DNV GL is hooking up with construction yards in South Korea in a bid to cut development project costs by as much as 15%.

DNV GL says variations in owner, operator and regulatory requirements during engineering and construction phases at South Korean shipyards present a huge challenge for operators and drive up costs.

To tackle this, the company has kicked off a joint industry project (JIP) with Hyundai Heavy Industries, Daewoo Shipbuilding and Marine Engineering and Samsung Heavy Industries to establish a new international standard for offshore oil and gas projects.

DNV GL believes the results could potentially cut project costs by 15%, or approximately $500mn for a typical tlp project, for example.

The JIP is also supported by Korea Offshore and Shipbuilding Association (KOSHIPA) and the Korea Marine Equipment Research Institute (KOMERI) to address this issue. Other oil companies and engineering firms are still welcome to join the project.

Arthur Stoddart, DNV GL’s new regional manager for Korea and Japan said, ‘Unfamiliar specifications and processes are today resulting in re-work, delays and misunderstandings and add thousands of engineering hours to projects.

‘The implementation of a standardised approach will be an opportunity to significantly reduce the general cost level of offshore projects without compromising on quality or safety.’

According to the JIP partners, standardising even the simplest components at this early stage will deliver huge cost savings.

‘The full cost of a tlp project, for example, is typically around $3.5bn. Although the project partners have not yet published estimates, we at DNV GL expect to see savings in the region of $150-250mnn for this type of project, which is up to 7% of the total project cost. The full standardisation potential is more than 15% of the project cost,’ Stoddart added.

The JIP will initially focus on simple components and equipment, such as tertiary structures and bulk materials for construction, piping and E&I (electrical and instrumentation) engineering.

Next year, the scope will be extended to complete modules and equipment packages. The project will consider industry standards, company standards as well as maritime rules and approaches for standardisation, as all methodologies will be reviewed to ensure the most effective and efficient means are applied.