Assignment 2010 Rev A

SETONIX OIL COMPANY BASIS OF DESIGN
PERTH CANYON DEVELOPMENT Doc No. 0902-84 Rev A
Setonix
BASIS OF DESIGN
PERTH CANYON DEVELOPMENT
Rev Description By Check PE PM Date

A Issued for Engineering Check K Mullen 28 July 2010
1 Revised as Noted K Mullen
Revised and Updated
MASTER OF OIL AND GAS ENGINEERING SUBSEA TECHNOLOGY MODULE OENA 8554
Assignment 2010 rev A.doc 28 July 2010 page 1 of 13
CONTENTS
1. INTRODUCTION...................................................................................................3
1.1 General ...............................................................................................................3
1.2 Seabed Topography ...........................................................................................3
1.3 Field Location......................................................................................................4
1.4 Development Drilling ...........................................................................................4
1.5 Subsurface Challenges .......................................................................................4
1.6 Design Intent.......................................................................................................5
2. FIELD DESIGN PARAMETERS ...........................................................................6
2.1 Design Life ..........................................................................................................6
2.2 Availability ...........................................................................................................6
2.3 Hydrate Prevention and Remediation .................................................................6
2.4 Corrosion Inhibition .............................................................................................6
2.5 Gas Disposal.......................................................................................................6
2.6 Well Test .............................................................................................................6
3. SUBSURFACE AND WELLS ...............................................................................7
3.1 Reservoir Data ....................................................................................................7
3.2 Well Productivity .................................................................................................7
3.3 Xmas Trees.........................................................................................................7
3.4 Drilling and Type of Wells ...................................................................................7
4. FLUID PROPERTIES ...........................................................................................9
4.1 Well Test Data ....................................................................................................9
4.2 Produced Oil Properties ......................................................................................9
4.3 Produced Water ..................................................................................................9
4.4 Crude Viscosities ................................................................................................9
5. METOCEAN AND ENVIRONMENTAL...............................................................10
5.1 Water Depth......................................................................................................10
5.2 Metocean Conditions ........................................................................................10
5.3 Variation of Water Temperature with Depth ......................................................10
5.4 Soil Conditions ..................................................................................................10
5.5 Environmental ...................................................................................................10
6. COSTING AND SCHEDULE ..............................................................................10
6.1 Costing..............................................................................................................10
6.2 Schedule ...........................................................................................................10
7. APPENDIX - CONVERSION FACTORS ............................................................11
8. APPENDIX - COST DATABASE / RELIABILITY DATA....................................13
1. INTRODUCTION
1.1 General
Setonix Oil Company (SOC) wishes to invite bidders to submit a tender for
the development of the Perth Canyon oil field.
The Perth Canyon oil field is located in a water depth of approximately

1600 m. The Perth Canyon oil is a medium-light crude with an
approximate gravity of 47.2°API and contains a small amount of
associated gas, primarily methane. It is planned to develop the field
through subsea wells. Tenderers are to recommend development and
export options for the field architecture.
The Perth Canyon oil field comprises a single reservoir with recoverable
reserves of 80 million barrels.
1.2 Seabed Topography
The Perth Canyon is a relict of the Swan River drainage system, cutting
into the shelf west of Perth and Rottnest Island. At the canyon head the
depth plunges from 200 m to 1000 m. The canyon mouth opens onto the
abyssal plain at 4000 m. In between, the canyon curves sinuously over
100 km, with a sharp bend halfway referred to as ‘the dogleg’, as shown in
Figure 1. Two small branches are present on the south rim near the
dogleg.
Figure 1 – Perth Canyon
1.3 Field Location
The layout of the Perth Canyon field is indicated in Figure 2 below.
Rottnest
Island
Figure 2 – Perth Canyon Reservoir

