Oil, Gas and Shipping Magazine by Oil, Gas and Shipping

ISSUE 82 www.ogsmag.com

Total:

Committed to better energy

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The Editor

Bribery and corruption

Editor

The

Martin Ashcroft

ust when you think everything is under control and your life is ticking over smoothly, you find yourself engulfed in a crisis you could not have foreseen – or could you? I imagine the outgoing Volkswagen chief executive may have been reflecting along these lines this past week. The jury is still out on who knew what at Volkswagen and it may yet turn out that Martin Winterkorn knew about, sanctioned or even ordered the installation of software to cheat emissions tests. Whether he was involved or not, the buck stops with him and his resignation was the honourable thing to do. Never mind that former colleagues may have held the sword steady for Winterkorn to fall on. Contrast this with the approach taken by Sepp Blatter and his organisation FIFA, where honour seems an altogether alien concept. It is not my place to speculate on whether either of these gentlemen are guilty of any malpractice, but I do subscribe to the principle that if they didn’t know what was happening in their organisations, they should have done. Whether you knew about it or not, you cannot allow widespread corruption to occur on your watch and expect to remain in post to oversee the recovery.

I’m sure none of our readers would ever do anything dodgy to cheat environmental tests, safety provisions or even the taxman, let alone anything involving ‘backhanders’ but this might be a good time to ask yourselves how much you really know about what happens in your name. The oil and gas sector operates in a high-pressure environment in more ways than one. Regulations are complex and demanding, and there are times when compliance issues conflict with operations. The temptation to cut corners must be huge. On the commercial side, the nature of the industry means that many of its operations are conducted in developing countries where subcontractors or even government officials may be more open to financial temptation than they are in mature economies. Oil and gas has significant exposure to third parties, from contractors to consultants to import agents to customs officers and government regulatory and permit authorities. Downtime and delays cause costly interruptions and pressure mounts to ‘motivate’ the cause of the obstacle with a sweetener. The risks are endless. Why not dust off your anti-corruption manual and make sure you don’t get caught out. OIL, GAS & SHIPPING MAGAZINE www.ogsmag.com

Contents Page 20

Cover story: Total Group: Committed to better energy

The Editor: Bribery and corruption

Gastech 2015 promotion

News in brief

Technology to the rescue

Damen delivers first crew transfer ship

Interview: Peter Sand of BIMCO

Total sells North Sea midstream assets

Turkey: A potential oil and gas hub

Offshore Europe 2015 review

Mercy Ships: Returning to Madagascar

X-Wave motion compensation system

Lerus Group: Inspiring training solutions

Maesrk Oil Culzean gas field approval

DNV GL launches two new JIPs

Shell suspends Arctic drilling

Piston air motor reliable in extreme conditions

LNG ready: American Bureau of Shipping

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News and features

News in Brief Rising global container port demand and ever larger vessels are driving terminal operators to make significant investments in additional capacity, according to the Global Container Terminal Operators Annual Report 2015 published by global shipping consultancy Drewry. Drewry predicts average global container port demand growth of 4.5% per annum through to 2019. This equates to an additional 168 million teu of port traffic, bringing the global total to nearly 850 million teu.

Damen delivers first crew transfer ship to Middle East

* * *

Martin Engineering has named two new distributors in South Africa. Alco Mining & Industrial Supplies and Vandlovu Mining & Industrial Supplies are sister companies that will both serve the Phalaborwa and surrounding areas, providing sales and support for the entire family of Martin Engineering products. The move will broaden the availability of high-performance bulk material handling technologies in South Africa, helping customers improve the safety and performance of their operations, while minimizing lead times. * * * Engineering plastics manufacturer Ensinger has achieved important accreditations for its engineering thermoplastic range TECAPEEK, used in petroleum and gas production. TECAPEEK is now compliant to ISO 23926-1:2009, which relates to the resistance of thermoplastics to deterioration caused by physical or chemical interaction with oil and gasfield media, and NORSOK standard M-710 Edition 3, which assesses the safety, value adding and cost effectiveness of elastomers and thermoplastics. * * * NauticExpo will be launching its first i-NOVO Awards at METS 2015 (Marine Equipment Trade Show) in Amsterdam from 17-19 November 2015. The awards will identify and reward products that improve industry standards through innovation in design, ecology or technology. The competition is open to manufacturers in the areas of equipment, marinas, ship and boat building. Entries will be accepted until midnight of 27 October 2015.

amen Shipyards Group has delivered a Damen Fast Crew Supplier 2610 workboat, AOS SWIFT, for the Atlantic Maritime Group. This is the first Damen Twin Axe vessel to be used in the Middle East for safe passenger and crew transfer to unmanned offshore platforms in the Strait of Hormuz. The vessel will be chartered to a Norwegian oil and gas company for its platform operations offshore Oman. Up to 35 people are transported to and from the unmanned platform daily. Although there is a heliport on the platform, it is much more efficient and less costly to do personnel transfer by sea. Atlantic Maritime Group FZE ordered the workboat for its reliability in rough water conditions and its maximum operational speed of 25 knots. “Damen specialises in broader marine access in the offshore wind and oil and gas industries,” said business development manager David Stibbe. “We see a large

potential in this marine access market to reduce costs and improve logistics as well as to partially replace helicopter flights which can be expensive and less efficient. Some unmanned platforms are without heliports and only have marine access.” The 25.75 metre long vessel was shipped from Damen Shipyards Gorinchem to Damen Shipyards Sharjah for further customisation and outfitting, including extra air-conditioning units for the Middle East climate zone. The workboat is also equipped with an additional hydraulically-operated 2200 kg crane with a reach of 8.6 metres and has deck space for two 20ft containers, a GPS plot self-managed man overboard system and a Jason cradle for emergency personnel recovery. The workboat can carry 35 passengers plus crew. This is the third Damen FCS 2610 workboat to be used in the oil and gas industry worldwide; the other two are employed in the North Sea.

Total sells North Sea midstream assets Total has signed an agreement to sell all of its interests in the FUKA and SIRGE gas pipelines and the St. Fergus Gas Terminal to North Sea Midstream Partners for £585 million (around $905 million), subject to the customary approvals. The FUKA pipeline delivers gas from some 20 fields in the northern North Sea to the terminal at St Fergus, a three-train processing plant with a capacity of 2,648 million cubic feet of gas per day.

The Shetland Island Regional Gas Export System (SIRGE) is a 234-kilometer, 30” gas pipeline with a capacity of 665 Mmscf/d connecting the Shetland Gas Plant to the FUKA pipeline. With the coming start-up of the LagganTormore project in the West of Shetland area, Total is opening up its third hub in the UK and a new frontier gas production area for the industry. By the end of 2015, Total is expected to become the largest producing oil and gas company in the UK. OIL, GAS & SHIPPING MAGAZINE www.ogsmag.com

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News and features

Offshore Europe 2015 confirms positive outlook for industry

SPE

Offshore Europe 2015, held in Aberdeen, Scotland from 8-11 September, sent out a very clear message that the oil and gas industry has a future for many years to come. The theme of the 2015 event, inspiring the next generation, allowed the industry to address the technical, business and people challenges it faces now and into the future. Attendance figures remained strong at 55,947, the second highest in the history of the show. A record 1,535 global organisations from 44 countries exhibited this year, including 336 companies exhibiting at the event for the first time. Over the four days of the world’s largest upstream oil and gas conference and exhibition outside North America, around 5,000 visitors attended conference sessions, presentations, lunches and briefings. “The conference programme successfully addressed a number of relevant industry priorities, incorporating the theme of inspiring the next generation,” said Stephen Graham, chief operations officer

for the SPE. “Combined with a busy show floor where exhibitors met with existing and potential customers, I believe SPE Offshore Europe 2015 has been a great success.” Michael Engell-Jensen, Executive Director, International Association of Oil & Gas Producers (IOGP) and keynote chairman, said: “This week’s keynote speakers, as well as the Inspire Programme, provided the next generation with plenty of inspiring reasons to join this industry. But, as Professor Brian Cox mentioned, we also need to provide students with pathways to a career in oil and gas. “I would like to see the industry develop multi-year programmes to encourage schoolchildren to consider a career in this sector. And, for our newly qualified graduates, who have been caught out by the current economic difficulties, I am supportive of industry exploring ways to allow them to get work experience, something many graduates say would help them get their first job in the industry.” Exhibitors were positive about the event, many saying that this year’s show had

been one of the best they’d experienced. Kris Frampton, CETCO Energy Services, said 2015 had been a good show for them: “There were more business opportunities for us than there were two years ago. I think the reason for that is that there is a lot more focus on production. Because we have strong environmental credentials and we can optimise operator production capabilities, we have had a lot of people coming to talk to us.” Organisationally, Reed Exhibitions thought the show was the smoothest running ever. Vasyl Zhygalo, Senior Exhibition Director for Reed Exhibitions, commented: “We learn lessons from every edition of the event and this year we think the logistics flowed very well. The increased number of shuttle buses running to and from the city centre, offices and hotels proved to be very popular as did the park and ride. The weather was also on our side.” The next SPE Offshore Europe will be held in Aberdeen from 5-8 September 2017. One of the new features announced for the next event will be the Decommissioning Zone 2017. OIL, GAS & SHIPPING MAGAZINE www.ogsmag.com

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News and features

X-Wave motion compensation system shown at Offshore Europe

t the recent SPE Offshore Europe exhibition I was privileged to witness a demonstration by ABB of the world’s first “out of the box”, selflearning motion compensation system. The load suspended over the side of the deck of the model remained perfectly still, while the “ship” danced around like a bucking bronco. The X-Wave is designed by MJR Power & Automation and uses a range of automation, electrical and control equipment from ABB. MJR is patenting a series of innovations within the device and is offering to integrate the system within any existing or new winch or crane control system. The marine and offshore sector is keen to improve the utilisation of assets, whatever the weather conditions. Nowhere is this more critical than when lifting, lowering and accurately positioning loads, equipment and machinery either above the sea or beneath the surface. Although these loads are generally large and heavy, they are relatively fragile and easily damaged, requiring delicate and precise handling and positioning. This is especially important when landing or interfacing loads from a moving vessel onto a fixed structure either in air or

subsea. Handling such loads with any degree of precision or accuracy is difficult from a lifting device located on a floating vessel, as the motion of that vessel caused by wave excitation is directly transmitted to the load. Other activities, like launching and recovering subsea vehicles (ROVs) that require docking of the vehicle into a tether management system (TMS) prior to recovery, are dependent upon stable position of the docking head. These operations are therefore significantly limited by weather conditions and much operational time is lost as a result. For this reason, active heave compensation is now the norm amongst most Tier 1 offshore contractors. It cancels the vessel’s vertical or heave motion in a single degree of freedom by introducing an equal and opposite vertical motion in the lift path. Such systems are referred to as ‘heave compensation’ and while many of the large operators and equipment manufacturers have access to the technology, many smaller ones do not. X-Wave, an advanced motion compensation system, helps fill this technology gap. Setting up and tuning an active heave compensation system can be time consuming, but X-Wave’s self-learning

routines ensure the application comes on line faster than any other system or solution, thus reducing set up costs. X-Wave automatically modifies and optimises control system behaviour in response to changing vessel dynamics, meaning no vessel specific setup is required and the equipment can be transferred between vessels. “Whilst active heave compensation and platform stabilisation systems are existing and well known, they are proprietary and single application, equipment and/or vessel specific,” says Paul Cairns, Managing Director of MJR Power & Automation. “They are generally bespoke, designed specifically for a particular application or machine and therefore require a significant amount of re-engineering or adaptation for a different application. They also require a lengthy, complex and therefore very costly commissioning period. “The X-Wave Motion Compensation System can be applied to all types of offshore motion compensation applications, whether building new or retrofitting to existing equipment. X-Wave provides a number of novel features to provide a single ‘out of the box’ OEM solution to all marine and offshore motion compensation applications.” OIL, GAS & SHIPPING MAGAZINE www.ogsmag.com

