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CAPITAL PROJECTS & CONTRACTSOVERVIEW more news at www.heavyliftpfi.com


Floating production


contractors are expected to struggle to keep up with the surge in demand for their services in the year ahead.


Surging demand for offshore energy brings new challenges


The mood in the offshore energy sector is buoyant as it faces a welcome flood of new contracts – although this is likely to put oilfield service providers under pressure in the year ahead, writes David Kershaw.


T


here is renewed optimism about the offshore energy sector. About 250 new oil


and gas projects are likely to be sanctioned for development in 2020, up from 160 in 2016, according to industry analyst Rystad Energy. However, with a sharp uptick in the number of new projects, the oilfield service sector is likely to come under pressure. Rystad Energy’s latest market


report on the global service market said that floating production contractors, subsea installation players and fabricators of LNG facilities will all likely struggle to keep up with the surge in demand for their services, thus causing project schedules to slip. Exploration and production (E&P) companies will find themselves in fierce competition to secure capacity.


www.heavyliftpfi.com FPSO manufacturers won 13


new orders in 2019, bringing the number of units under construction to 28. Furthermore, in the subsea umbilicals, risers and flowlines (SURF) installation market, orderbooks are swelling and players are racing to keep pace given the large number of Christmas trees – nearly 600 in all – that were ordered in 2018 and 2019, said Rystad Energy.


Subsea flowlines Marine contractors are already scheduled to install about 4,000 km of subsea oil and gas flowlines and umbilicals in 2020. “Deepwater projects are now


in a challenging situation as they are heavily dependent on SURF and FPSO contractors,” said Audun Martinsen, head of oilfield services at Rystad Energy. “Deepwater fields have been among the most sought-after supply sources in recent years, next to the shale bonanza, and the increase in massive contract awards to players in the deepwater industry now could put constraints on further field sanctioning activity.” Energy companies pressing


ahead with offshore wind energy projects are complicating matters further. Rystad Energy said that 25 GW


The increase in massive contract awards to players in the deepwater industry now could put constraints on further field sanctioning activity.


of offshore wind capacity is now operational, a figure that could hit more than 50 GW by 2022. This implies a huge increase in


demand for installation of offshore wind power cables, climbing from 1,800 km in 2019 to 4,300 km in 2022 – surpassing the amount of subsea cable installation work expected in the oil and gas industry. “Major SURF players like


Subsea7 and Saipem are in a great position to capitalise on this trend, having managed to diversify from being pure oil and gas players to become substantial drivers within the energy transition.


Jump in service prices “This segment will increasingly occupy vessel capacity from the installation fleet, likely causing a significant jump in service prices and exacerbating the contractual challenges faced by operators,” Martinsen explained. “Offshore gas and LNG


projects will also add to the rising demand for services, as we forecast that these projects will require the installation of about 1,000 km per year of export pipelines linking offshore fields


to onshore facilities over the next few years,” he added.


– Audun Martinsen, Rystad Energy January/February 2020


HLPFI 61


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