MISC Integrated Annual Report 2020

Continued demand for hydrocarbons worldwide is pushing the industry players to pursue exploration in deeper waters. Additionally, demands for operational efficiency and greater concern over environmental impacts, provides challenges for the FPSO industry in the future. While the FPSO is fundamentally a system for producing, storing and offloading of hydrocarbons, technological advancements such as digitalisation enables the analysis of data and optimisation of performance as well as the improvement of the safety, technical and operational capabilities of the assets. Over the years, various measures have been implemented to manage the FPSO’s environmental footprint by reducing emissions, waste management, pollution/spill prevention and improving energy consumption. Industry players are stepping up their efforts by developing and investing in technologies such as carbon capture and storage (CCS) system, renewable energy solutions to power facilities onboard as well as other eco-efficient technologies to ensure the sustainability of their operations and to support the industry’s transition towards a low-carbon future. The global FPSO market is expected to showcase significant growth with up to USD78 billion worth of new projects to be commissioned within 2021-2026. As of January 2021, there are 166 FPSOs in operation worldwide and 31 available for deployment. South America is the region with the biggest growth potential of FPSO projects, majority in Brazil. In the 1970s, FPS were developed as an economically competitive alternative to produce hydrocarbons that were discovered further offshore. As offshore exploration moves to deeper waters, FPS is the preferred alternative in the fields where fixed platforms are not feasible. The most common types of FPS units are Floating, Production, Storage and Offloading (FPSO), Floating, Storage and Offloading (FSO), Semi-Submersible FPS, Tension Leg Platform (TLP), Single Point Anchor Reservoir (SPAR) Platform, as well as Mobile Offshore Production Unit (MOPU). In selecting the type of FPS technology to be deployed for a field, the field operator/project owner takes into account various factors including project economics as well as technical and operational considerations. Today, FPSOs are by far the dominant and most widely used type of FPS, accounting for about 56% of the total FPS currently in operation. FPSOs are mainly ship-shaped floating structures with all the necessary production, processing and storage facilities required by floating platforms available onboard the unit. These units are secured to the seabed via a variety of mooring systems, depending on the specific environment of the field. They are connected to the oil wells on the seabed below by flexible risers and flowlines. Sustainability of the Industry Snapshot of the FPSO Market Typical Components of an FPSO Processing of Hydrocarbons Onboard an FPSO FPSO Life Cycle in the Offshore Field Development Introduction SPECIAL FOCUS The FPSO Industry Fixed Platform MOPU SPAR Tension Leg Platform Semi-Sub FPS FPSO Shallow Deepwater Ultra Deepwater 500m 625m 750m 875m 375m 250m 125m 1000m 1125m 1250m 1375m 1500m 1625m 1750m Exploration Geological studies Seismic activities Appraisal Feasibility study Concept selection Front end development Field owner’s nal investment decision Bid process for FPSO EPCIC phase EPCIC Process Operation & Maintenance Asset life extension Retired asset will be dismantled and recycled in a sustainable manner. Cessation of production and dismantling of facilities Repair, life extension and conversion of an existing vessel, usually an oil tanker Mobilisation and installation of the FPSO at the designated field Ensuring the FPSO is ready to start its operation Asset may be redeployed to another field, subject to repair and life extension Field decommissioning FPSO demobilisation Recycling Redeployment Engineering Procurement Construction Installation Commissioning Project de nition Basic engineering Detailed engineering Project procurement Marine conversion OR Transportation & installation Commissioning & start-up Top 3 Regions with the Highest Number of FPSOs FPSOs Currently in Operation In the next 57% 33% 10% 5 Years converted from tankers newbuilds Storage of Oil or Condensate Power Generation Water Injection Oil/Gas Processing Offloading Reel Spread Mooring Flare Accommodation redeployed FPSOs it is expected that there will be a higher demand for newbuild FPSOs Instead of owning the FPSO, the owner may charter the asset under long-term contract, usually through a bid process Field owner/operator will select the type of production facilities to be utilised e.g. fixed platforms or FPSO Drilling of well Well testing Environmental studies Difference between FPSO, FSO & Oil Tanker Field owner/operator may extend the use of the FPSO if the field remains viable, subject to repair and life extension Production Storage Of oading Gas Water Crude Oil D e c o m m i s s i o n i n g E x p l o r a t i o n & A p p r a i s a l D e v e l o p m e n t P r o d u c t i o n Hydrocarbons transported to FPSO via flexible risers. Consumed on board the FPSO as fuel. Reinjected back into well and/or used for lifting and increasing production or exported via pipelines. Stored in the produced water tank. Treated before discharged overboard and/or reinjected into the wells/reservoir. Exported into tankers for transportation to shore terminal/refinery. Three-phase separation. Processed and stabilised. Activities undertaken by MISC Group Other activities (Clients/third parties etc.) Procurement of equipment Mooring system Others Construction of purpose-built FPSO hull Newbuild Fabrication of topside modules Topside modules Integration of marine & topside modules Integration Fabrication & Construction (MHB/Other third parties) Overall project management (MISC) Facility types shown here can be installed in deeper waters than graphically illustrated. FPSO FSO Oil Tanker Production Storage Of oading Did you know? FPSOs are usually designed with the capability for continuous operations for 20 years or longer. Reference/Sources for information • Energy Maritime Associates (EMA) FPS Quarterly Report January 2021 • www.statistia.com None Complete Limited South America 46 Brazil is the country with the largest number of FPSOs in the world with 45 units. Africa 42 Nigeria is home to the world’s largest FPSO, with a storage capacity of 2.3 million barrels of oil. Southeast Asia and Australasia 30 FPSO Kikeh is Asia’s and Malaysia’s first and largest deepwater FPSO, built in 2007 and deployed to offshore Sabah. Storage types