Siemens (News - Alert) Oil & Gas Energy Division, based in Erlangen, Germany, has announced that its subsea power grid -- the first ever designed to supply power to oil and gas processing systems located at water depths of 3,000 meters (1.86 miles) or more -- will be available for deployment in 2012.

Siemens anticipates that the subsea power grid market will enjoy double-digit growth, to become a multibillion-dollar market in 2020.

The Oil & Gas Energy Division, a subsidiary of the global electronics and engineering company, first announced its intentions to supply power to subsea oil and gas facilities at the 2010 Offshore Technology Conference in Houston. Siemens’ subsea power grid comprises pumps and compressors, and large variable-speed drives, to transport the oil and gas from the wellhead to a processing facility. 

More importantly, the subsea smart grid sets the stage for large-scale subsea processing, which would reduce the costs of developing deep-sea fields dramatically. Until recently, oil and gas produced from deep-water fields have been brought to the surface and transported to onshore processing facilities. Bringing offshore oil to the surface, transferring it to an oil tanker and transporting it to an onshore refiners is very expensive.

Subsea processing enables more cost-efficient developments, especially for long step-outs, marginal and dispersed fields, and in deeper waters. Addressing power distribution to the remote facilities used to exploit these reserves is becoming an ever greater technical challenge.

At the 2010 Offshore Technology Conference, Tom Blades, CEO of the Oil and Gas Division of Siemens Energy, noted, “Full subsea processing is unthinkable without an industrial, heavy duty, high-reliability power grid directly on the sea bed.The depletion of onshore reserves is forcing oil and gas companies to exploit fields in the remotest places at ever greater water depths.”

However, the tremendous water pressure in subsea environments leads to a recovery gap as compared to traditional surface wells, which can be as high as 30 percent. The Siemens subsea power grid is an enabler in closing this recovery gap, opening the way for full fledged subsea processing.

In addition, the subsea power grid is an increasingly vital part of the infrastructure for renewable energy. Alternative energy systems in the marine environment attempt to make use of large open areas of the near-coastal ocean to provide a base for installation of multiple generating plants. These generating plants take the form of offshore structures to support windmills, subsea structures to support tidal current generators, and subsea moorings to support wave generators. All of these generating systems are designed to sustain an existence in an environment identical to the offshore oil & gas industry.

To bolster its subsea expertise and manpower even further, in March of this year, Siemens acquired the two subsea specialists, Poseidon Group AS and Bennex Group AS, from Subsea Technology Group AS, Norway. Poseidon provides subsea marinization, engineering and consulting; Bennex develops and manufactures subsea equipment mainly for power solutions.

“Subsea processing is a fast growing and technologically challenging part of upstream Oil & Gas,” said Blades. “With the acquisition of Poseidon and Bennex, Siemens has taken a major step to strengthen its in-house capabilities in marinization, subsea engineering, and consulting, and assert itself as the leading developer of subsea power grid solutions on the back of its traditional electrical engineering core-competence.”

Up until now, Siemens has delivered more than 15 subsea tie-in projects to clients around the world. Ten years ago, Siemens supplied a complete control system operating at a depth of 350 meters for Statoil’s Snorre project, located in the Norwegian North Sea. Together with Shell/NAM, Siemens developed the STC-ECO compressor, which is suitable for seabed deployment and dirty gas applications. Since 1998, Siemens transformers have been in operation at a depth of 1000 meters in Petrobras’ Carapeba oil field off the Brazilian coast.

Siemens Subsea Technology Group is a diversified engineering and manufacturing company with focus within subsea, drilling and well, reservoir, and process disciplines. The group includes the companies Bennex, Poseidon, Ross Offshore, and Well Processing and has key locations in Norway, Scotland, and the United States.

According to the latest World Market Update by Denmark-based BTM Consult, Siemens is the world's largest supplier to the offshore market. Today, Siemens has more than 600 wind turbines with a capacity of over 1,600 MW in operation. Additionally, Siemens has confirmed orders for close to 4 Gigawatts (GW) of offshore wind power plants. Several of those projects are already under constructionFor more information, visit the Siemens Energy website.