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CONTENTS
JULY 2010
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PhaseTester
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Accurate t fflow l measurements
48 12 NEWS ANALYSIS
38 PIPING HOT
50 EVENT REVIEW
How long can listed companies stay relevant as JV partners when companies like ConocoPhillips are dropping out of major projects?
We meet Sohrab Zuberi, board member of Logstor and Empower’s joint venture ELIP’s following the company’s first Qatar order.
Were you snapped at the Oil Field Get-together or the EIC World Cup networking events? Find out here.
19 NEWS REVIEW
40 ASK THE EXPERT
54 MWD UNCOVERED
Oil & Gas Middle East delivers detailed coverage of Honeywell’s Abu Dhabi delight, and BP’s unfolding American nightmare.
Dry gas compressor seal repair: Is there a viable alternative to the seal OEM? Expert: Jim Williams of AESSEAL says there is.
AlMansoori’s Target Well Control explains where MWD capabilities are today.
22 NORTH AFRICA PROFILE 44 QHSE SPECIAL REPORT The ease of doing business in North African states varies greatly, but major opportunities are there for those able to work the system.
Operating dangerous machinery with a mulitnational workforce requires an innovative approach to communicate HSE compliance.
30 COVER STORY
48 RECORD BREAKER
Fazel Fazelbhoy, Topaz chief executive talks up his growth plans.
Shell has recently begun production from the giant Perdido Spar.
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REGULARS
A client in Oman used the highly mobile PhaseTester* service to test one of its gas condensate wells. The superior dynamic response delivered accurate well test results in half the time it takes using a conventional test separator. Reduced operation time and greater mobility mean more wells tested cost-efficiently, resulting in significant improvements in reservoir management. PhaseTester portable multiphase well testing service with Vx† technology delivers highly accurate surface flow rate measurements in oil and gas wells in less time than using a separator. mea-marketing@slb.com www.slb.com/phasetester
2 WEB HIGHLIGHTS 4 COMMENT 7 REGIONAL NEWS 58 PROJECT DATA 64 THE BIG PICTURE
July 2010 Oil&Gas Middle East
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WEB HIGHLIGHTS
The online home of:
MOST POPULAR NEWS
ONLINE SPECIAL REPORT
25 EPC Contractors in the 1 Top Middle East nets Abu Dhabi Gas 2 Honeywell Development tech deal wins US$45m EPC contract 3 Topaz with Gulf Petrochem will push on with BP as 4 Libya deepwater offshore partner Dhabi’s Shah sour gas project 5 Abu awards PMC
IN PICTURES
Middle East’s top 25 EPC firms ArabianOilandGas.com provides a full list of the Special Report published in June of the Engineering, Procurement and Construction giants which have been most successful in the Middle East’s upstream field. Check out who made the presigious list and which companies dropped out after a year of resting on their reputations. Join the debate and tell us if you think we’re wrong - all on www.ArabianOilandGas.com BREAKING NEWS AND VIEWS FIRST CASPIAN UPSTREAM OIL & GAS PROFILE Getty Images
How the giant oil and gas basin is awakening to a renewed period of major upstream investment. Resource and business tips from industry experts.
No Heat Resources Middle East has delivered a water-based solution to the massive H2S challenge faced by the region’s upstream firms.
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DOING BUSINESS IN IRAQ - UPSTREAM GUIDE Getty Images
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TACKLING HYDROGEN SULPHIDE & MERCAPTINS
ENTERPRISE RISK MANAGEMENT: INSIGHT
Trade missions and finding good partners with experience on the ground can make all the difference in the emabttled oil-rich state.
Prajeev Rasiah, area manager for DNV, explains the benefits of full scale ERM for upstream oil and gas companies in the Middle East.
ArabianOilandGas.com
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Oil&Gas Middle East July 2010
LONE STAR LAUNCH GALLERY A look at the Abu Dhabi-built Lone Star semi sub drilling and development rig. Including shots of senior leadership of SBM. ArabianOilandGas.com SPOT POLL IS A MAJOR OIL SPILL IN THE ARABIAN GULF INEVITABLE OR AVOIDABLE??
47.6 % Inevitable. It’s only a matter of time 33.3% With better training its avoidable 19.1% Totally avoidable if procedures are followed
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COMMENT
Registered at Dubai Media City PO Box 500024, Dubai, UAE Tel: 00 971 4 210 8000, Fax: 00 971 4 210 8080 Web: www.itp.com Offices in Dubai & London
Energy still king in KSA Tadawul shows energy outstrips all other investments s we approach half-way this year, I see that the index for energy & utilities companies on Saudi’s Tadawul stock exchange has seen a greater rise than that of any other sector so far this year in the Kingdom. Energy & utilities has risen by 14.76%, clearly outstripping the petrochemical company index, which has risen 3.68%. (The two other big risers that come close to E&U, incidentally, are retail – 10.37% - and agriculture & food – 9.67%) At the very end of 2009 the index sat at 4,210.69, and three days ago reached its highest level for the year, at 4,915.92. Whilst it should come as no surprise that upstream companies are doing well in the Kingdom, the scale of the rise in performance is a good indicator of upstream health for the Middle East as a whole. Even in a frosty market in the year after the collapse of Lehmen Brothers, energy projects in the major energy hubs of the Middle East, namely Saudi Arabia, the UAE and Qatar pushed on ahead, and the project pipeline looking ahead remains extremely strong. There is talk of Saudi Aramco deploying over 100 exploration drilling rigs by the end of the first quarter next year, and major project awards have been forthcoming from Abu Dhabi. Companies which have ridden out a period in which collections, or rather payment for work done, has been a major problem should take some respite from the fact that, on the whole, energy has now normalised, and those payment strains should begin easing from the top down. It is also worth noting that despite the calamities surrounding Greece’s debt burden and default position, and suspicions building that other countries in the
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Oil&Gas Middle East July 2010
CEO Walid Akawi Managing Director Neil Davies Managing Director ITP Business Karam Awad Deputy Managing Director Matthew Southwell Editorial Director David Ingham Editorial Energy Group Editor Daniel Canty Tel: +971 4 210 8255 email: daniel.canty@itp.com Contributors Chris Sell, Ventures, Rigzone Advertising Commercial Director Jude Slann Tel: +971 4 210 8693 email: judith.slann@itp.com Sales Manager David Wheeler Tel: +971 4 210 8582 email: david.wheeler@itp.com Studio Group Art Editor Daniel Prescott Designer Lucy McMurray Photography Head of Photography Sevag Davidian Senior Photographers Efraim Evidor, Jovana Obradovic Staff Photographers IIsidora Bojovic, George Dipin, Murrindie Frew, Lyubov Galushko, Shruti Jagdesh, Mosh Lafuente, Ruel Pableo, Rajesh Raghav Production & Distribution Group Production Manager Kyle Smith Deputy Production Manager Matthew Grant Production Coordinator Devaprakash Managing Picture Editor Patrick Littlejohn Image Editor Emmalyn Robles Distribution Manager Karima Ashwell Distribution Executive Nada Al Alami Circulation Head of Circulation & Database Gaurav Gulati Marketing Head of Marketing Daniel Fewtrell Marketing Manager Annie Chinoy ITP Digital Director Peter Conmy ITP Group Chairman Andrew Neil Managing Director Robert Serafin Finance Director Toby Jay Spencer-Davies Board of Directors K.M. Jamieson, Mike Bayman, Walid Akawi, Neil Davies, Rob Corder, Mary Serafin
Investors at Abu Dhabi’s stock exchange. Eurozone, such as Portugal could be in hot water too, the oil price has remained safely in the $75-plus territory. This time around, a stable market price has been delivered not because of speculators, but rather real supply and demand fundamentals. The truth is energy demand has stayed stronger in this recession than was feared, and OPEC’s stewardship of output has kept its Middle Eastern member’s coffers full of cash. Daniel Canty, Editor E-mail: daniel.canty@itp.com
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Circulation Customer Service Tel: +971 4 210 8000 Certain images in this issue are available for purchase. Please contact itpimages@itp.com for further details or visit www.itpimages. com Printed by Color Lines Press Subscribe online at www.itp.com/subscriptions The publishers regret that they cannot accept liability for error or omissions contained in this publication, however caused. The opinions and views contained in this publication are not necessarily those of the publishers. Readers are advised to seek specialist advice before acting on information contained in this publication which is provided for general use and may not be appropriate for the reader’s particular circumstances. The ownership of trademarks is acknowledged. No part of this publication or any part of the contents thereof may be reproduced, stored in a retrieval system or transmitted in any form without the permission of the publishers in writing. An exemption is hereby granted for extracts used for the purpose of fair review.
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LEAD NEWS
Iran all alone for South Pars Following the walkout of European oil companies Shell and Repsol from the phases 13 and 14 of Iran’s South Pars project, the upstream development of these two phases will be handed over to the Iranian Khatam-ol-Osea Consortium for US$5 billion, according to reports from within Iran. Ever since the initial deal was signed, Shell has been delaying decisions on multi-billion dollar investments in phase 13 plans, reportedly due to global political pressures. However, Iran set a deadline for Shell and Repsol in April 2009, giving them until May to clarify their involvement in the project. After nine years of negotiations Iran’s oil minister has eventually ordered related officials to stop talks with these firms and turn to Iranian contractors, according to the Mehr News Agency. The Iranian Khatam-ol-Osea Consortium is made up of several large Iranian companies, namely Khatam-ol Anbia Construction Headquarters, OIEC, SADRA, ISOICO, IDRO, and NIDC. South Pars gas field is the biggest gas field in the world, shared between Iran and Qatar, which contains 1,800 Tcf gas in place and 56 billion barrels of condensate in place in both parts. Iran holds the world’s second largest gas reserves and third largest oil reserves, but has consistently failed to make significant progress on developing its resource base, and its fundraising abilities hampered by
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Getty Images
International community backs away from ever-more ostracised ‘rogue’ state.
A general view shows the massive ‘South Pars’ gas field development phases 6, 7 and 8 onshore facilities in the Iranian Gulf coastal town of Assaluyeh
massive state-backed subsidies on domestic energy. Some reports have suggested the combined value of deals signed is in the region of US$21 billion, and were awarded directly by the oil ministry to the Khatam al-Anbiya, Industrial Development and Renovation Organization ( IDRO) and Petropars consortia. Iranian President Mahmoud Ahmadinejad, who was present at the signing ceremony in the southern city of Asalouyeh, described the contracts as “the biggest contracts in the history of Iran’s oil industry.” Shell and Repsol initially agreed to take on the Persian LNG venture in 2004. The original aim was to finalise contracts and final investment decisions (FIDs) by 2006 and bring the project onstream by 2012–13—later pushed officially to 2014—before it became evident that no physical progress was being made. “Shell and Repsol have been carryng out ongoing studies and surveys of the project, making some credible progress—unlike other companies in Iran in recent
years—while being careful to keep the value of the work done below the US$20-million threshold mandated by US sanctions against Iran,” said Samuel Ciszuk, Middle East energy analyst at IHS Global Insight. “Secondly, the companies have been Iran’s only remaining link with a credible chance of obtaining liquefaction technology, which is a (relatively) new field, still dominated by the small group of supermajors and a handful of large-scale engineering and oil service giants. The Chinese companies investing in Iran in the last few years—although in most cases also refraining from committing financially out of fear of damaging their operations elsewhere— have not, for instance, mastered
the LNG technology themselves and could not therefore bring it to Iran for many years,” added Ciszuk. Increasing sanctions against the regime over the nuclear dossier have led to an exodus of companies like Shell, Total, Eni, Stat Oil, Sinopec, and Luc Oil from the region. Analysts have noted that the technical and scientific expertise of the IRGC is inadequate for developing the South Pars region. Economic observers believe that the decision is primarily motivated by propaganda needs, since the IRGC has insufficient technical knowhow and financial sanctions would prevent acquisition of the required tools and equipment for these projects.
1800TCF
The South Pars field represents the Iranian portion of what Qatar calls the North Field. The combined reserves are estimated to exceed 1800 trillion cubic feet of gas.
July 2010 Oil&Gas Middle East
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REGIONAL NEWS
J Ray hands over three topsides Qatargas 3 and 4 accept offshore gas production platforms from J Ray McDermott A signing ceremony was been held recently at Qatargas headquarters in Ras Laffan Industrial City to mark the occasion. Peter Flanagan, on behalf of the Qatargas 3&4 (QG3&4) Joint Asset Development Team (JADT), and Richard Withers, on behalf of JRM, signed the
Qatargas 4 receiving and processing planmts are under construction in Ras Laffan.
Mechanical Acceptance Certificate in front of colleagues from QG3&4’s Senior Leadership Team, QG3&4 Offshore Project Management Team, Qatargas Operations and Qatargas Expansion Start-Up Unit. The offshore facilities are located 65 kilometres north of Ras Laffan, in Qatar’s North Field. The total facilities comprise three 2,200-ton platforms, 33 gas wells and two 65 kilometre pipelines, which are shared by the separate Qatargas 3 and Qatargas 4 ventures. The offshore assets will deliver gas to two liquefied natural gas (LNG) mega-trains at Ras Laffan, one each owned by Qatargas 3 and Qatargas 4. Each train will be capable of producing 7.8 million tonnes of LNG, plus other associated products, annually. The trains are due to start production by the last quarter of 2010. Immediately following the ceremony, Bill Boyington offi-
cially transferred care, custody and control of the platform to Qatargas ESU. “The Project is proud of the finished product which is the result of an excellent partnership between the offshore team and our prime contractor. The Project takes great pride in delivering these facilities, and we wish Qatargas great success in starting up and operating them for many years to come,” said Clay Fryer, QG3&4 JADT Offshore Project Management Topsides Engineering Lead, who led design of the facilities since the FEED stage.
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Qatargas 3 and 4 will drill and produce from 33 gas wells in Qatar’s North Field. Source: Qatargas.
Getty Images
Qatargas has taken a major step towards completing work for its Qatargas 3 and Qatargas 4 ventures, with the mechanical acceptance and handover of the first of three offshore gas production platforms, known as QW8, from contractor, J. Ray McDermott (JRM).
Oman Oil Co expected to replace BG Group State-run Oman Oil Company (OOC) is in talks with Oman’s Ministry of Oil and Gas to take on an exploration block ceded by Britain’s BG Group, a senior Omani oil official told newswire Reuters last month. BG pulled out of its deal to develop Oman’s oil and gas Block 60 earlier this month to focus on global opportunities elsewhere. OOC is the government’s energy investment arm, and
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Oil&Gas Middle East July 2010
holds both domestic and international oil and gas assets. Oman Oil Company is in discussion with the ministry of oil and gas to take over the BG concession in Oman,” Nasser al-Jashmi, undersecretary for oil and gas, told Reuters. It was unclear whether the government would retender the block, which BG signed up to develop in 2006, or whether it would award the acreage
directly to OOC. The block covers an area of 1,500 square kilometres at Abu Butabul. BG had planned to start gas output from the block in 2012 and has already made substantial drilling investment there. Oman has signed production sharing agreements with a number of foreign companies to boost both oil and gas BG Group had made substantial drilling production. investment in Oman.
