Offshore World - April May 2014

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Contents OIL & GAS WORLD EXPO 2014 Underground Rock Cavern Storages – Challenges and Project Management

6

VOL. 11 NO. 3 APRIL - MAY 2014 MUMBAI ` 150

– R K Pillai, CEO, Indian Strategic Petroleum Reserves Limited (ISPRL)

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

Cost-Efficient SMR PRICO FLNG Technology 13

Jasu Shah Maulik Jasubhai Shah Hemant Shetty

– William Breckenridge, Vice President - India Oil & Gas Business Manager,

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Black & Veatch Consulting Private Ltd HSE Challenges at Construction Sites & Mitigation Plans 15 – Shriram Rahalkar, Regional HSE Head, Jacobs Engineerings Ltd

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Underground Rock Cavern Storages – Challenges and Project Management With rapid economic growth and the increasing energy requirement of Indian households, the issue of Energy Security has assumed importance. In view of the country’s high dependence on imported crude oil, volatility of oil prices in the international market as well as perpetual political instability in some of the major oil exporting nations/regions, the Indian Government appointed Indian Strategic Petroleum Reserves Limited (ISPRL), a special purpose vehicle (SPV), to build and commission strategic storage of crude oil at three locations (Visakhapatnam, Mangalore, and Padur) to ensure uninterrupted supply of crude oil to the country’s large and well spread energy supply chain. R K Pillai, CEO, Indian Strategic Petroleum Reserves Limited (ISPRL), details the challenges and geological risks while excavating the underground rock caverns storages. He also describes the magnitude of works, project management, and bidding process in successfully commissioning the underground caverns. Edited excerpts from Pillai’s presentation delivered during the Oil & Gas World Expo 2014.

In January 2006, the government approved the financial plan for the strategic reserves to create 5 million metric tonnes (MMT) of crude oil storage. The capacity is almost 75 days of the entire crude oil production of ONGC. This storage was to be in underground rock cavern. The client ISPRL was required to create the largest underground caverns, ever excavated, in the country, without any technical expertises, the necessary land acquisition, environment clearance and supporting infrastructure, within a timeline of six years. The height of the caverns is almost equivalent to a ten story building and the main storage galleries as long as 913 meter.

Location

Capacity [MMT]

Visakhapatnam

1.33

Mangalore

1.5

Padur

2.5

Risk & Challenges Involved in Underground Works It is noted that storage in rock caverns is akin to storage of hydrocarbon and porous vessels. Hence there were challenges with respect to containment of products. Unlike aboveground works where it is possible to a large extent to determine the timelines required for different activities, determination of timelines for underground works is not easy because geology can change very rapidly in underground works. www.oswindia.com

Drilling & blasting method for excavation in underground works can vary depending upon the rock quality. When the rock quality is good, it is possible to excavate large quantum of rock, but when the rock quality is poor, excavation can be painfully slow. This is because the support requirements for stabilising the cavities are different.

This is a major factor in deciding the timelines for underground project and can also be a major issue while deciding the performance of a contractor. A good contractor despite his best effort can end up being slow in excavation when he encounters poor rock condition.

Geological risks during construction of underground cavern include wedge failures that can cause fatalities and slow down the progress of the project.

Fault can cause a rock slide, hidden behind the bench. When the bench is excavated because of the weight of the rock, a rock slide can occur, and

>>Unlike aboveground works where it is possible to a large extent to determine the timelines required for different activities, determination of timelines for underground works is not easy because geology can change very rapidly in underground works.

Offshore World | 6 | April - May 2014

huge quantities of rock can come crashing down, resulting in accidents and delays.

Water bearing zones or aquifers could result in large water ingress into caverns or shafts, resulting in a slow down of works. Such problems were encountered by ISPRL in cavern projects in Vishakhapatnam. Water jetting out of the joints of the caverns with a speed as high as 17/18 kg per square centimeter can create problems for the progress of the underground works.

For the underground facilities, the quantum of excavation made by ISPRL is shown in Figure 2.

Large number of equipment are deployed for excavation of caverns in underground works and handling these equipments like loaders, huge excavators – PC 200 can be risky because these are louvered through shafts.

Magnitude of Works in Caverns A typical process scheme of crude cavern is included the construction of both underground and aboveground facilities (Figure 1).

Aboveground facilities are to be constructed as per standard oil industry p ra c t i ce a n d l ayo u t s h a l l b e a s p e r O i l I n d u s t r y S a f e t y D i re c to rate (OSID) guidelines.

Figure 2: Quantum of excavation in ISPRL caverns

In Figure 2, the encircled highlights that the total tunneling requirement was approximately 30 km, drilling of borehole of water curtain was to the extent of

Figure 1: Typical process scheme for ISPRL caverns

www.oswindia.com

Offshore World | 8 | April - May 2014

76 km and rock excavation was almost 22 million tonnes. The excavated rock debris can fill almost 2.5 million standard 10 ton trucks.

concept to India, EIL engaged foreign backup consultants (FBC) with the experience in underground rock caverns.

The FBC for the Visakhapatnam site was lead by SWECO of Sweden. For Mangalore, EIL choose Geostock of France and for Padur, EIL did not appoint any back consultant, only spot assistance was provided by SWECO of Sweden.

Figure 3: Quantum of material used in ISPRL caverns

For the underground facilities, the quantum of material used by ISPRL is shown in Figure 3.

Figure 3 shows that the amount of concrete used was around 1,77,000 cubic meter, shotcrete around 94,000 cubic meter, rock bolts around 7,000 tonnes, reinforcement steel around 10,000 tonnes and explosive around 8,300 tonnes.

Cost Reduction Method & Other Innovations ISPRL took many innovation steps to reduce the cost for building these rock caverns, with insured complete compliance to CVC guidelines. When it came to order placement, ISPRL had to insure that the government did not lose as a result of changes in the geology. Visakhapatnam was the first project to commence and ISPRL got a part of the land from Visakhapatnam Port Trust and a part of the land from Indian Navy. While the total area was approximately 68 acres at Visakhapatnam, land at Mangalore and Padur was yet to be acquired in 2007. ISPRL was not very sure of how the geology could turn out in these locations. The survey result at Visakhapatnam indicated that the geology is good.

The aboveground facilities were also a complex task; and packages and systems used by ISPRL in aboveground facility included: • In-shaft facilities • DCS, Metering skids and instrumentation • Hot oil circulation system including boilers & heat exchangers • Diesel/Fuel oil storage facilities • Flare system • Nitrogen system • Effluent treatment plant • Electrical substation, switchyard and distribution system • Standby generator • Compressed air supply system

At Visakhapatnam, the capacity of cavern was originally planned to be 1 million metric tonnes (MMT) by the Goverment. But ISPRL decided to increase the capacity at Visakhapatnam in order to keeping in mind that even if geological problems crop up at Mangalore or Padur, the capacity would not be less than 5 MMT. In underground works, the marginal cost for additional volume is low because a large investment is required to make for mobilization of equipment & facilities.

Hence larger the volume of excavation, lower would be the cost of excavation and this cost gets distributed over the entire volume. It was decided that in case the geology would turn out good at Mangalore or Padur, then the additional volume at Visakhapatnam would be offered to HPCL, which has a refinery at Visakhapatnam.

The quantum of work involved in the aboveground facility was equal to a crude unit in a medium size refinery.

The geology at Mangalore and Padur latter proved as good and approval was taken from the government to share the additional capacity at Visakhapatnam with HPCL at proportionate cost. This was a win-win situation for ISPRL and HPCL and resulted in cost saving to ISPRL.

Project Management in ISPRL There were many challenges faced by ISPRL for excavating the underground rock caverns and aboveground facility too. Because ISPRL did not have the expertise for underground and aboveground works, and had to bank upon the oil & gas industry for the expertise. ISPRL appointed Engineers India Ltd (EIL), the leading oil & gas consultant in India, as the project management consultant (PMC). As crude oil storage in unlined rock caverns was a new

>>One of the major achievements of ISPRL was successful implementation of reverse auction for determination of the L1 bidder for his contract. While the reverse auction was a tool, which was used successfully in the past by number of organizations, but it was never used for item rate contracts. www.oswindia.com

In underground works, geology can vary drastically. Cavern or tunnel having poor geology requires additional expenditure in terms of items like, shotcreate, rock bolts, grouting, etc. It is not possible to accurately predict the quantities that can be consumed. Hence ISPRL decided that underground works would be based on an item rate contract. To address the concerns of time and cost, ISPRL decided to introduce a concept called geotechnical reference frames or reference conditions (GRC), which was introduced for the first time in India.

The risk perceived by different contractors can be different, which could lead different in loadings. The basic philosophy of the GRC was to ensure that all bidders can base their estimates on a well-defined set of site conditions with an assurance that equitable compensation will be made if changed conditions are encountered. The

Offshore World | 10 | April - May 2014

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>>ISPRL decided to increase the capacity at Visakhapatnam in order to keeping in mind that even if geological problems crop up at Mangalore or Padur, the capacity would not be less than 5 MMT. GRC was an interval of values, which was determined by ISPRL in consultation with EIL and the back up consultants. If the actual geotechnical conditions encounterd were found to be outside the reference frames set out, the contractor was entitled to compensation in terms of time and cost.

Mangalore Underground Facilities

Mangalore site comprises of four parallel caverns, two of them are 913 m long and two are 873 m long (Figure 5).

One of the major achievements of ISPRL was successful implementation of reverse auction for determination of the L1 bidder for his contract. While the reverse auction was a tool, which was used successfully in the past by number of organizations, but it was never used for item rate contracts. ISPRL used an innovative method to apply the reverse auction process to item rate contract. ISPRL discussed the matter with EIL and the backup consultants and decided to provide the schedule of rates along with the estimate of quantities to the qualify bidders. And it is noted that all the clearances were taken from CVC prior implementation.

The reverse auction was then proposed to be conducted on the total estimated value derived from the estimated quantities in the rates. The percentage reduction obtained on the start price would then apply to all items equally. Before the reverse auction method could be finalized, it was also necessary to ensure compliance with CVC guidelines, security of the process, avoidance of speculative bidding, etc. The reverse auction in ISPRL resulted in saving approximately ` 500 crores on the bid start price of all major ISPRL contracts put together.

Figure 5: Layout at the Mangalore site

The cavern width is 20 m with a maximum height of 31 m, which altogether yields a total crude oil storage capacity of 1.5 MMT. The total tunneling including shafts of Mangalore facility exceeds 9.2 km. Physical progress of the project by the end of December 2013 was 94 per cent.

Visakhapatnam Underground Facilities

Padur Underground Facilities

The storage at the Visakhapatnam site comprises of five parallel caverns (Figure 4), three 840 meter long and two 320 meter long. Each cavern width is 20 meters with a maximum height of 30 m, which altogether yields a total crude oil storage capacity of 1.33 MMT.

Padur is the largest cavern crude reserve of these three strategic reserves in the country, with a total crude oil storage capacity of 2.5 MMT. Padur site comprises 8 parallel caverns, six of them 700 m long and two are 656 m long (Figure 6).

Figure 6: Layout at the Padur site Figure 4: Layout at the Visakhapatnam site

The total tunneling of Visakhapatnam facility is 7 km and hard rock excavation is approx. 19 lakh cubic meters and the borehole drilling for water curtains is approx.

17 km. Physical progress of the project by the end of December 2013 was 97 per cent. www.oswindia.com

The cavern width is 20 m with a maximum height of 31.40 m. The total tunneling including shafts of Padur facility exceeds 13.7 km and the total excavation is in excess of 36.8 lakh cubic meter. Entire excavation of the Padur site has been completed.

Offshore World | 12 | April - May 2014

Cost-Efficient SMR PRICO FLNG Technology Floating LNG terminals are being hailed by many as a low-cost revolution in meeting growing gas demands. The number of oil and gas discoveries has steadily increased, but immense financial overheads have reduced their potential for exploitation, creating opportunities for floating LNG terminals - effectively one-stop offshore shops for low-cost liquefaction.

Black & Veatch, which has been involved in many of the world’s LNG facilities, developed the PRICO® single-mixed refrigerant process for LNG that covers a broad range of LNG plant capacities. William

Breckenridge, Vice President - India Oil & Gas Business Manager, Black & Veatch Consulting Private Ltd, details the company’s SMR PRICO technology during Oil & Gas Expo 2014. Excerpts:

Global demand for LNG is about 250 MMPTA. Various forecasts have predicted that the demand will gain momentum with rise from 360 MMTPA to 460 MMTPA by 2020. Global imports of LNG are dominated by Asian markets like Japan, Taiwan, India, Korea, and China, constituting two third of the world demand.

However, Europe markets being stagnant, they are not the major drivers for global LNG demand. LNG market is definitely continuing to grow and there is a need for more liquefaction projects. North America right now imports a very small amount of gas and expects to achieve self-sufficiency very soon. One of wild cards for demands in global LNG is development of transportation fuel and LNG will be utilised for transportation fuel.

It is projected that LNG import capacity is to be augmented by 50 MMTPA to 70 MMTPA by 2020. One of the challenges that India is likely to face in near future is the development of infrastructure. It is essential to build new terminals and development of new pipeline systems for moving the gas around so that it can reach final consumers. Price of natural gas/LNG is going to be big driver and help projects to be economical. There are many import land based terminals and FSRUs being planned for Indian market now.

LNG Market in India Swelling population and economic growth have been driving factors for rise in demand for oil and gas. Geopolitical issues pose a serious threat to smooth supply of gas.

Around 80 per cent of the country’s energy needs are fulfilled through imports due to lack of indigenous production in the country. LNG has emerged as a leading factor for satiating rising demand in India. Today, imported natural gas meets approximately 30 per cent of the natural gas domestic consumption. As per estimates, by 2020, India is likely to emerge as the third largest importer of LNG in the world.

LNG Market Drivers Qatar is the largest supplier of LNG around the world making third of the world’s largest LNG supplier. Middle East makes up for 8 per cent of LNG supplies in world and Australia is a big contributor to global LNG supplies.

Currently, the global liquefaction facility stands at 280 MMTPA and the current global demand of LNG is about 250 MMPTA, which indicates almost complete utilisation of global liquefaction capacity. Australia is equipped with proper infrastructure for LNG facilities. So, several LNG projects are in progress in Australia. But, LNG projects in Australia have been challenged by project cost and delays. These challenges have led to think about some other alternative developments.

Right now, the current LNG import capacity of India is 20 MMTPA. Petronet Dahej, Petronet Kochi, Shell Hazira & Dabhol are four LNG operating stations in India.

Currently North America has excess of gas driven by shale gas development.

Shale Gas in USA is now trading at USD 3/4 mmbtu. But, there are doubts that

Offshore World | 13 | April - May 2014

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whether this gas will be sustainable at USD 3 mmbtu in US markets. In US, many existing import terminals have been re-permitted to export gas. There are also many other liquefaction projects in development stage for carrying pipeline gas from US and exporting it to the other regions of the world. The challenge with North America is that markets in Asia and North America are quiet distant and even though the gas is cheap, shipping cost of this gas becomes like land based.

Base Load LNG Challenges Base load LNG projects make up the majority of supply. The cost of building base load LNG projects is casual. These projects typically require massive gas fields to sustain them for 20 to 25 years of design life. So, these projects are limited to major international global companies which are capable of supplying LNG in the market. Though small gas producers have mechanism to get LNG to the market economically, infrastructure development for building liquefaction facility and large infrastructure development cost associated with them make these projects unviable. The challenges that the industry is facing right now, are lengthy project schedules, high cost, and economies of scale. These factors have really stretched limits of these base load projects upward, requiring billions of dollars investments. These projects require large gas fields with proven reserves that are diminishing. So, gas supplies don’t have huge untapped resources. In such a scenario, FLNGs are the most feasible option for the global LNG markets.

Floating Liquefied Natural Gas Projects Floating liquefaction facilities have a number of advantages over land based facilities. These projects can typically build in less than three years, whereas base load LNG projects are taking around four to five years for development. The capital cost for developing FLNG projects is significantly low. FLNG projects can be built in controlled environments like shipyards and carefully managed. They can bring solutions to stranded gas. Lot of gas around the world is currently in flared stage associated gas with well production with the volume destructed to be produced economically. Floating LNG is the relatively new concept. Black and Veatch are currently executing Shell project, Petronas project, and Examar project, which are currently in construction phase.

Black & Veatch’s Examar project is expected to be operational by first quarter of 2015. There are many projects under various stages of development. A typical FLNG project takes around eighteen months to two years for the process of developing project fieldwork. After that the owner can take the final investment decision. Once that decision is made, then the project can proceed rapidly on two and half years cycle which is much quicker than base load project.

While taking into consideration Floating LNG projects, Black & Veatch has categorised these projects into ship based projects and barge LNG project. In ship based LNG projects, the liquefaction facility can be built on dockside of ships and ship can produce LNG in offshore or open environment with capacity typically in the range of 2 to 4 MMTPA. Barge LNG concept is designed for open wharfs. These projects are cheaper to build and have shorter schedule. These projects are typically of smaller capacities around 0.5 MMTPA to 2.8 MMTPA. www.oswindia.com

Black & Veatch has been working on the development FLNG concept since 1990s with development of standard designs for barge solution and Ship based designs. Such offshore floating LNG (FLNG) production facilities reduce the capital expenditure (capex) per ton of LNG produced compared to base load LNG terminals, whose capex is generally higher. The cost reduction is largely due to the elimination of base load facilities and long, under-sea pipelines, which are required for base load LNG production terminals.

Black and Veatch’s technology has been vetted for various organisations like DNV, BV, ABS etc. The first step in designing LNG barge is just like the liquefaction technology. The criterion for ship based project is much different from traditional launcher project. These projects are very simple to maintain and build as compared to the onshore LNG projects. They also have the ability to handle changing feed gas composition. One of the important aspects of ship based LNG project is that they can be remobilised to an entirely different gas field.

SMR PRICO Technology FLNG also carry some unique challenges with regard to operational demands and feedstock variability. A solution to these challenges is Black & Veatch’s PRICO liquefaction technology, which contains the elements required to meet the needs of offshore LNG producers. Operational flexibility—specifically, the ability of PRICO single mixed-refrigerant (SMR) units to handle a wide range of gas pressures, compositions and production rates—provides owners with a wide range of feed gas options and commercial flexibility. Similarly, a low equipment count results in a smaller footprint and lighter weight, both of which are valuable in the offshore market, where footprint is limited and where weight drives costs and schedule.

The SMR process is the workhorse of the LNG industry and is used in the vast majority of liquefaction installations. This process depends on a single mixedrefrigerant system to perform liquefaction. After treatment, the feed gas is totally liquefied. Only a small amount of flash gas is produced, as the LNG is let down to storage. LNG yields of over 98 per cent are typical, and because the system uses a mixture of refrigerant components and can be tailored to the specific application, it is the most flexible of all the liquefaction systems.

The technology can be designed to fit the available utility systems with choices in air or water for interstage cooling, as well as a choice among motor, gas turbine or steam turbine drivers. This flexibility allows the owner to select the best options for its specific application. The proprietary SMR liquefaction plants have been designed in a wide range of capacities, from 0.1 million tons per year (MMtpy) to 1.5 MMtpy in a single train. When larger production rates or operational flexibility for capacities are required, multiple trains can be used to provide the design that best fits the client’s needs and commercial requirements.

Offshore World | 14 | April - May 2014

HSE Challenges at Construction Sites & Mitigation Plans Health, Safety and Environment (HSE) at construction site is of utmost importance to safeguard the lives of people working at the site, thus Indian companies are being forced to upgrade their safety norms and procedures to comply with the law & regulations. Shriram Rahalkar, Regional HSE Head, Jacobs Engineerings Ltd, details the challenges related to safety at construction site faced by the industry, and the mitigation plans that clients, consultants and contractors must focus on as they are the industry stakeholders. Edited excerpts from Rahalkar’s presentation delivered during the Oil & Gas World Expo 2014.

S a f e t y i n co n s t r u c t i o n i s f re q u e nt l y p u s h e d to t h e b o t to m r u n g o f priorities by the clients, contrac tors and consultants involved in the construc tion industr y. Fatal accidents, exposure to hazards, etc take place at work site that cause irreplaceable loss of human lives. While monetary loss heads the list, loss of man-hours and material progress are equally irreparable.

