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PETRONAS TECHNICAL STANDARDS

PROJECT MANAGEMENT

MANUAL (SM)

COST ENGINEERING MANUAL

PTS 10.009
JANUARY 1995

PREFACE

PETRONAS Technical Standards (PTS) publications reflect the views, at the time of publication,
of PETRONAS OPUs/Divisions.
They are based on the experience acquired during the involvement with the design, construction,
operation and maintenance of processing units and facilities. Where appropriate they are based
on, or reference is made to, national and international standards and codes of practice.
The objective is to set the recommended standard for good technical practice to be applied by
PETRONAS' OPUs in oil and gas production facilities, refineries, gas processing plants, chemical
plants, marketing facilities or any other such facility, and thereby to achieve maximum technical
and economic benefit from standardisation.
The information set forth in these publications is provided to users for their consideration and
decision to implement. This is of particular importance where PTS may not cover every
requirement or diversity of condition at each locality. The system of PTS is expected to be
sufficiently flexible to allow individual operating units to adapt the information set forth in PTS to
their own environment and requirements.
When Contractors or Manufacturers/Suppliers use PTS they shall be solely responsible for the
quality of work and the attainment of the required design and engineering standards. In
particular, for those requirements not specifically covered, the Principal will expect them to follow
those design and engineering practices which will achieve the same level of integrity as reflected
in the PTS. If in doubt, the Contractor or Manufacturer/Supplier shall, without detracting from his
own responsibility, consult the Principal or its technical advisor.
The right to use PTS rests with three categories of users :
1)
2)
3)

PETRONAS and its affiliates.


Other parties who are authorised to use PTS subject to appropriate contractual
arrangements.
Contractors/subcontractors and Manufacturers/Suppliers under a contract with
users referred to under 1) and 2) which requires that tenders for projects,
materials supplied or - generally - work performed on behalf of the said users
comply with the relevant standards.

Subject to any particular terms and conditions as may be set forth in specific agreements with
users, PETRONAS disclaims any liability of whatsoever nature for any damage (including injury
or death) suffered by any company or person whomsoever as a result of or in connection with the
use, application or implementation of any PTS, combination of PTS or any part thereof. The
benefit of this disclaimer shall inure in all respects to PETRONAS and/or any company affiliated
to PETRONAS that may issue PTS or require the use of PTS.
Without prejudice to any specific terms in respect of confidentiality under relevant contractual
arrangements, PTS shall not, without the prior written consent of PETRONAS, be disclosed by
users to any company or person whomsoever and the PTS shall be used exclusively for the
purpose they have been provided to the user. They shall be returned after use, including any
copies which shall only be made by users with the express prior written consent of PETRONAS.
The copyright of PTS vests in PETRONAS. Users shall arrange for PTS to be held in safe
custody and PETRONAS may at any time require information satisfactory to PETRONAS in order
to ascertain how users implement this requirement.

CONTENTS
INTRODUCTION
SECTION A - ONSHORE PRODUCTION FACILITIES AND TERMINALS
SECTION B - OFFSHORE FACILITIES
SECTION C - OFFSHORE SUBSTRUCTURES
SECTION D - SUBSEA PIPELINES
SECTION E - MINOR PROJECTS (FUTURE)
SECTION F - PROJECT LEAD TIMES
SECTION H - WORKED EXAMPLES

INTRODUCTION
This document is a modified version of the SIPM E & P Cost Engineering Manual (CEM) Volume
II. SSB/SSPC inhouse data, like design manhour norms and cost rates, fabrication cost
rates,
installation and the duration norms and cost rates have been incorporated to customise the module
for local applications. It provides type methods for preparing Type II cost (CAPEX) estimates for the
following Hardware elements

Onshore Facilities and Terminals

Offshore Topside Facilities

Offshore Fixed Substructures

Sub-sea Pipelines

Purpose of This Document


This document is intended to be used for preparing type II cost estimates (accuracy range 25%). It
is therefore suitable for projects that are in the Study/Optimisation and Conceptual design phases.
The method may also be suitable for preparing Company estimates for fabrication costs.
Method of Update
This document will be updated by EDV/14 twice a year, i.e. June and December updates, with cost
st
st
reference dates of 1 July and 1 January of each year respectively.
The update will be based upon the following sources of data

Feed back from EDV/1/2/3/4, EPO/2/4/5/6, ETS/1 /2/3, EGP

Feed back from current and newly completed projects

SIPM revised Cost Engineering Manual Volume II

1.1 COST ENGINEERING MANUAL USER GUIDE


The manual contains Type II cost estimating method having an accuracy within 25%. The improved
accuracy of the Type II method is achieved by breaking projects into a larger number of smaller
building blocks, by requiring more project specific input data, and by using more detailed algorithms to
determine the engineering quantities for each building blocks, by requiring more project specific input
data, and by using more detailed algorithms to determine the engineering quantities for each building
block.
Generally the manual employs SI unites modified for 'oil field' use. For example, pressure is in bar and
pipeline diameter is in inches. For reference purposes, graphs have been provided with a secondary
axis indicating units such as barrels per day and millions of standard cubic feet per day where
appropriate. Unit cost rates and costs are in Ringgit Malaysia throughout.
A detailed user guide for the Type II estimating method is provided in Section 5.1. The user guides
outline the procedures to be followed from definition of the project and obtaining the minimum basic
data required for the estimate through to the preparation of the final cost estimate and phased capital
expenditure summary. further guidance and step by step procedures are provided within each of the
various individual Hardware Category estimating methods.
Sections 5.2 contain the descriptions and definitions of the Hardware Item and Project Function
building blocks for the Type II methods.

Section 5.3 contain guidance on project definition, input data requirements, the selection of Hardware
Items and the preparation of field development scenarios for prospect evaluation for Type II
estimating methods. For the user familiar with the rest of the manual, the cost estimating process will
normally start in this section.
When using the manual it is important that the estimator be familiar with section 2 - Cost Engineering.
This section outlines the principles and practices of cost engineering as adopted in this manual, and
explains how a Project is broken down into building blocks, the relationships between the building
blocks, and the terminology associated with cost engineering as used throughout this manual.
Before proceeding, the user's attention is drawn to the following:

This manual is confidential and all methods and data contained herein must be treated as
such.

The manual 'is for the preparation cost estimates and should not be used for design
purposes.

Users in E&P Operating Companies should contact their cost engineering focal point to obtain
data which is particular to their Operating Company.

The user is also cautioned against using the manual for purposes for which it is not intended such as
using individual engineering quantities or unit rates in isolation. Cost estimates prepared in these
circumstances may not have the degree of accuracy normally associated with a Type II estimate for a
complete Hardware Item.

1.3 DEFINITIONS AND TERMINOLOGY


The following list of definitions and terminology is intended to provide the user with an overview of the
most commonly used terms in the Cost Engineering Manual. In addition to the list below, descriptions
of the various Hardware Items and Project Functions are found in Section 5.2, and descriptions of the
numerous System Groups and Systems are provided within the sections of the manual in which the
individual 'System Group or System is identified.
ACCURACY
The band width, expressed as +X%/-Y% relative to the 50/50 value of an estimate, outside which the
probabilities of overrun and underrun are each less than 10%.
ACTIVITY
An item of work performed on (a part of) a Project, It can be represented as an Intersection on a
Hardware Item/Project Function matrix.
ACTIVITY ALLOWANCE
An allowance added in the course of preparing a base estimated for an activity to cover identified but
yet unquantified elements In this manual the activity allowances are built into the algorithms for
deriving quantities and are not identified separately.
BASE ESTIMATE
Comprises the activity estimate plus the activity allowances (i.e. those uncertainties which are known
historically will occur). In the manual this corresponds to the sum of all Project Function costs for a
Hardware Item.
CALM
Catenary Anchored Leg Mooring. A chain and buoy based vessel mooring system or product loading
terminal.

CEM
Cost Engineering Manual.
CONSTANT VALUE MONEY (CVM)
Costs or revenue expressed on the basis of the value (purchasing power) or money at a stated point
in time.
CONTINGENCY
Funds added to the Hardware item base estimate in order to take into account the degree of
uncertainty in estimating and thus to provide an acceptable level of confidence in the total estimate.
CRM
The SIPM E&P Cost Reporting Manual (Report EP-90-3030).
DSV
Diving Support Vessel.
ESTIMATOR
The person using the CEM to obtain a cost estimate for a particular project.
50/50 ESTIMATE
An estimate with an equal probability or overrun as underrun. Comprises .base estimate (which
includes activity allowance) plus contingency. Basis for economics/sensitivity analysis.
FPSU
Floating Production and Storage Unit.
FPU
Floating Production Unit.
FSU
Floating Storage Unit.
HARDWARE
A physical component of a Project, which has defined physical and organisational interfaces with
other Hardware Items. For example a jacket, a gathering station or a pipeline. Reference should also
be made to Section 5.2.
HARDWARE CATEGORY
A heading for 'functionally similar hardware Items. For example onshore pipelines, floating
substructures or offshore production facilities. A separate cost estimating method is provided for each
of 10 Hardware Categories (Sections 5.4 to 5.13).
HARDWARE ITEM/PROJECT FUNCTION MATRIX
A technique for breaking down a Project into logical, manageable and controllable elements on the
basis of Hardware Items and Project Functions.
HLV
Heavy Lift Vessel or crane barge.

MANHOURS
Engineering manhours are the total engineering manhours including engineering contractors project
management manhours. Construction, fabrication, and onshore commissioning manhours are the
direct manhours only. Offshore hook-up and commissioning manhours are direct, indirect and nonproductive.
MONEY OF THE DAY (MOD)
Costs or revenue expressed on the basis of the value (purchasing power) or money at the time when
each cost or revenue element is expected to occur.
OPCO
A Shell Group E&P Operating Company.
OLU
Offshore Loading Unit, using a CALM buoy to provide an in field or at shore product loading facility for
shuttle tankers.
PMG
The SIPM E&P Project Management Guideline (Report EP 86-0500).
PROJECT
For the purposes of this manual, a Project is defined as being an exploration or development
prospect, a field development project, a feasibility or screening study, a detailed engineering study, or
any other activity related to oil or gas field development.
PROJECT FUNCTION
A discrete element of work performed on a Hardware Item such as design, procurement, construction
or a discrete cost element related to the Hardware Item such as insurance and certification.
Reference should also be made to Section 5.2.
REGION
Geographical areas which, for the purpose of the manual are defined as

1. Europe

2. Africa

3. Middle East

4. Far East

5. Western Hemisphere, (North, South and Central America)

Reference should also be made to Section 3.6.


RM
Ringgit Malaysia
ROV
A remotely Operated Vehicle used to support underwater maintenance, inspection or construction
activities.

SYSTEM GROUP
A physical component of a Hardware Item and the smallest building block for a Type I estimate. Each
Hardware Category has a fixed set of System Groups, some or all of which may be selected by the
Estimator to make up a particular Hardware Item. For example, the fixed substructures category has
jacket steel, piles and anodes as its three System Groups.
SYSTEM
A physical component of a System Group and the smallest building block for a Type II estimate. Each
System Group has a fixed set of Systems, some or all of which may be selected by the Estimator to
make up a particular System Group. For example the oil processing System Group has separation,
heating, dehydration and water treatment as its four Systems.
TAD
Tender Assisted Drilling. A method to drill platform wells using a platform mounted derrick equipment
set, and a tender support vessel moored alongside the platform on which additional drilling equipment
and accommodation is located and from which drilling support services are provided. The use of
Tender Assisted Drilling reduces the amount of drilling related equipment on the platform .and
consequently the platform topside facilities and jacket weights.
TYPE I
The highest estimating level of a Project. Type I cost estimates are defined as having an accuracy
within 40%..
TYPE II
The level below Type I for estimating a Project. Type II cost estimates have smaller blocks that Type
1, and are defined as having an accuracy within 25%.
USER
The Person using the CEM to obtain a cost estimate for a particular project.

1.4 REVISIONS AND CHANGES


The Cost Engineering Manual will be revised biannually. Individual sections, figures and forms will be
updated to reflect changes in the technical and cost data, to incorporate estimating methods for new
technology and to include corrections, additions, suggestions from users, etc. Updated sections and
pages will be issued to all registered holders of the Cost Engineering Manual and will be identifiable
from the revision number and date printed at the bottom of each page. The entire manual will be
reissued periodically, dependent upon the extent of interim revisions and updates. A record of
revisions will be maintained, and Will be recorded on Figure 1.1.
Proposals for corrections, additions and other changes to the manual should be made to EDV/14. All
proposed changes will be reviewed by, and be subject to the approval of the appropriate discipline
engineering section within SSB/SSPC before being incorporated. Proposed changes should
therefore be submitted to EDV/14 using a copy of Form 1.1. If the proposal involves amendments to
existing pages of the manual, a copy of the marked-up pages should be attached to Form 1.1.
Feedback from users regarding this update or the entire CEM would be appreciated, and can be
noted on the User's Feedback Form 1.1.

1.5 BIBLIOGRAPHY
The following list of references may be used in conjunction with this Manual.
GENERAL

SIPM E&P Project Management Guideline, SIPM EP90-4000, December l990

Production Handbook, by Production Division, SIPM (updated June 1987)

The use of S1 Units, PTS 00.00.20.10, (Revised March 1985)

Guidelines for preparation of Field Development Plans, SIPM EP87-0879, March 1987

COST ENGINEERING

Spreadsheet version of the Cost Engineering manual User's Guide, SIPM EP 91-0320, March
1991.

