Offshore World - Aug Sep 2014

August - September 2014 Vol. 11 No. 5 ` 150

ADIPEC 2014 Special

OiL

World Expo 2016

International Exhibition & Conference February 2016 | Mumbai, India

Contents

VOL. 11 NO. 5 AUGUST - SEPTEMBER 2014 MUMBAI ` 150

INTERVIEW

OFFSHORE WORLD R.NO. MAH ENG/ 2003/13269 Chairman Publisher & Printer Chief Executive Officer

EDITORIAL

Editor Features Writer Editorial Advisory Board Design Team Events Management Team Subscription Team Production Team

‘Demand of Innovative Technologies was never Greater’ 10

Jasu Shah Maulik Jasubhai Shah Hemant Shetty

– Doug Kelly, Vice President – Refining Technology, KBR

Mittravinda Ranjan (mittra_ranjan@jasubhai.com) Rakesh Roy (rakesh_roy@jasubhai.com) D P Mishra, H K Krishnamurthy, N G Ashar, Prof M C Dwivedi Arun Parab, Prasenjit Bhowmick Abhijeet Mirashi Dilip Parab V Raj Misquitta (Head), Arun Madye

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‘India is a Crucial Market for Mexican Crude Oil’ 14 – His Excellency Jamie Nualart, Ambassador of Mexico to India In the Battle of Oil: Is Europe Heading to Cold War-2?’ 18 – Joao Cravinho, Ambassador for European Union in India & Alexey Novikov, Consulate General of Russia

GUEST COLUMN The Shale Story – Some Realities & Trends 20

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– Kalyan Mukherjee, Senior Manager, Bharat PetroResources Limited

FEATURES Effective Use of CFD in Upstream Engineering 24 – Sumanta Sarkar, Tushar Bhad & Dnyandeo Ingale Valorisation of Stranded/Smaller Gas Field through GTL - Conceptual Design Studies 32 – Megha Aggarwal, Rabindranath Maiti & Ganesh Prasad Integrated Operations Solutions for Upstream Oil and Gas 38 – Saurbh Gupta Energy Commodities Continues Diverse Price Movement 40 – Niteen M Jain & Nazir Ahmed Moulvi

NEWS FEATURES Unconventional Today, Conventional Tomorrow – Nitin Khetawat India - The Mysterious Gas Price Hike 44

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Events Diary Offshore World | 6 | August - September 2014

62

interview

‘Demand of Innovative Technologies was never Greater’ “It is almost impossible to predict the way industry would behave,” says Doug Kelly, Vice President – Refining Technology, KBR, while sharing his experience of nearly three decades in the refining industry on the sidelines of KBR’s annual technology conference in Mumbai with Mittravinda Ranjan.

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Past few decades have been the fastest period of growth for oil and gas industry, says Kelly. He recalls his conversation with one of his dear friends and industry veteran Billy Kleese, former Chairman & CEO, Valero Energy Corp, who once said, “We live in extraordinary times … the rapid increase in production of domestic crude oil and natural gas is the most significant development that I have seen in my more than four decades in the energy business.”

Kelly started his career with one of the leading energy companies and witnessed the changes from very close quarters during the last thirty years of his career.

In his over three decades of career, Kelly feels, application of advanced IT solutions has emerged as a real boon for both the E&P and downstream refining industries; it has given access to the real-time data and helped industry integrate the overall operations and take quick decisions to respond to the fluctuating market dynamics.

Presently, shale gas is being looked upon as the US phenomenon and attracted major investments, but it is expected that this phenomenon will gradually spread over to rest of the world where shale gas reserves have been discovered. www.oswindia.com

The oil and gas industry has seen dramatic shifts, when they are least expected and it is almost impossible to predict the way industry would behave, Kelly expresses. “If you see, shale gas and oil have been there for ever since the hydrocarbon industry started to flourish, but five years back no one could predict what shale would do to the downstream oil and gas industry in the USA and the way it would impact the global oil industry dynamics,” he adds.

Presently, shale gas is being looked upon as the US phenomenon and attracted major investments, but Kelly believes that this phenomenon will gradually spread over to rest of the world where shale gas reserves have been discovered. Russia, for example has the reserves which are close to 75 billion barrels which is a greater number than the available shale gas reserves in the USA. Some of the other countries include – China, Argentina, Libya, Mexico, Pakistan, Canada and Indonesia.

Offshore World | 10 | August - September 2014

interview Maintaining high Gross Refining Margins (GRMs) continues to be the biggest challenge that the refiners are facing world over which will compel them to invest in new technologies.

By 2040, globally, energy demand is expected to grow by 35 per cent, but the oil and gas will continue to dominate the energy mix.

Global Refining Throughput Levels to Increase by One Million Barrels Per Day in 2014 • Middle East and China adding 500 thousand barrels each to global refining throughput levels in 2014 • The higher refining throughput levels in the Middle East are a consequence of new large and efficient refineries in the region Source: Global Data

If one looks at the bigger picture of oil supplies, shale gas availability has partially displaced the Latin American heavy crude oil which is now finding its way into China and India. Availability of light African crudes in the market is also resulting in additional supplies to the global crude basket. The oil supplies from the Middle East - that were earlier directed to North America - are now getting redirected to the Asian markets where the refiners are setting up new capacities with higher complexities to handle the crude mixes ranging from heavier to lighter crudes with economies of scale which has further escalated the competition.

Maintaining high GRMs continues to be the biggest challenge that the refiners are facing world over which will compel them to invest in new technologies. “I do not think that there is a single solution that will fit all refineries, but there are refineries that have made investments based on their current crude slate and there are ones who have long term vision and invested in technologies to allow them flexibility to handle diverse feedstocks. I feel that the need of innovative solutions and technologies has never been greater,” he observes.

Kelly cites the example of some of the developed nations where many refiners are facing the challenge of declining margins as the refineries are getting older. Many refiners in Europe are facing closure because of their inability to compete with the refiners in the US and their inability to maintain the Gross Refining Margins (GRMs) amidst increasing feedstock costs. Kelly notes that globally, more than 70 refineries have shut down and he reiterates that a study has indicated that one out of five refineries may cease to operate within next five years if they do not choose the right operating model.

Across the world, refiners have continued to adopt different growth models like backward integration, vertical integration, undertaking www.oswindia.com

downstream expansions, etc. Historically, tighter integration of refinery and petrochemicals – which were run as two separate businesses, has worked very well and allowed refiners to maximise value creation. In the scenario of refinery and petrochemical integration, it is critical for the refiners to invest in right kind of technologies which allow them to process complex crudes, respond to product demand and meeting the product and environmental specs.

Owing to growing product demand, refiners in Asia and the Middle East have set up greenfield refineries which have the ability to process highly complex crude mixes and invested in high-end technologies foreseeing the future trends and changing compliance norms.

Indian refining capacity is surging from the existing 215 MMTPA as the country aims to get into the league of becoming next exporter of petrochemicals. Already the refiners have capability to process heavy/ medium sour crudes and new refineries - with the ability to process complex crude mixes - are likely to be on-stream in next couple of years.

Indian refiners are enhancing their capacities to cater to the growing fuel demand in the domestic market and comply with the auto fuel policy which mandates all the automobiles to be BS IV compliant by 2017 and BS V by 2020. Globally, we see lot of increase in demand of bottom of barrels technologies and we see lot of interest in VCC technology as the technology enables refiners to convert heavy bottom of barrel products to low diesel products in compliance with the environmental specs as per the auto fuel policy. The regulation further mandates the refiners to produce low sulphur fuels and KBR’s hydroprocessing plays right into that. Kelly is very optimistic about the strong demand of KBR’s coal gasification technology in the near future as it takes low value coal and converts into syn-gas. “I think coal can be a very good cost-effective alternative route for producing syn-gas and further producing downstream petrochemicals instead of using natural gas which the country has to import,” he explains.

We are working very closely with most of refiners in India and some of the challenges that they need to gear up for include being cost competitive especially while competing with the imports from the Middle East at a time when the subsidies on gasoline have already been removed and the same is likely to follow for diesel.

In addition to the refining processing technologies, KBR has a very strong portfolio of automation technologies that allow the refiners to optimise the overall operations.

Offshore World | 12 | August - September 2014

interview

‘India is a Crucial Market for Mexican Crude Oil’ Mexican constitutional reforms to the energy sector under the leadership of President Enrique Peña Nieto has paved the way for foreign & private firms to invest in oil and other hydrocarbon exploration and extraction activities in the country. His Excellency Jamie Nualart, Ambassador of Mexico to India, shares his view on this Pro-Growth structural reforms agenda in detail, in an exclusive interaction with Rakesh Roy.

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After a more than 75-year hiatus, Mexico has opened up its acreages for foreign companies to explore hydrocarbons. Please appraise the reason behind it and what are the responses of global oil majors into it?

Currently, Mexico is going through a Pro-Growth structural reform agenda which main goal is to foster productivity and growth in all sectors. This Agenda, under the leadership of President Enrique Peña Nieto, has been one of the most ambitious reform agendas in Mexican history.

In the past, Mexico´s economic performance has not met its potential, and one of the main reasons behind it is the lack of productivity growth. From 1980 to date total factor productivity growth was −0.7 per cent on an annual average.

We are expecting the attraction of more than USD 50 billion in new private and foreign investment by 2018 as a result of the participation of private sector in the first round of contracts that will be open in mid 2015. www.oswindia.com

The reforms include measures that tackle inhibitors of productivity in key sectors of the economy, and encompass areas such as labor, education, financial intermediation, telecommunications, energy, among others.

The legislative changes incorporate deregulation in the labor market, the protection of creditors’ rights, and the exposure of sectors to competition where the entry of private participants is either completely banned, such as in most areas of the energy sector, or restricted to different degrees, such as in telecommunications.

Offshore World | 14 | August - September 2014

interview It’s worth noting that crude oil is the main export of Mexico to India.

With the recent energy reform, Mexico will effectively increase its role as a secure and important supplier of oil to India, thus strengthening our bilateral trade.

As regulation improves and obstacles to competition diminish, higher efficiency may emerge in related areas, with eventual benefits to our people in terms of higher quality and lower prices for goods and services.

In terms of the Energy Reform and Hydrocarbons, the key element is that the State may participate in oil and other hydrocarbon exploration and extraction activities through assignments granted to our State-owned oil company Petróleos Mexicanos (PEMEX), contracts with PEMEX, and with the private sector. There will be four types of combinable contracts for hydrocarbons: services, profit sharing, production sharing and licenses. The last three will allow transferring contractors geological and financial risks for exploration and extraction. The National Hydrocarbon Commission will be in charge of performing the public biddings, as well as signing and administrating contracts.

of contracts - expected for mid 2015 - will offer foreign and private oil companies the rights to invest in 60 fields covering 3.78 billion BOE in proven and probable reserves and 109 fields covering 14.61 billion BOE in prospective resources.

Accordingly to data from PEMEX, the prospective resources in Conventional are 54.8 billion barrels of oil equivalent, and 60.2 billion barrels of oil equivalent in Non Conventional.

What are the future plans of Mexico government to encourage the more investment in oil & gas sector in the country?

We haven’t started with the promotion of the sector. Just past August 13, SENER (Ministry of Energy) gave the results of Round Zero which already has identified projects that PEMEX will maintain as a productive State enterprise, while the rest will be tendered in the first half of 2015.

Foreign companies will also be allowed to book oil and gas reserves for financial reporting purposes. Reliance and BPCL from India and Exxon Mobil, Chevron, Shell, British Petroleum and Brazil’s Petrobas, among others, have already approached PEMEX and are likely to participate in the first round of biddings. The first private contracts are expected to be announced in the first quarter of 2015.

It is understood that around the fourth week of November 2014 will be announced the pre-bidding that will include the final areas for investment and contracting modality as well as economical and fiscal approach; once this information is out we will be able identify investment opportunities.

How Mexico’s historic opening of the oil sector for the foreign and private players will help in technology transfer?

The Pro-Growth structural reform agenda – especially in the energy sector – implies not only transfer, but development and implementation of new technologies as well. One of the main objectives of the Energy Reform is to provide our country with the required technology and experience to exploit our natural resources, this means technology transfer not only with PEMEX, but with other related sectors in Mexico, giving ways to technology development and innovation which will translate into a modern, competitive and productive sector.

Mexico is playing a pivotal role to meet the energy requirement of India, especially as a substitute oil supplier during the western economic sanction on Iran. Moreover, as per report, over 85 per cent of Mexico’s exports to India were crude oil in 2013, so can you brief our readers about how will Mexico play its role as a secure and stable partner towards India’s energy security vision?

The comprehensive reform opened up the energy sector to private and foreign investors for the necessary modernization of the oil, gas and electricity sectors as well as to drive forward the country’s renewable energy sector.

Foreign companies - Indians included -, as it was mentioned, will be able to bid on profit-sharing contracts to either jointly or individually participate in Mexican oil and gas exploration, production, refinement, transportation and storage which up to now have been controlled by PEMEX.

Please brief us about the overall potential of oil & gas sector - both conventional & unconventional - of Mexico that will attract the global oil majors to invest in the hydrocarbon sector of the country?

We are expecting the attraction of more than USD 50 billion in new private and foreign investment by 2018 as a result of the participation of private sector in the first round of contracts that will be open in mid 2015.

Currently our Government, through the Ministry of Energy has assigned, under the ‘Round Zero’, 83 per cent of the Country’s proved and probable reserves to PEMEX and has also granted 21 per cent of prospective resources. This allocation covers 90,000 sq. kilometers and contains an estimated 20.6 billion barrels of oil equivalent (BOE). The following Round www.oswindia.com

In that context, several opportunities will be available for Indian companies in Mexico’s energy sector, especially in all the stages of oil and gas production.

It´s worth noting that crude oil is the main export of Mexico to India.

With the recent energy reform, Mexico will effectively increase its role as a secure and important supplier of oil to India, thus strengthening our bilateral trade. Nonetheless, there has been a substantial increase in our commercial exchanges, from 1.8 billion in 2006 to almost USD 7 billion in 2013. In 2012, for example, India was our 7 th most important trade partner in the Asia Pacific region and the 19 th worldwide.

Offshore World | 16 | August - September 2014

interview

In the Battle of Oil: Is Europe Heading to Cold War-2?

In a move to get a better insight into the current geopolitical development in Europe and the impact of western sanction on the entire hydrocarbon industry, Titto Eapen brings the diplomatic perspective on some of the burning issues that concerns India, as well in an exclusive interaction with Joao Cravinho-Ambassador for European Union in India and Alexey Novikov -Consulate General of Russia.

“Russia should respect the sovereignty of Ukraine” leading to a more global price collapse – hence the swift action of the European Commission to introduce emergency market measures.

“Actions led by Russia in violation of Ukraine’s sovereignty, territorial integrity, stability and security are unacceptable and have consequences,” says Joao Cravinho-Ambassador for European Union in India.

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Can you discuss the rationale behind the western sanctions on Russia? And legitimate is the sanction?

The EU and other countries have been continuously urging Russia to stop the flow of weapons, equipment and fighters across the Russian-Ukrainian border.

These actions not only increased, but Russia even sent its soldiers into Eastern Ukraine. After the illegal annexation of Crimea, these actions undermine the sovereignty and territorial integrity of Ukraine and are not in conformity with international law. The EU has applied targeted measures against specific sectors of the Russian economy. These measures are part of a dual-track approach, together with diplomatic initiatives to find a negotiated resolution. They have a clear legal basis and are scalable and reversible. We are talking about a political conflict that has trade ramifications, not the other way around. Actions led by Russia in violation of Ukraine’s sovereignty, territorial integrity, stability and security are unacceptable and have consequences. At the same time, the EU is ready to reverse such measures when Russia starts contributing actively and without ambiguities to finding a solution to the crisis.

How the European market is prepared for a stronger-than-expected move by Russia to ban certain imports from Europe and the United States?

The European Commission remains optimistic that alternative sales outlets can be found for most of the products, in particular in the medium term. It is also clear that certain products and certain regions will face serious difficulties as a result of the Russian measures, especially in the short term. The most immediate concern is that products previously exported are sold cheaply on the EU market,

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How would you lke to respond to the notion that the entire sanction saga against Russia was well choreographed by the US and its allies to wipe out Russian companies from the European Hydrocarbon market and also a move to counter the growing Russian primacy in the Middle East and Asia Pacific?

The EU and its Member States do not have any interest in weakening or downplaying Russia. True, it is difficult today to see if and how successfully the EU relations with Russia will continue under the label of a “strategic” partnership in the short term. Much more effort is needed to reach a comprehensive conflict resolution in Ukraine, and Russia should prove in deeds its respect for international law and the territorial integrity and sovereignty of its neighbours.