Enforcement of laws & regulations to safeguard workers health and safety have not been properly implemented in India. Government bodies involving building and other construction workers act are neck-deep in many other activities and have not enacted these laws. So limited implementation & enforcement of laws & regulations makes it difficult in creating a safe condition at construction site.

Construction Safety Challenges Most of the construction sites in India often struggle with low workers literacy, unskilled labourers coming mainly from the farming background, with high strength & ability to work for long hours. The culture they bring really lacks the ideas as how to be safe at construction site. Lack of awareness and training is another big factor for fatal accidents at construction site.

In India, most labourers are poor migrants with no education, nil health benefits and absolutely no insurance cover. In such a scenario, it must be made imperative to have standards and processes for each work in a project.

Limited use of latest technology in construction is another reason for fatal accidents because labour intensive methods remain cost effective for the industry.

Thus, every contractor prefers to go by that and every client wants to have a project cost by keeping it minimum.

Client par ticipation in construction business is also a challenge because many clients prefer that all safet y norms and procedures be included in the contract document and all the responsibilities passed onto the contractor.

>>In India, most labourers are poor migrants with no education, nil health benefits and absolutely no insurance cover. In such a scenario, it must be made imperative to have standards and processes for each work in a project.

In most episodes of fatal incidents at construction sites, the onus always lies with everyone involved in the project – starting from the client, the contractor, the consultant and the workers. The construction workers’ problems of safety and danger to human life will spiral out of control if corrective measures are not taken before the pre-construction stage.

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>>In most episodes of fatal incidents at construction sites, the onus always lies with everyone involved in the project – starting from the client, the contractor, the consultant and the workers. The construction workers’ problems of safety and danger to human life will spiral out of control if corrective measures are not taken before the to be taken for mitigating all the problems related to electric hazards in construction site. Welfare facilities also do help workers to remain at sites and pre-construction stage. avoid attrition.

Pre-Construction Stage Contracting strategy & selection of contractors are the two impor tant factors that the industr y needs to evaluate at pre - construction stage.

For a specific project, the clarity about the right contracting strategy should be done before star ting the project. What kind of contract the client is going to have in a projec t, what kind of par ticipation the client wants from consultants or from contractors should be cleared at pre-construction stage.

Explicit HSE field, HSE specifications, how the job is to be executed, t h e w o r k a c t i v i t i e s i n v o l v e d i n t h e p ro j e c t , w h a t a re t h e s a f e t y precautions, etc need to be clarified to the contractors or consultants to take the project at the right stage, every time they intend to take up that work.

There are issues related to temporar y facilities can be resolved by c l i e nt s w i t h d e e p e r p o c ke t s s o t h at co n s t r u c t i o n p l a ce b e co m i n g much safer.

Planning assistance, which consultants need to do under its constructability review so that right from beginning whatever the client construct in a manner that it facilitates construction friendly and safety as well.

Temporary Site Facilities and Services It star ts from good security and fencing at access gate that minimise the unnecessar y access of PP (Parent Por tal) and no one can enter without PP at premises. All equipments like cranes, dumpers, excavators for construction work should be allowed inside the premises o n l y a f te r t h e i n s p e c t i o n . S o e n f o rce m e nt w i t h i n t h e s i te i s t a ke n care of.

Having a medical facility within or near to the construction site helps to reduce the attrition of workers from environmental a i l m e n t s . Wa r e h o u s e a n d l a y d o w n a r e a s s h o u l d b e m a r k e d i n advance and illuminated areas will eliminate construction hazards to such ex tent.

Power & water supply provided by the clients need to be solved with consultant’s work out. Total power requirement, main power distribution and main distribution boards should be installed at the right place rather than only at one place in the corner of the site. These precautions need www.oswindia.com

Safety Health & Environment Management Planning, implementation and co-ordination of constructability reviews across the facilities improve the portfolio of the project. Special construction methods, early engineering reviews, use of special material, etc for modular structural building reduce the work, material handling and obviously hazards. Contractual provisions like timely delivering materials for the construction of project can help to facilitate in mitigating hazards at construction site.

Suppor t through par ticipation between clients, contractors, consultants must not be only building into a contract condition but also going through the process of the construction of project. House keeping crew should be deployed in the site by the clients to keep the place neat & clean. Personal protective equipment (PPE) like safety shoes, gloves should also be kept inside the construction site to avoid hazards.

Motivational schemes like providing mosquito meshes to workers for avoiding malaria, providing socks for safet y shoes for avoiding shoe bites and blisters do help to reduce absenteeism in the workplace and monetary loss.

Fall through opening at construction site can be avoided if contractors would coat the covering the opening. There is also a need to take some expertise from design like providing a hole in the columns in the beginning so that the moment the columns are cast or insert pipe, there will have an edge protection.

Similarly, when dealing with the pipe racks and structural steel at construction site, having small cleats with the holes for putting pipes, the workers who are working at heights can have some solutions and latch their hook into the anchor.

Conclusion There is a need to create a safe onsite construction environment through protocol arrangement, checklist, supervision, planning and training involving all the key stakeholders in advance to mitigate hazards at construction site. As an industry at whole from a consultant, to a contractor, to a client, providing a smart budget and smart participation will help to mitigate hazards at construction site. While intervention is something that can’t be avoided and has to remain up to the end, commitment for the people who work at construction site needs to be created in saving their lives.

Offshore World | 16 | April - May 2014

Case Study

S ubsea Water Intake and Treatment – The Missing Link?

Moving oil and gas production technology from the surface to the seabed is becoming a common goal for the oil and gas community. However, treatment of water is lagging behind in this regard and is still only properly conducted topside. Norwegian subsea technology company Seabox’s results from the world’s first full scale pilot of a treatment plant at the seabed could change all this.

Water injection is the oil industry’s most commonly used method to increase production and recovery rates. In fact, water injection – or so-called waterflooding – began accidentally in Pithole, Pennsylvania, USA, in 1865, and became common in Pennsylvania during the 1880s. In short, water is injected into the reservoir to increase or maintain pressure and for displacing the oil and pushing it towards a producing well.

As the oil industr y moved from onshore to offshore, the concept of waterflooding followed in its path. Since the 1970s, water treatment systems and injection pumps have been installed on processing decks of offshore platforms to send filtered and disinfected seawater into the reser voirs to increase production and oil recover y rates. The topsidetreated seawater, which is typically sourced from about 30 m below the sea surface, can either be injected into the reser voir through dr y injection wells located at a platform, or transported through flowlines to satellite subsea fields where it is injected through subsea injection trees. In recent years, subsea pumps have also become a reliable alternative, but traditional topside pumping is still the commonly used option.

The Topside Conundrum There are also a number of challenges with a topside water treatment system.

The treatment equipment and injection pumps on a platform are large, heavy and occupy scarce deck space. In total, this can present significant weight problems – particularly for floating production units. In addition to being large and heavy, the traditional solutions for water treatment on platform topsides are quite energy consuming and use significant quantities of chemicals harmful to health and the environment in order to obtain proper treatment on the physical limitations that follows with a topside treatment system.

Another issue with topside treatment systems is that such equipment often has to be designed, engineered and constructed a long time before anyone knows exactly how the reservoir behaves. A common challenge for reservoir engineers is to predict exactly the dynamics of a reservoir over time and identify the optimal placement of injection wells based solely on appraisal well results. Assumptions rarely prove to be correct and the strategy for recovery normally changes during the lifetime of a field.

When S eabox star ted toying with the idea of moving the process e q u i p m e nt to t h e s e a b e d, i t wa s b a s e d o n a n a s s u m p t i o n t h at i t wo u l d f re e u p d e c k s p a ce a n d o f f e r a d d e d f l ex i b i l i t y i n t h e f i e l d d e ve l o p m e nt p h a s e. I n a d d i t i o n , a s t h e s p a ce l i m i t at i o n s at t h e s e a b e d a re o f l e s s i m p o r t a n ce, a n o p t i m a l t re at m e nt p ro ce s s f o r h i g h q u a l i t y w a t e r c o u l d b e t h e d r i v i n g d e s i g n p a r a m e t e r. Th i s h a s s i n ce re s u l te d i n t h e S W I T- te c h n o l o g y ( S u b s e a Wate r I nt a ke and Treatment).

Enter SWIT Moving technology from the surface to the seabed has traditionally been associated with numerous disadvantages. Higher risk and cost per well combined with lower recovery rates, less access for maintenance and upgrades, less robust technology and a lower level of predictability has been the norm.

Although the subsea oil and gas industry has identified the right ways to manage these issues, a subsea solution is still widely considered the ‘second best’ alternative to its more experienced topside cousin.

Seabox aimed to use Well Processing as the vehicle to develop the technology that was later denoted as SWIT. A guiding principle behind SWIT was that it would only be considered by the oil companies if it could compete with, and preferably outperform, a topside system when it comes to the quality of injection water, CAPEX and OPEX. Locating the technology at the seabed provides a

Cross-section of the SWIT-unit’s internals (Courtesy: Seabox)

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completely new way of thinking, as there are fewer restrictions to weight/space consumption and number of available well slots. This new approach gives rise to another important mechanism, which is the inherent flexibility that allows the operator to adjust reservoir drainage strategy during the life of the field based on the dynamics of the reservoir. From a financial point of view, this will also enable operators to defer some of the capital costs in a project, as long as it does not create any operational difficulties at a later stage.

There are also HSE benefits with placing equipment on the seabed, as different chemicals often required for operation of a topside plant are no longer necessary.

With all these factors in mind, the Seabox team is convinced that a subsea water intake and treatment technology is interesting from both a technology and financial perspective.

However, the one thing that would really prove the SWIT technology is if it enabled oil companies to recover more oil than what they would have traditionally done with a similar topside system.

Seabox’s subsea treatment unit is comprised of several pieces of kit assembled with the aim of maximising solids removal and disinfection of the seawater in a robust and reliable way suited for subsea use. The ultimate objective is to disinfect and filter seawater that will help prevent blocking of reservoirs or turning them sour when water is injected into them.

Whereas topside water treatment systems utilises water from near the surface, SWIT extracts water from close to the seabed, which represents an advantage as there are more stable temperatures on the seabed, a lower degree of bacterial concentration, and it is far away from potential platform discharges such as produced water, ballast water and drainage (rain) water.

The treatment process takes place in a square-shaped box that is positioned on the seabed, hence the company name ‘Seabox’. The SWIT unit is also utilised to isolate the water to be treated from external conditions.

Three Technology Steps Chlorine has been used for many years to treat water to control microorganisms because of its capacity to inactivate pathogenic microorganisms quickly. The effect of the process is dependent on the chlorine concentration, time of

Stand-alone SWIT application combined with injection pump (far left) and subsea wellheads (far right). (Courtesy: Seabox)

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Solution with both the SWIT unit and an injection pump integrated into the same subsea structure, operated by a single subsea control module.

(Courtesy: Seabox/Aker Solutions)

exposure and pH of the water. This method is widely used for topside treatment plants and is used as the first step in the SWIT treatment process.

The water enters the SWIT through grids at the top of the structure from a suction pressure that is created by a pump located downstream of the SWIT unit. The water continues through a set of electro chlorination cells that produce sodium hypochlorite, which initiates the disinfection process.

Seabox has developed a purpose built sensor that can detect change in total residual oxidant level in the treated water compared to the surrounding raw seawater. Tests by Seabox shows that the chlorine level can be adjusted with an accuracy of 0.01 mg/l, which enables tight control of the disinfection process. The objective is to produce chlorine in the treated water that is only marginally higher concentration than the level in the untreated seawater.

Unlike a typical topside treatment plant, where the processes are adjusted to platform weight/space limitations, the SWIT unit allows for a chlorine exposure time of 60-120 minutes compared to typically 60-90 seconds for topside facilities. This is the second step of the process, where the water enters a chamber inside the SWIT that is called the ‘stillroom’. The net result is an effective kill rate and collapse of the cell structure for organic species.

Another important key to the second stage is the solid settling. The SWIT unit has been designed to give rise for low velocities and laminar flow in order to have an effective settlement of inorganic solids. In the pilot test with high-suspended solids levels, the particle removal achieved was 99 per cent removal of all particles greater than 15 micron. Typical requirements for fracked water flooding conditions is 99 per cent removal of all particles above 24 micron. A 40,000 bpd capacity industry version of SWIT has been designed for this specification.

>> Seabox’s subsea treatment unit is comprised of several pieces of kit assembled with the aim of maximising solids removal and disinfection of the seawater in a robust and reliable way suited for subsea use.

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Industrialised SWIT unit, which consists of two parts: the treatment unit (top) that holds all power and control equipment, and the still room which works as a settler. (Courtesy: Seabox)

Step three of the treatment process happens as the disinfected water leaves the stillroom and passes through a hydroxyl radical generator. This module will generate highly reactive radicals that will clean the water further in addition to breaking the dead bacteria down into even smaller particles. Seabox holds the patent and exclusive rights for subsea-use of this technology.

All equipment items that are deemed to have an operational lifetime (cells, valves etc) are housed in a Retrievable Treatment Unit. The all-electric cartridge is typically powered by electricity from a nearby platform, or from a subsea pump located nearby. The power, control and monitoring systems enable the operator to perform remote operation and control of the treatment system.

Oslo fjord Pilot After the SWIT concept’s inception in 2002, the technology has gone through tens of thousands of hours of engineering, research and development, plus a series of technical qualification programmes. The SWIT unit’s biggest challenge so far, however, has been a recent full-scale pilot trial in the Oslo fjord in Norway.

In a joint industry project backed by ConocoPhillips, Shell, Total, GDF Suez and the Norwegian Research Council, the SWIT technology was put through its paces during a 15-month pilot.

The scope of the joint industry project covered the design of a full-scale SWIT pilot plant including a stillroom enclosure, electro chlorinator cells, hydroxyl radical generator cells, power, control and monitoring system. The project also covered fabrication, transportation, installation and hook-up of the SWIT system in 65 m water depth. The pilot plant was capable of treating 15,000 barrels per day.

Installation of SWIT pilot system in the Oslo fjord, Norway (Courtesy: Seabox)

The Oslo fjord location was chosen because of challenging water q u a l i t y a n d p r o x i m i t y t o t h e N I VA m a r i n e r e s e a r c h c e n t r e a t Solbergstrand, Norway.

Game-changing Results Despite seasonal changes that resulted in variable quality of the feed water, the pilot’s results showed a water quality with an average particle size below 10 micron, a typical solids concentration of 0.5 mg/l, and a silt density index (SDI) measurement of 5. The pilot showed a significant delay in the onset of biofilm in two SWIT treated sample lines compared to similar control lines with raw seawater.

All methods used for bacterial analysis indicated a significant reduction of both general aerobic bacteria (GAB) and sulphate reducing bacteria ( S R B ) i n t h e t wo S W I T t re a te d s a m p l e l i n e s c o m p a re d w i t h t h e control line.

The pilot test also showed that the combination of electrochloriation and the hydroxyl radical generator is highly efficient in removal of SRBs and delaying the onset of biofilms.

Another interesting finding is that no biocide was used during the oneyear SWIT test period. This opens up possibilities for alternative dosing regimes and types of chemicals, such as lower doses of nitrate chemical, to control SRB in the reservoir itself.

>>After the SWIT concept’s inception in 2002, the technology has gone through tens of thousands of hours of engineering, research and development, plus a series of technical qualification programmes.

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With risk-adverse oil companies’ understandable scepticism towards new subsea technologies, it was also important that Seabox managed to prove the system’s operational reliability during the trial.

Through the 15 months of testing, an impressing 99.8 per cent uptime was achieved with only minor debugging of the software at the start of the test. In comparison, typical topside treatment systems have an uptime of approximately 85 per cent.

December 2013 - January 2014 Vol. 10 No. 6 ` 150

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

SWIT’s Potential On a global basis, injection of seawater into an oil reservoir is the most effective and commonly used IOR technique. Currently global water injection is 240 MMbpd, which is three times the global oil production.

By 2020 analysts project that global water injection will be seven times the global oil production.

Water injection has t ypically shown to double recoverable reser ves compared to a traditional pressure depletion (from 18-22% to 35-45%).

Optimised water flooding may fur ther increase recoverable reser ves by up to 10 percentage points (i.e. up to 45-55%). Additional IOR/ EOR techniques combined with water injection (e.g. designer water, s u r f a c t a nt s ) w i l l f u r t h e r i n c re a s e re cove ra b l e re s e r ve s. Th e S W I T technology can also be utilised for onshore injection purposes by pumping the treated water from the coast to the targeted onshore wells. This is a more responsible alternative than using groundwater, which instead could be used as drinking water.

The SWIT treatment process provides high quality water in areas that are essential for increasing the sweep efficiency and avoiding reservoir souring. As such, it fills a technology gap by enabling a total subsea wate r f l o o d s y s te m , t h u s i n c re a s i n g I O R b e yo n d w h at i s p o s s i b l e by traditional topside water injec tion systems. This can unlock oil reser ves that would other wise have been unrecoverable – at a much lower cost.

Putting a fully-fledged factory on the seabed is not the fanciful notion it may once have seemed and with the SWIT technology available, it seems like the missing link in the already capability to inject ‘raw’ seawater on the seabed has finally been filled.

Eirik Dirdal Senior Engineer Seabox Email: edi@sea-box.no www.oswindia.com

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

OiL

World Expo 2016

International Exhibition & Conference February 2016 | Mumbai, India

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

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

Offshore World | 20 | April - May 2014

Case Study

Enhanced Oil Recovery through Membrane Technology Enhanced oil recovery (EOR) processes rely on the injection of aqueous water into an oil reservoir to increase the sweep efficiency and stimulate oil production, as the produced water from oil reservoir is a complex mixture of oilin-water, different types of salt ions, dissolved hydrocarbons and organic chemical compounds introduced during the oil production process. The article urges on Membrane Technology as an attractive technology for the reuse of water to make it suitable for reinjection as well as to recover valuable chemicals.

Three large-scale projects that use Pentair X-Flow membrane technology, developed for the reuse of produced water for injection purposes or enhanced oil recovery (EOR) processes have been commissioned in oil fields in China.

At the Daqing Oil Field – the largest in China and one of the most productive oil fields in the world – a full-scale two-stage ultrafiltration (UF) plant pre-treats 5000 m3 (1.3 million gallons) of produced water a day, to make it suitable for reinjection. At the same time, valuable chemicals are recovered.

This oil field requires a large amount of injection water – about 25 000 m3 (6.6 million gallons) per day. The limited water resources in the area make it necessary for the produced water to be reused. The same membrane technology is being used at the Yanan Fengfuchuan and Yanan Wangpiwan oil fields, where 1500 m3 (0.4 million gallons) and 1200 m3 (0.3 million gallons), respectively, are treated each day.

Case History Daqing oilfield (China’s largest) is among of the largest oilfields in the world.

The field had already produced a total of 1.95 million tonnes of oil by 2007.

It has maintained a high and stable yield of more than 50 million tonnes continuously per annum over the 27 years since oil production exceeded 50 million tonnes in 1976. After decades of high speed and high efficiency development, production in the Daqing oilfield has been decreasing since 1997. The annual production declined from the peak production of 56.0 million tonnes in 1997 to 41.6 million tons in 2007 - an average decline rate of 2.9 per cent per year. Even though the Daqing oilfield is experiencing decreased production, it still accounts for nearly 25 per cent of China’s oil production.

Challenge Daqing is one of the most productive oil fields in the world and faces a high requirement of injection water of about 25,000 m3/day (6.6 MGD). There are very limited water resources in the area. Pentair was called upon to provide a solution for the same.

Solution Pentair set up a recovery system for produced water. The membranes applied in these applications filter down to ultrafiltration level and can be compared to the ones utilized in direct potable water plants. Energy consumption is at the same level of submerged membranes or even less, due to the efficient use of process conditions for flux enhancement.

Ultrafiltration (UF) plant at Daqing oilfield

After extensive tests to optimise the plant performance, a full scale two-stage UF plant is reusing 7,500 m3/d (2 MGD) produced water and recovering chemicals.