Cost Engineering System Feasibility and Analysis Report, SIPM EP-91-0975, June 1991

Engineering Benchmarks, SIPM EP 91 -1190, November 1991

Introduction to Cost Engineering for E&P Projects, SIPM -EP/23.6, August 1982. SIPM EP56233 (now superseded by this Manual)

Standard formats for Cost Engineering for E&P Projects, SIP EP/-23.6 June 1982. SIPM EP55420 (now superseded by this Manual)

Applied Cost Engineering, Forest Clark and A. Lorenzoni, Marcel Bakker Inc. New York

Cost estimating manual for pipelines and marine structures, J.S. Page, Gulf Publishing
Company, Houston

Estimator's equipment installation man-hour manual, J.S. Page, Gulf Publishing Company,
Houston

Estimator's piping man-hour manual, Page and Nation, Gulf Publishing Company, Houston

BUDGETS AND COST DATA

SIPM E&P Cost Reporting Manual, SIPM EP 90-3030, November 1990.

Programme data books (Procedure for the presentation of Programme and Budget Data)
SIPM EP 89-000, November l990

Capital Budget Manual SIPM EP 60-791, March 1987

Fig. 1.1 - Form EDV14: (Revisions Number / Cost Ref / Reasons for Revision)

Form 1.1- Form EDV14 (Ref Indicator / Page Number / Comments etc.)

Costs Estimate(s) / Type(s) used / Completed Evaluations - Form EDV14

2 COST ENGINEERING
2.1 INTRODUCTION
Cost estimates of progressively increasing accuracy are required at every stage of prospect appraisal
and project planning, and provide the basis for economics analysis, management decisions, budgets
and cost control. Each estimate must correspond to the recommended level of accuracy for the
particular phase in the life of an exploration prospect or field development project. The CEM is
designed to produce cost estimates for the screening and feasibility studies normally associated with
the identification phase of prospective field development projects. The manual therefore relates
primary" to the identification phase, but is of course also relevant to all other project phases. For
specific guidance on cost engineering during the definition and execution phases of a project,
reference should be made to Group literature such as the SIPM E&P Project Management
Guideline, (EP 90- 4000), SIPM E&P Guidelines for the Preparation of Field Development Plans,
(EP 87-0879), and SIPM E&P Programme and Budget Documentation, (EP 59-000), as well as local
Operating Company practices.
The basic general principles of cost engineering are described in Section 2.2 - Principles of Cost
Engineering. The application of these principles in the CEM is explained in detail in Section 2.3 - Cost
Engineering in Practice.

2.2 PRINCIPLES OF COST ENGINEERING


2.2.1 Key Steps in Cost Estimating
Cost estimates are required to predict the final cost of a project at any point in time and play an
essential role in the economic appraisal or, as a cost model, in the Optimisation of design, execution
or operation of a project. Cost engineering covers the entire process by which a cost estimate is
determined and includes the following key steps:

Definition of the project for which the estimate is required.

Division of the project into building blocks.

Estimation of the cost of each building block.

Summation of the individual costs to obtain the total cost estimate.

The availability of project specific data, the degree of definition of the scope of the project, the number
and nature of the building blocks, and the method used to estimate the cost of each individual block
all impact on the overall accuracy of the estimate, The need to formalise the estimating methods and
to define the individual building blocks is therefore crucial, to ensure that cost estimates are both
consistent and reliable, with an accuracy commensurate with the purpose for which the estimate is
performed.
2.2.2 Uncertainty, Contingency and Accuracy
Estimates are usually predictions of future events and therefore provision must be made for
uncertainties. This is done by adding allowances and contingencies to the estimated cost of either
individual building blocks or the project as a Whole. These additions increase the probability of the
final actual project cost not overrunning the estimated cost. 'This probability is also referred to as the
level of confidence in the estimate and increases as a function of the value of the allowances and
contingencies included.
As estimate with a 90% chance of the final cost not exceeding the estimate (and therefore only a 10%
chance of overrun) is referred to as a 90/10 estimate to identify it's level of confidence. In such an
estimate, allowances and contingencies will be greater than for an estimate to the same project with
an equal chance of overrun and underrun, which would be called a 50/50 estimate.

The purpose of a particular estimate will decide which confidence level is required. Field development
economics for instance are usually based on 50/50 estimates.
Care should be taken in selecting contingency values. Unnecessarily high contingencies and
allowances in cost estimates for prospect appraisal, for instance, may lead to good business
opportunities being missed. On the other hand, as contingency provides a measure of protection
against uncertainties and the unforeseen, insufficient levels of contingency in such a case may lead to
overly optimistic expectations of profitability.
Having established the value of the estimate with an equal chance of overrun and underrun (50/50
estimate), the extent to which final actual project cost may over or underrun this estimate must be
specified. This is the accuracy of the estimate and is usually express a X%, for instance 25% for a
feasibility study estimate.
To put practical limits on the accuracy range, its upper and lower boundaries are defined as having a
probability of less than 10% of overrun or underrun, respectively. As a consequence, these
boundaries coincide with the 90/10 and 10/90 values of the estimate. In Section 2.3, Cost Engineering
Practice, this approach is discussed in more detail.
2.2.3 Cost Phasing
Cost estimates may be phased over time in order to obtain a project expenditure profile based on the
project schedule and the individual duration's associated with the completion of each of the project
building blocks. This introduces the time factor in the estimate and is an essential exercise if the
estimate is to be used for the analysis of field development economics on the basis of discounting.
Furthermore, if in addition to the phased capital expenditure profile, a production profile and an
estimate of the annual operating expenditure are available, then the estimated discounted unit
technical cost of the project may also be derived. This is a useful preliminary indicator of profit ability
when compared to the projected oil or gas price and may, in this form, be used to test the feasibility of
the selected development scenario.

2.3 COST ENGINEERING IN PRACTICE


2.3.1 Cost Estimating
The section of the manual expands the basic general principles outlined in Section 2.2 and
demonstrates how these principles have been incorporated into the cost engineering practice adopted
in this manual. The process by which a cost estimate is determined is further detailed below.
The key steps in the preparation of a capital cost estimate for a project are :

To define the nature and key parameters of 'scope' of the project or development scenario
being considered.

To breakdown the project into building blocks or 'Hardware Items', and to a level of details
appropriate for the type of estimate required.

To further breakdown each Hardware Item into discrete activities or "Project Functions'.

To derive the engineering or physical quantities of each Hardware Item using a method which
takes account of key parameters of the project.

To estimate the cost of each Project Function by application of unit cost rates to the derived
engineering quantities for each Hardware Item.

To add appropriate allowances and contingencies to the individual estimates at Hardware


Item or Project Function level.

To phase the components of the total cost estimate to obtain an expenditure profile which
reflects the project schedule.

To summate and record the complete estimate from the definition of scope, through the
derivation of quantities and the application of unit cost; rates to the final estimated cost of the
project.

These steps are required in all estimates, however the reason for the estimate and the accuracy
required will determine the degree of definition and the extent to which the project need be broken
down into building blocks. The type of estimate performed should therefore be commensurate with the
purpose for which it was prepared.
The practice adopted in the Cost Engineering Manual is therefore
1. To select and estimate type based on the .purpose of the estimate and the accuracy required,
2. To adopt a pre-determined breakdown structure for the selected estimate type.
3. To follow a consistent estimating method across the complete breakdown structure.
The above can be summarised in the following cost estimating elements which are addressed in the
subsequent sections :
1. Estimate types and accuracy
2. Breakdown structure.
3. Estimating method.
4. Contingencies and allowances.
5. Cost phasing.
2.3.2 Estimate Types and Accuracy
Estimates are classified as screening, study, budget or control estimates (also referred to as Type I to
IV) to give an indication of the accuracy which may be assigned to the cost figures. The accuracy is a
function of the engineering effort permitted by the scope definition. It is also a function of the variance
in both the derived engineering quantities and the unit cost rates selected for the estimate.
Figure 2.1 gives a summarised description to estimate types, their application and expected accuracy.
The detail of engineering effort required to estimate cost within these levels of accuracy is indicated in
this figure through reference to the "Technical data required for cost estimate'.
The expected accuracy of an estimate is expressed as X%, for instance 25% for a study estimate.
The upper and lower boundaries of the accuracy range are defined as having a probability of less
than 10% of overrun and underrun respectively. In other words an estimate with a value of 200 and an
expected accuracy of 25% would have a probability of 10% that actual cost will exceed 250 or be
less than 150.
Estimates produced from this manual are expected to have an accuracy within 25% for Type 11
estimate.
As will be exploited in Section 2.3.5 - Contingencies and Allowances, the accuracy range as
determined by the estimator (possibly with the aid of Figure 2.1) plays a role in the definition to the
confidence level of the estimates.

2.3.3 Breakdown Structure


The selection of building blocks from which to compose the hardware required for the particular
development scenario under study is the second step in the estimating process. It this important that
the boundaries of these building blocks are clearly defined, as this determines the estimating methods
to be used. For the estimating methods contained in this manual, the boundaries are specified in the
relevant chapters.
The breakdown structure adopted for the cost engineering system of which this manual forms part
(see also Section 2.4 - Cost Engineering System) is a Hardware Item/Project Function matrix,
whereby Hardware Items form the physical building blocks of a project and Project Functions are the
discrete elements of work performed on the Hardware Items (these definitions are further explained
below). For 'Type II estimates a more detailed breakdown of hardware is used to obtain more
accurate estimates.
The structure of the Hardware Item/Project Function matrix is described in more detail in the following.
Project
The cast engineering methods in this manual are applicable to oil and gas field development Projects,
either onshore or offshore. The Project is the provision, from engineering through to commissioning,
of the facilities necessary to produce a field and deliver the products to the point of sale or to an
existing transportation system. The Project facilities cover drilling of development wells, production
facilities, in field and export pipelines, oil export terminals and new permanent infrastructure.
Hardware Category
Hardware Items are chosen and described by the Estimator in order to fully define the Project. In this
manual, similar Hardware Items are grouped together into Hardware Categories.
For example, a gathering station and a production station are two Hardware Items in the onshore
production facilities category. To date a total of 5 Hardware Categories have been included in this
manual as follows

Production facilities - onshore

Production facilities - offshore

Substructures - fixed

Pipelines - offshore

Terminals

The purpose of grouping items into Categories is that there is one estimating method for each
Category, applicable to all Hardware Items in that Category.
It is quite possible that a Project will have more than one Hardware Item in a particular Hardware
Category (e.g. a central jacket and a satellite jacket). This points to an important distinction between
the terms Hardware Item and 'Hardware Category; a Hardware Item is a physical building block of a
'Project, whereas a Hardware Category is a subdivision of the estimating methods within this manual.
Hardware Item
The first breakdown of a Project is into Hardware Items. These are components with clearly defined
physical and organisation boundaries. Examples of possible Hardware Items for an offshore oil field
are a steel jacket substructure, the topsides production facilities, the wells drilled from the platform,
the export oil and gas pipelines, an onshore storage terminal, a marine facility for supply vessels and
a heliport.

System Group
Hardware Items are broken down into System Groups, which are the smallest building blocks for a
Type I cost estimate. Each Hardware Category has a fixed set of System Groups, some or all or
which may be selected by the Estimator to make up a particular Hardware Item. For example, the
fixed substructures category has jacket steel, piles and anodes as its three System Groups.
It is helpful to conceive the breakdown described so far as a triangle. This triangle, shown in
Figure 2.2 depicts the manner in which a Project is broken down into successively smaller
components, each level of breakdown giving an estimate of greater accuracy.
System
The final breakdown used in this manual is that of System Groups into Systems. These are the
smallest building blocks for a Type 11 estimate. Each system Group has a fixed set of one or more
Systems, some or all of which may be selected by the Estimator to make up a particular System
Group. For example, the oil processing System Group separation, heating, dehydration and water
treatment as its four Systems.
The Hardware Category breakdown structures are presented in Figures 2.4. to 2.5. The pre-defined
System Groups and Systems are identified for each of the Hardware Categories, and are defined in
more detail within the relevant Hardware Category sections.
There are two further breakdowns shown in Figure 2.2. which are beyond the scope of this manual,
The first is to break Systems into tagged equipment of the same type (e.g. piping, electrical, etc.).
These equipment/materials group further broken down into

Equipment list of all tagged equipment

Piping broken down by size and specification

Cabling broken down by size and specification

Etc.

These breakdown levels are used for Types III and IV estimates.
Project Functions
Project Functions are discrete elements of work performed on a Hardware Item, e.g. procurement, or
a discrete cost/budget element related to that item, e.g. insurance. The Project Functions are as
follows:
Onshore :

Procurement

Construction

Commissioning

Engineering and design

Project Management

Insurance and certification

Drilling

Offshore :

Procurement

Fabrication

Transportation and installation

Hook-up and commissioning

Engineering and design

Project management

Insurance and certification

Drilling

Note that not all Hardware Items have all Project Functions, for example infrastructure has only
construction and project management.
2.3.4 Estimating Method
Once the estimate type and associated breakdown structure are selected on the basis of the desired
accuracy of the estimate, as described in the previous two sections, the next step in the cost
estimating process can be taken.
This involves the definition of a minimum number of parameters, which together describe the scope of
the development scenario in question. These parameters include location, reservoir depth, production
plateau etc. When these have been determined, a selection can be made of Hardware Items and
System Groups/System in order to compose an engineering development scheme.
It is stressed that the cost of any development is decided to a large extent at this stage on scope
definition and hardware selection. Optimisation of a development scenario and the selection of the
most suitable and cost effective arrangement of hardware often have more impact on cost than the
application of new, cost saving technology. Sufficient time should therefore be allowed for these front
end activities, which in practice may involve the production of a number of estimates for different
development scenarios in order to identify the optimum solution.
The hardware selected for the development under study can be defined in terms of engineering
quantities. These quantities include weight of substructure steel in tonnes, drilling time for wells in
days, design time for production facilities in mandays etc. Each of the parameters defining the scope
of the development will have an impact on one or more of the engineering quantities. For instance,
water depth will impact an substructure weight and so forth.
Each Project Function executed to realise the project will incur a cost depending on the quantities
involved. These costs can be expressed as unit cost rates such as fabrication cost for substructures in
RM $/tonne or drilling cost for wells in RM $/day etc. These rates are specific to both the Hardware
Item and the Project Function in question.
A cost estimate of a particular development is therefore produced by translating the scope of the
development into engineering quantities which are then multiplied by unit cost rates per Project
Function to arrive at cost. In summary :
SCOPE --> QUANTITIES x RATES = COST
This manual guides the user through this process by :

Requesting the necessary information in to define the scope of a development (or part
thereof, such as the user requires). This will be more detailed for Type II estimates than for
Type I estimates.