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REGIONAL NEWS
Saipem nets Kuwait deal Saipem has been awarded an onshore contract worth approximately $900 million to build a new gas booster station in West Kuwait. Saipem has been awarded by Kuwait Oil Company (KOC) a contract for the engineering, procurement and construction (EPC) of the new booster station (BS-171) comprising of three high and low-pressure gas trains to produce 234 million cubic feet a day of dry gas and 69,000 barrels per day of condensate. The gas is fed from the existing gathering centres 17, 27 and 28 and the new gathering centre 16. The BS-171 contract will also cover a pipeline network from these units to the booster station and an intermediate slug catcher. The activities will be completed within the second quarter of 2013. Saipem is currently building the Gas Booster Station 160 (BS 160) located in Southeast Kuwait for KOC. The contract comes amid a particularly successful year for the EPC firm. In May Abu Dhabi Gas Development Company Limited awarded Saipem three EPC contracts as part of the Shah Gas development program.
Getty Images
EPC firm awarded $900 million gas booster station project
A worker is seen at the Gathering Center 15 (GC 15) oil facility in the northern Al-Rawdhatain oilfield, 80 kilometres from Kuwait City.
The development program is designed to treat 1 billion cubic feet a day of sour gas from the Shah field, before separating the sulphur from the natural gas and transporting both to processing facilities at Habshan area, and then to Ruwais, located in the northern part of the Emirate. The first two contracts encompass the engineering, procurement, and construction of the gas process plant and of the sulphur recovery unit. The third contract covers the engi-
1784 billion m
3
Kuwait has proven natural gas reserves of 1,784 billion cubic metres. Source: OPEC
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neering, procurement, and construction of nearly 250 kilometre long pipelines in total for transporting gas, condensate and NGL from the Shah Gas plant to Habshan and ASAB tie-in point. The activities will be completed within 52 months. In March 2009, Saipem was awarded a new contract worth approximately US$400 million for the charter of offshore drilling rig Scarabeo 6 of the coast of Egypt. The contract has been assigned to Saipem by Burullus Gas Company, extending their charter of Scarabeo 6 to the fourth quarter of 2014. Saipem recorded a net profit of US$222 million in the first quarter of 2010, with revenues of $3.08 billion.
HIGHLIGHTS OMV has confirmed a new gascondensate discovery following the successful drilling of the Ritma-1 exploration well in the Nawara Production Concession in southern Tunisia. This is the seventh successive well to encounter hydrocarbons in this area in the last four years, and underpins the significant potential of this block and of OMV’s surrounding exploration permit Jenein Sud. This is the third well in the 2010 drilling campaign designed to identify additional gascondensate resources for the planned Nawara Development Project. Helmut Langanger, OMV Executive Board Member responsible for Exploration and Production stated: ”We are very pleased with this promising series of 7 consecutive discoveries in southern Tunisia which is quite an outstanding achievement in the E&P business and allows us to stay on track for our planned field development in the Nawara Concession.“ Foster Wheeler’s Global Engineering and Construction Group has been awarded a feasibility study and frontend engineering design (FEED) contract by the Iraqi Ministry of Oil for a new grassroots refinery at Nassiriya in southern Iraq. The proposed refinery will have a capacity of 300,000bpd. The value for this project was not disclosed and will be included in the company’s second-quarter 2010 bookings. In executing this contract, Foster Wheeler will develop the configuration of the new refinery to meet the client’s processing objectives, evaluate proprietary technologies, prepare a report covering the feasibility of the project and the design basis of the refinery facilities, engage the selected licensors and prepare the front-end engineering design package for the total project.
July 2010 Oil&Gas Middle East
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REGIONAL NEWS
ABB scoops Kuwait pipeline deal Kuwait Oil Company award turnkey project for new crude oil transit line to Swiss firm ABB has won a contract worth $155 million from the Kuwait Oil Company (KOC) for a turnkey project to design and build a new crude-oil transit line and associated ancillary systems. The project includes the expansion of an existing manifold (a pipeline consolidation installation) at Point A, a location in the north of the country, and the installation of the new transit line. The 123 kilometre, 30-inchdiameter transit line will run between oil fields in the north of the country and a storage facility in the south. It will be equipped with pipeline inspection gauges at 15 km intervals, a leakdetection system and metering stations. The new installations are designed to transport up to 665 thousand barrels of oil per day from Point A to a tank farm in southern Kuwait. More than half of the oil will come from the newly established Jurassic field in northern Kuwait.
Veli-Matti Reinikkala is head of ABB’s Process Automation division.
“ABB has the technologies, industry knowledge and experience to deliver this important project to our customers,” said Veli-Matti Reinikkala, head of ABB’s Process Automation division. “By providing reliable solutions and infrastructure, we help
our customers to optimize the productivity and efficiency of their operations.” ABB will be responsible for the design, engineering, procurement, construction supervision, commissioning and start-up of the new system.
ABB will also provide an automation system and distributed-control systems, as well as instrumentation, electrical equipment and an emergencyshutdown system. The project is scheduled for completion in spring 2012.
Lamprell awarded new Seajacks liftboat project Lamprell Energy has been awarded a US$ 129 million EPC contract by Seajacks for the design, construction and delivery of a Gusto MSC NG-5500 design self elevating self propelled offshore wind turbine installation vessel. The vessel, named “Seajacks Zaratan” will be constructed at Lamprell’s Hamriyah facility and is due for delivery in 2012.
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Oil&Gas Middle East July 2010
Lamprell delivered two wind turbine installation vessels to Seajacks during 2009; the Seajacks Kraken and Leviathan are both currently employed in the North Sea. Lamprell chief executive officer, Nigel McCue commented “This award is significant because it marks another major contract for us in what has already been a
busy year for new business.” “Coming as it does after the Fred Olsen contract for two wind turbine vessels earlier this year, this award reaffirms our belief that we are well positioned to be leaders in the provision of such liftboats, a market we believe will continue to expand rapidly as the offshore wind energy sector pursues its ambitious expansion plans.” Lamprell staff at the firm’s Hamriyah yard.
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EVENT COVERAGE
Emerson Process Management has been active in Abu Dhabi for more than 35 years.
EMERSON BEEFS UP UAE PRESENCE E
Massive new $4 million Abu Dhabi facility will support regional growth
merson Process Management launched its new office in Abu Dhabi recently, with an investment of US$4 million. The new 22,000 sq. ft. office located in Musaffah Industrial Area follows on from the success the Jebel Ali office has had in Dubai, and further represents the company’s strong commitment to the Middle East region, according to senior management figures. “Emerson Process
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Oil&Gas Middle East July 2010
Management is continuing to invest across the Middle East and Africa, in terms of people, facilities and leadership,” Dave Tredinnick, president of Emerson Process Management Middle East and Africa, told Oil & Gas Middle East. “We have experienced tremendous growth across all of our businesses. One of our key growth initiatives is to continue to move our operations closer to our customers, in terms of
manufacturing, service and Abu Dhabi. The UAE’s largsupport. This year we will be est homegrown oilfield service opening three new facilities, in company, AlMansoori Specialclose proximity to our installed base, Abu Dhabi, Jubail Saudi Arabia and Ras Laffan Qatar,” he said. The Mussaffah Industrial THE ABU DHABI OFFICE Area plays host to many of the REPRESENTS AN INVESTMENT OF UAE’s leading upstream play$4 MILLION, AND WILL BUILD ON ers and has become a hub of THE SUCCESS OF THE DUBAI choice for compay’s looking FACILITY IN JEBEL ALI. to capitalize on the immense Source: Emerson project portfolio coming out of
$4mn
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EVENT COVERAGE
Cor Corbeek (far left) and Dave Tredinnick (far right) at the Abu Dhabi launch. ized Engineering has a major base in Mussafah, as does Abu Dhabi’s leading EPC contractor NPCC. Cor Corbeek, general manager - , Emerson Process Management added that Abu Dhabi represents both a core market, and a tremendous growth opportunity. “The importance of Abu Dhabi as a key growth market, increasing competitiveness within the sector and the need to offer comprehensive sales and after-sales services, led to the launch of this enormous wholly-owned facility in Abu Dhabi.” Emerson Process Management’s new Abu Dhabi facility
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currently has 40 employees, which is expected to more than quadruple within the next five years. It will serve as a sales office and Flow Service Center, providing systems staging and integration for process systems and solutions as well as power and water solutions, Rosemount quick ship and repairs, project engineering and services, training and project management solutions. Ahmad Nabulsi, managing director of Trizac Abu Dhabi, Emerson Process Management’s local business partner in Abu Dhabi, said the new facility will throw substantial weight
behind achieving ambitious growth targets. “We have been associated with Emerson Process Management since 1994 , responsible for their local distribution and sales. This new facility will go a long way in reassuring customers about the company’s commitment to this market, as well as assist in exploring new business opportunities to further stimulate the phenomenal growth the company has experienced over the past years,” said Nabulsi. Emerson Process Management has established offices in key local markets such as Dubai, Abu Dhabi, Al Khobar and Doha, with full sales and service teams in each market. In addition to this new facility in Abu Dhabi, Emerson Process Man-
agement is also partnering with Saudi Fal in Saudi Arabia to establish a manufacturing and repair facility in Jubail, and with DOPET in Qatar to establish a facility in Ras Laffan Industrial Area, as part of its expansion and growth strategy for this year.
Dave Tredinnick, president of Emerson Process Management Middle East and Africa.
July 2010 Oil&Gas Middle East
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NEWS ANALYSIS
NEWS ANALYSIS Conoco’s capital crunch Getty Images
Senior VP hints Shah Field may have been a sour deal for American firm
apital concern is being touted as the major reason behind the decision of ConocoPhillips to pull out from the US$10bn Shah gas field in Abu Dhabi last April, according to Ryan Lance senior vice president, exploration and production, International of ConocoPhillips. “We have restrained capital. We have to look at total costs. But Abu Dhabi is a good place to do business,” he added when
C
speaking to reporters on the sideline of the Asian Oil and Gas conference held in Kuala Lumpur, Malaysia last month. The JV agreement between ADNOC (60%) and ConocoPhillips (40%) was signed in July 2008, and aimed the development of the Shah Field’s sulphur-rich sour gas reserves, the construction of a gas processing plant, pipelines and sulphur-exporting facilities at Ruwais. According to Q1 filings
the company’s exit from both The project is designed to the Shah project and the Yanbu produce 10bn cubic metres of refinery in Saudi Arabia caused natural gas annually, in addition write-downs of $110 million. to 50 000 barrels per day (b/d)
$110 million IN ITS FIRST QUARTER REPORT ON APRIL 29 CONOCOPHILLIPS SAID THE WITHDRAWAL FROM THE YANBU AND SHAH PROJECTS COST THEM $110 MILLION, REDUCING QUARTILE EARNINGS FROM $2.2 BILLION TO $2.1 BILLION. Source: ConocoPhillips April Earnings Report
July 2010 Oil&Gas Middle East
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NEWS ANALYSIS
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Oil&Gas Middle East July 2010
and Gas Advanced Technology (SOGAT) event in Abu Dhabi in March. Since Conoco’s exit, ADGD has made over $5.5 billion worth of contract awards for the project, viewed as a key element in Abu Dhabi’s future energy strategy. Despite sitting on vast gas reserves the UAE is today gas-short, and imports billions of cubic feet of Qatari gas each day through the Dolphin Energy pipeline, and purchases LNG on spot markets. Earlier this year ConocoPhillips also withdrew from its joint venture with Saudi Aramco for the building of the Yanbu refinery on the western coast of the Kingdom. The cancellation of Yanbu project came four years after the signature of a memorandum of understanding between Aramco and ConocoPhillips to develop the refinery, which was planned to supply global markets including the US with refined products. The refinery was originally set to cost $6 billion to build. However, the project’s price tag doubled to as much as $12 billion in 2008 when raw material and commodity prices peaked. Construction of the facility is now estimated to cost about $10 billion. Escalating costs also led ConocoPhillips in 2007 to pull out of another export refinery project in Fujairah in the UAE to be developed with Abu Dhabi’s International Petroleum Investment Co.
“We have to look at total costs, but Abu Dhabi is a good place to do business,” Ryan Lance, Snr VP, ConocoPhillip
The day after Conoco officially pulled out of the Shah project the company reported first-quarter earnings of $2.1 billion, compared with firstquarter 2009 earnings of $0.8 billion. Excluding after-tax charges of $110 million for ending participation in the Shah and Yanbu projects, first-quarter 2010 adjusted earnings were $2.2 billion.
Despite ConocoPhillips’ departure from all of these Middle Eastern projects, local owners have proved their mettle and dedication by pushing ahead. The fact that a listed company has bailed on these projects should perhaps be seen as part of a financing gap trend, and which is bound to get wider in the region. With National Oil
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of condensates, 4,400 tonnes per day (t/d) of natural gas liquids (NGLs) and a massive 10,000 tonnes per day of sulphur. The gas and marketable by-products will then be transported from the gas field, which is situated onshore near the oasis of Liwa, to UAE customers or to storage and handling facilities at Ruwais on Abu Dhabi’s coast. Sulphur granulation storage, an export terminal and a marine channel will also be built at Ruwais. The scheduled start-date for production start-up is 2013-14, having been pushed back from 2012. When the deal was first signed the bi-product sulphur was trading at over $1000 a tonne, but that collapsed last year and has only recently seen a recovery to around $500 per tonne. It is widely thought that as part of the deal ConocoPhillips would be responsible for the marketing and sale of the sulphur, but when its price slid below what was considered a reasonable threshold the company wanted out of the deal. Abu Dhabi Gas Development company, the JV vehicle established by Conoco and ADNOC, Abu Dhabi’s state owned oil and gas company, has ploughed ahead in the wake of the US firm’s withdrawal. “The Shah gas development is set to come on stream in the second or third quarter of 2014,” CEO Saif Al Ghafli told ArabianOilandGas.com, speaking at the annual Sour Oil
James Mulva is ConocoPhillips chairman and chief executive officer.
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NEWS ANALYSIS
oil price, and access to the huge capital wealth of the Middle East’s investment vehicles, it is surely these companies, not beholden to shareholders and IN Q1 2010 CONOCOPHILLIPS dividend expectations who can FUNDED A $2.5 BILLION CAPITAL afford to fund the mega-projects PROGRAM AND PAID $0.7 BILLION the region wants to develop. OF DIVIDENDS. AS OF MARCH 31, The region has long-been 2010, DEBT WAS $29.0 BILLION on a quest of greater autonomy AND THE DEBT-TO-CAPITAL RATIO WAS 31 PERCENT. for its upstream industry, and Source: ConocoPhillips April Earnings if international oil companies Report to too risk-shy to participate in getting these projects off the Company coffers still brimming ground, there relevance in the thanks to a fairly sustained high region diminishes even further. ConocoPhillips also recently pulled out of a JV refinery deal in Yanbu, KSA.
