1
Introduction

In the search for new sources of oil and gas, operational activities have moved to harsher environments in deeper high pressure/high temperature wells, remote areas, and deep-water regions. These have created increased challenges for the economy of project development and subsequent operations whereby the integrity of the facilities, optimisation of the materials, and accurate prediction of the materials' performance are becoming paramount. In addition, the economic moves towards multi-phase transportation through sub-sea completions and long infield flowlines have a tendency to increase the risk of corrosion threats, thus placing a heavier duty on integrity management in upstream operations.

Corrosion potentially presents many threats, in many forms, and remains a major operational obstacle to successful hydrocarbon production. These threats have wide-ranging implications for the integrity of many materials used in the upstream petroleum industry, thus affecting capital expenditure () and operating expenditure (), with consequences on health, safety, and the environment (). Furthermore, if not effectively identified and managed, in extreme cases, corrosion may have major business implications, such as disruption to production, financial penalties, adverse societal publicity, and even an impact on the Licence to Operate (). However, corrosion mitigation and control by measures through national and international corrosion communities have led to significant improvements in the provision of safety and security and enhancing public welfare.

This chapter sets out to outline three subject areas with a common thread of describing the content of the book and its scope in relation to upstream hydrocarbon production. The subject areas are:

1. the impact of corrosion, highlighting its economic implications;
2. types of corrosion threats in oil and gas production and transportation, the manner in which they manifest, and the means of their control and design;
3. where future priorities need to be set to sustain and develop the continuing fitness-for-purpose of the practice and status of the corrosion and materials discipline.

In addition, brief reference is made to the image of the potential corrosion disciple with a view to outlining future priorities to attract a new generation of high calibre professionals to this field.

1.1 Scope and Objectives

This book aims to produce a practically driven reference guide to assist corrosion and materials engineers in their quest to select and optimise the most appropriate and economical choice of material and corrosion control strategy for upstream operations.1 It covers measures and mitigation methods to address corrosion threats in hydrocarbon production systems carrying hydrocarbons, injection water, and/or produced water.

In particular, the book provides an understanding of the primary subject areas that affect the continued and trouble-free operation of hydrocarbon production facilities. It provides a compendium of the principal considerations, current best practice, and key issues associated with each theme without going into absolute detail which will be specific to each individual application.

The focus primarily is on the following topics:

1. Corrosion threats and their respective assessment practices and mitigation methods.
2. Corrosion interrogation methods, including monitoring and inspection data capture and full analysis.
3. Methods by which materials are selected for a particular application.
4. Determining corrosion risk and implications with respect to defining safe operational conditions and the implementation of mitigation methods, measures and practice as an integral part of a fit-for-purpose corrosion and integrity management strategy.
5. Consideration of current and future challenges to those engineers who wish to specialise in materials and corrosion knowledge, and outlining the gaps in best implementation of know-how and knowledge.

While the majority of subject areas relate to addressing internal corrosion, cases of coatings, corrosion under insulation (), cathodic protection (), and corrosion trending, combining data generated from corrosion monitoring and inspection, are also included to complement mitigation methods.

The book is intended for use by both competent engineering personnel working in upstream production operations who have knowledge and experience of dealing with corrosion and materials as well as those entering the area who may not be fully familiar with the subject.

1.1.1 Contents of the Book

A summary of the themes and subject areas covered in this book is presented in Figure 1.1.

Figure 1.1 The overall themes and subject areas discussed in this book.

1.2 The Impact of Corrosion

The impact of corrosion can be viewed in terms of its effect on CAPEX, OPEX, and HS&E. In the past few decades there have been significant studies in various parts of the world on the cost of corrosion and how it affects a country's economy.

According to the current US corrosion study, the direct cost of metallic corrosion is $276 billion on an annual basis. This represents 3.1% of the US gross domestic product () [1].

The 2016 IMPACT [1] study, released by NACE International, indicates that there are problems with using the existing studies to examine savings over time due to the implementation of corrosion control practices. For instance, in the US, the cost of corrosion was estimated to be equivalent to 2.5% of GDP in 1949 (using the Uhlig method), 4.5% of GDP in 1975 (using the input/output method), and 3.1% of GDP in 1998 (using the Hoar method). The problem is that, in general, these studies use different analyses to estimate the cost of corrosion, so a direct comparison is not possible. Nevertheless, the overall cost of corrosion has been estimated to be between 2% and 5% of GDP, depending on the region of the world, which may be due to differences in methodology. Irrespective of the overall economic impact, the important point is that the cost of corrosion has not actually changed with time, knowledge, or technology since it was first looked at by Uhlig. Therefore, it needs to be reiterated that the use of economic impact alone has limited influence on the interest in raising the importance and funding of corrosion with management.

Domestic oil and gas production is considered a stagnant industry in the US because most of the significant available reserves have been exploited - although the growth in shale gas exploration and production may well change this view. Direct corrosion costs associated with conventional production activity were determined to be about $1.4 billion, with $0.6 billion attributed to surface piping and facility costs, $0.5 billion to downhole tubing, and $0.3 billion to CAPEXs related to corrosion [1]. The NACE 2016 IMPACT [1] study provides valuable tools for companies to implement an effective Corrosion Management System Framework, benchmark their current practices with other organisations worldwide, and learn how to optimise the safety and lifetime of critical assets.

While the overall cost impact of corrosion measured against GDP provides a benchmark for all industrial sectors, a measure focused specifically on hydrocarbon production was needed. To do this, many studies have focused on making the overall cost impact specific and tangible in terms of lifting cost per barrel equivalent. These studies have come up with a consensus view that corrosion failures, the majority of which are related to metal loss CO2 and H2S corrosion and cracking threats, account for some 25% of all safety incidents - affecting 2.8% of turnover and 2.2% of tangible assets - resulting in a 8.5% increase on CAPEX, 5% of lost/deferred production, and 11.5% increase to the lifting costs. These are estimated figures and dependent on the operator and region, obtained from a number of publications [2]. They are estimated as the additional corrosion management costs necessary to successfully deploy carbon and low alloy steels () as the appropriate construction materials.

The spread of these figures is highly dependent on the manner in which a corrosion control philosophy is planned and implemented, as they vary according to type of operation, location, and operator. The estimated cost of corrosion is put between US$0.3-0.9 (or even higher depending on the conditions and region) for the production of each barrel of oil equivalent (boe) [1-4].

It is outlined by the 2016 IMPACT study that some 10-30% of this cost can be reduced by implementing currently available corrosion control best practices [1]. However, the overall financial impact continues to place heavy penalties despite concerted efforts by the corrosion and materials community. This is primarily due to the increasing move to harsher production conditions and the extended use of CLASs beyond what was previously considered feasible. In addition, while limited, some costly failures have occurred, mainly due to lack of understanding of anticipated exposure conditions or inadequate metallurgical treatment of components, and are discussed in Chapter 19.

1.2.1 The Overall Financial...