Reservoir dimensions: ~12 km x 3 km.
Reservoir water depth: 1600 m.
Depth contours from the coast are [100, 200, 300, 500, 750, 1000, 1500, 2000, 2500,
3000, 4000] m.
1.4 Development Drilling
From February 2008 to July 2009, SOC executed an exploration and

appraisal program in the Perth Canyon resulting in the oil field discoveries.
A total of nine wells were drilled over this period.
The oil discovery was made in February 2009, when the PC-7 exploration
well encountered a gross oil column of 24 m in the reservoir.
1.5 Subsurface Challenges
Appraisal wells were drilled and a high-resolution seismic survey was

acquired over the field to assist in planning the production program.
The reservoir lies in the Perth Canyon which is an ancient river outfall. The
Miocene submarine fan / channel reservoir is located 1,700m below the
bottom of the ravine, in a water depth of approximately 1600 m.
Subsurface presents extreme challenges for drilling due to debris flow and
fluvial deposits comprising boulder beds, sandstone, clay, marl, with
blocky landslide material.
1.6 Design Intent
Tenderer shall:
• Design a subsea system to produce oil from the Perth Canyon field.
• Set production rates to optimise return on investment.
• Determine an optimised subsea architecture, and justify equipment
sizing and field life.
• Design equipment and provide an operating philosophy to permit
production from the field.
• Review economics of the field and design the production system to
give the best return on investment.
Where it is felt that essential development information is missing, Tenderer

is invited to use reasonable engineering judgement and make
assumptions (These should be stated and justified). Process analysis is
not required.
Tenderer shall provide a description and justification for the following:

• Well design ( vertical vs. deviated)
• Horizontal or vertical trees
• Initial number of wells, and any subsequent phases of drilling new
wells, if needed
• Number of manifolds, and location
• Flowline jumper routing, and manifold valving arrangements
• Well testing and monitoring facilities
• Annulus monitoring and venting
• Wax, hydrate and corrosion control
• Location and size of production facility
• Risers
• Technology for operation and control of the field
• Flowline route and materials
• Flowline sizing1
• Pigging and inspection philosophy
• Outline Environmental Impact Assessment
• Schedule, and time to First Oil
• Production rate, and life of field
• Use or disposal of associated gas
1
http://www.freefuelforever.com/Pressure%20Drop%20Calculator.exe
2. FIELD DESIGN PARAMETERS
2.1 Design Life
Facilities shall be designed for a life of 20 years.
2.2 Availability
Overall development availability shall be in excess of 95%.
Tenderer is to demonstrate how this availability will be achieved2.
The facilities shall be designed for operating flexibility in terms of being

able to continue production whilst equipment has failed or is degraded
awaiting repair (e.g. through provision of bypasses, redundancy, etc.).
2.3 Hydrate Prevention and Remediation
For the anticipated operating, shut-in, start-up and ambient conditions of

the subsea production and lift/injection gas systems, hydrate mitigation
techniques may be required to avoid operation inside the hydrate region.
Tenderer shall recommend whether hydrate inhibitor injection shall be

made only at start-up and shutdown, or on a permanent basis.
Tenderer shall make provision for clearing flowlines of a complete hydrate

blockage by relieving pressure from both sides of the blockage for safe
disposal.
2.4 Corrosion Inhibition
Tenderer shall make provision for the injection of corrosion inhibitor into
flowlines and subsea facilities where necessary.
2.5 Gas Disposal
Gas disposal methods should be reviewed and considered by Tenderer.
2.6 Well Test
Production wells are to be individually tested at least once a month for 12

to 24 hours.
2
By means of reliability modelling.
A useful tool is RAPTOR Version 4.0S available from http://www.barringer1.com/raptor.htm
3. SUBSURFACE AND WELLS
3.1 Reservoir Data
Reservoir data is provided in the following table.
Parameter Design
Oil In Place (MMbbl) 270
Recoverable reserves (MMbbl) 80
FWHP -
SIWHP -
FWHT -
Reservoir Initial Pressure (bara) 260 bara
Reservoir Temperature 120 °C
The reservoir is located 1700 m below the canyon floor in a water depth of
1600 m. The reservoir (shown in Figure 2) measures 3 km x 12 km,
oriented in an east-west direction.
3.2 Well Productivity
Well characteristics are given in the table below:
Parameter Design
Maximum well production rate (per well) 15,000 bbl per day
at start of field life
As oil is drawn from the reservoir, the maximum flow rate from each well
declines in proportion to the remaining recoverable reserves3.
3.3 Xmas Trees
Tenderer shall determine whether horizontal or vertical trees are preferred.
3.4 Drilling and Type of Wells
Wells shall have 5" tubing.
Tenderer shall determine whether vertical or deviated wells are preferred

