The Future of Decommissioned Oil Tankers: Scrapping, Retrofitting, or Storage

Introduction

Oil tankers, whether colossal VLCCs (Very Large Crude Carriers) or smaller versions, have a lifespan that can extend from 20 to 30 years. After this period, many face the question of what happens to them. This article explores the different end-of-life scenarios for decommissioned oil tankers, focusing on scrapping, retrofitting into FPSOs (Floating Production, Storage, and Offloading vessels), and their use as floating storage facilities. Each option offers unique environmental, economic, and social implications.

Scrapped

The most common fate for decommissioned oil tankers is scrapping. This process involves the ship being towed to designated shipbreaking yards, typically in countries like Pakistan or Bangladesh, where they are dismantled and their components recycled. Scraping old tankers is both an economical and environmentally conscious choice. For example, in 1980, a company with 8 VLCCs, all built in the mid-1970s, offloaded one tanker for floating storage in Abu Dhabi. The remaining seven were actively trading worldwide until the mid-1990s. However, after the Oil Pollution Act of 1990, older single-hull tankers became harder to operate, and any ship over 20 years old faced increasing operational costs. Thus, these vessels were sold for scrap.

The scrapping process involves several steps. First, the tanker is thoroughly cleaned and gas freed, with the exception of one fuel tank. Then, it is driven right up onto a beach where the hulk is progressively dragged up and cut up into pieces for recycling the steel and other materials. This process not only maximizes the use of valuable metals but also aligns with sustainable practices by reducing the need for new raw materials.

Retrofitting into FPSOs

Some oil tankers find a second life as FPSOs, which are floating production, storage, and offloading vessels. Retrofitting these vessels requires extensive modifications to adapt them to new operational roles. A typical FPSO will undergo a series of upgrades, including the installation of processing equipment such as oil/water separators, gas compressors, stabilizer columns, and mercury removal systems, depending on the specific field requirements. Retrofitting tankers into FPSOs not only extends their useful life but also continues to contribute to oil and gas exploration and production.

In the case of FPSOs, the retrofit process is complex and costly, but it offers significant advantages. FPSOs can operate in deep waters and can process and store large quantities of oil and gas, making them ideal for offshore fields. For instance, after the retirement of oil tankers, some were placed in Abu Dhabi as floating storage vessels, while others were converted into FPSOs through extensive modifications.

Use as Floating Storage

Another option for decommissioned tankers is converting them into floating storage facilities. This involves minimal modifications compared to retrofitting into FPSOs. Vessels are typically moored in place to store large quantities of oil and gas, making them cost-effective storage solutions. Floating storage is particularly useful in areas with limited storage infrastructure or during periods of high demand when additional storage capacity is needed.

The decision to retrofit a tanker into an FPSO, scrapping it, or using it for floating storage depends on several factors, including the vessel's age, condition, and the specific operational needs of the oil and gas industry. Scrapping is often the most economical choice when a vessel has reached the end of its operational life and cannot be cost-effectively modified. Retrofitting into an FPSO is more suitable when the vessel has significant remaining value and can be adapted to new roles. Floating storage is a cost-effective alternative for temporary storage or for use in areas with limited storage capacity.

Environmental Considerations and Sustainability

The decommissioning of oil tankers raises important environmental and sustainability issues. The scrapping process, while recycling valuable materials, can pose environmental risks if not managed properly. The use of benign cutting fluids and thorough clean-up procedures can minimize these risks. Retrofitting and repurposing tankers into FPSOs and storage facilities can also have significant environmental benefits, such as reducing the need for new construction and extending the life of valuable assets.

In conclusion, the future of decommissioned oil tankers is diverse, ranging from scrapping to repurposing into FPSOs or floating storage facilities. Each option presents unique challenges and opportunities, and the choice ultimately depends on the specific operational needs and sustainability goals of the oil and gas industry.