Produced water treatment systems that incorporate X-Flow membrane technology followed by either Reverse Osmosis (RO) or ion exchange offer the opportunity to produce low-salinity reinjection water for Enhanced oil Recovery (EOR) processes, thereby yielding the overall oil production volumes.

The technology applied has several advantages as downstream wastewater and upstream injection water are treated in a single process, resulting in major cost reductions. The UF membranes also offer a consistent effluent quality and significantly lower oil, polymer and suspended solids levels, which enables a better performance of the overall system.

CLASSIFICATORY DATA Location Heilongjiang province, China Source Produced water Application Reuse as reinjection water Capacity 7,500 m3/d (2MGD) Start-up July 2012

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Technical Specifications Compact 33: X-Flow’s Compact 33 ultrafiltration membrane modules can be installed in aerobic and anaerobic Crossflow MBR processes. This enables the efficient treatment of wastewater and provides high quality water for re-use.

Crossflow MBR System Description: The Crossflow MBR is a compact purification system combining the biological degradation step with a membrane separation process. The influent is fed to the aerated bio-reactor where the organic components are oxidized by the activated sludge. Next, the aqueous activated sludge solution passes through a membrane filtration unit separating the water from the sludge.

The latter returns to the bio-reactor, while the permeate is discharged or re-used as particle-free effluent.

The combination of biological treatment with membrane filtration offers several significant advantages over a conventional activated sludge system as presently being used for industrial wastewater, such as less surplus sludge and particle free-effluent. A smaller surplus sludge results in a higher average age of the activated sludge leading to more component-specific bacteria and not only to fast-growing bacteria. Therefore, a MBR is very suitable to treat more heavily polluted industrial waste streams. The particle-free effluent is suitable for direct reuse or can be upgraded further by means of reverse osmosis for high-grade application as process water.

Process Description: In this technology, the membrane modules are arranged vertically and are aerated continuously at the bottom. The turbulence created by the air injection enables high flux rates at a very low Trans Membrane Pressure (TMP) and a low energy consumption of 0.3 kWh/m3. The continuous aeration is the main driving force for the circulation of the activated sludge, while the feed pump is only used to overcome the hydraulic losses. A combination of forward flushing and periodic backflushing and/or relaxation intervals is used to control the cake layer formation inside the membrane tubes and to extend the intervals between maintenance cleanings. The continuous aeration also takes care of the fouling control inside the individual membrane tubes.

Hence, the purification system combines the biological degradation step with a membrane separation step. This combination offers several significant advantages over a conventional activated sludge system, including higher biomass concentration and less sludge carryover. The higher biomass concentration results in a more compact system design which is an advantage for both highly populated and remote areas. The decrease in sludge carry-over in the effluent reduces the need of post-treatment of the effluent protecting ecologically sensitive areas. Another advantage of the side stream set-up is that existing wastewater treatment plants can be easily expanded. By adding the membrane units to the existing plant, its capacity can be advanced significantly, without increasing footprint or civil works.

To sum up, in a Crossflow MBR the feed flows parallel to the membrane surface, controlling the cake-layer formation of retained particles by adjusting the crossflow velocity. Together with an optimal Cleaning-in-Place (CIP) procedure, the Crossflow MBR process is an efficient solution for industrial wastewater treatment.

Key Features • 3 m long 8” modules with 5.2 mm ultrafiltration membranes • Membrane placement outside the bioreactor www.oswindia.com

• • • • • • • • • •

True ultrafiltration leads to excellent permeate quality Accessible & clean environment Fully automated cleaning Fully automatic operation Fully enclosed pressurized system Permanent hydrophilic low-fouling ultrafiltration membranes Reliable enforced tubular membranes Crossflow MBR applications Industrial wastewater treatment (Typical application) Municipal wastewater treatment (Specific applications)

Membrane Characteristics • Hydrophilic tubular poly vinylidene fluoride membrane cast on a polyester carrier • Structure asymmetric • Mean pore size of 30 nm • Developed for use in large-scale processes for water purification • High performance and a very good anti- fouling behaviour • Membrane elements can be backflushed for efficient membrane cleaning resulting in a higher average product flux Membrane Storage (At Site) New membrane modules can be stored as supplied. Membrane modules should be stored in a dry, normally ventilated place, away from sources of heat, ignition and direct sunlight. Store between 0 and 40 °C. The membrane modules should not be subjected to any freezing temperatures. After use, UF membranes need to be stored wet at all times. To avoid biological growth during shutdowns or storage, wet membranes should be treated with a compatible biocide. The membrane is compatible with many common disinfecting agents or biocidal preservatives. For short-term shutdowns, a daily flush with permeate quality water containing up to 2.0 ppm free available chlorine for 30 to 60 minutes may be adequate for bacteria control. In case of long-term storage, membranes should be cleaned before the disinfection step is carried out. For disinfection, a 1 per cent sodium meta-bisulfite solution can be used. In either situation, modules should be stored hydraulically filled.

Operating Specifications • Backwash water should be free of particulates and should be of permeate quality or better.

• Backwash pumps should preferably be made of non-corroding materials, e.g., plastic or stainless steel. If compressed air is used to pressurize the backwash water, do not allow a two-phase air/water mixture to enter the element Advantages • Simple process setup & compact design • Adaption to plant specific needs • Produces high-quality effluent • Enables reuse of chemicals

Offshore World | 22 | April - May 2014

Courtesy: Pentair X-Flow

inter view

‘From Bottom-of-the-Barrel to Bottomless Refineries’ Industry has witnessed significant consolidation in the last decade, particularly in the refining and downstream petrochemical sectors which have seen a significant increase in the demand of new technologies.

Will you please comment on these changing technology trends and key drivers for the industry?

In India, there is an increase of participation of private sectors in the refining and petrochemical industry, which was dominated earlier by public sectors. This has led to strong domestic competition with respect to quality and production cost. Also, decontrolling of refining product prices, in India, has led to healthier competition. Under such an environment, all refiners and downstream producers are looking for technologies which can best enhance profitability and product quality, which ultimately becomes easy to sell.

It is certainly an age of transformation for refining industry. The line between refining and downstream petrochemical industry is diluting, and there in an increased focus on improving the Gross Refinery Margins (GRM). Refiners today want to move from bottom-of-the-barrel to bottomless refineries by investing in gasification projects, says Anil

Kumar Sarin, Managing Director, CB&I. In an exclusive interview with Mittravinda Ranjan , he further talks about the latest trends and technologies, future challenges for refiners, exploring the coal resources, etc. Sarin provides in-depth insights into the Gas-to-Liquid and Coal-to-Liquid technologies, and elucidates how India can make the most of the new methods.

The main focus in the refining and downstream petrochemicals sector today is to improve the Gross Refinery Margins (GRM) by processing heavy crudes and utilising each and every molecule to a usable component while maintaining the environmental norms. Since 2004 the spread between heavy crude and West Texas Intermediate (WTI) has roughly doubled, giving refiners even more reason to invest in heavy crude processing. Refiners today want to move from bottom-of-the-barrel to bottomless refineries by investing in gasification projects, so that they can produce syngas with their own petcoke feedstock.

On the petrochemical front, shale gas has changed the entire landscape of the industry.

Cheaply available gas-based feedstocks for crackers led to reduced production of C 3 s and C 4 +. Today, companies are looking for on-purpose technologies to compensate for the deficit in C 3 s and C 4 +.

Unless refiners and downstream petrochemicals producers continuously upgrade their processing Offshore World | 23 | April - May 2014

scheme, it will become increasingly difficult for them to remain competitive.

Technology selection is based on a number of factors specific to each refiner and project, including return on investment, the specific product slate desired, refinery location, refinery configuration, feed and product pricing and type of crudes available.

In summary, we see a major global shift of more demand for integrated refinery/ petrochemicals complexes to both upgrade to higher valuable products and increase market diversification.

The recently concluded international conference on refining highlighted maintaining the GRMs as the most critical issue for the refiners, which in adverse cases could even result in shutting down of the refinery - a common situation that most of the old refiners have faced globally that has resulted in shut down of almost 70 refineries so far world over. May we have your comments on what are the future challenges that the refiners need to prepare for right now and the key technologies that the refiners need to adopt now for long term sustainable growth?

Like many other refiners worldwide, Indian refineries were severely affected by the global economic downturn. India is heavily dependent on the import of crude oil and because of the depreciation of the Rupee by more than 20 per cent in the last year, the problem has been compounded. Also, some of the old refineries in India are below the threshold limit of 9 mmtpa, threatening competitiveness unless they can diversify into some speciality products. However, a large investment is required to upgrade these aging units. The principal challenge is the squeeze on gross refining margins. These refineries are under enormous stress because crude prices are on an upward trend but margins are not. The www.oswindia.com

>>The main focus in the refining and downstream petrochemicals sector today is to improve the Gross Refinery Margins (GRM) by processing heavy crudes and utilising each and every molecule to a usable component while maintaining the environmental norms.

enormous upsurge in diesel demand has meant that refineries have to find ways to increase the diesel production. In addition, India’s product specifications are becoming more stringent -specifications equivalent to Euro IV are being rolled out in 50 cities by 2015 and Euro V is to be introduced by 2017. Meanwhile, environmental regulations continue to tighten.

Indian refiners have to look into use of opportunity crudes for which resid upgrade technologies like the LC-FINING® and delayed coking technologies are available. Margins from petcoke can be increased by gasification and the use of synthesis gas for fuel and to produce hydrogen or power for the refineries. There is also a lot of synergy resulting from integrating the refinery and petrochemical complexes.

What are the opportunities for the refining to produce high value feedstock? May we have your comments on feedstock substitutions and new capacities that are coming up globally (especially from the shale gas in USA)?

The availability of large quantities of shale gas in US, has led to several new crackers being built using low cost associated ethane gas as a feedstock replacing naphtha. This has proved to be a game changer in the US. We need to explore similar opportunities in India.

It is becoming increasingly evident that countries with large reserves of coal will need to explore utilisation of coal not simply for power generation but also as a feed stock for valuable petrochemicals.

What kind of potential do you see for coal based technologies in the Indian market and how do you compare this with China, which has already set up projects on CTL technology?

The economics of using coal for power generation is based on the availability of cheap and abundant coal in India. With huge coal reserves, coal shall www.oswindia.com

remain India’s most important energy source into the future.

Gasification technology for producing power is economic in markets where gas is expensive or gas is imported in places like India, Korea, China and Japan where the FOB price of LNG is more than USD 14-16 per MMBTU. This is my understanding, depending on various factors, that the threshold price of LNG is approximately USD 9 per MMBTU for using coal gasification to produce power, and India and China fall into that threshold price of LNG. Similarly, the use of coal as feedstock for petrochemicals will be based on the price of crude oil. A major similarity between the Chinese economy and Indian economy is that both countries are heavily dependent on the import of crude oil. Developing coal-based liquid fuel and chemicals is more of strategic issue for the Chinese economy as China seeks to reduce its use of imported oil.

India should also look into that approach, but such projects are very capital intensive. Many private players have shown an interest in setting up coal-to-liquids but because the allocation of coal blocks has become too political in India, such projects have taken a back seat.

Through the CB&I gasification route, with low ash coal as feedstock, this coal (and petcoke) can be converted to very useful products like hydrogen, syngas, power and other chemical products.

Gasification technology is taking centre stage globally as most of the refiners are now setting up the delayed coker projects and there is significant demand of these technologies from the power sector as well.

To what extent can the GTL / gasification technologies bolster the growth of the Indian fertiliser sector?

Offshore World | 24 | April - May 2014

Yes, it is true that refiners are adding delayed cokers while processing cheap heavy crude oils to improve margins. The coke generation potential from heavy crude oils processing is about 25 per cent higher than that of normal sulphur crudes.

In India alone, in the last five years, there is an addition of about 20 million tonnes of planned coker capacity (equivalent coke generation of 6 million tonnes) which are either commissioned or will be commissioned in the next couple of years. Syngas produced from gasification can be good feedstock for fertiliser plants, and it can be used to produce power, hydrogen and other products.

India’s experience with gasification of liquid feedstocks dates back to the 1960s, when it was utilised for the production of hydrogen from naphtha for fertiliser plants. The fertiliser sector in India today faces the biggest challenge because of the availability of cheap gas, coal and pet coke gasification, which can replace liquid feedstocks in such a situation. In fact RCF, along with Coal India, GAIL and Fertiliser Corporation of India is contemplating setting up a fertiliser complex, comprised of a 2,700 MTPD ammonia plant, 3,850 MTPD urea plant, 850 MTPD nitric acid plant and 1,000 MTPD ammonium nitrate plant at Talcher, Odisha, through the coal gasification route as feedstock.

The advantage of Indian coal is relatively low sulphur content. The disadvantage is its extremely high ash content – often as high as 40 per cent -- and the nature of the ash, which contains very high amounts of silica and alumina. Gasification is definitely an answer for gas crises in the fertiliser sector but what needs to be evaluated is whether India should use Indian coal, imported coal or pet coke.

Today, gasification provides about a quarter of the world’s supply of synthetic ammonia

Table 1: CB&I’s Major Ongoing Projects in India Project

Scope

Status

Gasification (Client Confidential)

License and basic engineering

Under implementation

Paraxylene (Client Confidential)

License and basic engineering

Under implementation

High Purity Iso Butylene (Client Confidential)

License and basic engineering

Under implementation

IOCL Paradip Indmax Unit

License and basic engineering, detail engineering of reactor and regenerator section Under implementation

BPCL Kochi, Delayed Coker

License and basic engineering, detail engineering for delayed coking heater, Under implementation detail engineering for coke chamber and structure

CPCL, Delayed Coker

License and basic engineering

Under implementation

BCPL, Ethylene Cracker and Polypropylene Unit

License and basic engineering

Under implementation

MRPL, Delayed Coker and Polypropylene Unit

License and basic engineering

Under implementation

and about one third of the world’s methanol.

With an estimated 750 gasifiers planned or under construction across the world, the technology is set to play a major part for at least another century.

Which are the CB&I technologies that you are typically targeted for the Indian market and please tell us about some of the ongoing and future projects in India?

(Please highlight the scope and ongoing & future projects) CB&I has more than 70 technologies in its portfolio which are available to our clients in India. Our portfolio spans technologies in olefins, petrochemicals, refining, gasification and gas processing. Through our Chevron Lummus Global joint venture (CLG) we provide technologies in hydrocracking, hydroprocessing and heavy oils.

We also have a strategic alliance with Indian Oil Corporation Ltd’s R&D centre in Faridabad to license jointly-developed Indmax high propylene FCC technology. CB&I has been providing technologies in India for residue upgrade like delayed coking and gasification.

For diesel maximisation, we have been licensing our hydrocracker technology. On the petrochemical front, we have been actively licensing our crackers and polypropylene technologies in India.

Table 1 gives a brief about our major ongoing projects in India.

CB&I can provide full participation in planned grassroots refineries like HPCL Refinery at Rajasthan, and various refinery expansions such as IOCL-Gujurat, IOCL-Panipat, HMEL, Essar, BORL, etc.

How do you see the future of Indian downstream chemicals & petrochemical industry given the situation country goes full throttle to explore the coal resources?

As a result of ongoing consolidation, a decade down, how do you see the future of petrochemicals industry in India?

There are number of technologies available to use the contry’s large reserves of coal. Through the gasification route, India can convert coal to synthesis gas for power and steam production and hydrogen production. Technologies are also available to convert coal to methanol to olefins and then to polypropylene and polyethylene. The main challenge is that India’s coal has high ash content and requires a high investment. Thus the focus always lies on having a balancing process whereby ash is as per the desired input to the various consumers, while providing a maximum yield.

Petrochemicals form the basis for various consumer products that vary from domestic

>>The availability of large quantities of shale gas in US, has led to several new crackers being built using low cost associated ethane gas as a feedstock replacing naphtha. This has proved to be a game changer in the US. We need to explore similar opportunities in India.

Offshore World | 25 | April - May 2014

plastics to engineered plastics, from pharmaceutical ingredients to industrial solvents, from fibres to textiles etc, and they have become an integral part of our daily lives. As we progress, the demand for plastics is going to be greater and greater.

Today, India is the fourth largest economy in the world on a purchase price parity basis and one of the most populous countries in the world.

India’s 2013 population stood at 1.22 billion, but India’s plastic consumption is one of the lowest in the world at 6 kg/capita, in the US, it is 85 kg/capita and the world average stands at 40 kg/capita. The domestic petrochemical sector offers tremendous opportunities as India is a major unexploited market with immense growth potentials.

At some point of time, do you feel that the fertiliser sector which is also now going the syngas way could probably be integrated to the refining sector in the years to come?

Large integration between the refining sector and fertiliser sector is always debatable, because of the dependency of various units – if one critical unit fails, the whole complex is shut down, leading to huge losses. If the design can alleviate such eventuality, it makes sense to build large industrial zones integrating refining, petrochemicals and fertiliser industries.

This would enable value addition through inter-industry stream sharing, and CAPEX and OPEX optimisation through common facilities such as utility generation, environment management, manpower resource utilisation, etc while at the same time setting up economy-of-scale plants. This synergy can significantly bring down product cost. www.oswindia.com

features Energy Watch

Most Energy Commodities on Downward Slope Except for some, most energy commodities exhibited a downward price movement in the two-month period of March and April 2014. Continuing on its past momentum, CER (Carbon Emitted Reduction) futures prices (traded on ICE-ECX platform) dropped the most i.e. by 38.5 percent (albeit with low prices base). On the other hand, gasoline futures (traded on NYMEXCME platform) registered highest price rise amongst energy commodities i.e. 7.8 percent in past two month period.

Increased tensions between Russia and Ukraine led NYMEX crude oil (light sweet) futures to start the month of March at USD 104.92 per barrel, registering a rise of 2.27 percent from previous months close. Threats of Russian military action in eastern Crimea led to sizable jump in crude oil prices, as Russia is a key producer and exporter of oil. Moreover, Western Europe has been in a grip of one of the worst winters in history and dependent on Russian crude oil. Owing to these factors and with oil prices then staying low in following two-month period, NYMEX crude oil futures recorded its eventual month high of USD 105.22 on opening day itself.

Thereafter with easing of some tensions between Russia and Ukraine, along with a surprise climb in US distillate inventories raising concerns over the potential slowdown in energy demand led to the decline in crude oil prices. Later with plethora of downbeat data releases from Asia especially weak exports data from China, world’s second largest crude oil consumer, ensured the decline in crude oil prices to continue. A jump in US crude oil inventories and subsequent release of weak data from China indicating slow

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economic growth continued to pressurize oil prices. Later report indicating a surge in Iraq’s crude oil output to its highest level since 1979 eliminating the fear of supply risk amongst market participants, further stimulated the declining trend of crude oil prices. Separately, indications of the Federal Reserve of raising interest rates led the strengthening of US dollar. As a result, amid the aforementioned factors, NYMEX crude oil futures stooped down to eventual two-month low of USD 97.37 on March 17.

Oil prices then recovered in the wake of possible oil supply disruption as Crimea’s vote to leave Ukraine and join Russia. Later, upbeat US economic data (such as US industrial production), and subsequent US Fed’s decision to continue with its bond tapering plan added to market confidence on US economic growth prospects and hence added to oil price recovery. However the prices then quickly got range-bounded on contrasting factors such news on the expansion of a key US pipeline against an oil spill causing the closure of one of the busiest seaports (Houston Ship Channel) in the United States.

Later by end of the month of March, weak economic data releases from China, pushed

Offshore World | 26 | April - May 2014

down crude oil prices. Further, expectations that Libyan oil supply is more sooner than later is slated to return to the physical markets added to the bearish sentiments.

Later, crude oil prices recovered as it found support from news of a climb in US service-sector growth. Furthermore, expectations for potential oil demand grew as positive data indicating improvements in the US and European economies continued to pour in. Rise in geo-political tensions on reporting of clashes between the Ukrainian and Russian forces aided to a rise in crude oil prices.

Additionally, data release showing a jump in US retail sales data, signaling the potential for a rise in oil demand, continued to help the oil prices sentiments.