(see Figure 3). Due to the difficult subsurface conditions, the maximum
deviation permitted by Drilling is 1.0 km.
3
For example, after three quarters of the oil has been extracted, and 20 MMbbl recoverable reserves remain in
the reservoir, the maximum flow rate of each well falls to (20/80)*15,000 = 3,750 bbl per day.
Vertical Completion Deviated Completion
0.9 km
1.7 km
0.8 km
1 km
1.25 km 1.25 km
Figure 3 – Vertical vs. Deviated Wells
Bottom hole locations shall not be closer together than 2.5 km, as wells
any closer than this would unduly interfere with one another. This places
limitations on the top hole locations, as shown in Figure 4 below.
1.25 km 1.25 km
2.5 km
500 metres
1.25 km 1.25 km
2.5 km
Figure 4 – Distance between Bottom-Hole Locations
4. FLUID PROPERTIES
4.1 Well Test Data
A well test report for the PC-7 exploration well has been produced. This
has included preliminary characterisation of the wellstream composition.
Key results are presented in Table 4.1.
Table 4.1
Well Test Data
PC-7 exploration well
Date 9 Feb 09
Oil Gravity 47.2 °API
Solution GOR 65 scf/bbl
Pour Point 1.6°C (35°F)
4.2 Produced Oil Properties
The Perth Canyon crude oil is medium-light with an approximate gravity of

47.2°API and a low gas oil ratio GOR.
4.3 Produced Water
No produced water should appear during field life. The only water present
in the system should be water of condensation.
4.4 Crude Viscosities
PC-7 viscosity data4 is only available for the dead crude. The results are
summarised in Table 4.2 below.
Table 4.2
PC-7 Dead Crude Viscosities
Temperature Viscosity
(°C) (cP)
40°C (104°F) 2.46

50°C (122°F) 1.80
4
Viscosity is based on Beggs and Robinson equation.
5. METOCEAN AND ENVIRONMENTAL
5.1 Water Depth
The Perth Canyon field is located in a water depth of 1600 m.
5.2 Metocean Conditions
Tenderer is to determine metocean conditions.
5.3 Variation of Water Temperature with Depth
Tenderer is to determine variation of water temperature with depth.
5.4 Soil Conditions
Tenderer is to determine soil conditions.
5.5 Environmental
Terms of the operating license are expected to be extremely strict:

• Flaring not permitted except under emergency conditions.
• Loss of hydrocarbons to the environment not permitted (severe
penalties will be imposed)
• Disposal of waste materials to the environment not permitted
• Produced water disposed of overboard to contain less than 25 ppm
oil
• Interference with marine life is not permitted
6. COSTING AND SCHEDULE
6.1 Costing
A one page costing for equipment and vessels is to be prepared.
6.2 Schedule
Tenderer is to provide a one page schedule for the project.
7. APPENDIX - CONVERSION FACTORS
Mass 1 tonne 0.9842 UK ton

Mass 1 kg 2.2046 lb
Force 1N 0.10197 kgf 0.22481 lbf
Force 1 kgf 9.80665 N
Force 1 lbf 4.448222 N
Impact Energy 1 ft-lb 1.355818 J
Torque 1 ft-lb 1.355818 Nm
Volume 1 bbl 0.1589873 m3 158.9873 litre
Volume 1 US gallon 3.785412 m3
Speed 1 knot 0.5144444 m/s
Power 1 hp 0.746043 kW
Length 1 mile 1.609344 km
Length 1 ft 0.3048 m
Pressure 1 bar 100 kPa 0.100 MPa 14.504 psi
Pressure 207 bar 20700 kPa 20.7 MPa 3000 psi
Pressure 1psi 6.894757 kPa 0.006894757 MPa
Pressure 1MPa 1N/mm2
US Customary Units Metric