EU relations with Russia have still a huge untapped potential and the solution to the conflict in Ukraine is a test for launching a deeper dialogue. The EU is determined to avoid creating a lasting rift on its continent. On the energy side, the EU continues to encourage all possible forms of dialogue with Russia and is engaged in trilateral talks on trade and gas related issues with Russia and Ukraine. The last meeting was held in Moscow on August 29, with the EU as the moderator of this important process.

What will be the right choice for the emerging economies of South Asia, including India, to go for in the long run to meet their energy requirements: is it Eurasia led by Russia or European Union led by US? The EU has technical know-how and expertise which it could usefully share with India; I think more specifically about renewables where India has a declared interest and much could be done in terms of business development and research.

In strategic terms, India is also confronted with a number of bilateral, regional and international factors that leaves limited room for manoeuvring; India’s efforts to enhance its relation with Iran being the most evident illustration of the complicated regional setting where India’s diplomacy evolves. As an increasingly important element of both the EU’s and India’s diplomacy, energy issues should definitively be included among the key topics in our high-level meetings. Diversification of routes and suppliers is a common priority both for India and the EU and where convergence could be found. While engaging at political and diplomatic level with India on this issue, two strategic questions should be taken into account: stabilising Afghanistan (as a gateway to energyrich Central Asia) and engaging with Iran. These are two priorities where the EU is actively involved and both India’s and the EU’s have convergent interests.

What should be the wise approach of India in this East-West stand-off, which has brought us back to the Cold War Era? We have no advice to give to India, which is strongly committed to the respect of international law and the United Nations Charter, but we very much encourage an exchange of views on the evolving situation.

Offshore World | 18 | August - September 2014

interview

“Europe Union and US should respect the International Law” Actually, Western think-tanks themselves initially voiced a suggestion that the sanctions were well choreographed on the grounds of protecting interests of some countries and were hardly concerned with international law. Whatever intentions the above-mentioned countries have towards Russia, we can always ensure realization of our vital interests, despite any external factors.

“The Western Sanction on Russia were well choreographed on the grounds of protecting interests of some countries and were hardly concerned with international law, says Alexey Novikov Consulate General for Russian Federation In Mumbai.”

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How justifiable is the Western Sanction on Russia especially by the same European Union which usually endorses trade Liberalization and Globalization?

First of all, I would like to emphasize that any sanctions lack legitimacy without a mandate of such universally acknowledged authority as the UN. The sanction is not even in compliance with the EU policy with its traditional values and ideals, better to have comments of those responsible for the policy. Interestingly, the recent days saw a number of articles in the European mass media assuming that the sanctions were promoted from the outside in order to hit European economy through degrading strategic ties with Russia.

How will the Kremlin react against the sanction besides a ban on certain import from Europe and the United States?

President Vladimir Putin has already made it clear that Russia will never follow the pattern of some Western countries sacrificing its core economic interests and interests of its people to precarious political speculations. Reciprocating measures taken by Russia on import of certain goods can’t be considered a “ban” or “sanction” in return. They were primarily driven by the idea to exploit the situation to upgrade the goods basket of a Russian consumer and to draw to the market only the highest-quality products manufactured in Russia as well as in other countries.

Can you brief our readers about the notion which is engulfing in some of Russian Media that the entire sanction saga was well choreographed by the US and it allies to wipe-out Russian Companies from the European Hydrocarbon Market and also a move to counter the Russian primacy in the Arctic & Asia Pacific?

With the sanction in place, Russia will certainly look to explore the Asian market and at the same time US led western allies will use all the diplomatic might to foil the Russian proximity with the Asian & Indian market, so according to you, who will be the right choice for these emerging economies of south Asia including India to go for in the long run to meet their energy requirements?

We always appreciate the ability of rising South Asian economies to promote an independent policy. At the same time, I believe that those who understand the needs of their nation in economic sphere, including energy, will grasp all the advantages stemming from cooperation with Russia. And they hardly need any advice. We expect important documents in a wide range of avenues, including energy, might be signed during the regular biennial visit of Russian President Vladimir Putin to India in early December.

What should be the wise approach of India in this East-West stand-off, which has brought us back to the Cold War Era? As I have already said, we appreciate the unbiased stance of India in political and economic affairs. We expect this tendency to prevail in the long-run. In hindsight, in the traditional East-West competition India has always made a wise choice guided by its own interests and its people’s aspirations. This attitude typical of India was presented in a number of statements by respected vigorous grouping BRICS. How would you like to respond to a premise that Sanctions, Terror & War has become an inevitable aspect of the west in preserving its supremacy in the geopolitical sphere which has clear connotation with the Hydrocarbon Business?

Would Russia follow the same?

The leading world think-tanks cast doubt on the concept of Western supremacy in hydrocarbon area. The majority of Western countries are hugely dependent on import of oil and gas. Rather probably, this very circumstance was conducive to the recent crisis situation. As far as our perspective is concerned, Russia, which is abundant in hydrocarbon resources, always uses transparent and fair market approach dealing with energy-dependent countries without stigmatizing any state for particular properties of its political or cultural sovereignty. Moscow has never used oil and gas as a means to press any country. As for terrorism, Russia’s Foreign Minister Sergey Lavrov underlined that we need a general criterion: if we do fight terrorism – we do it everywhere and always. One can’t divide terrorists into good and bad, only because some of them are helpful to oust a legitimately elected leader of a UN member country that one does not like.

Offshore World | 19 | August - September 2014

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guest column

The Shale Story – Some Realities & Trends US has led the way in harnessing gas from shale, and today, shale gas development programmes exist in UK, Argentina, China, India, Lithuania, Poland, Romania & Ukraine, writes Kalyan Mukherjee, Senior Manager (Business Development & MIS) Bharat PetroResources Limited. He further explains the Positive & Negative facts/analysis towards shale exploration worldwide, Chinese Experience in Shale, Emerging Trends of Shale in world energy basket and Indian Scenario on Shale, etc.

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Few developments in industry have the potential to step beyond their technical boundaries and move into the world of the common man. Developments which manage such movements are ones which usually have a pan-geographic and pan-cultural impact.

Shale Gas - a phrase which, from the lexicons of industry has today, tiptoed its way into common parlance in a matter of just a few years, and is an example of one such development.

Deeper understanding and richer perspectives come with time, and shale gas development does not have the advantage of ‘historical distance’ yet. In fact, outside of the US, harnessing this resource is still in its infancy in most places. The heady years towards the end of the last decade, when this ‘game-changer’ was the favourite champagne of energy parties, have given way to more tempered views. However, the party is by no means over, as the resource is undeniably there, sitting below the earth in enormous quantities waiting for us to tap it economically for our needs. Admittedly, the answer to the question: ‘will shale gas be a game-changer’ continues to have far more ‘aye’ sayers than ‘nay’ sayers.

This article is an attempt to capture the positives and negatives of shale gas situation worldwide based on developments over the past six or seven years only, i.e. since the phrase ‘shale-gas’ entered the world stage, and also try and identify the future trends in shale energy. While the view today may not be as exuberant as it used to be, it is by no means off the interest radar.

Let us begin by noting the following Positive Facts: • Huge Resources: Immense quantities of shale exist on earth. As per an EIA report of 2013, based on studies carried out in 95 basins across 41 countries, the technically recoverable shale gas reserves stand at about 7300 trillion cubic feet (tcf ). To put numbers in perspective, one tcf of gas is sufficient to provide power to city of population 1 million for a period of 20 years.

• Preferred Source of Energy: Gas will continue to be a preferred source of energy as it is clean and relatively eco-friendly. In US, in 2000, shale was 2 per cent of natural gas supply; in 2012, it was about 37 per cent; and will be about 65 per cent within the next two decades.

• Rising Demand: Demand for energy is bound to increase.

• Outstanding Plays: There are heroes amongst Shale plays - The Marcellus shale play, already one of the most prolific unconventional regions in the world, could

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hold more than USD 90 billion more in hydrocarbon riches and is positioned to account for nearly 25 per cent of total US shale gas output, according to consultancy Wood Mackenzie. The shale play remains the driving force behind the North America shale gas revolution, with current production of 12 Bcf/d surpassing production from any shale gas play worldwide.

• Growing Production: The industry has seen a production growth of 1 mb/d seen over the last three years.

• US has led the way in harnessing gas from shale, and today, shale gas development programmes exist in UK, Argentina, China, India, Lithuania, Poland, Romania & Ukraine.

As per reports, Reliance Industries is reportedly preparing to invest USD 2 billion on its three shale assets in the US. RIL has already invested over USD 7 billion since 2010 towards shale developments in the US, and RIL’s’ US shale gas business has overtaken its domestic oil and gas operations.

All this is very good news from the Shale gas front. But there are other facts which are not so positive, and which we need to be mindful of. The following are some such Uncomfortable Facts/Analysis: • Increasing Costs: It is estimated that this year independent producers will spend USD 1.5 drilling for every USD they get back. The average Capex spending of the 35 companies analysed to serve as a guide to the industry has amounted to a staggering USD 50 per barrel of oil equivalent (boe) over the last five years, at a time when their revenue per boe has averaged USD 51.5. Cost of production/bbl in the US is expected to be 9 times that in the Middle East in the middle to long term. US drillers are expected to spend over USD 2.8 trillion by 2035. The Middle East is estimated to spend less than a third of that for three times more crude.

• High Leverage: To meet their Capex requirements, the companies have had to take on increasing levels of debt, and this is where we highlight the key risk to this business. The companies involved in shale production are highly geared, Shale debt has reportedly doubled over the past four years.

• Value Erosion: Fifteen of the main operators have wrote off USD 35 billion worth of assets since the shale boom started.

• Modest Productivity: It will take 2500 new wells/yr just to sustain output of 1 million barrels/day in N.Dakota’s Bakken shale. Iraq could do the same with 60. Hence, getting more oil is taking more energy and becoming more expensive.

Offshore World | 20 | August - September 2014

guest column • Environmental Problems: Moratoriums on ‘fracking’ continue in France, Bulgaria, Germany, the Czech Republic, Luxembourg, Northern Ireland, parts of Spain and Switzerland and some states in the US. In fact in France, President Hollande announced this July that “As long as I am president, there will be no exploration for shale gas in France.” Also, Germany’s new government has said it plans to draft a law that would ban hydraulic fracturing for shale gas for seven years. Hence, Europe seems to be especially sensitive to environmental issues related to Shale gas.

Alas, such is the problem with shale. Added to the usual basket of uncertainties inherent in a geology centric project, it brings with it an added complication. The possibility of replicability of shale projects seems to be a distant dream. No two shale plays are identical, below-ground (and even above-ground) conditions vary significantly from place to place.

This fact has been brought home to the world by the Chinese Experience in Shale.

Despite years of research and communication with the public, oil companies have not been able to put the spectre of environmental issues behind them. A recent report has urged developers of Canadian shale to ‘go slow’ so that more research and evaluations can be done to assess the risks of hydraulic fracturing.

• Challenging Business Model: Understanding shale and the developing a sustainable business model for long term Shale Gas development is taking time.

Poland has enacted its new shale taxation measures almost three years after embarking on an overhaul aimed at revamping shale gas licensing and taxation to stimulate the resource’s development. French oil major Total has allowed its only Polish shale gas license to lapse.

• Declining IOC Interest: US oil major Chevron has concluded shale gas exploration in the Silistea-Pungesti perimeter in eastern Romania. Experts say that it would take at least five years before any exploitation of shale gas, with a clear regulation for environmental protection, can begin in Romania.

• Challenging Matrices: Widely discussed and acknowledged features of this industry include high decline rates, high costs, extremely high Capex levels that are required to fund the drilling programmes, and, to a certain extent, the extremely light quality of crude oil (in the US) that cannot substitute one-forone with declining conventional crude production.

• In the US, these companies produce large volumes of super-light condensates and Natural gas liquids (NGLs). Prices for these liquids have started to fall sharply and disconnect from crude oil, in much the same way as natural gas did, and lower realised prices across the liquids and gas stream have begun to significantly impact baseline revenues.

• Issues in India: Issues related to land acquisition, water availability, chemicals used in hydraulic fracturing are of critical importance and major challenges in India.

China is estimated to hold the largest technically recoverable reserves of shale gas in the world—nearly twice as much as the US. However, China is finding it harder than it expected to unlock a shale gas boom like the one in North America, and is facing the following problems:

One of the hallmarks of science is that findings and truths are universal and replicable, i.e. the laws of nature don’t change from person to person or from place to place. Geology has, for decades, been trying to get full membership into the ‘science club’ but it has, at best, been able to position itself only in a cusp between science and art. All said and done, even today, subjective interpretation plays a vital role in the geo-scientific world.

As regards countries for shale development, after the US, the preferred investment destination would most likely be South America. China does not appear very keen to invite foreign investment in Shale; also, there are pricing issues which need to be addressed there. Europe appears bogged down with environmental issues.

For decades, Conventional oil & gas exploration has been navigating on the decks of Geology, Geophysics, Petrophysics, Reservoir Engineering and other such ships of the Geoscientific fleet. Scientific endevour has definitely narrowed windows of uncertainty and aided decision making in business. Today, there is a great volume of work done on sub-surface evaluation and standard models exist which are scientific and fairly replicable across the globe. Comprehensive understanding, standardisation and replicability are some of the key requirements in today’s world of business. A business which needs continuous R&D and newer and newer prototypes would take a long time to get off the ground and become a commercial endevour. www.oswindia.com

• Complicated geology.

• High production costs.

• In many cases the formations that hold gas are deeper than in North America and more expensive to reach.

• Chinese shale tends to have more clay in them, which is an obstacle to extraction.

In fact, recognising the fact that the above problems are going to slow down the shale gas programme, the Chinese government has cut its ambitious 2020 target for shale gas development roughly by half.

Emerging Trends Despite all the above, shale is undisputably on its way to become a respectable member of the energy basket. Significant business interest persists in this space.

Merger and acquisition (M&A) activity in the US reached its highest first-quarter total for more than a decade but lagged well behind last year’s fourth quarter in terms of both volume and value.

Also, according to a recent report, Shale and tight oil plays are posing a threat to the floating production segment, with the pace of orders for new units already slowing. The US is poised for shipping out shale gas in liquefied form as a net exporter of energy.

Further, as it has in the United States, shale gas is tipped to emerge as a major new energy source in eastern Australia, particularly as three major liquefied natural gas (LNG) developments will be seeking supply after they come onstream in Queensland during the next 18 months.

Conclusion Shale energy is here to stay. Technological R&D is key to improvement in shale gas/oil output and, in the near future, it appears that R&D focus on shale would perhaps be a preferred option as compared to R&D focus on unconventional or Arctic ventures. Commercial factors are clear drivers for shale exploitation. Hence, shift in the US from shale gas to shale oil is to be viewed not as a ‘mid course correction’, but simply as a digression stemming from commercial necessities.

Offshore World | 22 | August - September 2014

Features CFD Analysis

Effective Use of CFD in Upstream Engineering In offshore oil & gas industry Computational Fluid Dynamics (CFD) has been used extensively as an analysis tool towards meeting contractual obligations, risk mitigation, evaluation of new technology/equipment, safety studies etc. The R&D centre of L&T Hydrocarbon Engineering Limited (LTHE) has carried out a number of studies using CFD analysis as tool.

The current study deals with the CFD analyses performed for an offshore production unit during design/engineering phase to finalize the layout of critical hot gas stacks and flare boom. The base case result showed passage of hot gas plume over helideck leading to unsafe condition for helicopter operation. The Flare boom was subsequently relocated to mitigate the problem.

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Oil & Gas industries face frequent design challenges associated to fluid flow problems coupled with heat transfer in exploration, production, and process equipment. Fluid flows and heat transfer are inherently complex and governed by complex equations. Computational Fluid Dynamics (CFD) has become an important tool in solving many of these problems. In recent decades with tremendous growth in computational technology both in terms of hardware and software, it is possible to solve complex governing equations depicting a real life system numerically and able to deliver results within acceptable time limits. Commercial CFD codes are versatile and are able to produce visual results and quantification of parameters related to flow, heat transfer, species etc. These capabilities have made CFD an indispensable tool whenever practical analysis and engineering design work involving fluids is required.

Offshore installations are normally comprised of a number of systems and processes that release hot gases at substantial rate. Typical hot gas sources are exhausts of PGC modules, GT or DG set exhausts and Flares. For combusting flares, luminous flames are also present along with hot flue gases which cause substantial increase in surrounding temperature through radiation which might require higher metallurgy for flare boom and nearby structures. These hot gases emanating from different sources may also create turbulence and other thermal effects (increasing the ambient air temperature) that may severely affect helicopter operations, unless adequate risk reducing measures are taken at the design stage.