The rally in oil prices was then again reversed on releases of successive weekly reports showcasing steady rise in US oil inventories to record levels, dampening any supply concerns sentiments. Oil prices were further pressurized over prolonging of conflicts between Ukraine and Russia thereby fizzling out some tensions. Later by end of the month, market sighed relief on learning about new sanctions by Western nations against Russia that weren’t likely to disrupt oil supply. Subsequently, NYMEX crude oil futures closed the month of April at USD 99.74, registering a fall of 2.78 percent in two-month period of March and April.

Like crude oil prices, futures prices of its derivate i.e. heating oil (traded on NYMEX-CME platform) also moved down in two-month period of March-April, registering a fall of 5 percent. However the other derivate i.e. gasoline futures (also traded on NYMEX-CME platform) treaded an opposite movement i.e. rising by 7.81 percent in two-month period. Record low level of inventory as refineries indulged in seasonal maintenance as well as expectations of high demand in upcoming driving season in US, helped the rise in gasoline prices.

Apart from gasoline, the other energy commodity to register a price rise in the two-month period was natural gas. NYMEX natural gas futures registered a price rise of 4.47 percent. Unreasonably high temperatures in US pushing demand for gas-run air conditioning and gas-fired electricity in addition to Russia’s threat to cut natural gas supplies to Ukraine led to the rise in natural gas futures prices.

Amongst other energy commodities, ICE Rotterdam monthly coal futures prices continued the trend of past few months of moving down; eventually registering a fall of 2.66 percent in the two-month period. The declining price trend was at its peak in emission segment. While futures prices of European Union allowances (EUA) traded on ICE-ECX platform declined by 23.51 percent over two-month period, CER futures prices (as mentioned earlier) registered a price decline of 38.46 percent.

The European Commission in January proposed a market stability reserve to help the EU Emissions Trading System (ETS) adjust to changes in the economy by holding or releasing carbon permits to balance the market. However, there is still major uncertainty as to the exact shape of the reforms as European nations are divided on the urgency of market reforms i.e. whether they should start before the end of the decade. Additionally weaker energy prices (especially Germany power prices) and oversupplied market, dented price sentiment in emission market segment.

(Opinions expressed by authors are their views.)

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

Offshore World | 27 | April - May 2014

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news features

Indian Oil & Gas Tax Framework & New Tax Reforms For an import dependent country like India, upstream industry, especially for exploration & production operations, needs to be resurgent in order to achieve the huge energy demand of the country. While the slowdown in the upstream activity and potential lack of interest by Global Oil majors in Indian upstream activity could be attributed to many techno-commercial factors, the taxation system has also been alleged to contribute towards it. The author, a well-versed expert in Tax & Regulatory Services, discusses about the special tax regime applicable to companies engaged in upstream activities and also summarises some of the key tax expectations which the domestic oil and gas industry will be looking eagerly from the new Government.

India n is one of the world’s fastest growing economies. There is no denying the fact that Energy has been a key driver for economic growth and India is th no exception to it. Energy security has been a key agenda for the Government and we have witnessed a significant efforts being made by Indian Oil & Gas companies to enhance the share of India in the Global Oil & Gas landscape.

Some of the Public Sector companies have contributed significantly in this pursuit by making large sized acquisitions over the period of last 2 years. On the contrary, the domestic sector, upstream in particular, has been devoid of the level of activity or the excitement about it that the Government would have expected.

While the slowdown in the upstream activity and potential lack of interest

by Global Oil majors in Indian upstream activity, barring a few examples could be attributed to many techno-commercial factors; interestingly, the taxation system has also been alleged to contribute towards it. We have discussed below the special tax regime, as applicable to companies engaged in upstream activities.

Special Tax Regime for Companies Engaged In Upstream Activities Provisions of Model Production Sharing Contract and the Indian direct tax law (DTL) provides for following specific allowances in computing the taxable income of companies from exploration & production operations.

Entire exploration and drilling expenditure are 100 per cent tax deductible.

Such expenditure is required to be aggregated till the year of commencement of commercial production and post that, they can be either fully claimed in the year of commercial production or can be amortized equally over a period of 10 years beginning with the year of commercial production.

A seven-year tax holiday equal to 100 per cent of taxable profits is available for an undertaking (subject to satisfaction of certain specified conditions) engaged in the commercial production and is applicable with respect to blocks awarded until New Exploration & Licensing Policy VIII. The recent discussions in respect of potential change in fiscal regime of NELP and appointment of Cabinet Committee of Investments for granting approvals for oil & gas blocks (where operations were suspended due to requisite clearances) suggests that the Government is conscious of the need to provide the necessary impetus to this industry and is working towards it. Accordingly, the new Government will need to take concrete actions to address the relevant challenges and provide the necessary confidence to the Global investor community. www.oswindia.com

We have attempted to summarize some of the key tax expectations which the domestic oil and gas industry will be looking eagerly from the new Government.

Tax Holiday Even though, production of ‘natural gas’ is adjunct to the production of oil, however, tax authorities have been denying the tax holiday claim on ‘natural gas’ based on an observation in Budget Memorandum for financial year 2009-2010 that ‘mineral oil’ does not include natural gas.

On a separate note, some upstream companies, in the past had taken a position that each well should be considered as an ‘undertaking’, which was resulting into longer period for tax holiday (given that tax holiday is linked to commencement of commercial production). In this relation, they are likely to be impacted by the amendment introduced in 2009 from retrospective effect i.e. financial year 1999-2000. The amendment specifies, ‘all blocks licensed under a single contract to be considered as a single undertaking’.

Point of View: There is a strong commercial need to include production of ‘Gas’ to be eligible for the tax holiday till the time provisions of DTC are implemented. The financial models for the purpose of bidding are made on certain assumptions and tax holiday is certainly a key assumption, the denial of which subsequently could severely impact the basis of making investments. It is further expected that the eligibility period for claim of tax holiday should be equated with tax holiday for other Infrastructure facilities which provide for a tax holiday of 10 consecutive years in a block of 15 years.

Secondly, the withdrawal of well wise tax holiday has been made retrospectively. Indian tax system has faced a strong reaction because of retrospective amendments, particularly those which impose or enhance tax liability. Accordingly, retrospective withdrawal of well wise tax holiday should be removed.

>> The recent discussions in respect of potential change in fiscal regime of NELP and appointment of Cabinet Committee of Investments for granting approvals for oil & gas blocks suggests that the Government is conscious of the need to provide the necessary impetus to this industry and is working towards it.

Offshore World | 28 | April -May 2014

news features Presumptive Taxation Regime Non-resident services providers to exploration & production sector have an option to be taxed at a presumptive profit rate of 10 per cent on the gross receipts (without deducting any expenditure) which results in an effective tax rate of 4.326 per cent.

In this regard, amendment was introduced in 2010 to withdraw such regime for companies providing ‘technical services’, even if services are in connection with exploration / production of oil & gas. As a result, such receipts are then made to tax at a higher rate, as applicable to ‘fee for technical services’. Even though arguments exist to contend that the amendment should not be applicable for service providers opting for presumptive taxation regime, however, the amendment has resulted in tax litigation and has challenged the almost settled tax position. The income tax department has now also started to apply the amendment across all the services in connection with exploration / production of oil & gas, by arguing that such services also involve a transfer of technical knowledge.

Point of View: This inherent uncertainty on applicability of tax regime is not only discouraging interest from reputed oil & gas service providers, any incorrect assumption on the tax rate could lead to increased cost of exploration activity. Given that India needs innovative and state of the art technologies to improve the production capabilities viz deepwater, shale gas etc, a specific clarification to this effect will be looked forward to.

Investment Linked Incentive Provisions of DTL provides for investment linked tax incentives for ‘specified business’ including the business of laying and operating a cross country natural gas or crude or petroleum oil pipeline network for distribution, including storage facilities being an integral part of such network. As a result, 100 per cent deduction of pre-commencement capital expenditure is allowed.

However, the above provisions only cover ‘cross country pipelines’. Dedicated pipelines and intra-city & intra-state gas distribution networks are not covered within the ‘specified business’ category. Given that India needs to strong gas infrastructure to support the growth of economic activity across the country, it is recommended that the benefit of this incentive should also be given to inter-state and intra-city gas distribution networks.

Since then, after considering suggestions from the public, various stakeholders and the relevant recommendations from the Standing Committee on Finance specifically formed for the purpose, a ‘revised’ version of DTC 2013 has been released.

The Special tax regime for Oil & Gas sector in DTC provides investment linked incentive for the oil and gas sector which implies that companies engaged in upstream activities can set off their entire capital and operating expenditure before being liable to pay tax. While DTC is principally moving to an investment linked incentive regime from a profit linked regime for all the tax incentives which are presently provided in the current legislation, there is a need to re-look at this position since the oil and gas industry needs that additional Government support for more focussed and commercially viable contribution to the growth of the Indian economy.

Goods & Service Tax (GST) Further on the tax reform initiatives, Government of India has proposed to replace the current indirect tax regime with a comprehensive dual tax regime to be known as GST, which would be levied concurrently by the Centre and States. It is envisaged to be a tax efficient system which will widen the tax base, do away with the multiplicity of taxes and their cascading effects, minimize competitive distortions, exemptions / exclusions and ensure better compliance.

From an oil & gas sector standpoint, inclusion of petroleum products within the GST ambit has been a matter of much debate, with the States holding the view that petroleum products should be excluded from GST while the Central Government is in favour of levying GST on such products. Exclusion of petroleum products from GST would lead to multiple tax regimes for petroleum sector and will put extra burden on the consumer, thereby resulting in increased compliances.

One of the major steps for the new Government towards fiscal consolidation of the country would be introduction of GST. Though the seed of GST was sown long before, its introduction was delayed largely on account of the difference in opinion between the State and Central Government. It would be the key responsibility of the new Government to come at a common consensus with all the States on the introduction of GST as well as inclusion of petroleum products within the GST. (The views expressed by author are his personal.)

Direct Tax Code As part of Government of India’s tax reform initiatives to revise, consolidate, simplify the language and structure of the domestic direct tax laws into a single legislation, a draft code was released in August 2009 and Direct Tax Code (DTC) was introduced in the Indian Parliament in 2010.

>> Given that India needs to strong gas infrastructure to support the growth of economic activity across the country, it is recommended that the benefit of this incentive should also be given to inter-state and intracity gas distribution networks.

GRaju Sathiamoorthy Kumar Country Head Associate Director and -Managing Oil & Gas Director, Practice Black & Young Ernst Veatch E-mail:Raju.Kumar@in.ey.com Email: ???????????????

Offshore World | 29 | April -May 2014

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news features

‘Canada is keen to export LNG to Asia’ Bill Gwozd, Senior Vice President of Gas Services, Ziff Energy, talks to Offshore World about development of unconventional energy resources in the countr y, new opportunities emerging out of shale gas boom in Canada and many more.

C Canada is the fifth-largest producer of natural gas in the world and has up to 37 trillion cubic metres of marketable natural gas resources, enough to meet current trillio production for over 250 years. The International Energy Agency’s 2013 World Energy Outlook predicts world energy demand will increase by 33 per cent by 2035. The rapidly rising economies of China, India, and the Middle East will drive growth, commanding more than 58 per cent of the rise in global energy demand.

India’s energy needs alone will double over this period. In the oil and gas world, big emerging growth means big opportunities. Recently, the potential giant growth of unconventional gas supply in Western Canada is creating investment opportunities to buy in early and reap long term benefits. Many Asian countries have already started taking advantage of this growth.

Bill Gwozd, Senior Vice President of Gas Services, Ziff Energy, has worked in the natural gas industry for more than three decades, focusing on forecast assessments and customised consulting. While talking about overall scenario of Canadian gas sector and the ongoing development of unconventional energy resources in the country, he says that the western portion of Canada has a wealth of unconventional gas from several world-class unconventional gas basins: Horn River, Montney, and the Duvernay. These basins have been tested and are now awaiting confirmation of the numerous Canadian LNG export facilities to be started. Upon confirmation, a huge drilling program will get underway to underpin the LNG export supply requirements. Without the opportunity to export this vast unconventional gas resource, gas development will drift sideways with little overall growth. He further elucidates that Western Canada Gas Supply Outlook report will show the development of western Canada gas supply with and without LNG activity. This report will be prepared by a seasoned geologist and experienced engineer. It will be very important for Asia LNG buyers to be aware of as the Canadian gas producers will not develop the gas resources unless the gas price received covers the full cycle cost of gas development, gas processing, gas transport, gas liquification, LNG tanker expense, and, finally, the cost to re-vaporize.

With energy supply struggling to keep pace with rising demand worldwide, oil and gas producing countries have focused more on unconventional energy resources like shale and tight oil and gas. While expressing his views on this, Gwozd opines that unique to Canada is significant surplus of politically stable oil and gas supply. With a relatively small population of less than 40 million people, most of Canadian oil and gas existing supply can be sold to other countries who have a need for it. He further adds that most of the growth of Canadian supply is being targeted to worldwide buyers in several Asian countries. It is really very good that Canada is very open to sell energy to all countries as there is no implied bias to certain countries. In addition to huge gas resources, Canada is home to the giant oil sands. Oil production is growing significantly, new massive pipelines are being proposed, and new exports will start up before 2020. In a way, the Canadian energy giant is waking up to www.oswindia.com

assist the world in providing a politically stable energy supply. Our series of four gas supply and infrastructure studies is currently subscribed by 25 clients (55 subscriptions overall), an indication that companies worldwide are very interested in our views. Canada is poised to become a global energy superpower with the recent development of unconventional resources like shale gas and tight oil. While summarising opportunities for Asian countries like India, Gwozd says, “Opportunities are significant and interesting. For example, the doubling of the oil production from the giant oil sands projects in Alberta will require several very large diameter long haul pipelines – thus worldwide mills will have an opportunity to bid. On the natural gas side, new gas processing, new gas transport, new LNG liquifiers, new LNG tankers, and all the services to support this activity are about to start. Thus, many companies are quite interested in providing materials, service, and expertise.

Independent advisory firms such as Ziff Energy can provide the local eyes and ears on site to offer unbiased advice for assisting Asian companies find the better opportunities unique to their expertise.”

Asia is the largest regional market for liquefied natural gas (LNG), acquiring 64 percent of total world imports. It has mainly long-term gas linkage with Middle Eastern countries like Saudi Arabia, Qatar, UAE and Iran. While elaborating gas exporting opportunities to energy-hungry countries like India, China and Japan, Gwozd articulates that Canada will enter the LNG community by providing significant LNG supply and for many years to come. Canada has an experienced workforce, deep experience in gas production, and a very big interest in helping the world with its energy needs. Our Canadian leader, the Honorable Prime Minister, is encouraging exports of energy to many countries.

Further, the local leaders of the large energy provinces of British Columbia and Alberta are very supportive of export energy. When this strong support and encouragement, this Canadian energy supply will be developed and be exported. Geopolitical concerns surrounding the major crude producing countries like Iraq, Iran, Nigeria and Saudi Arabia have restricted security of supply concerns for large-consuming countries like India and China. Taking note of geopolitical issues hitting profit margins of E&P companies, he expresses that Canada is very neutral and merely wants to support countries that want to develop. Thus Canada has been supportive of exporting to many countries.

Our newest multi-client study, “Asia LNG,” addresses many of these points and greatly assists companies with their outlook planning. The study provides deep insight as to the resource available, the gas activity requirements, and the new infrastructure needed to bring Canadian LNG to Asian markets.

G Sathiamoorthy Bill Gwozd Country Head and Managing Director, Senior President of Gas Services Black &Vice Veatch Ziff Energy E-mail: ???????????????

Offshore World | 30 | April - May 2014

news features

Oil Subsidy to Fall 20% in FY15 Th financial year would be brought cheer for the new government and The the new Finance and Petroleum Ministers. The under-recovery on sensitive petroleum products is set to fall 20 per cent in FY15. The under-recovery is expected to reach ` 1,11,000 crore in 2014-15 from ` 1,39,869 crore during 2013-14. This will be certainly a big relief for the new government as the countr y has been faced a huge current account deficit (CAD) to the GDP. According to petroleum ministry estimates, for the year 2014-15, the new government will be suffered the lowest oil subsidy burden since 2011-12.

The loss on diesel, kerosene and cooking gas (LPG) is expected to be ` 35,000 crore, ` 29,000 crore and `47,000 crore, respectively.

According to oil & petroleum ministry, the drop in under-recovery is due to the decline in subsidy on diesel. It might fall 44 per cent — from ` 62,837 crore in 2013-14 to ` 35,000 crore in 2014-15. This is due to an increase in prices because of the diesel decontrol measures since January 2013.

Further, the rupee’s appreciation has also helped bring the figure down.

Current calculations are based on crude oil prices of USD 105-108 a barrel and the rupee at about 58/dollar.

FUELLING HOPE (Under- recovery in ` cr Domestic LPG Kerosene Diesel 161,029 139,869 39,558 29,410

Under-recoveries on kerosene and liquefied petroleum gas (LPG) were seen at ` 30,575 crore and ` 46,458 crore, respectively, the same levels as in 2013-14.

46,458 30,575

111,000 47,000 29,000

Of the overall fuel subsidy last financial year, upstream majors such as ONGC, OIL India and GAIL will pay 48 per cent, or ` 67,021 crore. Former finance minister P Chidambaram had said the government’s contribution to subsidy figures would be about ` 70,772 crore.

Last financial year, average international crude oil prices dropped from USD 110-112 a barrel to USD 105.

29,410

62,837

35,000

2012-13

2013-14

2014-15

As expected by the Petroleum Ministry “The drop in under-recoveries is primarily due to the appreciation of the rupee.

An increase of every rupee against the dollar will cut ` 10,000 crore on the under-recovery front. If the current trend continues and the new government goes ahead with the monthly dose of diesel decontrol of 50 paise a litre, the under-recovery on high-speed diesel will be wiped out in six months. This could even bring down overall under-recovery to about ` 1,00,000 crore,” said Debasish Mishra, Senior Director, Deloitte - India.

This will further fall if the new government implements the suggestions of the Kirit Parikh committee. The committee, mandated to revisit the pricing methodology for petroleum products, had recommended a ` 5/litre increase

in diesel prices, ` 250-a-cylinder rise in LPG prices and a ` 4/litre rise in kerosene prices, with immediate effect.

Currently, the state-run oil marketing companies — Indian Oil Corporation, Bharat Petroleum Corporation, and Hindustan Petroleum Corporation — are incurring a daily loss of ` 318 crore on the sale of diesel, kerosene and cooking gas.

Source: Ministry of Petroleum & Natural Gas, GoI

Compiled by Rakesh Roy Offshore World | 31 | April - May 2014

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Marketing Intiative

Unique Maritime Group (UMG) Founded in 1993, Unique Maritime Group is one of the world’s leading integrated turnkey subsea and offshore solution providers. Through its expanding network of companies, UMG is a specialist in the provision of services, and the sale and rental of equipment for the marine, diving, hydrographic, oceanographic, oil & gas, inspection and NDT market sectors. The Group has an established manufacturing capability for the delivery of customized engineering projects worldwide.

Headquartered in the Hamriyah Free Zone of the United Arab Emirates, the Group’s head office is situated within a land area of 14,630 square meters and comprises a collection of corporate and administrative offices, electronic and mechanical workshop facilities, training facilities, warehouses and a large area of yard space.

Historical Overview: Founded on the 6th of January, 1993 by Harry Gandhi, Unique Maritime Group is one of the world’s leading integrated turnkey subsea and offshore solution providers. Through its expanding network of companies, UMG is a specialist in the provision of services, and the sale and rental of equipment for the marine, diving, hydrographic, oceanographic, oil & gas, inspection and NDT market sectors. The Group has an established manufacturing capability for the delivery of customized engineering projects worldwide.

Unique System, as the Group was first known, was established as an equipment rental sales and service organization, providing specialized products and services to the offshore oil, natural gas and maritime industries in the Middle East, India and Singapore. As the group evolved, Unique System began operations in the US, Aberdeen in the UK and Mumbai in India, resulting in a new holding name being adopted – Unique Maritime Group.

Through a process of both organic growth and the targeted acquisition of companies, the Group has continued to expand its services, capabilities and

geographical infrastructure to better support customer requirements, regardless of their location.

