North East oil and gas cable-maker Duco Ltd is working on a significant £250m contract with oil giant Chevron North Sea Ltd to manufacture subsea technology for a North Sea project.
The firm, which designs and manufactures underwater umbilical cable systems at its factory on Walker Riverside, Newcastle, netted the agreement via its parent company French multinational Technip.
The company, which expanded its workforce by 100 last year bringing its total headcount to 600, is working on the manufacture of a 28km steel tube umbilical, which is a critical link in the subsea operation as it relays power, communications and chemicals between hydraullic-operated equipment on the seafloor and a platform or support vessel.
Technip’s operating centre in Aberdeen will carry out the majority of the engineering, procurement, installation and construction (EPIC) contract for the Alder field. However the umbilicals are being manufactured entirely at the Newcastle site, in line with Chevron’s plan to develop the field via a single subsea well, tied back to the existing Britannia platform, a distance of 17 miles.
Around 75% of the Alder project work is being handled by UK vendors with a total of £200m being awarded to Technip, Leeds-based OneSubsea and Aker Solutions in Aberdeen.
The whole project has a planned design capacity of 110 million cubic feet of natural gas and 14,000 barrels of oil per day. The work is expected to be completed in the second half of 2015 with first production expected in 2016.
The Alder field was discovered in 1975 and has taken many years to bring to economic development. It is around 200km North East of Aberdeen, Scotland, at water depths of about 150m.
Technip’s work will include the design and pipelay of a 28km pipe-in-pipe system and the installation of the 28km hybrid umbilical – made by Duco Ltd. Subsea works also include the installation of a manifold structure, subsea isolation valve structure, valves and other components. Vessels from the group’s fleet will be used for the offshore campaign, including its newest pipelay vessel, the Deep Energy.
Bill Morrice, MD of Technip for the UK, said: “We are delighted to be re-igniting our relationship with Chevron with this substantial contract that will allow us to support them in bringing the Alder field onstream. Technip has a proven track record in delivering EPIC contracts of this scale and our unique vertical integration is an added-value advantage for our clients as our capabilities cover the entire value chain for subsea infrastructures.
“The UK Continental Shelf is still an exciting place to be with many major fields being developed both around traditional developments and in deeper waters West of Shetland, a market Technip is keen to maximize opportunities.”
Craig May, managing director of Chevron Upstream Europe, said: “Our decision to proceed with this valuable asset was enabled by the right combination of technology, commercial conditions and knowledge sharing on high pressure high temperature experience.
“Field development is also being assisted by the enhanced Small Field Allowance introduced by the UK Government in 2012, which recognizes the importance of developing small fields in a mature oil and gas basin.”