Offering guidance in the composition of a suitable engineering development scheme.

Providing methods to translate scope into quantities for a large variety of Hardware items and
System Groups/Systems form which onshore and offshore engineering development
schemes can be composed.

Providing unit cost rates per Project Function for the spectrum of Hardware Items covered in
the manual.

2.3.5 Contingencies and Allowances


Through the process described in the previous chapters, an estimate is obtained of development cost
associated with the particular scope defined for the estimate. There is a tendency, however, for the
scope of the unique type of projects executed by E & P , to grow.
As a consequence, typically
greater quantities are required than estimated in a first approach; that is the base estimate (see also
below).To cater for this growth of scope, contingencies and allowances are added at various points
in the estimating process. The contingencies are therefore real cost elements, albeit for 'unspecified'
scope and are thus related mainly to quantities.
Obviously, a more detailed definition of scope not only improves the accuracy of the estimate but also
reduces the levels of contingency to be applied. Contingency should never be used as comprehensive
cover for each and every uncertainty, or as insurance against all conceivable disasters since this
would lead to 'padded' estimates and inflated budgets.
Contingencies are assigned at three stages in the estimating process :
Activity Allowances
Activity allowances are added by the estimator to the various cost Items to account for cut and waste,
weather downtime, weight growth and to the such known uncertainties, which have a high probability
of occurring. Activity allowances are added to the various cost items at the discretion to the estimator.
The resulting estimate is named "base estimate'.
When using this manual it may be assumed that activity allowances are included in the estimates so
that these would quality as "base estimates".
Contingency
Contingency is added to the base estimate to allow for incomplete project definition (but riot for major
scope changes, each of which would require a new project estimate). Current practice, in many
cases, is to add what is considered reasonable at the discretion for the estimator, to cover the
unknown uncertainties. The resulting estimate is named '50/50 estimate'. By definition of this estimate
the project has an equal chance of overrunning the 50/50 estimate within its accuracy range.
The estimate thus derived could be considered the "most likely" estimate and should therefore be
used as the basis for the analysis of development economics and, in later stages, as the target for
project expenditure.
Overrun Allowance
An allowance is added to the 50/50 estimate to allow for the risk of overrunning this estimate. A
project estimated to cost for instance 200 with and accuracy of 25% may require an actual
expenditure of 250. Thus, the accuracy range could be taken as the monetary "exposure" of the
project. Therefore, by adding a value representative of the accuracy range (and named the overrun
allowance) to the 50/50 estimate, and estimate is arrived at with 10% probability of being exceeded by
the actual cost. This estimate is named a "90/10 estimate" and could be considered a 'minimum risk'
estimate. It may be sued for the setting of budget levels or the sensitivity analysis of field development
economics.

Contingency may be assigned to the complete estimate to development cost or to the individual
Hardware Items. In choosing the later approach the estimator has the possibility to assign different
contingency percentages to different cost elements. For instance, sufficient well stream data may be
available to allow the use of a modest contingency level to the cost of production facilities while
uncertainties on the routing of the associated export pipeline may require a much higher percentage.
When a large number of similar wells forms part of a development scheme then it may be considered
mot to assign contingency at all to well cost in view of the repetitive nature of the drilling operation,
etc.
A further refinement could be applied by assigning individual contingencies to Project Functions for
each Hardware Item, for instance 10% to design and 30% to hook up and commissioning, etc.
The individual contingency percentages must be converted to absolute cost values, summed and then
divided by the Base estimate to get an indication of the overall contingency in the form of a weighted
percentage for the total cost estimate. The table below indicates typical overall contingency levels
expected at the various stages of the project definition to which the estimator may compare the results
of this exercise. Accuracy levels mentioned in Figure 2.1. are added for reference.
Table of Typical Overall Contigency Levels

As stated before, allowances and contingencies are real cost elements in an estimate and therefore
deserve proper attention. In practice, however, only a certain amount of time and resources will be
available for any estimate. This should be assigned evenly to each step in the estimating process.
The estimator should guard against the tendency, sometimes observed, to devote a disproportionate
amount of effort in the area of contingency, thus neglecting the important areas of optimising the
development scheme, gathering the maximum amount for input data, etc.

2.3.6 Cost Phasing and Escalation


Once the project estimate of the required confidence level has been established, the expenditure of
cost over time can be determined. This expenditure profile should reflect not only the durations
associated with design, procurement, construction etc. of the individual Hardware Items but also the
various lead-times as dictated by the overall project schedule. The manual contains methods which
help to establish a profile which reflects these considerations.
Cost estimates should be prepared initially in constant value money (CVM), referenced to a base
reference date, and this should form the basis for the cost phasing. The CEM provides estimates in
terms of CVM with a reference date.
The phase cost estimate may then be presented in either CVM with a specified reference date, or
escalated to Money of the Day, (MOD). Escalation, which estimates the future combined effect of
general inflation and market conditions specific to the project, is necessary if the phased cost estimate
is to be used for economics analysis.

2.4 COST ENGINEERING SYSTEM


The manual provides methods for the translation of scope into quantities together with unit rates per
Project Function (procurement, fabrication, ect.) for a variety of Hardware Items which can be
combined to reflect any onshore or offshore development.
To be able to generate the various methods and rates, a significant sample of technical and cost data
must be available and be maintained for each to the building blocks addressed in the system. An
integral part of the cost engineering system is, therefore, a Cost Engineering Data Base (CEDB). In
this data base, technical and cost data of completed and ongoing projects will be stored, together with
any other reliable data which may contribute to the derivation for methods and rates.
The CEDB will be equipped with facilities which will allow manipulation of the cost data (such as
adjustment for exchange rates, inflation, escalation, etc.) and updating and analysis of the technical
data. In this way, every year an up-to-date CEM can be available to users.
In addition to cost and technical information, the database will also contain information on expenditure
phasing to support the phasing method given in this manual.
The definition of a cost breakdown structure is a very important step in the development of a cost
engineering system as it determines not only the structure on the database and the manual but also of
the data gathering process required to obtain the necessary information for the CEDB.
The majority of data will be obtained from the Operating Companies, Via the Cost Reporting Manual
(CRM). Some effort may be required initially to make available project data fit the structure but in time
if is expected that the breakdown structure will be used by all Operating Companies to estimate,
record and report cost. Data gathering will then become a matter of routine, and the considerable
benefits to be obtained form a consistent approach to cost engineering throughout SIPM and E & P
Operating Companies will be realised.
A computerised Cost Engineering system is being developed which will cover all aspects of the Cost
Engineering scope providing user friendly facilities for the production of a prospect estimate, the
recording of project estimates and actuals, the maintenance of reference and conversion data and the
flexible analysis of all information held, (Cost Engineering System Feasibility and Analysis SIPM
Report EP91 - 09 75)

2.5 NEW TECHNOLOGY AND COST REDUCTION


For several years the oil industry has been faced with uncertain world oil market and increasing cost
of recovery. Consequently there has been considerable effort spent to reduce the cost of
developments. All aspects of design and project execution are being reviewed, e.g. new engineering
technology, design codes, drilling practice and equipment, contracting strategy etc.
As a result of these studies considerable potential has been identified to save development cost by
the application of new engineering and drilling technology, once it becomes available for use in the
field.
To reach the stage of development, each prospect will have to go through the various stages of
exploration and appraisal with the screening of economics at the major decision points. To meet the
potential expected from the application of cost saving techniques, the associated cost engineering
should incorporate these techniques, provided that the technology will be available at the time of
prospect development.
The following will be required therefore to integrate new technology into the cost engineering system

development of cost estimating methods for new technology.

An assessment of the time scale within Which this technology may be assumed to be
available for application in the field.

Guidance on the limitations to application of the new technology.

The development of new estimating methods will necessarily follow or run in parallel with the
development of the associated technology. Inevitably, in the absence of such methods the envisaged
cost saving potential will not be used to its full extent. The development of the estimating methods
remains therefore as urgent a requirement as the development of the technology itself.
The approach taken in the Cost Engineering Manual is to utilise mainstream, proven technology,
Current practices and design codes. Changes in these areas will be incorporated into the CEM as
soon as the particular technology becomes accepted for field application and data becomes available.
The new technology discussed above includes such techniques as multiphase pumping and
automated drilling, that is technology not yet available for application in field development. The studies
mentioned in the foregoing also re-emphasised the need to carefully consider already available
technology and to spend sufficient effort in identifying the optimal development scheme as early as
possible in the life of a project. Particular attention has been drawn to areas like offshore tender
assisted drilling, optimal use of satellite platforms, reduced offshore manning levels, optimised
platform topside facilities etc.
The contents of the current revision of the manual will allow the user to take the recommendation with
regard to these areas into full account, even though in certain cases such as for an estimate for an
optimised topsides, in the required level of detail may make it necessary to use Type II.

2.6 OTHER CONSIDERATIONS


As explained in the previous chapters, estimates are classified as screening, study, budget or control
estimates to indicate the expected accuracy of the estimate. Base, 50/50 and 90/10 estimates are
terms used to specify the level of confidence to be assigned to an estimate. Allowances and
contingencies are cost elements included in these estimates to arrive at certain levels of confidence.
Strictly speaking these terms refer to two different methods of estimating; that is the conventional
(also referred to as deterministic) and the probabilistic method. The intention of the latter is to produce
a probability curve on the basis of a detailed probabilistic investigation for a conventionally derived
base estimate. Such a curve also indicates the basis for the current definition of the conventional
contingencies.
A few years ago, probabilistic cost estimating, or cost risk analysis, began to receive increasing
attention and was expected to rapidly replace conventional methods to estimating. In anticipation of
this the concept of confidence level and associated terminology such as 50/50 and 90/10 estimates
were introduced. A few practical but fundamental problems have hindered the advancement of the
technique however, and it has not yet met the potential expected of it initially. Meanwhile terms like
50/50 and 90/10 have become household words in E&P, and provide a common understanding of the
cost basis. More conventional terms such as "most likely' or 'minimum rusk" probably confusion, and
are therefore best avoided.
It is recognised that in the absence of reliable cost estimating probabilistic, the purpose of the
definition given to confidence level indicators or the boundaries of the accuracy range is somewhat
limited. It does, however, provide a basis for consistent use of estimating terminology and definitions
and thus for the future validation of current practice with regard to accuracy and contingency.
In order to validate currently applied contingencies and expected accuracy ranges, a comparison is
required of original development plans and associated budget estimates with as built facilities and
cost data for a significant number of projects. This in turn will require the collection of data on past and
current projects in terms of scope and cost. The CRM contains cost reporting methods for this
purpose, This data will be fed into the CEDB which will assist in determining if the correct values for
accuracy and contingency are being applied.
Until such time it is recommended that the cost engineering practice described in this manual be
adhered to.

FIGURE 2.1 : PROJECT PHASE / IDENTIFICATION

FIGURE 2.2 : PROJECTS & ETC.

FIGURE 2.3 : PRODUCTION FACILITIES OFFSHORE

FIGURE 2.4 : STRUCTURES

Other Hardware Items / Group Combinations

SECTION A - ONSHORE PRODUCTION FACILITIES AND TERMINALS


5.5 PRODUCTION AND TERMINAL FACILITIES - ONSHORE
5.5.1 Introduction
This section contains the methods and cost data to be used in preparation of Type II cost estimates
for onshore production facilities and terminals. The System Groups available as building blocks for a
Hardward Item in this category are shown below in the form of a System Group/Hardware Item matrix.
Possible combinations of System Groups for common Hardware Items are shown as examples. Other
Hardware Item/System Group combinations can be considered at the user's discretion.

For a Type II estimate many System Groups are broken down into Systems. The breakdown of
Systems is given below, and guidelines for System selection are given in Section 5.5.2.2.
System Group

System
Separation
Heating

Oil processing
Dehydration
Water treatment
Export pumping
Liquid export
Metering
Separation
Heating
Gas processing

Dehydration
Dewpoint control
Condensate stabilisation

Gas sweetening

Gas sweetening
Power generation

Power generation & distribution


Power distribution
Process and personnel support
Utilities
Safety
Atmospheric storage
Storage tanks
storage
Control/ES D/F & G

Control/ESD/F & G

Telecommunications & telemetry

Telecommunications & telemetry

Bulks

Bulks

Civils

Civils

Jetty

Jetty

The method allows for the possibility of some of the equipment and associated bulks to be
prefabricated at a yard remote from the site, then transported to the site for erection. An example is
when a separator and associated piping and instrumentation are fabricated into a small module with
some structural steel framing. It is then transported to site and hooked-up-to the piperack. The user is
required to estimate the percentage of the total equipment weight that might be prefabricated in this
5.5.2 Method
5.5.2.1 Hardware Item Excel Spreadsheet Eform-6 Working Form
Use the attached Excel spreadsheet, Eform 6, when preparing cost estimates for onshore production
facilities and terminal.
5.5.2.2 System Selection
Section 5.5.1 lists the System Groups and Systems within those groups which are available to the
user for the Hardware Item being estimated.
Some notes are provided here to aid the user in selection of Systems. Notes are provided only for
those Systems where guidance is needed either for the selection of the System itself, or for the
selection of a choice of processing equipment within the System.
When a Project contains both production facilities and a terminal the user must exercise care in the
allocation of Systems. For example a production facility and a terminal share common power
generation, power distribution, process and personnel support, safety, control ESD/F & G, and
telecommunications and telemetry systems. Similarly, care must be exercised when selecting System
Groups for developments With both gathering and production stations.
The spring philosophy of the project will dictate the requirement for multiple trains. In addition to this,
should the required capacity of a system exceed the ranges given in this manual, multiple trains will
be required. The following table shows national system capacity per train. Use this table to dictate the
required number of trains. It should be noted that these limits are national only and in reality they will
be influenced by a number of design parameter, e.g. GOR will influence separator system maximum
capacity etc.