31%
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July 2010 Oil&Gas Middle East
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NEWS REVIEW
Honeywell nets ADGD tech deal Experion Process Knowledge System and Safety Manager technologies given the nod Honeywell announced it has been selected to help Abu Dhabi Gas Development Company Ltd (ADGDCL) achieve safe and efficient production at the Shah Gas Development Project, which is expected to significantly increase the Emirate’s domestic gas supply. When it reaches full production capacity in 2014, the site is expected to yield some 1 billion cubic feet of gas per day. Although the Shah Gas field was discovered more than 40 years ago, dangerously high levels of hydrogen sulfide have prevented ADNOC from extracting the gas, which is critical to domestic and industrial growth in the region. To help reduce the risk of safety incidents, Honeywell is providing its Experion Process Knowledge System (PKS) and Safety Manager technologies, which can be integrated to give personnel a complete view of process and safety information across the site. This approach helps operators more-effectively manage the safety systems throughout the plant. In addition to this core system, Honeywell will design, engineer and implement a broad array of new technologies and
1bn
THE SHAH GAS DEVELOPMENT PROJECT IS EXPECTED TO YIELD OVER 1 BILLION FT 3 OF GAS EACH DAY
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advanced applications that will help the plant operate as efficiently as possible from the first day of production. “This is a highly strategic project for the Emirate and it was imperative for us to select the right partners,” said Saif Al-Ghafli, CEO of Abu Dhabi Gas Development Ltd. “Honeywell’s reputation for successfully executing complex megaprojects was a significant factor in our selection. Its IntegratedMain Automation Contractor methodology and Operations Readiness approach using consultancy and workshops have been a perfect fit for us as we strive to seamlessly integrate our unique work processes with Norm Gilsdorf, president, Honeywell Process Solutions. a fit-for-purpose automation infrastructure.” Other advanced applications will include Honeywell’s UniSim Operations simulation technology, which ADGDCL will use to train plant personnel several months in advance of startup, and advanced process control software that will help optimize gas plant operations. “This is the biggest gas development project for years in the UAE, and designing and delivering this solution would not have been possible even just five years ago,” said Norm Gilsdorf, president, Honeywell Process Solutions. “Today, new technology combined with deep consulting expertise and a proven methodology means we are able to help ADGDCL make this essential project a success from day one.” Saif Al-Ghafli, chief executive officer of Abu Dhabi Gas Development Limited.
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NEWS REVIEW
Update on BP’s GoM operations Company says surface skimming alone has recovered over 27 million gallons of oil BP provided an update on developments in the response to the MC252 oil well incident in the Gulf of Mexico as Oil & Gas Middle East was going to press. The report said two systems continue to collect oil and gas flowing from the Deepwater Horizon’s failed blow-out preventer (BOP) and transport them to vessels on the surface. The lower marine riser package (LMRP) containment cap, installed on June 3, takes oil and gas to the Discoverer Enterprise where oil is collected and gas is flared. The second system, which began operations on June 16, takes oil and gas to the Q4000 vessel on the surface where both oil and gas are flared. On June 26, the LMRP containment system connected to the Discoverer Enterprise collected 14,730 barrels of oil, and the Q4000 flared an additional 8,020 barrels of oil. To date, the total volume of oil recovered or flared by containment systems is approximately
Gas from the damaged Deepwater Horizon wellhead is burned by the drillship Discoverer Enterprise.
435,600 barrels. Preparations continue for the next step in containment operations. Work on the first floating riser containment system, which will be connected to the Helix Producer vessel, remains on schedule. It
GOM RESPONSE - NEWS IN NUMBERS Over 39,000 personnel, almost 5,000 vessels and some 110 aircraft are now engaged in the response effort. Operations to skim oil from the surface of the water now have recovered, in total, approximately 652,000 barrels (27 million gallons) of oily liquid. In addition, a total of 275 controlled burns have been carried out to date, removing an estimated 238,000 barrels of oil from the sea’s surface. The total length of containment boom deployed as part of efforts to prevent oil from reaching the coast is now over 2.9 million feet (over 550 miles), and over 4.7 million feet (almost 900 miles) of sorbent boom also has been deployed.
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is currently anticipated that this system will be available to begin first operations at the end of June or in early July. The system is intended to provide additional oil containment capacity of approximately 20,000-25,000 barrels a day. Together with the LMRP cap and Q4000 systems, the addition of this new system should increase total oil containment capacity to 40,000-50,000 barrels a day. The floating riser system is designed to allow more rapid disconnection and reconnection of the system, reducing the time that collection may be impacted in the case of, for example, inclement weather. The first relief well, which started drilling May 2, has reached a measured depth of
16,546 feet and has successfully completed a second ”ranging” run using specialist equipment inserted into the well to help more precisely locate the MC252 well. Drilling operations will continue over the next few weeks as the well progresses towards the target intercept depth of approximately 18,000 feet. Once intercept has occurred, operations are expected to begin to kill the flow of oil and gas from the reservoir by pumping heavy fluids down the relief well. The second relief well, which started May 16, is at a measured depth of 12,038 feet. Both wells are still estimated to take approximately three months to complete from commencement of drilling.
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UPSTREAM PROFILE: NORTH AFRICA
N A C I R AF ADVENTURES
he Northern most region of the African continent represents one of the world’s key oil and gas markets. A growing openness to foreign investment and proximity to Europe and Asian markets means that, while not the most plentiful in terms of reserves, North Africa,
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together with a growing infrastructure, is set to continue to be a major global player. North Africa is a compilation of seven countries or territories; Algeria, Egypt, Libya, Morocco, Sudan, Tunisia and Western Sahara. The Atlas mountains traverse across much of Morocco, northern Algeria
and Tunisia before receding to the south and east, becoming a steppe landscape before meeting the Sahara desert, which covers more than 90 per cent of the region. It is this physical layout that has seen the region historically more linked to its Mediterranean cousins than African neighbours.
The sector possesses significant oil and gas reserves and is viewed strategically vital due to its proximity to Europe across the Mediterranean. Furthermore, local crudes and condensates also are desirable to refiners because they tend to be lighter and lower in sulphur than its Middle East counter-
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UPSTREAM PROFILE: NORTH AFRICA
The oil and gas rich countries of North Africa are rapidly developing their production and export potential to meet energy-hungry European demand projections Words: Chris Sell
share of 159 trillion ft3, followed by Egypt with 58.5 trillion ft3 and Libya at 54.38 trillion ft3. Libya’s reserves have grown as a direct result of the lifting of the US sanctions in 2004 and high global energy prices. According to the Libyan National Oil and Gas Company (NOC) it will be able to double its natural gas reserves to around 100 trillion ft3.Tunisia and Moroccan reserves are negligible compared to their North African neighbours. Though minor in comparison, the size of the hydrocarbon reserves in Tunisia and Morocco are directly propor-
the middle of 2009 at more than $3 billion. There are 55 firms operating in the country, including Italy’s ENI, the Austrian energy group OMV and British energy services firm Petrofac, which is a partner in a major off-shore concession. Speaking at the Energy Exchange North Africa Oil and Gas summit in Tunis in 2009, Craig McMahon, lead analyst for the Middle East and North Africa with consultancy Wood Mackenzie said Tunisia had the highest exploration success rate in North Africa in the last ten years.
“Algeria and Libya are anything but transparent. They are highly politicised but they do represent huge opportunities and are pursuing, as well as needing investmen” Samuel Ciszuk, Middle East and Africa Energy Analyst, IHS Global Insight
Sonatrach’s production plants in Algeria.
parts. Algeria and Egypt – and to a lesser extent Libya – are significant exporters of liquified natural gas, primarily to European consumers but also exporting to the Americas and a number of Asian customers. Of the big three countries – Algeria, Nigeria and Egypt – Libyan oil reserves account for
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almost three quarters of North Africa’s total with approximately 43.7 billion bbls. Algeria holds 12.2 billion bbls. In terms of gas reserves, Algeria is the eighth largest country worldwide in terms of proven gas reserves. In 2008 total gas reserves had climbed 8.21 trillionm3, with Algeria possessing the majority
tional to the ease in which firms can do business. Samuel Ciszuk senior energy analyst, Middle East and North Africa at IHS Global Insight, reveals more on the government’s approach. “Tunisia has never been a big producer and is facing a mature decline. Consequently it is trying to attract companies with very little opportunities and is very attractive and liberal.” According to state energy company ETAP, investment in Tunisian exploration had increased from just over US$100 million in 2005 to $400 million in 2008. Tunisia’s largest gas producer, BG, supplies 40 per cent of domestic demand and has valued its total investment by
The state energy firm claims it will increase production so that by the end of 2012 it will become a net exporter of gas, pumping 4 million cubic metres a day via undersea pipeline to Italy. Of the big three, Ciszuk argues Egypt represents a pivotal market but only for the bigger names, while the less open economies of Algeria and Libya are beginning to open up. “Egypt meanwhile is a mix of every-
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Countries operating in Tunisia’s upstream oil and gas industry. Source: State energy company ETAP
July 2010 Oil&Gas Middle East
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UPSTREAM PROFILE: NORTH AFRICA
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Drilling activity is expected to pick up quickly in North Africa next year.
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thing; mature on and off-shore fields and is very attractive to the high-opportunity, high-cost gas developer in the Mediterranean. It only attracts the largest and major companies. “Algeria and Libya are anything but transparent. They are highly politicised but they do represent huge opportunities and are pursuing, as well as needing investment. The NOC of Libya is suffering from a bad political framework.” Not only do they suffer from a poor political framework, the reputation of such NOC’s is poor in comparison to countries with more accountability. “Libya is not a place where safety and environmental concerns are prioritised,” says Ciszuk. “Companies don’t want to face a backlash and realise it is not in their interest. NOC’s in Libya for example have anything but a good reputation. Egypt has a better regulatory framework. While attention is focused primarily on oil production and downstream and upstream activities, Ciszuk believes it is the gas market that will define the region in the coming years. “If government’s find oil, they are generally happier, but most of the future growth is to be in gas. It is a geological reality. More and more Egypt is looking for gas and Libya is trying to develop more gas capacity.” Algeria was the sixth largest natural gas producer in the world in 2008 after Russia, the United States, Canada, Iran and Norway. Algeria produced 3.05 trillion cubic feet of natural gas in 2008, of which 69 per cent was exported and 31 per cent was consumed domestically. Its total reserves rose to 159 trillion cubic feet – the second largest in Africa – as of January 2010.
State-owned Sonatrach, headquartered in Algiers is one major firm in the region. It operates the largest oil field in Algeria, Hassi-Messaoud, which is reported to have produced 350,000 barrels per day of crude in 2009, about 26 per cent of total national oil production. Hassi-Berkine, a joint venture between Sonatrach and Anadarko, reportedly produced 250,000 bbl/d in 2009. Sonatrach has announced the discovery of 16 oil fields in the Berkine, Illizi and HassiMessaoud basins since the beginning of 2009. According to data from the International Energy Agency, about 482,000 bbl/d were imported by the OECD European countries, of which France, Germany, Italy and the UK were major importers. In 2007, US major ExxonMobil signed an exploration and production sharing agreement with Libya’s state-controlled NOC to start offshore exploration in the Sirte basin. The deal encompasses four blocks in contract area 20, around 160 kilometres offshore. The firm re-entered Libya in 2004 after departing the country in the 1980s. In 2005 it was awarded the 2.5 million-acre contract area 44 lease block in the Cyreniaca basin offshore Libya’s northeast coast. ArabianOilandGas.com reported in July 2009 that ExxonMobil Libya had commenced its first deepwater drilling in Libya.
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BP’s planned investment in its Libyan concession areas. Source: BP
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UPSTREAM PROFILE: NORTH AFRICA
The A1-20/3 well is being drilled in Contract Area 20 (CA 20) located offshore in the Sirte Basin, northeast of the city of Misrata, in the Libyan Mediterranean Sea. “We are pleased to start drilling our first deepwater exploration well in Libya based on the rigorous technical work conducted by our Libyan National and expatriate scientists, and in collaboration with the National Oil Corporation (NOC) to progress our exploration program,” said Phil Goss, president of ExxonMobil Libya. The company said that the rig, contracted from Noble Africa Limited, is capable of operating in water depths up to 2195 metres, and can drill to a depth of 9144 metres. Elsewhere in Libya, ExxonMobil Libya has completed two 3D seismic surveys in offshore Contract Areas 20 and 21, and three 2D seismic surveys in offshore Contract Areas 44, 20, and 21. While currently deepwater drilling in the Mediterranean has been successful, there are concerns that the backlash from the Deepwater Horizon disaster in the Gulf ofMexico could have an adverse impact. “Any changes brought about by the BP disaster will eventually filter through to the North African offshore space,” says Ciszuk. “Whatever regulatory changes they introduce in the United States will appear sooner or later, although I would say more later.’
97.5%
Hydrocarbons represent over 97% of Algeria’s total export earnings.
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BP announced in 2009 it would begin drilling in 2010 on both its onshore and offshore concessions in Libya, bringing BP’s total investment on the two concessions to more than $1bn over the seven-year license period, with the bulk being spent on drilling, according to Hugh McDowell, president and general manager of BP Exploration Libya. The under-fire firm won exploration and develop-
ment rights when a deal with signed alongside a visit by then PM Tony Blair in 2007. “With its potentially large resources of gas, favourable geographic location and improving investment climate, Libya has enormous opportunity to be a source of cleaner energy,” said BPs CEO Tony Hayward. The firm’s two contract areas in Libya, the offshore Sirte basin and the Ghadames basin in the
Sahara desert represent the company’s biggest single exploration commitment. Each concession is sizeable – the northern part of the Ghadames basin is the same size as Kuwait and the offshore Sirte contract area is the size of Belgium. Earlier this month, it was reported that Libya wanted assurance from BP following its handling of the Gulf crisis, but it would allow it to start deep-
UPSTREAM PROFILE: NORTH AFRICA
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An oil refinery in Skikda, on the eastern coast of Algeria.
Shokri Ghanem is Libya’s acting oil chief.
“The region doesn’t host the largest countries in OPEC, it is mainly mid-size but from an industry point of view it is very important, especially for gas” Samuel Ciszuk
water drilling. Shokri Ghanem, head of Libya’s NOC said what happened in the Gulf would be a “learning process”. Meanwhile, Royal Dutch Shell has enjoyed a less profitable period in the continent. The firm announced it was pulling out of no less than 19 countries due to poor earnings and a slow economic recovery. According to energy analysts PTC, North Africa will occupy
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a place of growing importance, both in terms of demand and refining, in a recent study it states the region will experience the largest incremental demand and refining capacity additions by 2020. Strong structural factors are behind this expected increase, notably a growing population, sustained economic development and investments, increasing revenue from hydrocarbons and the further open-
SONATRACH With 120,000 employees, Algeria’s state-owned energy giant is the largest company in Africa. With hydrocarbons accounting for 97.5 per cent of Algeria’s export earnings, Sonatrach is one of the pillars of the country’s economy. The company was rocked at the beginning of this year by news that the firm’s CEO, Mohamed Mezanie is under investigation over corruption allegations and his duties taken over by interim CEO, AbdelhafidFeghouli. In May this year, Algerian president AbdelazizBouteflika fired Feghouli and the four vice-presidents including ChawkiRahal, vice-president for marketingat the state-owned oil firm. They had already been jailer or placed under house arrest because of an investigation into the suspected embezzlement of hundreds of millions of dollars. A combination of this and the global economic crisishas resulted in all but two of the six planned petrochemical projects to be shelved, and these two are still bogged down in contract negotiations. The Galsi gas pipeline to Italy, originally planned for 2010, will not be delivered before 2014 at the earliest.