1 trillion (T) 10^12 1 Terajoule (TJ) 10^12
1 billion (B) 10^9 1 Gigajoule (GJ) 10^9
1 million (MM) 10^6 1 Megajoule (MJ) 10^6
Heating value
1 cubic metre of natural gas between 37.3 to 41
(North West Shelf) Megajoules
1 British Thermal Unit BTU 1055 joules
Volume
1 standard cubic metre of 35.3147 cubic feet of
natural gas natural gas
1 billion cubic metres of 750,000 tonnes of LNG
natural gas
1 trillion cubic feet of natural 28.3168 billion cubic
gas metres of natural gas
1 terajoule per day 26,300 cubic metres of 0.929 million cubic feet of
natural gas per day natural gas per day
1 barrel of oil 158.987 litres of oil
1 barrel of oil equivalent 0.1024 tonnes of LNG
1 tonne of crude oil 7.8616 barrels of oil
Mass
1 metric tonne 0.984207 long tons 1000 kilogram
LNG
1 metric tonne of LNG 52.9 million British 1333 cubic metres of natural 1.242 tonnes of oil
Thermal units gas at 0°C equivalent
1 million tonnes of LNG per 1.333 billion cubic metres 3.65 million cubic metres of
year (1 mtpa) per year natural gas per day
1 barrel of oil 0.158987 kilolitres of oil

1 kilolitre of oil 6.29 barrels of oil
1 standard cubic metre of natural gas 35.3147 cubic feet of natural gas
1 billion cubic metres of natural gas 730,000 tonnes of LNG
1 terajoule 26,300 cubic metres of natural gas 0.929 million cubic feet of natural gas
Pressure bara Temp °C

Metric standard conditions 1.01325 15
Normal conditions 1.01325 0
Metric standard conditions should normally be used.
Approximate Conversion Factors from BP website
Crude oil*
To
Tonnes (metric) kilolitres barrels US gallons tonnes/year
From Multiply by
Tonnes (metric) 1 1.165 7.33 308 –
Kilolitres 0.858 1 6.2898 264 –
Barrels 0.136 0.159 1 42 –
US gallons 0.00325 0.0038 0.0238 1 –
Barrels/day – – – – 49.8
*Based on worldwide average gravity.
Products
To convert
Barrels to tonnes tonnes to barrels kilolitres to tonnes tonnes to kilolitres
Multiply by
LPG 0.086 11.6 0.542 1.844
Gasoline 0.118 8.5 0.740 1.351
Kerosine 0.128 7.8 0.806 1.240
Gas oil/diesel 0.133 7.5 0.839 1.192
Fuel oil 0.149 6.7 0.939 1.065
Natural gas and LNG

To
billion cubic billion million million trillion million
metres NG cubic feet tonnes oil tonnes British barrels oil
NG equivalent LNG thermal equivalent
units
From Multiply by
1 billion cubic metres NG 1 35.3 0.90 0.73 36 6.29
1 billion cubic feet NG 0.028 1 0.026 0.021 1.03 0.18
1 million tonnes oil 1.111 39.2 1 0.805 40.4 7.33
equivalent
1 million tonnes LNG 1.38 48.7 1.23 1 52.0 8.68
1 trillion British thermal 0.028 0.98 0.025 0.02 1 0.17
units
1 million barrels oil 0.16 5.61 0.14 0.12 5.8 1
equivalent
Units and conversion factors from BP website