LTHE’s in-house capability of providing advanced engineering solutions using computational technologies such as CFD, FEA etc have been gainfully utilised in the Hydrocarbon project business. For issues related to fluid flow, CFD analyses using commercial code have been used in predicting complex flow fields involving

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multiphase, mixing, combustion, heat transfer, and radiation. Typical process equipment or systems modelled were multiphase flow simulation in pipeline, manifold and separation equipment, design analysis of waste heat recovery units, dispersion analysis for flammable and toxic gases, analysis of radiation and heat transfer from flares and hot gas stacks, heli-deck environment assessments, design analysis of gas dehydration and gas sweetening units etc. These in-house analyses were specifically helpful towards meeting contractual obligations, risk mitigation, evaluation of new technology/equipment, safety studies etc. In-house modelling capability also helped to evaluate performance of OEM designs before installation, thereby reducing/eliminating uncertainties during commissioning/PGTR. The current study deals with the CFD analyses performed for an offshore production unit during design/engineering phase to finalize the layout of critical hot gas stacks and flare boom. During operation of the platform and flaring, the high temperature off gases from the gas turbine (GT) exhausts and flare get dissipated in the atmosphere forming flue gas plumes. Based on the ambient air direction and velocity, the shape, size and direction of the flue gas plume changes. In the event of spreading of hot flue gas around the helideck area, it would rise the ambient air temperature around the helideck and may affect the helicopter operation. In order to ensure safe helicopter operation, it is required to estimate the rise in temperature around the helideck. To estimate such temperature enhancement (if any), a comprehensive CFD study was conducted for the offshore production unit involving the platform along with the HP/LP flares, exhaust ducts and the helideck.

CFD as an Analysis Tool The basic idea behind CFD analysis is to set up equations for the conservation of mass, momentum and energy for the volume in which the fluid flows. This is

Offshore World | 24 | August - September

Features achieved by dividing the computational domain volume into a finite number of small control volumes (cells). Conservation equations for mass, energy, momentum, species etc are solved numerically over the small control volumes. The equations are solved by an iterative process to arrive at a solution. As the number of calculations can become very high depending on the number of control volumes and the number of equations solved, a high processing speed computer is generally required to perform the calculations.

(ii) The Momentum Equation Physical principle: The time rate of change of momentum of a body equals the net force (body & surface force) exerted on it. With u denoting the x- direction velocity, then momentum equation is given below:

Governing Differential Equations A Governing differential equation expresses a certain conservation principle, and each equation employs a certain physical quantity as its dependant variable and implies that there must be a balance among the various factors that influence the variable. The dependent variable of these differential equations are usually specific properties, e.g., mass fraction, velocity (momentum / percent mass) and specific enthalpy.

Here, μ is the viscosity, P is the pressure, Bx is the x direction body force per unit volume, and Vx stands for the viscous terms that are in addition to those expressed by div (μ grad u).

[3]

(iii) k – ε Model for Turbulence The model employed in the present simulation is the standard k-ε model proposed

by Launder and Spalding. This employs two partial differential equations to estimate the velocity length scales of turbulence:

In general, if Φ denotes the dependent variable, then the general differential equations is

[4]

[1] These four terms in the general differential equation are the unsteady term, the convection term, the diffusion term and the source term. If Φ is the specific property and ρ is the density ρΦ denotes the amount of corresponding extensive property contained in a unit volume. The quantity ∂( ρΦ )/ ∂ t is the rate of change of relevant property per unit time, the unsteady term. The quantity ρ uΦ is the convection flux that is the flux carried by the general ρ u field. The third term Γ is the diffusion coefficient and is specific to a particular meaning of Φ.

The last term S is called source term, that is it can be the rate of heat generation for a conduction convection problem or the rate of generation of the chemical species in the chemical species problem or S = (G- ρε) where G is the rate of generation of turbulence energy and ε is the rate of dissipation and (G- ρε) is the net source term for a turbulent flow model.

In the current study, continuity equation, x, y, z momentum equations and energy equations have been solved. Also turbulence was modeled using the k-ε model and two equations for k and ε have been solved. (i) The Continuity Equation Physical principle: Mass can neither be created nor destroyed.

[5] In the above two equations, P represents the production term given as [6] (iv) Energy Equation The general equation for energy conservation used in Ansys Fluent as given below, [7] Where keff is the effective conductivity (k + kt) where kt is the turbulent thermal conductivity, defined according to the turbulence model being used, and jj is the diffusion flux of species j. The first three terms on the right-hand side of equation 7 represent energy transfer due to conduction, species diffusion, and viscous dissipation, respectively. Sh Includes the heat of chemical reaction, and any other volumetric heat sources you have defined.

In Equation-7 [8]

That is the net mass flow into the control volume must be equal to the rate of increase of mass inside the control volume.

Where, sensible enthalpy defined for ideal gases and for incompressible flows as

[2] This equation is applicable to all flows, compressible or in-compressible, viscous or in-viscid. www.oswindia.com

Offshore World | 26 | August - September

[9]

Features In above equation 9 is the mass fraction of species j and

[10]

The value used for T ref in the sensible enthalpy calculation depends on the solver and models in use Assessment of Environment around Helideck For heli-deck environment assessments, it is necessary to estimate the air temperature around helideck for several scenarios with respect to various operating conditions and ambient conditions. Here various operating conditions means the different mass flow rates of hot gases from the different exhausts and the different mass flow rates of combustible gases at the flare. Various ambient conditions are related to the different ambient air directions, velocities and temperatures. As per CAP 437 guidelines, for safe helicopter operation, variation of air temperature around the helideck should not exceed by more than 2°C. Hot air flow, combined with a sudden change in air temperature, may pose serious threat to helicopter operation such as possible momentary stalling of helicopter engines due to sudden air density changes through the turbine compressors, significant reduction in helicopter lift capacity etc. These risks can be controlled by proper design and by operational measures involving certain helicopter flight limitations. The risk varies with helicopter type, and the risk level increases with large temperature gradients in the flight path.

In the current analyses CFD simulations have been carried out for a 3D Hemispherical domain of 400 m diameter comprising of upper deck, production deck, main deck, Helideck, GTG/PGC modules with exhaust ducts and HP/LP flare with flare boom at their respective locations. HP/LP Flare tips and GTG/PGC Exhausts have been modelled at the exact location with respect to elevation of the support structures. Several cases have been studied considering different wind direction, wind velocities and ambient temperature.

Steady state single phase multi component (consisting of CH4, CO2, O2, N2 and H2O) dispersion analyses have been carried out using ANSYS Fluent. Burning of the gases emanating from the HP/LP flare tips has been modelled considering equivalent methane as a single combustible gas. To take care of the effects of convective and radiative heat transfer from flares to the structures, combustion and radiation have been modelled using Fluent based eddy dissipation reaction model and Discrete Ordinate (DO) radiation model respectively. Velocity inlet boundary condition has been used at the air inlet corresponding to specific ambient air velocities and ambient air temperatures.

Results were analysed in terms of pathline and iso surface plots for temperature.

While pathline plots gave idea about the flow path of hot gas streams, iso-surface plots for temperature 2°C above the ambient air temperature (iso-surface for 42°C against ambient air temperature 40°C) gave visual representation about the 3D region where air temperature exceeds the 2°C limit as described above. Results (Figure-1D) shows the iso surface plot for temp (42 °C) and Figure 1C, show that the hot gases after combustion from the flares pass over the helideck leading to unsafe condition for helicopter operation. Weather data reveals this condition prevails during most of the period in a year.

Based on the findings of the first analysis, modification in the layout was suggested to relocate the flare boom (attached to one of the legs opposite to the helideck direction). For modified layout as shown in Figure-2A & 2B, another set of analysis was performed keeping all the operating and boundary conditions same as the previous study.

Results show that the iso-surface of flue gas plume @ 42 °C (2°C rise in temperature above ambient temperature of 40°C) does not come in the vicinity of the helideck and hence helicopter operation would not get affected by the hot gases emanating from the flare.

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Offshore World | 28 | August - September

Features

VOL. 11 NO.4 JUNE - JULY 2014 Mumbai ` 150

Authors are thankful to the LTHE management for allowing publication of this paper.

OFFSHORE WORLD

Acknowledgement

` 150

authority 2010.

New Frontiers

Mumbai

1. CAP 437 “Offshore helicopter landing areas –Guidance on standards” Civil aviation

Leaders Speak: Oil & Gas World Expo 2014 >> Pg 6

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Reference

Advanced Technologies

VOL. 11 NO.2

1. For the existing layout, hot gas plumes from flare passes over the helideck which may affect the helicopter operation.

2. Based on the results of the first analysis with existing layout, flare boom location has been changed and the study has been repeated keeping all conditions same as the previous study.

3. Modification study revealed that hot gas plumes from flare would not pass over the helideck during most of the time in a year and hence the modification has been implemented.

June - July 2014 Vol. 11 No. 4 ` 150

February - March 2014 Vol. 11 No. 2 ` 150

OFFSHORE WORLD

Summary LTHE’s in-house capability of providing advanced engineering solutions using computational technologies such as CFD, FEA etc. have been gainfully utilised in the Hydrocarbon project business. At the R&D of LTHE, CFD analyses are performed to predict complex flow fields involving multiphase, mixing, combustion, heat transfer, and radiation. For helideck environment assessments, a steady state analysis combining the effect of fluid flow, combustion and radiation has been carried out to assess the air temperature around the helideck for various wind velocities and wind directions. Based on the findings of the study decisions were taken regarding position of the helideck vis-a-vis the flare location.

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Dear Readers, Offshore World (OSW), a bimonthly publication of Jasubhai Media & CHEMTECH Foundation, disseminates into the entire hydrocarbon industry from upstream to midstream to downstream. The endeavour of OSW is to become a vehicle in making “Hydrocarbon Vision 2025” a reality in terms of technologies, markets and new directions, and to stand as a medium of reflection of the achievements and aspirations of Indian hydrocarbon industry. OSW, the niche bi-monthly publication, has been extensively covered technological advances, reviews & forecasts, new products, processes & solutions, upcoming projects, market trends, R&D, events, products review, book review, industry surveys, environment management, news & views, interviews, awards, outstanding performance by individuals & organizations, case studies and practice oriented and well researched articles and features by industry experts for more than a decade.

You can contribute in the magazine with technical articles, case studies, and product write-ups. The length of the article should not exceed 1500 words with maximum three illustrations, images, graphs, charts, etc. All the images should be high resolution (300 DPI) and attached separately in JPEG or JPG format. Have a look at Editorial calnder of OSW - www.oswindia.com

Sumanta Sarkar Dy General Manager (R&D) L&T Hydrocarbon Engineering Limited Email: Sumanta_Sarkar@Lntenc.com

To know more about Chemtech Foundation, Jasubhai Media and other publication and events, please our website – www.chemtech-online.com.

Tushar Bhad Asst Manager (R&D) L&T Hydrocarbon Engineering Limited Email: Tushar_Bhad@Lntenc.com

Thank you, Regards, Mittravinda Ranjan Editor Jasubhai Media Pvt Ltd Tel: +91 22 4037 3636 ( Dir: 40373615) E-mail: mittra_ranjan@jasubhai.com

Dnyandeo Ingale Sr Executive Engineer L&T Hydrocarbon Engineering Limited Email: Dnyandeo_Ingale@Lntenc.com www.oswindia.com

Offshore World | 30 | August - September

Features GTL Technology

Valorisation of Stranded/Smaller Gas Field through GTL - Conceptual Design Studies The share of natural gas in world energy mix is steadily rising and is expected to grow from the present 23 per cent to 27 per cent by the year 2020. However, the distant location of the gas reserves from the market and costly transportation limit the economic utilisation of the gas. The method to avoid the need of cryogenic transportation, equipment and tankage and which would bring remote natural gas to the market is its conversion to higher hydrocarbons like diesel and wax through Fischer-Tropsch synthesis route. The present work provides the technical insights of a semi-commercial size GTL plant based on the composition of Tripura Gas, SMR+ATR for syngas generation, fixed bed reactor for F-T synthesis and utilisation of tail gas towards monetisation of smaller gas field/stranded gas.

A

About 50 per cent of the proven natural gas reserves are distant from any sizeable market, e.g., large reserves in Middle East. The costly transportation of this gas through pipelines or as LNG further restricts its economic utilization. The application of Gas to Liquid (GTL) is emerging as one of the most sought after technology options, not only to valorise stranded natural gas but also to provide additional hydrocarbon security. GTL provides the opportunity to convert natural gas to usable liquid products which are of high value and can easily be shipped, obviating the need for dedicated cryogenic transportation, equipment and tankage.

Gas to liquid (GTL) is a three step process in which the C1 fraction of natural gas is first converted to syngas followed by F-T synthesis to produce heavier liquid hydrocarbons (C5+) which are then fractionated into usable products such as naphtha, diesel, gas oils, paraffinic waxes and lube base oils. Since the gas is sulphur free, the products are of premium quality and there is no residue in the form of asphaltenes and resins. The Syn crude can also be blended with conventional crude oil. The blending of GTL products with conventional products helps refineries to meet future clean energy requirements and reduces the load on hydro-processing units in refineries.

The process is best suited for stranded gas fields where pipeline transfer of gas is not feasible. Current projects are being pursued in regions that are large gas producers and also have LNG facilities, so that GTL supplements the LNG operations rather than compete with them. However, the application of GTL on a stand alone basis appears to be a viable proposition given the benefits in terms of investment and operating costs as compared to LNG along with the premium that is possible for GTL liquids vis-a-vis conventional crude oil(s). Such GTL projects could come up at locations like Iran, Middle East, Nigeria and CIS countries where abundant natural gas resources are available at competitive price.

pipelines/LNG. This technology would also prove useful in valoriszing stranded gas fields in the North east, especially when the facility is integrated with an existing refinery. In the following section a design configuration of 6000 BPD GTL plant through Fischer Tropsch synthesis route along with technical details based on Tripura Gas composition (2.8 MMSCMD) is established, which could facilitate an investment decision to set up the project. The design would integrate the various steps of a GTL facility and would be based on inputs obtained from experienced licensors as well as indigenously developed information/know how, as explained in the following sections.

Key Technical Components of GTL Plant The basic three steps in the GTL process are synthesis gas (a mixture of H 2 and CO) production, Fischer-Tropsch synthesis and product upgradation. The various schemes are available for conversion of natural gas to syngas, which include steam methane reforming, partial oxidation and combination of both. The F-T synthesis is carried out in either a fixed bed reactor or slurry reactor with iron/cobalt catalyst.

The synthesised liquid products are fractionated and mildly hydrocracked to meet product specifications.

Synthesis Gas Generation Synthesis gas is produced from natural gas using one or combination of the available three technologies: 1) Steam Methane Reforming (SMR): It is an endothermic reaction which requires 800째C to convert methane and steam to syngas in the presence of a catalyst.

2) Partial Oxidation (POX): It is an exothermic reaction in which oxygen is consumed to extinction in the temperature range of 900-1400째C to form syngas.

While India is not a major gas producer, GTL technology would help to provide additional hydrocarbon security since overseas natural gas can be transformed to usable products at site without the hassle of transferring natural gas through www.oswindia.com

Offshore World | 32 | August - September 2014

Features 3) Autothermal Reforming (ATR): It is a combination of SMR and POX which requires 0.3 kg of oxygen per kg of natural gas and produces syngas in the H 2/ CO molar ratio of 1.5-2.7. Reactions are carried out in various forms of exchange reformers and reactors filled with equilibrium catalysts.

4) Secondary Reactions: Many reactions take place in syngas reactor along with primary reactions, e.g., water gas shift reaction, CO 2 reforming, carbon deposition, carbon conversion, etc.

EIL has designed and implemented SMR processes for hydrogen production. These reactors operate in high steam environment to maximise on hydrogen. The proposed application for GTL process involves operation at significantly lower steam rates.

The partially steam reformed gas is routed to Autothermal Reforming (ATR) for further conversion of methane to carbon monoxide. Carbon dioxide recycle is also carried out to improve overall carbon efficiency of the GTL process.

The integration of SMR technology with ATR along with CO2 recycle stream is an important step with a view to reduce oxygen and steam requirement and to optimise on hydrogen export. The overall synthesis gas process configuration is also need to be optimized to produce desired hydrogen-CO ratio in syngas that is suitable for downstream FT process. The ratio itself is a function of the catalyst to be used in FT synthesis so that to maximise on overall carbon and thermal efficiency.

Fischer Tropsch (FT) Synthesis The hydrogenation of carbon monoxide by FT process primarily produces saturated compounds of the homologous hydrocarbon series. Depending upon the catalyst, operating temperature and type of process employed, hydrocarbons ranging from methane to higher molecular weight paraffins and olefins are produced.

