OFFSHORE SUBSTRUCTURE DESIGN-SPECIFICATION OPTIONS

COMPARISON USING LIFE-CYCLE COST ANALYSIS

Gajda P. & A. Whyte, Curtin University, Australia
R. Nishanth & Kurian V. J., Universiti Teknologi PETRONAS, Malaysia

ABSTRACT
Choice between alternative offshore substructure specifications typically addresses fit-for-purpose
criteria and then compares design options in terms of respective capital cost(s) for supply and installation.
Ideally however, the decision-making process to select an appropriate offshore substructure design
requires the design team to go beyond an initial evaluation of structural integrity and capex. Assessment
of options through value-management, whole-life comparisons is argued as an increasingly essential step
in the decision-making process. This work described here applies a life-cycle-costing analysis (LCCA)
technique to compare three alternate substructure options for an asset constructed off-shore Perth,
Western Australia; the results generated provide stakeholder guidance in choosing between alternative
specifications. Objective analysis for whole-life economic performance is described for: a pile on water
substructure option; a reinforced concrete floating substructure; and used a traditional land-based
substructure design as a benchmark. A qualitative case-study analysis towards a decision-making guide is
described and encompasses: design, construction, maintenance, and disposal. The findings of the life-
cycle costing analysis conducted argue that, given a choice of several alternatives, the lowest net-present-
value over a life-span study-period of 30 years is a pile-on-water substructure option; this is found to be
the most economically viable alternative in lieu of other specification solutions in this specific location.
The work presented here argues that life cycle costing analysis is an invaluable tool for designers and
stakeholders, to determine the true costs of development/design alternatives in a decision making process,
where several, technically-viable, design solutions are available for a specific environment.

1. INTRODUCTION takes into account the floating substructure

Nations are increasingly going towards
environmentally conscious sustainable
development [7]; indeed as water occupies 70% of
the worlds surface, a push towards construction
on water is increasing a green option. Floating
substructures present an alternative design option
for off-shore construction [4]. This research
builds upon a developed life-cycle-costing tool
examining 3 options for substructure towards
assessing feasibility/liability of alternatives for
water-borne structures [10, 11]; namely traditional
land substructure specification, alongside
traditional piles on water foundation; as well as
floating substructures. Governments spend much
on infrastructure development [6, 1] to enhance
both economic as well as cultural/recreational
experiences. Land reclamation and pile
substructure construction have been used
traditionally and therefore there are various
sources of costing information for land
reclamation and pile substructure construction;
resultant availability of information allows for
costing comparisons between land reclamation and
pile substructure to be made with relative ease;
however currently limited costing information
specification-option. A Swan River Perth Western
Australian case-study was chosen for analysis and
it was decided that the project would compare the
use of a floating sub structure to that of a pile on
water and bored pier on land substructure, for a
superstructure of approximate 400 square meter
area. Preliminary designs of each of the
substructure alternatives were conducted, followed
by a detailed design of the three options to
incorporate respective component specifications.
Full design plans and sections are available under
separate cover [8, 10, 11]. The work presented
here goes beyond the preparation of design
solutions and is argued to fill a need for a life-
cycle costing analysis that provides an objective
comparison between three technically-viable
substructure design-options.
2. CAPEX
Capital-expenditure/costs capex costs for each of
the substructure options (pile on water, floating
and traditional) were based on information
gathered objectively for compounded prices of
labour, plant materials, from commonly available
standard texts, industry supplier sources [9, 1] and
advice related to land-purchase and land-lease Cycle-Costing Analysis breakdown, NPV and
arrangements. Availability of land-lease in lieu of discount rate incorporation calculated using a
land-purchase was deemed appropriate. Land methodology developed by the RICS as a function
purchase requirements for the traditional of Treasury bonds rate of return; Inflation rate;
(default/control) the land substructure option Average. Thus a resultant discount-rate for the life
meant that its (net present) value was higher than cycle costing analysis was set at 5.94%, with table
alternatives. Capital Costs options to support the 4.1 summarising LCC findings:
400m2 superstructure were calculated as: Pile on
Water option: $348k; Floating option: $445k; with TABLE 4.1 NPV/LCCA) FOR
the Traditional Land option : $1.3M. SUBSTRUCTURE OPTIONS
Substructure Pile on
3. COSTS TO MAINTAIN Floating Trad. Land
Option Water
Capital
Maintenance costs for each of the substructure $348k $445k $ 1,301k
Expenditure
options (pile on water, floating and traditional Replace/
land) assessed [3]. Maintenance works schedules $64k $55k $34k
Residual
for sub-components of the substructure options Annual
$697k $736k $38k
(floating V traditional land pile V water), service Costs
life and analysis of maintenance and inspection Total Costs
works and costs associated are tabled below (3.1). (NPV) $1.1M $1.2M $1.4M