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News and features

Maersk Oil’s Culzean gas field approved for development

he development of the largest new gas field discovered in the UK North Sea for a decade has been approved by the UK Oil & Gas Authority. The Maersk Oil operated high pressure, high temperature (HPHT) Culzean field in the UK Central North Sea is expected to produce enough gas to meet 5% of total UK demand at peak production in 2020/21. Discovered in 2008, the gas condensate field has resources estimated at 250300 million barrels of oil equivalent. Production is expected to start in 2019 and continue for at least 13 years, with plateau production of 60,000-90,000 barrels of oil equivalent per day. Maersk Oil and its co-venturers, JX Nippon and BP (Britoil) are investing around £3bn ($4.5 bn) in the development, with more than 50% committed to investments in the UK. Over the projected life of the field, it’s anticipated that £2.1bn ($3.3 bn) in operating expenditure will be spent in the UK domestic market. The Culzean field aligns with the UK’s commitment to increased gas-fired electricity generation and is expected to support an estimated

6,000 UK jobs and create more than 400 direct jobs. The Culzean development has benefited from the HPHT Cluster Area Allowance introduced by the UK Government as part of the 2015 Budget. The allowance

“Production is expected to start in 2019 and continue for at least 13 years, with plateau production of 60,000-90,000 barrels of oil equivalent per day”

supports the development of high pressure, high temperature projects which typically have considerably higher capital costs - and encourages exploration and appraisal activity in the surrounding area or ‘cluster’. Welcoming the announcement, Jakob Thomasen, CEO of Maersk Oil said, “Culzean is an important development

for the UK and also for Maersk Oil and our co-venturers. We are pleased the field will support UK economic growth as well as extend understanding of HPHT development. Culzean is the latest in a series of large investments by Maersk Oil in the North Sea where we are active in Denmark, Norway and the UK – reflecting our commitment to the future of the North Sea region.” Andy Samuel, Chief Executive of the Oil & Gas Authority said, ”Maersk Oil and partners’ £3 billion investment to develop the Culzean discovery is excellent news for the UK during a period when the decline in global oil prices has created difficult operating conditions for this critical sector of our economy. The Oil & Gas Authority has worked closely with Maersk Oil and HM Treasury on the development plans for the Culzean field, which will support many new contracts in the oil and gas supply chain across the UK.”

Send your news to martin@ogsmag.com OIL, GAS & SHIPPING MAGAZINE www.ogsmag.com

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News and features

DNV GL launches two new JIPs with huge potential industry savings

Jan Weitzenböck

n today’s cost constrained climate, the subsea and pipeline sectors are looking at alternative means to drive down costs, cut complexity and reduce project overruns. DNV GL, a leading technical advisor to the oil and gas industry, is launching two joint industry projects (JIPs) to investigate affordable composite components for the subsea sector and qualify technology for more efficient linepipe production processes. It is estimated that the JIPs could deliver a combined saving of £6.75 million. The DNV GL Affordable Composites for the Oil and Gas Industry JIP aims to reduce the cost of qualifying composite components for subsea use by replacing large scale tests with ‘certification by simulation’. Statoil, Petrobras, Petronas, Nexans, Airborne and the Norwegian University of Science and Technology (NTNU) in Trondheim, are participating in the project, which is partly funded by the Research Council of Norway. The project, which could potentially deliver a 40% to 50% cost saving for certification and qualification of subsea

Leif Collberg

composite components, will seek to validate new advanced material models by experimentation, with the main focus on predicting chemical ageing. “Composite components require fullscale testing to document long-term properties to achieve certification,” said Jan Weitzenböck, Principal Engineer, DNV GL - Oil & Gas. “A typical qualification campaign for a subsea composite component can cost in the region of ten to 100 million NOK (£800,000 - £8 million). The results of this JIP could potentially save up to 16 million NOK for re-certification of existing components.” DNV GL will also develop processes to accept mathematical material models in the certification process. This will be documented in a revised edition of the DNV GL offshore standard for composite components (DNV OS-C501). The driver for the New Material Solutions for Flowlines JIP is to explore cost savings by use of HFW/SAW (high frequency welded/submerged arc welded) pipes. Within the envelope of production parameters, these may be a very attractive

alternative to the traditional seamless pipes, due to their lower cost and shorter delivery time. The JIP has drawn interest from pipe manufacturers, installation contractors and operators such as Corinth PipeWorks, EMAS, JFE-Steel, Sumitomo, Tata Steel, Tenaris/Tamsa and Woodside. The JIP is still open to additional partners. “Though there is a considerable amount of research and full-scale reeling trials for the use of HFW or SAW linepipe, as well as a good track record in terms of executed projects, a joint systematic approach to optimize the design of these linepipe for reeling is lacking,” said Leif Collberg, vice president - pipeline technology, DNV GL Oil & Gas. “There is much to be gained through this project we estimate that it could deliver a 2030% reduction in pipeline material cost, corresponding to £4—£5.5 million saving potential for a 30 km flowline.” The JIP will be run as a Technology Qualification (TQ) project and is expected to result in a qualification plan that will require qualification testing by the manufacturers. OIL, GAS & SHIPPING MAGAZINE www.ogsmag.com

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News and features

Shell suspends Arctic drilling after disappointing results

arely six weeks after being given final approval by the US Bureau of Safety and Environmental Enforcement (BSEE), Shell has decided to suspend drilling in the Artcic “for the foreseeable future”. Shell has been drilling the Burger J exploration well in the Chukchi Sea about 70 miles off the Alaskan coast, reaching a total drill depth of 6800 feet in about 150 feet of water. The indications of oil and gas found, however, are not considered to be worthy of further exploration in the Burger prospect. Shell said the well will now be sealed and abandoned in

accordance with US regulations. The open water season for drilling is now closed in any case. “The Shell Alaska team has operated safely and exceptionally well in every aspect of this year’s exploration program,” said Marvin Odum, Director, Shell Upstream Americas. “Shell continues to see important exploration potential in the basin, and the area is likely to ultimately be of strategic importance to Alaska and the US. However, this is a clearly disappointing exploration outcome for this part of the basin.” The US Geological Survey has estimated

that the Arctic region may hold more than 20% of the world’s undiscovered oil and gas resources. Shell paid over $2 billion for leases in the Chukchi Sea in 2008 and has since spent around $7 billion on exploration there and in the Beaufort Sea off Alaska’s north coast. This decision reflects both the Burger J well result, the high costs associated with the project, and the challenging and unpredictable federal regulatory environment in offshore Alaska. Shell said it will provide an update on the financial implications of its decision in its third quarter 2015 results.

Piston air motor from Huco Dynatork proves reliable in extreme conditions

ad experience with the reliability of a vane air motor prompted oil and gas well services company, Blue Manta International, to look for a better performing alternative. The motor they were using was proving inefficient in extreme conditions, a problem exacerbated by its inaccessibility for repair and maintenance. Both issues were resolved when the company switched to a Huco Dynatork piston air motor.

Blue Manta uses air motors to tension cable as it is lowered into the well, which can be offshore or in the desert. In both environments the efficiency of the vane motor was compromised by the extreme conditions. Its design makes it very difficult to seal, exposing the unit to the ingress of salt water and sand. By the same token air is lost to the atmosphere rather than being converted into motion. A Huco Dynatork piston air motor is immune to such problems. The operating

principle of the product is simple. Via an integral rotary valve, air up to 100 psi is supplied to each of three pistons in turn. The free floating pistons transmit torque on start-up that can be adjusted via a pressure regulator. This results in high torque at variable low speed. Unlike a DC motor in a similar application, the piston air motor will not burn out or cause overload. And thanks to its sealed body it is proving highly reliable and cost efficient in the field. OIL, GAS & SHIPPING MAGAZINE www.ogsmag.com

OIL, GAS & SHIPPING MAGAZINE www.ogsmag.com

Total:

Committed to better energy

Total produces, refines and markets oil as well as manufacturing petrochemicals, and is a major player in natural gas. Over almost a hundred years, it has expanded its business into more than 130 countries. OIL, GAS & SHIPPING MAGAZINE www.ogsmag.com

hanks to the unflagging commitment of its employees and investors, Total is now the worldâ&#x20AC;&#x2122;s fourthlargest oil and gas company and second-largest solar energy operator with SunPower. With operations in more than 130 countries, Total has over 100,000 employees who are fully committed to better energy. 22

OIL, GAS & SHIPPING MAGAZINE www.ogsmag.com

Readily available energy helps to drive progress. In building a responsible energy future, we must ensure that each individual has access to energy and that energy is used in the most efficient way possible. This is the environment in which Total conducts its business. Total produces, refines and markets oil as well as manufacturing petrochemicals. It is also a major player in natural gas and ranks second in solar energy with SunPower. Demonstrating their commitment to better energy, its 100,000 employees help supply its customers around the world with safer, cleaner, more efficient and more innovative products that are accessible to as many people as possible. Total works alongside its stakeholders to ensure that its operations consistently deliver economic, social and environmental benefits.

A market leader

The Exploration & Production division is responsible for Totalâ&#x20AC;&#x2122;s oil and natural gas exploration, development and production activities in more than 50 countries. The Gas division unlocks

Gladstone LNG is a leading project in the conversion of coal seam gas (coalbed methane) into liquefied natural gas

Milestones

Total

Total’s story began in the 1920s, with the creation of Compagnie Française des Pétroles (CFP). At the time the company produced oil in the Middle East. Over the years CFP expanded internationally and diversified into refining, petroleum product marketing, and chemicals. In 1929 CFP was listed on the Paris Bourse. It was renamed Total-CFP in 1985, then Total in 1991. As the 21st century dawned, Total strengthened its position by merging, first with PetroFina and then Elf Aquitaine. Total’s production activities in the Middle East began in 1924. In 1929, the company embarked on exploration work in other countries to discover and develop new resources. Its refining activities began the same year, with the creation of an affiliate, Compagnie Française de Raffinage (CFR). Total started building its chemicals business in the 1960s. At the same time its retail network continued to expand, growing into the global operation it is today. Solar energy was first explored by Total in the 1970s. In 2011 it acquired 60% of the US company SunPower and now owns 65% of what is the world’s secondranking solar operator. In 1982 Total performed its first deepwater drilling operation (1,714 meters) in the Mediterranean. In 1986 it opened its first automated service station in France and 2011 it created the Total Access network, 600 low-price stations across France. Total plans to open another 150 stations by the end of 2015.