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UPSTREAM PROFILE: NORTH AFRICA
ing of regional economies. This is further complimented by the hope of the end of the politically driven inefficiency of the Arab Maghreb Union. A number of plants and Greenfield refineries are also forecast to come onstream, notably in Libya and Egypt.
The author of the report warned companies operating in the Mediterranean basin will have to carefully assess and understand the impact of the North African situation on their activities, either because it opens trading opportunities or threats for them, or because
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Chekib Khelil was, until recently, Algeria’s energy minister.
the integration of North Africa also increases the rationale for developing or establishing activities there. “Nevertheless, except for Morocco, the downstream oil industry in all North African countries is dominated by National Oil Companies, which currently control virtually 100 per cent of refining capacities, almost all oil products transportation infrastructure and at least 50 per cent of fuel retail sales.” It added a caveat however, claiming all North African countries have undergone some denationalisation of their downstream oil industry. In particular Tunisia has signed a BOO agreement with Qatar Petroleum for its Skhira refinery; Libya is mooting the sale of shares in its refineries to upgrade and privatize some of its network of service stations. In summary, the report argues that North Africa
will play an increasing role as a producer, consumer and trader of oil products within the Mediterranean and “if the right incentives are provided should be able to attract sizeable foreign investment in downstream oil infrastructure in the next 10 years.” A point confirmed by Ciszuk: ‘The region doesn’t host the largest countries in OPEC, it is mainly mid-size but from an industry point of view it is very important, especially for gas. “It is open for investment to other countries, which is not the case for those operating in the Gulf. Companies can enter the market and invest and make a profit. It is also close to the European market which is huge. It gives Algeria and the other countries an important position, it raises their profile and they will be well-positioned to capitalise in the future.”
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An oil tanker prepares to load with cargo from the Libyan port and capital city of Tripoli. Libya holds the largest reserves of oil in North Africa.
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CEO INTERVIEW
TEAM WORK Topaz Energy and Marine CEO, Fazel Fazelbhoy, says a renewed focus on the UAE is keeping his team of 6000 busy on a diverse portfolio of exciting upstream projects ixty two stories above the coastal hub of New Dubai, the panorama from Fazel Fazelbhoy’s office is quite humbling. The Topaz Energy and Marine CEO’s vista overlooks the UAE’s main artery, Sheikh Zayed Road, which splices the new marina developments and the sea from the corporate hub offices opposite. Though impossible through the intense
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summer haze which shrouds the region in June (and because of the immense distances involved), it is almost as though an office which could deliver views of the company’s activity hubs of Fujairah and the Caspian out to the north and east, Abu Dhabi, Jebel Ali and Qatar out West had been sought. The view doesn’t quite reach, but the massive regional
map which dominates the wall space shows where the company’s strategy man is clearly focused today. “Topaz Energy and Marine is a company at the cutting edge of the marine services and oil and gas fabrication business in the Middle East and much further beyond. It is true we’ve stayed loyal to our marine base, but we are not a shipping company – we are an oil and gas service company, whether
that’s onshore EPC work, or oil supply vessels and anchor handling tugs in the Caspian,” enthuses Fazelbhoy. In 2009, Topaz Energy and Marine delivered the best financial results in its history, generating net earnings of $65 million, up 38% on the previous year. Revenue for the year was $448 million, up 7%. Delivering strong figures in a tough year for upstream
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CEO INTERVIEW
Topaz Energy and Marine has maintained a workforce of around 6000 people despite the downturn.
companies was possible, Fazelbhoy says, because the company has been through a rigorous reorganisation from 2008 onwards, all of which was geared around streamlining its upstream service offering. “We went through a period of convergence in 2008 and 2009 and reconfigured the entire company into two separate engineering and marine divisions. Topaz has developed a new business architecture, which is built on the natural synergies of aligned core capabilities and resources,” he explains.
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“We wanted to see all the Topaz subsidiaries share capabilities, knowledge, resources and facilities to build stronger client value propositions,” he adds. The convergence was followed by the launch of the new divisional brands; Topaz
Engineering and Topaz Marine. The Topaz business units BUE Caspian, BUE Kazakhstan, Nico Middle East and Doha Marine Services operate under the banner of the Topaz Marine division. Adyard Abu Dhabi and Nico International operate
“While the rest of the market slowed down significantly the MOPU project became the core activity of the engineering team”
under the banner of the Topaz Engineering division. “The marine division is geographically split with a general managers in Kazakhstan, Azerbaijan and MENA region and now in Turkmenistan, all headed up by a chief operating officer. Each one has its own profit and loss sheet to manage, but also overall they have been amalgamated into a distinct operation,” explains Fazelbhoy. On the other hand, the engineering division is split around functional capabilities. Topaz Marine Repair encapsulates
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CEO INTERVIEW
represents around 30 vessels throughout its vast geographical coverage area of UAE, Qatar, KSA, North Africa and Southeast Asia. The diverse fleet features cable layers, multipurpose supply vessels, workboats and numerous AHTS and PSVs. Major clients include Total, Maersk, Dolphin Energy, Occidental and Dubai Petroleum. Topaz Marine Kazakhstan operates over 40 vessels, providing the services of its ice-breakers, tugs, barges, crew boats and ERRV’s to support offshore projects in the Kashagan, mainly for Agip KCO and Saipem. PLAIN SAILING Topaz Marine Azerbaijan owns The company’s marine opera- and operates a fleet of 13 vessels tions for the MENA region in Azerbaijan and Turkmenithe ship repair and dry docking activities of Nico International and Adyard while Topaz Shipbuilding merges the steel boat building capability of Adyard with the aluminium building capability of NicoCraft. Topaz Fabrication and Construction represents the offshore fabrication capability of Adyard and the onshore tank farm and terminal capability of Nico International Hydrospace in Fujairah. Topaz Maintenance continues to operate out of Abu Dhabi focusing on the expansive petrochemical activities of the Emirate.
stan, comprised primarily of anchor-handling tugs (AHTS), DP 2 platform supply vessels (PSV) and emergency recovery and response vessels (ERRV); focusing above all on serving the main operator in Azerbaijan, BP. In 2010, Topaz will operate seven vessels in Turkmenistan, three anchor-handling tug sup-
ply vessels, two barges for pipe lay support, one fast crew boat and one towing vessel. Topaz’s modern fleet will make a considerable impact in the local market since the Turkmen sector of the Caspian has been dominated by older tonnage. Fazelbhoy explains that prudence and patience have proved
The Mobile Offshore Production Unit has the finishing touxhes applied at the AdYard facility.
DOHA ACQUISITION Topaz acquired Doha Marine Services (DMS), a Qatar-based offshore vessel company at a cost of US$124 million in May of 2008. DMS operated a fleet of 14 vessels including two vessels under joint venture with Jaya Holdings of Singapore. The acquisition of DMS helped create a strong foothold in the growing Qatar market and DMS now forms an integral part of the Topaz Marine MENA fleet. This MENA fleet has over 26 vessels today. “This acquisition was done very much at the peak of the market, but strategically it was hugely beneficial because opened up the Qatar market with an existing fleet which was already there. We could also leverage our other Gulf support industries, such as our Marine Repair unit in order to capitalise on that,” says Fazelbhoy. “Qatar is a future market in every sense and is growing rapidly. We always feel we have to be close to our customers, so we moved the Marine MENA operations centre and general manager to Doha.”
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CEO INTERVIEW
the drivers for the marine operations solid economic performance. “We have had a maintained a 70/30 split between vessels being deployed on long term contracts (seven to ten years) and the spot markets. Whilst longer-term deals may have a lower profitability rate than spot markets can offer, it
is continuous reliable business and a steady and consistent source of income and profitability over time,” he says.
ENGINEERING SUCCESS On the engineering side a major success has been the Mobile Offshore Production Unit (MOPU) which has taken the
bulk of the backlog from 2009 into this year. The unit will load out as soon as the barge designated to take it to its North Sea destination has been adequately reinforced to carry the 12,500 tonne behemoth. “While the rest of the market slowed down significantly the MOPU project became the
core activity of the engineering team. The contract was won when business was progressing as normal, pre-Lehman Brothers, and before the world economy fell off a cliff, and it’s been fantastic to have such an important project to focus on during an otherwise tough period,” says Fazelbhoy.
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CEO INTERVIEW
Specialist vessel fabrication for the TOPAZ Energy & Marine group has always had a strong association with the upstream oil and gas industry’s needs. Winning the contract for the MOPU ultimately for Talisman Energy is clearly a source of pride for the CEO. “We’re talking about a company operating in the Norwegian sector of the North Sea, in an environment with the highest technical specifications in the world. They have a 20 year-contract with SBM who is leasing the unit. SBM conducted a worldwide search evaluating capability, delivery
100%
Topaz is a wholly owned subsidiary of Renaissance Services SAOG, a publicly traded company on the Muscat Securities Market. Today the company has operations throughout the Middle East and the Caspian, and vessel operations in North Africa and South East Asia.
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Oil&Gas Middle East July 2010
schedules, quality and safety and eventually honed in on us and we won the deal,” Fazelbhoy beams. “This is significant because if you are talking about how competitive an operation is, I can’t think of a better example of sitting in Abu Dhabi, producing 12,500 tonnes of steel in one monolithic structure, with 7.5 million man hours without a lost time incident, for a destination which is all the way up in Norway.” The company has a long pedigree in building modular units and topsides, and LNG berths, which pose their own engineering challenges, but Fazelbhoy sees the MOPU as a real step up in terms of project scope for the group. “Previously, within an overall EPC context we have done significant niche contributions.
However, I’ll make no secret about that for the engineering side of the business we want to be regionally dominant and respected as a premier EPC contractor, and we absolutely have the capability and capacity to deliver that.”
LOCAL FOCUS Strategically the company will be refining and honing its efforts on the business potential in its own back yard, with a tremendous project pipeline in Abu Dhabi taking centre stage. This process has already begun in Fujairah, and the local focus is paying dividends for the company, explains Fazelbhoy. “If you look at the regional map then you can see that almost all Arabian oil passes through the choke point at the Straight of Hormuz. Fujairah is
the only location within the UAE which has access to the Indian Ocean. So a couple of years ago Fujairah took it upon itself, with the full cooperation of Abu Dhabi, to become a strategic oil reserve. This involved a plan to go from around 2 million barrels of oil up to 20 or 25 million barrels of oil storage capacity,” explains Fazelbhoy. The project involves building more oil terminal berth facilities, oil handling and distribution facilities as well as massive storage facilities. In response to this vision Topaz set up a custom facility in Al Hayl in Fujairah to handle that projected growth in the tank farm business. “We bought a farm which was being redesignated into an industrial area and then built a custom facility exactly for this purpose.
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CEO INTERVIEW
We invested in the infrastructure, from the paving through to the sheds and the cranes all designed around safe and efficient production.” What differentiates companies bidding falls into two main areas, says Fazelbhoy. “Efficiency is absolutely key, as is intelligent procurement. Our production line process was designed so that the cutting and rolling, right through to the prefabricated assembly is done in a manner that was conducive to really gearing up production efficiencies.” It was a calculated investment based on expected return and it has paid off handsomely for the company. Indeed, just as Oil & Gas Middle East was going to press news broke of a major contract win for the facility. Topaz Engineering’s fabrication
and construction unit, through its subsidiary Nico International Hydrospace, was awarded a $45m Gulf Petrochem EPC contract. The contract covers phase 1 of a major petroleum storage terminal in close proximity to the Port of Fujairah. When completed, the terminal will have storage capacity of over 1.0 million cubic meters at single location. The facility, which is expected to take 17 months to complete, will feature dock pipeline connectivity to the Port of Fujairah, a pigging system for all dock pipelines, operational flexibility to handle Class A, B, C products in all tanks, a road tanker unloading and loading facility. Mott MacDonald has been appointed project management consultant and will oversee the entire development. “This overall strategic oil
reserve project is still a going concern. We are bidding for around $500m worth of work within this tank farm arena. Recently the first oil was delivered through some of the terminals we have worked on in Fujairah, and so that is a great cause of celebration for the team. It’s always special when you see a project come to life.” The Fujairah instalment of the UAE country focus is just the beginning says Fazelbhoy. “Companies all over the world are dying to be part of the Abu Dhabi story, but to date our fabrication and construction divisions have actually been extremely busy with international orders, from Qatar through to Norway, so we weren’t really in a position to take on or competitively bid for much of the work in our own backyard.”
“However, I think we need to refocus and ensure that we really concentrate on Abu Dhabi and more on the onshore activity side. I’m certain we need to develop a stronger regional specificity to our engineering workload, which will help build even stronger ties with the local firms here. We have been extremely successful with ZADCO and carried out a lot of projects for them in the past, and we would be delighted to be part of the huge projects there going forward too.”
FUTURE SCOPE Fazelbhoy says that whilst the company has always had an EPC division and is used to handling a lot of projects up the $100 million mark, now the ambition is to move to a more ambitious project scope. “We are look-
“We are looking at significantly larger EPC contracts. Today we have several individual bids each larger than $100 million”
Fazel Fazelbhoy is Topaz Energy and Marine’s chief executive officer.
www.arabianoilandgas.com
A topside unit ready for delivery to RAK Petroleum from the Abu Dhabi yard.
July 2010 Oil&Gas Middle East
35
CEO INTERVIEW
ing at significantly larger EPC contracts. Today we have several individual bids each larger than $100 million. We know we can take the detailed engineering, procurement, fabrication and construction work, and in the past this has been done in conjunction with some of the world’s leading EPC firms, often as either a nominated sub-contractor or as a JV bid partner.” The association with those firms is a win-win in terms of brand association explains Fazelbhoy. “Both parties are well known for their strengths and that makes a very powerful combination at bid-level, and it is clear to me that in the future one of our defined goals is to enhance and develop that inhouse EPC capability further.”
Looking ahead, the CEO says one of the driving principals behind keeping the company at the cutting edge is staying relevant to the upstream industry. “When we look at our future, it follows that we will need to be closely aligned with future oil. Ultimately that means deepwater.” Fazelbhoy says there may be an immediate tendency to overplay the implications of the Gulf of Mexico for the wider industry as a whole. “It’s a dreadful accident no doubt, but it doesn’t change the fact that deepwater drilling is necessary to sustain production levels. If you follow
the industry timeline we can see that there aren’t any huge easy onshore fields being discovered anymore and offshore shallow waters are also well developed. The future of oil is offshore and in deep water with key areas being offshore West Africa and offshore Brazil – These are truly giant fields.” Fazelbhoy points to the fact that when NOCs and IOCs were pulling back around the globe, these deepwater markets remained active. “Brazil didn’t blink an eyelid during the global financial crisis. Nothing was shelved or delayed.” These markets present an important opportunity for a company in our position. “We see companies which we would
be interested in acquiring that would be suited to the deepwater market, and keeping the beachhead philosophy which has served us so well in the MENA and Caspian regions.” “With the engineering capability we’ve got, we have a world class platform brimming with individual skills, and each of the functional business units has a best-in-class reputation. From a management team perspective, we are working to merge that capability into a consolidated delivery mechanism, coupled with the offshore organisations, which will propel us to being a genuinely world-class operations right through a very important, and growing oil and gas value chain,” he concludes.
