South Pars Gas Field development project - Phase I

TWO WELLHEAD JACKETS AND CELLAR DECKS

Contract for Provision of Management Services for Engineering, Procurement, Fabrication and Commissioning (EPC)

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The South Pars Gas Field Development Project has been conceived by National Iranian Oil Company (NIOC) for the exploitation of gas and condensate reservoir located in the Persian Gulf. The first phase of this project has been planned to be capable of producing, transporting to the mainland and processing 1000 MMSCFD of reservoir fluid (on dry basis).

The offshore complex will be located at approximately 100 km from the Iranian coast in water depth ranging from 60 m to 75 m and will be distributed over a complex of several platforms namely two Wellhead Platforms (SPD1 and SPD2), one integrated Central Production Platform SPD1, one living Quarter SPQ1 and a Flare Platform SPF1.

After preparation of the basic design of the project, in order to meet the project schedule and facilitate drilling of the required development wells, a contract was awarded to Iranian Offshore Engineering and Construction Company (IOEC) to carry out the detailed engineering, procurement, construction and installation of the two wellhead platforms SPD1 and SPD2.

In order to accomplish the job, IOEC utilized the services of Amid Engineering and Development Company (AMIDCO) for the management of the project. These services started from negotiation and finalization of the contract between IOEC and PEDEC (client) and ended in taking over of the facilities by the client. All phases of the project, i-e. engineering, procurement, construction and installation were executed under direct supervision of the management team fully employed by AMIDCO.

The key elements of managerial philosophy and approach were:

• To execute the project in a professional, economic and timely order in compliance with contract specifications and to the full satisfaction of the client.
• To have a flexible and efficient organizational structure capable of rapid and efficient communication and coordination between different parties involved in the project.
• To implement rigorous management producers to ensure clear definition of scope of work and interfaces for subcontractors together with understanding of time and work schedule.
• To maximize utilization of services and supplies from domestic market.
• To undertake quality assurance control and safety management throughout the project.

Based on the above, the whole scope of EPC package was broken to several packages.

Each package was then awarded to a subcontractor after consultation with IOEC management. Following is a list of major parties responsible for execution of different activities of the job:

1. Technip Geoproduction (TPG of France), detailed engineering of the jacket
2. Namvaran Consulting Engineers, detailed engineering of cellar deck
3. Department of Commerce (IOEC), procurement of main items of the project
4. National Petroleum Construction company (NPCC of UAE), fabrication of SPD2 platform
5. Iran Marine Industrial company (SADRA), fabrication of SPD1 Platform
6. Department of Installation (IOEC), installation of Platforms

In addition to the above there were other parties either providing services such as insurance, legal, inspection and marine warranty services or acting as a subcontractor for the A/M parties.

Project controls were carried by the project management team and included planning, scheduling, progress measurements and reporting, allocation of budgets, cash flow assessment, change identification and change order control.

On the technical side, the project management team consisted of high caliber personnel with depth of relevant experience and excellent qualifications. They ensured strict adherence of subcontractors to the project specifications, in depth scrutiny of all engineering documents such as calculation notes, drawings, specification and procedures.

They also supervised all the fabrication and installation activities in fabrication yards and offshore sites and made sure those specifications, procedures and quality control measures were properly followed.

The EPC project, which consisted of approximately 7,500 MT of steel work, commenced in June 1996 and was handed over to the client in January 1999. The completion of project took longer than planned. It was due to two main reasons firstly due to a change in client’s plan for drilling, an additional work was ordered for design, fabrication and installation of temporary drilling decks to suit the use of tender assisted drilling rigs. Secondly IOEC acquired a complete second hand marine spread, which was planned to be utilized in this project as their first job (Preparation and mobilization of marine spread, construction equipment and personnel took several month).

Successful completion of an offshore project of this size with so high contribution from local experts, consultants, suppliers and subcontractors was a great achievement for Iranian industrial sector.