Oil Heating
Oil heating is sometimes required to effect stabilisation and/or dehydration to the required export
specification. Crude oil heating is often required upstream of electrostatic desalters to help break
oil/water emulsions. If electrostatic dehydration is a part of oil processing then this System should be
included. It is also usually required when processing waxy crude.
Methods for two types of heating System are provided. There are :

A heating medium System comprising a process heat exchanger, fired heater, expansion
vessel, circulating pumps and associated bulks. Such a System should be provided for a
production facility that has a number of process heat consumers.

A water bath type System comprising a water/glycol filled tank fitted with heat exchange
tubes, fire tubes and associated bulks. This System should be provided at remote gathering
or production stations where heat is required by a single process user only.

Oil Dehydration
Most onshore production facilities are required to produce crude oil suitable for tanker loading, i.e.
required water in oil specifications O.5%. B.S.& W and salt specification is 25 pounds per thousand
barrels. Oil dehydration/desalting onshore may be effected in one of two ways:

Dehydration using a wash tank type of system. An atmospheric storage tank with a long
residence time (24 hours based on gross liquids throughput) is utilised to effect oil/water
separation. This form of dehydration is used generally where land is readily available with few
environmental restrictions and when the oil specific gravity is high.

Dehydration using a continuous wash tank type of system. An atmospheric storage tank
system is utilised on a continuous basis to effect oil/water separation.

Dehydration based on the use of electrostatic coalescers. Depending on the salt content of
the produced water and the required salt specification of he export oil, two stages of desalting
may be required. This form of dehydration/desalting is used generally where land is less
readily available.

Gas Separation
This System is required for gas and gas/condensate developments. For developments that include
'both oil processing and gas processing the oil separation System should always be selected in favour
of the gas separation System .
Gas Dehydration
Gas dehydration is required where it is necessary to

Meet export gas specifications.

Recover condensate from the gas by refrigeration.

Avoid corrosion problems downstream caused by H2S or CO2 in the reservoir fluid.

Prior to NGL extraction to produce LPG from the gas

Dew Point Control


Gas dew point control onshore is generally required for condensate recovery and to meet export gas
specifications. If neither condensate recovery nor gas export is included in the development then this
System is not required.

Condensate Stabilisation
Condensate stabilisation is generally required Where associated gas contains sufficient recoverable
condensate to justify the inclusion of this System. Condensate stabilisation would typically be required
for gas/condensate developments and for oil development featuring a large amount of associated gas.
Gas Sweet
Gas sweetening is required for oil, gas and gas/condensate developments where the reservoir fluid
contains H2S or CO2 . This System required to meet export specifications for gas.
5.5.2.3 Input Data
With reference to Section 5.5.2.2 indicate on Eform 1A the selected System Groups and Systems by
ticking the relevant boxes.
Complete Eform-1A by entering the data required for the selected systems.
5.5.2.4 Calculated Quantities
Proceed systematically through the Excel Spreadsheet Eform-6 as follows.
Oil Heating
Select the type of heating System required and determine the duty from Figure 5.5.4 From duty obtain
equipment weight from Figure 5.5.5.
Oil Dehydration
Select the type of dehydration System required. if a wash tank type of System is required then
determine tankage volume from Figure 5.5 6, using the net oil flowrate and record the storage volume
on the equipment/bulks weight table of Form 5.5.2 (for bulks calculation) and the storage tank table.
Determine the number and capacity of dehydration tanks from Figure 5.5.42. If electrostatic
dehydrators are to be used then determine the equipment weight from Figure 5.5.7 using the net oil
flowrate.
Water Treatment
From the produced water flowrate and the required effluent specification for oil in water determine the
equipment weight from Figure 5.5.8.
Pumping
Select the export method (i.e. by rail or road or sea) Determine the loading rate using Fig. 5.12.3 and
record on the Eform-6. From the required loading rate use Figure 5.12.4 to determine the loading
pump power. Note the pump power on Eform-6. From tile required loading pump power use figure
5.12.5 to determine the pump equipment weight.
Liquid Export Metering
From the liquid product flowrate determine the metering System equipment weight from Figure 5.5.16.
Gas Separation
From the sum of gas export and gas injection flowrates (as appropriate) determine the gas separation
System equipment weight from Figure 5.5.17.
Gas Dehydration
From the sum of gas export flowrate determine the weight of the gas dehydration equipment using
Figure 5.5.19 sheet 1. Obtain the dehydration power from figure 5.5.19 sheet 2 and record on power
summary table in Eform-6.

Dewpoint Control
From the gas export and/or injection flowrate determine the weight of the dewpoint control equipment
from Figure 5.5.20. sheet 1.Obtain the dehydration power from figure 5.5.20 sheet 2 and record on
power summary table in Eform-6.
Condensate Stabilisation
From the condensate flowrate determine the condensate stabilisation equipment weight from
Figure 5.5.21.
Gas Sweetening
From acid content of inlet gas, sweet gas specification and gas export flowrate determine the gas
sweetening equipment weight from Figure 5.5.22 sheet 1. Obtain the power demand from Figure
5.5.22 sheet 2 and enter in the power summary table of Eform-6.
If the development incorporate gas export compression in additon to gas lift then gas lift compression
is covered in the gas export system weight. If the development excludes gas export then the gas lift
equipment weight is estimated as follows.
Determine the overall compression ratio from Figure 5.5.23 and record on Form 5.5.2, Sheet 5. From
the compression ratio and the gas lift flowrate determine the required compression power either from
Figure 5.5.24 or from Figure 5.5.25 and record this on Form 5.5.2 in the gas compression table.
Record the number of trains/items in the civils table on Form 5.5.2.
Gas lnjection
If the development has gas injection without gas export then first determine compression
requirements from the first stage separation pressure minus 4 bar to a typical intermediate pressure of
135 bara. This involves calculating the compression ratio from Figure 5.5.23 and hence the
compression power from Figure 5.5.24 or Figure 5.5.25, and the equipment weight from figure 5.5.26
or Figure 5.5.27. Record the compression ratio and compression power on Form 5.5.2, sheet 5. This
weight is then added to the equipment weight for compression from 135 bara to the injection pressure
which is determined again by means of compression ration (Figure 5.5.23), compression power
(figure 5.5.24 or Figure 5.5.25) and finally equipment weight, this time from Figure 5.5.28. Record the
compression ratio and compression power on Form 5.5.2 sheet 3. Record the number of
trains/iitemss in the civils table on Form 5.5.2.
For a development with both gas injection and gas export the injection gas is compressed from the
export gas pressure to the injection pressure. The export compression requirements must be
calculated first (see below) to determine the export pressure. Then the injection equipment weight is
determined by means of compression ratio (Figure 5.5.23), compression power (Figure 5.5.24 or
Figure 5.5.25) and equipment weight (Figure5.5.28). Record the compression ratio and compression
power on Form 5.5.2 in the gas compression table and in the power summary table (with reference to
Figure 5.5.41). Record the weight in the weights table and the number of trains/items in the civils table
on Form 5.5.2.
If the final compression to the injection pressure utilises electric motor drivers then the required
compression power (i.e. un-derated power) should be entered in the electrical consumers column of
the power summary table.
Gas Metering
From the gas flowrate determine the metering equipment weight from Figure 5.5.34.

Liquid Metering
If product is to be loaded into a tanker either via a jetty or via a pipeline and an offshore loading unit
then only fiscal metering is required. In this case determine the metering equipment weight from the
loading rate using figure 5.1 2.6
Power Generation
Determine the power generation requirements for each system as determined by Figure 5.5.38 and
enter on Eform-6 according to whether the system is electrically powered or turbine driven.. Eform-6
allows the user to enter a drive as either turbine driven or electrically driven to enable a power
balance to be carried out. To allow for intermittent/standby loads and unidentified Systems, an
electrical design factor is included. Where drives are turbine an allowance for parasitic loads is
included. Total the electrical consumers, add the Electrical Design Factor and enter as the Required
Power.
Enter the values for Imported and Exported Power onto Eform-6. Calculated the Generated Power by
subtracting the Imported Power and adding the Exported Power to the Required Power.
If all the power is to be imported, then transfer the value for Required Power to the Imported Power.
From Figure 5.5.31, determine the derating factor for gas turbines and enter on Eform-6. Derate by
dividing by each of these factors and enter as the Turbine Power. Use the Turbine Power and
Figure 5.5.39 to obtain the Power Generation equipment weight and enter on Eform-6.
Power Distribution
From the sum of the Required power and the Exported power determine the power distribution
equipment weight from Figure 5.5.40 and enter on Eform-6.
The cost derivations for cabling for imported and exported power are not included in the methodology.
Process and Personnel Support (Utilities)
The sum of system equipment weights obtained thus far give subtotal A on Eform-6. From subtotal A
determine the process and personnel support System equipment weight from Figure 5.5.41 Sheet 1.
From Figure 5.5.41 sheet 2, obtain the power demand and enter in power summary table of Eform-6.
Atmospheric Storage
Determine the required atmospheric storage capacity, the number of tanks and capacity per tank from
Figure 5.5.42 and record these values on Eform-6. The storage capacity should be recorded on the
equipment/bulks weight table of the Eform-6 (for bulks calculation) as well as the storage tank table.
Pressurised Storage
Determine the required pressurised storage capacity from Figure 5.5.42 and the pressurised storage
equipment weight from Figure 5.5.43.

Civils
Determine the foundation area for each System from Figure 5.5.44, and sum these to obtain
foundation and paving area subtotal G. From Figure 5.5.45 determine the area for grading, the area
for clearance and the equivalent area for civils bulks. These values are entered on Eform 6.

Safety
If the development excluded product storage then from the total foundation area (subtotal G on Eform6) determine the safety system equipment weight from Figure 5.5.46, sheet 1.
If the development includes product storage then determine the foundation area, subtotal G, less the
atmospheric and pressurised storage foundation areas, and use this to determine the safety System
equipment weight from Figure 5.5.46. sheet 1. In addition determine the safety System equipment
weight from Figure 5.5.46, sheet 2, using the sum of the installed storage capacities for both
atmospheric and pressurised storage. Use the larger of these two weights as the safety System
equipment weight.
Bulks weight
Obtain the bulks factor for each System from Figure 5.5.47. Multiply the equipment weight by each
bulk factor to obtain the bulks weights for piping, electrical, instruments and others. Sum the weights
for each bulks category to obtain the total weight for piping, electrical, instruments and other.
Prefabrication/Site Construction
Determine the percentage of equipment to be prefabricated and enter this value on Eform-6. Apply
this percentage to the equipment weight total B to determine the equipment weights for prefabrication
and for site construction, respectively.
Structural Steel
Determine the structural steel requirements for both prefabrication and site construction from
Figure 5.5.48.
Jetty
Determine the jetty Length using Figure 5.12.13.
5.5.2.5 Cost Estimate
Procurement Cost
The individual equipment and total bulks dry weights are transferred automatically to the procurement
section of the Eform-6 where procurement cast rate of figure 5.5.49 have been incorporated and will
be applied automatically to give the total procurement cost.
The procurement costs for contrived/F & G and for telecommunications and telemetry are lump sum
costs, and should be entered directly into the cost column.
Construction Cost
Apply the percentage of prefabricated equipment weight to the total bulks weights (totals C, D, E and
F on Eform-6) to obtain the prefabrication weights for .piping, electrical, instruments and others. The
prefabrication manhour rates from Figure 5.5.50, sheet 1 and the prefabrication labour rates from
Figure 5.5.50, sheet have been incorporated into the Eform-6.
The prefabrication costs is given by subtotal D.
The sum of equipment, piping, electrical, instruments, others and steelwork prefabrication weights
give the total weight for prefabrication. The manhour rate for erection of prefabricated units from
Figure 5.5.50, sheet 4 and the site construction labour rate from Figure 5.5.50, sheet 2 have been
incorporated in the Eform-6. Eform-6 multiplies the total weight for prefabrication by the manhour rate
and by the labour rate to obtain subtotal E, the erection cost of prefabricated units.