The MOPU is destined for Norwegian waters and will leave Abu Dhabi in July.
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Oil&Gas Middle East July 2010
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TECHNOLOGY FOCUS
PIPING
Oil & Gas Middle East met Sohrab Zuberi, board member at Empower-Logstor Insulated Pipes Systems, shortly after the firm’s first contract win in Qatar anagement at the region’s largest insulated pipe manufacturing facility are brimming with enthusiasm on the back of orders from Qatar and the huge promise the region’s oil and gas business represents. Elips is the brainchild of a 51:49 joint venture between Emirates Central Cooling Systems (Empower), and Logstor, a global manufacturer of pre-insulated pipes. The company opened the UAE’s largest pre-insulated pipe manufacturing facility in Jebel Ali back in January of this year. The $25 million facility is gearing up to supply the region’s oil and gas producers with sharper turnarounds and quicker to market products than its international rivals. “Elips will reduce regional reliance on imports and help ensure ready local availability of an essential construction material,” explains Sohrab Zuberi, Director of Corporate Strategy,
M
Empower and Board Member, Empower Logstor Insulated Pipe Systems (ELIPS). ELIPS, the joint venture between Empower and Logstor, was awarded its first contract for insulated pipes by the Energy City development in Qatar, just two months after opening its Jebel Ali factory. “The order for 13km for district cooling piping was won by Logstor, the Danish piping company that owns 49 percent of ELIPS. A good proportion of the
Sohrab Zuberi, board member at EmpowerLogstor Insulated Pipes Systems.
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Oil&Gas Middle East July 2010
“You would think that better quality automatically means higher prices. But that’s not the case” piping will be manufactured in the Jebel Ali plant,” says Zuberi. Zuberi believes that placing the first order with Energy City will generate more business. “The moment customers see the quality of what we are supplying, that’s the best selling point for us to do it again. Getting 10 km the first time round is harder than getting 50km next time.” Zuberi also confirmed that ELIPS is bidding for orders in the oil and gas markets. “Our partner, Logstor has been supplying to the oil and gas industry for over 20 years, so we have a great heritage in terms of brand awareness and reputation in the energy business.” Though upstream or midstream oil and gas orders have not been signed off yet, Zuberi is confident that the project landscape in the Middle East will
deliver business. “It is important to remember that due to the criticality and risk profile of oil and gas pipeline projects, the process can is very time and resource consuming, typically taking several months, if not years to finalise.” Right now ELIPS is leveraging the expertise from Logstor’s oil and gas technical teams and has already started laying the ground work to bid for a number of oil and gas contracts. Zuberi says that there are some crucial differences in the products ELIPS can bring to market over its competitors. “What we manufacture here is without doubt the best quality of pre-insulated pipes anywhere in the world – and we are doing it right here in the UAE,” he enthuses. The ELIPS facility has installed an enhanced version of Logstors technology, which Zuberi says really highlights the quality differentiation throughout the company’s product lines. “For energy clients this
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TECHNOLOGY FOCUS
is most relevant in the product’s insulation values, insulation quality and seal quality both in the Polyurethane foam and the High Density Polyethylene jacket,” he explains. Zuberi says the Jebel Ali location was a strategic decision, largely because of the benefits associated with being neighbours with the region’s premier shipping terminal. “By locating our factory near the Jebel Ali port we are well positioned to service the entire GCC. We’ve also introduced a great deal of flexibility in our lines by separately handling large and small Logstor has been supplying pre-insulated pipes to the upstream oil and gas industry for over 20 years. diameter pipes. This means we can service multiple diameters and orders at one time and flex our operations to meet peak demands peaks and troughs.” Zuiberi adds that the emphasis placed on quality does not necessarily mean greater expense. “You would think that better quality automatically means higher prices. But that’s not the case. By better technology we can produce less waste and an overall more efficiently produced product. So what you will get are pre-insulated pipes which are competitively priced. Where ever possible we have relied on local labour and local sourcing,” he concludes.
EXPERT VIEW What’s the most important consideration when ordering new insulated pipes? Sohrab Zuberi: Reliability- this is
a long term investment, therefore customers must look at the total life cost of their investment and be sure that they invest in pipe systems that do not require heavy ongoing maintenance or replace costs. The company opened the UAE’s largest pre-insulated pipe manufacturing facility in Jebel Ali in January of this year.
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July 2010 Oil&Gas Middle East
39
ASK THE EXPERT
Jim Williams, AESSEAL.
Ask the
Expert
Question: Dry Gas Compressor Seal Repair: Is there a Viable Alternate to the Seal OEM?
Expert: Jim Williams , AESSEAL plc
If you have a question you want answered, or a topic discussed, please send it to daniel.canty@itp.com
T
he use of centrifugal compressors for gas transportation has increased over the past decades. In these presumed “clean gas� services, many modern gas movers are now fitted with dry gas seals (DGSs) in preference to the older conventional wet and labyrinth seal configurations. Dry gas seals operate by creating and maintaining a very
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Oil&Gas Middle East July 2010
thin fluid film between two mating surfaces. Maintaining this fluid film under all operating conditions is essential to ensure reliable seal operation. How do I know if I have the right size fluid film? The fluid film is so small that the most efficient method of demonstrating its existence is to perform
a dynamic test. For this reason, all dry gas seals are dynamically tested at the time of manufacture and after repair. AESSEAL have two dedicated DGS test facilities, capable of testing at shaft speeds up to 45,000 rpm and pressures up to 350 bar (5000 psi). What are the advantages of DGS technology?
Dry gas seals contribute to significantly improved overall machine reliability. Advanced seal designs reduce overall maintenance requirements; they also save power and gas consumption and thus contribute to sizeable operating cost savings in gas transmission services. It has been shown over the last 2 decades that upgrading from the
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ASK THE EXPERT
traditional compressor seals to advanced dry gas seals is an opportunity to gain economic benefits from advances in technology. What are the DGS repair options? Primary emphasis from seal OEMs on the manufacture of new dry gas seals has resulted in a short fall in after-market capability with regards product engineering and repair support for DGSs that have been in use for several years. As with all industries where demand for new products outstrips the capacity to support existing products, both pricing structure and lead time for component
repairs have come under scrutiny. In 2005, AESSEAL recognized this issue and has invested in facilities aimed at the repair and testing of all types and makes of dry gas compressor seals. This is supported by a comprehensive global refurbishment reference list. Control of the AESSEAL test activities is achieved through specially designed test panels and software. The test panels control all gas flow in and out of the test environment and are designed to enable any part of seals cartridge to be individually pressurized or vented, as appropriate. Test speeds and temperatures are controlled
“Many modern gas movers are now fitted with dry gas seals (DGSs) in preference to the older conventional wet and labyrinth seal configurations�
WITNESS TESTING AND SEAL EXAMINATION DEVELOPMENTS Customers are invited to participate during either the evaluation or testing process either in person of in real time via a WebEx Internet link. A second remote surveillance option involves a 3G mobile phone link, whereby the test is being filmed with a 3G camera. This option is available in the form of live video streaming to any mobile phone with suitable 3G features. Each test is recorded and a CD produced for each individual seal. The CD is supplied with the information pack that is placed inside the shipping cartons for the repaired seals. The company provides a documentation pack for each repaired seal; the documentation normally includes the pre-repair inspection report, a post-test condition inspection report, dynamic test specification, a full set of tabulated dynamic test results, a tabulated and graphical representation of the data captured during the test and a full set of installation details. It includes a spin test certificate, a balance test certificate, a dynamic test certificate, plus full material certificates for any materials used. In addition to the actual seal repairs, an assembly tool replacement service is offered. This is particularly useful when seal assemblies were produced at locations remote from the compressor factory, but the compressors were shipped without the best available dry gas seal installation tools. In summary, there is an established and viable alternate to the seal OEM when repairing Dry Gas Compressor seals – contact AESSEAL plc.
Figure 1 AESSEAL DGS test facilities
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July 2010 Oil&Gas Middle East
41
ASK THE EXPERT
via an integrated software program. This software also facilitates the data capture and logging of parameters such as speed, pressure, gas consumption and temperature when experienced from critical locations around the seal during the test regime. AESSEAL have the ability to meet all customer verification testing requirements, including over speed, shuttle and reverse rotation. What makes AESSEAL DGS service different from others? The ability to test DGSs to high standards is only one aspect of a full repair service. The first element of the repair process is usually an initial price quotation which can also be based upon electronically
protocol, normally conducted in accordance with API 617. Following customer approval, the repair process commences. Where needed, steel components are repaired or recoated and seal faces relapped / recut to the OEM face profile. Replacing consumable items is standard. Such replacement includes all springs and fasteners and secondary seals where all O-rings fitted to DGS repairs are explosive decompression-resistant grades. Furthermore, whenever polymer seal components require replacement, the original selections are replaced with spring-energized PTFE-equivalent sealing devices. Prior to reassembly and
Figure 2.
“As with all industries where demand for new products outstrips the capacity to support existing products, pricing structure and lead time for repairs have come under scrutiny” transferred images or historical repair knowledge of the seal’s condition. Based on this information, and before a seal leaves the customer premises, AESSEAL issue DGS repair budget quotations within days of receiving the relevant information, where seal OEM’s / industry standard is often weeks. When a seal arrives at the AESSEAL DGS service facility, a detailed damage assessment is carried out. The scope of work required to effect the repair is then documented to provide full information to the owner of the equipment to highlight areas where the operating methods can be improved to extend seal operating life of the seals. Firm price and delivery commitments are offered together with details of the dynamic test
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Oil&Gas Middle East July 2010
dynamic testing all non ductile components are subjected to a full over speed test, this is conducted at 23% over the maximum speed rating of the seal. The component is subjected to twice its normal rotational stress. Also, whenever applicable, full dynamic balancing is done on all rotating assemblies to ISO standard 1940. Certification for materials of construction is available on request. What about the External Barrier Device? Since most DGSs are supplied with external barrier devices, these components can also be repaired in parallel with the seal cartridges, by AESSEAL. Labyrinth components or contacting/non contacting segmented bushes can be supplied as part of the repair program.
Figure 3.
A gas processing plant in Saudi Arabia.
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HSE SPECIAL REPORT
Tackling the language barriers in the upstream oil and gas business calls for an integrated QHSE implementation. Power rental supplier Aggreko has found investing in overcoming that language barrier saves time, money and lives. hese days, QHSE is by no means an optional extra. However, the degree to which policies and systems are applied and upheld varies greatly from company to company and culture to culture. In the Middle East, and significantly the United Arab Emirates, one of the many challenges facing QHSE teams is the significant mix of nationalities, which can make communicating key QHSE policies even more difficult.
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As companies continue to expand their presence across the world, the varying levels of understanding about good QHSE become apparent. Although some countries, including the UK and the UAE, have already imple-
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Oil&Gas Middle East July 2010
mented legislation to ensure that a minimum standard of health and safety must be followed, this is not true in many regions. Because of the varying standards of QHSE worldwide, companies must ensure that their own QHSE systems are communicated clearly to all employees, a task which involves a thorough educational process. Power rental supplier Aggreko International is acutely aware of the struggles that can be faced when trying to standardise QHSE systems across an international workforce. Headquartered in Jebel Ali in Dubai, UAE, and with depots and project sites based across Africa, Asia, Australia, Central America and South America, the company has had to design a QHSE system that can be adapted cross-culturally, in several
different languages and sometimes in regions where the standards in place are lower and the understanding of QHSE concepts are minimal. Recognising these issues, the company has taken steps to ensure that the key messages are conveyed and that the vital procedures that must be followed are understood no matter where in the world they are being implemented. An online portal, QHSE Share Point, is one of the simplest ways in which Aggreko communicates its QHSE policies. The intranet facility is a bank of all the company’s ISO and OHSAS certifications as well as Aggreko policies that must be adhered to. A translation strategy is now being put into place so that all materials are available in English, Chinese, French,
Spanish and Portuguese, with further languages being added as needed.
UNDERSTANDING IS KEY However well documented the QHSE procedure, once systems have been designed, companies must then ensure that they are actively adhered to. A formal induction process is an essential part of this, helping any new employees to understand the procedures and also the reasons why they are so important from the very beginning of their career with the company. Following this induction, workers should be provided with a gradual introduction to hazardous situations which helps them to ensure that precautions and QHSE actions become a regular part of the working day.
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HSE SPECIAL REPORT
An effective way to highlight how serious a company takes its QHSE policies is to ensure that before any project goes ahead the system is already an integral part of all planning and procedures. Aggreko conducts a risk assessment of all activities at two points before any work begins, with a Pre Tender QHSE Review and then a Post Contract QHSE Review, which takes place before mobilisation. A Compliance Review is then conducted following the commissioning of the project and then again every six months for its duration. These reviews are carried out by a professional QHSE auditor with further monitoring performed by a member of Lloyd’s Register Quality Assurance (LRQA), also at six-month intervals.
At Aggreko, such reviews are then presented to the company’s senior management who act on any discrepancies. In fact, QHSE is regarded so highly by the
measures are correctly in place to reduce the possibility of any accidents occurring. Another successful initiative that has been put into place
“In the Middle East one of the many challenges facing QHSE teams is the mix of nationalities, which can make communicating key QHSE policies even more difficult” management team that Aggreko’s managing director has a note of the most dangerous hazards on any project site, so when visiting these sites he can ensure that all
is to have all necessary hazard warning signs on site in the dialect of that location, whether Hindi, Arabic or Mandarin, to ensure that workers are aware of the
most important HSE procedures that they must abide by. Further to this, Aggreko is using more pictorially based signs to convey warning signs on site, and has launched ‘Safety For Life’, which is a collection of eight cartoon based posters which explain hazardous situations through imagery to get the message across effectively. The posters are displayed clearly on site at important health and safety points - for example, in areas where dangerous machinery is being operated a character is on hand wearing a hard hat and safety glasses to remind workers to wear protective items at all times. Pradeep Bhalla, QHSE manager at Aggreko International, says that one of his most powerful weapons in the implementation
Oil and gas teams are regularly made up of people from across several continents so making sure everyone understands key safety messages is vital.