Headquartered in the Hamriyah Free Zone of the United Arab Emirates, the Group’s head office is situated within a land area of 14,630 square metres and comprises a collection of corporate and administrative offices, electronic and mechanical workshop facilities, training facilities, warehouses and a large area of yard space.

UMG has built up an impressive reputation for quality, innovation, service and speed of response in its nearly two decades of existence and is always striving to improve its product and service offering. One of the ways it achieves this is by constantly adhering to a series of strict values. Promising to operate ethically and responsibly at all times, the aim of the Group is to maintain integrity by conducting its business in a way that makes people want to work with, and for, UMG. The Group’s operations are spread across 7 global regions which are: Middle East, USA, UK, South Africa, India, Nigeria and Singapore, and are well positioned to manage all project requirements for a fast growing international customer base.

The Group employs over 500 people worldwide. The list of companies that form the Unique Maritime Group are: • Unique System FZE/Unique System LLC (UAE) • Unique Wellube FZC (UAE) • Unique Computer Systems FZE (UAE) • Unique System (UK) Ltd • Unique Seaflex (UK) • Unique Hydra (South Africa) • Unique System LLC (USA) • Unique System TR & ENG WLL (Qatar) • Unique Hydrographic Systems Pvt. Ltd. (Representing Unique Maritime Group in India) Our Range of Solutions: UMG is a specialist in the provision of services, and the sale and rental of equipment for the marine, diving, hydrographic, oceanographic, Oil & Gas, inspection and NDT market sectors. Our services can be summarized as follows: 1) Marine Solutions: • Integrated Vessel Management, Control and Safety Systems • Power Generation and Propulsion Systems for Offshore Vessels • Onboard Energy Management Solutions • Hoisting Equipment, Deck Machineries & Offshore Containers • Subsea Cable Protection/Crossing and Buoyancy Systems, Including the Whole Range of Seaflex Buoyancy Products.

• Offshore containers, all certified as per DNV2.7-1 standards • Oil Spill Response Systems and Services 2) Survey Solutions: • Supply & Rental of Hydrographic, Oceanographic, Geophysical & Geotechnical Survey Equipment

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Offshore World | 32 | April - May 2014

Marketing Intiative

• • • •

Complete Integrated Survey Solutions Environmental & Oceanographic Monitoring Solutions Remotely Operated or Autonomous Operated Underwater Vehicles for Marine, Survey & Inspection Underwater Security Solutions

3) Inspection Solutions: • Subsea Corrosion Protection Inspections • NDT Equipment Rental • CSWIP Inspection Engineers • ACFM, MPI, FMD, UT 4) Diving Solutions: • Air and Mixed Gas Diving Systems • Saturation Diving Systems • Hyperbaric Reception Facilities • Complete Range of Diver’s Personal and Ancillary Equipment • Scuba Replacement Packages • Underwater Tools • HP and LP Diving Compressors 5) Oil & Gas Solutions: • Pipeline Rehabilitation • Hot Tapping & Line Stopping • On-Site Machining • Under Pressure Leak Sealing • Pipeline Repair Clamps • On-Line Safety Valve Testing • On-Line Valve Maintenance • Pipe Freezing • Portable Onsite Machine Rental Solutions • Subsea Diamond Wire Pipe Cutter • Hot Tap & Line Stop Tees and Fittings • Extruded Headers • Pipeline Isolation and Inspection Tooling Solutions • DNV Containers, Baskets, Workshops and A60 Cabins on Rental & Sales

6) Rental Solutions: Comprehensive Range of Rental Equipment for: • Hydrographic, Geophysical and Oceanographic Surveys • Positioning and Telemetry Services • Navigation and Ranging Systems • ROV Systems and Sensors • Non-Destructive Testing and Cathodic Protection Surveys • Winches, Compressors and Underwater Tools • Air and Mixed Gas/Saturation Diving Systems 7) Unique Seaflex Solutions: Design, manufacture, hire and sale of: 1) Buoyancy: • Open-ended parachute-style air lift bags up to 50t capacity for dynamic lifting from seabed to surface • Enclosed-type buoyancy units for support at or near the surface (pipeline installation, jacket installation, etc) • SeaSerpent enclosed buoyancy systems for continuous support during cable laying operations 2) Ballast: • WaterLoad bags up to 50t units for the testing of cranes, davits and other load-bearing structures, also counter weight use during offshore installation • Lifeboat testing systems • Combination of bags & loadcells to carr y out load testing of even 1000T cranes Key Benefits: • Main product lines are FULLY compliant with IMCA D-016 or LEEA 051 and have ABS Product Design Assessment • Extremely favorable weight to capacity ratio (approx 1%): easy to stow, transport, handle and use • Hire and sale options available, from stock positions held in multiple worldwide locations • Unique Seaflex technicians available to travel onsite to assist with the use of our equipment

Offshore World | 33 | April - May 2014

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news

India Fertiliser Industry Seeks 5-years Agreement on D6 Gas Supply New Delhi: It is not only the price that is contradicting the buyers of KG-D6 gas, but also the supply validity period proposed by the producer - Reliance Industries - is a factor for the user industries like fertiliser sector.

While RIL is in favour of an annual contract in the absence of any clarity on new gas price, fertiliser companies are seeking a five-year agreement. The existing D6 gas price as well as supply agreements with the buyers expire on March 31.

The RIL-BP-Niko combine and the buyers, mainly fertiliser companies, will now have to ink new gas supply and sales agreements.

RIL and its foreign partners in the block have been asked to continue to sell the fuel at the prevailing rates of $4.2/unit (gas is measured in million British thermal units) from April 1. This follows the deferment of new price announcement by the Government based on the Election Commission directive.

Mitsui, Qatar Eye on Petronet Stake Padmanabhan Takes Charge of NRL MD Guwahati: P Padmanabhan, a Bachelor of Engineering (Chemical), has been appointed as Managing Director of Numaligarh Refinery Limited succeeding Dipak Chakravorty.

Prior to his appointment, he was the Executive Director (Refineries Coordination) of Bharat Petroleum Corporation P Padmanabhan, M a n a g i n g D i r e c t o r , Limited (BPCL), NRL’s holding company Numaligarh Refinery LimitedLimited with major equity.He was in charge of co-ordination among group refineries of BPCL’s Mumbai and Kochi Refinery, joint venture Bharat Oman Refineries Limited (BORL) and NRL. He was also the task force leader for finalising BPCL’s future strategy till 2020 and contributed in finalising BPCL’s entry into Petrochemicals through Propylene derivative products.

NTPC Turns to LNG for Power Generation Kayamkulam: National Thermal Power Corporation Ltd (NTPC) at Kayamkulam is on the way to get LNG supply for power generation. The public sector company had floated global tenders inviting suppliers to provide 1.75 million cubic metres of gas per day. The supply was sought to be launched by the end of the year.

NTPC was considered one of the prime consumers of Petronet LNG Ltd which had commissioned its 5 mmtpa terminal at Puthuvype here. Though the terminal was fully geared up to meet the demands of consumers, various issues relating to pricing of gas as well as connectivity had come in the way of the flow of LNG to the latter.

FACT and BPCL Kochi were the major consumers now, but the capacity utilisation of the terminal had remained below 10 per cent in the absence of more bulk consumers, threatening the viability of the ` 4,500-crore terminal. Though NTPC had not entered into a pact with Petronet LNG so far, the latter could join the bidders and offer supply. www.oswindia.com

Mumbai: Asian Development Bank (ADB) had in 2011 decided to sell its stake in Petronet but could not go ahead as promoter PSUs like gas utility GAIL refused to waive off their first right of refusal. At that time, Japan’s Mitsui and Qatar interested to buy 5.2 per cent stake in Petronet LNG Ltd. However, with the Oil Ministry refusing permission to public sector oil companies to buy the stake on ground that such a move will alter the character of Petronet, the promoters have fallen in line and all of them including GAIL giving consent.

ADB is being told to go ahead with the stake sale... there are a lot of people interested in buying the stake. Sovereign wealth funds of Qatar, Abu Dhabi and Oman as well as multinationals like Mitsui are all interested besides some PE investors, according to a top official of Petronet privy to the development.

MRPLs CHTU Goes on Stream Mangalore: The 0.65 million metric tonnes per annum (MMTPA) coker heavy gas oil hydro treating unit (CHTU), a secondary processing facility of the phase III up gradation and refinery expansion project of Mangalore Refinery and Petrochemicals Limited, an ONGC group company and a schedule A mini ratna went on stream at Kuthethur .

CHTU is designed to treat coker heavy gas oil (CHGO) and VGO to produce low sulphur, low nitrogen (450 pppmw) hydrotreated CHGO/VGO stream which is used as feed for downstream PFCCU.

Construction at Pachpadra Refinery Hangs in Balance Jaipur: The refinery at Pachpadra in Barmer district hangs in balance with no work starting even after eight months of the foundation stone being laid. Final decision on it is now likely to be taken by the next government that will be formed in the Centre.

The refinery project is worth ` 37,230 crore in which HPCL has 74 per cent stake while state government’s share is 26 per cent. The project was expected to be commissioned by 2018, however, it has gone off-track even before the construction could commence.

Offshore World | 34 | April - May 2014

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news

India IOC to Set up Storage Unit at Mauritius New Delhi: State-owned refiner Indian Oil Corporation is the frontrunner to set up a 140 million tonnes crude storage facility in Mauritius. Mauritius plans to set up the facility before exploring the option of building a refinery and has put out feelers to the Indian refiner.

IOC is a dominant player in the island nation: it operates 19 retail stations, has a 24-million-tonne storage facility in capital Port Louis and has a 42 per cent share in the region’s aviation fuel business.

N K Verma is New OVL Director New Delhi: Narendra Kumar Verma has selected to head ONGC Videsh Ltd, India’s flagship overseas oil and gas assets acquisition firm. Verma is currently director for exploration at OVL’s parent company, Oil and Natural Gas Corp (ONGC).

Government head-hunter Public Enterprises Selection Board (PESB) interviewed seven candidates for the post, which fell vacant after Dinesh K Sarraf was elevated as chairman and managing director of ONGC.Verma hold masters degree in applied geology and an M Tech degree in petroleum exploration and is MBA in Finance. He has played vital role in management of exploration activities in frontier basin, mumbai offshore and AssamArakan basin. He was also involved in assessing the blocks in Vietnam Offshore, Indonesian Offshore, Myanmar Offshore, Qatar, Iran Onland and North Caspian.

N K Verma, Director, OVL

A storage unit will open up the possibility of a refinery. There is no refinery in the region, except one in Madagascar, which is non-functional, and South Africa that just barely meets the country’s requirement.

Since the storage facility involves huge investment and risk, the island nation wants the project to be a joint venture with IOC as the lead partner along with MRPL and Mauritius government owned State Trading Corporation.

GAIL to Invest into Overseas Upstream Assets New Delhi: GAIL (India), the state-run gas marketer, has planned to invest in upstream hydrocarbon assets overseas, including in the unconventional but fast-emerging area of shale gas acreages in the US, mainly eyeing the comfort such investments would bring to its LNG import business.

B C Tripathi, Chairman and Managing Director, GAIL (India)

The gas trading and transmission company is willing to spend USD 500-700 million to pick up minority stakes in US shale assets and also some conventional hydrocarbon projects in Africa, according to B C Tripathi, Chairman and Managing Director, GAIL (India).

With gas demand in India projected to far outstrip domestic production, GAIL has tied up LNG imports of 5.8 million tonnes (mt) a year from the US alone and the 20-year fuel supply in India would commence from 2017. Contracts for LNG imports of another 2.5 mt a year have been signed up with Russian gas firms.

RIL Divests Peru Oil Blocks Stake Mumbai: Reliance Industries (RIL) has divested its 30 per cent stake in an oil and gas block in Peru to Australia’s Woodside Petroleum and Pluspetrol of Argentina to trim its overseas properties.

The company, in a presentation to investors after the fourth-quarter earnings announcement, said its current international portfolio “comprises of three blocks - two in Yemen and one in Peru. In addition, RIL last month won two offshore exploration blocks (M17 and M18) in Myanmar.

CEO Elango Quits Cairn India New Delhi: After waiting in the wings as interim chief executive of Anil Agarwal-led Cairn India Limited for two years, P Elango has quit citing personal reasons. The former Oil and Natural Gas Corporation executive had taken charge in August 2012 after Rahul Dhir. Elango was with Cairn India for 18 years and was initially involved with their Ravva field off Andhra Pradesh.

The board has accepted the resignation and made Chief Financial Officer Sudhir Mathur the new interim CEO. Navin Agarwal, Chairman, Cairn India, said that Elango has had a successful stint at Cairn. He leaves Cairn India in the hands of a strong technical and business organisation. Cairn India has a terrific future and I am confident that Sudhir Mathur and the team will steer the organisation to realise its true potential.

Private Refiners Plan Expansions Mumbai: Reliance Industries (RIL), owner of the world’s biggest refining complex, and HPCL-Mittal Energy Ltd (HMEL), part owned by steel tycoon L N Mittal, have sought environment ministry approval for raising capacity of their refinery plants.

RIL’s two plants at Jamnagar in Gujarat has installed capacity to process about 1.2 million barrels per day (bpd) oil, has the capability to turn the heaviest crude into value added products. Reliance seeks to add a fifth crude train of 400,000 bpd, some polymer units and changing the fuel for 450 megawatt of an already approved 2100 MW power plant from gas to coal.

In a separate proposal, HMEL seeks to raise capacity of its existing 180,000 bpd Bathinda refinery in northern India to 225,000 bpd.

Offshore World | 37 | April - May 2014

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India Share of LNG in India’s Gas Mix May Rise to 38 per cent: Sachs

ASSOCHAM Pitches for Strong Policy on Coal & Gas Pricing

New Delhi: The share of imported gas in India’s mix of the fuel is likely to rise to 38 per cent in 2015-16 from 35 per cent in the previous financial year on muted domestic natural gas production, said Goldman Sachs.

Goldman Sachs said in a research report that out of the total availability of 128 million standard cubic meters per day of gas in the country last year, 83 mmscmd, or about 65 per cent, was produced from domestic fields.

The bulk of the domestic gas came from state-owned Oil and Natural Gas Corp (ONGC), which supplied about 50 mmscmd, while Reliance Industries’ eastern offshore KG-D6 is estimated to have supplied 13 mmscmd, it said.

The remaining 45 mmscmd of gas was imported in liquid form (liquefied natural gas or LNG) in ships at ports in Gujarat and Maharashtra.

Goldman said domestic natural gas production in the current financial year will rise to 89 mmscmd on the back of a marginal increase in the output of ONGC 3.06 per cent and RIL 3.17 per cent, while import of LNG is projected to increase to 52 mmscmd, or almost 37 per cent of the total gas mix.

In the following year (2015-16), domestic output will climb to 95 mmscmd and so will LNG imports to 59 mmscmd, or 38 per cent of the gas mix, it said.

D S Rawat, Secretary General, ASSOCHAM

D S Rawat, Secretary General, ASSOCHAM, said that the new government needs to initiate a comprehensive review of policies related to energy sector as well as processes that govern core industries.

Healthy output of electricity, coal and crude oil helped in pushing the core sector growth to 4.5 per cent in February 2014 from 1.3 per cent in the same month a year ago. The Index of Eight Core Industries grew 1.6 per cent in January 2014.

The eight core industries -- fertilisers, cement, steel, electricity, crude oil, coal, petroleum refinery products and natural gas -- have a combined weight of about 38 per cent in the Index of Industrial Production.

Kochi Refinery Set for Expansion

Goldman expects ONGC’s gas production to rise to 52.4 mmscmd in the current financial year and to 53.9 mmscmd in the following year. RIL’s eastern offshore KG-D6 field output was seen increasing to 16 mmscmd by 2015-16.

The report said that the share of imported gas in India’s total gas mix to increase to 38 per cent in FY16 on muted domestic production growth.

India’s demand for natural gas, according to Goldman, is much more than supplies but is price sensitive. At the current price of USD 4.2 per million British thermal units, there is an unmet demand of 122 mmscmd.

The unmet demand at the likely price of USD 8, after the Rangarajan formula is implemented, dips to 93 mmscmd. It drops to 78 mmscmd at USD 10 per mmBtu gas price and to 62 mmscmd at USD 12 rate.

Goldman said the recent pullback in Asian spot LNG prices has improved the relative affordability of spot LNG among Indian consumers.

Spot LNG import prices to India dropped to about USD 16 per mmBtu from USD 18-22 for most part of the January-March quarter, primarily driven by post-winter seasonality and high inventories from nuclear restarts in Korea.

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Mumbai: The Associated Chambers of Commerce and Industry of India (ASSOCHAM), the apex industry body of the country, has pitched for strong policy measures on pricing of coal and gas to strengthen the power distribution framework and to address the issue of public sector monopoly in coal production to lift the performance of core sector.

S Varadarajan, Chairman and Managing Director, BPCL

Kochi: Bharat Petroleum Corporation (BPCL), the state-owned refiner, is expanding its Kochi refinery where it is also setting up a petrochemicals unit. After expansion, the project envisages increasing the capacity of the refinery from 6 million tonnes per annum (MTPA) to 15.5 MTPA. The refinery will also be able to produce automotive fuels complying with Euro-IV and Euro-V specifications, said S Varadarajan, Chairman and Managing Director, BPCL.

Varadarajan said that as part of the expansion of Kochi refinery, BPCL would be setting up a petrochemical fluid catalytic cracker that would generate 500,000 tonnes of propylene annually. The propylene produced can be the feedstock for the petrochemical venture.

BPCL is examining several options in this regard, including implementing the petrochemicals initiative as a joint venture or by direct sourcing of technology from licensors.

The PSU has been talking to major players in the petrochemicals business for jointly setting up a complex in the vicinity of the refinery, he said.

Offshore World | 38 | April - May 2014

news

India Khazkhistan Looks Indian OMCs to Participate its Oil Economy New Delhi: Despite China’s major holding in Kazakhstan oil fields, the country now looks Indian oil companies to participate in exploration projects in partnership with Kazakhstan’s state-run oil company KazMunaiGas. Last year, the country dismay denied Kashagan oilfield to ONGC Videsh Ltd and instead sold it to China.

As a prelude, Kazakhstan has invited Indian firms to participate in bids for oil and gas blocks in partnership with state-run KazMunaiGas.

India to Become Third Largest Oil Consumer: US New Delhi: India will overtake Japan to become the world’s third largest oil consumer behind the US and China by 2025, the US Energy Information Administration (EIA) said.EIA in its Annual Energy Outlook said India’s oil consumption will rise from 3.68 million barrels per day (bpd), or 173.5 million tonnes, in 2012 to 5.19 million bpd in 2025, overtaking Japan’s 4.38 million bpd consumption. Japan consumed 4.75 million bpd of oil in 2012. India’s oil consumption growth rate from 2012 to 2040 will be highest in the world with a 3 per cent compounded annual growth rate. Its oil consumption, according to EIA, will reach 6.11 million bpd in 2030 and 8.33 million bpd in 2040.

India had in 2013 overtaken Japan as the world’s third-biggest crude oil importer. It imported 3.86 million bpd of crude oil, nearly 6 per cent higher than Japan’s customs- cleared imports of 3,648,372 bpd.

The International Energy Agency estimates that India will become the world’s largest oil importer by 2020.

Kazakhstan is also eager to join an international oil pipeline venture with India and other countries similar to the Turkmenistan-AfghanistanPakistan-India (TAPI) gas pipeline and is looking to reduce its dependence on China, which now controls nearly 40 per cent of the country’s petroleum resources.

Once the TAPI pipeline proves successful, Kazakhstan hopes to chart the same route but originating from within its borders to transport its oil and gas resources to markets other than China.

India Needs Multi-pronged Approach to Energy Security: Oil Secretary

Saurabh Chandra, Oil Secretary

New Delhi: India, the world’s third largest oil importer, needs multi-pronged approach to addressing its energy security, said Saurabh Chandra, Oil Secretary, on the sideline of the International Symposium of Fuels & Lubricants, ISFL-2014, organised by Indian Oil. He said that the need for a time-bound action plans for carrying out futuristic research to improve energy security in all sectors.

Chandra said that the country needs a multi-pronged and coordinated approach of focused research in multi-disciplinary fields. There is no single answer to the question of energy security.