It is well known that group VIII transition metals, iron, cobalt, nickel and ruthenium are the most active as potential FT synthesis catalyst. Catalyst development activity has already centered on the preference for linear alkanes and diesel fuel production. Research has focused on achieving the highest chain growth possible to produce a product distribution of heavy waxes that can be hydrocracked to the desired products in the middle distillate range. It is reported that catalyst consisting only of Co or Fe are generally unsatisfactory since they produce mainly light hydrocarbons. The addition of promoter (typically noble metals) is essential to shift the selectivity towards higher molecular weight hydrocarbons. The FT synthesis can be summarized by the following reactions:

The first two reactions describe the formation of higher hydrocarbon and of methane respectively. The –CH 2- group in equation 1 indicates a link of a hydrocarbon molecule. Carbon monoxide can also react with water vapour, which is formed in www.oswindia.com

reaction 1 & 2 or already present in syngas, to carbon dioxide and hydrogen. The yield of higher hydrocarbon can be maximized by suppressing reaction 2 & 3 to the maximum extent possible (catalyst specific).

FT synthesis reaction is highly exothermic, thus heat removal is a very important factor in the selection and design of a commercial reactor. In principle three different types of reactor design are used for the FT synthesis.

1. Fluidised bed reactor 2. Fixed bed reactor 3. Slurry reactor Fluidised bed reactors are not suitable for production of heavy waxes due to agglomeration of catalyst particles and de-fluidisation problems caused by deposition of heavy compounds present in the product on to the catalyst. The slurry and multi-tubular fixed bed reactors are preferable for production of high value linear FT waxes. Since fixed bed reactor has more advantages in wax separation, the flow-scheme is proposed to be developed with fixed bed reactor configuration only.

Concept Studies: Design Configuration of 6000 BPD GTL Plant Concept design studies were carried out for 6000 BPD GTL plant based on the following:

1. Tripura Gas composition is taken as the basis (Table 1) 2. SMR+ATR simulations were carried out using FEM of Gibbs Energy algorithm in Aspen PLUS 3. Fixed bed FT reactor ( Reactor Model; developed in-house) 4. Utilization of tail gas The simulation of syngas generation was carried out using Gibbs free energy algorithm which is considered reasonable in view of high temperature operation.

The flow scheme given in Figure 1a envisages Steam Methane Reforming followed

by Auto Thermal Reforming. The syngas from ATR is corrected with regard to H 2/CO ratio with hydrogen – Pressure Swing Adsorption process already developed by EIL. The generated syngas is passed through FT reactors to produce liquid hydrocarbons and the flow scheme is shown in Figure 1b. The simplified mathematical model for multi-tubular fixed bed reactor was developed and used for simulation to predict conversion, yield, temperature and pressure profile along the reactor.

The reaction rate constants were obtained from literature and were further

Fig 1 a: Flow scheme of GTL plant (syngas generation section)

Offshore World | 34 | August - September 2014

Features

Fig 1 b: Flow scheme of GTL plant (FT liquid production)

extrapolated in the present operating range. The sensitivity analysis for water gas shift reaction was also carried out and it needs to be suppressed for meeting the present commercially achieved product yields. The products from FT synthesis were empirically fractionated in different carbon numbers. The overall material balance and enthalpy balance are shown in Figure 2 and Table 2.

The mass conversion comes out to be 64.9 per cent. The broad specifications of equipments (FT reactors, compressors and exchangers) are shown in Table 3. Utilities like cooling water, steam, etc. are required for different purposes and their requirements are given in Table 4. No catalyst recovery from wax and catalyst regeneration scheme was considered. The downstream of FT synthesis was considered to be syn crude which can be easily blended with conventional crude.

Conclusions Conversion of gas to liquid through FT synthesis is an important option in bringing remote natural gas to the market. The various technical components of GTL plant through FT route for natural gas utilisation are presented in this paper. Conceptual design configuration of 6000 bpd GTL plant is provided with recycle of CO2 and utilization of tail gas. Mass conversion came out to be 64.9 per cent while thermal conversion is 60.1 per cent for hydrocarbon liquids and 75.8 per cent when hydrogen production is considered. High pressure steam (450째C, 42 atm) and excess hydrogen is available for export or integration with refinery. Overall an attempt is made to provide lots of insights, facts and figures, useful to the oil and gas industry for taking informed decision about GTL plants.

Fig 2: Overall material balance www.oswindia.com

Megha Aggarwal Engineer Engineers India Ltd Email: amegha@eil.co.in Dr R N Maiti Dy. General Manager Engineers India Ltd Email: rn.maiti@eil.co.in Ganesh Prasad General Manager Engineers India Ltd Email: g.prasad@eil.co.in Offshore World | 36 | August - September 2014

Features IO Solution

Integrated Operations Solutions for Upstream Oil and Gas The article explains Integrated Operations (IO) solutions for Upstream Oil and Gas companies through Information Technology (IT) services to reduce costs by managing their onshore and offshore assets effectively.

I

Integrated Operations (IO) is very much the cornerstone of any Upstream Oil and Gas company that has assets and resources spread across the globe. These companies look for Information Technology (IT) services to build Integrated Operations solutions to help them reduce costs by managing their onshore and offshore assets effectively.

In this article talks about the IO solution and business value it brings to the Upstream Oil and Gas Companies. In my four years with this Industry, I have observed that a company needs to transform its enterprise IT and business strategy as per the below maturity model to get the best out of the IO solution.

Solution The IO solution ingests a variety of information gathered from equipment in the field and performs advanced analytics to provide actionable insights for Planning, Surveillance, Production Optimisation, Hydrocarbon Delivery and Equipment Management. These insights can be used in multi-disciplinary, integrated analytical workflows by operations staff across the enterprise.

With this integrated solution, one can: (1) Monitor and predict the performance and production of reservoirs, wells and facilities (2) Optimise future production and hydrocarbon delivery (3) Monitor equipment health, predict failures and other actionable events (4) Optimise maintenance schedules and repair cycles

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(5) Identify the root causes of upstream performance issues and equipment failures (6) Orchestrate multi-disciplinary workflows using a variety of analytical techniques These capabilities are critical to fulfill higher level business objectives of an oil & gas operator such as production planning, field surveillance, operational decisions, production optimisation, inventory optimisation and beyond.

Instrumented equipment generates Time Series data such as an asset or equipment ID, temperature and other readings. This data can be collected and used (together with other data such as maintenance schedules) in analytical models that predict field performance, hydrocarbon production and equipment failures. Equipment that can be monitored includes platforms, risers, drills, turbines, pumps, separators, condensers, pipelines, etc. This Time Series data is typically stored in a Data Historian and can be augmented with data from Well Logs (depth dependent data in formats such as WITSML), Maintenance Logs (text), Geospatial data, Video and Image data and so on to develop predictive analytics and optimisation models.

Such models can be used in conjunction with Physics-based modeling and simulation capabilities in analytical workflows that experts from a variety of backgrounds can interact with and use to generate increased value. For example, a Well Engineer using predictive analytics to assist in Well Surveillance may signal a forecasted event, which may in turn be used by a Facilities Engineer to modify the Production outlook or used by a Reservoir Engineer to run a dynamic Reservoir Simulation with the forecasted values as inputs.

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Features Business Values The business value of the Integrated Operations solution is described in the following list.

(1) Improve Operations Business goals include reducing Non-Productive Time (NPT) and downtime and optimising equipment and plant turnaround operations. Globally, non-production time is estimated to be about 15 to 40 per cent which cost USD 14 to USD 37 billion loss in business. The bottom line is that if they are not drilling or producing, they are not making money.

The Integrated Operations solution has six main components: (1) Data Ingestion Layer This layer is responsible for connecting (via a set of Adapters) to the underlying equipment sensors, Data Historians and other sources of data required for advanced analytics. It is responsible for ingesting all required data into the Data Services Layer.

(2) Data Services Layer This layer is responsible for the appropriate storage of the ingested data, providing a semantic understanding of the ingested data, ensuring its consistency with Master Data and providing access to the data for advanced analytical processes.

(3) Advanced Analytics Layer This layer is responsible for the development, training, deployment and operational management of advanced analytical models and functions including: • Predictive (data-driven) analytics • Optimisation and decision management • Static and dynamic modeling and simulation (potentially provided by ISV components) • Other analytical techniques (potentially provided by ISV components) (4) Role-based Visualisation Layer This layer is responsible for providing the relevant solution visualisations to users of the solution. These may include: • Operator and Administrator Consoles • Analytical Dashboards, Reports, Graphs, etc.

• Views of the status and execution of Analytical Workflows (5) Business Process Management Layer This layer is responsible for the development, deployment and orchestration of multi-disciplinary, analytical workflows or business processes used to perform an end-to-end business function combining instances of the capabilities provided by the layers described above.

(6) Solution Management Layer This layer is responsible for managing the solution, including: • Providing services for the installation and configuration of the solution’s software components • Providing services for the monitoring, logging and auditing of the solution • Providing services for the administration of the solution

As an example, for drilling operations - integrate and process multiple real-time data streams from the wellbore with the measurement data generated from the rig. Using streams processing software at the rig and ‘scoring’ the results from the predictive model built prior to spud allows drilling managers to receive alerts and perform analytics during the drilling process.

(2) Improve Reservoir, Well and Facilities Performance Business goals include improving upstream field performance across reservoirs, wells and facilities, managing the integrity of the field and detecting and avoiding leaks and other detrimental scenarios.

(3) Improve Production Optimisation The business goal is to maximise the value of hydrocarbon production within the constraints of operations, logistics, supply chain, environmental and other factors.

(4) Improve Forecasting and Allocations Business goals include improving forecasting of hydrocarbon production and the ability to allocate that production (by well, for example) to Joint Venture (JV) partners or other allocation requirements.

(5) Improve Maintenance Business goals may include optimising logistics and equipment scheduling, predictive maintenance, improving equipment capacity, availability and utilisation, etc to promote the reliability of the equipment (including rotating equipment) under consideration.

(6) Reduce Costs by Deploying Virtual Sensors Data-driven analytical models can be used as proxies for physical sensors, gauges and meters. The business goal is to use these ‘virtual sensors’ to obviate the need to deploy (often expensive) physical sensors, thereby reducing operational costs.

(7) Reduce Costs and Time to Develop and Execute Analytical Models Data-driven analytical models can be used in place of physics-based, engineeringbased or first principle models, such as dynamic or static simulation models for reservoirs, wells and facilities. Data-driven models can be developed more rapidly (in minutes or hours compared to weeks or months for the other methods noted) and executed more efficiently (in seconds or minutes compared to days or weeks for executing the other models noted). The business goal is thus to use these techniques to reduce the cost and time associated with analytics in Integrated Operations, particularly in cases where scalability of model development and execution is an issue (e.g. in Coal Seam Gas fields with thousands of wells).

Saurabh Gupta Solution Architect Industry Solutions Company - IBM Email: sgupta18@in.ibm.com

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Features Energy Watch

Energy Commodities Continues Diverse Price Movement Energy commodities continued to exhibit diverse price movement in the two-month period of July and August 2014. In this two months, fall in crude oil prices along with ample US gasoline inventories resulted in gasoline futures prices to drop the most amongst energy commodities i.e. by 9.56 per cent. On the other hand, European Union allowances futures prices rose by highest i.e. 9.81 per cent as effects of back-loading started to take hold of the markets.

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Notwithstanding upbeat Chinese and European economic data, NYMEX (CME) crude oil (light sweet) futures started the month of August on a flat note at USD 105.34 per barrel. With oil prices then staying low through the next two-month period, the opening day’s high of USD 106.09 eventually emerged as period’s high. Following the registering of period-high, oil prices declined on easing supply concerns with Libyan rebels agreeing to allow two oil terminals to reopen. Strengthening of US dollar against major global currencies also aided the fall in prices. Big fall in the prices was however averted by a weekly US government report that showed a steeper-than-expected drop in crude supplies. Nevertheless, expectations of increased crude supplies from Libya and no apparent signs of any new production disruptions in Iraq kept pressure on oil prices. Later, smaller-than-expected decline in weekly US crude supplies and increased supply from Saudi Arabia, Iran, Nigeria and Angola offsetting the decline in Iraqi production, thus keeping OPEC production steady, ensured the steady fall in oil prices. By the mid of the month of August, the Organization of the Petroleum Exporting Countries, the International Energy Agency and the US Energy Information Administration — all cut their forecasts for growth in oil demand this year, thereby continuing the selling pressure.

Later, oil prices staged some recovery as US government supply report showed a larger-than-expected drop in oil inventories. Additionally a flare-up in concerns

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about Ukraine, including news that a Malaysia Airlines passenger plane with 295 people on board was shot down while flying over eastern Ukraine and Israel’s decision to send ground troops into the Gaza Strip, aided the recovery in oil prices.

However oil prices were soon back on its south-bound journey as market seemed to be in oversupply mode with a weekly US government supply report released at fag end of August showing larger-than-expected supply increases for gasoline and other crude derivatives, despite a drop seen in crude stockpiles.

Contrastingly, the initial phase of the new month i.e. August was marked with steady crude oil price movement helped by a subsequent release of a weekly report indicating decline in US oil supplies. Geopolitical concerns including potential airstrikes in Iraq by the US, and Russia’s ban on food imports and other products from the US, members of the European Union and other countries in retaliation over sanctions, further helped in steadying of oil prices. Also helping the oil price was data release from China that showed rise in China’s oil imports in July from a month earlier.

Later, oil prices were back on south-bound journey with the release of weak growth data from the euro zone and a surprise uptick in US oil stockpiles. The euro zone’s gross domestic product in the second quarter was flat, while Germany’s GDP

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Features

declined 0.2 per cent, the first contraction for Europe’s biggest economy since 2012.

Notably despite geopolitical concerns surrounding violence and unrest in Ukraine and Iraq, oil prices continued to move down helped by reopening of a pipeline in the North Sea and an uptick in Libyan oil production. Weakening of Chinese manufacturing activity in August and relatively fading-off geo-political tensions kept oil prices on steady downward slope. Subsequently, MCX crude oil futures stooped down to its two-month low of USD 92.5 on August 21.

Following the registering of period-low, oil prices staged some sort of recovery helped by fluctuating geo-political tensions. Apart from tensions between Ukraine and Russia, escalating violence in oil exporter Libya also worried market participants. Later, oil prices were also helped with the weekly US supply report showing a decline in stockpiles marginally below expectations. At the end of the month of August, few upbeat US economic data releases such as upward revision to US second-quarter economic growth and a higher-than-expected consumersentiment index, helped the recovery in oil prices. Finally, NYMEX crude oil futures closed the month of August at USD 95.96 registering a fall of 8.93 percent in two-month period of July and August.

Like crude oil prices, futures prices of its derivate i.e. heating oil and gasoline (both traded on NYMEX-CME platform) also moved down in the two-month period of July-August. While heating oil futures prices declined by 3.83 per cent, gasoline futures prices moved down by 9.56 per cent helped by ample gasoline inventory levels in US amidst rise in US oil production. The other major energy commodity natural gas futures traded on NYMEX (CME) platform too registered a price fall of 8.88 per cent in past two months. Consistent increase in US gas stocks, mild summer weather in US dented demand expectations as well as relatively quiet hurricane season in US led to the fall in gas prices.

Amongst other energy commodities, ICE Rotterdam monthly coal futures prices moved up by 5.21 per cent in the two-month period. News that Ukraine, which is usually an exporter of thermal coal, has turned buyer due to the war which has caused a collapse in production at the damaged mines, helped the rise in coal prices.

Besides, unusually cold weather since early August in northwestern Europe, which includes top buyers Germany and Britain, helped in boosting demand for coal.

Finally in emission segment, while futures prices of CER (Carbon Emission Reduction) traded on ICE-ECX platform registered no change in prices over the two-month period, futures prices of EUA traded on ICE-ECX platform (as mentioned earlier) rose by 9.81 per cent over two-month period. Apart from effects of back-loading starting to take hold of the markets (as mentioned above), expectations of rebound in carbon market with rise in demand on ETS compliance obligations against reduced auction volumes in coming futures, also helped the rise in EUA prices.

Niteen M Jain Senior Analyst, Department of Research & Strategy Multi Commodity Exchange of India Ltd E-mail: niteen.jain@mcxindia.com Nazir Ahmed Moulvi Senior Analyst, Department of Research & Strategy Multi Commodity Exchange of India Ltd E-mail: nazir.moulvi@mcxindia.com

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news features

Unconventional Today, Conventional Tomorrow It is a well known fact now that all last New Exploration Licensing Policy (NELP) rounds for exploration & production of domestic hydrocarbon in India has not been a sizeable success as it was expected. Now the new Government is planning to relaunch the NELP X round with some changes. Further to make India a favourable destination globally for exploration and natural gas, the government plans to move to the Open Acreage Licensing Policy (OALP) regime, which would be setting up of a National Data Repository (NDR) for accessing reliable exploration and production data from Indian sedimentary. Now the question raises: ‘is the establishment of NDR the only pre-requisite for introducing OALP for attracting investment into the E&P sector’?