TABLE 3.1 MAINT. /INSPECTION OPTIONS The LCC analysis notes a pile-on-water
(for a 400m2 structure) substructure option as having the lowest net-
present-value, whole-cost/cost-in-use ($1.1
Pile on Water Floating Trad. Land million); lower than both the (default/control)
Substructure Substructure Substructure
time $ time $ time $ traditional land-based option and the floating
Grout substructure alternative specification design-
injection
5yr 16k 5yr 10k
option. Sensitivity analysis tests were based on
for 5yr 5k
longitudinal
variations in future maintenance costs NPVs and
cracks discount rate variations [2] across a period of
Patch jobs analysis of 30 years. Sensitivity tests endorsed an
Minor 20yr 51k - - - -
Works
initial finding that the pile on water option, in this
Patch work location is the most economically attractive over
major 25yr 158k 20yr 140k 20yr 70k the whole-life. The NPV replacement/salvage
Works
value were factored-in alongside annual costs for
Inspection
by engineer the substructure design-specification options and
(Visual & 1yr 0.7k 1yr 1k 1yr 0.7k found that the overall life-cycle cost for the Pile
sounding on water substructure for the 400m2
hammer)
Diver superstructure equated to $1.10 million; the
services floating substructure = $1.24 million; and the
(Inspect 1yr 0.6k 1yr 0.8k - - traditional land substructure equalled $1.37
piles, report
to engineer) million. Sensitivity analyses confirmed that, in this
scenario the pile-on-water option was the
Un-factored disposal costs were similarly economically attractive option.
determined [9], with disposal costs for each option Land purchase for the traditional land substructure
noted to be Floating option disposal: $61k; Water (default/control) option ultimately meant that this
Pile disposal: $56k; and land residual cost of $67k. traditional substructure design option was highest;
albeit that the capital and maintenance costs for
4. LIFE-CYCLE COST ANALYSIS the pile-on-water substructure and floating-
substructure were more than the capital-
The life cycle costing analysis [5] addressed construction and maintenance costs for the
typical source material, towards a localised Life- traditional land substructure option.
NPV differences between the pile-on-water and
floating-substructure option was capital costs of
$96, with costs for the floating substructure
coming from concreting. $334k or three-quarters
of the capital costs for the option of the floating
substructure came from concrete (in-situ) and
concrete (false-work) ancillaries; indeed low
density concrete, formwork of a complex nature
alongside Re-bar installation contributed to the
floating substructure option having a high NPV.
Although a literature review typically identifies
low-density concrete as a more cost effective
floating-solution it might be suggested that future
work examine in more detail construction
methods/specifications pertaining to floating
substructure design; floating substructure NPVs
can be argued as potentially lowered further with
value-management/value-engineering exercises
that align the superstructure with the substructure
option holistically.
ACKNOWLEDGEMENTS
The research presented above acknowledges with
thanks A./Prof Lau Hieng Ho, Deputy Dean,
Faculty of Engineering and Science, Curtin
University Sarawak Campus and Editor of
Advances in Steel & Aluminium Structures,
Research Publishing, towards adaptation of
findings presented by Whyte & Gajda, pp.348-353.
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