1 metric tonne = 2204.62 lb.
1 kilolitre = 6.2898 barrels
1 kilocalorie (kcal) = 4.187 kJ = 3.968 Btu
1 kilojoule (kJ) = 0.239 kcal = 0.948 Btu
1 British thermal unit (Btu) = 0.252 kcal = 1.055 kJ
1 kilowatt-hour (kWh) = 860 kcal = 3600 kJ = 3412 Btu
Calorific equivalents
One tonne of oil equivalent equals approximately:
Heat units 10 million kilocalories
42 gigajoules
40 million Btu
Solid fuels 1.5 tonnes of hard coal
3 tonnes of lignite
Gaseous fuels See Natural gas and LNG table
Electricity 12 megawatt-hours
One million tonnes of oil produces about 4000 gigawatt-hours of electricity in a modern power station.
Convert.exe http://joshmadison.com/article/convert-for-windows
8. APPENDIX - COST DATABASE / RELIABILITY DATA
The following budgetary cost database is provided for high level costing of options to aid in the
selection process for this assignment and to calculate budgetary field development CAPEX and OPEX.
More detailed cost information may be provided by some lecturers. Note that this is not a
comprehensive component list and students should not feel obliged to use only those components
listed below. Cost and failure for other equipment may be derived from the data below.
Equipment Cost (A$) Mean Time to Failure MTTF (yrs)
Subsea Wellhead 300,000 200
Xmas Tree - Diver Installed 2,000,000 50
Xmas Tree - Diverless 3,000,000 50
4 Slot Manifold, mudmat foundation, cluster 4,000,000 Assume only critical failures are leakage from valves in
arrangement, no pigging loop, diver installed. production flowpath - 1200 yrs each, and diver made-up
Not including choke, control pod or flanged connections - 1000 yrs each.
flowmeter
6 Slot Manifold, mudmat foundation, cluster 5,500,000 Assume only critical failures are leakage from valves in
arrangement, no pigging loop, diver installed. production flowpath - 1200 yrs each, and diver made-up
Not including choke, control pod or flanged connections - 1000 yrs each.
flowmeter.
Subsea Heat Exchanger - for 1 well 600,000 Critical failures is limited to leakage from isolation valves in the
production flowpath and end connections as per manifolds
Incremental cost for diverless installation of 1,000,000 Note that diverless connections have a MTTF of 250 years
manifold / heat exchanger etc. - remote
connections and isolation valves required
Choke Valve - Diver Retrievable 200,000 Assume 25% of chokes are repaired during field life.
Control Pod - Diver Retrievable 600,000 15 years
Incremental cost for ROT for choke and 250,000 N/A
control pod
Multiphase Flowmeter - Diver Retrievable 250,000 10 years
Multiphase Flowmeter - ROT Retrievable 550,000 10 years
High Integrity Pipeline Protection System 5 - 7,000,000 - 3 years. Failure results in loss of production. Repair by retrieval
(HIPPS) for 6 wells (downstream of manifold) - limited data of HIPPS module using vessel with >30 tonnes cranage
ROT retrievable
Subsea Separation System for 1 well - diverless 3,000,000 3 - 6 years. (Little data available)
installed
Subsea Separation System for 6 wells 10,000,000 3 - 6 years. (Little data available)
Direct Hydraulic Control Umbilical - 6 wells 2,000 / metre 15 years
Electrohydraulic Control Umbilical - 6 wells 500 / metre 15 years
Incremental cost increase for chemical 100 / metre N/A
injection line in umbilical
Cost for CRA flowlines 6,210 / tonne Flowlines are unlikely to fail (MTTF >> 1000 years). Connections
(Corrosion Resistant Alloy) failure MTTFs as per manifold data above.
Cost to lay CRA line 280,000 / km
Cost for Carbon Steel flowlines 883 / tonne As above
Cost to S-lay Carbon Steel line 150,000 / km
Cost to J-lay Carbon Steel line 270,000 / km
Flexible flowlines - 6” X 50m 4,000 / metre As above
Flexible flowlines - 6” X >1 km 1,700 / metre As above
Flexible flowlines - 12” X 50m 5,500 / metre As above
Flexible flowlines - 12” X >1km 3,500 / metre As above
Flowline Bundle Cost +10% Assume cost of individual components of bundle plus 10%.
Assumes availability of fabrication/launch site.
Vessels/Buoys Cost Notes