Major projects Surmont Phase 2, Canada: Total’s joint venture with

the value of Total’s natural gas assets. Its capabilities span the liquefied natural gas chain, from liquefaction to shipping and regasification, as well as natural gas marketing. Refining & Chemicals is a major production hub, with expertise covering refining, petrochemicals and specialty chemicals. Total ranks as one of the world’s ten largest integrated producers. Trading & Shipping sells Total’s crude oil production, supplies its refineries with feedstock, charters the vessels required for those activities and is involved in derivatives trading. Total is a leading global trader of oil and petroleum products. Marketing & Services designs and markets a broad array of refined products, including automotive fuel and specialty products such as lubricants, special fluids, LPG, heating and heavy fuel oil, asphalt, additives and special fuels. It also provides services to consumers and to the transportation, housing and manufacturing industries. Total is a leading marketer in Western Europe and the top marketer in Africa. New Energies is helping Total to prepare the energy future by developing its expertise in two core renewable energies, solar and biomass.

ConocoPhillips Canada, Surmont Phase 2 Oil Sands project involves the expansion of the Surmont steam-assisted gravity drainage (SAGD) plant to increase its production capacity from the existing 27,000 barrels of bitumen a day to 136,000 barrels of bitumen a day. The Surmont site is located approximately 60km southeast of Fort McMurray, Alberta, in the Athabasca oil sands region. It covers an area of approximately 567km². The Surmont Phase 2 project was sanctioned by the partners in January 2010 and construction activities commenced in the same month. It is the biggest SAGD production facility to be built in a single phase. Plans are in place to implement additional phases to further enable the production from the facility to reach an ultimate capacity of 283,000 barrels a day for more than 30 years. Project activities under Phase 2 will primarily involve the installation of additional well pads, central processing facilities, storage tanks, pipelines and water treatment facilities. Construction of additional camps, water source and disposal wells, power lines, substation, and roads will also be involved. The terminal expansion project will involve the installation of two 450,000-barrel blend tanks, conversion of an existing blend tank to accommodate diluent, installation of receipt, and distribution manifolds to facilitate transfers to its Waupisoo Pipeline. An upgrade to the associated measurement equipment will also take place.

Gladstone LNG Plant, Australia: GLNG is a

planned liquefied natural gas plant nearing completion in Queensland, Australia. It is a leading project in the conversion of coal seam gas (coalbed methane) into LNG. The GLNG project was announced in July 2007 and will involve piping coal seam gas (CSG) from Santos’ eastern Queensland fields to a plant at Curtis Island off Gladstone, where the gas will be liquefied and loaded to ships for sale to world markets. The project involves the production of coal seam gas in the Surat OIL, GAS & SHIPPING MAGAZINE www.ogsmag.com

The Laggan and Tormore fields are expected to make Total the largest producing oil and gas company in the UK

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Total

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The gas produced on CLOV will be exported via a subsea line to the onshore Angola LNG liquefaction plant

and Bowen basins in eastern Queensland, which surround the regional centres of Roma and Fairview. Gas will be piped then 435 kilometres (270 mi) to a gas liquefaction plant at Hamilton Point West on Curtis Island near Gladstone, Queensland where the coal seam gas will be converted into LNG. The GLNG project started producing its first liquefied natural gas (LNG) on Curtis Island, Queensland, on 24 September 2015, on schedule and within budget. LNG is currently being produced from Train 1 ahead of the first cargo, which is expected to be shipped to Asian markets in the coming weeks. Work on the second train is continuing to progress well, with Train 2 expected to be ready for start-up by the end of the year. Total has a 27.5% interest in the project with Santos holding 30%, Petronas 27.5% and Kogas 15%. Gladstone LNG strengthens Total’s foothold in the Australian market and rounds out its expertise in unconventional gas.

Laggan-Tormore Project, North Sea: Located approximately 125km northwest of the Shetland Islands, the Laggan and Tormore fields represent the future of the UK oil and gas industry. Both fields lie in an area known generically as 26

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West of Shetland – a region geographically closer to the North Atlantic than the North Sea – located on the edge of the UK continental shelf. Here, water depths descend rapidly from an average of 120m to 600m and beyond. It’s a uniquely challenging environment in which to operate, but also one with great potential. Until today, only oil was recoverable from this harsh frontier area. Now, with the pipelines and infrastructure Total has built, the region is open to further opportunities in this new strategic hub for the UK. Much of what was previously stranded can now be developed. The £3.5 billion Laggan-Tormore development will add an estimated 100,000 barrels of oil equivalent per day of gas to UK energy supply. Gas will be brought ashore for processing at the Shetland Gas Plant for transporting to the St Fergus Gas Terminal near Peterhead and onward transmission to the National Grid. Development of the fields was launched in 2010 and first gas is expected in the coming months, at which time Total will expect to become the largest producing oil and gas company in the UK. The development concept consists of a 140-kilometer tie-back of five subsea wells to the new onshore Shetland Gas Plant, with a peak

EuropEan oil & gas

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Total

production rate of 500 million standard cubic feet per day. Total is the majority stakeholder in this project, which represents exciting challenges for the business.

CLOV, Angola: Developing four fields (Cravo, Lirio,

Orquidea and Violeta), this project comprises 34 wells and 8 manifolds connected by 180 km of subsea pipelines to an FPSO unit at water depths of 1,100 to 1,400 m. Measuring 305 meters long and 61 meters wide, the FPSO has a storage capacity of 1.8 million barrels of oil. The gas produced on CLOV will be exported via a subsea line to the onshore Angola LNG liquefaction plant. CLOV is a flagship project for Total. It demonstrates the Group’s capacity to successfully start-up projects on time and within budget while mastering cutting-edge deep offshore technologies and keeping safety and environment a top priority. CLOV will contribute to increasing the Block 17 production to 700,000 barrels per day, while also generating significant free cash flow for the Group. Block 17 will therefore become Total’s most prolific production site and bring Total a step closer to achieving its production potential of 3 million barrels per day by 2017.

A subsea multiphase pump system will be used deep offshore to enable production of two different oil qualities from the ssue oligocene reservoirs and the more viscous miocene reservoirs. A first for Total at this depth, this system will ef be used lastoIl to boost the commingled fluid and enhance oil recovery. The FPSO design minimizes its environmental footprint, with zero flaring under normal operating conditions and an “all electric”confIRm concept lease a to increase on-site energy efficiency by producing only the quantity of electricity required to operate the facilities. As part of Total’s commitment to increasing local content in its projects, a significant part of the CLOV development work was carried out in Angola.

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Elk and Antelope, Papua New Guinea (PNG): The Elk Antelope LNG field is one of Asia’s biggest potential gas sources. Working together with InterOil, Total’s selection of two key sites to develop Papua New Guinea’s Elk Antelope LNG fields was a difficult task, requiring a full set of studies to reach a decision. The partners in PNG’s second LNG plant have chosen Caution Bay near Port Moresby as the site for the project, while the site of the upstream processing plant will be located near the OIL, GAS & SHIPPING MAGAZINE www.ogsmag.com

The Elk Antelope LNG field is one of Asiaâ&#x20AC;&#x2122;s biggest potential gas sources

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years

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Purari river in Gulf Province, about 360 kilometres north-west of the capital. The project will be known as Papua LNG. The decision marks a milestone as it allows the joint venture partners to carry out environmental and societal studies, and perform more detailed surveys on each location while working with local communities. The LNG plant at Caution Bay, about 20 kilometres north of Port Moresby, will also maximise the opportunity to pursue potential synergies with the PNG LNG project. Early works are expected to begin in 2016.

environment and culture. It strives to build local capacity in those areas in all its host regions, while introducing development models that can be reproduced anywhere. It cultivates long-term partnerships with private and public stakeholders to achieve those goals. Today, the Total Foundation is France’s largest corporate foundation. Together with Total’s corporate philanthropy projects, its programs represent close to €30 million each year.

Total Foundation

Regardless of the size of any of its projects, Total is committed to protecting the environment and helps communities tackle major social issues. Created in 1992, the Total Foundation implements initiatives in the fields of public health, community support, OIL, GAS & SHIPPING MAGAZINE www.ogsmag.com

LNG ready Despite the price of oil, shipowners are still ready for LNG as fuel, says Patrick Janssens, VicePresident, Global Gas Solutions, ABS (American Bureau of Shipping)

he recent fall in the oil price and its knock on effect to fuel oil has prompted some shipping industry observers to remark that the prospects for growth in the use of LNG as fuel might also be in decline. The oil price fall might bring some temporary relief to owners who are simultaneously suffering from pressure on freight rates and high operating costs but it is not a signal that alternative fuels are about to fall out of fashion. The belief that a lower oil price might dampen interest in LNG as fuel overlooks the main reason for shipowner interest: the need to comply with environmental regulations. Owners preferring to stay with conventional fuel must still source traditionally more expensive distillate fuel for SECA compliance. They may also specify a scrubber for SOx compliance but they will need to find a way to comply with Tier III NOx limits, which sulphur scrubbers by themselves cannot deliver. Whether the oil price stays low for months or years is hard to predict but it should also be remembered that a fall in the oil price also means a corresponding fall in natural gas prices. This may have positive impact in markets such as Asia where gas prices have been higher than in Europe or the US, spurring rather than stalling adoption. LNG as fuel remains an opportunity to be embraced. Indeed, there can hardly be a shipowner considering newbuilding orders

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LNG ready

The world’s first LNG powered containership, Isla Bella, was launched in San Diego in April 2015

who has not at least considered LNG as fuel in their deliberations. Some may decide to do nothing – that is a decision in itself – and some are evaluating at what stage in the future they might adopt LNG and for them it is more a question of when than if. ABS is already providing classification services to newbuilding projects using LNG as fuel and is increasingly helping owners understand what ‘LNG Ready’ means for them as environmental regulations continue to evolve. At this point it is worth considering what LNG Ready actually means. This has been the subject of a great deal of discussion but owners who want to say ‘I am LNG Ready’ still need a clear definition in terms of class approvals. ABS has been conducting ad hoc Approvals in Principal for LNG Ready ships for some years. In these cases, the shipowner will define the level of preparedness to be achieved, but each project is different and there has been no consistency between the resulting definitions of LNG Ready and the requirements the owner must satisfy for different degrees of readiness. ABS has an existing set of rules in its Gas Fuelled Ships Guide and has recently published an LNG Fuel Ready Vessel Guide which defines much more specifically the different levels that can make ships LNG ready. The basic level is the conceptual review which looks at overall arrangement and includes defined layouts for equipment, fuel tank and bunkering and includes a safety risk

assessment. The second level is a general design review, the main aim of which is to make sure that when an owner takes delivery they will have a conversion design package that is approved by their class society. This means that should they decide to convert in future they are able to approach a conversion yard with an approved package. This also reduces the potential headache for the owner since their technical staff and superintendents are unlikely to be gas experts, but can use the class approval as a basis for the conversion. The third level applies when an owner decides to install some of the equipment and includes a class notation for those elements – typically fuel tank foundations, the fuel tank itself or piping systems. Approval in this case includes a detailed design review so that when an owner decides to convert the ship will require an additional survey rather than fresh approval. ABS is already providing classification services for newbuildings that will use LNG as fuel and the level of interest around LNG Ready vessels can only continue to grow as the number of ships affected by regulation increases. Shipowners are increasingly recognising that classification societies have the specialist knowledge to support them as they evaluate what LNG Ready means and how to prepare for that future. OIL, GAS & SHIPPING MAGAZINE www.ogsmag.com

WH AT ’S I N

TH EN EX TM ON TH ’S O IL, GA S&

Next month’s cover story:

SH IPP ING

MA GA ZIN E

Ebara: Transforming Wasted Energy into LNG

KE TA

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Our next issue will be distributed at Gastech Singapore 2015 as well as to our 105,000 readers across the globe. You can visit the Gastech website at www.gastechsingapore.com for more information. The front cover and lead article will feature Ebara International who will be discussing transforming wasted energy into LNG and applying liquefied gas expander technology throughout the world. If you would like to be involved in this issue we have a number of opportunities at discounted prices. IF YOU WANT TO BE INVOLVED IN THE GASTECH EDITION OF OIL, GAS AND SHIPPING PLEASE READ ON.