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The Indian Government formulated the New Exploration Licensing Policy (NELP) during 1997-98 to accelerate the pace of hydrocarbon exploration in India’s vast sedimentary area of 3.14 million square kilometres. The idea was to provide a level playing field for private sector and PSUs. The policy generated a good amount of interest in exploration and production in India, from public as well as private.

The investment commitment reached its peak in the sixth (2006) and seventh round (2007) of award of hydrocarbon blocks. Unfortunately the last two rounds have not been able to generate the same amount of interest. Since 2011, the Government is yet to announce the next round of award of hydrocarbon blocks.

A feature of the policy in vogue is that the Government offers onshore and offshore blocks with well-defined areas which are then put up for auction. The company which offers the best deal to the Government in terms of the work programme and the fiscal package is finally awarded the block. Under the current practice, industry has concern around the following items: i) Companies have to wait for an exploration round to be announced by the Government; ii) Companies have to choose areas for hydrocarbon exploration amongst the blocks which are put on auction only.

An answer to the above challenges could be rolling out Open Acreage Licensing Policy (OALP). Such a policy would allow investors to carve out acreages perceived lucrative for hydrocarbon exploration. Companies would be free to bid for such areas at any time of the year. Such a regime would give flexibility to E&P companies in choosing the location and size of blocks. Small and midsized companies would be free to choose acreages soothing their appetite. An important pre-requisite for successfully rolling out OALP would be setting up of a National Data Repository (NDR) which would help companies in evaluating

areas and demarcating the hydrocarbon prospective areas where they wish to undertake exploration activities. The main objective of setting up this NDR would be seamless access to reliable exploration and production data for Indian sedimentary basins which can then be utilised by firms in choosing areas which they want to bid for.

Present Status of the NDR The Directorate General of Hydrocarbons (DGH) appointed Engineers India Limited (EIL) as the Project Management Consultant for this project. Further, the contract to build, populate and operate the NDR was awarded to M/S Halliburton early this year. It would take nearly a year to set-up the infrastructure required for hosting this NDR and a further year to feed data into the system. Once it has been established, India would join the league of countries which have an NDR and this would help it in competing with other countries in order to attract investments in hydrocarbon exploration sector.

Attracting Investors in Future Hydrocarbon Bidding Rounds So, is the establishment of NDR the only pre-requisite for introducing OALP for attracting investment into the E&P sector? In reality it is a necessary but

An important pre-requisite for successfully rolling out OALP would be setting up of a National Data Repository (NDR) which would help companies in evaluating areas and demarcating the hydrocarbon prospective areas where they wish to undertake exploration activities.

Source: DGH, PwC Analysis.

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news features Establishment of OALP could help investors: • To allow investors to carve out acreages perceived lucrative for hydrocarbon exploration.

• To permit in bidding acreages at any time of the year.

• To give flexibility to E&P companies in choosing the location and size of blocks.

• To allow small and mid-sized companies to choose acreages soothing their appetite.

• To help companies in evaluating areas and demarcating the hydrocarbon prospective areas through NDR where they wish to undertake exploration activities.

not sufficient condition to increase the interest of investors in the Indian E&P industry. A stable regulatory regime governing oil and gas exploration and production is of prime importance in order to improve the attractiveness of India as an E&P destination. Even OALP may not be successful in attracting the E&P supermajors to bid for Indian hydrocarbon blocks if the current challenges faced by the industry are not removed before the next hydrocarbon block is put up for auction. The Government has taken the right stand of removing the bottlenecks in the E&P industry before announcing the next round of award of hydrocarbon blocks. Some of the challenges faced by E&P companies and possible steps to address them have been detailed out below: • There have been instances of exploration being held up for want of clearances from different Ministries like Defence, Space, Environment, Forest etc. Companies have had to consider relinquishment even before mobilising exploration resources.

Understandably, such a challenge can be overcome if Government departments synergise before offering blocks. To attract investments such a synergy would be welcome.

• Currently oil and gas companies are not allowed to explore for any type of hydrocarbons in a block except for the one which it is awarded for, which means that in a conventional oil and gas block companies are not allowed to undertake E&P operations for unconventional hydrocarbons like CBM/shale gas and similarly in a CBM block they are not allowed to carry out E&P activities relating to non-CBM hydrocarbons. Industry believes that the unconventionals of today may become conventional few years from now; hence companies should be allowed to commercially produce any type of hydrocarbons which they encounter during its E&P operations. Recently the Government has allowed National Oil Companies ONGC and OIL to explore for shale resources in their existing onland nomination acreages. It is a welcome step and this dispensation should be extended to all players and for all types of hydrocarbons.

Even OALP may not be successful in attracting the E&P supermajors to bid for Indian hydrocarbon blocks if the current challenges faced by the industry are not removed before the next hydrocarbon block is put up for auction. exact role of the Management Committee needs to be put in black and white and standard operating procedures need to be laid down for different activities. Such steps would address the challenges resulting out of procedural delays.

Conclusion It is essential that investor concerns like those listed above are addressed and the Government unleashes the true potential of Indian sedimentary basins in order to combat the rising import bill. Industry consultation on such matters could find the solution to many of the investors’ woes. If right measures are not taken to address investor concerns, even the introduction of OALP may not be successful in attracting investors to India.

(The views expressed by the author are his personal opinions.)

• The role of the Management Committee has been a subject of intense debate in the E&P industry. As the Management Committee comprises of members both from the Government as well as the Contractor, often there is a stalemate on important decisions which tend to delay the E&P operations. One can count on fingers the number of NELP blocks where commercial hydrocarbon production has started, the reason for this being procedural delays. A country like India which is heavily dependent on oil imports to meet its demand cannot afford to delay domestic production. Procedural challenges need to be removed in order to ensure early monetisation of discoveries and reduction in our import bill. The Offshore World | 43 | August - September 2014

Nitin Khetawat Senior Consultant - Oil & Gas Practice PwC India

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news features

India - The Mysterious Gas Price Hike The oil & gas industry in India is going through a big turmoil and is facing scrutiny from domestic as well as foreign players operating in India. Unfavorable pricing, delays in approval for surveys, projects, etc. are few issues which have hampered the industry and operations. The stubborn pricing of natural gas has further made it very difficult for the operators to explore proven reserves. This in turn has fuelled imports of LNG (Liquefied Natural Gas), whose price is costlier than domestic production (USD 16-20/unit). This whitepapers highlights various issues pertaining to gas price hikes as well as few options, which Indian government can consider.

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Reliance Industries Limited (RID, BP Pic (its partner), and other public and private companies in India are looking forward to gas price hike, currently at USD 4.2/ mmbtu. As per Exploration & Production (E&P) companies operating in India, it is not economical to explore and produce natural gas from proven reserves at the current rate and therefore these companies had demanded the rise.

The previous government - UPA (United Progressive Alliance), had agreed to a formula recommended by the Rangarajan Committee, according to which, natural gas would be supplied at a rate of USD 8.4/mmbtu. This price rise should have been effective from April 1, 2014. However, Election Commission of India didn’t allow the price hike due to the election which took place in the month of April.

The present government has twice deferred the decision on gas price hike.

Now a decision would possibly come about only after November 15. Already, this issue has created several problems for the government like allegations from Aam Aadmi Party (AAP) accusing government of favoring RIL, investigations by Anti Corruption Bureau - Delhi, PIL (Public Interest Litigation) in Supreme Court as the Rangarajan formula has been challenged and arbitration notice slapped

by RIL-BP Pic due to the delay in the revision of prices. This highlights the states’s failure to abide by the rules of Production Sharing Contract (PSC) which provides the market based pricing.

Options with Indian Government Indian government has several options in hand in order to increase the price of natural gas.

Rangrajan Formula: Applying Rangarajan formula and increasing rates up to USD 8.4 per mmbtu (double). This formula takes average rates at major global trading hubs and cost of Japanese and Indian LNGs. There is another method which requires a minor change in the same formula and refers to including Russian crude instead of Japanese crude. Once applied, for every dollar increased in the price of gas, the cost of producing urea would increase by ` 1370/tone and the electricity tariff would increase by ` 45 paise per unit.

New Panel: Setting up an entire new panel that would recommend new price and change the benchmarks (international) which is used to calculate the price.

many of RIL’s fields in KG-D6 basin but excludes fields of ONGC. This price setting model excludes blocks allotted under APM - Administered Price Mechanism.

Cost-plus Formula: This includes setting up the prices of natural gas in terms of Rupees instead of US Dollars thereby opting for fixed returns on investments for the producers of natural gas. This would in turn shut down the exchange rate volatility.

Effect on India in terms of Foreign Investments BP bought 30 per cent stake in several fields of RIL including KG-DG at a whopping cost of USD 7.2 billion, making it the largest foreign investor in India. RIL-BP are still selling gas at USD 4.2/mmbtu even though its five year old contract (for which the price was valid) has expired on March 30.

Bob Dudley, Chief of BP Pic - India’s largest foreign investor, has already expressed his disappointment in matters like pace at which the approvals from government regarding surveys and projects (in order to increase the output from KG-D6 basin). Factors such as delay in government clearance and policy indecision on gas price formula goes on to reinforce the view that India is not an attractive destination for hydrocarbon investments.

Recommendations • It is not feasible for India to import natural gas in the form of LNG from Australia, Qatar, etc at rates as high as USD 16-20 per million cubic feet, when the same resource can be developed in India at lesser price.

• The government of India has to take decision which is favour of both the producers and the consumers. The price hike must be such that it is not fueling inflation and affecting sectors such as power and fertilisers.

• The decision should be encouraging enough for E&P companies as well as other investors. A right mix of policy framework would increase E&P activities in India and help make it an energy independent nation.

References • Economic Times • Wikipedia • Journals, Newsletters, Articles, etc.

(The views expressed by the author are his personal opinions.)

NELP: One of the most feasible options is to allow higher prices only for those fields wherein the output is in excess of what was produced in 2013-14 or from those fields discovered under NELP (New Exploration Licensing Policy). This includes www.oswindia.com

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Akshat Singh Senior Research Analyst - Oil & Gas Beroe Inc Email: akshat.singh@beroe-inc.com

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Super-duplex steels in demanding topside Offshore Applications The author explains how the stainless steel manufacturer has developed advanced hydraulic and instrumentation tubing in super-duplex material for topside applications for more demanding applications.

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Energy and petrochemical suppliers worldwide are highlighting the need for innovation and collaboration in order to meet the most pressing issues facing the global oil and gas industry. These challenges include greater needs for cost-efficiency as well as growing health, safety and environmental (HSE) demands.

Global demand for energy continues to grow, especially in developing economies such as China and India. Market pressures are driving oil and gas companies towards deeper wells in more exposed locations to achieve higher productivity and efficiency. This subjects rigs to even greater threats of localized corrosion.

On offshore platforms stainless steel tubing is used in process instrumentation, hydraulic lines, chemical inhibition and utility applications. Many of these applications are topside and in tropical sea waters corrosion of ASTM 316L stainless steel tubing often occurs, primarily due to marine atmospheric corrosion. In the main this is pitting and crevice corrosion that takes place in inaccessible locations such as beneath clamps, support trays and connections. Both types of corrosion depend on chloride concentrations and moisture levels. However, they can be further exacerbated by surface contamination - caused by iron particles from welding and grinding operations, surface deposits from handling, drilling and blasting and from sulfur-rich diesel engine exhaust.

Operational experience in tropical waters, such as the Gulf of Guinea and the Gulf of Mexico, prove that ASTM 316L tubing service life is less than 5 years while in some extreme cases it can be under 1 year. Obviously, this has serious implications not least of which are life hazard accidents resulting from sudden failures as well as the potential serious damage to the platforms.

Improved corrosion resistance for longer lifecycles The normal lifecycle of ASTM 316L steels can exceed 100 years in non-corrosive environments. However, tests in chloride containing environments have demonstrated that tubing made from ASTM 316L has a service life shorter than 5 years and, in some

cases, less than one year. This has been confirmed by operational experience.

Such corrosion failures are adverse to the increasing performance demands faced by oil and gas companies. In process systems found on topside platforms – consisting of various vessels, heat exchangers, separators and compressors – poor equipment life spans pose serious risks of sudden equipment failures and may even lead to hazardous, costly and highly-publicized accidents. Consequently, some oil and gas suppliers have gone so far as to implement a ‘zero tolerance policy’ against accidents.

With the growing demand on oil and gas the exploration is going deeper and the processing environments are becoming more extreme and corrosive to meet production targets. The industry is turning to corrosion resistant alloys (CRAs). These CRAs include grades from 13Cr and upwards and 6Mo austenitic steel types (containing 6% Mo) such as 254 SMO™ and alloy 625. However, because they have higher levels of Ni and Mo and somewhat lower market availability they are more costly than super-duplex steels.

Twice the strength of high-alloy steels Fortunately, there is a further alternative material that is helping the oil and gas industry face emerging market challenges, while also achieving lower lifecycle costs and other operational benefits. Super-duplex steels have been gaining a bigger market share thanks to their higher strength which can reduce the wall thickness of tubes and pipes in hydraulic and instrumentation systems, thus reducing both cost and weight.

Among these materials is the super-duplex austenitic-ferritic steel Sandvik SAF 2507™, which has a PRE (Pitting Resistance Equivalent) value of 42.5 due to its chemical composition of 25% Cr, 4% Mo and 0.3% N compared to other steels (see Table 1).

Sandvik SAF 2507 is specially designed for highly corrosive conditions and chloridebearing environments. Its high mechanical strength can also enable lighter constructions with weight savings of up to 50% over standard steels. With these qualities, the material

Table 1 – Range of chemical composition and PRE values for some corrosion resistant alloys. (Okeremi & Simon-Thomas, 2008.) PRE (Pitting Resistance Equivalent) is a practical application for selecting appropriate materials, today widely recommended by stainless steel manufacturers. PRE = % Cr + 3.3% Mo + 16% N.

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Figure 1 – ASTM 316L stainless steel and Sandvik SAF 2507™ super- duplex tubing installed side by side, with the ASTM 316 tubing showing extensive corrosion and the super-duplex tubing showing none. (Schiroky, Dam, Okeremi and Speed, 2009.)

The temperature range was 30 to 40 deg C

can endure long and secure equipment durations, as was clearly proven when it was installed alongside ASTM 316L in Sandvik’s Gulf of Mexico tests.

316L (min. 2.5% Mo), 904L (N08904), Sanicro 28 (N08028), SAF2205 (S32205) and SAF2507 (S32750)

While ASTM 316L experienced heavy corrosion in the tests, no signs of corrosion were detected in the super-duplex tubing, Figure 1. The latter material’s mix of austenite and ferrite provides a very high mechanical strength with a minimum proof strength of 550 MPa (N/mm2) – nearly twice that of high-alloy austenitic steels. The material’s excellent resistance to stress corrosion cracking (SCC), pitting and crevice corrosion in chloride bearing environments makes it a natural choice for hydraulic and instrumentation tubing applications on offshore platforms.

We will try to focus on two grades in discussion here.

Material selection and chemical composition Pitting and crevice corrosion at temperatures above 50˚C to 60˚C (122˚F to 140˚F) and stress corrosion cracking (SCC) are the most common of all types of corrosion in oil and gas topside applications. Such corrosion is caused predominantly by localized attacks from seawater. Here the chloride content, alongside other factors such as fouling and galvanic effects induce stress corrosion cracking, particularly if the material is too low alloyed for the service conditions.

Corrosion challenges are driving companies to upgrade their platforms with intelligent infrastructure to reduce costs and prolong equipment lifecycles. Materials selection for the Hydraulic and Instrumentation tubing is of paramount importance for these improvements.

The grades that were put on installation –

In the analysis that followed 316L showed a lot of corrosion in the 18 months of Installation as can be seen in the picture.

316L tubing after 18 months of installation

Further analysis with SEM and EDS shows the presence and Sulphur and Chlorine in the corrosion area as can be seen in the graph and the table.

In light of these requirements, the high-alloy super-duplex stainless steel grade Sandvik SAF 2507 has become a favored choice for hydraulic and instrumentation tubing in such exposed locations.

The proven corrosion resistance of Sandvik SAF 2507 makes the grade an increasingly justifiable solution for economic considerations, such as operational reliability and long service life. The steel’s Mo content is 4% which gives it performance levels comparable to 6% Mo austenitic stainless steels like 254 SMO and AL-6XN. Lower Deck Test Installation The H&I tubing in various grades were installed to check their resistance to corrosion in a given marine environment. The period of study was from 22nd of August 2002 to 12th of Feb 2004. www.oswindia.com

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The Pitting Resistant Equivalent, or PRE number, is widely accepted as the best method to rank the pitting resistance of stainless steels. It is calculated from the level of Cr, Mo and N present in an alloy, PRE= %Cr + 3.3% Mo +16%N.