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July 2010 Oil&Gas Middle East
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HSE SPECIAL REPORT
POWER PROVIDERS Aggreko is a world leader in the supply of temporary power and temperature control solutions. Aggreko provides 24/7 availability and service support with approximately 3,500 employees operating from over 133 locations. In 2008 it served customers in over 100 countries, and had revenues of approximately US$1.8bn
and monitoring of QHSE policies is the support of the company’s senior management team. “We have a very culturally diverse workforce at Aggreko and it is a challenge to ensure that QHSE is understood and upheld across the whole company. Countries such as Brazil and UK have already implemented legislation to ensure that a minimum standard of health and safety is applied to every company’s activities and those involved in the oil and gas sector tend to have very high levels of safety already in place. “It is in countries where such legislation does not exist that understanding of the importance of QHSE is low. Aggreko is currently trying to recruit trained QHSE managers native to the country that it is working in to better understand the culture of health and safety management and the ways
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in which we can work to heighten the standards and ensure application is consistent and correct.” For companies where proper QHSE plays such an important role, understanding the differing approaches that need to be taken to ensure each employee is fully aware of his or her role in adhering to this system is crucial. Language barriers and cultural divides may prove challenging, however in the long run spending time on translating the importance of QHSE to all employees will certainly save time, money and lives in the future.
MORE ON THE WEB To view the safety posters which form the backbone of the campaign go to www.ArabianOilandGas.com Visual prompts on site help remind staff of proper QHSE procedures.
July 2010 Oil&Gas Middle East
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RECORD BREAKER
Deep Driller Shell’s Perdido Development project in the Gulf of Mexico has smashed the world water depth record for an offshore platform by more than 50%
The spar arrives at the Perdido offshore drilling platform.
hell has begun producing its first oil and natural gas from the Perdido Development, the world’s deepest offshore drilling and production facility. Located in an isolated, ultra-deep sector of the Gulf of Mexico, Perdido marks a new era in innovation and safely unlocks domestic sources of energy for US consumers. The facility sits in approximately 2,450 metres (8,000 feet) of water, which is roughly equivalent to six Empire State Buildings stacked one atop the other, and will access reservoirs deep beneath the ocean floor.
S
“Perdido is an impressive project in a strong Gulf of Mexico portfolio that continues to grow,”
said Marvin Odum, Upstream Americas director, Shell Energy Resources Company. “Perdido presented technical challenges unlike we’ve ever seen in the Gulf of Mexico. Shell’s team used its expertise to open this new frontier and confront complex reservoir characteristics, extreme marine conditions, and record water depth pressures. Perdido demonstrates what companies like Shell can do when US federal lands and waters are opened to responsible energy exploration and production.” From the first lease purchase to today’s production, the Perdido Development required an industry workforce of approximately 12,000 people, including employees and contractors. Shell designed, and operates, the Perdido host spar, a
PERDIDO FAST FACTS: One day’s production from Perdido is equivalent to the energy needed to fuel 500 cars for 15 years First commercial production from the Lower Tertiary reservoir in the Gulf of Mexico First Gulf of Mexico full host subsea separation and boosting removes about 2,000 psi of backpressure from the wells First spar wet tree Direct Vertical Access (DVA) wells in water more than two kilometers (1.2 miles) deep The project achieved 10-million hours without a lost time injury Located 320 kilometres (200 miles) from the Texas coast in Alaminos Canyon Block 857 The Great White field represents about 80% of Perdido’s total estimated production Perdido’s project life is expected to be about 20 years The Perdido development required a workforce of approximately 12,000
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Oil&Gas Middle East July 2010
www.arabianoilandgas.com
RECORD BREAKER
The Perdido host spar is almost as tall as the Eiffel Tower. floating production facility, which is jointly owned by Shell (35%), Chevron (37.5%), and BP (27.5%). The facility will produce from the Great White, Silvertip, and Tobago offshore fields, requiring perhaps as many as 35 wells over the life of the fields. Tobago sits in more than 2,900 metres (9,600 feet) of water and surpasses the world depth record for a completed subsea well. In addition, all Perdido subsea fields will utilise a unique an innovative subsea separation and boosting system to enable oil and natural gas recovery. “This is a new frontier in many respects,” said Odum. “Perdido’s floating production facility can be expanded to serve the future potential in the area, and we can apply the technology and expertise
www.arabianoilandgas.com
utilised at Perdido to other similarly challenging environments in the future.” The Perdido Development will ramp up to annual peak production of more than 100,000 barrels of oil equivalent per day. Perdido smashes the world water depth record for an offshore platform by more than 50%. Also in the Gulf of Mexico, Shell recently announced another deepwater discovery at Appomattox, which is in addition to recent exploration success at West Boreas, Vito, and Stones. These discoveries underpin the potential for four new production hubs, but production license granting may be trickier than ever in the wake of the BP and Transocean disaster.
Perdido is the deepest oil development in the world.
The spar being transported to the offshore platform.
July 2010 Oil&Gas Middle East
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OIL FIELD GET TOGETHER
Terry Willis and Michae
l Bovery
FACTS AND STATS
Dave Voller, Catherine Wang, Jimmy Larsen and Hansen g ng. Zhang.
rry Chris Boyd, Cpt Te my Larsen. Robinson and Jim
Where: Ruth’s Chris Steak House At: The Monarch Hotel, Dubai When: Last Thursday – Every month Attendees: 99 Sponsor: TSC Offshore
Jim Graham and Kevin Daglish.
John Dragonette and Nigel McCue
Gerry Ryan and Mike Smith.
RARE EVENT IS WELL DONE NOV sponsored the latest instalment of the booming Oil Field Get Together in Dubai last month, pulling in upstream celebrities from the surrounding Emirates he Ruth’s Chris Steak House monthly Oil Field Get-togethers at the restaurant’s Middle East HQ in The Monarch Dubai is proving the mustattend event for the UAE’s oil professionals. The Oil Field Get-together kicked up another notch last month, with a whole host of industry stalwarts battering down the doors at Ruth’s Chris Steak House to enjoy good great food and company,
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Oil&Gas Middle East July 2010
and a raft of networking opportunities. The event, sponsored by TSC Offshore in May, and Abu Dhabi Commercial Bank (ADCB) in June, raised the bar for local industry networking events. Most of the region’s key upstream and offshore companies sent representatives, and many competitors found themselves waxing lyrical about market conditions in a convivial and relaxed setting.
“The OFG has quickly grown to become a staple part of the upstream industry’s networking calendar. Essentially it’s a great afternoon and a brilliant way to catch up with old friends and colleagues in an informal setting,” said Jimmy Larsen, deputy managing director of Momentum Engineering. The Oil Field Get-together is held on the last Thursday of every month and sponsorship opportunities are available.
$/. 4 -)33 JULY
29
The next Oilfield get-together will be held on July 29. Check out the June attendee s on ArabianOilandGas.com
www.arabianoilandgas.com
OIL FIELD GET TOGETHER
Jim Graham and Peter Williams.
Ian Anderson and Neil Millar.
Siddharth Dolia, Hitesh Asundani. Dolia, Ramesh, Siddharth Dolia L Ramesh Dana Iskandar, Fiona Walker.
r Anna Xavier and Dana Iskanda from sponsors ADCB.
FACTS AND STATS Where: Ruth’s Chris Steak House At: The Monarch Hotel, Dubai When: Last Thursday – Every month Attendees: 99 Sponsor: ADCB
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July 2010 Oil&Gas Middle East
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OIL FIELD GET TOGETHER
EIC UK MIDDLE EAST
WORLD CUP NETWORKING NIGHT he stunning venue of Meydan racecourse in Dubai was transformed for the World Cup as expatriates from throughout the Middle East’s energy market experienced all the action live from South Africa last month. The Parade Ring Restaurant within Meydan Grandstand, was the place to go to experience a live show during this summer’s football carnival. Hosted by ShowTime’s Rob McCaffrey and Derek Whyte, The Energy Industries Council (EIC – UK) membership and headline spon-
T
sor Aggreko’s guests had exclusive access to England’s third and final group stage game against Slovenia. The party atmosphere continued long after the full whistle and the hospitality generated a hugely successful networking opportunity.
Gary Burgess, Terry Willis and Steve Hodgkins.
FACTS AND STATS When: Wednesday 23rd June 2010 Where: The Parade Ring Restaurant, Meydan Grandstand, Dubai. Why: England vs Slovenia
Julian Ford. Ashley Watkins and Ted Mallinson.
on Phil Brown, Carlt Burridge. n Joh d an er lm Pa
Crowds assemble ahead of the England vs Slovenia clash.
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Oil&Gas Middle East July 2010
Julie Zollikofer and Mazen Kayssar.
www.arabianoilandgas.com
TECHNOLOGY FOCUS
DIRECTIONAL DRILLERS AlMansoori’s wholly owned subsidiary Target Energy Group is leading the way in delivering MWD and LWD technologies to the engineer’s steering the sharp end of the business. easurement and logging whilst drilling (MWD / LWD) is a system developed to perform drilling related measurements downhole and transmit information to the surface while drilling a well. MWD tools are conveyed downhole as part of bottom hole assembly (BHA). The tools are either contained inside a drill collar or are built into the collars themselves. MWD systems can take
M
John Daniels, MWD operations supervisor, Target XXxxxxxxxxxxxxxxxxxxxxx Xxxx Xx xxxxxxxx xxxxxx xxxx xxxxx xxx xxxxxxxxxxWell xxxx xx xxControl. xxxxxxxxxxxxxxxxxxxxxxx xx xxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxx xxxxxxxxx xxxxxxxx xxxxxx xx xxxxxxxxxxxxxxxxxxxx xx xxx xxxxxxxxxxxxxxxxx xxxxxxxx xx xxxxxxx
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Oil&Gas Oi Oil O iill& l&G Ga Gas as M as Mi Middle iddl dd d d dlle E East ast as a sstt July Julyy 2010 Ju 2201 20 00110
several measurements including gamma ray, directional survey, tool face, borehole pressure, temperature, vibration, shock, torque etc. Key to the challenges facing the Middle East, MWD are also vital in relaying the telemetry for operating rotary steering tools (RSTs), critical in the directional, or horizontal drilling business. Target Well Control, a subsidiary Target Energy Group, is a high technology oil and gas drilling service company specialising in directional drilling, and MWD / LWD operations. “We
provide a broad range of well placement technology and is particularly advanced in providing drilling engineering, directional drilling, well planning, rotary steerable tools, MWD and LWD provided on a rental or service basis,” explains John Daniels, MWD operations Manager at Target Well Control . “In addition to these products, we provide field engineers and office based supervisors who are widely experienced in the management of challenging drilling projects,” he says. MWD tools are generally capable of taking directional
www.arabianoilandgas.com
TECHNOLOGY FOCUS
AlMansoori Specialized Engineering has fast become a leader in the regional directional drilling sphere.
surveys in real time. The tool uses accelerometers and magnetometers to measure the inclination and azimuth of the wellbore at that location, and they then transmit that information to the surface. With a series of surveys at appropriate intervals, the location of the wellbore can be calculated. “We are specialised in providing directional surveys, which is the azimuth inclination toolface for when operators are steering. We also provide, gamma ray and resistivity steering and pressure while drilling tools,” says Daniels. On the directional side, MWD or LWD is a fairly established requirement for surveying the well, even if it’s a vertical well the deployment of the right
www.arabianoilandgas.com
tools means drilling engineers can get a survey in two or three minutes rather than having to run wireline. “On the logging while drilling side we have developed our own annular pressure while drilling tool which can help prevent things like stuck pipes because you can see when the annular presure is building up with cuttings and loadings, for example,” explains Daniels. Data is fed back through mud pulse telemetery. Downhole a valve is operated to restrict the flow of the drilling mud coming back up the annular, according to the digital information to be transmitted. This creates pressure fluctuations representing the information. The pressure fluctuations propagate within
April 2010 Oil&Gas Middle East
July 2010 Oil&Gas Middle East
47
55
TECHNOLOGY FOCUS
MWD tools are extremely complex pieces of high- tech electronics which have to operate in extremely harsh downhole enviornments. the drilling fluid towards the surface where they are received from pressure sensors. On the surface, the received pressure signals are processed by computers to reconstruct the information. The technology is available in three varieties - positive pulse, negative pulse, and continuous wave. “Our tools can transfer that signal encoded as either a negative or a positive pulse, which means either a momentary drop in pressure, or a momentary rise in pressure. The negative pulse tool is probably the more robust, but for shallow holes and low-cost drilling projects the positive pulse has the advantage of being retrievable, which means if you get stuck in hole you can yank out the expensive bits,” says Daniels.
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Oil&Gas Middle East July 2010
To relay information the tool will start by telling the operator what data it will be sending, typically using a three digit code. One set of numbers, or identifier, will signify a resitivity test, another will signify a gamma ray information feed is to follow. High temperature lithium batteries provide the power
154°
John Daniels says the Target equipment was recently exposed to the very limits of safe operations, but pulled through the job intact. “We’ve just had a job in Russia which tested out equipment to the absolute extreme, because the temperature from the formation was around 154 degrees C. We’re interested to see that equipment when we get it back!”
source for Target’s MWD and LWD tool kits. “Developments in battery technology means we can now run around 500 hours, or around 20 days drilling,” reveals Daniels.
ENVIRONMENTAL FACTORS MWD tools are extremely complex pieces of high- tech electronics, and there’s no question that operating downhole is a harsh environment. “Our tools are rated up to 20,000 psi hydrostatic pressure, and around 150 degrees C, and built to cope with high vibration, and they are built to stand up to a combination of those conditions simultaneously,” says Daniels. The sensors can ride anything from anything as close as five feet behind the bit, right up to 35 – 40 feet depending on
whether a motor is behind run, and depending on which tool it is. “Vibration can potentially be a problem, but most of there tools out now very robust. In the early 1980s we had a number of sensor failures because they were simply shaken too much. That is very rare now under typical drilling conditions,” he says. MWD and LWD tools typically now come with a vibration sensor as standard built in, which will send back vibration warnings at certain thresholds.
FLEXIBLE FRIENDS MWD probably came of age around ten years ago, and is very much taken as fairly standard rather than being utterly top-end only, and where any deviation in the well and steer-
www.arabianoilandgas.com
TECHNOLOGY FOCUS
Site visit: AlMansoori’s Mussafah yard in Abu Dhabi is the regional MWD HQ. ing is expected, then MWD is a no-brainer. Regulatory frameworks in many mature drilling environments actually specify that certain downhole tools are delpyed as standard.
www.arabianoilandgas.com
“Often a minimum requirement is to have a gamma ray survey as part of the project. It’s particularly useful for horizontal drilling because you need to become horizontal in the right formation bed. In Abu Dhabi
Gamma Ray is often used when whipstocks, which are sometimes used in controlled directional drilling, in straightening crooked boreholes, and in sidetracking to avoid hazards such as unretrieved fish,”
Daniels says that the MWD and LWD technology today is not just better in the sense the tools have improved, but also more processing power is improving the way the data interacts with the operator. “There are many more sensors available now and there is no doubt LWD has come a long way. It’s not just an improvement in the tools and their capabilities and processing power, but also the computer power on the surface which enhances the information at the user interface, for example graphically so that operators can understand it better.” The Target Well Control and AlMansoori directional drilling teams have been successful in winning a lot of remote exploration work, says Daniels. We “One of the reasons we’ve excelled in that niche is because all of our pressure while drilling and resistivity tools can be added on to the basic, most commonly deployed directional gamma. We have managed to develop a very flexible system which makes these add-ons simple to implement for the engineer,” he concludes.