Gastech Conference & Exhibition is the leading event for the international oil & gas industry and a global meeting place for energy professionals working in the natural gas cycle. The event is now in its 43rd year, and dates back to 1972, when the original event was launched in London to bring together technical decision makers involved in LNG and LPG shipping. Gastech has since evolved and now brings together the commercial and technical communities from the global energy supply chain. Held every 18 months in a different international location, it gathers the international gas community from 27 to 30 October 2015 at the Singapore EXPO in Singapore. Oil, Gas and Shipping Magazine has a number of editorial and advertising packages available for this edition which will be distributed at the event. If you are willing to confirm and make immediate payment we can offer the following reduced rates (in £s Sterling): Option 1: Quarter Page Advertisement £625 (usual rate £1,450) Option 2: Half Page Advertisement £950 (usual rate £2,450) Option 3: Full Page Advertisement £1,450 (usual rate £4,895) Option 4: Double Page Advertisement (inside cover and following page available to one customer only) £2,195 (usual rate £6,000) Option 5: Half Page Advertisement + One and Half Pages of Editorial £1,995 Option 6: Full Page Advertisement + Two Pages of Editorial £2,495 Option 7 (available to 1 customer only): 8 Page Editorial + Full Page Advertisement £3,250

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Technology to the rescue The need to economise forces the oil and gas industry to innovate, says Wouter Last, president of Hint

ith the lowest oil and gas prices since 2009 and the disappearance of shopfloor-based knowledge, cost cutting has become a priority for many companies in the industry. Research by Lloyd’s Register Energy shows that the reduction of costs is the main objective for 43 per cent of organizations in the oil and gas industry. Meanwhile, improvement in operational efficiency, directly related to cost, scored 44 per cent. I believe, going forward, that investment in innovation is the best way to save. First sow and then harvest. While the crisis of the last few years can now be left to the history books, it has left its mark. Back then, there was too much resting on laurels, which allowed us to be overtaken, suddenly, by events. Now is the time for catching up. In modern industry, digital technology is most often responsible for cost reduction. I find a number of additional developments to also be promising. My top four: 1. Every oil and gas factory is an ICT company: In the future, each plant in the energy industry will be controlled from a digital platform. Here all the data on the site will be measured together in one dashboard. The system would then analyse the data and draw conclusions on which engineers on the shop floor can base their actions. Think of “actions” not as physical work in the field, but as adjustments to the plants from afar. Maintenance is condition-based and not malfunction driven. This saves costs since you keep ahead of potentially bigger problems. According to a Gartner study from 2013, effective software-based asset management can, within one year, result in technology cost savings of 30 per cent. With a high degree of automation, we also address the outflow of personnel and knowledge that many companies face. This becomes another cost saving because you can make do with fewer staff at a plant. 2. New extraction methods: Oil fields are still being found, but their reserves can be difficult to exploit. Some organizations have become more adept at exploiting such reserves. In Texas, Norway’s Statoil, for example, is currently experimenting with sand of different gradations. It is spraying water and chemicals in the ground to loosen hard rock that is deep within the soil. It also varies the depth of wells in order to discern what level delivers the highest production. The engineers can control the valves remotely and can quickly adjust the flow. But does this represent cost savings or investment? As so often is the case, they go hand in hand. Statoil can now produce more with fewer rigs and the average cost of the drilling process has decreased from $4.5 million to $3.5 million by, for one, reducing the initial exploitation time from 21 to 17 days.

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Technology to the rescue

Sand conveyor, Eagle Ford, Texas: Photo Tom Payne - AP - Statoil

3. Measurement while drilling: With the measurement while drilling (MWD) method, data about the condition of the well is collected during the drilling for oil. Information about the composition of the stone that the drill encounters on its way down, along with the pressure in the well, is analysed real-time by engineers. Also, a three-dimensional graph can be made of the well, so that the drill is guided directly to the reserve. This makes the drilling process more efficient and precise. During drilling, the process can be adjusted for maximum yield. No more ‘trial and error’ saves money. Hours of non-productive time can be eliminated and the risk of blow-outs is reduced.

to many losses in the loading and distribution process. What happens between the point of departure and arrival port is, in part, a black hole. We have not fully penetrated the physical properties of the gas under low temperature. The measuring volume is not very accurate, and this also applies to the sampling. The margin of error can be as much as ten per cent. If measured quantities and qualities do not match, this can result in huge unexpected costs. I anticipate that there will be a lot of savings achieved in the future. The technology is in the works and Hint is also working with partners to develop the right measurement and analysis technology for LNG. We’re not there yet, but we’ll get there.

4. LNG metering and sampling: LNG is extremely popular, especially in countries that have no energy resources. LNG transport by ship is relatively easy. This would be beneficial to producers were it not that this sport is still so new and there are few or no industry standards, which leads

Dutch-American company Hint supplies IT and consultancy services to the oil and gas industry, with special focus on metering, analysing and allocation. www.hint.nl OIL, GAS & SHIPPING MAGAZINE www.ogsmag.com

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120 SPEAKERS, 12 TOPICAL SESSIONS, 4 DAYS KEYNOTES & LEADERSHIP PLENARY AFTERNOON Keynote Speeches

SHIPPING Chairperson’s Welcome

Andrew Clifton , General Manager, Society of International Gas Tanker & Terminal Operators (SIGTTO)

Summary of Developments in Ship to Ship LNG Transfer Safety

Alasdair Barclay, Electrical, Instrumentation & Control Engineer, Shell Shipping Technology

A Ship Owner’s Perspective of the Technical & Operational Challenges of Delivering LNG to Pacific Markets via the Northern Sea Route and Panama Canal

Suryan Wirya-Simunovic, Global Energy, LNG and Maritime Shipping Executive, Mitsui OSK Bulk Shipping (Asia Oceania) Pte. Ltd., Singapore

Learning from the Past – A View of the Future of LNG Transportation at Sea

Richard Boudiette, Technical Advisor, Society of International Gas Tanker & Terminal Operators (SIGTTO)

Develop Next-Generation LNG Carriers with Succeeding MOSS Type Cargo Tank

Takumi Yoshida, Manager - Ship and Offshore Structure, Kawasaki Heavy Industries, Ltd

New Shipbuilding of KC-1 LNG Cargo Containment System

Young-Kyun Kim, Principal Researcher, Korea Gas Corporation (KOGAS)

Large Ethane Carriers – Providing Transport Solutions to a New Market

Klaus Gerdsmeyer, Director Business Development & Sales, TGE Marine Gas Engineering GmbH

Supplier Panel Debate Importers Panel Debate COMMERCIAL STREAM Gas Market Outlook Future Use of Gas & LNG in the Asian Fuel Mix Contracting, Pricing & Trading LNG Projects: Non-Technical Risks, Progress & Delivery TECHNICAL STREAM Application of Innovative Technology Shipping Gas as a Transport Fuel SPECIAL FOCUS STREAM Health, Safety, Security & Environment Emerging Gas Markets: Developments & Investment FLNG Innovation, with Containment & Storage

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Interview: Peter Sand, Chief Shipping Analyst, Baltic and International Maritime Council (BIMCO) Peter Sand joined BIMCO in 2009. With a master’s degree in economics from the University of Copenhagen he is responsible for analysing the commercial markets for dry bulkers, tankers and containerships. What do you enjoy most about being chief shipping analyst? Having the whole world as my playground! As an economist now working in shipping, I am spoiled for choice every day as to what to analyse. So many things are happening in so many different countries. Your market reports are highly regarded by the shipping community. How do you manage the different sources of information and their veracity? An integral part is to always stay abreast with who provides quality information. We continuously evaluate our sources. Building a report or a market comment always starts with something happening on the global macroeconomic side of things, or a pure shipping event that we would like to know more about because it affects the market. For our quarterly Shipping Market Overview & Outlook we start our work on the supply side. Getting the data from either of the two major fleet data suppliers, in a raw format. Then we add our market insight and understanding of the dynamics of the order book and of how the data is compiled by the supplier.