Super duplex SAF2507 after 18 months

For offshore applications the common specified minimum PRE number is 40. While ASTM 316L and its variants, like ASTM 317L, have insufficient corrosion resistance with maximum PRE numbers of 27.9 and 34.8 respectively, Sandvik SAF 2507 is a satisfactory alternative with a minimum PRE of 42.5.

Conclusion 316L has severe limitations when it comes to offshore application. The Pitting Corrosion and the Stress Corrosion Cracking are seen as major issues with this grade. SAF 2507 (UNS 32750) with its very high strength and high resistance to corrosion both pitting and stress corrosion cracking becomes an ideal choice of material for Hydraulic and Instrumentation Tubing on Offshore platforms. It also becomes a viable solution with respect to the High Nickel grades where cost is very high and quick availability is also a concern.

The analysis of SAF 2507 as can be seen in the table didn’t show any traces of Sulphur and Chlorine.

Collaborating with long-term partner The challenge for the oil and gas industry is to continue its long-held track record in overcoming technological obstacles – and no single organization or government can meet these industry changes alone. This is where Sandvik 150 years of unmatched expertise in metallurgy and steel production for varied applications comes into play.

Sandvik can be a long-term productivity partner for its customers, with the know-how and experience to create next generation materials that can bring more value for end users and help to future-proof their business. Meanwhile, as dynamic and cost-effective steel materials and infrastructures become ever more critical to oil and gas producers, Sandvik is con dent that its operationally tested Sandvik SAF 2507 super-duplex is one of the best material grades for the replacement of ASTM 316L in hydraulic and instrumentation tubing on offshore platforms.

Sandvik and Sandvik SAF 2507 are trademarks owned by Sandvik Intellectual Property AB. 254 SMO is a trademark owned by Outokumpu OY and AL-6XN is a registered trademark of ATI Properties, Inc. Inconel 625 is a trademark of Special Metals Corporation.

Vikram Pandit Product Manager - Hydraulic & Instrumentation Tubing Sandvik Materials Technology

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Unique Wellube Launches its Oil & Gas Range of Products & Services in Indian Market @ ADIPEC 2014

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A division of Unique Maritime Group (UMG) which is one of the world’s leading integrated turnkey subsea and offshore solutions provider, Unique Wellube (UW) is pleased to announce the launch of its oil & gas range of products & services to customers within the Indian sub-continent. It is also announcing its expansion, investment and strategic plans at the ADIPEC exhibition. ADIPEC is being held in Abu Dhabi, UAE from the 10th of November to the 13th. In addition to India, Unique Wellube has major expansion plans to enter into markets such as KSA, UK and West Africa in order to offer its unmatched range of products and services to customers in these regions. The expansion plans are in unison with UW’s growth strategy. The total value of investment in the Oil & Gas division is USD 2.5 mn with future plans of growing its containers business (represented by JV OEG Unique) within these newly targeted markets.

Unique Wellube offers specialist engineering services and associated products to a diverse range of industries. The services are focused on ensuring plant and pipeline operability and avoiding costly unplanned shutdowns by allowing intervention and plant critical maintenance work to be carried out in a safe and cost effective manner.

During the 4-day course of the show, Unique Wellube plans to showcase its impressive line-up of products and services for the oil & gas industry to existing clients and target potential clients to further grow the business in the GCC region. This will also be combined with its marketing initiatives to strengthen the brand value in the market.

The ADIPEC exhibition is one of the most prominent shows for the oil & gas industry.

It is an unrivalled show which unites the oil & gas industry professionals under a common platform to showcase innovations in technology and highlight issues currently challenging the industry. The show is aptly held in the Middle East which is a central hub for the oil & gas industry. It is a meeting point for industry leaders across the world to discuss the changing face of the industry. Ever since the show’s inception in 1984, ADIPEC has managed to be a momentous platform to showcase ideas and innovations that rapidly impact the changing face of the industry.

Unique Wellube is expanding its portfolio of products & services in the Indian market.

The Indian sub-continent is one of the most rapidly growing markets in Asia for the oil & gas industry with a vast majority of independent and government-run organizations competing to bring in the latest technologies, thereby contributing to the overall economic growth. Presently the oil & gas industry accounts for approximately 16% of the country’s GDP. Huge investments are being made in the upstream and downstream market sectors as well. Unique Wellube is looking forward to offer more efficient and effective range of products and services to clients in the Indian sub-continent. With an impressive lineup of products and services, customers within the region will have more choices to opt for world-class products and services for their project requirements. This in turn will significantly improve market competitiveness which ultimately will be of benefit to the customer.

Unique Wellube will offer its range of products and services to the Indian market from its office in Mumbai which can be summarized as follows: www.oswindia.com

• Hot Tapping & Line Stopping • On-Site Machining • Under Pressure Leak Sealing • “Uni-Test” Online Valve Testing • “UniSeal” Pipeline Repair Clamps • On-Line Valve Maintenance • Pipe Freezing • Composite Wrapping • Portable Onsite Machining Sales & Rentals • Custom Pipeline Fittings • Pipeline Pressure Testers • Platform Decommissioning Services Some Recent Noteworthy Achievements: Unique Wellube is proud to have received several high profile projects over the last year from some of the major companies in this area. A few of the projects are as listed below: • Successfully completed 4 off 8” Class 600 Subsea Line Plugging operations, Offshore KSA at a depth of 50 meters.

• A 24” Class 900 Double Position Line Stop project has also been awarded for the repair of a high pressure natural gas pipe in Kurdistan.

• 500 UniSeal Self Sealing Pipeline Repair Clamps of sizes ranging from 2” to 48” of pressure classes up to 1500# were supplied to clients in Qatar, Oman, Kuwait and| Iraq. Some of these were special builds with 2+ meter seal lengths.

• Leak Sealing operations on 10000 psi rated leaking wellheads in Iraq were successfully completed.

• 18” Class 900 Subsea Hydrocarbon Leak Sealing at a depth of 75 meters in Malaysia.

• Flange and tube sheet machining of 8 Amine Regeneration Reboilers in Kazakhstan including planarity check and In – situ machining of heat exchanger gasket seating

Offshore World | 50 | August - September 2014

OSW marketing intiative area of tubesheet (front and back side) channel flange and shell flange.

• Design, manufacture and successful testing of extended mechanical seal plugs to replace defective section of the 8” oil riser at OCCP platform. The plugs had to be installed 2 meters from the open end of the pipe to facilitate cutting and re-welding.

The design of the FWT & PP has been created to make the tool efficient and simple to use as well as extremely cost effective to the operator in terms of time and money. Some of its benefits are: they are easily installed and simple to use, they are applicable in any pipeline material, reduce operational costs and minimizes downtime.

Brief Description on some of its Products and Services on display during ADIPEC: Unique Wellube will showcase a lineup of products on its stand in ADIPEC 2014 which includes the Flange and Pipe Weld Testers; Uni-Test Online Valve Testing equipment; Diamond Wire equipment and the pipe spool which includes the Hot Tapping Machine.

Unique Wellube also offers the “Uni-Test” Online Valve Testing System which is ideal for testing valves without the need of increasing the line pressure and removing the valve. The primary device used to prevent over-pressurization in any onshore or offshore installation is the Pressure Safety Valves (PSV). The primary function of a PSV is therefore to protect life and property and it is paramount to ensure that the PSV will operate as designed. The Uni-Test system is used to verify the set pressures of the PSV and also to ensure that it lifts when required, thus, eliminating the need to remove the valves from the system. Uni-Test can be used for testing when the plant is operational or even during shut down.

Unique Wellube offers specialist hot tapping & line stopping equipment for numerous live interventions on pipeline systems. From the smallest bore emergency operation to large project planned interventions, Unique Wellube can successfully carry out live insertions into the plant without any need for production down time or interruptions in service. Unique Wellube’s hot tapping & line stopping services come in handy with the following features and benefits: • Services available with local expertise & equipment for hot taps up to 84” diameter.

• Full size on size or reduced branch size on any pipeline materials & line mediums.

• Topside & subsea; offshore & onshore.

• At any orientation – vertical/horizontal/offset/lateral.

• High pressure & high temperature capabilities.

• Thermowell & probe installation online or tapping into storage tanks.

• Extruded or fabricated fittings designed to client standards & requirements.

• Highly reliable and cost-efficient for all applications All equipments are based within the region to meet emergency client requirements to cover all standard hot taps as well as single or double position line stops with/ without bypass.

Unique Wellube has recently added the Diamond Wire Saws to its existing range of products. These are typically used for Subsea and Topside Multi-String Casing and Structure Cutting. The Wire Saws have the following features: • Rigid frame makes repeatability and back-cutting easier and more accurate.

• Operates in the most challenging environmental conditions.

• Powerful dual drives cut through the toughest steel and aggregates, with less hang-up from pinching.

• Compact and lightweight design takes less deck space and is easy to handle.

• Continuous loop diamond wire resists breaking, makes multiple cuts with a single wire.

• Small footprint saves deck space, reduces excavation for BML cuts.

Unique Wellube also maintains a stock of flange weld testers and pipeline plugs.

The Flange Weld Tester [FWT] is used to test the integrity of a new weld joint by hydrostatic testing methods. It allows for a fast and efficient operation to be carried out using standard hand-tools for hydrostatic testing of a new weld.

Pipeline Plugs [PP] are widely used for hydrostatic test applications. This range includes low, medium and high pressure pipeline plugs. Apart from being used in a testing scenario, these pipeline plugs are also used for isolation and in some cases for very basic pig launching.

The principle of the online valve testing is to apply a force to the valve spindle to overcome the spring tension of the valve. This is achieved using a hydraulic power pack in conjunction with an electronic force transducer linked to a digital recorder that controls and records the force applied. The recorder data together with knowledge of the valve seat area and the line pressure of the valve enables the set pressure to be calculated.

Unique Wellube tests the valve with no interruption to plant production, thus, achieving considerable cost savings and operational advantages.

Additionally, the valve is also free to function normally throughout the testing operation.

In addition to its ability to keep the process systems operational even during the testing, Uni-Test enables the recording and verification of the Set Pressure, Reseat Pressure, Spring Rate and Valve Displacement.

Some of the benefits of using Unique Wellube’s Uni-Test system include: • TÜV & DNV approved; BV certified system.

• Certificate issued for every valve tested.

• All Spring Operated and Pilot Operated Valves can be tested.

• Enables testing of response pressures without increasing the operational pressure.

• Avoids down time and labor costs associated with valve removal/replacement.

• Eliminates costs for transport of the valves and avoids possible damage to valves whilst in transit.

• Efficient digital management of test data including settings and results • Only valves that require overhauling can be removed from the line • Temperature compensation is not necessary for set pressure as the test is being executed at actual site operating conditions.

UMG has built up an impressive reputation for quality, innovation, service and speed of response in it’s nearly two decades of existence and is always striving to improve its product and service enhancements, via Organic Growth and strategic acquisitions. We have always been open to prospective business opportunities which contribute to our growth plans and ADIPEC is a show which is an exceptional platform for acquiring such business opportunities within the oil & gas industry as some of the top industry majors visit the show looking for partnerships and distributor agreements.

Visit Unique Wellube at Stand 1332 in Hall Number 1. For general information relating to other specialist engineering products and services, please visit http://www.uniquegroup.com/oil-and-gas.

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www.oswindia.com

OSW marketing intiative

Tekla India kicks off ‘Concrete Construction Seminar Series 2014’ Showcases benefits of Tekla BIM technology in concrete construction projects

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Mumbai, 20th September, 2014: Tekla India, Building Information Modelling (BIM) software provider for the engineering and construction industry, kicked-off its roadshow series ‘Tekla Concrete Construction – 2014‘ this month. This series aims to create awareness amongst the top corporates about latest technologies in modern concrete construction practices in the country. The first two seminars were successfully conducted in Hyderabad and Delhi, which will be followed in Kolkata and Ahmedabad in the month of October 2014.

Highlighting the benefits of the latest Tekla BIM technology in concrete construction projects for the reinforced and precast concrete process, these seminars were addressed by key note speaker Andy Dickey, Business Manager, Tekla Corporation and Nirmalya Chatterjee, COO & Business Director, Tekla India. The event also provided an opportunity for the participants to learn how to manage a concrete construction through a unique Model-Plan and Pour concept.

Further on, dignitaries from esteem corporate houses showcased case studies, sharing their experience on usage of Tekla BIM Technology in their construction projects. To name a few, Mr. Rajesh Shirakol, Senior Vice President, Sobha LTD; Mr Brij Nandan Yadava, Sr. Vice President, DLF Home Developers Ltd; Mr. Aniruddha Roy, Associate Vice President, Intec Infra-Technologies Pvt. Ltd and Mr. Sanjeev K Sharma, Founder & Principal, Melior Structural. These seminars were attended by a gathering of more than 80 senior executives from top construction houses and varied from general contractors, concrete contractors, precast and rebar fabricators, quantity surveyors and estimators.

The Tekla BIM technology helps to enhance the quality of the projects by reducing errors, improving reliability and integrating Tekla modelling. It further enables to seamlessly www.oswindia.com

generate construction deliverable documentation from the same 3D project model.

Tekla’s technologies, including BIM tools, are focused on optimizing collaboration so that managing the moving parts of complex building programs becomes easier and smarter.

Speaking on the occasion, Nirmalya Chatterjee, COO & Business Director, Tekla India said, “Concrete Construction is a huge industry in India. There have been various technology advancements and breakthroughs that have immensely revolutionalised this segment in the recent times. Innovations have led to a more advanced form of automation in the methods and processes, making it swifter and easier. For a construction company to sustain in this constantly rising pace of industry, it is very necessary that it adopts advanced technologies.”

About Tekla Tekla drives the evolution of digital information models to provide greater competitive advantage to the construction, infrastructure and energy industries. Established in 1966, Tekla has customers in over 100 countries, offices in over 20 countries, and a global partner network. Tekla Building & Construction is part of Trimble Buildings, a group focused on technology solutions that improve collaboration, efficiency and accuracy across the Design-Build-Operate (DBO) lifecycle of construction.

For more Information: Samir Bhatia, National Marketing Manager – 9930137825, Email – samir.bhatia@tekla.com Mishtii Hindlekar, Dy Manager – PR & Events – 9930949060, Email – mishtii.hindlekar@tekla.com

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OSW marketing intiative

Z

Ziqitza Health Care Limited (ZHL), has been a pioneer in Emergency Medical Response Services and Patient Transport Services in India since 2003. ZHL was setup by a group of young professionals who, after their education / training in the US and professional employment / entrepreneurial projects in India, realized the acute need for an organized and networked Ambulance service in India for saving lives, which may otherwise have been lost ONLY for want of timely medical attention.

ZHL’s vision is to assist in saving human lives by providing a leading network of fully equipped Advanced and Basic Life Support Ambulances across the developing world.

Our vision reflects in our commitment to meet International standards for quality in Emergency Medical Services and be accessible to everyone regardless of income bracket.

Our value lies in being ethical, being transparent and fostering teamwork.

The name ZIQITZA was derived from the Sanskrit word chikitsa, meaning medical treatment and jigyasa, meaning quest for knowledge.

‘Dial 108 in Emergency’ - This model is usually in public private partnership with State Governments, this could be either free to patients or on a user fee, as per the contract with State Governments. The service is provided to Emergency victims. This model is operational in Bihar, Odisha and Punjab.

Ambulance Outsourcing - Today Corporates, Refineries, Factories, SEZ’s, Infrastructure Companies, Ports, Mines etc require 24*7 Ambulance onsite for safety of their employees & under regulatory requirements .The trend in Hospitals & Nursing homes is also towards outsourcing the allied services to experts and focusing on core services. ZHL operates more than 50 Ambulances for leading brands like Fortis, Max, Sahyadri, Mutooth , GE, SOS International, ACC. We are currently operating 1250 ambulances across 17 states and have served over 3.2 million people till date.

Ziqitza Health Care operates the Emergency Medical Response (Ambulance) Services under three models: ‘Dial 1298 for Ambulance’ - Fee for Service model with cross subsidy, where the rich and affluent pay higher and the poor pay less, and for the very poor in accidents / emergencies, the service is free of cost. Currently, this service is operational in the city of Mumbai and states of Odisha, Punjab, Bihar and Kerala.