India Cuts Iran Oil Imports Nearly a Fifth in 2013/14 • India’s 2013/14 Iran imports at 222,000 bpd, down 16.5 pct • January-March imports from Iran up 42.9 pct y/d • March shipments from Iran rose 45.6 pct from Feb

Abu Dhabi Offers to Fill up Oil Storages New Delhi: The Gulf kingdom of Abu Dhabi has offered to fill up the crude oil storage facilities coming up in south India, leading to savings of Rs 25,000 crore in precious foreign exchange. However, Abu Dhabi has said it will fill up the tank without paying the ‘storage fee’. It will only pay for the operational and maintenance costs.

As much as 5.3 million tonnes (mt) of crude storage facilities is being built at Visakhapatnam in Andhra Pradesh and Mangalore and Padur in Karnataka enough to meet the country’s requirement for almost a fortnight during crisis.

The storage tanks will be ready for commissioning this fiscal.

Oil ministry would be set up a joint working group to examine its merits of the proposal, particularly from the cost-benefit perspective. Apart from the Abu Dhabi offer, the ministry considered for the optimal utilisation of the facilities.

Besides renting them out, the government may mandate Indian Strategic Petroleum Reserves Ltd, which is building the facilities, to fill them up.

New Delhi: India’s imports of Iranian crude tumbled about a fifth in the fiscal year ended in March, despite a surge of shipments in recent months that came after a deal easing sanctions on Tehran.

India, the world’s fourth-biggest oil consumer and Tehran’s top client after China, imported around 358,000 barrels per day (bpd) in the first quarter, up nearly 43 per cent from a year ago.

Even with the surge over the January-March quarter, India’s oil purchases in the year to March 31 dropped 16.5 per cent to 222,000 bpd.

India had targeted at least a 15 per cent cut in its imports from Iran to 220,000 bpd for the 2013/14 year.

India’s shipments from Iran rose 45.6 per cent from February to about 387,000 bpd.

Offshore World | 39 | April - May 2014

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news

India Work on LNG Terminal at Seemandhra Soon Visakhapatnam: After obtaining stamp of approval from Expert Appraisal Committee, Petronet India Ltd (PIL) is waiting eagerly for the new government formation in Seemandhra to take up work on` 4,500-crore LNG terminal in Visakhapatnam. The 5 million-tonne Gangavaram Port LNG terminal, being developed by Petronet LNG Ltd in Visakhapatnam, will be held up till a new government comes to power in Seemandhra, the residual state formed after Telangana was carved out of Andhra Pradesh.

Objections over environmental problems and the Samaikyandhra agitation had a tell-tale effect on the timeline set by PIL, leading LNG supplier floated by industry majors BPCL, GAIL, IOCL and ONGC, for making the project operational at Gangavaram Port. The Expert Appraisal Committee of Ministry of Environment and Forests had deferred its decision on according environmental clearance last year seeking compliance reports on some issues. The capacity of the terminal will be doubled in the second phase.

Visakhapatnam Crude-oil Storage Set to be Commissioned in September Visakhapatnam: Crude oil storage at Visakhapatnam, India’s first underground crude-oil storage, is set to be commissioned in September.

Rajan Pillai, CEO, India Strategic Petroleum Reserves Ltd (ISPRL), the staterun company which is building the storage, said that the Visakhapatnam project has a capacity of 1.33 million tonnes, or 9.75 million barrels, of crude oil. The first shipment is expecting to receive in November.

DGH Sticks to Production Sharing Contract with COs like BHP Billiton New Delhi: The Directorate General of Hydrocarbons (DGH) has cautioned the oil ministry against unilaterally amending contractual terms and warned it against penalising operators such as BHP Billiton and ENI for not completing committed exploration works for want of defence and space clearances.

The upstream watchdog said that the government can’t unilaterally amend production-sharing contracts (PSCs) for two blocks held by BHP Billiton in Mumbai offshore as the Australian explorer declined the defence ministry’s conditional and limited access to these blocks. In a letter to the oil ministry, the directorate said that the PSC is a mutually agreed document (by both the govt of India and the contractor) and one party modifying conditions and seeking to penalise the other party for noncompletion of committed MWP (minimum work programme) may not be legally tenable.

ONGC Begins Drilling near Chennai Chennai: ONGC, the sate-owned oil marketing company, has began drilling its first well in the Palar basin, some 40 km north of Chennai, at a scientifically chosen patch of land in the middle of hundreds of mango trees. In a couple of months, the ‘drill bit’ - the steel-toothed contrivance that chips off rocks and bores into earth - will hit its target 2 km below the ground. Drilling wells is to an oil company as regular as casting nets to a fisherman, and typically only one in 10 drills yields anything. But the first well in the PR-ONN-2005/1 block that ONGC won in the seventh round of auctions in 2005 seems to be laden with hope.

Oil India Acquires Stake in Russian Oil Block

ISPRL is building strategic storage capacities that can hold reserves equivalent to 90 days of crude oil imports by 2020. To put that in perspective, India imported roughly 3.7 million barrels of crude oil a day in 2012/13. ISPRL is working on two other storage tanks - one in Mangalore and the other at Pudur near Udipi, both in Karnataka.

New Delhi: Oil India Ltd (OIL), the nation’s second-biggest state-run explorer, has bought a 50 per cent stake in an oil block in Russia for USD 85 million. OIL signed an agreement with Ireland-registered but Russia-focused firm PetroNeft Resources plc to take a 50 per cent non-operating interest in License 61 in Tomsk Oblast in Russia. The deal includes a three-stage payout including USD 35 million in cash up-front, USD 45 million in exploration and development spending and a performance bonus of up to USD 5 million. Tungolsky Licence 61 is located on the east side of the Ob River in the least explored oil bearing region of the Tomsk Oblast. The 4,991 square kilometer Licence contains 7 oil fields and over 25 identified prospects and leads.

Petroleum Plant at Arunachal

Pay Suppliers of Food, Medicines with Oil Euros: Iran

Itanagar: A large petroleum installation with tankers and other state-ofthe-art facilities has inaugurated in Arunachal Pradesh. The project is a joint venture between Bharat Petroleum and the Army.

New Delhi: Iran now wants to get back its euros owed by India through a new channel. It wants New Delhi to pay the money that Tehran owes to third countries for purchase of food, medicines and medical equipment. With nuclear talks between Iran and P5+1 going slow, Tehran has approached New Delhi for allowing third country exports of humanitarian goods for drawing down the USD 3.6 billion accumulated balance on account of India’s oil imports. The Reserve Bank of India has agreed that payments for third country exports to Iran could be made from the 55 per cent euro component of oil payment due to National Iranian Oil Company (NIOC) with UCO Bank acting as the settlement bank.

The storage would be a 7.5-km-long tunnel with several caverns to store various grades of crude. The roof of these caverns would be 162 meters below the sea level. “We have to balance out the level of gases, especially oxygen, in these tunnels, before filling in the oil,” Pillai said.

S Vardarajan, Chief Managing Director, Bharat Petroleum inaugurated the plant in the presence of commander of Army Eastern Command, Lt Gen MMS Rai and other dignitaries. The plant was built at an estimated cost of ` 8 crore and will serve the remote areas of the northeast. www.oswindia.com

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India Oman Gas Pipeline Back in Favour

India’s Energy Independent is Ambitious: IEA

New Delhi: It is a good sign that the long-awaited underwater gas pipeline project connecting Oman with India’s west coast is being resurrected.

Several factors explain the renewed interest, including the relaxing of sanctions against Iran and India’s need to counter-balance geopolitical and security considerations dogging other land-based projects.

In February 2014, India’s Ministry of External Affairs (MEA) suddenly disinterred a long-forgotten infrastructure project from the seabed – an underwater pipeline connecting Oman with India’s west coast, which will transport natural gas from Iran, Oman and, perhaps, Qatar. India already has a long-term gas supply agreement with Qatar and is looking to finalise similar deals with Iran and Oman.

A day after Yusuf bin Alawi bin Abdullah, the Sultanate of Oman’s minister responsible for foreign affairs, met India’s outgoing external affairs minister Salman Khurshid in New Delhi in February 2014, newspaper reports indicated that the discussions included the Oman-India deep sea pipeline.

Natural Gas Output Falls over 7 per cent Y-o-Y New Delhi: Production of natural gas in April 2014 recorded a year-on-year fall of 7.7 per cent as both public and private sector explorers failed to meet targets, data released by the petroleum ministry showed. The data, which came ahead of the announcement of new prices of the commodity, showed that the actual production of 2.77 billion cubic metres of natural gas in April represents a target shortfall of 5.9 per cent, as well as a drop of 7.7 per cent from the production recorded in the same month of the previous fiscal.

The natural gas production in April 2013 was over 3 billion cubic metres.

While state-run explorer Oil and natural Gas Corp (ONGC) fell short of its April production target by 6 per cent, private producers and joint ventures, which together produced over 733 million cubic metres of gas, too missed their month’s target by 7.2 per cent.

MRPL Targets FY14 Levels of Iran Crude Imports Mangalore: Mangalore Refinery and Petrochemicals (MRPL) is targeting to import 4 million tonne of crude from Iran in FY15. This is the same volume it imported last fiscal. Also, India and Iran have worked out a payment mechanism, through Oman, to settle about USD 1.6 billion of pending bills by July.

“We have got the waiver (from sanctions), which will be reviewed in July.

We hope we would be able to procure similar volumes of crude from Iran, as much we did in 2013-14,” said a senior MRPL official. The refiner does not want to lose its share of Iranian crude because of technical and commercial advantages that would help it earn better refining margins, which are already under stress.

New Delhi: The International Energy Agency (IEA) has termed India’s plan to become energy independent by 2030 as a ‘very ambitious’ and an ‘idealistic challenge’. India plans for achieving the target by 2030, even as India, the world’s fourth largest energyconsuming nation, imports 80 per cent of its crude oil and 25 per cent of its natural gas requirements.

Maria van der Hoeven, Executive Director, IEA

“Where 300 million Indians are lacking access to electricity and where per-capita electricity consumption is one-fourth of the world’s average, this is a very, very ambitious and huge challenge. It is not easy. There is a dependency in India on oil and gas imports and that’s something that shouldn’t be forgotten either,” said Maria van der Hoeven, Executive Director, IEA. “So, to put it very mildly, it is a very, very, very ambitious target.”

India’s energy demand is expected to more than double by 2035, from less than 700 million tonnes of oil equivalent (mtoe) today to around 1,500 mtoe, according to the oil ministry’s estimates, even as there is rapidly diminishing interest in the Indian hydrocarbon sector.

Fuel Demand Growth Slowest in 12 Years New Delhi: India’s fuel demand rose by its slowest pace in almost 12 years after monthly price increases chipped away growth in diesel consumption.

The world’s fourth largest oil consumer saw petroleum products demand growing by a meagre 0.7 per cent to 158.197 million tonnes in 2013-14, according to the latest Oil Ministry data. The growth is the slowest since 2001-02 when demand had expanded by 0.4 per cent to 100.432 million tonnes. Diesel, which is India’s most consumed fuel accounting for close to 45 per cent of the total petroleum products demand, recorded a 1 per cent drop in demand at 68.370 million tonnes, the first drop in consumption since 3.7 per cent fall in 2001-02.

Diesel demand had risen by 6.7 per cent in 2012-13 to 69.08 million tonnes.

It posted a record 11.1 per cent growth rate in 2007-08 and since then had showing near 8 per cent growth. India had recorded a 6 per cent growth in fuel consumption in 2012-13 to 157.057 million tonnes, according to the data.

It’s Wait and Watch for Gas-based Power Plants Mumbai: Six gas-based power projects in East Godavari district with a combined capacity of 5,000 MW have shut down their units due to acute shortage of gas. One of the projects has even started selling gas turbines and other units from its plant.

The government, on its part, has said that gas supply is possible only after July.

The idle plants due to shortage of gas are GMR’s Vemagiri (850 mw), GVK’s Jegurupadu Extension (440 mw) and Gauthami (250 mw), Konaseema Gas Power (750 mw) Reliance (450 mw) and Spectrum (450 mw).

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India Oil Pipeline to be Built from Russia to India through Northwest China New Delhi: Talks on the construction of the Russia to India oil pipeline project should conclude by mid-2014, officials from ONGC said. Thus, Russia is changing its energy export policy vector as strong demand for hydrocarbons, both in China and in India, one of the largest economies in the world, continues to grow. The benefits are obvious, including those in connection with India’s plans to become a member of the Shanghai Cooperation Organization (SCO). China supports the pipeline oil supplies to India, which is not surprising. One of the project’s options is the construction of a pipeline from the Altai region through the north-west of China to the north of India.

Xia Yishan, Director Center for Strategic Studies in Energy of the People’s Republic of China, said, “The project is beneficial for both India and China, as it would allow China to become an oil transit in addition to its ‘status’ of recipient of the Russian oil.” For Russia, the project’s additional benefit is providing oil to the SCO market. “Russia and India have agreed to establish a joint group to study the possibility of direct ground transportation of hydrocarbons” the joint statement by Vladimir Putin and Manmohan Singh in December. The discussion of such a project began back in 2005.

At the end of last year, ONGC supported its implementation, by saying “The pipeline from Russia seems appropriate. The details of the project will be clarified with the Russian partners.”

OVL, Rosneft to Search Hydrocarbon in Offshore Arctic Mumbai: ONGC Videsh Ltd (OVL), the overseas arm of the state-owned explorer ONGC, has signed a deal with Russia’s largest oil and gas producer Rosneft to jointly explore hydrocarbons in the offshore Arctic. Igor Sechin, President and Chairman of the Management Board of Rosneft and Dinesh Kumar Sarraf, Chairman of OVL and Chairman & Managing Director, Oil and Natural Gas Corp, signed a Memorandum of Understanding at the St Petersburg International Economic Forum, in the presence of Russian President Vladimir Putin. The Memorandum paves the way for the companies’ co-operation in subsurface surveys, exploration and appraisal activities and hydrocarbons production in Russia’s offshore Arctic.

Panel Moots JV of PSUs for Smooth Crude Oil Imports New Delhi: A joint venture company promoted by public sector oil companies, which will have the flexibility that the private refiners currently enjoy, is needed for hassle-free crude oil imports, says a Parliamentary Panel. “Instead of all oil PSUs carrying out purchase of crude oil, the Committee recommended formation of a joint venture company promoted by all interested PSUs and entrusted with the work of importing crude oil required for them in line with their refining specifications,” said the Standing Committee on Petroleum & Natural Gas report on ‘Long-term Purchase Policy And Strategic Storage of Crude Oil’.

The report, which was presented to the Lok Sabha, also pointed out that this proposed company may be given the same degree of flexibility as enjoyed by private sector refineries to carry out their operations, including price negotiations, hiring of ships, and negotiate better terms on freight and so on. This, according to the report, will help PSUs save a lot of work relating to imports.

“Purchase of crude oil is a complex process which involves negations of contract with NOCs (National Oil Companies) or floating tenders, shipping arrangements, unloading at ports, transporting to refineries etc, to be made by the oil companies,” it noted.

At the same time, the Committee observed that private refiners are able to procure crude oil at lower prices. Crude oil imports for 2012-13 by the PSU oil companies were estimated at 120 million tonnes. Among the PSUs, import by Indian Oil Corporation is placed at 66.3 mt, Bharat Petroleum Corporation at 22.80 mt, Hindustan Petroleum Corporation at 17 mt, and Mangalore Refinery & Petrochemicals Ltd 14.40 mt.

GAIL to Expand Global LNG Trading New Delhi: GAIL (India), which has tied up LNG contracts from the US and Russia, is looking to expand its footprint into the global gas trading market. The idea is that even if the Indian market for the fuel fails to live up to expectations, there would be an assured market overseas.

“We have allocated 1 million tonne for Singapore to test out the international market. We hope sizeable LNG would be absorbed in India. We have about six million tonne of LNG off-take right now. There is full flexibility for us on whether to bring it to India or sell it in the international market,” said B C Tripathi, Chairman and Managing Director, GAIL.

Shell to Buy Stake in Kakinada LNG Project Hyderabad: Global energy major Royal Dutch Shell is in talks with the Andhra Pradesh state government for buying up to 24 per cent stake in the planned Kakinada liquefied natural gas project on the east coast. GAIL Gas, a subsidiary of GAIL (India), is a co-promoter of Andhra Pradesh Gas Distribution Company (APGDC) that will build the project in the southern Indian state.

APGDC will have a 50 per cent stake and Gaz de France 26 per cent share in the project, leaving the remainder for the new partner. www.oswindia.com

He added that the company’s offices in Houston and Singapore are trying to seal the deal. We will see where we can have maximum margins on the commodity. The details would be decided in another six-eight months.

In 2013, about 240 million tonne of LNG was traded globally. Of this, about 60 per cent was through long-term contracts and the remaining through shortterm contracts. At the end of 2013, there were 17 countries exporting LNG and 29 countries importing LNG. About 75 per cent of the LNG demand originated in Asia.

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Press Releases Tekla Launches in Nepal

Nepal: Tekla, a global provider of Building Information Modeling (BIM) software for the building and construction industry, has announced its presence in the Nepal market. With this launch, Tekla will now offer its 3D BIM software in Nepal through its official local partner Envision Builders. Tekla started its journey in Nepal with the target to expand its business.

“Building and construction industry in Nepal is booming. For a developing nation like Nepal, Tekla’s BIM software can offer help in decreasing the project run-through time, increase construction coordination, provide better design management and increase cost savings. This will assist project development teams in carrying out errorless projection of requirements of project materials aided by accurate measurement matrixes,” said Samir Bhatia, National Marketing Manager, Tekla India.

Sunil Lidkar, Sales Manager, Tekla India, presented the benefits of Tekla Structures to Steel and Concrete industry in Nepal. In the launching ceremony, also Mr. Michael Kramer, Managing Director of Envision Builders, was present. Tekla has made a strategic business association with Envision Builders, a leading Nepal based company specializing in engineering software products. This association will help local construction companies to avail local support for implementing Tekla technology in their upcoming projects.

Unique Maritime Group Signs Joint Venture Honeywell Ultrasonic Flowmeter Helps Achieve Agreement with OEG Offshore ‘Metering Intelligence’ for Pipeline Monitoring UAE: Unique Maritime Group, one of the world’s leading integrated turnkey subsea and offshore solutions provider, has announced that a joint venture agreement with OEG Offshore (OEG), to offer the rental and sale of offshore equipment in the Middle East region. The new joint venture company, OEG Unique, which will be based in UAE & QATAR, will provide local access to OEG’s full range of over 200 individual certified designs of DNV 2.7-1 certified Cargo Carrying Units (CCUs) and A60 modules across the GCC countries.

The partners have jointly invested over USD 1million in new equipment including offshore containers, baskets, half heights, tanks and waste equipment rated to the leading international standards DNV 2.7-1 and EN 12079. The sales and rental fleet is located in bases at Sharjah, UAE and Doha, Qatar and is available for immediate mobilisation. The modern and diverse fleet will be supported by OEG Unique’s customer and technical support resources from facilities in Dubai, Sharjah, Abu Dhabi and Qatar.

On this occasion, Sahil Gandhi, Director, Unique Maritime Group commented, “We are extremely pleased to be venturing into the business of offshore containers and fleet. This is in line with our growth strategy for this year. By partnering with OEG Offshore, who is an industry stalwart in this field, we are confident that the new inception ‘OEG Unique’ will offer the range of offshore containers (CCUs) and A60 cabins specialized or customized products certified to DNV 2.7-1 / EN 12079 to customers in the Middle East region. We look forward to a stronger brand presence in this business over the years to come.”

Daniel Lim, Group Asset Director, OEG Offshore asserted, “We are delighted to be working closely with an experienced and respected Middle East partner that has an established reputation for quality service and support and shares similar business ethos.”

Mumbai: Honeywell has released its newest ultrasonic flowmeter designed to help natural gas producers improve efficiency by more-accurately tracking the movement of gas through pipelines. The USM GT400 Ultrasonic Flowmeter helps to reduce the amount of effort needed to maintain pipeline metering, which is especially critical today given the skills shortage many oil and gas companies are facing as veteran engineers retire.