The site fabrication weights for piping electrical, instruments and others are derived automatically by
taking the appropriate percentage of totals C. D E and F on Eform-6. The manhour rates from
Figure 5.5.50, sheet 4 and the construction labour rates from Figure 5.5.50, sheet 2 have been
incorporated into the Eform-6 which will be used to determine the site construction cost. The erection
rate for a single tank from Figure 5.5.50, sheet 5 which has been incorporated into the Eform-6, will be
multiplied by the installed tank capacity and the number of tanks to obtain the cost. The costs in
summed to obtain site mechanical construction cost subtotal F. The sum of prefabrication, erection
and site construction costs to obtain the mechanical construction cost, subtotal G.
Obtain the grading factor from Figure 5.5.50, sheet 5 and enter It on Eform-6 against 'Area for
grading'. Similarly enter the clearing factor from Figure 5.5.50, sheet 5 against "Area for clearance'.
The manhour rates from Figure 5.5.50, sheet 5 and the labour rates from 'Figure 5.5.50, sheet 2 have
been incorporated in Eform-6. Eform-6 multiplies are by factor (if applicable), 'by manhour irate and by
the labour rate to obtain cost. The sum of costs give the civils construction cost subtotal H. The total
of mechanical and civils construction cost subtotals G and H give the construction cost total.
Commissioning Cost
The commissioning cost is a percentage of the mechanical construction cost, subtotal G. The
percentage is given in Figure 5.5.51.
Engineering and Design
If the development incorporates oil production only then from the gas flowrate use Figure 5.5.52,
sheet 1 to determine the manhours for engineering and design.
If the development incorporates gas production only then from the gas flowrate use Figure 5.5.52,
sheet 2 to determine the manhours for engineering and design.
If the development incorporates both oil and gas production then determine the engineering and
design manhours by summing the manhours obtained form both sheets 1 and 2 of Figure 5.5.52.
Enter the engineering and design manhours on Eform-6 from Figure 5.5.3. The labour rates from
Figure 5.5.52, sheet 3 has been incorporated in the Eform-6. Eform-6 calculates the cost from the
total manhours and the labour rate.
Insurance and Certification
Insurance and certification is taken as a percentage of the costs for procurement, construction and
commissioning. 'The percentage is given in Figure 5.5.53.
The sum of costs for procurement, construction, commissioning, engineering and design, project
management and insurance and certification give the total Hardware Item cost.
Hardwater Item Cost Summary
The Eform-6 summarises the total cost and cost by Project Function into the Project Function into the Project
Cost Summary.

Construction Cost
Apply the percentage of prefabricated equipment weight to the total bulks weights (totals C, D, E and
F on Eform-6) to obtain the prefabrication weights for .piping, electrical, instruments and others. The
prefabrication manhour rates from Figure 5.5.50, sheet 1 and the prefabrication labour rates from
Figure 5.5.50, sheet have been incorporated into the Eform-6.
The prefabrication costs is given by subtotal D.
The sum of equipment, piping, electrical, instruments, others and steelwork prefabrication weights
give the total weight for prefabrication. The manhour rate for erection of prefabricated units from
Figure 5.5.50, sheet 4 and the site construction labour rate from Figure 5.5.50, sheet 2 have been
incorporated in the Eform-6. Eform-6 multiplies the total weight for prefabrication by the manhour rate
and by the labour rate to obtain subtotal E, the erection cost of prefabricated units.
The site fabrication weights for piping electrical, instruments and others are derived automatically by
taking the appropriate percentage of totals C. D E and F on Eform-6. The manhour rates from Figure
5.5.50, sheet 4 and the construction labour rates from Figure 5.5.50, sheet 2 have been incorporated
into the Eform-6 which will be used to determine the site construction cost. The erection rate for a
single tank from Figure 5.5.50, sheet 5 which has been incorporated into the Eform-6, will be
multiplied by the installed tank capacity and the number of tanks to obtain the cost. The costs in
summed to obtain site mechanical construction cost subtotal F. The sum of prefabrication, erection
and site construction costs to obtain the mechanical construction cost, subtotal G.
Obtain the grading factor from Figure 5.5.50, sheet 5 and enter It on Eform-6 against 'Area for
grading'. Similarly enter the clearing factor from Figure 5.5.50, sheet 5 against "Area for clearance'.
The manhour rates from Figure 5.5.50, sheet 5 and the labour rates from 'Figure 5.5.50, sheet 2 have
been incorporated in Eform-6. Eform-6 multiplies are by factor (if applicable), 'by manhour irate and by
the labour rate to obtain cost. The sum of costs give the civils construction cost subtotal H. The total
of mechanical and civils construction cost subtotals G and H give the construction cost total.
Commissioning Cost
The commissioning cost is a percentage of the mechanical construction cost, subtotal G. The
percentage is given in Figure 5.5.51.
Engineering and Design
If the development incorporates oil production only then from the gas flowrate use Figure 5.5.52,
sheet 1 to determine the manhours for engineering and design.
If the development incorporates gas production only then from the gas flowrate use Figure 5.5.52,
sheet 2 to determine the manhours for engineering and design.
If the development incorporates both oil and gas production then determine the engineering and
design manhours by summing the manhours obtained form both sheets 1 and 2 of Figure 5.5.52.
Enter the engineering and design manhours on Eform-6 from Figure 5.5.3. The labour rates from
Figure 5.5.52, sheet 3 has been incorporated in the Eform-6. Eform-6 calculates the cost from the
total manhours and the labour rate.
Insurance and Certification
Insurance and certification is taken as a percentage of the costs for procurement, construction and
commissioning. 'The percentage is given in Figure 5.5.53.
The sum of costs for procurement, construction, commissioning, engineering and design, project
management and insurance and certification give the total Hardware Item cost.
Hardwater Item Cost Summary
The Eform-6 summarises the total cost and cost by Project Function into the Project Function into the Project
Cost Summary.

FIGURE 5.5.2

NUMBER OF SEPARATIONS STAGES

FIGURE 5.5.3 OIL SEPARATION EQUIPMENT WEIGHT

FIGURE 5.5.4 OIL HEATING WEIGHT

FIGURE 5.5.5 HEATING EQUIPMENT WEIGHT

FIGURE 5.5.6 OIL DEHYDRATION TANKAGE VOLUME (SHEET 1)

FIGURE 5.5.6 OIL DEHYDRATION TANKEGE VOLUME (SHEET 2)

FIGURE 5.5.7 OIL DEHYDRATION EQUIPMENT WEIGHT (SHEET 1)

FIGURE 5.5.7 OIL DEHYDRATION EQUIPMENT POWER (SHEET 2)

FIGURE 5.5.8 WATER TREATMENT EQUIPMENT WEIGHT

FIGURE 5.5.9 LIQUID EXPORT PUMPING

FIGURE 5.5.10 OIL EXPORT PIPELINE SIZING

FIGURE 5.5.11 OIL EXPORT PIPELINE SIZING

FIGURE 5.5.12 CONDENSATE/LPG EXPORT PIPELINE SIZING

FIGURE 5.5.13 CONDENSATE/LPG EXPORT PIPELINE SIZING

FIGURE 5.5.14 LIQUID EXPORT PUMPING POWER

FIGURE 5.5.15 LIQUID EXPORT EQUIPMENT WEIGHT

FIGURE 5.5.16 LIQUID EXPORT EQUIPMENT WEIGHT

FIGURE 5.5.17 GAS SEPARATION EQUIPMENT WEIGHT

FIGURE 5.5.19 GAS DEHYDRATION EQUIPMENT WEIGHT (SHEET 1)

FIGURE 5.5.19 GAS DEHYDRATION POWER REQUIREMENT (SHEET 2)

FIGURE 5.5.20 DEWPOINT CONTROL EQUIPMENT WEIGHT (SHEET 1)

FIGURE 5.5.20 DEWPOINT CONTROL ELECTRICAL POWER REQUIREMENT (SHEET 2)

FIGURE 5.5.21 CONDENSATE STABILISATION EQUIPMENT WEIGHT

FIGURE 5.5.22 GAS SWEETENING EQUIPMENT WEIGHT (SHEET 1)

FIGURE 5.5.22 GAS SWEETENING ELECTRICAL POWER REQUIREMENT (SHEET 2)

FIGURE 5.5.23 GAS LIFTING AND INJECTION COMPRESSION RATIOS

FIGURE 5.5.24 GAS COMPRESSION POWER

FIGURE 5.5.25 GAS COMPRESSION POWER

FIGURE 5.5.26 GAS COMPRESSION EQUIPMENT WEIGHT

FIGURE 5.5.27 GAS COMPRESSION EQUIPMENT WEIGHT

FIGURE 5.5.28 GAS INJECTION COMPRESSION EQUIPMENT WEIGHT

FIGURE 5.5.31 TEMPERATURE DERATING FACTOR FOR GAS TURBINE

FIGURE 5.5.32 ALTITUDE DERATING FACTOR

FIGURE 5.5.34 GAS METERING EQUIPMENT WEIGHT

FIGURE 5.5.38 POWER GENERATION SYSTEM REQUIREMENTS

FIGURE 5.5.39 POWER GENERATION EQUIPMENT WEIGHT

FIGURE 5.5.40 POWER DISTRIBUTION EQUIPMENT WEIGHT

FIGURE 5.5.41 PROCESS AND PERSONNEL SUPPORT EQUIPMENT WEIGHT

FIGURE 5.5.42 PRODUCT STORAGE REQUIREMENT

FIGURE 5.5.43 PRESSURISED STORAGE EQUIPMENT WEIGHT

FIGURE 5.5.44 CIVILS FOUNDATION AREA (SHEET 1)

FIGURE 5.5.44 CIVILS FOUNDATION AREA (SHEET 2)

FIGURE 5.5.44 CIVILS FOUNDATION AREA (SHEET 3)

FIGURE 5.5.44 CIVILS FOUNDATION AREA (SHEET 4)

FIGURE 5.5.44 CIVILS FOUNDATION AREA (SHEET 5)

FIGURE 5.5.45 CIVILS AREAS FOR GRADING AND CLEARANCE

FIGURE 5.5.46 SAFETY EQUIPMENT WEIGHT (SHEET 1)

FIGURE 5.5.46 SAFETY EQUIPMENT WEIGHT (SHEET 2)

FIGURE 5.5.47 BULKS FACTORS

FIGURE 5.5.48 STRUCTURAL STEEL

FIGURE 5.12.3 PRODUCT LOADING RATE

FIGURE 5.12.4 PUMPING POWER

FIGURE 5.12.5 PUMPING EQUIPMENT WEIGHT

FIGURE 5.12.6 METERING EQUIPMENT WEIGHT

FIGURE 5.12.13 MARINE LOADING JETTY

FIGURE 5.5.49 PROCUREMENT RATES (SHEET 1)

FIGURE 5.5.49 PROCUREMENT RATES (SHEET 2)

FIGURE 5.5.49 PROCUREMENT RATES (SHEET 3)

FIGURE 5.5.49 PROCUREMENT RATES (SHEET 4)

FIGURE 5.5.50 CONSTRUCTION RATES (SHEET 1)

FIGURE 5.5.50 CONTRUCTION RATES (SHEET 2)

FIGURE 5.5.50 CONTRUCTION RATES (SHEET 3)

FIGURE 5.5.50 CONTRUCTION RATES (SHEET 4)

FIGURE 5.5.50 CONSTRUCTION RATES (SHEET 5)

FIGURE 5.5.51 COMMISSIONING RATES

FIGURE 5.5.52 ENGINEERING AND DESIGN AND RATES (SHEET 1)

FIGURE 5.5.52 ENGINEERING AND DESIGN AND RATES (SHEET 2)

FIGURE 5.5.52 ENGINEERING AND DESIGN AND RATES (SHEET 3)

FIGURE 5.5.53 CERTIFICATION RATES

SECTION B - OFFSHORE FACILITIES


5.6 PRODUCTION FACILITIES - OFFSHORE
5.6.1 Introduction
This section contains the methods and cost data required for the preparation of Type II cost estimates
for offshore topsides facilities. The System Groups available as building blocks for a Hardware Item in
this Category are shown below in the form of a System Group/Hardware Item matrix. Possible
combinations of System Groups for common Hardware Items are shown as examples. Other
Hardware Item/System Group combinations can be considered at the user's discretion.
HARDWARE ITEM / SYSTEM GROUP COMBINATIONS

For a Type II estimate many System Groups are broken down into Systems. The breakdown of
Systems is given below, and guidelines for System selection are given in Section 5.6.2.2.
System Group

System

Wellhead facilities

Wellheads
Separation
Heating

Oil processing
Dehydration
Water treatment
Export pumping
Oil export
Metering
Separation
Heating
Gas processing
Dehydration
Dewpoint control
Gas lift

Gas lift

Gas injection

Gas injection
Gas export compression

Gas export
Metering
Water injection

Water injection
Power generation

Power gen & dist


Power distribution
Process and personnel support
Utilities

Safety
Material handling

Quarters

Quarters

Drilling facilities

Drilling facilities

Control/ESD/F & G

Control/ESD/F & G

Telecommunications & telemetry

Telecommunications & telemetry

Bulks

Bulks

Interplatform bridges

Interplatform bridges

Structural steel

Structural steel

For fixed platforms, structural steel for either an integrated deck or for modules and a module support
frame (MSF) is included in this production facilities category rather than in the fixed substructure
category.

The offshore production facilities category does not included acid gas removal as this is not normally
carried out offshore. The method also excludes the retrofit of new equipment to, or modification of ,
existing facilities. New technology such as membranes multiphase pumps etc., are not included. The
method will be extended to include these items in the future when proven estimating methods and
data are available.
5.6.2 Method
5.6.2.1 Hardware Item Excel Working Spreadsheet
The following Excel Spreadsheets will be used when preparing type II cost estimate for offshore
topside facilities.

Input Data - Eform-1 B

Quantities and Cost - Eform-2

Hardware Item Cost Summary - SUMM

Eform-2 has incorporated the material cost rates, fabrication manhours norms and cost rates and
HUC and installation spread day rates.
5.6.2.2 System Group and System Selection
Some notes are provided in this Section to aid the user in selection of Systems, Notes are provided
only for those Systems where guidance is needed either for the selection of a choice of processing
equipment within the System.
When a Project contains several platforms with distinct functions the user must exercise care in the
allocation of System Groups. For example a shallow water gas development may have separate,
bridge linked platforms for Wellhead, production, compression and quarters, all of which share
common power generation and distribution, utilities, control/ESD/F & G and telecommunications and
telemetry System Groups, and care should be taken to include these only once. Similarly, the
interplatform bridges should be allocated to only one Hardware Item, and not covered twice.
The sparing philosophy of the project will dictate the requirement for multiple trains. In addition to this
should the required capacity of a system exceed the ranges given in the manual multiple trains will be
required. The following table shows national system capacities per train. Use this table to dictate the
required number of trains. It should be noted that this limits are national only in reality they will be
influenced by a number of design parameters e.g. GOR will influenced separator system maximum
capacity etc.