July 2010 Oil&Gas Middle East
57
PROJECTS
Ongoing and upcoming projects Information is supplied by Ventures Middle East. Tel: +971 2 622 2455. URL: www.ventures-uk.com BAHRAIN Project Title
Client
Consultant
EPC Contractor
Budget ($M)
Status
Redevelopment of the Refinery in Bahrain
Bapco
Chevron Lummus Global (US)
Not Appointed
100
FEED
Redevelopment of Awali Onshore Oil Field
Bapco / National Oil and Gas Authority (NOGA) / Occidental Petroleum Corporation (US)
Not Appointed
1000
Study
Lube Base Oil Project
Bapco / Nestle
Jacobs Engineering
Samsung Engineering Company
430
Execution
Offshore Field Development
Bapco
Fugro Robertson Limited (UK)
Occidental Petroleum Corporation / PTT Exploration and Production (PTTEP)
2000
Execution
Project Title
Client
Consultant
EPC Contractor
Budget ($M)
Status
Oil & Gas Pipelines at Mina Al Ahmadi
KOC
Not Appointed
2000
EPC Bid
Crude Oil Transit Line (TL4)
KOC
Not Appointed
280
EPC Bid
Booster Station 171
KOC
Not Appointed
800
EPC Bid
Gathering Center 16 in West Kuwait
KOC
Not Appointed
750
EPC Bid
Early Production Facilities- Phase 2
KOC / Processes Unlimited
Abdulaziz Abdulmohsin Al Rashed Sons Company
117
Execution
Crude Oil Flow Pipeline
KOC
Combined Group Contracting Company
135
Execution
Pilot Water Injection Plant at Dharif Marrat Oil Field in West Kuwait
KOC
Not Appointed
14
EPC Bid
Effluent Water Injection Phase I & Sea Water Injection Phase II
KOC
Not Appointed
750
EPC Bid
Pipeline between GC-7 and manifold TB-1 at Burgan Field
KOC
Heavy Engineering Industries & Shipbuilding Company (Heisco)
20
Execution
Crude Oil Flow Pipelines in North Kuwait
KOC
Not Appointed
110
EPC Bid
KUWAIT
Fluor Corporation
AMEC, Kuwait
Sulphur Handling Facilities at Mina al-Ahmadi
KNPC
Not Appointed
132
FEED
Crude Oil Export Pipelines at Gathering Center 16 and Water Flowlines at Minagish
KOC
Thyssenkrupp (Germany)
Combined Group Contracting Company
52
Execution
LPG Filling Plant at Umm Alaish
KOTC
Not Appointed
100
EPC Bid
Mina Al Ahmadi Refinery Upgrade - Phase 1
KPC
Almeer Techical Services Company/ Flour Corporation
140
Execution
KOC Facilities at Kuwait's Key Oil Fields
KOC
National Petroleum Services Company (Napesco)/ Halliburton
206
Execution
Maintenance & Repair of Pipelines
KOC
O & G General Engineering & Contracting
72
Execution
Mechanical Maintenance Works for Shuaiba Refinery
KNPC
Not Appointed
150
EPC Bid
New Acid Gas Removal Plant in Mina Al Ahmadi Refinery
KNPC
Worley Parsons
Not Appointed
522
EPC Bid
Gas Booster Station 160
KOC
AMEC, Kuwait
Snamprogetti Kuwait
649
Execution
Pipeline from Shuaiba North to Mina Abdulla
Ministry of Energy
Not Appointed
55
FEED
Jurassic Early Production Facility (EPF)
KOC
Not Appointed
1500
EPC Bid
Booster Station 132
KOC
SK Engineering & Construction, Kuwait
724
Execution
Fourth Gas and Condensate Train at Mina al-Ahmadi Refinery
KNPC
Not Appointed
679
EPC Bid
Upgrade of South Ghudair Gathering Centre
KOC / Saudi Arabia Texaco (SAT)
Arabi Enertech
27
Execution
Maintenance of Oil Production Facilities in West Kuwait
KOC
Not Appointed
161
EPC Bid
Fifth Gas Fractionation Train at Mina al-Ahmadi
KNPC
Not Appointed
888
EPC Bid
Gathering Center 14 in the South East
KOC
Almeer Technical Services
45
Execution
Fluor Corporation
OMAN Project Title
Client
EPC Contractor
Budget ($M)
Status
Fuel tank at Mina Al Fahal Refinery
ORPC
Daewoo Engineering & Construction,Oman
17
Execution
Propane Recovery Unit at Mina Al-Fahal Refinery
ORPC
Not Appointed
50
Feed
Upgradation of Refinery at Mina al-Fahl
ORPC
Not Appointed
60
EPC Bid
58
Oil&Gas Middle East July 2010
Consultant
www.arabianoilandgas.com
PROJECTS Project Title
Client
Sea Water Supply at Sohar Refinery
ORPC
Duqm Refinery & Petrochemical Complex
ORPC
Oil Exploration in Blocks 3 & 4
CCED /Tethys Oil (Oman) Ltd
Gas Compressor Station at the Nimr field
Oman Gas Company
Octal Petrochemical Project at Salalah Free Zone
Octal Holding
Consultant
Not appointed
EPC Contractor
Budget ($M)
Status
Not Appointed
20
EPC Bid
Not Appointed
7000
Study
CCED
100
Execution
Tecnicas Reunidas / Worley Parsons
Galfar Engineering & Contracting, Oman
36
Execution
Uhde
National Construction & Trading Co. LLC (NCTC)
700
Execution
Kauther Gas Compression Project
PDO
Petrofac International, Oman
350
Execution
PTA Plant at Sohar Port
Oman Oil Company (OCC)/ JBF Industries Ltd.
Not Appointed
680
Study
Crude Oil Stabilisation Unit at Mukhaizna
Occidental Mukhaizna
Not Appointed
100
EPC Bid
Depletion-Compression Project at Saih Nihayda
Petroleum Development Oman (PDO)
GS Engineering & Construction, Dubai
350
Execution
Storage Tanks and Terminals at Sohar
Oiltanking Odfjell Terminals & Company
Oiltanking (India) / Larsen & Toubro
80
Execution
Marmul Central Development - Phase 3
Petroleum Development Oman (PDO)
Gulf Petrochemicals Services, Oman
61
Execution
Qarn Alam EOR Project - Off-plot Package
PDO
Galfar Engg. & Cont.
139
Execution
Qarn Alam EOR Project - On-plot Package
PDO
MEG WorleyParsons
Dodsal
450
Execution
Methanol Plant in Salalah
Oman Oil Company (OCC) / UK GTL Resources / Mubadala Development Company, Oman / Vitol
Jacobs Engineering
GS Engineering & Construction
910
Execution
Oil & Gas Pipeline and Processing Plant in Musandum
Oman Oil Company (OCC)
Not Appointed
500
EPC Bid
Harweel Cluster Phase - 2
PDO
AMEC
Petrofac International / Galfar Engineering & Contracting
960
Execution
Project Title
Client
Consultant
EPC Contractor
Budget ($M)
Status
Petrochemical Complex at Ras Laffan
QP/Total
Not Appointed
Not Appointed
3000
Concept
Low-Sulphur Condensate Storage Facility at Ras Laffan
Dolphin Energy Limited, Qatar
Qatar Engineering & Construction Company
212
Execution
QATAR
reliability focused engineering
www.aesseal.com
contact: don van rooyen email: donvr@aesseal.co.za tel: +971 4 2669595 / +971 2 6778700 cell: +971 (0) 508120142
www.arabianoilandgas.com
dry gas mechanical seals & repair engineered mechanical seal support systems advanced air coolers bearing protection mechanical seals
• • • • •
solutions extending equipment life
July 2010 Oil&Gas Middle East
59
PROJECTS Project Title
Client
Consultant
EPC Contractor
Budget ($M)
Status
Jetty Boil-Off Gas Recovery Project
Qatargas
Fluor Corporation, Abu Dhabi
Fluor Corporation
800
Execution
Block 4 North
Qatar Petroleum/Anadarko
Not Appointed
Wintershall, Germany
150
Execution
Acid Gas Removal Plant in Dukhan
Qatar Petroleum (QP)
Technip, Qatar
Petrofac International
350
Execution
Melamine Project at Mesaieed
Qatar Melamine Co.
Eurotecnica/Urea Casale
QECC
250
Execution
Petrochemical Complex at Ras Laffan
QP /ExxonMobil Corporation
Not Appointed
Oily Water Effluent Pipeline in Dukhan Field
Qatar Petroleum (QP)
Oryx GTL - Phase 2
QP/Sasol/Chevron
Gas Pipeline Network within Ras Laffan Industrial City
Qatar Petroleum
Olefins Complex
Qatar Petroleum (QP) / Shell Chemicals
Condensate Refinery at Ras Laffan - Phase 2
Laffan Refinery Company
Pearl GTL Project - Package C4
QP / Royal Dutch/ Shell
Halliburton /JGC Corporation
Barzan North Field Development
ExxonMobil Corporation/Qatar Petroleum (QP)
Chiyoda Corporation/J Ray McDermott
Pearl GTL Project - Package C8
QP/Royal Dutch/Shell
JGC Corporation/Halliburton
Veolia/Saipem/Al Jaber
101 - 250
Execution
Plateau Maintenance Project
Qatargas
Technip, Qatar
Chiyoda/Technip
1200
Execution
QVC Expansion Project
QVC
Not Appointed
Not Appointed
31 -100
Study
Oxygen & Nitrogen Production Unit at Ras Laffan
Gasal
Air Liquide Engineering
70
Execution
Nitrogen Pipeline Network at Ras Laffan
Gasal
Black Cat Engineering & Construction
12
Execution
Gas to Liquids Project-3 (Pearl GTL)
QP/Royal Dutch/Shell
JGC Corporation/Halliburton
Consolidated Contractors International Company (CCC)
16000
Execution
Low Density Polyethylene Unit at Mesaieed - LDPE 3
Qapco
Uhde
Uhde/Tefken
549
Execution
Polyacetal Resins Plant at MIC
National Qatar Industries / LG Chem / Tasnee
Not Appointed
137
FEED
Qafco VI
Qatar Fertilizer Company (Qafco)
Saipem / Hyundai Engineering & Construction Company
610
Execution
TSE Pipeline from STP to Dukhan
Qatar Petroleum (QP)
Petroserv Limited
15
Execution
Al-Wukair RPS and Associated Pipelines
Qatar General Electricity & Water Corporation (Kahramaa)
Not Appointed
110
EPC Bid
Al Shaheen Project - Package 14
Maersk Oil Qatar
Larsen & Toubro
250
Exectution
Two New Glycol Regeneration Trains in Dukhan
Qatar Petroleum
Qatar Kentz
300
Exectution
South Field Development
Qatar Petroleum Development Company (QPD)
National Petroleum Construction Company (NPCC)
40
Exectution
Qafco V
Qafco
Saipem/ Hyundai Engineering & Construction Co
3200
Execution
Maintenance on Platforms at Measieed Refinery
Qatar Petroleum (QP)
Not Appointed
50
EPC Bid
Headworks for Muaither RPS and Associated Pipelines
Qatar General Electricity & Water Corporation (Kahramaa)
Al Waha Contracting
109
Execution
Receiving & Loading Facility at Ras Laffan
Qatargas
Qatar Kentz
100
Execution
Common Sulphur Project
DEL
Washington Group International
Not Appointed
101 - 250
FEED
Sulphur Handling Facilities
Qatar Gas 2
Washington Group International
Al Jaber Energy Services / Washington Group International
360
Execution
Pearl GTL Project - Package C5
QP / Royal Dutch / Shell
JGC Corporation / Halliburton
Toyo Engineering Corp. / Hyundai Engineering & Construction Company
1480
Execution
Mott MacDonald Qatar
Worley Parsons
Not Appointed
Not Appointed
3000
Concept
Galfar Al Misnad Engineering & Contracting
11
Execution
Not Appointed
1400
Study
Larsen & Toubro, Qatar
117
Execution
2500
Study
Not Appointed
800
Study
Chiyoda Corporation / HHI Company
1750
Execution
Not Appointed
8000
EPC Bid
Gas Sweetening Facilities Integrated Project at Mesaieed
Qatar Petroleum
Worley Parsons
Petrofac International
350
Execution
Pearl GTL Project - Integrated Process Automation
Qatar Petroleum (QP)/ Royal Dutch / Shell
Honeywell
Honeywell
175
Execution
Pearl GTL Project - Package C2
QP/Royal Dutch/Shell
JGC Corporation/Halliburton
Linde
900
Execution
Project Title
Client
Consultant
EPC Contractor
Budget ($M)
Status
Safaniyah Offshore Infrastructure
Saudi Aramco
J Ray McDermott
1000
Execution
Jubail - 2 Export Refinery - Interconnection between Refinery Units and Plant Utilities
Saudi Aramco / Total
Technip, Saudi Arabia
Technip/ China Technical Consultants Incorporate(CTCI)
700
Execution
Yanbu Export Refinery - Coker Unit Package
Saudi Aramco / ConocoPhilips
Kellogg Brown & Root (KBR), Saudi Arabia
Shabab-2 Oil Pipeline Project
Saudi Aramco
Caustic Chlorine / Ethylene Dichloride Factory in Jubail
Arabian Chlor Vinyl Company /Maaden /Sahara Petrochemical Company (Al Waha)
SAUDI ARABIA
60
Oil&Gas Middle East July 2010
CMAI Consulting Company
Not Appointed
1200
EPC Bid
Stroytransgaz
200
Execution
Daelim Industrial Company,Saudi Arabia
400
Execution
www.arabianoilandgas.com
PROJECTS Project Title
Client
Consultant
EPC Contractor
Budget ($M)
Status
Jubail-2 Export Refinery - Pipeline and Offsite Package
Saudi Aramco/Total
Technip
Gulf Consolidated Contractors (GCC)
300
Execution
Yanbu Export Refinery - Crude Unit Package
Saudi Aramco / ConocoPhilips
Kellogg Brown & Root (KBR), Saudi Arabia
Not Appointed
970
EPC Bid
Gas Oil Separation Plant at Hout Field in Divided Zone
Al Khafji Joint Operations (KJO)
Toyo Engineering Company
Consolidated Contractors International Company (CCC)
400
Execution
Sasref Refinery - Jubail Sulphur Treatment Unit
Saudi Aramco Shell Refinery Company (Sasref)
CBI Lummus in Middle East
JGC Corporation,SaudiArabia
350
Execution
Jubail-2 Export Refinery - Distillation and Hydrotreating
Saudi Aramco / Total
Tecnicas Reunidas (TR)
1200
Execution
Petrochemical Complex - Polyolefins Package
SCP
Parsons E&C
Daelim Industrial Company
1200
Execution
Kayan Petrochemicals Complex at Jubail - PP Package
Saudi Basic Industries Corporation (Sabic)/Saudi Kayan Petrochemical Company
Fluor Arabia Ltd., Saudi Arabia
Samsung Saudi Arabia Ltd.
