Wednesday, April 15, 2009

Are Submarine Tankers in Gazprom's Future? (Update Note)

With all of the activity and interest Russia has displayed in the Arctic, you would have to wonder what is in Gazprom's future when it comes to natural resource exploration.

In 1998, according to Reuters it is written that:

Boris Dronov, a chief designer at the Malakhit design bureau in St Petersburg, said the first 30,000-tonne submarine --about the capacity of a medium-sized surface oil tanker -- could be launched within four years if a sale can be clinched this year.

``Our bureau has finished all the blueprints and our first clients are familiarising themselves with them,'' he told Reuters by telephone from the Baltic port. ``The first client to show an interest in our tanker was Russia's Arctic Transport Company.''

He said the two sides had agreed to sign a deal this year to build an underwater oil transporter for $150 million at Severodvinsk, near Arkhangelsk on the White Sea.

Malakhit designed the first Soviet nuclear submarines in the 1950s and worked on subsequent generations of the vessels seen by the Kremlin as the backbone of its strategic nuclear forces.

But the post-Communist cash crunch and a planned navy cuts have forced Malakhit to find a new niche.

Dronov said state-owned oil company Rosneft (PFGS.RTS) had financed the design work. Gas monopoly Gazprom (GAZPq.L) and the Arctic Transport Company had funded more recent researches.

Malakhit unveiled a mock-up of its design in Brussels last year, sparking talks with British, South Korean and Japanese oil companies.

``The era of ice-breakers is coming to an end, underwater tankers are an all-weather transport and can carry oil and gas all the year round,'' he said.

Russia's Arctic north coast, close to many of its biggest oil and gas fields, is ice-bound for most of the year.

Dronov said the company has several designs capable of carrying 10,000, 20,000 or 30,000 tonnes at speeds of 19 to 21.5 knots up to 400 km (250 miles) offshore.

He said it was envisaged that the new tanker could deliver oil and gas from Russia's northern Yamal peninsula to western Europe and Japan, South Korea and other big Asian consumers.

``Our tanker can call on ice-bound ports, simply breaking the ice from below. We have a great deal of experience of doing this with military nuclear submarines,'' Dronov said.

But he added that the new underwater tanker would not be simply a modification of a military submarine. ``We abandoned an idea of using decommissioned nuclear submarines for carrying oil and other fuel, and our newly-designed tanker is completely different,'' Dronov said.

``Only superficially does it look like a submarine.''


In an article written and posted on-line in 2002, it is stated:

In late 1997, the big offshore gas fields of Rusanoskoye and Leningradskaya in the Arctic Kara Sea were offered for companies to participate in detailed design studies. Their development, with 5 TCM of reserves located under moving and thick ice cover, is to cost $25 bn. The fields were proposed for subsea development, based on new technology, and could produce up to 1m b/d of syncrude over 60 years. The liquids should be produced by six syncrude plants to be built on an artificial island off the Yamal Peninsula.

The liquids would be exported to western markets by tankers from a terminal at Novaya Zemlya and to the far east by submarine tankers.

A subsea technology to drill production wells, install production systems and operate below moving ice without any support from surface vessels or platforms was identified in 1997 by a $4m technical and economic assessment (TEA) unit involving Werner Deep Engineering of the US and Maris International of the UK.

The system should include fully automated "wet" drilling rigs and mud processing units located on the seabed, and "one atmosphere" subsea control and power centres. The venture could also produce LNG for export to the far east by submarine tankers.


Gazprom has commissioned Lazurit Central Design Bureau to do work for them.


Because government (i.e., Navy) funding has been cut significantly, Lazurit is now busy trying to commercialize its capabilities. But the process is slow and some reductions of personnel have taken place. While they still do work for the Navy (some subs need maintenance and repair), as of early 1997 some 90% of their current orders were from GAZPROM (The Russian oil and gas company).

As a designer of Soviet naval submarines, Lazurit has extensive experience in titanium metal properties and processing (forming and forging), nuclear propulsion, and submersible technologies. Conversion projects include designs for a wide array of underwater vehicles, chambers, and complexes including nuclear powered deep water transport vehicles, submerged nuclear power generating stations, rescue submarines, maneuvering vehicles, towed vessels, tourist submarines, and equipment for the exploration and exploitation of offshore oil and gas fields. It also design of ballasting systems, fuel cells, manipulators, and pneumatic systems for submarines. Lazurit has designed a truck-mounted decompression chamber, several of which were built by another Nizhniy Novgorod firm and are now in operation.

Lazurit is associated with the Nizhniy Novgorod Corporation, a joint stock company, to market tourist and cargo submarines, and it is actively seeking technical liaison with Western firms. Part of their work is the design of "technical" fleet vessels for the offshore industry: dredges, soil carrying ships, split hopper barges, pipeline inspection and repair vessels. There is also a modest interest in fishing vessels, tourist subs, and research vessels.

CDB Lazurit has developed a concept of technology to build submarine nuclear supertankers with a 150,000-300,000 ton oil capacity that excludes the necessity to build new, special-purpose shipyards. The concept is based on the possibilities of existing Russian shipyards in the Far East, but it requires widely developed international cooperation. Neither Russia nor any other country of the world has ever built nuclear submarine supertankers, and currently there are no shipyards capable of constructing them. The discovery of fields with unique hydrocarbon reserves off the coast of the Arctic and Far East seas has raised the urgent problem of developing reliable year-round operating tanker transport systems.