Honeywell flowmeters are currently used in thousands of installations worldwide to measure the volume of gas across the supply and value chain.

The USM GT400 measures the volume of natural gas at every stage of its movement, storage and utilization, which is important because the volume of gas transported via pipelines to consumers is metered for billing purposes.

“As the natural gas industry continues expanding, companies have a tighter margin of error when it comes to lowering operating and capital costs, improving uptime and reducing risks,” said Tony Tielen, Vice President of Honeywell Process Solutions’ Engineered Field Solutions division. “Accuracy is the key to staying within those margins, and the USM GT400 uses a unique blend of multi-path measuring technology, field-proven electronics, sophisticated diagnostics and a user-friendly interface to achieve true metering intelligence.”

Compliant with CEESmaRT technology – a secure, cloud-based solution for conditionbased monitoring – the USM GT400 provides stability during flow perturbations thanks to its direct-path technology with six measuring paths on three levels. The paths are arrayed in an “X” pattern in horizontal planes. This orientation enables measurement of swirl, cross-flow and asymmetry, as well as transparent path velocity weighting per the Gauss-Chebyshev profile model for compressible fluids.

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news Analyst Warns Australia’s LNG Investors to Face Chip Profit Margin

Zeus Launches High-Temperature Line of Polymer Tubing

Australia: While the Australian LNG sector has massive financial potential, ballooning development costs, driven by the prodigious strength of the Australian dollar, are continuing to chip away at profit forecasts. But despite the emergence of such a challenging macroeconomic environment, the national government is unlikely to offer concerned investors any respite, says an energy expert with research and consulting firm GlobalData.

Orangeburg: Zeus, a global leader in material science and polymer extrusions, now offers an array of extruded products that maintain excellent electrical properties at high continuous service temperatures of up to 300° C / 572° F.

In the firm’s latest report, Jonathan Lacouture, the firm’s lead upstream analyst for the Asia-Pacific region, says that the Australian government has neither the financial motivation nor the political will to make concessions for the LNG industry.

“The government’s share of production revenues is already relatively low, and currently emissions targets stand as the primary focus of energy policy in Australia. Furthermore, the substantial capital costs required to develop onshore LNG plants have caused a surge in the amount of floating LNG projects in the country.

Zeus unveiled its new NeoTem™ fluropolymer line at the Offshore Technology Conference held recently in Houston. Through extensive research, Zeus has developed processes to extrude ECCtreme® ECA 3000 by DuPont™-- the first perfluoroplastic that breaks the maximum temperature threshold of 260° C/500° F— into heat shrinkable tubing, insulated wire, drawn fiber and extruded tubing.

Prior to NeoTem™, polymer tubing and products had a maximum temperature threshold of 260° C / 500° F. The new engineered polymer possesses excellent dielectric strength, chemical resistance and permeation resistance, even at extreme temperatures.

“This has sparked opposition amongst labor organizations as the construction of these vessels takes place in shipyards in Southeast Asia, completely circumventing the Australian economy and thereby lessening government incentives to stimulate these developments.”

“Zeus is excited to offer NeoTem™ because it is the 572 degree polymer solution engineers have been seeking,” said Rob Hall, Vice President - Engineered Extrusions, Zeus. “The ability of this polymer to retain its mechanical integrity in high thermal environments such as SAGDs will pave the way for applications in numerous industries. Zeus NeoTem™ represents a breakthrough not only for Zeus, but also for the industries we serve.”

Advanced Insulation Acquires Manuplas

Zeus currently extrudes NeoTem™ for application in automotive, aerospace, fiber optics, semiconductor and petroleum exploration industries.

Gloucester: Advanced Insulation Ltd (AI) has acquired Plymouth-based Manuplas, a specialist in the design, engineering and manufacture of polymer solutions for the marine and offshore sectors.

Commenting on the acquisition, Advanced Insulation’s Managing Director Andrew Bennion says: “The acquisition of Manuplas enhances AI’s market diversification by providing further penetration into our existing offshore markets whilst simultaneously increasing our presence and breadth of product offerings in the marine sector.”

Founded in 2003, Manuplas specialises in the manufacture and supply of floatation and protection products for the global marine and offshore energy markets. Its in-house design and development team provide innovative bespoke solutions from concept to manufactured product using sprayed, cast and moulded polymer systems.

Through substantial investment in research and development, Manuplas’ product range also now includes market-leading solutions for the rapidly growing offshore industry, where lightweight buoyancy materials for use in depths in excess of 3000m are required. Products include sub-surface buoyancy and subsea protection products such as pipe laying floats, umbilical floats, installation buoys, modular subsea mooring buoys, distributed buoyancy modules, piggyback saddles, subsea cable protection systems and ROV buoyancy. www.oswindia.com

Iran’s Oil and Gas Industry Hopes to Attract Foreign Investors: GlobalData LONDON, UK: With progress being made towards a nuclear deal and the prospect of lifting sanctions on the horizon, Iran is hoping to reinvigorate its upstream oil and gas industry by offering improved fiscal terms. The country’s oil sector has struggled to receive foreign investment in the last decade and therefore needs to attract new technologies to reverse production declines, says an analyst with research and consulting firm GlobalData.

Will Scargill, GlobalData’s Upstream Fiscal Analyst, states that in order to maximize investment if sanctions are lifted, the Iranian Oil Ministry has developed the Iran Petroleum Contract as a replacement for its previous buyback model. This change seems to be an improvement from an investor perspective and has already attracted interest from international oil companies, such as BP, Eni, Total, Gazprom, CNPC and PETRONAS. Scargill says: “Based on recent reports, this new model will offer a share of output based on oil prices and associated risk, instead of cash repayment.

While Iran would retain ownership of reserves, this should allow companies to book production entitlement as reserves in financial reports. This would be similar to the Production Sharing Agreements (PSAs) offered in several countries in the region.”

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International OPEC to Raises Oil Demand Forecast for 2014: IEA

USA: As the global oil demand will be higher in 2014 at 1.32 million barrels per day (bpd), the Organisation of Petroleum Exporting Countries (OPEC) may be increased their oil production rising by 1.14 million bpd, the International Energy Agency (IEA) said in its monthly Oil Market Report.

It also stated that OPEC needs to pump more oil this year to reach its target of 30 million barrels per day and meet rising demand as Asian contries like India and China.

The IEA report also stated that turmoil in producers such as South Sudan and problems at Kazakhstan’s Kashagan field and elsewhere saw the West’s energy watchdog cut its estimate for non-OPEC supply growth by 100,000 bpd to 1.5 million bpd for the year.

Eni Appraises Offshore Agulha Discovery Oil Discovery at Offshore Indonesia in Mozambique Area 4 Mozambique: Eni has executed the appraisal campaign for the Agulha discovery in Area 4 offshore Mozambique. The delineation was through the Agulha 2 well drilled in a water depth of 2,603 m (8,540 ft) to a TD of 5,645 m (18,520 ft). The well is located in the southern part of the Area 4 block, 12 km (7 mi) south of the Agulha 1 discovery well and 80 km (50 mi) off the Cabo Delgado coast. Agulha 2, the 12th well successfully drilled in Area 4, proved about 25 m (82 ft) of gas column in good-quality Paleocene reservoir sandstones and confirmed the southern extension of the field. Eni is considering further exploration drilling in the southern part of Area 4. Total resources in the area are estimated at 85 tcf of gas in place.

Indonesia: Premier Oil has discovered oil and gas with a well on the Kuda Laut structure in the Tuna production-sharing contract (PSC) offshore Indonesia. Kuda Laut-1 intersected 183 ft (56 m) of net oil-bearing reservoir and 327 ft (99.7 m) of net gas-bearing reservoir. Oil and gas samples have been recovered to the surface. The well will be side tracked to drill the Singa Laut prospect in the adjacent fault block. Premier continues drilling on Natuna Sea block A PSC on the Ratu Gajah-1 exploration well.

Kuwait to Sign LNG Supply Deal Kuwait: Kuwait’s state oil group has said that it would sign a six-year liquefied natural gas (LNG) supply deal with Royal Dutch Shell estimated at USD 12 billion (Dh44 billion) as the major oil exporter seeks to meet energy demands for the hot summer months. In a statement KPC said Oil Minister Ali Al Omair had received a delegation from Shell to sign the contract. It did not provide the volume of the super-cooled gas that would be supplied by Shell.

Russia, China Sign 30-year Gas Deal Eni is the operator of Area 4 with a 50 per cent indirect interest owned through Eni East Africa, which holds 70 per cent of Area 4. The other partners are GalpEnergia (10 per cent), KOGAS (10 per cent), and ENH (10 per cent, carried through the exploration phase). CNPC owns a 20 per cent indirect participation in Area 4 through Eni East Africa.

Deepwater Drilling at Offshore South Africa South Africa: Total expects to spud its first exploration well in deepwater block 11B/12B offshore South Africa in third quarter of 2014, according to partner Canadian Natural Resources. The exploration right is in the Outeniqua basin, roughly 175 km (109 mi) offshore. Off Côte d’Ivoire, Canadian Natural has contracted a drilling rig for a 12-month light crude oil infill drilling program at theEspoir field. The 10-well program is expected to start during 2Q 2014.

Russia: China and Russia has signed a landmark gas deal ending more than decade-long negotiations, with the agreement for the annual supply of 38 billion cubic metres of natural gas, hailed by the leaders of both countries as underlining their increasingly close ties. For energy-hungry China, the deal will provide a crucial source of clean energy as the country attempts to sustain growth while reducing its reliance on coal as it battles worsening pollution. The deal has been valued by some analysts at more than USD 400 billion, although both sides did not reveal the agreed upon price — the biggest sticking point in tough negotiations that were drawn out over a decade.

The deal was signed as visiting Russian President Vladimir Putin held talks with Chinese President Xi Jinping in Shanghai, where both sides are attending a regional security summit.

Oil Discover Confirms at Potiguar Basin Brazil: Petrobras has confirmed an oil discovery in the Piti structure in the deepwater Potiguar basin offshore Brazil. Well 1-BRSA-1205-RNS (1-RNS-158) was drilled in 1,731 m (5,679 ft) of water, 55 km (34 mi) offshore Rio Grande do Norte state. It encountered a 188-m (617-ft) hydrocarbon column with 24º API oil.

A formation test confirmed the reservoir’s satisfactory permeability and porosity, Petrobras adds. The company and Petrogral, its partner in the BM-POT-17 concession, will continue exploratory activities, with a view to propose a discovery evaluation plan to Brazil’s National Petroleum, Natural Gas and Biofuels Agency (ANP).

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International Solid Test Results from Oil Discovery Offshore Oman Iran Upbeat on Latest Deepwater Well in Caspian Sea Iran: Results from Iran’s latest deepwater exploration well in the Caspian Sea look positive, according to operator Khazar Exploration and Production Co (KEPCO).

Yousef Etemadi, Exploration – Director, KEPCO, told that the second exploration well on the Sardar-e-Jangal field, currently at a depth of 2,664 m (8,740 ft), may have found new hydrocarbon reserves. Recently 16inch liners were installed in the well. Total planned depth is 4,022 m (13,195 ft).

Sardar-e-Jangal holds in-place oil estimated at 2 Bbbl, with a recovery rate of 25 per cent.

Within five years the field could be producing 15,000-20,000 b/d, Etemadi claimed.

Offshore Iran 2D Seismic Survey Data Offered to Prospectors Iran: Global Geo Services (GGS) has made available its Persian Carpet 2000 multi-client 2D (MC2D) seismic survey. This covers 106,000 km (65,865 mi) over the Iranian part of the Persian Gulf and the Sea of Oman.

Bjorn Ursin-Holm, CEO, GGS said that with the ongoing international negotiations to lift the US/EU embargo on Iran, there is a big push to open up Iran for new foreign investments to international oil companies. The PC-2000 seismic survey covers the entire offshore area offshore Iran and preliminary interpretation of the data shows geological risks will be minimal, reserves are huge, and there is significant potential for the international community.

PC-2000, claimed to be the world’s largest MC2D seismic survey, provides a dense grid of 2x2 km seismic lines. Results suggest strong indicators of petroleum in the Iranian part of the Sea of Oman, GGS claims.

Numerous undrilled structures and stratigraphic prospects have already been found from preliminary interpretation of the PC-2000 seismic data, the company adds. GGS plans to reprocess the MC2D data. However, PC-2000 is available for immediate data licensing/data sales. www.oswindia.com

Oman: Masirah Oil, the operator of block 50 offshore Oman, has confirmed positive test flow rates from the block. The exploration well was drilled to its final depth in the Cambrian formation. Main objectives were to demonstrate the presence of movable hydrocarbons and a working petroleum system within the block.

Several zones in the well provided evidence of hydrocarbons.

During a 48-hr test, hydrocarbons flowed to the surface with the well producing up to 3,000 stock tank b/d of light oil with no water production. It is currently suspended. This was the first offshore oil discovery east of Oman after more than 30 years of exploration, Masirah claimed.

Chairman Hans Lidgren said the result will assist planning for more exploration, appraisal, and development over the 17,000-sq km (6,564-sq mi) block. Earlier the Oman’s Ministry of Oil and Gas approved Masirah’s entry into the second phase of the minimum work obligation starting from March 23. The company acquired the concession in February 2011.

Noreco Intensifies Exploration Offshore Norway Norway: Noreco says its latest exploration well in the Norwegian Sea has reached the reservoir of the Verdande prospect. It hopes to issue the results within a month. The company will also partner with Lundin Norway in an upcoming appraisal well of last year’s Gohta discovery in the Barents Sea, which is designed to assess the field’s western extent and reservoir properties.

According to Noreco CEO Svein Arild Killingland, the company has identified a new prospect in the PL 616 license in the southern Norwegian North Sea which could be drilled in 2015.

3D Seismic Completes Offshore Morocco Morocco: Chariot Oil & Gas Ltd has completed a 1,700-sq km (656-sq mi) 3D seismic survey offshore Morocco. The survey, encompassing 1,075 sq km (415 sq mi) in Rabat Deep, 250 sq km (97 sq mi) in Loukos Offshore, and 375 sq km (145 sq mi) in Mohammedia Reconnaissance, will enable the company to mature drillable prospects in the Mio-Pliocene and Jurassic plays identified within this region on reprocessed legacy 2D data.

Following processing, Chariot will interpret this new data, which is expected to be completed by year-end 2014. Chariot is the operator with 75 per cent interest, and ONHYM holds 25 per cent carried interest.

2D Seismic Begins Offshore Kenya Kenya: Swala Energy Ltd has begun a 2D seismic acquisition program in block 12B offshore Kenya. The work will be carried out by BGP International. Swala and its joint venture partner Tullow Kenya BV will acquire 350 km (218 mi) of 2D seismic over coming time. The data will be used to determine the forward exploration program for the block. Block 12B lies in the Neogene Nyanza basin, an offshoot of the East African Rift System, where large quantities of oil have been proven in recent years by Tullow in Uganda and Kenya.

Kenli Oil Fields Onstream Offshore China Japan: First oil from its Kenli 3-2 oil fields in the southern Bohai Sea has spudded. Development took in the Kenli 3-2, Bozhong 34-6/7, southern part of Bozhong 29-4, and the Bozhong 35-2 oil fields in an average water depth of around 20 m (65.6 ft). Production facilities include seven offshore platforms and an onshore oil processing terminal. At peak the fields are expected to deliver 35,000 b/d.

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International

South Belut Onstream Offshore Longreach Discovers Gas in Morocco Indonesia Morocco: Canada-based exploration company Longreach Oil & Gas has intercepted two separate natural gas Indonesia: ConocoPhillips has started gas production from the South Belut field in South Natuna Sea block B offshoreIndonesia, according to partner INPEX. Chevron is the other participant. The block is about 1,200 km (746 mi) north of Jakarta, with various other fields in production.

South Belut is 15 km (9.3 mi) south of the North Belut gas field in a water depth of 100 m (328 ft).

It has been developed via subsea wells tied back to the North Belut central processing platform. At peak South Belut will deliver around 120 MMcf/d (3.4 MMcm/d) to Singapore via an existing pipeline commingled with gas from the Belanak, Bawal, and Tembang fields. Resultant LPG will be sold to the Indonesian domestic market.

First Oil Discovers in Argentina Oil Find Argentina: Exxon Mobil Corp has made its first discovery from an unconventional oil and gas play in Argentina’s sprawling Vaca Muerta shale formation in the energy-rich province of Neuquén.

Exxon Mobil is testing the well to evaluate the discovery, but initial results produced an average flow rate of 770 barrels of oil a day in initial stage.

“Not all shales are alike, so our first ExxonMobiloperated discovery in the Vaca Muerta play is a very positive sign that the shale in this area of Neuquén Province holds great promise,” Exxon Mobil Exploration President Stephen M Greenlee said.

zones measuring over 200 m in total at its Kamar-1 well in Morocco. The zones were identified in the Lower Liassic and Lower Dogger / Upper Liassic. One measures a gross interval of 110 m and the other 100 m.

Longreach believes it has encountered a hybrid reservoir that holds substantial resource potential. The company noted that it has capitalised on the lessons learned in Koba-1, which was drilled in late 2013 at a location 4 km to the northwest. Dennis Sharp, Executive Chairman, Longreach said that the exploration results from the company’s second Moroccan well adds vital new technical evidence to its understanding of the large resource potential in the Kechoula structure.

He added that most importantly, the Kamar-1 well did not encounter any bottom water, which is excellent news for Longreach shareholders and our Moroccan partners. The company said that the data is currently being processed, reviewed, analysed and integrated with the Koba-1 results for the purpose of designing a formation testing programme over the gas-bearing intervals encountered at both the Koba and Kamar wells.

A follow-up 3-D seismic programme is also planned to better identify potential appraisal drilling locations.

Oil India Seeks Oil & Gas Assets in Nigeria Nigeria: Indian hydrocarbon explorer and producer Oil India is considering acquiring oil and gas blocks of Anglo-Dutch firm Shell in Nigeria, at around cost of USD 2 billion. For the proposed transaction, the Indian firm plans to partner with Sterling Energy & Exploration Production (SEEPCO), a division of Sandesara Group.

SEEPCO owns over 250 million barrels of certified oil reserves along with natural gas reserves of one trillion cubic feet in the Niger Delta. Other firms seeking to buy the Nigerian assets include Dangote Group and Lagos-based Seplat Petroleum Development.

Oil Production Begins from West Qurna-2 field in Iraq Iraq: Lukoil has announced the commencement of commercial production at the West Qurna-2 oil field in Iraq, reaching the target production level of 120,000 barrels per day (bpd). Located in southern Iraq 65km from Basra, West Qurna-2 comprises 35 billion barrels of estimated geological oil reserves in two main formations, known as Mishrif and Yamama. The project’s existing participants include the South Oil Company of Iraq’s Ministry of Oil and a consortium of contractors comprising Lukoil (75%) and the Iraqi North Oil Company (25%).

Hydrocarbons Discovers at Rozhkovskoye Field in Kazakhstan Study Finds Mixed Financial Effects of Kazakhstan: KazMunaiGas Exploration Production has discovered oil and gas at the Rozhkovskoye field Shale Gas for Local Communities USA: A study by Duke University researchers has found that oil and gas development from shale fields does not always help the public finances of communities. The report describes major revenue sources for local governments, which can include property taxes, sales taxes and state-collected severance taxes or fees that are sent back to the local level. Some local governments also partner with oil and gas firms to help maintain roads, with new costs including damage to roads from heavy truck traffic. They also partner to carry out water and sewer service expansions and several other projects.

in Kazakhstan. The well was drilled in 2013 in the northeast wing of the field. The U-24 well flowed at maximum rates of 1.9 kilo barrels of oil equivalent a day of light, dry crude oil and 6 million cubic feet a day of gas through a 9.5 mm choke. The company noted that positive test results from the new Bashkirian deposit increase the prospects of increasing the field’s reserves and a quantitative evaluation of reserve growth will occur after the results of additional exploration.

Reserves Increase Offshore eastern Russia Russia: Gazprom has informed that exploration in 2013 year boosted reserves from the Yuzhno-Kirinskoye field in the Sea of Okhotsk offshore Sakhalin Island. C1+C2 reserves increased 13 per cent from 564 bcm to 636.6 bcm.

