Trinidad and Tobago's Juniper project a crucial endeavour for the oil and gas industry

BP Trinidad and Tobago (BPTT) is developing Juniper, a major offshore natural gas project off the south-east coast of Trinidad. Juniper is significant in many different respects. For T&T the project is vitally important; it promises to help close the natural gas supply deficit that has affected the downstream and liquified natural gas (LNG) processing industry for the last four years. It is also critical that such a large project – total cost is estimated at $2.1bn – is being developed at a time when the slump in the global energy industry is leading many companies to cut back their capital expenditures and lay off workers.

For BPTT, Juniper features prominently in the ranking of its global development and investment priorities in 2016. The Juniper platform, initially built for five wells, may incorporate others from adjoining fields sometime in the future, extending its productive life cycle. Juniper is also significant because it is providing contracting and employment opportunities in a wide range of engineering and specialised areas in the country, helping to retain and stimulate the domestic oil and gas services supply chain.

The Juniper project consists of five subsea gas wells in the Corallita and Lantana fields, part of the Columbus basin 80 km off Trinidad’s south-east coast. It has been in development for almost three years, after BPTT gave it the formal greenlight in 2014. It was to involve the construction of a normally unmanned installation (NUI) in water depth of approximately 110 metres. Five subsea wells were to be linked to the platform, which in turn would feed the Mahogany B hub through a new 10-km flowline; from Mahogany B the gas would be exported to the onshore facility at Port Galeota. Total capacity was set at 590m standard cu feet per day (scfd). This represents an additional 15.4% on top of T&T’s total 2015 gas output.

Drilling In 2015

Drilling for the five Juniper sub-sea wells commenced in 2015, along with platform fabrication and commissioning of contractors and services. This was the first time that BPTT has used such a configuration of subsea wells. The Ocean Victory, a semi-submersible rig owned by Diamond Offshore Drilling, was brought to Trinidad to carry out the drilling operations, under the terms of a two-year contract. Technip of France won an engineering, procurement, installation and construction contract for the 6100-tonne jacket and 4300-tonne topsides, along with contracts for flowlines and pipelines.

The contract for onshore fabrication was awarded to Trinidad Offshore Fabricators (TOFCO), using the Labidco yard. Houston-based InterMoor, a major supplier of mooring technology, was responsible for the NUI mooring and foundation installation, using eight concrete piles of 1.2m diameters and 39m lengths.

Strategic Priority

In October 2015, during its third quarter global earnings presentation, BP mentioned Juniper as an important component of its Latin American and global strategy. BP chief executive Bob Dudley said new projects in T&T, Argentina, Brazil and Mexico were forecast to contribute to the company’s oil and gas production over the next five years. Juniper is scheduled to start production in 2017, Dudley said, noting that upstream investments were weighted towards natural gas. He also stated that BP was prioritising countries like T&T, where there are also shortages in domestic gas supply.

At the annual T&T energy conference BPTT regional president Norman Christie reiterated what he said was the company’s commitment to continue investing in upstream development despite the necessary cost adjustments required by the low-price environment. He noted for example that “third-party cost reductions” were necessary but said BPTT sought to work closely with its contractors and saw opportunities during the downturn to “further nationalise the workforce and to continue local content efforts”.

Despite Christie’s optimism there are some concerns about the ability of local fabricators to continue winning orders against strong competition from US Gulf Coast yards. In 2003-11 nine platforms were fabricated at Labidco; before the Juniper contract, there was a fallow period with no orders in 2011-14.

Faced with possible delays caused by industrial relations issues in mid-2015 TOFCO made the decision to transfer fabrication of the Juniper jacket to a US yard, while retaining fabrication of the topside in Labidco. While this was a way of guaranteeing project deadlines would be met, there were concerns that it might reflect badly on local oil and gas support service capabilities. “Greater use of local content is desirable, especially during a downturn. We would like to see more local participation in projects of national relevance, such as the deepwater campaign, whereas operators tend to seek less expensive solutions on the global market,” Frank Teelucksingh, managing director of Coastal Dynamics, an environmental consultancy firm based in T&T, told OBG.

On the issue of the shortfalls in gas supply, BPTT managers have suggested there are lessons to be learned from the past, in the sense that insufficient upstream investments have a negative downstream effect after a time lag. BPTT supplies natural gas to both Atlantic and The National Gas Company of Trinidad and Tobago, which is state-owned, for onward supply to the processing plants. PROJECT 50% COMPLETE: In February 2015 Charles Zimmerman, BPTT’s Jupiter project manager, told OBG that the project was over 50% complete. “We are committed to meeting the deadline of first gas in late 2017 and to being consistent. A lot of deep-water projects around the world get delayed or go over budget, but we are focused on keeping to our milestones and delivering a safe, cost-effective and competitive project.” BPTT is also working with local people and a local supply chain; there are more than 400 people involved at the fabrication yard at TOFCO most of whom are Trinbagonians. Zimmerman added, “We’ve built five of our previous platforms at TOFCO and it is important to maintain that capability in-country,” he said. Both Zimmerman and Giselle Thompson, BPTT vice-president for corporate operations, stressed the pivotal nature of the project for T&T, since it would represent more than 10% to the country’s total gas supply and help close the shortfalls experienced by the downstream and LNG processing plants. Company sources say that available data from an ocean-bottom cable survey suggest there are still significant hydrocarbons resources in the basin to be developed in future years.

At the beginning of April 2016 BPTT said that all five subsea trees required to pump gas from the wells had arrived in the country. The basic structures had been assembled at the OneSubsea fabrication yard in Johor, Malaysia and shipped to T&T’s Labidco yard for testing. The trees contain a number of component parts supplied by various global custom manufacturers and specialist engineering companies. Weighing 76 tonnes each, the trees are believed to be among the largest and heaviest ever built.

First Gas In 2017

Looking forward, Zimmerman told OBG that with four of the five wells now drilled, he was confident the project would meet its main deadlines. The platform, subsea equipment and pipeline work were all on schedule, while fabrication of the jacket and topside was ongoing. The subsea pipeline was set to be installed later in 2016. The platform would be installed in early 2017; allowing for further work and testing, with the gas set to start flowing in late 2017. He added that the company was seeking to deliver a complex project with particular attention to risk management and safety issues. BPTT was using a operating management system with various layers of assurance. Thompson stressed the importance maintaining a healthy and competitive domestic supply chain, keeping a range of skills, from welders through to divers, ready for projects of this type. She noted that La Brea in southern Trinidad had the potential to become a world-class industrial port, although there was still some room for improvement in the port infrastructure and supporting road networks.