As shipping lines continue to open more trade routes in Africa, what advice would you give to companies considering this as part of their business plan? Africa provides a wide array of opportunities. This goes for dry bulk, containers and tankers as well as the more specialized parts of shipping. In the maritime sector, industry relationships are important, so if you want to do business in Africa tomorrow you should start to work on your relationships today. Currently, Africa as such is not a big market, if you look beyond some specialized trade and the all-important sweet crude oil exports out of West Africa. A futurist once told me not to underestimate Africa, and I certainly wouldn’t do that, but to put it into perspective, the entire African continent has a GDP about the same size as Italy. We need to be a bit further down the road before Africa becomes a driver in the shipping market. Until then, we will monitor the developments closely. What are the current options for shipping lines looking to finance vessel acquisitions? We have just passed the 7th “anniversary” of the Lehman Brothers crash. That event changed everything, including ship financing. Before the crisis, it appeared as if banks and other lenders did not put the right price on risk, meaning that you could obtain the same conditions regardless of whether your new build would go directly into a 10-year time charter with an OIL, GAS & SHIPPING MAGAZINE www.ogsmag.com

“A global network of LNG bunkering facilities is needed before shipping can fully embrace this new fuel option”

A-rated financially rock solid counterpart or trade fully in the spot market at its mercy. Today, the price-setting of risk has “normalised”. Many of the lenders now have to hold higher reserves if they want to lend out to shipping interests, due to regulations like Basel III, as well as a more cautious approach to shipping lending, as banks attach a higher risk to the shipping industry today than before. This means financing is more expensive and more difficult to get. In theory, this development has resulted in ship owners seeking financing elsewhere and there are many options to choose from, i.e. bond issues, private equity, export credit agencies etc. Bank lending remains the preferred option, however, as fewer strings are attached it. While financing is more difficult to obtain today, you cannot say those difficulties have resulted in a significantly lower number of new build orders. What are the key variables affecting shipping freight rates in the current market? It is the same “2 times 5” fundamental variables that have always affected the freight rates. On the demand side we have world economy, seaborne trade, average haul, random shocks and transport cost. On the supply side we have world fleet, fleet productivity, shipbuilding production, scrapping and freight revenue – all in order of importance. Certainly, we have a “new normal” in shipping, but that only means that we have to get used to slower growth rates and adapt to that in our decision making. In terms of the freight rate mechanism, an oversupplied market finds its equilibrium freight rate on the elastic part of the supply curve. An example of this is the current dry bulk market. Only 40

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when all ships are in service and operate at a more normal speed level does the supply side become inelastic and freight rates become very sensitive to changes in demand. An example of this is the current crude oil tanker market. LNG is considered by many to be the fuel of the future. What are your views? In 1912, M/S Selandia marked the beginning of a new era in shipping as it was the first large diesel-powered ship; until then coal-burning steam ships had been used. Nevertheless it took many years for the merchant fleet to become fully diesel-powered. Some of the reasons for that we also see today for one of the fuels of the future – LNG. First and foremost, availability is key. I know that Gibraltar is committed to add LNG bunkering to its already wide pallet of services to industry, and a global network of LNG bunkering facilities is needed before shipping can fully embrace and enjoy this new fuel option. Beyond the pioneering environment of Scandinavia, I believe we are going to see this develop along the liner trade lanes first. Later, tramp shipping will join in, when LNG bunkering becomes more widely available. It is still premature to say when we will see LNG being offered to the shipping industry as a fuel next to oil bunkers everywhere. That’s why remembering M/S Selandia puts things into perspective – eventually it will happen. What are your thoughts on Gibraltar as a shipping centre? It’s a unique location where the Med meets the Atlantic, in the middle of continents and trading lanes and a shipping centre with more and more services being added as we go along. Gibraltar has the fundamentals in place to become an even more important player in the market in the future.

Interview: Peter Sand

What attracted you to the shipping industry in the first place? I love economics and geography and have a general interest in understanding what goes on in the world. In our industry these are central pillars. I also realised quickly that our industry attracts all kinds of people from all kinds of backgrounds from all over the world. We have adventure in common. Having spent a decade in shipping, I take pride in being a part of the global family that our industry truly is. As well as being an analyst, you also teach maritime trainees. How important is training and development in this industry? I would say it’s all-important. For seafarers as well as landlubbers. Knowledge needs to be passed on to the next generation of shipping people. BIMCO has a lot of family-owned businesses in our membership and for them passing on a lifetime of experience and know-how to the sons, daughters and other relatives or partners is essential. But they can only pass on so many things. BIMCO assists with “all the rest”. Be it technical guidance, contractual knowledge, education or our vast database of information, the BIMCO staff is ready to service members across the shipping industry. Your favourite book? As a professional it’s Stopford’s Maritime Economics. You take something new from it you every time you read it. As a private individual – I am a sports fan, crazy about motorsports, football and cycling. Right now I am speed-reading the memoires of a life on a bicycle, by the former cycling professional with Team Telekom etc, Brian Holm. The book is called Enjoy the pain (Originally: Smerten - glæden). Full of humour and insights from an enclosed world.

After reading his more recent book this summer, which was focused on his year of ups and downs, as sporting director with HTC Highroad in the year 2011, ending with Mark Cavendish becoming the World Road Cycling Champion and the dissolvent of HTC-H team, I needed more – and I got it. Your favourite ship? As a professional it would be the Panamax dry bulk carrier Nord Navigator. She took me on a journey from Hamburg to Sveagruva on Svalbard in November 2014. This was a huge experience and it brought me a richer picture of the entire industry. I enjoyed extraordinary hospitality on board as I got to know the entire crew during their daily work. Admittedly, we did also share a few songs on the karaoke machine. Wonderful people. In many ways this journey also epitomises what shipping is all about – relationships. Thanks to my former colleagues at D/S Norden for given me this opportunity and making it happen. As a private person, it would be my kayak, or rather my kayak clubs. This summer I took my license to prove I had obtained the basics of how to handle such a “ship”. Being on the water as a rookie, you need to be fully focused. If you’re not, you’ll end up in the lake. During my training I earned the nickname: “pool attendant”; I guess it was due my multiple capsizing. Today I normally stay in the kayak. Paul González-Morgan Editor, Gibraltar Shipping Email: shippinggib@gmail.com Twitter: @ShippingGib Web: www.gibraltar-shipping.com OIL, GAS & SHIPPING MAGAZINE www.ogsmag.com

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Turkey: A potential oil & gas hub Ozan Karaduman and Direnç Bada of Istanbulbased law firm Gun + Partners examine Turkey’s potential to become a global oil & gas hub

urkey is a country almost barren of oil and natural gas resources. Its production is minimal when compared to its hydrocarbon rich neighbours such as Azerbaijan, Russia, Iraq and Iran. Although recent exploration activities suggest a potential in terms of oil and natural gas, Turkey is not expected to be an important oil or natural gas producer in the short or even mid-term. Although Turkey does not have the natural resources of its neighbours, it still has a specific advantage, however. It is located between the oil rich countries and the highly industrialised western economies which are large oil and natural gas consumers. Turkey bridges the gap between the energyhungry West and the energy-rich East and is a connection point between the supply and demand of oil and natural gas. However, at present Turkey does not actually connect this supply and demand and does not currently use its potential. Throughout history, oil and natural gas have never been separated from politics. The recent problems with Russia accelerated Europe’s searches for alternative sources of supply and Turkey has now become their principal focus. With the 44

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outstanding strategic importance its geographic location plays, Turkey is considered to be essential for the future of Europe’s energy security. Currently, crude oil and natural gas are carried via land pipelines to and within Turkey from countries such as Russia, Azerbaijan, Iraq and Iran. Crude oil is then transferred to oil tankers at the end-points of the oil pipelines destined to go to refineries in Turkey or abroad. Natural gas is mostly fed-in to the national transmission infrastructure for domestic consumption except for the Turkey-Greece pipeline which feeds the Azeri natural gas to Greece. In exceptional circumstances, it is also possible to transport crude oil via road or rail. However, this article will focus on the transportation of oil and natural gas into and out of Turkey via pipelines and Turkey’s efforts to develop the pipeline projects to become an energy hub in its region. Legal framework The main legislation for transporting oil and natural gas through pipelines is the Law on Transit Pass of Oil through Pipelines dated 23 June 2000 (Pipeline Law). The Oil Market Law dated 4

December 2013 and the Natural Gas Market Law, 18 April 2001 are also relevant as these laws regulate the transmission and transportation of oil and natural gas within Turkey. Finally, the Decree on Transportation of the Crude Oil and Jet Fuel via Road or Railway published in the Official Gazette dated 11 November 2011 (Decree) is of importance as it prohibits the import, export and transit of oil through roads and railways unless a specific

â&#x20AC;&#x153;Turkey bridges the gap between the energy-hungry West and the energyrich Eastâ&#x20AC;? permit is obtained for such actions. The permit is obtained from the Ministry of Customs and Trade (MCT) only in cases

where the importation, exportation or transit of oil via roads or railways is beneficial to the interests of Turkey. In addition to the exceptional cases of transport by road and rail, oil and natural gas can be transported by sea. However, pipeline projects are preferred instead, since they have the ability to transport larger amounts of oil or gas, reduce the risks involved and ensure better accountability. Although this type of project requires considerable capital, it is nonetheless the economically most favourable method overall. The Pipeline Law aims to regulate the main principles and procedures of pipeline projects and for many issues it leaves room for the regulations of international treaties signed/to be signed for construction and operation of such pipeline projects. This is a practical approach as a pipeline project can cover many countries and it would not be wise to regulate all the issues related to such a project with a domestic law. The Pipeline Law mainly sets the principles regarding the local part of the pipeline projects such as how the expropriation will be made, how the security of the pipeline will be maintained, whether insurance for third party liability is required, etc. OIL, GAS & SHIPPING MAGAZINE www.ogsmag.com

Article 6 of the Pipeline Law states that the security of pipelines will be maintained by the state security forces and Article 10 requires that a third party insurance policy be made to cover the losses of any third party arising from the pipeline. Completed oil pipeline projects Although Turkey has not maximised its geographical potential to be an oil and gas hub, this does not mean that the country has not made any progress, however. Turkey currently has a number of completed international oil and gas pipelines which are operational and is developing new pipelines. The Baku-Tbilisi-Ceyhan Crude Oil Pipeline Project (BTC) came from an agreement between Turkey, Azerbaijan and Georgia and was approved by the Turkish government in June 2000. This is a 1,768-kilometer-long crude oil pipeline connecting Baku, the capital of Azerbaijan, to Ceyhan via Tbilisi in Georgia. The oil coming out at the end-point in Ceyhan is shipped around the world by oil tankers. The first batch of oil was transported in 2005 and arrived in Turkey in 2006. From then to the end of 2014, 2.1 million barrels of oil have been carried around the world from here. The Turkish Petroleum International Corporation (TPIC) owns 6.53% of the project. The Azerbaijan and Georgia sections of the pipeline are operated by BP on behalf of its shareholders in the BTC company, while the Turkish section is managed by BOTAŞ International Limited (BIL). The Iraq-Turkey Crude Oil Pipeline Project was the result of a 1973 agreement between Turkey and Iraq and approved by the Turkish parliament in March 1986. This pipeline connects Kirkuk to Ankara. The stored oil is shipped around the world. In 2014, it was recorded that 55.9 million barrels had been carried through this pipeline. Because of the problems in Iraq, however, Turkey has not benefited from this pipeline to the extent originally expected. 46

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Completed natural gas pipeline projects The 1,213 kilometre Blue Stream Natural Gas Pipeline Project was agreed between Turkey and Iraq and approved by Turkish government in May 1998. Blue Stream carries Russian gas to Turkey through the Black Sea. The Russian section is owned and operated by Gazprom, while the Turkish section is owned and operated by BOTAŞ. Italian Eni acted as a key partner involved in the project, especially during the construction period. The first gas supply was transported in 2003. The Baku-Tbilisi-Erzurum Natural Gas Pipeline Project was approved in December 2001. The project was built in parallel to and with the same principles as the BTC Crude Oil Pipeline project, and carries Azeri gas to Turkey. The first delivery was received in 2007 and the agreement is presently in force. The Interconnector Turkey-Greece-Italy (ITGI) Pipeline was approved in 2004 and carried its first delivery in 2007. The 296 kilometre ITGI Pipeline carries Azeri gas to Greece from Turkey and is recorded to carry 705 million cubic meters per annum. There are plans to extend the project to Italy, although there are no specific developments on that yet. The Tabriz-Ankara Pipeline is the result of an agreement between Turkey and Iran to carry Iranian gas originating from Tabriz to the Turkish capital Ankara, through Anatolia. This pipeline has a potential to transport 10 billion cubic metres per annum. Ongoing natural gas projects The TANAP Natural Gas Pipeline Project was agreed between Turkey and Azerbaijan in June 2012 and approved by theTurkish Parliament in January 2013. The primary goal of the TANAP Project is to deliver natural gas produced in Azerbaijan’s Shah Deniz-2 gas field and other areas of the Caspian Sea, primarily to Turkey, but also to Europe. TANAP will run through 20 provinces in Turkey until it reaches the end of

