Every cloud has a silver lining – and offshore oil & gas industry divers could soon be reaping the benefits of a double rise in raw commodity prices for oil and helium.
With the cost of oil through the $100-a-barrel mark, the demand for offshore diving and ROV services looks set to boom as oil companies expand their exploration and production. However, diving regulators have been getting the jitters that the surge in demand could lead to an increase in accidents and fatalities. But a supply shortage and soaring prices of helium could offset the increased risk factor as new rebreather technologies that promise increased safety and gas savings look set to hit the market.
Diving safety has been a running sore with the Norwegian government, which has had to deal with a series of safety and regulatory issues since the 1970s. These culminated in August, 2007, when a Norwegian court ordered the Oslo government to pay almost 30million kroner (£3million) to three deep sea divers in compensation and interest for health problems associated with working in the offshore oil industry.
Meanwhile, Britain’s Health and Safety Executive has stepped up its campaign on rebreather safety by running footage of a real near-fatal rebreather accident involving a Sky TV cameraman.
Norway’s StatoilHydro has laid the groundwork for the expected increase in diving operations when it began a five-year contract with Technip Offshore Norge last year for diving and pipeline repair and maintenance on the Norwegian Continental Shelf.
The contract included the sponsorship for the development of new personal diving equipment (PDE) for commercial offshore diving.
Technip teamed up with Scottish technical design firm Deep Life, which was brought in to design the safety systems on the rebreather core.
Developed primarily to eliminate safety risks associated with standard rebreather or gas reclaim systems, Technip says the PDE will save about 10% more helium, the main ingredient in saturation diving gas, than existing technologies.
“It will improve ergonomics, safety and efficiency,” says Technip diving manager Mikal Sjur Lothe.
“The helium cost savings are basically an added benefit, but a not insignificant one.
“Today’s systems all have reclaim systems reusing helium and we can reclaim 82-87% of that helium. The rebreather we’re designing at the moment increases that amount to the mid to high 90s.”
The “not insignificant” savings stem from the steep rise in helium prices reported worldwide. Industries from flat-panel TV makers and MRI scanner manufacturers to party balloon suppliers are smarting from the soaring costs.
Two of the biggest suppliers, Air Products and Air Liquide, announced price hikes of 20-25% for the North American market in the last two months – and there is little sign of costs easing in the near future.
Helium is critical to the offshore oil & gas diving industry because it is inert and does not cause narcosis or anaesthesia when breathed under pressure. It is also very light, so easy to breathe.
“It provides a better breathing mix so the work on the lungs becomes more acceptable under high pressure,” says Sjur Lothe.
Much of the promised savings come from the portability of the new PDE, which relies less on topside gas supply, he says.
“Today’s systems function as a big loop. What we are doing is taking the thing and putting it on the diver’s back, so we’re pumping much less down to the diver.
“A lot of hardware that we’re using today – compressors, piping, instrumentation – we should be able to get rid of. Meanwhile, umbilicals, slip-rings, diving control rooms become much simplified.”
Technip diving equipment development engineer John Nortcliffe says the PDE, which should be on the market after tests by the end of the year, “basically shortens a 1.5km reclaim loop to a 1.5m loop”.
Deep Life’s Alex Deas says he started working on rebreather safety technology as far back as 2000 when he was “thoroughly under-whelmed” by a series of “avoidable critical failures” on rebreathers he was working with.
“There has been very little development of commercial diving equipment over the past 15 years,” says Deas.
“This equipment is a replacement for the conventional gas reclaim systems.”
Deas says the number of diving deaths has decreased markedly in the past 15 years due to the move to ROVs, but “now large numbers of new divers are entering the industry, the safety systems need to be in place to avoid a steep climb in the number of accidents”.
Deas reckons operators of the new system will recoup their investment in eight months to a year.
“The primary incentive for operators is really the savings in helium usage, the lower operating costs compared with hot-water systems and the continuous safety monitoring in real time on the diver.”
Glenrothes-based Deep Life has been publishing much of the safety design information free of charge as part of the Open Revolution initiative, which requires “openness and verification” of safety standards.
Deep Life is working on safety systems for other rebreather markets and demand is expected to increase along with helium prices.
Helium, which can be a byproduct of oil & gas production if found in concentrations of at least 0.3%, cannot be artificially manufactured.
Dominion Gas, which supplies diving gas to Technip, has been forced to raise helium prices by 15-20% over the last nine months. Dominion chief executive George Yule says the global helium shortage, which has many causes, has come at a time of sustained high demand from the diving sector of the oil&gas industry.
“The current deficit in the helium market is expected to last until 2010, when increased capacity in Algeria and Qatar will mitigate the depleting reserves in US. The management of reliable helium supplies is a strategic consideration for subsea companies rather than just a commercial issue.”
John Bigham, director of helium product management and global logistics at US-based Matheson Tri-Gas, sees no let-up in the soaring price of helium, most of which is produced in the US.
“There will be no oversupply until 2011 at least, and that’s based on new supplies coming on line,” says Bigham.
“Demand has been growing by about 3-5% per annum over the past 10 years or so, but we don’t have the figures for the last year.”
Marcus Jakt, of specialty gas consultants Spiritus Consulting, says the irony is that helium production is likely to rise again as more natural gas fields come online.
“Helium is derived from fractional distillation of liquefied natural gas. Not all natural gas fields contain all that much helium to make it financially viable to extract it.
“It’s just that there are only a few places where there are the necessary facilities to extract the helium, and many of the newer facilities have been slow in getting fully under way in the last few years.”
John Macdonald is a freelance journalist who covers energy and Asian affairs