Norway’s Petroleum Safety Authority identifies “serious breaches” in Equinor FPSO construction

The Petroleum Safety Authority Norway (PSA) has completed its investigation of the reasons for the challenges faced in constructing the hull and equipment of the Johan Castberg floating production storage and offloading vessel (FPSO).

The PSA said "serious breaches" of the regulations have been identified, and vessel operator Equinor has been issued with an order.

The Johan Castberg field lies in the Barents Sea, 240 kilometres north-west of Hammerfest. The field is being developed with an FPSO facility and subsea templates tied back to this.

The planned date for coming on-stream in the original plan for development and operation (PDO) was the fourth quarter of 2022.

Equinor awarded the contract to build the hull with integrated living quarters to Singapore's Sembcorp Marine in November 2017.

Investigation

The PSA said it became aware in the first half of 2020 of weld-quality errors in the FPSO's hull. Extensive repair work is thus required.

An investigation was launched by the PSA to identify the reasons for the challenges in constructing the hull and equipment. This is also intended to contribute to learning lessons for future field developments.

Causes

A number of causes for these challenges have been identified by the investigation.

• The operator had not previously used Sembcorp for newbuilding of offshore production facilities. This yard's experience was primarily with ship repair.
• The contract specified that fabrication and assembly should take place at Sembcorp's Tuas Boulevard Yard. During the first construction year, fabrication of the living quarters and some of the hull modules was transferred to three other yards.
• Equinor's follow-up of the construction contract rested on a desire for a lean project organisation, although the company was aware of the quality, capacity and expertise challenges at Sembcorp.
• Sembcorp reportedly underestimated the scope of front-end engineering design (FEED), but the PSA said that milestones were nevertheless maintained.
• Welding expertise and quality control at Sembcorp were found to be inadequate. The PSA remarked that Equinor failed to get to grips with this problem early enough, and the project's governing inspection and test plan was not complied with.
• The PSA said several identified risks remained unresolved over a long period, and the seriousness of some increased during the project period. Quality challenges related to welding and consequent delays were initially escalated out of the project and into enterprise risk in connection with the Covid-19 pandemic.

Actual and potential consequences

The quality challenges meant that the scope of inspecting hull welds increased to 100 per cent, and associated repairs will delay completion by about a year. The PSA now expects to come on-stream in the fourth quarter of 2023, with a consequential reduction in present value as a result of delayed earnings.

The PSA added that inspection and repair cannot compensate for inadequate welding expertise. Full inspection of all welds is impractical, nor is it technically feasible for inspection to identify reliably all defects that might be present.
Where details and areas are accessible for inspection and repair, some increase will be experienced in the expected need for maintenance and repair. Inaccessible details and areas will have a lower structural reliability than would have been the case if the welding had been done by competent personnel.

Nonconformities and improvement points

The investigation has identified four nonconformities related to

• risk reduction
• management of project execution
• qualification and follow-up of the contractor
• application of experience in dimensioning own follow-up

Two improvement points have also been identified, related to

• information to the licensees
• verification of fatigue analyses

Order

The PSA's investigation has identified serious breaches of the regulations, and it has therefore issued Equinor with an order to review its systems for identifying risk in critical deliveries and for dimensioning its follow-up of suppliers to its projects, and to implement the necessary measures.

The deadline for compliance with the order is October 1, 2021.