Lack of Facilities Standards: The Achilles’ Heel of Modularization?
I read with interest Paul S. Jones’ “A Facilities Perspective” column on the state of modular components for production facilities in the February Oil and Gas Facilities. He argued that, as facilities are becoming more costly and complex, there is an increasing need for the oil and gas industry to embrace the possibilities of modularization in its production facilities. Cost savings, production maximization, and overall facilities simplification would be among the results, along with a better use of human capital at wellsites that would enable firms to redirect their operational focus to their core competencies.
“Ideally, I would like a catalog of modular production facilities components that could be assembled into an early phase architecture that is optimum for oil continuous phase production, then is modified simply for higher water cut production, and reconfigured again, if boosting/artificial lift/improved oil recovery is required in the final stages of field life. I want fluid based architecture flexibility and the ability to deliver an optimized facilities configuration based on reservoir deliverability,” Jones wrote.
In my view, this is a great idea.
As drilling has leveraged technology and innovation to become more assembly line in nature, oilfield facilities need to follow suit. Gone are the days of single-well sites where engineers could design one-off facilities for each individual well and call it good. Today’s multiwell systems, which can support dozens of active wells per site, demand robust, carefully engineered systems to support these high levels of production and risk, and need to be modifiable based on type curve maturity, regulation, and other variables. Modularization would most definitely make this process more manageable than it is today.
Unfortunately, however, it may not be that simple.
Every oilfield development comes with its own set of technical and engineering challenges. Individual facilities engineers approach the design of their systems in unique and personal ways. For example, they may prefer piping to be below ground rather than above, or they want storage tanks to fill from the bottom instead of the top. This illustrates the numerous decision points that go into every new site development—beyond just which components go where. Yes, certain parts of the oil field are primed for modularization. Emission control systems, for example, are now mandated by law, making them a logical starting point for standardization, but it may prove challenging to implement these sorts of changes industrywide.
Why? In large part, the march toward modularization has been slowed by the lack of facilities standards for oil and gas. Yes, emissions systems are now tightly regulated, but what about safety standards? What about design regulations? It is impossible to establish a truly modular oil field without standards and regulations in place that all companies need to meet. If we are all working toward different goals, how will we ever be able to agree on standardized componentry?
That said, the move toward modularization is beginning. Our firm has been developing modular systems for a number of our clients in recent years and has realized gains in efficiencies and cost savings as a result. Although this is great news for our clients, it is just a drop in the bucket for the industry. Modular components may well be the future of oil and gas facilities, but we still have a long way to go before we will have the regulatory framework in place to actually get there.
Matt Halker is the owner of Halker Consulting and is a registered professional engineer in Colorado, USA. He holds a BS in petroleum engineering from the Colorado School of Mines and has engineering and construction experience in the oil and gas industry, spanning from the US Gulf of Mexico to the Rocky Mountains. He can be reached at firstname.lastname@example.org
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