Turkey: A potential oil & gas hub

its course at the Greek border in the Ipsala district of Edirne. TANAP constitutes part of the Southern Gas Corridor along with the South Caucasus Pipeline (SCP) and the Trans-Adriatic Pipeline (TAP). The TAP will connect to this pipeline to convey natural gas to European states, initiating at the Greek border beside the Ipsala district. TANAP will secure the delivery of gas to European markets, while also satisfying the growing demand for natural gas in Turkey. The State Oil Company of the Azerbaijani Republic

Turkey is heavily dependent on Russia for natural gas and needs an alternative source (SOCAR) holds 58 per cent of the total stak The country is heavily dependent on Russia for natural gas and needs an alternative source es, while the state-owned Turkish company, BOTAŞ, holds 30 per cent. Construction of the project began on 16 March with the attendance of the Presidents of Turkey, Azerbaijan and Georgia. The Turkish Stream Pipeline is a proposed project to transport Russian gas across the Black Sea to Turkey and the rest of Europe. The proposal was announced by Russian president Vladimir Putin on 1 December 2014, during his state visit to Turkey and is expected to replace the South Stream Pipeline project. The planned capacity of the pipeline is to carry 63 billion cubic meters of natural gas per annum. This would mean that Turkey would receive about 14 billion cubic meters per annum, while the rest of the gas transported is planned to be exported

to Europe. The negotiation process between Turkey and Russia, however, is currently suspended. Conclusion Currently, Turkey is neither a corridor nor a hub for oil & gas but the potential of becoming a corridor or even a hub is there. Turkey has every reason to develop new pipeline projects; despite the financial turmoil, its economy continues to grow which results in greater consumption of oil and gas. The country is heavily dependent on Russia for natural gas and needs an alternative source. Its oil rich neighbours Iraq and Iran are both more than willing to supply it. Europe’s oil and gas consumption increases constantly and Russia’s gas supply plays an important role for that demand as well. It is no secret that Europe also searches for an alternative. The barriers for taking Iranian gas and oil will hopefully be revoked for good as a result of the nuclear agreement, which will create an important source of supply. Iraq has the potential to be an even more important supplier if the issues between the northern regime and the central government can be resolved and the risks of war are reduced. Turkey’s domestic needs and Europe’s requirements for alternative sources of supply create an excellent potential for the development of new oil and gas pipelines crossing the country. Turkey needs to aim not only for transition fees but also for enabling off-take stations within Turkey and for ownership rights over a considerable capacity so it can overcome its lack of oil and gas resources, begin to use its geographical potential and establish itself as an oil and gas hub. Ozan Karaduman is managing associate and Direnç Bada a trainee associate at Istanbul-based law firm Gun + Partners OIL, GAS & SHIPPING MAGAZINE www.ogsmag.com

Mercy Ships: Returning to Madagascar

Looking forward to another nine months of changing lives and transforming healthcare

his month there will be a familiar sighting from the beaches of Toamasina. For the next nine months the Africa Mercy will return to her berth where along with her all-volunteer crew she will bring hope and healing to the people of Madagascar. Not only will the ship be returning, but many of the ship’s dedicated volunteer crew will also be re-joining Mercy Ships to continue its work of changing lives and transforming the level of healthcare on offer. One such volunteer is Michelle White, an anaesthetist from Bristol who has been volunteering on the Africa Mercy since 2005. Initially, Michelle volunteered on the ship for a few weeks every year, however in 2012 she became a full-time volunteer and now enjoys the roles of Medical Capacity Building Director and Assistant Chief Medical Officer. Reflecting on her experience so far as a Mercy Ships volunteer, Michelle said: “My personal dream would be that there wouldn’t be a country in Africa or anywhere else in the world without 48

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“There is no better feeling than knowing you’ve given hope where there was none before”

Mercy Ships As a chaplain, Patricia is part of a team that supports the Africa Mercy crew, whilst her husband Tony is the senior biomedical technician on board. Explaining why she continues to volunteer year after year, Patricia said: “My job affords me a lot of joy

Michelle White

and special moments. I love talking to the crew. I love seeing our crew in their place of work. I love when we are on our field service and you can go down to the wards and talk to our patients. “I just love my job. It’s very difficult for me to pick out any one thing. It’s not about me or what I can do. It is always about what I can learn from the people we are serving.” As the world becomes a more volatile place, volunteers like

Pat Royston

a paediatric anaesthetics service able to support the surgeons doing the surgery. But dreams will always remain just that if no one is willing to act. I think this is why humanitarian work is so important. It turns dreams into actions and a real feeling of hope for those around the world who have had theirs dashed. “This is why I continue to volunteer with the Africa Mercy as there is no better feeling than knowing you’ve given hope where there was none before.” Michelle works tirelessly to improve the education surrounding safer surgery, training local healthcare workers to promote the WHO Surgical Safety Checklist and is working to pioneer new ways of implementing this tool in low income countries. It is her enthusiasm and kind nature that has encouraged many others to give up their annual leave to volunteer and serve on the ship. Another long-term volunteer who will continue to dedicate her time for the second field service in Madagascar is Patricia Royston, who has been serving on the ship with her husband Tony since 2008.

Michelle White and the Roystons have never been so important and their compassion never more needed. Over 2,000 surgeries are planned during this time as Mercy Ships continues its work of changing lives and transforming the nation of Madagascar. * * * Mercy Ships is an international charity which operates the world’s largest civilian hospital ship, the Africa Mercy, providing free healthcare services to people living in developing countries in Africa, where the services of professional medical staff are most needed. Professionals including surgeons, dentists, nurses, health care trainers, teachers, cooks, seamen, engineers and agriculturalists donate their time and skills to the effort.

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Lerus Group: Inspiring training solutions In less than ten years a crew management agency in Ukraine has grown into one of the worldâ&#x20AC;&#x2122;s premier providers of specialist training for the offshore sector

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uslan Gromovenko founded Lerus in 2007 in Odessa, Ukraine, as a crewing agency and ship service company to serve the northern Black Sea ports. In less than ten years the company has grown to become the owner and operator of one of the biggest offshore training centres in the world and a consultancy service specialising in dynamic positioning, lifting equipment and personnel assessment. “Our main activities are crew management, offshore training, consultancy and ship service,” confirmed Gromovenko. “Our ship service department operates along the north coast of the Black Sea and provides a wide range of services including survey and maintenance of life-saving appliances, life and rescue boats, firefighting equipment supply and chandlery services. We launched the training centre in 2012 and the consultancy department in 2014.” As you might expect, Gromovenko has a seafaring background himself, having sailed as a marine engineer with offshore and merchant fleets around the world. “I’m familiar with the conditions, and the ups and downs of seafarers’ work,” he says. “You have to meet high standards, perform your duties safely and remember your family’s expectations – they want to see you come back home just like you left, so you can enjoy what you worked hard for.” The oil and gas industry has always expected high standards from its offshore employees, but ‘training on the job’ is not 52

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Ruslan Gromovenko appropriate nowadays with all the technology on board modern vessels, and the increasing emphasis on safety and environmental issues. This is a potentially dangerous industry and accidents can be catastrophic, so it is absolutely imperative that the industry should have a skilled workforce capable of responding to emergency situations, wherever they occur. It has been historically difficult however, for Eastern Europeans to get the best training without paying high premiums. Attending

Lerus Group

specialized offshore training courses in the UK or other European countries involves visa issues, travel expenses, course fees, hotel accommodation, etc.

“We launched the training centre in 2012 and the consultancy department in 2014.” “The idea to open a local training centre popped into our heads in 2011,” said Gromovenko. “All the necessary equipment and software was installed in Odessa by the end of 2012, then Lerus

Training became a member of the Nautical Institute training scheme in April, 2013. Now we train students from Europe, Africa and the Middle East.” There is much more to safety in the oil and gas industry than avoiding explosions on oil rigs like in the Gulf of Mexico. This is a dynamic, fast-paced and demanding global industry and its requirements for safety and emergency training are many and varied. Modern vessels can be extremely large in relation to offshore installations and an impact due to control or mechanical failure can result in serious damage. The vessel itself may well be able to limp away for repair but a mobile unit may have to cease operation and be towed away. To avoid such eventualities, expertly-trained and experienced

Class B Simulator at Lerus OIL, GAS & SHIPPING MAGAZINE www.ogsmag.com

All the equipment and software was installed in Odessa by the end of 2012 and Lerus Training became a member of the Nautical Institute training scheme in April 2013 54

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Lerus Group

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instructors at the Lerus Training Centre give masters and crew a realistic offshore training experience to provide them with the appropriate skills in a safe and controlled environment. Training is organised into five main groups: ship handling, dynamic positioning, offshore crane operator, helicopter landing officer and helideck assistant, and human resources. Training in ship handling provides an introduction to the offshore environment and an understanding of the basic skills required on board ship, along with the opportunity to practise them in a Kongsberg simulator. A five day course for deck officers would cover (among other things) basic manoeuvring theory, calculation of wind and current and their influence on the operation, basic knowledge of offshore installation terminology, safety of personnel, vessels, offshore installations and the environment, risk assessment and contingency planning for emergencies such as thruster, rudder or propeller failure, and an introduction to dynamic positioning. The course includes practical exercises on the full mission offshore support vessel simulator in various weather conditions and in different working situations, with full feedback sessions after each completed operation.

Dynamic positioning

Dynamic positioning (DP) is at the heart of the Lerus Training Centre’s prospectus, having rapidly become a core technology of the offshore industry. DP is the term given to the computercontrolled system that maintains a vessel’s position and heading automatically by using its own propellers and thrusters. Position reference sensors, combined with wind sensors, motion sensors and gyrocompasses, convey information to the computer in relation to the vessel’s position and the magnitude and direction of the environmental forces affecting it. “Dynamic positioning is the modern computer system for keeping a vessel in a static position in any environment,” says Gromovenko. “Imagine a diving support vessel, for instance, with 56

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divers working underneath on inspection or repair; the vessel must be able to stay immediately above the divers.” Anchors are not as precise, he explains, because heavy current or wind can move vessels around their anchors. “Fifty years ago they used anchors, but now we have DP.” Dynamic positioning may be either absolute, when the vessel’s position is locked to a fixed point over the bottom of the sea, or relative to a moving object like another ship or an underwater vehicle. The vessel may also be positioned at a favourable angle towards wind, waves and current, called weathervaning. DP is now routinely fitted in a range of vessel types, including drilling rigs, offshore support vessels, floating production units, survey vessels, shuttle tankers and more. These vessels frequently need to conduct safety-critical operations close to platforms or other fixed structures. Properly trained DP operators are essential for the vessel to work to its maximum efficiency.