For more Information: Ziqitza Health Care Limited 23rd floor, Sunshine Tower, Senapati Bapat Marg Dadar (West) - 400013 Email: contactus@zhl.in

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www.oswindia.com

project update

Media Barter with gulfoilandgas.com

Projects Database Petrochemical Plants and Refineries

Major Projects in the Middle East, Africa and Caspian Sea

Project

Country

Value ($)

Status

Sitra Refinery Expansion Project

Bahrain

6,500,000,000

Execution

Yateem Oxygen - Carbon Dioxide Extraction Plant

Bahrain

-

Execution

Baiji Oil Refinery

Iraq

-

Execution

Bazian Refinery Expansion Phase 3

Iraq

-

Bidding

Karbala Refinery

Iraq

6,040,000,000

Execution

Ninewa Refinery

Iraq

-

Execution

Al Zour Refinery

Kuwait

15,000,000,000

Bidding

Clean Fuels Project (CFP)

Kuwait

18,000,000,000

Execution

Duqm Refinery and Petrochemical Complex

Oman

6,000,000,000

Bidding

Liwa Plastics Project (LPP)

Oman

-

FEED

Sohar Refinery Expansion

Oman

2,100,000,000

Execution

Halul Island Master Plan

Qatar

-

Bidding

QAFAC - Carbon Dioxide (C02) Recovery Plant

Qatar

145,500,000

Completed

QP/Shell - Al Karaana Petrochemicals

Qatar

6,400,000,000

Bidding

Petro Rabigh Refining & Petrochemical Complex - Phase 2

Saudi Arabia

8,500,000,000

Execution

Ras Tanura Refinery - Clean Fuels & Aromatics Project

Saudi Arabia

3,000,000,000

Bidding

SATORP - Jubail Export Refinery

Saudi Arabia

9,600,000,000

Completed

Yanbu Export Refinery

Saudi Arabia

12,000,000,000

Execution

Gulf Petrochem Refinery

UAE

-

Planning

IPIC - New Fujairah Oil Refinery

UAE

3,500,000,000

Bidding

Petrixo Biofuels Refinery

UAE

800,000,000

Bidding

Ruwais Refinery Expansion (RRE) Africa

UAE

10,000,000,000

Execution

Africa

Country

Value ($)

Status

Sonatrach - Paraxylene Crystallization Plant

Algeria

-

Study

Tiaret Oil Refinery

Algeria

6,000,000,000

Execution

Lobito (SonaRef ) Refinery

Angola

8,000,000,000

Execution

Soyo Refinery

Angola

-

Planning

Middle East

www.oswindia.com

Offshore World | 54 | August - September 2014

project update

Cameroon Ammonia Urea Fertilizer Plant

Cameroon

1,400,000

Study

Ain Sokhna Petrochemical Complex - Ammonium Nitrate

Egypt

600,000,000

Execution

Alexandria Petrochemicals Complex - Ethylene Plant

Egypt

600,000,000

Execution

Alexandria Petrochemicals Complex - Polyethylene Plant

Egypt

-

Execution

Egypt/South Korea Petrochemical Plant

Egypt

4,800,000,000

Study

Tahrir Petrochemicals Complex

Egypt

5,000,000,000

Execution

Gabon Ammonia Urea Fertilizer Project

Gabon

1,300,000,000

Execution

Atwereboanda LPG Storage Facility

Ghana

200,000,000

Study

Equatorial Guinea Fertilizer

Guinea

-

Study

Kenya Petroleum Refineries Limited (KPRL) Mombasa Refinery

Kenya

17,000,000

Execution

Azzawiya Refinery Upgrade

Libya

700,000,000

Execution

Mohammedia Refinery Rehabilitation & Expansion

Morocco

816,000,000

Execution

Zinder Refinery (Soraz)

Niger

980,000,000

Execution

Brass Fertilizer Plant

Nigeria

3,500,000,000

Study

Dangote Oil Refinery

Nigeria

-

Execution

Coega (Mthombo) Refinery

South Africa

10,000,000,000

FEED

Mnazi Ammonia/Urea/Methanol Project

Tanzania

-

Study

Hoima Oil Refinery

Uganda

2,500,000,000

Bidding

Caspian Region

Country

Value ($)

Status

Azerikimya Ethylene-Polyethylene Plant

Azerbaijan

-

Execution

Oil, Gas Processing & Petrochemical Complex (OGPC) Project

Azerbaijan

15,000,000,000

Study

Sumgayit Nitrogen Fertilizer-Urea Complex

Azerbaijan

-

Study

Abadan Second Refinery

Iran

3,500,000,000

Execution

Anahita Oil Refinery

Iran

3,130,000,000

Bidding

Bandar Imam Petrochemical Complex

Iran

-

Execution

Esfahan (Isfahan) Refinery Expansion

Iran

2,500,000,000

Execution

Hengam Urea/Ammonia Plant

Iran

726,000,000

Study

Hormoz Urea Ammonia Plant

Iran

526,000,000

Planning

Marjan Methanol Plant (7th Methanol Unit)

Iran

212,000,000

Execution

Parsian Gas Refinery

Iran

400,000,000

Execution

Persian Gulf Star Gas Condensate Refinery (PGSCR)

Iran

2,600,000,000

Execution

Tabriz - Gasoil Hydro-Treating Plant (GHP)

Iran

-

Bidding

Atyrau Refinery Upgrade

Kazakhstan

1,040,000,000

Execution

Kazakh GTL Plant

Kazakhstan

50,000,000

Planning

Pavlodar Refinery

Kazakhstan

40,000,000

Execution

Achinsk Refinery Upgrade

Russia

759,500,000

Execution

Afipsky Oil Refinery

Russia

-

Execution

Kuibyshev Refinery Upgrade

Russia

102,000,000

Execution

Syzran Refinery Upgrade

Russia

-

Execution

Togliatti Ammonia and Hydrogen Plant

Russia

350,000,000

Study

ZapSib-2 Project

Russia

9,500,000,000

Bidding

Offshore World | 55 | August - September 2014

www.oswindia.com

news H Kumar Appointed MD, MRPL

Rajasthan Block Holds 1-3 TCF Gas Reserves: Cairn

Mangalore: Kuthethur-based Mangalore Refinery and Petrochemicals Ltd (MRPL), a subsidiary of ONGC, has a new Managing Director in H Kumar. Government headhunters — the Public Enterprises Selection Board (PESB) had recommended the name of Kumar for the post of managing director of Karnataka’s only oil refinery.

H Ku m a r, M a n a g i n g Director, MRPL

Kumar will take charge from Vishnu Agrawal, Director (Finance) of MRPL who was given additional charge as MD on the superannuation of P P Upadhya. MRPL has a design capacity to process 15 million metric tons per annum and have two hydrocrackers producing premium diesel (High Cetane).

BPCL Plans Assam Refinery Expansion New Delhi: State-run oil refiner-marketer Bharat Petroleum Corporation Ltd has drawn up plans to ramp up the capacity of its refinery at Numaligarh in Assam’s Golaghat district from three million tonnes per annum to nine million tonnes at an investment of `16,600 crore.

The project includes laying a 1,350-km pipeline to bring in crude from a port on the east coast. While the refinery expansion would cost about ` 8,800 crore, the remaining investment is expected to go into laying the pipeline and other assorted facilities.

Company sources said the project would mark the single-largest investment in Assam and boost economic activities in the north-east as well as unlock potential for exporting fuels to India’s eastern neighbourhood. Government consultancy firm Engineers India Ltd is preparing the feasibility report for the project and the pipeline. The BPCL board has discussed the plan but a final call would be taken after the project report and other paperworks are completed.

Naveen Jindal to Exit Oil & Gas Business New Delhi: Naveen Jindal plans to exit from the oil and gas business and his listed entity Jindal Steel and Power (JSPL) will sell stakes in some projects to reduce the group’s debt burden.

JSPL had debt of ` 37,500 crore as of June against ` 36,500 crore in the year earlier. However, the company plans to continue its investment drive to expand in mining besides its steel and power plants.

In a bid to diversify in 2008, the group established Jindal Petroleum that acquired seven oil and gas blocks, including five in Georgia and one each in Bolivia and India. According to Jindal Petroleum’s website, the company has so far committed an investment of USD 200 million and is currently producing about 550 barrels a day. Last year, it announced the discovery of crude oil in one of its blocks in Georgia and a USD 100 million development plan for the blocks. www.oswindia.com

Jaipur: Cairn has so far made 36 discoveries in the Rajasthan block, including the biggest onland oil field of Mangala. After oil, Cairn India’s prolific Rajasthan block holds significant natural gas reserves, estimated at 1-3 Trillion cubic feet (TCF), over half of which can be produced.

It made a significant gas discovery in Raageshwari find. Recent exploration drilling and the proximity of the Raageshwari deep gas field indicates the presence of a larger multi-Tcf gas resource base, comprises Raag Deep, Guda Deep and Guda South structures.

“RDG (Raageshwari Deep Gas) field is estimated to hold 1-3 Tcf of gas in-place with estimated recovery factor of over 50 per cent,” the company said in its latest corporate presentation.

OilMin Plans to Bring Simpler Sharing of Revenues in NELP-X New Delhi: In keeping mind of more transparency and accessible, the oil ministry plans to introduce simpler revenue-sharing in the next auction of oil and gas blocks, so it does not need to micromanage oilfield affairs and companies have no incentive to inflate costs, official sources said. The ministry will shortly seek Cabinet approval after inviting public comments. It plans to launch the 10 th round of the New Exploration Licensing Policy (NELP-X) by December, officials said.

The revenue-sharing system was suggested by a panel headed by C Rangarajan, who proposed ending the controversial system in which oil companies recover costs before sharing profit. The ministry has several disputes with exploration firms on issues linked to cost of development, which has an impact on the government’s share. CAG has criticised the government’s handling of contracts.

Rangarajan Panel proposed the cost recovery to dispense in favour of sharing of the overall revenues of the contractor, without setting off any costs. But Kelkar Panel said the proposed model would discourage companies, though some officials, including the former director general of hydrocarbons, disagree.

IOC to Invest on LPG Pipeline Projects Chennai: State-owned Indian Oil Corporation has proposed to invest about ` 1,200 crore during the current financial year for expanding its Liquefied Petroleum Gas (LPG) pipeline projects.

Recently, IOC has renewed focus on LPG pipelines so as to leverage the economics and safety aspects of LPG transport via pipelines. With increased LPG imports and significant evacuation through tankers, LPG piplines are in the next growth avenue,” IOC said in its annual report.

Paradip-Haldia-Durgapur Pipeline and Ennore-Trichy-Madurai Pipeline are being planned for transportation of LPG. IOC has planned to invest ` 1,200 crore during the current financial year for implementing various pipeline projects, the report said.

Offshore World | 56 | August - September 2014

news Petroleum Secy Favours Private Participation

Sourav Chandra, Union Secretary, Petroleum and Natural Gas

New Delhi: Even as the oil and gas industry awaits the new gas price revision by the government plans to focus on alternative energy sources such as allowing private participation in shale gas, increasing allotment of more coal bed methane blocks, a new policy on marginal fields and undertake deep water drilling in energy-rich areas like Andaman Sea.

Sourav Chandra, Union Secretary, Petroleum and Natural Gas, said although the government has allowed PSUs like ONGC and OIL to develop shale gas assets in the country, real development of assets would take place with the involvement of private companies such as Reliance Industries and Essar Oil. The real benefit of shale is visible in the growth of this segment in US, now being followed

by European countries, he said at the India Tech foundation-organised oil and gas seminar in Mumbai.

India has huge potential in the North East, Gondwana and other areas identified by the government, which would be exploited over the coming years, Chandra said.

The country also needs a separate policy on the development of marginal fields and ONGC is well equipped in that field. They require the right emphasis on these marginal fields as they contribute substantially towards meeting India’s requirement, he said.

Cairn Gets Green Nod to Raise Output New Delhi: The Ministry of Environment and Forests has given environment clearance to Cairn India to raise crude oil production from its prolific Rajasthan block by 50 per cent to 300,000 barrels per day.

The Ministry also gave environment clearance to Cairn to produce up to 165 million standard cubic feet per day of natural gas from the Barmer basin block.

The Ministry noted that the hydrocarbon resource potential of the Rajasthan block is estimated at 7.3 billion barrels of oil equivalent and the estimated cost of project is ` 160 billion. According to the proposal, Cairn will develop 205 well pads for additional production/injection/EOR wells and evacuation infrastructure.

Govt Starts Review Crude Import Policy New Delhi: The ministry of petroleum and natural gas has started review of the crude oil import policy by the public sector oil marketing companies (OMCs) on term basis for possible amendments towards relaxing the norms.

The review has started based on the recommendations of the standing parliamentary committee.

Officials said the policy is one of the steps to help build strategic crude oil reserves of 5.33 million metric tonne capacity besides bolstering other measures of oil exploration and production.

He said that the governments’ decision to make India the manufacturing hub has logic to it since most countries other than surplus oil producers have manufacturing as their core means of growth. Germany, China, Japan and Korea all have emphasised on manufacturing. Indian oil and gas equipment manufacturers can now focus on producing equipment on a large scale as the demand for domestic equipment requirement could be mandated for oil explorers.

The amendments are aimed at imparting more operational freedom to the PSU oil refiners to negotiate crude prices and other transport procedures in the import at par with their private peers. Officials explained that this has become necessary as oil subsidy is getting capped and under recoveries are becoming a constant problem for the PSU companies.

“We also need to focus on building gas infrastructure since requirements of fertiliser companies, power and the city gas distribution sector is going to increase phenomenally. We need to build gas grids crisscrossing the national highways to replace the costly liquid fuel and replace with cheaper fuel,” said Chandra.

Dahej: State-owned Oil and Natural Gas Corp Ltd (ONGC) had in 2006 set up ONGC Petro-additions Ltd (OPaL) for building a mega petrochemical complex at Dahej in Gujarat. State-owned Oil and Natural Gas Corp’s (ONGC) long-delayed mega petrochemical plant at Dahej in Gujarat will be commissioned by June next year but at 27 per cent higher cost of ` 271.22 billion.

The country also needs to monetise around 142 discoveries. Around 201 blocks were awarded in the nine NELP rounds out of which 30 blocks are producing, while 29 were abandoned.

Meanwhile, the government has ordered state gas utility GAIL India to cut natural gas supplies of non- priority sectors like steel and petrochemicals so as to meet full requirement of CNG retailers like Indraprastha Gas. The petroleum ministry in an order on Wednesday said it has revised guidelines for allocation/supply of domestic natural gas to city gas distribution (CGD) entities for CNG and piped cooking gas sector.

Dahej Petrochem by June 2015

ONGC had in 2006 set up ONGC Petro-additions Ltd (OPaL) for building a mega petrochemical complex at Dahej in Gujarat. The plant was originally planned to come on stream by end 2012 but delays have led to two revisions in completion dates.

“Pre-commissioning activities have started at Dahej. The plant will be mechanically complete by April 2015 and commercial operations will start by June 2015,” said D K Sarraf, Chairman and Managing Director, ONGC.

Offshore World | 57 | August - September 2014

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news Govt Increases List of Foreign Firms to Buy Crude Oil New Delhi: In a bid to widen supply sources, the government is expanding the list of foreign firms that can sell crude oil to state-run oil companies, by including global giants like Italy’s Eni and Russian companies. Besides national oil companies of oil producing nations, the government had on May 21, 2001 permitted state refiners to buy crude oil from top 10 foreign firms.

Of this list, a few firms have subsequently merged and some are no longer major players in global oil production and supply business.

Prime Minister Announced to Launch Energy Highway for Eastern India New Delhi: Prime Minister Narendra Modi has announced to launch Energy Highway for Eastern India. The pipeline project will connect Eastern India with the national gas grid.

GAIL will implement the project. GAIL has already started activities related to detailed survey of the pipeline route.

The Oil Ministry has now decided to revise the list of multinational companies with whom the PSU oil companies can enter into term contracts for supply of crude oil, official sources said.

Narendra Modi, Honourable Prime Minister of India

Currently, refiners like Indian Oil Corp are allowed to buy crude oil from 10 MNCs -- Exxon (which has merged with Mobil), Shell, BP, Elf (merged with Total Fina), texaco (merged with Chevron), South Korea’s SK, Chevron, USX of USA, Spain’s Repsol and Nippon Mitsubishi of Japan. In the new list now being prepared, suppliers from South Korea, Spain and Japan as well as USX of USA have been dropped while Eni, Valero Energy, Russia’s Lukoil, Conoco Phillips, Occidental and Marathon have been added.

The Jagdishpur – Phulpur – Haldia pipeline will consist of 922 km main line (36 inch-diameter) and 1128 km spur lines and feeder lines (12 to 30 inch diameter). The compressor station will be located at Haldia.

Technip Bags BPCL’s Industrial Gas Complex Contract Kochi: French engineering & construction company Technip has been awarded by the US-based Air Products a contract to provide project management, as well as engineering, procurement and construction management (EPCM) services for a new industrial gas complex for Bharat Petroleum Corporation Limited’s Kochi Refinery (BPCL-KR) in Kerala.