Oil Separation
This System is required for all oil producing facilities. If some gas processing is also required then the
gas separation System should not be selected in addition to the oil separation System.
Crude oil exported from offshore production facilities is generally required to meet one of two vapour
pressure specifications.
There are :

Dead crude - having a TVP of approximately 0.97 bara at 25C.

Live crude - having a TVP of approximately 7.0 bara at 25C.

Generally the oil separation System required for dead crude export requires more separation stages
and different operating pressures to the oil separation System required for live crude export.
If the required export oil specification is not known the user needs to select the oil separation
equipment based on either dead crude export or live crude export. If the crude oil is to be loaded
directly into a tanker or is transferred to atmospheric storage at a terminal then dead crude processing
is required. If the oil is transferred by pipeline to an onshore complex where further oil and gas
processing takes place then live crude processing is adequate.

Condensate Stabilisation
Condesate stabilisation is generally required where a gas field sufficient recoverable condensate to
justify inclusion of the system. It may also be required for oil development featuring a large amount of
associated gas.

Gas Separation
This System is required for gas and gas/condensate developments. For developments that include
both oil and gas processing the oil separation System should always be selected in favour of the gas
separation System.
Wellstream Cooling
Wellstream cooling is required for gas/condensate developments.
Gas Dehydration
Gas dehydration is required where it is necessary to

Meet export gas specifications

Recover condensate from the gas by refrigeration

Avoid corrosion problems caused by H2S or CO2 in the reservoir fluid.

Dewpoint Control
Gas dewpoint control is generally required to meet export gas specifications for both oil and
gas/condensate developments. This System is not required if gas export is excluded from the field
development.
Compression
Gas processing does not include compression. This is covered under gas lift, gas injection and gas
export. If both gas lift and gas export are required for the development the use the gas export system
Group only, with the combined flowrate for the gas export compression System. If both gas injection
and gas export are required for the development then both System Groups must be used, with the
combined flowrate for the gas export compression System. If there is only gas injection, then use the
gas export System Group for the first level of compression to an intermediate pressure, then use the
gas injection System Group to achieve the final pressure.
Water Injection
If the produced water profile of the reservoir is such that the produced water rate is in excess of the
water injection rate then the produced water may be used for water injection. If produced water is
used then filtration equipment only is required prior to water injection. If seawater is used however,
then both filtration and deaeration is required prior to water injection. The water injection System
required for seawater is this heavier than that required for produced water.
5.6.2.3 Input Data
Complete Eform-1 B by entering the data required for the selected System Groups.
5.6.2.4 Calculated Quantities
Proceed systematically through Eform-2 as follows
Wellheads
From the number of wells and the flowing wellhead pressure indicated on Excel Spreadsheet Eform-1,
determine the wellheads System weight from Figure 5.6.1.

Oil Separation
Determine the number of separation stages and the separation stage pressures from Figure 5.6.2
(sheet 1 for live crude export and sheet 2 for dead crude export).
From the appropriate separation pressure determine the weight of each separator from Figure 5.6.3
using the gross (oil plus water) flowrate. An allowance for the test separator weight is included in
Figure 5.6.3 Should only are required, then determined the equipment weight from Figure 5.6.3,
Sheet 1. If multiply trains are required, then determined the equipment weight from Figure 5.6.3,
multiply by the number of trains and delete the weight of the multiple test separators.
Condensate Stabilisation
From the condensate flowrate determine the condensate stabilasition equipment weight from
Figure 5.6.6
Oil Export Pumping
Standard pumps are used in SSB/SSPC's operation. Figure 5.6.12 gives the pump operating
philosophies with respect to the production and the pump size and weight.
Oil Metering
From oil flowrate determine metering System equipment weight using Figure 5.6.13.
Gas Separation
From the sum of gas export and gas injection flowrates as appropriate determine the gas separation
equipment weight from Figure 5.6.14. sheet 1 or 2 according to whether there is glycol injection
upstream or not. If no glycol information is available, use sheet 1.
Gas Cooling
From the sum of gas export and gas injection flowrates (as appropriate) detetrmine the gas cooling
duty and equipment dry weight from Figures 5.6.5 sheet 1. Use sheet 2 to obtain the electrical power
requirement.
Gas Dehydration
From the sum of gas export, gas lift and gas injection flowrates as appropriate determine the weight of
the gas dehydration equipment using Figure 5.6.16.
Dew Point Control
From the gas export and/or injection flowrate determine the weight of gas dewpoint control equipment
from Figure 5.6.17. sheet 1 and the electrical power requirement sheet 2.
Gas Lift
If the development incorporates gas lift but excludes gas export then from the gas lift flowrate
determine the gaslift compression ratio from Figure 5.6.18 and the compression power form either
Figure 5.6.19 or Figure 5.6.20. From the power requirement obtain the equipment weight either form
Figure 5.6.21 or from Figure 5.6.22. Record these on Eform-2. If the development incorporates both
gas lift and gas export then the gas lift equipment weights not required as it is covered by the gas
export System.

Gas Injection
If the development has gas injection without gas export then first determine compression
requirements from the first stage separator to 135 bara . This involves calculating the compression
ratio from Figure 5.6.18, hence the compression power from Figure 5.6.19 or Figure 5.6.20, and the
equipment weight from Figure 5.6.21 or 5.6.22. This weight is then added to the equipment weight
It the development has gas injection without gas export then first determine compression
requirements from the first stage separation pressure minus 4 bar to a typical intermediate pressure
of 135 bara . This involves calculating the compression ratio from Figure 5.6.18, hence the
compression power from Figure 5.6.19 or Figure 5.6.20, and the equipment weight from Figure 5.6.21
or 5.6.22.
This weight is then added to the equipment weight compression ratio (Figure
5.6.18), compression power (Figure 5.6.19 or Figure 5.6 20) and finally equipment weight this time
from Figure 5.6.23.
For a development with both gas injection export, the injection gas is compressed from the export gas
pressure to the injection pressure. The export compression requirements must be calculated first
(see below) to determine the export pressure. Then the injection equipment weight is determined by
means of compression ratio (Figure 5.6.18), compression power (Figure 5.6.19 or Figure 5.6.20) and
equipment weight (Figure 5.6.23).
If the final compression to the injection pressure utilises electric motor drivers then the compression
power requirement should be entered on Eform-2.
Export Gas Compression
If gas injection or gas lift is incorporated in the development then add the gas lift or injection flowrate
to the gas export flowrate and use the combined flowrate to determine the weight of the export gas
compression equipment from Figure 5.6.24 to Figure 5.6.27 using the procedure specified in
Figure 5.6.24. Figure 5.6.23 sheet 2 gives standard compression equipment weight for gaslift
compression using reciprocating compressors i.e. TEK-A, SJK-A and TKK-A.

Gas Metering
From the export gas flowrate determine the metering System equipment weight from Figure 5.6.28.
Water Injection
Determine whether produced water or seawater is to be used for water injection. From water injection
flowrate use Figure 5.6.29 to determine the water injection treatment equipment weight. Determine
the injection pump power from Figure 5.6.30. Use the injection pump power to determine the pump
weight from Figure 5.6.31 and enter the combined treatment and pump weight on Eform-2. If electric
motors are used then record the pump power on Eform-2.
Power Generation
Determine the power generation requirements for each system as determined by Figure 5.6.32 and
enter on Eform 2 according to whether the system is electrically powered or turbine driven. Eform 2
allows the user to enter a drive as either turbine driven or electrically powered or turbine driven to
enable a power balance to be carried out. Where drives are turbine, an allowance for parasitic loads is
included. sum the totals on Eform 2. To allow intermittent/standby loads and unidentified systems, an
electrical design factor in included. Add the Electrical Design Factor and enter as the Required Power.
Enter the values for Imported and Exported Power. Calculate the Generated Power by subtracting the
Imported Power and adding the Exported Power to the Required Power.
If all the power is to be Imported then transfer the value for Required Power to the Imported Power.
From Figure 5.6.27, determine the derating factor for gas turbines and enter on Form 5.6.2. Derate by
dividing by the factor and enger as the Turbine Power. Use the Turbine Power and Figure 5.6.33 to
obtain the Pwer generation equipment weight.
Power Distribution
From the sum of the Required power and the Exported power, determine the power distribution
equipment weight from Figure 5.6.34. Determine the subsea power cable length from Figure 5.6.34
and record on Form 5.6.2.

Process and Personnel Support


Eform-2 calculates the System equipment weights to obtain subtotal A. From subtotal A determine the
process and personnel support equipment weight from Figure 5.6.35.
Safety
From the total of equipment dry weight determined so far, (subtotal B), determine the safety System
equipment weight from Figure 5.6.36.
Material/Handling
From the equipment dry weight (subtotal B) determine the material handling equipment weight from
Figure 5.6.37.

Drilling
Select the type of drilling facility required and determine the drilling equipment weight from
Figure 5.6.38 sheet 1 to 3 of 4. If the drilling equipment is not installed permanently the equipment
weight given in Figure 5,6.38 sheet 3 of 4 should only be used to determine the overall bulk structural
steel weight.
Bulks Weight
Eform 2 has been incorporated with the bulks factors for each System from Figure 5.6.39. Eform-2
multiplies the equipment weight by each bulks factor to obtain the bulks weight for piping, electrical,
instruments and others. Add the equipment weight to the bulks weights for each System to obtain the
equipment and bulks weight by System. Sum the combined weights for all Systems to arrive at
subtotal D. Sum the weights for each of piping, electrical, instruments and others.
Quarters
From the total number of beds determine the accommodation module weight from Figure 5.6.41 (for
facilities an fixed substructures). Helideck weight is obtained from Figure 5.6.42, Sheet 2 of 2.
Interplatform Bridges
Obtain the weight for interplatform bridges from Figure 5.6.42, multiply by the number of bridges, and
enter the total weight in Eform-2. Establish which platform will carry the whole bridge load and then do
not include bridge weight for the other bridge sharing platform.

Structural Steel
From subtotal D equipment and bulks dry weight and the TAD drilling equipment weight (if platform
associated with more than 15 wellheads or non-standard topsides), determine the topsides structural
steel weight using Figure 5.6.42, sheet 1 of 2.
For standard topsides, deck weights are given in Figure 5.6.42, sheet 2 of 2.

Total Topsides Weight (Dry)


Eform-2 calculates the total equipment, bulks, quarters, interplatform bridges and structural steel dry
weight (total E on Eform-2).

Total Topsides Weight (Operating)


Eform-2 applies operating factors to the equipment and bulks weights for each System together with
the System weights for quarters, interplatform bridges and structural steel to give the System
operating weights. The Sum of the System operating weights gives the total topsides operating weight
(total F). This total is used in estimating the cost of the substructure for water depth in excess of 90 m
(see Sections 5.8).
Number of Major Lifts
From the total topsides dry weight (total E) and the lift strategy determine the number of major lifts for
both modules and integrated decks form Figure 5.6.49.
Transportation and Installation Durations
From the total topside weight determine the total transportation and installation durations using
Figure 5.6.49. compression ratio (Figure 5.6.18), compression power (Figure 5.6.19 or Figure 5-6.20)
and equipment weight, this time from Figure 5.6.23.

5.6.2.5 Cost Estimate


Complete Eform-2 as follows:
Procurement Cost
Eform-2 automatically applies the procurement cost unit rates from Figure 5.6.46 to the individual
equipment and total bulks dry weights to give the total procurement cost for each System.
Fabrication Cost
Eform-2 calculates the total fabrication cost by applying the fabrication norms (manhour/tonne) from
Figure 5.6.47 and fabrication cost rates (M$/manhour) from Figure 5.6.48 to the derived weight. Loadout and sea-fastening cost is taken as 5% of fabrication cost.
Hook-up and Commissioning Cost
The hook-up and commissioning rate depends on the topsides configuration. Choose which one of
the following configurations characterises the topsides under consideration. For modular
configurations the rate depends on the size of the heaviest module.

Modules up to 2000 tonnes

Modules up to 6000 tonnes

Integrated decks

Wellhead platforms

Determine the hook-up and commissioning manhour rates for one of the above configurations from
Figure 5.6.50, sheet 1 and the labour rate form Figure 5.6.50, sheet 2. Multiply weight by rate to
obtain the hook-up and commissioning cost total.
For simple standard platforms i.e. 6 JTS, 9 JTS, 15 DPS, Mini-Production station and 60,000 bpd
oil capacity production facilities, standard installation durations are given in Figure 5.6.50.
Barge/workboat spread day rates from Figure 5.6.50 has been incorporated in Eform-2.
Engineering and Design Cost
From the total topsides facilities dry weight (total E on Eform-2), Eform-2 derives the engineering and
design manhours from Figure 5.6.51. It calculates the Engineering and Design Cost by applying the
manhour cost rates (M$ per manhour) from Figure 5.6.51 to the total Engineering and Design
Manhours.
Certification Cost
The certification cost is taken as a percentage of the procurement, fabrication, transportation,
installation, hook-up and commissioning cost. The percentage factor is given in Figure 5.6.51.
Hardware Item Cost Summary
Transfer the total cost and the cost by Project Function from Eform-2 to the Project Cast Summary
Spreadsheet SUMM.
This completes the estimate for the Hardware Item. If an additional hardware item is required within
the offshore production facilities Category the user should return to the beginning of Section 5.6.2.

