Economic Analysis of Subsea Oil and Gas Production Pipe-In-Pipe Technology for Offshore Gas Development in Nigeria

Abstract

Abstract Pipe-in-Pipe technology is a pipeline system consisting of two coaxial pipes. The inner pipe carries the fluid and is encased within a larger diameter outer pipe which seals the annulus between the two pipes. The annulus can be filled with a wide range of thermal insulating materials such as fiberglass, glasswool, microporous materials, aerogel, polyurethane foam, ceramics etc. This is seen as a solution to the effective management of the long problem of flow assurance in subsea fields. The pipe-in-pipe technology is thought to be extensively ideal for the transportation of well bore fluids from a subsea field, as it is capable of withstanding the difficult conditions of the ocean with its low overall heat transfer coefficient (OHTC) of less than 1 W/m2K, but this it does achieve at added cost. The aim of this paper is to economically analyze the pipe-in-pipe technology using a case study of Rosa field, an offshore field off the coast of Angola relative to offshore Gas Development in Nigeria. The following profitability indices; Net present value (NPV), internal rate of return (IRR), Profitability index and Payout or payback period were used to compare the cost of a pipe-in-pipe technology and that of a conventional pipeline system for an oil and gas field. For the pipe-in-pipe technology, a real NPV of $5.5 billion, IRR of 65.7%, PI of 3.22and payback period of 1.46 years and a money of the day NPV of $10 billion, IRR of 82.1%, PI of 5.0 and payback period of 1.19 years were achieved while for a conventional pipeline, a real NPV of $5.6 billion, IRR of 66.5%, PI of 3.28 and payback period of 1.49 years and money of the day NPV of $10.1 billion, IRR of 83%, PI of 5.1 and payback period of 1.16 years were achieved.