Being built on a build-own-operate basis (BOO), the industrial gas complex of Air Products is designed to cater to the requirement of industrial gases (hydrogen, nitrogen and oxygen) of BPCL-KR for its Integrated Refinery Expansion Project (IREP), which will increase BPCL-KR’s crude refining capacity from 9.5 million metric tonnes per annum to 15.5 million metric tonnes per annum (from 190,000 barrels per day to 310,000 barrels per day) and produce clean transportation fuels to meet Euro IV/V specifications.

The plant will feature the latest technology advancements to maximise energy efficiency and minimise emissions, and will include optimal heat integration, which in turn lowers feedstock consumption during production.

New Domestic Natural Gas Price Unveiled New Delhi: Taking advantage of softening global prices, the Government on Saturday took the cautious route of fixing the price of domestically produced natural gas at USD 5.61 a unit (gas is measured in million British thermal units) up from USD 4.2 a unit currently. The new price, applicable from November 1 will be effective prospectively and revised on a half-yearly basis. www.oswindia.com

The Energy Highway is a 2050 km Jagdishpur – Phulpur – Haldia natural gas pipeline. It will carry the efficient and environment-friendly fuel to West Bengal, Bihar, Jharkhand and Uttar Pradesh.

It is estimated that the project will have 46 river crossings, 17 Railway crossings, 14 State Highway crossings and 12 national Highway crossings, thus making it one of the most difficult engineering projects of its kind.

Domestic Production to Rise by two-thirds over Five Years: Oil ministry New Delhi: India’s domestic gas production is set to rise by two-thirds from 100 million standard cubic metres per day (mscmd) in the current financial year to 163 mscmd, or 59 billion cubic metres (bcm), over the next five years through March 2019, said Petroleum Ministry.

India’s domestic production fell 13 per cent from 111 mscmd in 2012-13 to 97 mscmd the previous financial year (2013-14). Output is expected to pick up marginally to 100 mscmd (or 36 bcm) in the current financial year, including 24 bcm from state-run Oil and Natural Gas Corporation (ONGC), 2.8 bcm from Oil India Limited (OIL) and 9.7 bcm from production sharing contracts (PSC) regime blocks.

The bulk of the additional gas would come from ONGC’s ramp-up in output from the 24 bcm in the current financial year to 35 bcm by 2019, on the back of development of the C-26 cluster next financial year, the Daman offshore block, additional production in east coast from deepwater wells of the G1 field and from commissioning of Nelp (New Exploration Licensing Policy) block KG-98/2 in the Krishna Godavari basin after 2017.

OIL is expected to increase production from the current 2.8 bcm to 4 bcm by 2018-19. Production begins from the Baghjan field in Assam next financial year and incremental output will be from Nelp blocks in the northeast and KG-basin in 2018-19.

Offshore World | 58 | August - September 2014

news L&T Signs Contract for Gas-Based Plant in Bangladesh

Govt to Set up More Strategic Oil Reserves

New Delhi: Larsen & Toubro has announced signing of a USD 200-million contract with Bangladesh Power Development Board to set up a 225 MW gasbased power plant in Bangladesh. The contract has signed between Bangladesh Power Development Board (BPDB) secretary Mohd Zahirul Haque and L&T Vice President Saurabh Indwar in Dhaka.

Four development partners of Bangladesh from the Middle-east (Saudi Arabia, Kuwait, UAE and OPEC Fund) will finance the project with a fund of approximately USD 167 million. L&T’s scope includes design, detailed engineering, supply, installation and commissioning of the power plant on a turnkey basis. L&T-Sargent and Lundy, a subsidiary of L&T, will carry out the plant integration and detailed engineering, the statement added. This is the second gas-based power project secured by L&T in Bangladesh. L&T had recently been awarded a USD 280 million order for setting up the 360 MW Bheramara combined cycle power plant.

Odisha to Get Huge Energy Investment: Pradhan Bhubaneswar: Union minister of state for petroleum and natural gas Dharmendra Pradhan said he hopes to make his home state of Odisha the ‘energy gateway’ in eastern India as he announced a clutch of projects that he said will bring in ` 1 lakh crore in investments and employ 50,000 people.

These include linking of IOCL’s refinery to a proposed petroleum and petrochem park in Odisha and oil-gas pipelines from ports to Ranchi and Surat.

Pradhan said that Odisha is among the few states which will have gas from three sources - imported LNG, domestic natural gas, coal bed methane.

New Delhi: The Centre has chalked out plans to set up at least four more strategic oil reserves in the country in a bid to store adequate stock for meeting 90-100 days requirement during any crisis.

Dharmendra Pradhan, Petroleum Minister

“It is planned to reserve crude oil for 90-100 days to meet the requirement during emergency situations and crisis. The present storage capacity is 70-75 days and the four proposed projects will raise it further,” said Dharmendra Pradhan, Petroleum Minister.

At present, there are three strategic reserves - one in Andhra Pradesh and two in Karnataka - while four more such facilities were proposed to be set up at Bikaner in Rajasthan, Rajkot in Gujarat, Padur in Karnataka and Chandikhole in Jajpur district of Odisha, the Minister said. The new reserves would have a combined capacity of around 12.5 million metric tonnes, Pradhan said adding the largest petro reserve was proposed to be set up in Odisha’s Chandikhole with an investment of ` 38 billion.

Three More Oil Discoveries in Rajasthan Jaipur: Cairn India said it has made three new oil discoveries in its Rajasthan block, taking the total number of finds in the prolific block to 36. The discoveries in the Barmer basin Block RJ-ON-90/1 “further exemplifies the capabilities of Cairn’s exploration team operating in this prolific onshore block,” the company said in a statement.

IOCL’s 15 mt refinery, entailing a ` 34,000-crore investment, near port town of Paradip is nearing completion and will be commissioned by February 15, kicking in an 11-year tax deferment agreement that will cost the state ` 3,000 crore in earnings annually. It was also agreed at the meeting that GAIL and IOCL will tie up with Industrial Infrastructure Development Corporation for a city gas distribution. Odisha hopes to attract investment of ` 2.74 lakh crore at a proposed petroleum, chemicals and petrochemicals investment region at Kendrapara and Jagatsinghpur.

Exploration well DP-1 has encountered 70 meter gross oil bearing interval in the Barmer Hill formation. The well has been fracced and tested, flowing oil at the rate of 120 barrels per day.

Penspen to Study TAPI Pipeline Feasibility

Private Players Expresses Displeasure on Gas Price Hike

New Delhi: British company Penspen has been awarded the contract for studying the feasibility of the Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline, by the project’s principal financier Asian Development Bank.

Estimated in 2008 to cost USD 7.6 billion, the pipeline is designed to carry 90 million cubic metres a day of gas from Turkmenistan’s prolific Galkynysh gas field to Afghanistan, Pakistan and India. If the pipeline becomes a reality, it will mean a lot to India, but it is still a long way, literally and figuratively, for the project to reach even ground-breaking. Issues such as price and security would first need to be resolved. The pipeline would run 735 km across Afghanistan and another 800 km through Pakistan.

New Delhi: While State-owned ONGC has expressed its satisfaction on the raising natural gas prices by the MODI government, but private explorers, who were pitching for higher rates and waiting for signals of eventual decontrol, have expressed their displeasure over the decision. D K Sarraf, Chairman & Managing Director, ONGC, said the increase price will significantly boost the earnings of the company.

Further, exploration well Saraswati SW-1 tested in a Mesozoic sand interval and flowed oil at the rate of 248 bpd. Well Aishwariya-46 flowed oil at the rate of 182 bpd in Dharv Dungar formation, making it the 36th discovery in the block.

Some officials of exploration companies, particularly in the private sector were disappointed and expressed concern that the price was not good enough to attract more investment.

Offshore World | 59 | August - September 2014

www.oswindia.com

news BPCL to Invest in Overseas Upstream Business

Gautam Roy Appointed MD of CPCL Chennai: Gautham Roy has been appointed as the new Managing Director of Chennai Petroleum Corporation Ltd (CPCL). He has been appointed in place of A S Basu, and since then the charge of Managing Director was with S Venkataramana, Director - Operations of CPCL.

Mumbai: Bharat Petroleum Corp Ltd (BPCL) plans to invest ` 13,000 crore in energy exploration and production in Mozambique and Brazil over the next four years—its biggest investment in the so-called upstream sector.

The planned investment is twice the amount the company has spent in exploration and production activity in the last 10 years and is part of the total capital expenditure of ` 35,000 crore it has chalked out for the next four years.

The investment has been planned keeping in mind the target of commencing production from the Mozambique and Brazil assets by fiscal 2019, said S Varadarajan, Chairman and Managing Director, BPCL.

ONGC Plans Huge Invest New and Existing Project

D K Sarraf, Chairman and Managing Director, ONGC

Mumbai: State-owned petroleum explorer Oil and Natural Gas Corporation (ONGC) said that it would invest ` 81,800 crore to bring new discoveries into production and check the decline in output from ageing fields. The company has taken up 15 projects for development. Of these, seven are complete and eight are under implementation.

“These projects, with an estimated capital outlay of ` 40,573 crore, are geared up to produce an additional 45.6 million tonne (mt) of crude and 67.4 billion cubic metre (bcm) of gas,” said D K Sarraf, Chairman and Managing Director, ONGC. He added the company was focusing on two other projects – Daman, a cluster of multiple discoveries in western offshore and KG-DWN-98/2 in the KrishnaGodavari basin. The Daman project, with an estimated peak production of 8.5 million standard cubic metres a day (mscmd) and an investmenty of ` 5,200 crore, has been approved by ONGC’s board. It is likely to start production by July 2016 while output in KG-DWN-98/2 will commence in 2018.

Russis Offers Stake to ONGC in Eastern Siberia Oilfield New Delhi: Russia’s biggest oil company Rosneft has offered Oil and Natural Gas Corp (ONGC) a stake in its Yurubcheno-Tokhomskoye oilfield in eastern Siberia. Rosneft sent a formal proposal to ONGC Videsh Ltd, the overseas arm of state-owned oil and gas producer, for joint development of YurubchenoTokhomskoye oilfield. The field is estimated to hold 991 million barrels of oil equivalent reserves and is planned to start production in 2017. YurubchenoTokhomskoye will reach a production plateau of up to 5 million tonnes a year (100,000 barrels per day) in 2019. Energy-hungry India is keen on sourcing one million barrels per day of oil and oil-equivalent gas from Russia, and had identified Sakhalin-3 in Far East, Vankor in East Siberia, and Terbs and Titov oilfields in Timan Pechora region. But it has so far been unsucessful in its attempts. www.oswindia.com

The 56-year old official is a Chemical Engineer from Jadavpur University, Kolkata, and has over three decades of professional experience in Refinery Operations & Management in IOCL. He has served in diverse capacities in IndianOil’s various refineries- Gujarat, Barauni, Mathura and also at Refineries Headquarters, New Delhi. Prior to this appointment he was executive director (in charge), Gujarat Refinery. refiners are in talks with them,” the official said.

Gautam Roy, Managing Director, CPCL

Ministries Plans to Mine Coal along with CBM New Delhi: Concerned over maintaining continued fuel supplies – coal and gas – for sectors such as power, exploration of gas along with coal mining is finding favour with the oil and coal ministries.

The two key ministries – Petroleum & Natural Gas and Coal – had earlier attempted to work out a system wherein contractors were to be allowed to mine gas from coal seams or coal bed methane (CBM) and coal in the same block. But, due to the turf war between the two ministries the concept did not take off.

With the third-largest proven coal reserves, and the fourth largest coal producer in the world, India holds significant prospects for commercial recovery of CBM. The country has an estimated 710.39-948.73 billion cubic metre of CBM gas. Meanwhile, the Central Mine Planning and Design Institute (CMPDI) has also prepared data on eight prospective CBM blocks in Johilla, Singrauli Coalfields and Cambay basin which have been submitted to the Director General Hydrocarbons. The blocks will be up for global bidding in the next round.

Falling Global Crude Prices Help to Trim Borrowing Target New Delhi: A fall in the international prices of crude oil has helped India reduce its subsidy outgo on fuels and thereby trim its borrowing target. The central government will borrow ` 8,000 crore less than its budget estimates for the current fiscal following an improvement in the country’s fiscal position.

The central government said it would borrow ` 2,40,000 crore from the market in the second half of the current fiscal, ` 8,000 crore less than the annual estimate.The government’s market borrowing had touched 61.2 per cent of the budgeted target for 2014-15 in the first four months of the year, but the government is confident that as inflows improve in the second half it would be well within the targeted 4.1 per cent of GDP.

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For details contact: Dover India Pvt Ltd – PSG 40 Poonamallee By-pass, Senneerkuppam, Chennai 600 056 Tel: 044-26271020, 25271023 E-mail: sales.psgindia@psgdover.com

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Offshore World | 61 | August - September 2014

www.oswindia.com

events diary OSRW 2014 Date: 18 - 19 November 2014 Venue: Beijing, China Event: OPCO is re-launching Oil Spill Response Workshop (OSRW 2014) by showcasing the latest and best technologies and solutions for oil spill through five dedicated sessions. OSRW 2014 is designed to be Asia’s top networking, knowledge-sharing and sourcing event of choice for oil spill prevention and clearing professionals and companies. The event features discussions on technical innovations and best practices across spill prevention, preparedness, response and restoration.

It will provide an optimum mix of networking opportunities for industry shareholders and will bring to the audience the most update technology and cost-efficient solutions to contain oil spill. Themed Improving Environment amid Spill Prevention, Preparedness and Response, the exhibition will display the latest technologies and equipments. Representatives from ITOPF, ISCO and OSRL also took part in the workshop as industry experts. We recorded a huge success in the conference attendance and achievements in the past three years.

For details contact: The Oriental Pro-Energy Consulting Organization (Topco) Telephone: +86 58634346 Fax: +86 58634346 Email: topco@topcoevents.com Web: http://www.oilspillchina.com/osrw_2014/index_en.html

OSEA 2014 Date: 2-5 December 2014 Venue: Marina Bay Sands, Singapore Event: OSEA is the biennial tradeshow that has served the offshore Oil & Gas market and its supporting industries since 1976. Established as the region’s most well-attended Oil & Gas event, it has continuously attracted a high quality attendance. Tapping into the region’s increasing need for more sophisticated technologies and solutions, an international representation of exhibitors will put up a comprehensive showcase for buyers from Asia and beyond.

OSEA2014 will bring in more than 1,600 exhibitors from over 45 countries / regions, showcasing latest applications / equipment for the Oil & Gas industry.

As a preview to the upcoming Online Show Catalogue, this is a sneak peak of some key exhibitors.

For details contact: Singapore Exhibition Services Pte Ltd No. 1 Jalan Kilang Timor #09-02 Pacific Tech Centre Singapore 159303 TEL: +65 6233 6638 FAX: +65 6233 6633 www.oswindia.com

SIPPE 2014 Date: 4 - 6 December 2014 Venue: Shanghai New International Expo Center (SNIEC) Event: The SIPPE is a focal project of the Shanghai Municipal Government and the China Council for the Promotion of International Trade (CCPIT). The exhibition is jointly hosted by the Chinese Petroleum Society, CCPIT Pudong Sub-Council, The China Chamber of Commerce for Import and Export of Machinery and Electronics Products (CCCME), and organized by the Shanghai AiExpo Exhibition Service Co Ltd. Over the past seven years, with the great support from domestic and overseas enterprises and industrial organizations, the SIPPE has grown greatly in scale year after year, cumulative total 3000 enterprises from over 50 countries and regions having participated in this exhibition. At the same time SIPPE has also attracted over 200,000 professional audiences from over 50 countries and regions. SIPPE has become one of the most influential petroleum shows in Asia.

The 9 th SIPPE will be held at Shanghai New International Expo Center is expected to cover 45,000 square meters’ exhibit space and attract over 30,000 industry related audiences, 600 VIP procurement personnel and over 900 exhibitors across the world.

For Detail Contact: Shanghai AiExpo Exhibition Services Co Ltd Room 1309-1310, Building A, Fudan Software Park No 15 Changyi Road, Shanghai Tel: +86-21-6592 9965 / 3641 1666 Fax: +86-21-6528 2319 E-mail: info@aiexpo.com.cn Oil and Gas Cyber Security Conference Date: 24 - 25 November 2014 Venue: Marriott Regents Park Hotel, London, UK Event: Building on 4 years SMi’s 4th annual Oil and Gas Cyber Security conference will address the most pressing cyber security issues facing the oil and gas sector with key presentations and case studies delivered by senior industry decision makers from an array of global oil and gas companies.

The two-day programme will build on the success of the 2013 event by discussing recent efforts to bolster protection of highly valuable intellectual property and commercially sensitive information on production, exploration plans and assets through project updates, case studies, live demonstrations, technology sessions, panel debates and networking opportunities.

For details contact: SMi Group Andrew Gibbons Tel: +44 (0) 207 827 6156 E-mail: agibbons@smi-online.co.uk Web: http://www.smi-online.co.uk/2014cyber-security27.asp

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