto Gray.

“Although our fabrication to date has focused on piles, sub-sea structures, manifolds, jackets, bridges and decks of up to 1500 tons, the Saldanha Bay facility – supported by DCD-DORBYL Heavy Engineering – will include topside modules of up to 5000 tons and pressure vessels. We are also considering the opportunity of providing tension leg platforms (TLPs) and smaller semi-submersible hulls,” says Eddie Du Rand, Grinaker-LTA M&E.

With its large-scale infrastructure, DCD-DORBYL Heavy Engineering is South Africa’s prime supplier of heavy equipment to the international and local mining sector, with 27% of its annual turnover consisting of exports. “This capacity and expertise will be put to good use in the manufacture of heavy plates, tubulars and machined components required for the structures in the Saldanha yard,” Booysen explains.

DCD-DORBYL Heavy Engineering also has oil and gas experience, as it was involved in the Mossgas project through the supply of nodes and piles as well as portions of the platform. The company has the largest heavy engineering machining capability in the southern hemisphere and is capable of manufacturing large components and sub-assemblies.

The Saldanha fabrication yard will provide employment on the West Coast and will support sustainable development in the region. Many opportunities will be created for small, medium and micro enterprises as well as broad-based Black economic enterprises to participate in these projects.

Cape Town Operation
The Cape Town Service Hub’s operational partners are DCD-DORBYL Marine, SA Five Engineering and Globe Engineering supported by the established base of local industry. This team will provide a range of repair, maintenance, refurbishment and survey services through the A Berth facility.

DCD-DORBYL Marine specialises in ship repair as well as the servicing and repair of oil rigs and marine diamond mining vessels. Its services range from steelwork, pipework, mechanical, engine repair and hydraulics. “Over the years, we have completed some of the largest repair contracts in the Port of Cape Town and we have also teamed up with other companies to ensure quick turnaround time for oil rig repairs,” says Johann Venter, DCD-DORBYL Marine.

SA Five Engineering is a fabrication company with particular experience in topsides and sub-sea structures, while Globe Engineering is a ship repairer.

The combined capacity of these companies now operating off a dedicated quay and a purpose-designed quayside facility with adequate cranage will be able to offer a more efficient service with shorter turnaround times.

The A Berth facility, geographically located to significantly cut towing and off-station time compared to established repair yards in other parts of the world is well placed and configured to support the most demanding repair and refurbishment requirements.

MAN Ferrostaal and Atlantis Marine Projects have developed a rapid roll-out plan for both facilities to satisfy market demands. The site construction phases are planned to take 10 months and run concurrently.

This allows for the planned mobilisation of the operating companies to the facilities in the first quarter of 2007. During the site construction phase, the businesses will be in a position to engage with the market and respond to tenders to load the sites for work early next year.

The project has the support of local industry, national and provincial government, the Department of Trade and Industry, Minerals and Energy, Public Enterprises, the National Ports Authority, Industrial Development Corporation and the South African Oil and Gas Alliance.



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