(emphasis added)

In an article in 2007 published by the Kommersant with its headline: Submarine: Military Secret Shows Up on the Internet

On September 6, the official site of the city of Sarov (www.adm.sarov.ru) reported on a visit to the city by the commander of the submarine Sarov Capt. 1st Rank Sergey Kroshkin. In the text, it stated that the Sarov was still in the stocks at the Severodvinsk but “the chief commander of the Navy has set the task of finishing work by the end of the year.” The number of the submarine project was given: 20120 and its technical and tactical characteristics as well. those data indicate that the new submarine is very similar to the Project 877 Paltus (Halibut) diesel submarine, but its water displacement is greater (3950 vs. 3050 tons).

On September 11, that information disappeared from the site, but it had already been reprinted by the local media. Russian Navy press service representative Alexander Smirnov told Kommersant, that he “knows nothing” about the Project 20120. Kommersant contacted the Zvezdochka shipbuilding enterprise and Northern Machine Building Enterprise (Sevmash) in Severodvinsk for commentary about the submarine. A Zvezdochka spokesman stated that no new submarines are being built there. Sevmash declined to answer Kommersant's questions. The Rubin central design bureau, a leading developer of submarines, also declined to confirm or deny its involvement with the Project 20120.


(emphasis added)

Displacement of a Rubin designed submarine cargo tanker

TsKB-18 also developed the draft for Project 626, a smaller landing ship-transport ship intended for Arctic operations. The ship would have had a surface displacement of some 3,480 tons and was intended to carry 165 troops and 330 tons of fuel or four T-34 tanks for transfer ashore.


In an article published on August 2004 in APS Review Gas Market Trends the following was stated:

In late 1997, the big offshore gas fields of Rusanoskoye and Leningradskaya in the Arctic Kara Sea were offered for companies to participate in detailed design studies. Their development, with 5 TCM of reserves located under moving and thick ice cover, is to cost $25 bn. The fields were proposed for subsea development, based on new technology, and could produce up to 1m b/d of syncrude over 60 years. The liquids should be produced by six syncrude plants to be built on an artificial island off the Yamal Peninsula. The liquids would be exported to Western markets by tankers from a terminal at Novaya Zemlya and to the Far East by submarine tankers. A subsea technology to drill production wells, install production systems and operate below moving ice without any support from surface vessels or platforms was identified in 1997 by a $4m technical and economic assessment (TEA) unit involving Werner Deep Engineering of the US and Maris International of the UK. The system should include fully automated "wet" drilling rigs and mud processing units located on the seabed, and "one atmosphere" subsea control and power centres. The venture could produce LNG for export to Asia by submarine tankers.


(emphasis added)

Werner Offshore proposed building submarine tankers in Vladivostok.

Werner plans to build a fleet of 22 submarine tankers by the year 2013 at a new shipyard set tobegin construction in Vladivostok in 1997, which will be jointly operated by Werner Offshore andits Russian partners. The tankers will be 1,300 ft long with a capacity of 170,000 cubic meters of LNG. They will be manned by a crew of 14 and powered with an air-independent, closed-cyclediesel system from CDSS of the UK. Werner's production scheme consists of a fully automated, subsea production system - designed by Werner Offshore - which will produce the oil and gas, with the oil piped to conventional surfacetankers for transport to Europe. The gas, however, will be piped to a gas liquefaction plant on the coast of Novaya Zemlya Island, where it is to be processed into LNG, then transferred to submerged submarine LNG tankers. The plan is for Werner's submarine LNG tankers to carry the gas in an 11-day voyage under the polar ice across the Kara, Laptev, and East Siberian Seas of the frozen Arctic Ocean north of Russia to Alaska's St. Matthew Island, in the Pacific Ocean's Bering Sea. Once at St. Matthew, the LNG is to be transferred to conventional surface LNG tankers for further transport to Japan or China. The first voyage of LNG under the arctic ice is expected to occur in May 2004. Werner Offshore predicts peak production will find the submarine fleet carrying more than 21 million tons of LNG ayear. An artist's conception of the Werner LNG submarine tanker.

(Copyright 1997 Oil & Gas Journal. All Rights Reserved.Offshore November 01, 1996volume 56, issue 11 Article URL: Copyright © 2009: PennWell Corporation, Tulsa, OK; All Rights Reserved.)


That never materialized and arguably prices of oil and gas kept that from happening. But things have changed and the Shtokman field is being developed and even though the Novaya Zemlya was a military test site, Gazprom has invested alot of money and effort there.

A support base for the Shtokman project will be established at Novaya Zemlya, sources involved in the project development report. So far, the archipelago is most known for its 132 nuclear test launches.

Head of the Russian construction company Arktikstroy, Mr. Sergey Khromtsov, confirms to Regnum that the base will be built on the highly militarized archipelago. He believes the construction of the base can start in about one and a half year, writes Barents Observer.

Gazprom is reported to be engaged in the project plans, which already are starting to materialize, Mr. Khromtsov says.

-The archipelago has an airfield capable of accepting any kind of aircraft and five moorages, which can take any kind of vessel, he says. The islands also have the necessary infrastructure, including a school, a hospital, shops and more, he adds.

The project includes the construction of a compressor station, installations for liquefying of gas, as well as a base for technical repairs.

Novaya Zemlya is closed military area under the control of the Russian Armed Forces. A minor military unit is permanently based on the archipelago. In the Soviet period, a total of 132 nuclear bombs were test launched in the area, 86 of which were atmospheric, 43 underground and 3 under water.


Considering Russia's play on the Arctic waters and the development of the Shtokman field, I wouldn't be too surprised to see the development of submarine/cargo tankers that transport LNG in the near future.

Update Note: There should be a great interest in what Gazprom is doing.

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