OGUK Decom Insight Report 2021

Topsides and substructure removal activity on the rise – 125 topsides (704,230 tonnes), and 115 jacket structures (382,308 tonnes) will be decommissioned over the next decade. This is up from 93 topsides and 85 jackets as reported in Decommissioning Insight 2020 . Both topsides and substructure charts show tonnage being removed at a steady rate in the first half of the decade before rising in the latter half. Topsides removals between 2021 and 2025 will average around 50,000 tonnes per year, and substructure decommissioning around 20,000 tonnes. This increases to around 90,000 tonnes of topsides removed, and 60,000 tonnes of substructures decommissioned per year from 2026 to 2030. The data show the relationship between tonnage removed, and quantity of installations removed. For example, 2023 is the year with the lowest topsides tonnage removed: 33,666 tonnes. It is also a year of high activity with 15 topsides removed. All the removals activity in this year is conducted in the SNS, where assets are much smaller than in the CNS and NNS. The weight of individual assets being removed in 2023 is between 240 and 6,547 tonnes. More cost certainty for platform removals costs – The cost per tonne of both topsides and substructures has dropped slightly in the CNS, NNS and WoS. This year’s report expects topsides removal to cost £2,011 /tonne, down from £2,190 last year; and £1,722/tonne for substructures compared with £2,024/tonne in last year’s report. By contrast, in the SNS and IS we see a slight increase at £2,296/tonne, compared with £2,020 last year. Topsides and substructure costs are combined in this region as most projects remove the topsides and the substructure in the same campaign. They are smaller than assets in the CNS and NNS.

It should be noted that the top and bottom ends of the cost estimate range have moved closer together (see the charts in Figure 10) as the amount of data about project expenditure rises. Decommissioning lift market interacting with other markets – The offshore decommissioning market is now interacting with the offshore wind installation market. As of 31 December 2020, the UK had 2,291 offshore wind turbines, and 33 offshore substations installed around its shores with a further 719 offshore turbines and 11 offshore substations under construction. 3 The lift vessels and resources used to install offshore wind turbines are the same as those used to remove offshore oil and gas installations, particularly the smaller assets in the SNS. The oil and gas industry will normally offer long time windows of two to three years for a lift contractor to remove an installation. This has allowed contractors to remove assets during quieter periods, which increases vessel utilisation and cuts operator costs. Offshore wind farm installation projects are getting larger, with many installation campaigns for a lift vessel now running into the hundreds of days. This means that even though oil and gas removal projects have offered windows, the timeframes for removals are constrained. With many assets being removed during short time periods this could in future have a knock-on effect on onshore disposal facility capacity. Additionally, as offshore wind turbines get larger, this market could start to interact with those larger oil and gas installations in the CNS and NNS. Over time, as offshore wind farms age, these too will be decommissioned as will offshore structures to support industries like CCUS, hydrogen and geothermal. While these industries will benefit from a supply chain expertise born from decommissioning oil and gas structures, as many of the skills and infrastructure are easily transferable, competition for resources may also drive up prices.

3 https://www.thecrownestate.co.uk/media/3792/offshore-wind-operational-report-1.pdf

DECOMMISSIONING INSIGHT 2021

17

Made with FlippingBook - professional solution for displaying marketing and sales documents online