Figure 5.6.1 WELLHEADS EQUIPMENT WEIGHT

FIGURE 5.6.2 NUMBER OF SEPARATIONS STAGES (SHEET 1)

FIGURE 5.6.2 NUMBER OF SEPARATIONS STAGES (SHEET 2)

FIGURE 5.6.3 OIL SEPARATION EQUIPMENT WEIGHT (SHEET 1)

FIGURE 5.6.3 OIL SEPARATION EQUIPMENT WT (SHEET 2)

FIGURE 5.6.5 GAS COOLING EQUIPMENT WEIGHT (SHEET 1)

FIGURE 5.6.5 GAS COOLING ELECTRICAL POWER REQUIREMENT (SHEET 2)

FIGURE 5.6.6 CONDENSATE STABILISATION EQUIPMENT WEIGHT

FIGURE 5.6.7 OIL DEHYDRATION EQUIPMENT WEIGHT (SHEET 1)

FIGURE 5.6.7 OIL DEHYDRATION EQUIPMENT POWER (SHEET 2)

FIGURE 5.6.8 CRUDE OIL EXPORT-PIPELINE SIZING

FIGURE 5.6.9 CRUDE OIL EXPORT - PIPELINE SIZING

FIGURE 5.6.10 OIL EXPORT PUMPING

FIGURE 5.6.11 EXPORT PUMPING POWER

FIGURE 5.6.12 EXPORT PUMPING EQUIPMENT WEIGHT

FIGURE 5.6.13 OIL METERING SYSTEM

FIGURE 5.6.14 GAS SEPARATION EQUIPMENT WEIGHT (SHEET 1)

FIGURE 5.6.14 GAS SEPARATION EQUIPMENT WEIGHT (SHEET 2)

FIGURE 5.6.15 GAS HEATING SYSTEM DUTY

FIGURE 5.6.16 GAS DEHYDRATION ELECTRICAL POWER REQUIREMENT (SHEET 1)

FIGURE 5.6.16 GAS DEHYDRATION ELECTRICAL POWER REQUIREMENT (SHEET 2)

FIGURE 5.6.17 DEWPOINT CONTROL EQUIPMENT WEIGHT (SHEET 1)

FIGURE 5.6.17 DEWPOINT CONTROL ELECTRICAL POWER REQUIREMENT (SHEET 2)

FIGURE 5.6.18 GAS LIFT AND INJECTION COMPRESSION RATIOS

FIGURE 5.6.19 GAS COMPRESSION POWER

FIGURE 5.6.20 GAS COMPRESSION POWER

FIGURE 5.6.21 GAS COMPRESSION EQUIPMENT WEIGHT

FIGURE 5.6.22 GAS COMPRESSION EQUIPMENT WEIGHT

FIGURE 5.6.23 GAS INJECTION COMPRESSION EQUIPMENT WEIGHT (SHEET 1)

FIGURE 5.6.23 GASLIFT COMPRESSION EQUIPMENT WEIGHT (SHEET 2)

FIGURE 5.6.24 GAS EXPORT COMPRESSION (SHEET 1)

FIGURE 5.6.24 GAS EXPORT COMPRESSION (SHEET 2)

FIGURE 5.6.25 GAS EXPORT PIPELINE SIZING

FIGURE 5.6.26 GAS TURBINE ISO RATINGS

FIGURE 5.6.27 TEMPERATURE DERATING FACTOR FOR GAS TURBINE

FIGURE 5.6.28 GAS METERING EQUIPMENT WEIGHT

FIGURE 5.6.29 WATER INJECTION EQUIPMENT WEIGHT

FIGURE 5.6.30 WATER INJECTION PUMP POWER

FIGURE 5.6.31 WATER INJECTION PUMP EQUIPMENT WEIGHT

FIGURE 5.6.32 POWER GENERATION AND DISTRIBUTION

FIGURE 5.6.33 POWER GENERATION EQUIPMENT WEIGHT

FIGURE 5.6.34 POWER DISTRIBUTION EQUIPMENT WEIGHT

FIGURE 5.6.35 PROCESS AND PERSONNEL SUPPORT EQUIPMENT WEIGHT (SHEET 1)

FIGURE 5.6.35 PROCESS AND PERSONNEL SUPPORT (SHEET 2)

FIGURE 5.6.36 SAFETY EQUIPMENT WEIGHT

FIGURE 5.6.37 MATERIAL HANDLING EQUIPMENT WEIGHT

FIGURE 5.6.38 DRILLING FACILITIES EQUIPMENT WEIGHT (SHEET 1)

FIGURE 5.6.38 DRILLING FACILITIES EQUIPMENT WEIGHT (SHEET 2)

FIGURE 5.6.38 DRILLING FACILITIES EQUIPMENT WEIGHT (SHEET 3)

FIGURE 5.6.38 DRILLING FACILITIES EQUIPMENT WEIGHT (SHEET 4)

FIGURE 5.6.39 BULKS FACTORS

FIGURE 5.6.41 ACCOMODATION

FIGURE 5.6.42 DECK STRUCTURAL STEEL (SHEET 1)

FIGURE 5.6.42 DECK STRUCTURAL STEEL (SHEET 2)

FIGURE 5.6.43 OPERATING FACTORS

FIGURE 5.6.45

FIGURE 5.6.46 PROCUREMENT RATES (SHEET 1)

FIGURE 5.6.46 PROCUREMENT RATES (SHEET 2)

FIGURE 5.6.46 PROCUREMENT RATES (SHEET 3)

FIGURE 5.6.46 PROCUREMENT RATES (SHEET 4)

FIGURE 5.6.47 FABRICATION MANHOURS (SHEET 1)

FIGURE 5.6.47 PROJECT MANAGEMENT (SHEET 2)

FIGURE 5.6.47 FABRICATION COST RATES (SHEET 3)

FIGURE 5.6.47 PROCUREMENTS RATES (SHEET 4)

FIGURE 5.6.49 TRANSPORTATION AND INSTALLATION DURATION (SHEET 1)

FIGURE 5.6.49 TRANSPORTATION AND INSTALLATION DURATION (SHEET 2)

FIGURE 5.6.50 HOOK-UP AND COMMISSIONING DURATION (SHEET 1)

FIGURE 5.6.50 HOOK-UP AND COMMISSIONING DURATION (SHEET 2)

FIGURE 5.6.50 HOOK-UP AND COMMISSIONING DURATION (SHEET 3)

FIGURE 5.6.51 ENGINEERING AND DESIGN MANHOURS (SHEET 1)

FIGURE 5.6.51 ENGINEERING AND DESIGN MANHOURS (SHEET 2)

FIGURE 5.6.51 ENGINEERING AND DESIGN MANHOURS (SHEET 3)

FIGURE

SECTION C - OFFSHORE SUBSTRUCTURES


5.8 SUBSTRUCTURES - FIXED
5 8.1 Introduction
This section contains the methods and cost data to be used in the preparation of Type II cost
estimates (accuracy 25%) for fixed substructures. The System Groups available as building blocks
for a Hardware Item in this category are listed below. There is a single Hardware item, multileg jacket,
which requires all three System Groups.
THE SYSTEMS GROUPS

For a Type II estimate the System Groups are normally broken down into Systems. For Type II fixed
substructures the Systems are the same as the System groups.
Aspects associated with fixed substructures which are not included in this method but are covered
elsewhere in this manual are:
Item

Reference

Risers

Section 5.11 Pipelines -Offshore

Module support frame

Section 5.6 Production Facilities - Offshore

The method covers only fixed steel piled jackets, and does not consider gravity based structures,
tripod tower platforms, or jack-up type substructures. The method will be extended to include these
items in the future when proven estimating methods and data are available.
5.8.2 Method
5.8.2.1 Hardware Item Excel Working Spreadsheet
The following Excel Spreadsheets will be used for the preparation of Type II cost estimates for
substructures.

Input Data - Eform-1C


Quantities and Costs - Eform-3
Hardware Cost Summary - SUMM

Eform-3 calculates conductor weight automatically and it has been incorporated with cost rates for
material, fabrication, installation and HUC Spreads.

5.8.2.2 Input Data


Complete Eform-1C by entering the data indicated.
In the Type II estimate it is necessary to differentiate between various environmental conditions to
establish the System Group weights. These environmental conditions are described in SIPM CEM
Section 3.3 (attached) and the description is reproduced here for reference purposes.

5.8.3 ENVIRONMENTAL DATA


The fixed and floating substructures cost estimating methods require the environmental condition of
the site as input. For the purposes of the Cost Engineering Manual, the environmental conditions are
defined as follows.

Since environmental criteria vary considerably, no only by region but also by country and distance
from land, water - depth, etc., it is considered prudent not to provide detailed data in this Manual.
However, as an aid to the user who has no other information available, an overview of the type of
criteria presently available and an indication of the Environmental Conditions found in various
locations is provided below. In case of any queries regarding actual design values, the reader is
advised to contact in the first instance their local metocean focal point or secondly the SIPM
Metocean-Services section (EPD/55).
It should be noted that the reliability of the 100 year estimates of the wind and wave criteria sensitive
to the quality and quantity of field data available. For initial cost estimates, it is normal practice to
make as much use as possible of any data from climatically similar areas as well as any archive data
available in reference publications. The resulting criteria are known as "level-1" metocean criteria. In
certain well established areas where the Company has been operating for many years, (e.g. in East
Malaysia, Brunei, UK) higher level criteria (e.g. "level-2") may be readily available.
The level of metocean criteria given in the tables below are intended to indicate the stage of field
development for which the data should be used, as follows :

Level of Metocean Criteria

Typical Applications

4 - joint probability criteria

Significant field extensions(comprehensive databases needed)

3 - windcast study criteria

Mid-term field developments

3 - field data criteria

Initial field development plans

1 - desk study criteria

New areas

Form 5.8.1 INPUT DATA

Form 5.8.2 QUANTITIES (SHEET 1)

Form 5.8.3 COSTS (SHEET 1)

FORM 5.8.3 COSTS (SHEET 2)

5.8.2.4 Calculated Quantities


Proceed systematically through Eform-3 as follows
Jacket Weight - Environmental Condition 3 (Typical for SSB/SSPC Jackets)
The milder environmental parameters assigned to condition 3 are often associated with leg piled
structures, hence the determination fo numbers of legs is relatively important in defining the weight of
the structure.
Determine the jacket type using the tabulation in Figure 5.8.6, sheet 2, incorporate platform type and
number of conductors into the Eform-3. Determine the jacket steel weight from the appropriate curve
on sheets 2 to 9 of Figure 5.8.3.
The jacket curves of Fig. 5.8.3 are only good for water depth not exceeding 90m because these
curves are derived based on data from existing jackets, which are normally installed in less than 90m
of water, Refer to Figure 5.8.2 sheet 1 and 2 of 2 for water depth in excess of 90m.

Piles Weight
Determine the piles weight/jacket weight ratio from Figure 5.8.6 sheet 2 of 2 and insert in Eform-3.
The later calculate the pile weight using the correlations given in Figure 5.8.6 sheet 1 of 2.
Anode's Weight
Eform-3 determine the anodes weight using the factor given by Figure 5.8.7, sheet 1 of 3.
Conductor Weight
Enter the number of conductors in Eform-3. This spreadsheet determined the conductor weight form
the Correlation in Figure 5.8.7, sheet 1 and 2 of 3
Boat Fender
Determine the boat fender weights from Figure 5.8.7, sheet 3 of 3 and insert it in Eform-3.
Transportation and Installation Durations
Determine the transportation and installation durations using Figure 5.8.8 and insert them in Eform-3.
5.8.2.5 Cost Estimate
Complete Form 5.8.3 as follows
Procurement Cost
Eform-3 applies procurement rates for each system and bulk from Figure 5.8.9 to the quantities
derived, to obtain the procurement cost.
Fabrication Cost
Eform-3 applies the fabrication norms (manhours/tonne) to the quantities derived, to obtain the total
fabrication manhours. Fabrication cost rate (cost/manhour) is applied to the total manhours to obtain
the fabrication cost.
Transportation and Installation Cost
Based on the jacket tonnage, Eform-3 derives the total design manhours. It applies the design cost
rate to the total design manhours to obtain the design cost.
Engineering and Design Cost
Based on the jacket tonnage, Eform-3 derives the total design manhours. It applies the design
manhours to obtain the design cost.
Pre design (Soil Investigation)
Enter the lump sum cost form Figure 5.8.9 in Eform-3 if soil investigation is required (refer to
Figure 5.8.12).
Certification Cost
The insurance and certification cost is taken as a percentage of the procurement, fabrication,
transportation and installation cost and the percentage is given in Figure 5.8.1 1.
Hardware Item Cost Summary
Transfer .the total cost and the cost by Project Functions from Eform-3 to the project Cost Summary
Spreadsheet, SUMM.
This completes the estimate for the Hardware Item. If an additional Hardware Item is required within
the fixed substructure category the user should return to the beginning of Section 5.8.2.

FIGURE 5.8.2 JACKET WEIGHT ENVIRONMENTAL CONDITION 3 DEEPER WATER


SUBSTRUCTURES (SHEET 1)

A:

Water Depth < 90m


To arrive at weight for lift/launched jackets with topside > 2500 MT in SSB/SSPC waters
(environment 3), the weight obtained from the above curves are to be multiplied by the
following factor:
Environment 2-3 adjustment factor = 0.75

B:

Water Depth > 90 m


To arrived at weights for launched jackets in SSB/SSPC waters (environment 2), the weights
obtained from the above curves are to be multiplied by the following factor:
Adjustment factor = 1.40
The above weights (from A & B) are to be multiplied by the conductor correction factor (if
applicable) as given in Figure 5.8.4, sheet 2 of 2, in addition to the adjustment factor.

FIGURE 5.8.2 JACKET WEIGHT ENVIRONMENTAL CONDITION 3 DEEPER WATER


SUBSTRUCTURES (SHEET 2)

FIGURE 5.8.3 JACKET WEIGHT ENVIRONMENTAL CONDITION 3 (SHEET 1)

The jacket steel weight for SSB/SSPC environmental condition (condition 3) can be determined from
EDV/2 generated jacket curves in Figure 5.8.3, sheets 2 to 12. These curves are to be used for
standard SSB/SSPC configuration in water depths less than 90 m.
The equivalent mathematical expression for each curve is given in the figure. In these expressions :
W

= jacket steel weights [metric tonnes].

= Water depth (metres).

Basis of Curve : EDV/2 weight estimating system.

FIGURE 5.8.3 JACKET WEIGHT ENVIRONMENTAL CONDITION 3 (SHEET 2)

FIGURE 5.8.3 JACKET WEIGHT ENVIRONMENTAL CONDITION 3 (SHEET 3)

FIGURE 5.8.3 JACKET WEIGHT ENVIRONMENTAL CONDITION 3 (SHEET 4)

4 Pile (JT) Drilling Jacket (MWD)


If the 4 pile drilling jacket (JT) is a multi-waterdepth (WMD) design, a typical weight penalty of 15%
applies as a result of using a standard inventory of materials in a non-optimized design. Hence,
weights derived form Figure 5.8.3, sheet 3 of 11 need to be multiplied by 1.15 for multi-waterdepth
designs.
4 and 6 Pile (DP) Drilling Platforms (Water Depth < 90 m)
Jacket steel weights of 4 and 6 pile drilling platforms in water depths < 90 meter are derived by
multiplying the weights obtained form Figure 5.8.3, sheet 5 of 11 (8 pile DP) with the following
adjustment factors. These factors covers topside weight reduction and launch-to-lift conversion.
Adjustment factor

0.5 (Conductor < 12)

0.6 (12 < Conductor < 20)

0.65 (Conductor > 20)

FIGURE 5.8.3 JACKET WEIGHT ENVIRONMENTAL CONDITION 3 (SHEET 5)

FIGURE 5.8.3 JACKET WEIGHT ENVIRONMENTAL CONDITION 3 (SHEET 6)

FIGURE 5.8.3 JACKET WEIGHT ENVIRONMENTAL CONDITION 3 (SHEET 7)

FIGURE 5.8.3 JACKET WEIGHT ENVIRONMENTAL CONDITION 3 (SHEET 8)

FIGURE 5.8.3 JACKET WEIGHT ENVIRONMENTAL CONDITION 3 (SHEET 9)

FIGURE 5.8.3 JACKET WEIGHT ENVIRONMENTAL CONDITION 3 (SHEET 10)

FIGURE 5.8.3 JACKET WEIGHT ENVIRONMENTAL CONDITION 3 (SHEET 11)

FIGURE 5.8.4 JACKET WEIGHT ENVIRONMENTAL CONDITION 3 DEEPER WATER


SUBSTRUCTURES

FIGURE 5.8.6 PILE WEIGHT ENVIRONMENTAL CONDITION 3 (SHEET 1)

FIGURE 5.8.6 PILE/JACKET WEIGHT ENVIRONMENTAL CONDITION 3 (SHEET 2)

FIGURE 5.8.7 ANODES WEIGHT ENVIRONMENTAL CONDITION 3 (SHEET 1)

FIGURE 5.8.7 CONDUCTOR STEEL WEIGHT ENVIRONMENTAL CONDITION 3 (SHEET 2)

FIGURE 5.8.7 FENDER WEIGHT ENVIRONMENTAL CONDITION 3 (SHEET 3)

FIGURE 5.8.8 PROCUREMENT AND FABRICATION RATES (SHEET 1)

FIGURE 5.8.8 PROCUREMENT AND FABRICATION RATES (SHEET 2)

FIGURE 5.8.9 TRANSPORTATION AND INSTALLATION DURATION


ENVIRONMENTAL CONDITION 3

FIGURE 5.8.10 TRANSPORTATION AND INSTALLATION RATES

FIGURE 5.8.11 ENGINEERING AND DESIGN MANHOURS ENVIRONMENTAL CONDITION 3


(SHEET 1)

FIGURE 5.8.11 ENGINEERING AND DESIGN MANHOURS ENVIRONMENTAL CONDITION 3


(SHEET 2)

FIGURE 5.8.11 ENGINEERING AND DESIGN MANHOURS ENVIRONMENTAL CONDITION 3


(SHEET 3)

FIGURE 5.8.12 PRE-DESIGN - DURATION ENVIRONMENTAL CONDITION 3 (SHEET 1)

FIGURE 5.8.12 PRE-DESIGN (SIDE INVESTIGATION) LUMP SUMP COST (SHEET 2)

SECTION D - SUBSEA PIPELINES


5.11 SUB-SEA PIPELINES
5.11.1 Introduction
This section contains the methods and cost data to be used in the preparation of Type II cost
estimates for offshore pipelines. The method contains data for pipelines in a variety of services, these
being oil, gas, water and flowlines (oil or gas). For each pipeline a separate cost estimate should be
prepared.
A typical pipeline hardware element can be broken down into the following components.
System Group

System

Linepipe

Linepipe
Flexible pipe
Special alloys
Cathodic protection

Coating

External/anti-corrosion
Insulation
Concrete

Risers

Fixed
Flexible
Special alloys

Further included are pipeline crossings and tie-ins.


The sub-sea pipelines method does not include rock dumping, as the requirement for, and cost impact
of , this Item can only be assessed when details of the pipeline route has been established.
5.11.2 Method
5.11.2.1 Hardware Item Excel Working Spreadsheet
The following Excel Spreadsheet will be used for the preparation of Subsea pipeline type II cost
estimates,
The forms are

Input Data

- Eform-1

Quantities and Costs

- Eform-4

Hardware Item Cost Summary - SUMM

Eform-4 already incorporates the lay rate [day/km], cost rates for material, design and Cat I spread.

5.11.2.2 Input Data


Complete Eform-1D by entering the pipeline data.
The following notes are provided as a guide.

Use of flexible pipe could be considered for short length field lines in corrosive service where
either low installation cost or redeployment within the field are development parameters.

Special alloy materials have application where internal corrosion rates of carbon steel pipe
are expected to be high unless chemical injection or fluid treatment is incorporated upstream
of the Pipeline. Where such pretreatment/injection is difficult to achieve then use of duplex
stainless steel or inconel clad carbon steel pipe should be considered for wet gas
transportation service where the partial pressure of carbon dioxide exceeds 2 bar.

Cathodic protection is provided to reduce corrosion rates. The rate of corrosion dependent on
the environmental conditions and also on product temperature. Offshore pipelines are
generally protected cathodically by a system of sacrificial anodes.

External coating of pipe is generally required as an anti-corrosion barrier between the


environment and the pipe. A nominal thickness of 6 mm of asphalt coating or 400 micron of
fusion bonded epoxy coating is normally sufficient. Internal coating of pipe is not considered
in this Type II method; for corrosive services selection of special alloy materials is
recommended (see above).

Insulation should be considered when heat conservation is required. This will apply to oil lines
where the fluid exhibits high viscosity or high pour point (e.g. high wax content) or where the
downstream processing unit required temperature maintenance. Lines transporting wet gas or
2 phase mixtures should be maintained above 25 C for pressures above 1 00 bar to prevent
hydrate formation, otherwise hydrate inhibitors will be required.

Concrete coating may be required to provide on-bottom stability of the line, particularly for line
10" diameter and larger.

Tie-in refers to subsea tie-in existing pipelines only and does not encompass tie-in of
pipelines to risers. This is covered in the riser System Group.

Fixed risers are used with a fixed substructures.

Flexible risers are used with floating production facilities. Flexible risers normally find
application in water depths greater than 60m and for line diameters fo 2" to 16". For low
pressure loading lines, diameters up to 24" are available, but these are not covered as
separate items in this manual.

Special alloy materials are used for the riser when chosen for the pipeline.

For flowlines, injection lines etc., to/from wells enter the sum of all the individual line lengths.

5.11.2.3 Calculated Quantities


Proceed systematically through Eform-4 as follows:
Pipeline Length
Enter the pipeline length in Eform-4.
Pipeline Diameter
Determine the pipeline diameter from one of the following figures, according to the service. Oil and
gas export pipelines may have already been sized while estimating the offshore production facility. If
so, enter the size directly on Eform-4.

Pipeline Service

Figure Number

Oil pipeline (to existing trunkline)

5.11.1

Sheet 1

Oil pipeline (to terminal facility)

5.11.1

Sheet 2

Gas pipeline

5.11.2

Sheet 1

Water pipeline

5.11.3

Sheet 1

Flowline (low GOR oil)

5.11.4

Sheet 1

Flowline (high GOR oil and gas; also gas


injection and gas lift)

5.11.4

Sheet 2

Pipeline Weight
Eform-4 calculates the linepipe steel weight based on the linepipe length and wall thickness using the
procedure given in Figure 5.11.5.
Pipeline Construction
Eform-4 uses the appropriate pipelay rate for rigid pipelines from Figure 5.11.6 and multiply length by
rate to obtain the duration. Obtain the unit durations for mob/demob, start- up/terminations and
pipeline crossing from Figure 5.11.6. Enter the number of mob/demobs, start-up/terminations and
pipeline crossings in Eform-4, where it will be multiplied by their respective unit durations. Eform-4
sums the durations to obtain the unfactored laybarge duration. The material factor from Figure 5.11.6
will be added, as appropriate, to obtain the total laybarge duration.
Trenching
The pipeline may require to be trenched if it is less than 16" diameter and in a region where there is
considerable fishing activity (or where it is known that existing pipelines are trenched). If trenching is
required, obtain the trenching rate from Figure 5.11.6, multiply by the pipeline length and by the same
regional factor as used for construction to obtain the total trenching duration.
Free Span Rectification
Obtain the Cat I duration for free span rectification. Assumed one rectification required per 50 km
length of pipeline.
Subsea Tie-in to Existing Pipeline
Eform-4 will use either DSV or Cat I duration norms, whichever is assumed, from Figure 5.11.6
and 5.11.7 respectively to calculate the tie-ins duration. There is an option to choose between DSV
and Cat I.
Pipe Crossing
Obtain Cat I duration from Fig. 5.11.6. Assume one crossing per 50 km length of linepipe.
Riser Installation and Subsea Tie-ins Duration
Eform-4 calculates the installation duration by applying the installation rate [day/riser] form
Figure 5.11.6 or Figure 5.11.7, whichever is assumed, to the number of risers. There is an option to
choose between DSV and Cat I vessel.

5.11.2.5 Cost Estimate


Complete Excel Spreadsheet Eform-4 as follows
Procurement Cost
The Spreadsheet calculates the procurement cost by applying the unit cost form Figure 5.11-3 to the
derived quantities, i.e. line pipe tonnage, number of risers, etc.
The Spreadsheet also calculates the following pre-fabrication cost by applying unit cost rates form
Figure 5.11.8.
Prefabrication Item

Figure 5.11.8 Sheet Number

Anti-corrosion coating

Concrete coating

Cathodic Protection

Insulation

For fixed riser, the Eform-4 applies the unit cost rates for the riser and fittings from Figure 5.11.9 to
the number of risers.
Eform-4 finally adds together the linepipe cost, prefabrication cost and riser cost to obtain the
procurement cost total.
Construction Cost
The Eform-4 applies Cat I or DSV spread day rates form Figure 5.11.10 to the derived installation
durations.
Engineering and Design Cost
Obtain the engineering and design manhours form Figure 5.11.11 and enter on Eform-4. Eform-4
applies the design cost rate to the total design manhours to obtain the design cost.
Certification Cost
The insurance and certification cost is taken as a percentage of the procurement, construction and
commissioning cost and the percentage is given in Figure 5.1 1.1 1.
Pre-design (Seismic and route Survey)
Eform-4 calculates the pre-design cost based on the expression in Figure 5.11.12.
Cost Summary
Transfer the total cost and the cost by Project Function form Eform-4 to the Hardware Item Cost
Summary Spreadsheet SUMM.
This completes the estimate for the pipeline. If an additional pipeline estimate is required for offshore
pipelines category the user should return to the beginning of Section 5.11.2.

FIGURE 5.11.1 OIL PIPELINE DIAMETER (SHEET 1)

FIGURE 5.11.1 OIL PIPELINE DIAMETER (SHEET 2)

FIGURE 5.11.2 GAS PIPELINE DIAMETER

FIGURE 5.11.3 WATER PIPELINE DIAMETER

FIGURE 5.11.4 FLOWLINE DIAMETER (SHEET 1)

FIGURE 5.11.4 FLOWLINE DIAMETER (SHEET 2)

FIGURE 5.11.5 PIPELINE WEIGHT (SHEET 1)

FIGURE 5.11.5 PIPELINE WEIGHT (SHEET 2)

FIGURE 5.11.6 RIGID PIPELINE INSTALLATION DURATION

FIGURE 5.11.7 RISER INSTALLATION AND PIPELINE TIE-IN DURATION

FIGURE 5.11.8 PROCUREMENT RATES (SHEET 1)

FIGURE 5.11.8 PROCUREMENT RATES (SHEET 2)

FIGURE 5.11.8 PROCUREMENT RATES (SHEET 3)

FIGURE 5.11.9 RISER PROCUREMENT RATES

FIGURE 5.11.10 INSTALLATION AND COMMISSIONING RATES (SHEET 1)

FIGURE 5.11.10 PRE-DESIGN SEISMIC AND ROUTE SURVEY (SHEET 2)

FIGURE 5.11.11 ENGINEERING, DESIGN AND SUPERVISION (SHEET 1)

FIGURE 5.11.11 ENGINEERING AND DESIGN, AND INSURANCE AND CERTIFICATION RATES
(SHEET 2)

SECTION E MINOR PROJECT FUTURE

SECTION F STANDARD PROJECT LEAD TIMES

ATTACHMENT 1

EFORM 1

EFORM 2

EFORM 3

EFORM 4

SECTION H WORKED EXAMPLE

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