“Dynamic positioning is the modern computer system for keeping a vessel in a static position in any environment” The industry-recognised route to becoming a qualified DPO is the successful completion of training courses accredited by the London-based Nautical Institute, which has managed the DP Operator training scheme since its inception in the mid 1980s. For prospective DPOs the Lerus Training Centre runs a five day basic induction course which is a mixture of theoretical sessions and practical exercises on Kongsberg DP stand alone simulators. Assessment is by tests in which a successful candidate must achieve 70% correct answers, and then go on to complete

Lerus Group a minimum of 60 days seagoing DP familiarisation. They then return to the Centre to take the advanced course and follow that with a minimum of 60 days watchkeeping on a DP ship. Lerus also runs a course for engineers in Maintenance of DP Systems, and for people who work with failure mode and effect analysis (FMEA) in relation to DP it has an FMEA Familiarization course. Kongsberg makes a range of simulators and Lerus has a full set. “The Class A simulator is the 360o view full mission simulator with the ability to run seven different types of vessels plus a semi submersible rig,” explains Gromovenko. “We also have a class B which allows us to run another small bridge with a 270o view, and we have two class Cs which are single consoles specially designed to train newcomers to the DP industry.”

“In real life a captain would never let a student handle a vessel, but with our training vessel we can let the student run it by himself to feel how it responds, how it moves” Lerus also has an offshore crane simulator on which the crane operator can work on the rig or on the vessel. “We can carry out ship to ship transfers,” adds Gromovenko, “and we can simulate loading and unloading, anything that you need to do.” However good the simulators are (and these are the top of the range) it’s not quite the same as being out on the ocean. Lerus is unique in having a chartered DP-equipped ROV support vessel and now offers an on-board DP course, aimed at students undergoing their familiarisation period. “We teach the students to handle the vessel themselves, under the supervision of a

master,” says Gromovenko. “In real life a captain would never let a student handle a vessel because the captain is responsible for that vessel, but with our training vessel we can let the student run it by himself to feel how it responds, how it moves. We have 100% positive feedback from students.” A new course in the planning stage will use the same vessel for on-board training of ROV pilots. “We plan to run an ROV course from October,” Gromovenko continues. “We just need to finish getting the curriculum together and the handbook for the students and then get approval from the accreditation society. We intend to use the vessel for both DP students and ROV students so the vessel will be in DP mode and at the same time the ROV students will be having DP practice. It’s a double-win.” Another project in the pipeline will be another world-first, as Lerus is working with the Nigerian government to set up a training centre on-board a multipurpose support vessel to train Nigerian seafarers. “At any one time there are approximately 350 vessels in operation offshore Nigeria,” explains Gromovenko. “Seventy five per cent of the crew are from overseas. That means that millions of dollars are going overseas and the Nigerian government would like to revert them back to Nigeria, but they do not have enough people qualified to work on these ships. Many of their sailors have only fishing boat experience. “We are talking with the Nigerian government about training 100-200 seafarers a year, and they will be fully trained, from A-Z. Every trainee will have it stated in his experience book that he has spent some time training on a real offshore vessel. As a prospective employee he will have real on-board experience of what it’s like to work on a vessel, he will be familiar with the structure and the safety procedures and drills, etc. You can’t duplicate that exactly onshore. Whatever equipment you have, and Lerus has the most expensive in the world, it’s still a classroom. It’s close, but it’s not 100%. Here they will be trained in the same environment they will work in.”

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The class A is a 360o simulator with the ability to run seven different types of vessel plus a semisubmersible rig

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Lerus Group

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Lerus Group Lerus has its sights set on expansion even further east, however. Its first branch opened in Singapore in July 2014 and a second is planned for Indonesia in 2016. “This is a hard time for the industry,” admits Gromovenko, “but we have plans to develop our business because we see opportunities for growth. “We see the main opportunities in the developing countries of the Asia-Pacific region,” he continues. “Indonesia, Malaysia, Vietnam, Thailand, etc. Their onshore and offshore oil & gas reserves have become one of the main sources of potential growth for these countries, but to develop new fields and projects they need new technologies and a qualified labour force – engineers, seafarers, managers, etc. We are ready to meet this demand and offer our experience, investment and technologies to train the necessary workforce.”

“We save a lot of time for our recruitment clients by having an office in Singapore; they don’t have to wait for Ukraine to wake up” The Singapore branch provides crew management services and represents Lerus’ training and consulting departments for efficient communication with clients. “Singapore is the hub of the maritime business but it’s five or six hours ahead of us,” says Gromovenko. “We can save a lot of time for our recruitment clients by having an office in Singapore, so they don’t have to wait for Ukraine to wake up before they can get an answer.” The offshore sector has had a tough 12 months and many operators have cut back on recruitment and nonmandatory training. Despite all that, Lerus has managed to find opportunities for expansion. “You have to face these challenges with head held high because this is an opportunity to show your ability to be stable, efficient and ready for quick changes in hard times. We have to be proactive within the current economic climate to be ready for the future. Our main mission is to assist the offshore sector to get qualified and well trained personnel to complete their project without accidents.” Gromovenko believes that long term relationships with partners are key to a company’s success. “You have to work hard every day and show that you understand the current needs of partners and be willing to adapt to future changes in the market. “The most important project in our immediate future is to establish an offshore training centre in Jakarta. Indonesia is a developing country and the new government supports investors establishing new projects in Indonesia. Our main objective is to improve the competence level and skills of the offshore employees who will work in the waters of Indonesia and the Asia Pacific region.”

Offshore crane simulator at Lerus

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Clair Ridge Installation QUID & GM modules- BP PLC 64

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Group: Continuing to succeed Oil and gas giant BP, with its global workforce of more than 83,000 people, continues to be an innovative force in today’s marketplace and one project more than any other highlights this – Clair Ridge.

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BP Group

Clair Ridge GM & LQ modules onboard Dockwise Mighty Servant- BP PLC

lair Ridge is a £4.5 billion investment in the second phase of development on the Clair field, which lies 75km to the west of the Shetland Islands. The project will comprise two new bridgelinked platforms, as well as new pipeline infrastructure to connect to processing facilities on Shetland. Production from Clair started in 2005 from the first phase facilities, which are designed to continue producing until 2028. About 80 million bbl have been produced thus far. Oil and gas is exported via pipelines to the Sullom Voe terminal on Shetland where it is processed. Full production is expected to commence in late 2016. The Clair reservoir was first discovered in 1977. In the 1980s ten appraisal wells were drilled. This activity demonstrated that the structure extended to an area of some 400 square kilometres (150 sq mi) with static oil-in-place, although it failed to confirm the presence of economically recoverable reserves. Two further wells were drilled in 1991, two in 1992 and one in 1995. In 1996 there was a breakthrough in the drilling and extended well testing (EWT) of one well. The EWT was followed by the side-tracking of an offset well into the pressure sink created by the EWT. The 1996 well test results set the scope for the 1997 drilling programme and triggered interest in a first phase of development. Two further wells were drilled in 1997 to appraise the ‘Graben’ and ‘3A’ segments to reduce uncertainty in these areas adjacent to the core area. In May 1997 it was agreed by the Clair partners to jointly develop the field. BP was appointed as the operator and programme coordinator. A development plan was approved 66

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in 2001, representing an investment of £650m by BP and its partners, ConocoPhillips, Chevron and Shell, in the project. The production facilities were installed in 2004. The first stage of the development was inaugurated on 23 February 2005. The project primarily involves the installation of two bridgelinked platforms at a water depth of approximately 140m, the drilling of 36 wells (26 producing wells and 10 water injectors), and a tie-in to the existing Clair Phase 1 export pipeline system. The platforms will include a drilling and production (DP) platform and a 9,000t quarters and utilities (QU) platform. The installation of the DP and QU steel jackets weighing 22,300t and 9,000t respectively was completed in August 2013, while the topsides are expected to be installed late in 2015. Initial drilling works for the project include the pre-drilling of seven wells using an eight-slot subsea template with the help of a semi-submersible drilling rig. The remaining wells, on the other hand, will be drilled by the DP platform over 12 years.

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The project involves the installation of two bridge-linked platforms at a water depth of approximately 140m, the drilling of 36 wells and a tie-in to the existing Clair Phase 1 export pipeline system

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BP Group

Clair Ridge Installation- LQ module approach- BP PLC

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Clair Ridge InstallationLQ module- BP PLC

“In Norwegian tradition the platform jackets have been formally named. The largest is called Odin, after the most powerful Norse god. The smaller jacket has been named Frigg - Odin’s wife” The produced oil will be exported to the Sullom Voe Terminal (SVT) via a new 6.5km long and 22in diameter pipeline connected to the existing Clair Phase 1 oil export pipeline, whereas the produced gas will be exported to the SVT via a new 14km long and six inches diameter pipeline connected to the west of the Shetland pipeline system. 70

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In August last year BP and its co-venturers confirmed the safe installation of the Clair Ridge platform jackets, a major milestone in the Clair Ridge project. The platform jackets were made at the Kvaerner yard in Verdal, Norway. In Norwegian tradition they have been formally named. The largest is called Odin, after the most powerful Norse god, reflecting the size of the jacket. The smaller jacket has been named Frigg - Odin’s wife. In June this year BP announced the safe installation of the new Clair Ridge platform’s quarters and utilities (QU) topside modules, and so another milestone is achieved. The QU platform comprises three modules—the quarters and utilities integrated deck (QUID), which has a lift weight of 9,400te; the power generation (GM) module, which has a lift weight of 4,550te; and the living quarters (LQ) module, which has a lift weight of 2,210te. They were safely lifted onto the pre-installed jackets by the Heerema Thialf heavy-lift vessel. “The safe installation of these three topside modules is a fantastic

BP Group

Clair Ridge quick facts Clair Ridge is a £4.5 billion investment in the second phase of development The Clair reservoir was first discovered in 1977 BP was appointed as the operator and programme coordinator in May 1997 The installation of the DP and QU steel jackets was completed in August 2013 The Clair Ridge development will be able to produce an estimated 640 million barrels of oil over a 40-year period, with peak production expected to be up to 120,000 barrels of oil per day The produced oil will be exported to the Sullom Voe Terminal via a new 6.5km long pipeline connected to the existing Clair Phase 1 oil export pipeline

achievement by the project team,” said Trevor Garlick, regional president for BP’s North Sea business. “In a challenging time for the industry, this project shows the potential of our basin and why it is so important that we work to ensure a competitive future business.” BP describes Clair Ridge as the first sanctioned large-scale offshore enhanced oil recovery scheme using reduced salinity water injection to extract a higher proportion of oil over the life of the field. To reduce the environmental impact of the project, the platforms will be powered using dual-fuel power generators, incorporating waste heat recovery technology. Vapor recovery will also be used to capture and recycle low pressure gas for use as fuel or for exporting to shore. The Clair Ridge development will have the capability to produce an estimated 640 million barrels of oil over a 40-year period, with peak production expected to be up to 120,000 barrels of oil per day. The project is headquartered in London, where over 750

people are currently employed. About 30% of the £2.1bn base cost of the project is in the UK and around 80% of the estimated £1.1bn of drilling costs will be spent in the UK. More than 80 British companies are providing engineering design and support services, hook up and installation services, manpower and a wide range of engineered equipment. A project of this size and longevity requires secure, long-term partnerships and BP has made use of its extensive network of suppliers and subcontractors, to ensure Clair Ridge meets cost and timeline targets. In addition, BP has been able to recruit an additional 600 staff internally, including offering new engineering apprenticeships.

