NEXSTEP: Re-Using Existing Elements Key to Energy Transition

The preparations for what would germinate and blossom into Nexstep, National Platform for Re-use & Decommissioning, began back in November 2016, following recommendations made in the Netherlands Masterplan established by Energie Beheer Nederland (EBN), the Netherlands Oil and Gas Exploration and Production Association (NOGEPA) and IRO. These represent the state, the oil and gas operators, and service industry respectively.

“A huge cloud of decommissioning liabilities was hanging over the industry and the government,” depicts outgoing-GM Jacqueline Vaessen. “There was a hive of activity and preparation taking place as a result, with a keen eye on reducing the looming decommissioning costs. These are estimated at some €7 billion,” she details of the sum calculated in 2017 and used as the base figure.

“The aim of Nexstep is to reduce those costs by 30%, to bring them down to €5 billion, whilst keeping the safety measures at the same highest level. It is our ambition to stimulate re-use and collaboration in decommissioning of oil and gas infrastructure in the Netherlands,” Vaessen summarises.

COOPERATION AND KNOWLEDGE SHARING

A large proportion of these installations will become available between 2022 and 2027, ramping up again in 2039 and 2040. “We see collaboration in decommissioning as a large contributor to reduce costs of decommissioning. While Nexstep is not the owner of the infrastructure and can therefore not make tenders, we do bring parties together. We started developing a joint campaign of Mud Line Suspension wells, which are wells that were once drilled for exploration purposes, but never became producing wells. These wells are relatively easy to decommission as they are not connected to a platform. We are very proud to have announced the contract award for this campaign earlier this year. It is a world first that six operators jointly take up a decommissioning project, and within Nexstep we are now identifying new campaign opportunities,” says Vaessen.

A membership-based organisation, Nexstep is tiny in number with a staff complement of just three, but entirely idiosyncratic, as Vaessen details. “We are unique as we are the only organisation in oil and gas technically composed of 100% female staff. We are, however, joined by 60-70 people from the operators, NOGEPA and EBN, working together to face this enormous challenge which drives us every day.

“Operators are typically being associated with exploration and production activities for oil and gas. However, decommissioning of the assets following the production phase is also a natural part of the total life cycle and as such of the operators’ core business. Many operators have taken their responsibility to decommission as an independent and solo activity. Now we are reaching the point where numerous platforms are about to be decommissioned, the time has come to look at things differently.

“We share learnings, drive innovation and promote effective and efficient regulation,” Vaessen summates, “all with the clear ambition to contribute to the energy transition.” Vaessen then explains that the removal and re-use of onshore and offshore infrastructure will be more sustainable and efficient by making use of the broadest collection of knowledge and experience available.

“As a result,” Vaessen goes on, “we have a dedicated Shared Learnings team working hard to create a comprehensive database of learnings for the benefit of all members. Today, this resource contains over 350 novel, collaborative learning artefacts, providing insight into a wealth of areas and integral to achieving cost reductions and attaining the road to 30% agenda.”

INNOVATION ON THE AGENDA

There is an unmistakable growing international consensus that hydrogen will be urgently required at scale, in order for countries to meet the climate targets as set out in the Paris Agreement. It offers a solution to lower emissions in many traditionally environmentally impactful sectors, such as steel and heavy-duty transport, and can provide plentiful long-term energy storage. With 196 parties bound following COP 21 in 2015 to avoid dangerous climate change by limiting global warming to well below 2°C, and pursuing efforts to limit it to 1.5°C, hydrogen is proven to improve air quality and strengthen energy security. 

“We believe that hydrogen is vital to the energy transition,” Vaessen agrees, and the decline of hydrocarbon production means that a proportion of the extensive existing oil and gas infrastructure will become available to be deployed in other uses. “Together with TNO, the Netherlands Organisation for applied scientific research, and representatives of the industry, we initiated a pilot project to establish the world’s first offshore green hydrogen production plant on an operational platform. In 2018, we began looking into the feasibility of such an initiative, as a number of our platforms are fully electrified and connected to the gas grid. We organised the project with four operators and TNO, compiled a list of the competences and specifications required and then chose one of the five platforms presented to us.”

From these contenders, it was Neptune Energy’s Q13a-A platform that emerged as the clear victor, already fully electrified using green electricity. Testament to the importance of the project was the Netherlands Enterprise Agency’s (RVO) awarding a subsidy of €3.6 million to PosHYdon, the world’s first offshore green hydrogen pilot on a working platform. “The aim of the pilot is to gain experience of integrating working energy systems at sea,” Vaessen tells us, “and the production of hydrogen in an offshore environment.”

In receipt in 2019 of an Innovation Excellence Award from the Oil and Gas Council during the World Energy Capital Assembly, the pilot integrates offshore wind, offshore gas and offshore green hydrogen in the North Sea. The PosHYdon project was officially launched last summer, now managed by Neptune Energy with Nexstep as one of the 14 partners in the consortium. “At Nexstep we have a specific and devoted innovation agenda, to identify new challenges and promote technology development where it is needed,” Vaessen concludes, “and PosHYdon was a big aspect of this overall objective.”

While the search for further appropriate pilot locations for re-use continues around the world, Vaessen has remarked a definite shift in attitudes in her time with Nexstep and decommissioning is now no longer the not so sexy word it once may have been. “When I started in 2018 decommissioning was not a fashionable subject in the least,” she admits. “Along the way, however, I have noticed a real change and there is much more publicity and focus now on successful decommissioning projects.

“Decommissioning is for our sector a natural, and integral, part of the lifecycle of oil and gas, but only for a couple of years have people recognised its importance. The energy transition is imminent, which gives us an abundance of opportunities to re-use existing elements which complement renewable investments,” Vaessen finishes. “Decommissioning activities will only increase over the next decade, and Nexstep will continue to act as a driving force in connecting all opportunities and players to reduce the costs of decommissioning the oil & gas infrastructure in the Netherlands by 30%.”