Aging Oil & Gas Installations in the Middle East

The Middle East is one of the oldest suppliers of oil and gas to the global market. The industry has delivered tremendous growth for many of the region’s producing countries and they have built thriving economies geared to delivering energy to meet the world’s needs. 

However, a lot of the energy installations that were built in the 60s and 70s are now reaching the end of their useful lifecycle. This presents immense challenges because these installations were not built with environmental considerations in mind for their eventual decommissioning. Consequently, the GCC is expected to become a decommissioning hotspot and home to a multi-billion dollar market for addressing this situation. 

At present, around 700 offshore facilities are awaiting decommissioning, and by 2038 this figure is expected to reach 1,000 structures and 300 wells. To navigate the challenges of how to manage these installations that have powered the world for decades, all stakeholders will have to contribute towards implementing effective solutions. 

A critical factor in this decommissioning process is cost. Every option for dealing with old installations carries a high cost. More importantly, given the lack of experience in this field, the cost of decommissioning seems open-ended.

These are uncharted waters for stakeholders working with tight margins and a relentless focus on cost efficiency, and this presents a dilemma for governments, regulators, operators, and other stakeholders.

Alternatives

AlternativesThe first part of the decommissioning process is to cap the well and stop production. From there, the available alternatives are: 

  • Complete or partial removal: Given the nature and location of these installations, complete removal is viewed as impractical, especially in offshore environments. The technical and logistics challenges that the decommissioning process poses are further compounded by the complex geopolitical dynamics of the Middle East, its sensitive marine ecosystems, and the need to maintain energy security. Governments and other stakeholders navigating the decommissioning process must carefully balance environmental stewardship with economic considerations, ensuring that decommissioned rigs are dismantled and disposed of safely to minimize potential impacts on marine life and coastal communities.
  • Repurposing: The most commonly considered alternative in repurposing is the creation of marine habitats. Offshore installations can be toppled and left on the sea floor, and the corresponding piping networks are either left in place or are totally or partially removed. They can be moved elsewhere, or abandoned in the deep sea. The typical repurposing alternative for offshore installations is to leave them in place and let them develop into marine habitats. This is an attractive alternative, but the empirical evidence about the environmental and societal benefits vs the risk of pollution is still unclear.
  • Innovation: Other alternatives for creating marine habitats are being developed and include repurposing offshore installations for the defense industry, where they are used as missile defense platforms and logistical support bases. This alternative also carries cost/benefit considerations, because repurposing structures may not provide cost savings over purpose-built structures, especially for high-security/high-risk operations.

The Role Of Pipe Suppliers in the Decommissioning Process

Decommissioning is a complex and costly process, involving the safe dismantling of old systems while adhering to strict environmental and safety regulations. With estimates suggesting that the decommissioning of offshore platforms in the Arabian Gulf alone could cost between $30 billion and $50 billion over the next two decades, the scale of this task is significant.

As an important pipe system solutions supplier to the oil and gas industry, Gerab has supplied a significant number of these installations and is in a unique position to further support clients in meeting the challenges ahead. We see the decommissioning process as a prime opportunity to further support our clients and the industry with our extensive range of pipes, fittings, and accessories. Here’s how we can help.

  1. Replacement and retrofitting: As older installations are nearing decommissioning, their useful life is being extended as far as possible in an effort to defer liabilities and to give time to come up with acceptable solutions with clear cost structures. Consequently, there is a significant need for replacement and retrofit projects. Aging pipelines and infrastructure can be updated with new, more efficient systems that address environmental and ecological considerations. These systems are designed with their eventual safe removal in mind. Gerab’s steel and alloy pipes, known for their strength and resistance to corrosion, are ideally suited for these projects, ensuring longevity and reliability.
  2. Supporting the Decommissioning Process: Decommissioning isn’t just about tearing down old structures—it also involves setting up temporary installations to manage the safe removal of hydrocarbons and other materials. Our pipe system solutions are perfect for these temporary solutions, providing the necessary durability and flexibility, and offering viable alternatives for recycling and recommissioning of old piping materials.

In a market as dynamic as the Middle East’s oil and gas sector, strategic partnerships are key. By collaborating with engineering, procurement, and construction (EPC) firms, as well as oil and gas operators, we can turn the decommissioning of aging oil and gas installations in the Middle East from a challenge to a significant opportunity for growth and innovation. Whether it’s supporting replacement projects, offering environmentally friendly solutions, or embracing new technologies, we’re committed to being a reliable partner for all your pipe system needs.

Gerab can help you with your next decommissioning project, contact us today for more details.