Holdfast Training Services Trial Blog

So the Clair Coolers project is in off-shore execute, 27% complete which is actually slightly ahead of schedule and this is good because the TAR itself was running about 2% off schedule up until this week. My role is mostly finished and I just need to ensure that final sign off is completed and a few post implementation actions are carried out before the project closes out further down the line.

Other than a couple of new project scopes I have picked up (more on them in due course), I have been following another issue in the Clair Coolers Saga. You may remember that this was supposed to be a like-for-like change out, with all pre-existing pipework being re-used. Due to various issues the pipework had to be redesigned, doubling the length and creating a whole new pipe route. This pipe work came to a total of 73 spools which were due for delivery from the sub-contractor, SeaFab, about 2 months ago. I’ve been sitting in on meetings with WGPSN (prime contractor), BP and SeaFab because the pipes are not finished. Not even close. Piping construct is set to start early next week and only 43% of the spools have been released and none have been shipped as yet.

The main issue is that there are only 4 companies in Aberdeen who carry out piping NDT, a pre-requisite in the production process. One of these companies is not an approved BP vendor and two of the others are over worked. It appears that everybody uses Euro NDT and it has been taking a minimum of 3 days to get spools through NDT. Added to this Sea Fab have a weld failure rate of around 5.6% and each spool has at least 2 welds, you can start to see the problem. 

What has been most striking in these meetings is how unbothered SeaFab appear to be by the fact that they could be in a position where they are delaying a critical path project on the Clair TAR. This would be equivalent to hundreds of thousands of pounds liquidated damages per day….if the contract had any clause to impose financial penalty on SeaFab for late delivery. It doesn’t.

Now I have not seen the contract, I haven’t even had the chance to talk through the subject with the contract manager, but my understanding is that liquidated damages are generally not used in the oil and gas industry. The value of lost production is so high that to impose that on a sub contractor would quickly ruin many of them. Milestone payments are used on larger projects, but the Clair coolers project is only worth £5.6M OPEX, although the NPV would be an order of magnitude higher as the asset cannot produce gas without them.

Other than the issues with NDT, the site contractor cited work force problems as being the main reason for the production delay. His exact phrase was ‘prima donna fabricators’, which makes a little sense to me. Piping, in this industry, is where the real money is. If you see an Aston Martin in the car park, it probably belongs to a pipey (although the one I am working with has an Orange VW Transporter with custom tartan seats). There are only 4 or 5 BP approved piping vendors, of which SeaFab is one and so SeaFab know they have a captive market. It stands to reason that the fabricators know this too and I got the impression that the SeaFab management are currently at the mercy of their workforce. It is no secret that there is a dearth of skilled workforce in Aberdeen and I get the impression that SeaFab can’t afford to have its workforce walk out. 

That said, I was shocked by the working practices on the shop floor.

Now you tell me that this is how a shop floor ought to look and I will be happy to call you a liar. WGPSN have issued SeaFab with a priority list, it is clear which spools should be fabricated first to feed the project should the schedule be this close, but at the end of the day, only two of the pipes in that pile are for the Clair coolers project and this visit left me with no confidence that the guys on the shop floor had any idea of the importance of getting this project pushed through.

Yes SeaFab has several other projects on the go, but most of that piping is destined to supply other BP projects and BP has set the Clair Coolers as the number one priority. As much as the WGPSN piping rep wanted to hang around the shop floor to motivate the fabricators, it really is not worth the contractual angst it would cause. That is not to say he has not done his bit to get SeaFab organised, but at the end of the day it is going to be touch and go as to whether the project is delayed because of an inept subby.

I look forward to sitting down with the BP contracts manager so that I can better understand how BP has gotten in to a position where a tiny piping firm has them completely and utterly by the balls. I think I may already know the answer.