Other projects

Clair Ridge is a flagship project, but it’s not the only one. Other significant upstream projects include Kizomba Satellites 2, In Salah Southern Fields, Greater Plutonio 3, Western Flank A, OIL, GAS & SHIPPING MAGAZINE www.ogsmag.com

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KaMOS® Patented Kammprofil

KaMOS® Patented Gaskets for sealing and surveillance - the efficient solution for flanged connections KaMOS® Patented Gaskets verifies correct installation by pressure testing the ring room in flanges.

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Selected references: BP, ExxonMobil, Total, Saipem, Shell, Subsea 7, AMEC, Hyundai, ConocoPhillips, Chevron, PTTEP, Halliburton

“KaMOS® Patented Gaskets to be used, when having too many leakages in flanged connections...”

KaMOS® Patented RTJ

KaMOS® Patented Portable Air-driven Valve Actuator

- the efficient solution for manual valves KaMOS® Patented Portable Valve Actuator increase the effiency when opening and closing manually operated heavy duty valves, head valves and gas transport valves for on- and offshore industry. For valves taking up to 4 man-hours to open and close, KaMOS® Patented Portable Valve Actuator will perform the same work in 5 minutes with only one man to operate.

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Selected references: Statoil, ConocoPhillips, BP, Mærsk, ExxonMobil, Total, AMEC, Score

“If you are spending too much time turning manual valves - Please contact us!”

P.O.Box 484, N-4291 Kopervik, Norway • Tel +47 52 84 43 40 • Fax +47 52 84 43 41 • offshore@kamos.no • www.kamos.no

“By applying the KaMOS® Patented Portable Valve Actuator, a heavy duty valve may be opened or closed within 10 minutes, while the same operation may take up to 2 hours using manual power” - STATOIL

- time, cost & safety efficient -

Sullom voe terminal- BP PLC

Thunder Horse Water Injection, In Amenas Compression Point, Thomson Quad 204, Juniper, Persephone, Oman Khazzan and Thunder Horse South Expansion. All are scheduled for completion between now and 2017. Kizomba Satellites phase 2 is a subsea infrastructure development of the Kakocha, Bavuca and Mondo South fields, tied back to the existing Kizomba B and Mondo floating production, storage and offloading (FPSO) vessels and is expected to recover around 190 million barrels of oil. The project scope includes subsea wells, FPSO topside modifications and installation of flowlines and subsea equipment. The development is located approximately 150 kilometres off the coast of Angola in water depths of around 1350 metres.

“In Salah Gas, a joint venture with Statoil and Sonatrach, is one of the largest dry gas joint venture projects in Algeria” 74

OIL, GAS & SHIPPING MAGAZINE www.ogsmag.com

In Salah Gas, a joint venture with Statoil and Sonatrach, is one of the largest dry gas joint venture projects in Algeria. The venture involves the development of seven proven gas fields in the southern Sahara, 1,200km south of Algiers, and has been onstream since July 2004. Greater Plutonio Phase 3 started up in June this year and is expected to sustain production through the existing Greater Plutonio FPSO, in Block 18, by developing six wells (four producers and two water injectors), connected into the existing subsea infrastructure. The Western Flank A project is expected to extend the production plateau of BP’s assets in the Australian North West Shelf by approximately two years. The project develops the Goodwyn H and Tidepole fields to deliver over 230 million barrels of oil equivalent with five subsea wells tied back to the existing Goodwyn A platform. The project scope also includes brownfield modifications to the topsides and the installation of a new riser. The Thunder Horse field is located around 120 miles southeast of New Orleans in over 6,000 feet of water. Phase 1 of this water injection program is expected to develop 65 million barrels of oil equivalent (gross) of the Pink reservoir resources as well as establishing pressure support. Phase 1 scope comprises refurbishment and replacement of existing topsides and subsea

BP Group existing plant. It is expected to develop 216 million barrels of oil equivalent and to produce 107,000 barrels of oil equivalent per day at its peak. Point Thomson is a remote natural gas field located on Alaska’s North Slope, approximately 60 miles east of Prudhoe Bay. It is estimated to hold about 25% of known natural gas on the North Slope. Processing facilities include separation, compression and utilities plants, three new wells and gathering and condensate export lines. The project is designed to produce 10,000 barrels per day of condensate at start-up. A pipeline is being installed with capacity of 70,000 barrels per day, which will take gas and condensate to the Trans-Alaska Pipeline. The Juniper project includes the construction of a normally unmanned platform, together with corresponding subsea infrastructure. Fabrication began in 2014. The Juniper facility will produce gas from the Corallita and Lantana fields located 50 miles off the south-east coast of Trinidad, in water depth of approximately 360 feet. The development is expected to include five subsea wells and to have a production capacity of approximately 590 million standard cubic feet per day. Gas from Juniper will flow to the Mahogany B hub via a new six-mile flowline. The Persephone gas field is located 85 miles north-west of Karratha, Western Australia, in a water depth of approximately 415 feet. The development concept is a two well subsea tieback to the existing North Rankin complex. This first phase of the Khazzan field development plan involves drilling approximately 300 wells using several drilling rigs. The project is expected to develop circa seven trillion standard cubic feet of gas and deliver plateau production of one billion standard cubic feet of gas per day and 25,000 barrels per day of gas condensate. The full field development involves a 15-year drilling programme, with production tied back to a new central processing facility in Block 61, via a 315-mile gathering system.

Downstream overview

equipment, procurement and installation of new equipment and the drilling and completion of two water injection wells. The South Expansion Project comprises a new subsea drill centre located two miles from the Thunder Horse platform. Three new wells and an existing fourth well are expected to tie-into the new drill centre. Topsides scope is minimal as a result of maximising use of existing subsea infrastructure.

“Point Thomson is a remote natural gas field located on Alaska’s North Slope, approximately 60 miles east of Prudhoe Bay” In Amenas is a wet-gas field, also operated in partnership with Algerian state oil company Sonatrach and Statoil. The field is approximately 810 miles from Algiers and about 40 miles west of the Libyan border. The project scope consists of two gas turbine compressor trains, a new slug-catcher, a produced water surge drum, associated utilities and control systems and tie-ins to the

In 2014 BP saw continued improvement in its process safety and delivered strong operational performance resulting in profit and operating cash flow growth. The downstream segment has significant operations in Europe, North America and Asia, and also manufactures and markets products in Australasia, Africa and Central and South America. It is made up of three businesses. • Fuels includes refineries, fuels marketing and convenience retail businesses, together with global oil supply and trading activities that make up fuels value chains (FVCs). It sells refined petroleum products including gasoline, diesel and aviation fuel. • Lubricants manufactures and markets lubricants and related products and services globally, adding value through brand, technology and relationships, such as collaboration with original equipment manufacturing partners. • Petrochemicals manufactures products at locations around the world, mainly using proprietary BP technology. These products are then used to make essential consumer products, such as paint, plastic bottles and textiles. BP’s high-quality and material project portfolio is set to underpin growth to 2020 and beyond. More than 900 mboed of new net production is expected by 2020 and 2015 - 2020 project margins are set to be over 35% greater than the 2014 segment average.

OIL, GAS & SHIPPING MAGAZINE www.ogsmag.com

STAINLESS STEEL, DUPLEX, SUPERDUPLEX, 6MO & NICKEL ALLOYS STAINLESS STEEL, DUPLEX, SUPERDUPLEX, 6MO & NICKEL ALLOYS

Hot formed butt weld ﬁttings up to 56”

FULL RANGE BUTT WELD FULL RANGEOF OF BUTT WELDFITTINGS FITTINGS FROM WITH FROM PRODUCTION WITH NORSOK M-650 Ed. 44 approval NORSOK M-650 Ed. approval

Cold formed butt weld ﬁttings from ½” to 16”

STAINLESS STEEL, DUPLEX, SUPERDUPLEX, 6MO & NICKEL ALLOYS

In 1988, Raccortubi S.p.A. established Tecninox S.r.l., manufacturer of butt weld fittings in stainless steel, duplex, superduplex, 6Mo and nickel alloys, with the intention of becoming a manufacturer as well as a stockist and supplier. It recognised that, by incorporating the Tecninox production, it could be of added value to its customers thanks to a new-found ability to supply the critical fittings element of a package quickly, on demand and to customer specifications. Over the course of the years, Raccortubi and Tecninox have worked together for the continuous improvement of productive processes via automation, use of advanced technology and evolution of quality assurance, meaning that today the achievement of added value for the client is stronger than ever before. Raccortubi Group can offer customers fittings to NORSOK M-650 Ed. 4 specifications, manufactured by its integrated production plants, from strategically placed distribution points around the world. Raccortubi’s subsidiaries in Dubai, Brazil and Singapore are conveniently located near shipbuilding ports to supply pipes, tubes, fittings and flanges in stainless steel and special alloys directly from stock. Raccortubi Group is making sure that it has fully-tested and certified piping materials in full compliance with the vast majority of end-user requirements at its disposal, from both production and stock, to fulfil customer needs to short timescales.

PETROL RACCORD EXTENDS QUALITY HOMOLOGATIONS WITH NORSOK M-650 Ed. 4 approval Under Raccortubi ownership, Petrol Raccord has renewed its commitment to the most up-to-date quality standards, adding NORSOK M-650 Ed. 4 certificates to its already-substantial collection. Using the hot forming method, Petrol Raccord manufactures butt weld fittings up to 56”, almost without wall thickness limitations, for the oil & gas, power generation and petrochemical industries. It has its own internal laboratory and, thanks to its experience and expertise, holds an impressive number of end-user approvals, as well as ASME certification for the nuclear industry. Both Raccortubi Group’s integrated manufacturing plants, Petrol Raccord and Tecninox, are implementing NORSOK M-650 Ed. 4 standards, which have been cemented in place as part of their day-to-day procedures. Not only are such norms practised without fail, but the resulting top-notch processes and quality controls are constantly under analysis for improvement and further development. By ensuring manufacturing to such specifications at its production facilities, Raccortubi Group is guaranteeing the supply of the highest-quality fittings in stainless steel, duplex, superduplex, 6Mo and nickel alloys in the provision of complete project packages.

raccortubigroup.com