400
Execution
Yanbu Export Refinery-Offsites & Utilities-Package 8
Saudi Aramco/ ConocoPhilips
Kellogg Brown & Root (KBR), Saudi Arabia
Not Appointed
125
EPC Bid
Wasea Bulk Plant
Saudi Aramco
Dar Al Riyadh Architecture & Engineering
Sinopec
250
Execution
Kayan Petrochemicals Complex at Jubail - Amines Package
Saudi Basic Industries Corporation (Sabic) Saudi Kayan Petrochemical Company
Fluor Arabia Ltd., Saudi Arabia
China Technical Consultants Incorporated(CTCI), Taiwan
300
Execution
Dammam 7 - Petrochemicals Complex
Dammam 7 Petrochemicals
Not Appointed
400
FEED
Ethyl Vinyl Acetate Plant
Saudi International petrochemical Company (SIPC)/ Hanwha International Private Ltd.
Not Appointed
800
FEED
Rabigh Refinery Expansion & Petrochemical Complex - Phase 2
Rabigh Refining & Petrochemical Company (Petro-Rabigh)/Sumitomo Corporation
Not Appointed
4000
Study
Polysilicon Plant in Jubail
First Energy Bank/ Cosmos Industrial Investment Corporation/PMD
Not Appointed
1200
FEED
Jubail - 2 Export Refinery - Aromatics Plant
Saudi Aramco / Total
Axens
Samsung Saudi Arabia Ltd.
650
Execution
Jubail-2 Export Refinery - Coker Unit Package
Saudi Aramco / Total
Foster Wheeler
Samsung Saudi Arabia Ltd / Chiyoda Corporation
850
Execution
www.arabianoilandgas.com
JGC Corporation
July 2010 Oil&Gas Middle East
61
PROJECTS
PROJECTS
Project Title
Client
Consultant
EPC Contractor
Karan Field Exploration - Platforms Package
Saudi Aramco
Clough-Zuhair Fayez Partnership
J Ray McDermott
500
Execution
Yanbu Export Refinery - Gasoline Unit Package
Saudi Aramco / ConocoPhilips
Kellogg Brown & Root (KBR), Saudi Arabia
Not Appointed
2300
EPC Bid
Kayan Petrochemicals Complex at Jubail - LDPE Package
Saudi Kayan Petrochemical Company / Saudi Basic Industries Corporation (Sabic)
Fluor Arabia Ltd.
Daelim Industrial Company,Saudi Arabia
400
Execution
Petrochemical Complex - Ethylene Cracker Package
Saudi Chevron Phillips Petrochemical Company (SCP)/ Saudi Polyolefins Company (SPC)
Parsons Engineering Corp.
JGC Corporation,SaudiArabia
1200
Execution
Karan Field Exploration - Onshore Elements Package - Gas Facilities
Saudi Aramco
Foster Wheeler /A. Al Saihati , A. Fattani & Al Othman Consulting Engineering Company (Sofcon)
Hyundai Engineering & Construction Company (HDEC)/ Petrofac
600
Execution
Jazan Economic City Export Refinery
Ministry of Petroleum and Mineral Resources
Not Appointed
12000
Study
Petrochemical Complex - Polymer Package
Saudi Chevron Phillips Petrochemical Company (SCP)/ Saudi Polyolefins Company (SPC)
Daelim Industrial Company/JGC Corporation
5000
Execution
Al Khafji Oil Processing Facilities Expansion
Al Khafji Joint Operations (KJO)
Not Appointed
400
EPC Bid
Yanbu Export Refinery - Hydrocracker Package
Saudi Aramco/ConocoPhilips
Kellogg Brown & Root (KBR)
Not Appointed
1200
EPC Bid
Jubail-2 Export Refinery - Storage Tank Package
Saudi Aramco / Total
Technip, Saudi Arabia
Punj LIoyd Ltd / Petro Steel
1000
Execution
Karan Field Exploration - Offshore Elements Package
Saudi Aramco
Petrocon Arabia, Saudi Arabia
J Ray McDermott
1000
Execution
Parsons Engineering Corp.
Budget ($M)
Status
Fertiliser Complex Expansion at Jubail - Urea & Ammonia Plant
Saudi Arabian Fertilizer Company (Safco)
Not Appointed
150
FEED
Dammam Oil Field Development
Saudi Aramco
Not Appointed
1000
Concept
Jubail - 2 Export Refinery - Plant Utilities Package
Saudi Aramco / Total
Technip
SK Engineering & Construction
150
Execution
Manifa Oil Field Redevelopment - Onshore Package
Saudi Aramco
Foster Wheeler
JGC Corporation / TR / Snamprogetti
2360
Execution
Yanbu Export Refinery - Offsite Pipelines Package
Saudi Aramco
Not Appointed
300
EPC Bid
Pipeline from Ras Tanura to Riyadh
Saudi Aramco
Nacap-Suedrohrbau, Saudi Arabia
350
Execution
ASU at Jubail
National Industrial Gas Company (GAS)
Samsung Saudi Arabia Ltd.
300
Execution
Yanbu Export Refinery - Tank Farm - Package 5
Saudi Aramco/ ConocoPhilips
Kellogg Brown & Root (KBR), Saudi Arabia
Not Appointed
900
EPC Bid
Yanbu Export Refinery - Battery Limits and Solids Handling - Package 6
Saudi Aramco / ConocoPhilips
Kellogg Brown & Root (KBR), Saudi Arabia
Not Appointed
450
EPC Bid
Upgrade of the Oil Refinery at Yanbu
Samref
Worley Parsons, Saudi Arabia
Worley Parsons, Saudi Arabia
2000
Execution
Project Title
Client
Consultant
EPC Contractor
Budget ($M)
Status
Replacement of Oil & Water Pipelines
Adma - Opco
Technip / Worley Parsons, Abu Dhabi
Costain
900
Execution
Borouge Complex Expansion - Phase 2: PE and PP Units
Abu Dhabi Polymers Co. (Borouge)
Fluor Corporation, Abu Dhabi
Tecnimont SpA, Abu Dhabi
1850
Execution
Borouge Complex Expansion - Phase 3 - Offsites & Utilities Package
Abu Dhabi Polymers Co. (Borouge)
Tecnimont SpA, Abu Dhabi
Hyundai Engineering & Construction Company, Abu Dhabi
935
Execution
Zirku Production Facilities Debottlenecking
Zadco
Technip
Not Appointed
450
EPC Bid
UNITED ARAB EMIRATES
Crude Oil Pipeline Replacement
Zadco
Not Appointed
300
EPC Bid
OGD-3/ AGD-2 - Pack 2
GASCO
Bechtel
Bechtel
1460
Execution
OGD-3/ AGD-2 - Pack 4
GASCO
Bechtel
Snamprogetti
1420
Execution
Green Diesel Project in Ruwais
Takreer
Wood Group Mustang
GS Engineering & Construction
350
Execution
Umm Shaif Gas Injection Facilities
Adma - Opco
WorleyParsons
Hyundai Heavy Industries
1597
Execution
Base Oil Plant in Abu Dhabi
Abu Dhabi Oil Refinery Company (Takreer); Neste Oil (Finland);
Neste Jacobs / Technip
Not Appointed
1000
EPC Bid
Zakum West Gas Processing Facilities Project
Adma - Opco
Technip
Technip / NPCC
300
Execution
Asab Full Field Development
ADCO
Foster Wheeler
Petrofac
1000
Execution
Bab Oil field Development - Phase 2
ADCO
Technip
SK Engineering & Construction Company
805
Execution
LNG Trains Replacement at Das Island
ADGAS
Not Appointed
3000
Study
Gas Pipeline from Nitrogen Plant to Habshan Oil Field
Gasco
Dodsal, Abu Dhabi
85
Execution
Sahil Phase-2 Development
ADCO
Tecnicas Reunidas / CCC
250
Execution
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Oil&Gas Middle East July 2010
Foster Wheeler
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PROJECTS Project Title
Client
Consultant
EPC Contractor
Budget ($M)
Status
Onshore and offshore Sour Gas Development
ADNOC / ConocoPhilips
Fluor Corporation
Saipem / Samsung Engineering/ Tecnicas Reunidas/Punj Lloyd/Al Jaber Group
10000
Execution
IGD - Gas Processing Platform - Pack 6
Adnoc / Adma-Opco
Fluor Corporation Abu Dhabi
NPCC
405
Execution
Flowlines & Wellhead Installations to ADCO
ADCO
Mott MacDonald, Abu Dhabi
Al Husam General Contracting
100
Execution
Fertil Plant Expansion
Fertil
Jacobs Engineering
Samsung / Uhde
1200
Execution
OAG Network-Das Island Compression Facilities
Adgas
Fluor Corporation
Technip
610
Execution
Zakum Central Super Complex - Seawater Injection Facilities
Adma-Opco
Technip, Abu Dhabi
Not Appointed
400
EPC Bid
OAG Network-Pack 3 - Ras Al Qila to Habshan Pipeline
Gasco
Fluor Corporation
CCC
400
Execution
OGD-3/ AGD-2 Pack 3
GASCO
Bechtel
Bechtel
1241
Execution
Borouge Complex Expansion - Phase 2: Ethane Cracker
AUH Polymers Company
Linde
1100
Execution
Development of Bab, Qusahwira & Bida Al-Qemzan Fields
ADCO
National Petroleum Construction Company
1800
Execution
Taweelah-Qidfa Gas Pipeline
DEL
Stroytransgaz, Abu Dhabi
418
Execution
Asab Gas Development (AGD) Modifications - Package 1
GASCO
Veco Engineering
Technip
408
Execution
Inter Refineries Pipeline Project at Ruwais - 2nd Stage - Pipeline
Abu Dhabi Oil Refinery Company (Takreer)
Technip, Abu Dhabi
Not Appointed
700
FEED
Borouge Complex Expansion - Phase 3 - LDPE Plant
Abu Dhabi Polymers Co. (Borouge)
Tecnimont SpA, Abu Dhabi
Technimont / Samsung Engineering
400
EPC Bid
Washington Group International / Veco Engineering
Interconnecting Pipelines in Fujairah Oil Terminal 2
Port of Fujairah
Nico International
100
Execution
Sour Gas Development - Sulphur Pipeline
Abu Dhabi National Oil Company (ADNOC); ConocoPhilips;
Fluor Corporation, Abu Dhabi
Not Appointed
125
EPC Bid
Expansion of Ruwais Refinery - Package 3
Abu Dhabi Oil Refinery Company (Takreer)
Foster Wheeler, Abu Dhabi
Samsung Engineering
2700
Execution
PTA & PET Complex in Abu Dhabi
IPIC /CPC
Not Appointed
1000
Concept Stage
Borouge Complex Expansion - Third Polyolefin Plastics Project
Abu Dhabi Polymers Co. (Borouge)
Tecnimont SpA / Jacobs Engineering
Technimont / Samsung Engineering
3000
Execution
Upper Zakum - Fujairah Oil Pipeline
IPIC/Conoco Phillips
WorleyParsons
China Petroleum Construction Corporation
3290
Execution
Expansion of Ruwais Refinery - Package 4
Abu Dhabi Oil Refinery Company (Takreer)
Foster Wheeler, Abu Dhabi
Daewoo Engineering & Construction Ltd.
1200
Execution
Sour Gas Development - Gas Processing Plant
Abu Dhabi National Oil Company (ADNOC); ConocoPhilips;
Fluor Corporation, Abu Dhabi
Saipem
1900
Execution
Sour Gas Development - Sulphur Recovery Unit
Abu Dhabi National Oil Company (ADNOC); ConocoPhilips;
Fluor Corporation, Abu Dhabi
Saipem
1450
Execution
Integrity Enhancement of Fire Protection System at Umm Al Nar Refinery
Takreer
Not Appointed
Not Appointed
15
EPC Bid
Integrated Gas Development (IGD) - Das Island Process & Utilities Package
Adnoc / Adgas
Fluor Corporation
Hyundai Heavy Industries(HHI),Abu Dhabi
1000
Execution
Satah Full Field Development
Zadco
Tebodin Middle East, Abu Dhabi
Not Appointed
250
FEED
Expansion of Sulphur Handling Facility in Ruwais - Phase 3
Takreer
Washington Group Int'l
Dodsal
272
Execution
Sour Gas Development - Offsites & Utilities
Abu Dhabi National Oil Company (ADNOC); ConocoPhilips;
Fluor Corporation, Abu Dhabi
Samsung
1500
Execution
Sour Gas Development - Sulphur Handling Terminal
Abu Dhabi National Oil Company (ADNOC); ConocoPhilips;
Fluor Corporation, Abu Dhabi
Not Appointed
450
EPC Bid
Expansion of Ruwais Refinery - Package 1
Takreer
Bechtel
SK Engineering & Construction Company
2100
Execution
Expansion of Ruwais Refinery - Package 2
Takreer
Bechtel
GS Engineering & Construction
3100
Execution
New SCADA System at Umm Shaif and Lower Zakum
Adma - Opco
WorleyParsons
Telvent
50
Execution
Integrated Gas Development (IGD) - Ruwais Storage Tanks Package
Gasco / Adnoc
Fluor Corporation
Chicago Bridge & Iron (CB&I), Dubai
533
Execution
NGL Pipeline from Asab to Ruwais
Gasco
VECO
Dodsal
153
Execution
Gas Injection Topsides at Upper Zakum
Zadco
Technip
Not Appointed
12
FEED
Shah Full Field Development
Adco
Foster Wheeler
CCC / Tecnicas Reunidas
250
Execution
Integrated Gas Development (IGD) - Ruwais 4th NGL Train Package
ADNOC / Gasco
Fluor Corporation, Abu Dhabi
Petrofac International / GS Engineering & Construction
2100
Execution
Refinery in Fujairah
IPIC
Foster Wheeler
Not Appointed
5000
Study
www.arabianoilandgas.com
July 2010 Oil&Gas Middle East
63
THE BIG PICTURE
Full steam ahead: Train 6 Qatargas Train 6 will produce 1.4 billion standard cubic feet of gas per day.
he Qatargas 3 project involves the construction of a new LNG train with a capacity of 7.8 million tonnes per annum. Once completed this will be the sixth Qatargas train.
T
The LNG that Qatargas 3 will produce will be transported to market on a fleet of ten ships each with a capacity of approximately 210,000 – 266,000 cubic meters. The first cargo is expected to be delivered later this year. The upstream platforms and infrastructure consists of three unmanned platforms, up to 33 wells and two subsea pipelines, all of which are shared with Qatargas 4. Qatargas 3 will produce 1.4 billion standard cubic feet of gas per day, delivering LNG and substantial volumes of condensate and LPG.
64
Oil&Gas Middle East July 2010
Qatargas 3 utilizes the same Air Products proprietary APX process technology as Qatargas 2, helping to achieve economies of scale and integration which puts Qatargas ahead of its competitors. The Qatargas 3 and Qatargas 4 projects are being developed and executed by a Joint Asset Development Team to capture synergies between the two projects. When completed Train 6 will ship its LNG predominantly to the United State’s Gulf of Mexico receiving terminals. When the project was first conceived it was thought Train 6 would, at full operational capacity, provide approximately 1 billion cubic feet of gas per day for 25 years to the US market, though it is now thought more of this will be marketed to Asia and Europe.
Qatargas is building a fleet of the world’s largest LNG carriers to service its global customer base.
www.arabianoilandgas.com
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