3rd Semi submersible drilling rig spread rate 350,000 / day Mobilisation cost is $25,000,000. Wait time of up to 6 months.
DP deepwater drillship spread rate 400,000 / day Vertical wells take 30 days to drill.
[Spread rate is about double the day rate] Offset/horizontal wells take 45 days to drill
Diving Support Vessel (includes sat diving 138,000 / day Mobilisation cost is $ 2,250,000. Wait time up to 3 months.
spread and 50 tonne cranage)
Diving Support Vessel ( includes 300 tonne 320,000 / day Mobilisation cost is $ 2,250,000. Extra for sat diving spread is
cranage but no sat diving spread) $25,000 / day. Wait time up to 6 months
ROV Support Vessel (includes 15 tonne 35,000 / day Mobilisation is $1,500,000. Wait time up to 2 weeks
cranage)
FPSO (Floating Production, Storage and 700,000,000 Rental: 70,000,000 p.a.
Offtake Vessel)
East Spar - type buoy 30,000,000

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SETONIX OIL COMPANY BASIS OF DESIGN

PERTH CANYON DEVELOPMENT Doc No. 0902-84 Rev A

PERTH CANYON DEVELOPMENT

Rev Description By Check PE PM Date

1 Revised as Noted K Mullen

Revised and Updated

The Perth Canyon oil field is located in a water depth of approximately

1.2 Seabed Topography

Figure 1 – Perth Canyon

1.3 Field Location

The layout of the Perth Canyon field is indicated in Figure 2 below.

Figure 2 – Perth Canyon Reservoir

1.4 Development Drilling

From February 2008 to July 2009, SOC executed an exploration and

1.5 Subsurface Challenges

Appraisal wells were drilled and a high-resolution seismic survey was

1.6 Design Intent

Where it is felt that essential development information is missing, Tenderer

Tenderer shall provide a description and justification for the following:

2. FIELD DESIGN PARAMETERS

2.1 Design Life

Facilities shall be designed for a life of 20 years.

Overall development availability shall be in excess of 95%.

Tenderer is to demonstrate how this availability will be achieved2.

The facilities shall be designed for operating flexibility in terms of being

2.3 Hydrate Prevention and Remediation

For the anticipated operating, shut-in, start-up and ambient conditions of

Tenderer shall recommend whether hydrate inhibitor injection shall be

Tenderer shall make provision for clearing flowlines of a complete hydrate

2.4 Corrosion Inhibition

2.5 Gas Disposal

Gas disposal methods should be reviewed and considered by Tenderer.

2.6 Well Test

Production wells are to be individually tested at least once a month for 12

3. SUBSURFACE AND WELLS

3.1 Reservoir Data

Reservoir data is provided in the following table.

3.2 Well Productivity

Well characteristics are given in the table below:

3.3 Xmas Trees

Tenderer shall determine whether horizontal or vertical trees are preferred.

3.4 Drilling and Type of Wells

Wells shall have 5" tubing.

Tenderer shall determine whether vertical or deviated wells are preferred

Vertical Completion Deviated Completion

Figure 3 – Vertical vs. Deviated Wells

Figure 4 – Distance between Bottom-Hole Locations

4.1 Well Test Data

PC-7 exploration well

4.2 Produced Oil Properties

The Perth Canyon crude oil is medium-light with an approximate gravity of

4.3 Produced Water

4.4 Crude Viscosities

40°C (104°F) 2.46

5. METOCEAN AND ENVIRONMENTAL

5.1 Water Depth

The Perth Canyon field is located in a water depth of 1600 m.

5.2 Metocean Conditions

Tenderer is to determine metocean conditions.

5.3 Variation of Water Temperature with Depth

Tenderer is to determine variation of water temperature with depth.

5.4 Soil Conditions

Tenderer is to determine soil conditions.

Terms of the operating license are expected to be extremely strict: