The great challenge of Wheatstone project
The Wheatstone project, with a global cost estimated at around
30 billion dollars, aims to exploit one of the world’s largest natural gas reserves in Australian waters. Downstream from the extraction process is an immense onshore gas liquefaction plant where Vallourec – via its partner Van Leeuwen – supplies most of the carbon steel pipes and fittings. A challenge that a dedicated team and adapted methodology have successfully met.
Wheatstone’s offshore field was discovered by Chevron in 2004. It is considered today as one of the largest natural gas reserves in the world. Situated north-west of Australia, at more than 200 kilometers (124 miles) from the coast and at an average depth of 180 meters (590 feet), it is operated as part of a joint venture bringing together, among others, Chevron, Apache and Kuwait Foreign Petroleum Exploration Company (KUFPEC).
The extracted gas from the ground is brought onshore to the central processing platform where it is dehydrated and compressed. It is then sent towards the coast via a major 225 km (140 miles) trunkline until reaching the north of the Shire of Ashburton, near the town of Onslow. There, an industrial complex on the same gigantic scale as the Wheatstone project must ensure gas liquefaction from 2016 so that the largest LNG carriers can load and transport it across oceans.
Nearly 8 000 tons of pipes and fittings
Awarded to the American group Bechtel, construction of the first two trains for the liquefaction plant began in December 2011, as well as a domestic natural gas plant. With each train having an annual capacity of 4.45 million tons, the Wheatstone project could eventually produce around 25 million tons of LNG per year.
To guarantee a significant part of its tubular product supplies, Bechtel called on Van Leeuwen, Vallourec’s long-standing partner in the trading of pipes. “For this project,” explains Renaud de Lapeyrière, Onshore Line Pipe Sales Manager in Vallourec’s Pipe Project Division, “all the pipes we supply are seamless carbon steel (ASTM A106 GR B, API 5L GR B, A333 GR 6) for pre-treatment and liquefaction. In total, that represents 7,180 tons of pipes and 430 tons of fittings. The portion of premium tubes – mainly heavy wall thickness – represents around 45% of the total volume.”
A winning duet
Besides the close relations built up with Vallourec over decades, Van Leeuwen had significant advantages for winning this market, in particular its presence in Australia for over fifty years where the authorities naturally pay close attention to the local content dimension of the project. In addition, it has a number of yards across the world, like Vallourec, some of which are close to the four prefabrication sites and of the actual job site for building the two LNG trains.
Bechtel have in fact shared out the workload into four subcontractors who prefabricate modules in yards located in China, Malaysia, Indonesia, United Arab Emirates before the final assembly on the job site in Australia, so as to guarantee the project’s tight deadlines are met.
“On our side,” underlines Renaud de Lapeyrière, “we were able to supply the full range of requested products while keeping costs perfectly under control. To achieve that, we called on several of our production plants in Brazil, Germany and France. The project was relatively complex to manage as we had to use five Vallourec plants at a time to supply five different fabrication sites, mainly from the ports of Antwerp and Rio de Janeiro. Added to that were a large number of product references: 380 for pipes and 400 for fittings, relating to steel grade, diameter, thickness or marking details.”
A dedicated team
Faced with all these challenges, the Pipe Project Division decided to set up a team entirely devoted to the project. Production, logistics or even relations with Van Leeuwen were handled by many people placed under the responsibility of a project manager. Always with maximum efficiency in mind, this dedicated team used a methodology initiated in the last few years by Vallourec and called “Magellean”. It relies on a back office lean management inspired by methods used in plants for years. It helps to optimize all the ‘administrative’ steps, from registering orders until products are received by the customer.
“All our initiatives paid off”, concludes Renaud de Lapeyrière. “We signed an agreement with Van Leeuwen in November 2012 for the first deliveries in the first quarter of 2013. We initially signed a blanket order for the supply of 4,000 tons of pipes, and to date we already supplied over 7,200 tons of pipes. The objective we set to deliver 100% of products on time has therefore been achieved and even far exceeded. That confirms our ambitious targets for the process pipes market which appears buoyant this year and even more promising for 2015. In particular, we intend to offer complete packages of pipes, fittings and services to our customers through our specialized distributor network.”