Hybrid Modular Process Design in Onshore Field Development: Reduction in Cost with Early Monetisation
Authors: Khan Arshil Aazam , Sharma Vaibhav 
Published: October 2019

Inflationary activity in oil & gas industry led to shifting of application of ‘Module’ approach from offshore operations to land based field development. Recently this ‘Module’ approach has been adopted in land based field development in India. This paper deals in detail with the approach adopted by operators in India, its benefits & challenges, risk associated & mitigation and the learning received by adopting the modular approach.

Construction of facility in remote locations by modular approach not only results in saving of time & cost, but even increases the performance level of wells. Underperformance of major & minor projects based on delay in scheduling and surpassing of budget is common phenomenon. By taking a modular approach of field development, operators are becoming better equipped to manage their type curves, plan their long term capital expenditure needs and maximise the efficiency of the system. This approach has led to significant reduction in downtime and ease in reservoir management.

Indian Oil adopted this approach in constructing the Modular Gas Processing Plants (MGPP) at one of its field location in North-East India. The components of this MGPP were manufactured in modules and then transported to the project site. A time of 24 to 36 months for construction of conventional GPP, the limited fair weather window and presence of difficult terrain was countered by offsite fabrication of modules.

Based on this successful execution, IndianOil implemented this approach in another Eastern India gas project. This time the hired and purchased equipments both were procured, resulting in a Modified Hybrid Approach of Modular Facility Design.

The benefits realised based on this approach are reduction in commissioning time by approximately 50%, reduction in CAPEX & realisation of early monetisation, risk reduction in terms of lease hiring of equipments rather than huge CAPEX upfront, minimum abandonment & site restoration cost, better quality realisation of finished components, enhanced productivity and reduced labour cost. Saving realised through reduction in upfront CAPEX was utilised for drilling of additional development wells and it resulted in the enhancement of earlier planned gas production rate by more than 50%, resulted in considerable improvement in project techno economics.

Maintaining a smooth line of communication across construction sites, maintaining basic quality standard and manage construction across different parts of the globe are some inherent challenges with the methodology.

Oil & Gas operators in the past have looked into the approach for increasing the well deliverability by addressing the sub-surface reservoir characteristics. This approach now needs to be shifted to midstream and downstream components. This technology is now cost effective, scalable, efficient and well available in India along with highest level of QHSSE standards. Therefore, paradigm shift from conventional facilities construction to Hybrid Modular Process Facilities is the need of hour.