First “smart factory” for offshore oil and gas extraction equipment starts operations in China

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China’s first smart factory for producing offshore oil and gas extraction equipment started operations on June 26, marking a big step forward in the digitalization of marine energy industry manufacturing.

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The facility includes three smart production centers, seven auxiliary workshops and eight assembly stations in an area of ​​about 575,000 square meters, Global Times reported, citing China National Offshore Oil Corp (CNOOC).

The facility, located in Tianjin Municipality in northern China, will increase production efficiency by more than 20%, with more than 400 sets of intelligent machines capable of covering all stages of production.

The plant has an annual production capacity of 84,000 tonnes and a quay capable of accommodating large offshore engineering vessels such as floating production, storage and offloading (FPSO) and liquefied natural gas (LNG) carriers. .

CNOOC’s smart factory

Smart equipment reduces the need for labor and eliminates risk when producing metal parts. The report indicates that the plant achieves 90% automatic steel cutting and 70% automatic welding.

The Tianjin facility uses advanced technology including 5G, industrial big data and artificial intelligence, according to Yu Yi, chairman of the board of Offshore Oil Engineering Co under CNOOC.

The smart factory integrates innovative systems including smart manufacturing, smart warehouse management, smart security, monitoring and logistics.

“The digital and intelligent operation management mode achieved in the Tianjin plant can be promoted and used throughout the marine oil and gas extraction equipment manufacturing industry,” Yu said. .

The plant, designed by a research team of more than 200 engineers in collaboration with leading Chinese universities and organizations, used about 10 cutting-edge technologies, according to CNOOC.

China’s quest for energy security

Chinese President Xi Jinping has prioritized strengthening domestic energy security in recent years. He previously said his administration would lead an “energy revolution” to reduce energy consumption, increase energy supply and improve energy efficiency.

Xi Jinping-China
File Image: Xi Jinping

While the statement lacked details on implementation, the three reform initiatives mentioned in his speech serve as the foundation for China’s future policy direction and market movements.

The smart factory could be one of the cornerstones to support these goals. Moreover, China’s oil and gas aspirations have frequently led to clashes with its neighbors. And the South China Sea continues to be an important point of these clashes.

According According to estimates by the US Energy Information Agency, the South China Sea has probable reserves of 11 billion barrels of oil and about 190 trillion cubic feet of natural gas.

In January 2021, Chinese authorities revealed plans to deploy their country’s first semi-submersible oil rig in a deep-water field in the disputed South China Sea. The move was apparently aimed at increasing its political influence and showing its rivals how far it is willing to go for energy security.

Beijing claims ownership of around 90% of the South China Sea and backs up its claim with historical data. He has developed islets in the sea that stretch from his southern beaches to the island of Borneo, using his technological and military prowess over the other contenders.

Other claimants Brunei, Malaysia, the Philippines and Vietnam are exploring for oil and gas in the same 3.5 million square kilometer sea.

China, a net importer of oil since 1993, is trying to assuage its “fear of strategic vulnerability” by importing fuel from other countries, developing natural gas and increasing its refining capacity in the Middle East.

In the past, Chinese efforts to explore oil and gas in the South China Sea have heightened tensions, including in 2014 when state-owned China National Offshore Oil Corp (CNOOC) set up a platform deep-sea drilling in waters claimed by Vietnam. .

Beijing, however, continues to pursue its goals. In April 2021, China drilled deep into the South China Sea to extract sediment cores from the ocean floor. Drilling with China’s national “Sea Bull II” system enabled Chinese researchers aboard a marine research vessel to extract a sediment core measuring 231 meters (253 yards) long at a depth of 2,060 meters ( 6,760 feet).

China is advancing these efforts with its technological prowess, but it still has major geopolitical hurdles to overcome.

Politically and legally, cooperation over disputed oil and gas resources is more difficult than in the case of fisheries or environmental management. The South China Sea is a semi-enclosed sea, and the United Nations Convention on the Law of the Sea (UNCLOS) contains no provision requiring states to work together to manage their oil and gas resources.

Articles 74 and 83 of UNCLOS specify that states must exercise mutual restraint and create “provisional arrangements of a practical nature” to resolve their disputes without permanent demarcation of maritime boundaries, which provides a limited basis for compromise.

Nonetheless, China appears to be making tremendous progress in ensuring its energy security. With the launch of the latest factory, he will probably be able to do this even faster.

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