Recoverable reserves of gas condensate grew from 71.6 to 97.3 million tons, with 6 million tons of oil added. Late last year the company brought onstream Russia’s first subsea production system at the Kirinskoye field.

Offshore World | 47 |April - May 2014

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p ro d u c t s

LPG RETICULATED SYSTEM

OIL RIGS

GE Projects Pvt Ltd offers wide assortment of LPG reticulated system (piped gas). These premium grade LPG reticulated system (piped gas) are highly appreciated for its renowned features.

For details contact: GE Projects Pvt Ltd No: 1/5 & 1/6, DSIDC Factory Shed Khichri Puri, Block-3 Nr Gazipur New Delhi 110 091 Tel: 011-22784827, 65660399

AJK Global Infratrade have a broad range of equipment, systems and components for land drilling rigs, truckmounted rigs, and workover rigs ; the main products include drilling rigs, rig spare parts, drilling tools and pipes, oil and gas tubes, instruments and transport vehicles.

For details contact: JK Global Infratrade Euro House 4th Floor, Chincholi Bunder Road B/h Inorbit Mall, Malad (W), Mumbai 400 064 Tel: 022-42511155

NATURAL & LPG GAS METERS Minicon Thermal Systems offers wide range of gas meters for various flow rates and pressures. Minicon Thermal Systems mainly sell gas meters of turbine wheel technology for gas flow measurement. They are available in models such as Kromschroeder gas meter DM 10R25-40; Kromschroeder gas meter DM 25R2540; and Itron gas meter MZ 50.

PROPANE FLOW METERS Sometimes referred to as EFM (electronic flow meter) or mass flow computer (MFM), their gas flow computer GFC-147 has an internal database of physical properties of most commonly used industrial gases. It measures gas pressure and temperature, and uses extremely complex algorithms for calculations of gas density and compressibility all in real time.

It also uses algorithms confirming to International Standards like ISO 5167 to compute flow from Orifice plates, Venturis, flow nozzles, pitot tubes, etc, and corrects for factors like Reynolds number when the flow is computed.

The Flow Computer can easily be interfaced to SCADA or DCS systems as various options like Analog Retransmission and RS485-MODBUS outputs are available.

For details contact: Cosmic Technologies Plot No: 87 Indl Area, Phase-9 Mohali Punjab 160 062 Tel: 0172-5096230 E-mail: vikram@cosmictech.com / info@cosmictech.com www.oswindia.com

For details contact: Minicon Thermal Systems Gala No: U-50, Nr Paliwal Doodh, Jai Matadi Compound Opp: Rajlakshmi Complex, Thane-Bhiwandi Road, Kalher Bhiwandi, Maharashtra 421 302 Tel: 02522-662064 | Fax: 91-02522-662064

GAS FLOW METERS In todays world, Blue Bell are in a constant effort to save energy and control increasing fuel cost. To support this cause, one needs to measure their LPG/natural gas supply at consumption points. Blue Bell supply and install various types of gas flow meters in industries, as well as residential buildings and commercial malls and food courts. Blue Bell understands each application, in different elevation and pressure requirement. As per your requirement Blue Bell design an individual metering system which can be accurate and robust.

For details contact: Blue Bell 8B, Lalbazar Street, 1st Floor, PO Box-2980, Kolkata 700 001 Tel: 033-40076595 | Fax: 91-033-22488483

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p ro d u c t s

ELECTROMAGNETIC FLOW METER Charun Instruments offers electromagnetic flow meter which is fully automatic and digitally designed. These product range have no mechanical inertia, quick response and good stability, application in automatic examination, and regulation and controlling. Measuring accuracy is uninfluenced by the physical parameters such as type, temperature, viscosity, density and pressure. This range of product posses operation data for safe and firm protection of memory. Charun Instruments offer many types of flow meter such as sandwich type and insertion type.

For details contact: Charun Instruments No: 210- C-D, 2 nd Floor, Kalrav Comml Complex Opp: Maninagar Railway Station, Maninagar (W) Ahmedabad, Gujarat 380 008 Tel: 079-25471190 | Fax: 91-079-25471190

MYKO Electronics Pvt Ltd offers complete range of products offering the best solutions for the measurement of oil consumption. It has state-of-theart design with electronic counter, flow indication, analogue and digital output signals and limiting value switch. Mounting is on the pressure or suction side of a pump, with no straight inlets or outlets required.

For details contact: MYKO Electronics Pvt Ltd No: 204, B-2, Sakivihar Complex, Saki Naka Andheri (E). Mumbai 400 072 Tel: 022-28575634 | Fax: 91-022-28581020

OIL FLOW METERS Global Engg Enterprises offer precision engineered range of fuel oil flow meters that find application in petroleum, petrochemical and process control industries. These are suitable for fitting into tanks or process vessels for controlling liquid levels for preventing tank overflow.

DIGITAL FLOW METER RMS 200 Series flow meters are extremely versatile flow meters that can be used for a wide variety of applications.

These meters offer extreme reliability and low cost for flow measurement. RMS 200 Series flow meters can be used for water and water like liquids. These meters can also be used for line sizes from 0.5� to 48�. Microprocessor based instrumentation ensures accurate readings for both rate of flow indication and total flow indication. A number of programmable features including In-line calibration are standard. Advanced models can offer relay outputs for signals exceeding rate of flow or total flow set points. Industry standard 4-20 mA output is optionally available. These instruments are field programmable and does not needs any special instruments for calibration. All variables and program parameters are programmable through key pad provided in the instrument. In addition, these meters have RS485 or RS-232 mode of communication to PC through MODBUS Protocol. All the parameters are saved in a non-volatile EEPROM memory which does not need any external battery. There is an advanced power fail feature by which even if there is any power failure the total flow reading is automatically saved to memory and resumes with the same value after power On. RMS200 is available in a IP65 enclosure with field mount, panel mount, pipe mount as well as wall mount options.

For details contact: RMS Controls No: 1/3-A, 11th Cross Street, Venkateshwara Nagar Ramapuram, Chennai 600 089 Tel: 044-24760086

OIL FLOW METER

For details contact: Global Engg Enterprises Plot No: 276, Sector-2 Opp: Swami Samarth School Indrayani Nagar, Bhosari, Pune, Maharashtra 411 026

FLOW METERS Hydro Treat Technology is the preferred name in the industry that offers a wide collection of flow meters that are efficient and durable. Made available in different specifications, these flow meters are used to determine the rate of water flow. Precisely engineered to fulfill the varied customer demands, these flow meters are highly demanded due to their accurate measurements, clear display and no recalibration.

For details contact: Hydro Treat Technology (A unit of BDS Hydro Treat Consultants Pvt Ltd) G-288, Aya Nagar, Phase-6, New Delhi 110 047 Tel: 011-47072472 | Fax: 91-011-22355449 E-mail: hydrotreattech@rediffmail.com

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p ro d u c t s

FLOW METERS

GAS LEAK DETECTOR

E Cube Water Solutions offers flow meters by making use of high-grade basic material while taking into consideration requirements of the clients and industry laid parameters.

For details contact: E Cube Water Solutions No: B402, Rishab Tower Karkarduma Community Center Opp: Karkarduma Metro Station Delhi 110 092 Tel: 011-43003928 E-mail: ecubewater@gmail.com

Installing gas leak detectors can be crucial to several installations including homes. Ranging from electronic leak detectors, water leak detection, gas detectors and helium leak detectors to ultrasonic leak detectors, detectors come for a variety of needs. Most gas detectors are like smoke detectors. They use both a light and a sound to alert you to a gas leak.

For details contact: Tech Fire Engineers Pvt Ltd F-38, Ashoka Mall, Opp: Sun North, Sand Bund Garden, Pune, Maharashtra 411 001 Tel: 020-32335189, 32335208

LPG GAS LEAK DETECTORS ELECTROMAGNETIC FLOW METER Cryogenic Process Control offer a wide range of electromagnetic flow meter in various designs, applicable in conductive fluid and water treatment processes. Their products are made from fine grade components according to the industrial standards. These meters are completely involuntary and digitally designed.

For details contact: Cryogenic Process Control No: 21, Gr Floor, Amman Villa, 4 th B Cross M M Layout, Kavalbirasandra, Bengaluru, Karnataka 560 001 Tel: 044-42043266

Sakthi Fire Protection Systems Pvt Ltd offers LPG gas leak detectors. It can detect the leakage of LPG gas and will give you the siren and call to intimate you and can cover the mishappening around.

For details contact: Sakthi Fire Protection Systems Pvt Ltd No: 6 & 32, Vasudevapuram Street, West Mambalam, Chennai 600 033 Tel: 044-24722655 | Fax: 91-044-24722655 E-mail:sakthifireprotection@gmail.com / sakthifire@hotmail.com

LPG/CNG LEAK DETECTORS GAS LEAK DETECTOR The offered products are highly demanded for their optimal functionality, longer service life, rugged construction and compact design. These products are available at affordable prices.

For details contact: Vrajesh Security Systems No: 156, Vrajesh Mukti Medan Opp: Ravjibhai Tower, Krishna Baug, Maninagar Ahmedabad, Gujarat 380 008 Tel: 079-25463575, 40372448 www.oswindia.com

Designed for permanent installation, the unit is able to monitor the presence of combustible gases such as LPG, CNG, LNG, etc, in a variety of applications.It has a microprocessor based system with in-built self-test facility and RS 485 digital data communication link; local and an optional remote alarm indicator console provides audiovisual alarm status from all detector heads; relay output for automatic activation of exhaust fan, hooter, solenoid valve etc; CMRI/CCOE certified Gas Leak Detector heads continuously monitors the presence of flammable gases; and alarm acknowledgement/reset and mute keys on both local and remote consoles.

For details contact: Subham Safety House House No: 36-A, Shalimar Bagh, Main Ajmer Road, Jaipur, Rajasthan 302 021 Tel: 0141-3237888

Offshore World | 50 | April - May 2014

p ro d u c t s

LPG LEAK DETECTOR

FIXED GAS & FLAME DETECTOR

LPG leak detector that S S Instruments offer are a compact electronic device which detects the presence of LPG or LNG in the air. It switches on a relay at less than 1/4th of LEL (Lower Explosive Level) thereby warning much before the escaped gas can pose a fire hazard. There is also a visual warning LED. The ignitable leakage gases can be detected by the method of light/sound alarm For details contact: S S Instruments No: 96, 4 th Cross, 2 nd Main, Indl Lane Kamakshipalya, Nr Sai Mandir, Bengaluru, Karnataka 560 079 Tel: 080-23485069, 22748688, 23563074 | Fax: 91-080-23485069

TETRA GAS DETECTOR Tetra is a flexible multigas monitor for the detection of flammable gases, oxygen and a wide range of toxic gases.

Available in rechargeable or disposable battery format and with or without an internal pump, it is used extensively in the utilities, chemicals and hydrocarbon processing markets.

Intrinsically safe, Tetra is one of the only portable gas detectors with embedded software designed to the exacting requirements of IEC 61508-3, guaranteeing reliable and dependable operation.

For details contact: Super Safety Services No: 5, Grd Floor, Indu Chambers, No: 349/353, Samuel Street, Majid (W), Mumbai 400 003 Tel: 022-23473300, 23473311 | Fax: 91-022-23473024

WIRELESS GAS LEAK SENSOR TA must have sensor in every home, it detects gas leakages and sends our audio alerts via the local wireless siren. It can be programmed into the eHomes network to send out SMS alerts to the owner or local security, switch ON lights in the house or even send out email notifications to multiple mail IDs

For details contact: Param Products & Services No: 413/1, 41st Cross, 7 th Main Road, 5 th Block, Jayanagar Bengaluru, Karnataka 560 011 Tel: 080)-65460906

Fixed gas and flame detector instantly detect pressurized gas leaks with this high-precision, omni-direction device. Features advanced acoustic detection technology, it works even when traditional methods of detection are unsuitable or dependent on ventilation. The patented self-test system provides fail-safe operation. It functions in extreme weather conditions, making it ideal for use in complex pipeline systems, both onshore and off.

LED display provides actual sound pressure level and alarm indication. Easily integrates with a broad range of applications.

For details contact: Secure Plus Allied Pvt Ltd Bharti Vidya Bhavan Building No: 3, Room No: 14 Datta Ram Lad Marg, Chinchpokli Mumbai 400 012

LEAK DETECTOR InterTech Development Co, USA, has launched its new Eco-Series 1 low-cost leak detectors.

Designed around the company’s patented pressure decay process of leak measurement, which offers both speed and accuracy in leak testing, the InterTech Eco-Series 1 leak detector is a high-resolution (24-bit), pressure-change measuring instrument. It offers a touchscreen control panel for easy control and operation, an important feature that enables comprehensive use of the instrument’s impressive range of capabilities. Packaged in a compact cabinet, the Eco-Series 1 leak detector is portable and easy to use in on-site applications. It is also ideal for standalone Go/No-Go QC on test-benches of small and medium industries. At the same time, advanced communication facilities such as an Ethernet connection and user I/O port have been provided to allow integration of the unit into complex instrumentation panels. The EcoSeries 1 will find use in any size of industry, also allowing for upgrade from standalone to being part of a larger panel.

For details contact: InterTech Development Co C-31, Fort Indraprastha, No: 45 Kalakshetra Road Tiruvanmiyur Chennai 600 041 Tel: 044-42112525

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products

LPG MULTI-VALVES TIMKEN SHEAVE PAC BEARING ASSEMBLY

OMB Saleri Valves India Pvt Ltd offers quality range of LPG multi-valves that is specially designed for ring shaped and cylindrical tanks. Conforming to international standards, these valves not only allow free flow of LPG but also control the filling limit of the tank. High on performance, these multi valves are resistant to corrosion and abrasion.

The Timken Company introduced a product that helps increase safety and improves uptime on oil rigs.

For details contact: OMB Saleri Valves India Pvt Ltd Plot No: 490, Pace City 2, Hero Honda Chowk, Gurgaon, Haryana 122 001 Tel: 0124-4268087

LPG FLOW METERS Cosmic Technologies offers accurate LPG flow metering systems be it low cost volumetric flow monitoring application or applications demanding precision density compensated totalisation. Their differential pressure based flow measurement systems follow International Standards like ISO 5167, which means that time tested technologies like Orifice Plates, Venturis, Flow Nozzles, Pitot Tubes, etc, deliver predictable and accurate metering results. Their systems can easily be interfaced to SCADA or DCS systems as various options like Analog Retransmission and RS-485-MODBUS outputs are available.

For details contact: Cosmic Technologies Plot No: 87, Indl Area, Phase-9, Mohali, Punjab 160 062 Tel: 0172-5096230 E-mail: vikram@cosmictechNo:com / info@cosmictechNo:com

The pre-greased, pre-set and unitized Timken Sheave Pac can eliminate the need for re-greasing the bearing because Timken engineers designed the bearing assemblies to run an entire operating cycle between rebuild without the need for re-lubrication or additional maintenance. The Sheave Pac assembly easily interchanges with current industry-standard bearing assemblies and seals.

For details contact: The Timken Co 4500 Mount Pleasant Ave NW North Canton, Ohio 44720, U.S.A. Tel: 330.471.7948 E-mail: gloria.irwin@timken.com

LPG GAS ALARM

LEAK DETECTOR The LEAK-DETECT represents the highest technology for pinpointing leaks in air systems. LEAK DETECT finds any gas disappearing out of a pressure system. Anywhere :in tubes, couplings, valves, sealing, packagings, etc.Any gas disappearing out of a pressure system The sound of small leaks is mostly ultrasonic. The LEAK DETECT receives the ultrasonic sound that escapes from the leak point, processes it, and displays its strength. The larger the leak, the higher the indication. In addition to the display, the electronic generates an audio leak sound for the ear phones.

For details contact: Tribotech No: 133, Hindustan Kohinoor Indl Complex, L B S Marg, Vikhroli (W), Mumbai 400 083 Tel: 022-25777295, 67997858 | Fax: 91-022-67997859 www.oswindia.com

The Timken Sheave Pac bearing assembly is designed to eliminate the need to re-grease the traveling block or crown block on oil rigs. The Timken Sheave Pac alleviates that job through its sealed-for-life sheave bearing assembly, helping to increase safety for rig workers and reduce expensive downtime.

RDS Series gas leak alarm is a kind of wall-hung household gas alarm designed to detect the concentration of combustible and toxic gases or vapours. Provides visual and audible signals when the gas concentration reaches preset level, remind you take prompt favorable action, can start up other link equipment, ventilate gas or shut off gas supply to avoid fire, explosion, suffocation and other evil accident. Alarms are available for liquefied petroleum gas (LPG), natural gas (methane), propane, hydrogen, town gas, smoke.

For details contact: RDS Enterprises C-312, New Ashok Nagar, Nr Mayur Vihar, Phase No: 1 Opp: Metro Station, New Ashok Nagar New Delhi 110 096 Tel: 011)-22716897

Offshore World | 52 | April - May 2014

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

Bahrain Deep Gas Exploration Project

Bahrain

-

Execution

NOGA - Awali Onshore Oil Field Development

Bahrain

1,500,000,000

Execution

Akri-Bijeel Exploration Block

Iraq

-

Execution

Block K42 (Taza Block)

Iraq

-

Execution

Hawler Exploration Area

Iraq

-

Execution

Sarsang Block

Iraq

100,000,000

Execution

KOC - Wara Pressure Maintenance Project

Kuwait

500,000,000

Execution

New Oil Gathering Centres

Kuwait

1,000,000,000

Bidding

Epsilon - Oman Block 55

Oman

-

Execution

Offshore Block 50

Oman

-

Execution

Oman Block 38

Oman

-

Execution

Al-Shaheen Offshore Field Development

Qatar

6,000,000,000

Execution

Al Khalij North Development Project - Phase III

Qatar

200,000,000

Execution

Bui Hanine Field Expansion

Qatar

11,000,000,000

Execution

Contract Area A - Lukoil Concession

Saudi Arabia

215,000,000

Execution

Khurais Light Crude Increment Program

Saudi Arabia

3,000,000,000

FEED

Offshore Fields Maintain Potential Programme (MPP)

Saudi Arabia

-

Execution

Saudi Shale Gas

Saudi Arabia

-

FEED

ADMA-OPCO Nasr Field Development

UAE

2,000,000,000

Bidding

ADNOC - Shah Sour Gas Development

UAE

10,000,000,000

Execution

Fujairah Oil Terminal Expansion - Phase 7

UAE

200,000,000

Execution

Mubarraz Offshore Field Development

UAE

-

Execution

Africa

Country

Value ($)

Status

Angola- Block 18

Angola

-

Execution

Block 15/06 West Hub Project

Angola

-

Execution

Heba/East Bahariya Concession

Egypt

-

Execution

Taurt Gas Field Development

Egypt

437,000,000

Execution

West Esh El Mellaha 2 Block (WEEM-2)

Egypt

9,000,000

Execution

South Omo Block

Ethiopia

-

Execution

Middle East

Offshore World | 53 | April - May 2014

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Accra Contract Area

Ghana

4,900,000,000

Execution

Offshore Guinea Concession

Guinea

-

Execution

Block CI-26 / Espoir Development

Ivory Coast

-

Execution

Block L10B

Kenya

-

Execution

Kenya - Block 1

Kenya

-

Execution

BlockLB-15

Liberia

-

Execution

Banda Gas Field

Mauritania

-

Execution

C-10PSC

Mauritania

-

Execution

Foum Assaka Area

Morocco

2,750,000

Execution

Tarfaya Offshore Block

Morocco

40,500,000

Execution

Agadem Block

Niger

-

Execution

OML 120 - Oyo Field Development

Nigeria

600,000,000

Execution

Otakikpo Marginal Field

Nigeria

-

Execution

Kiliwani North Gas Field

Tanzania

-

Execution

Bir Ben Tartar (BBT) Concession

Tunisia

-

Execution

Block 3A - Kingfisher Structure

Uganda

4,000,000,000

Execution

Caspian Region

Country

Value ($)

Status

Chirag Oil Project (COP)

Azerbaijan

6,000,000,000

Execution

Gunashli Oil Field Development

Azerbaijan

500,000,000

Execution

Neft Dashlari Field Development

Azerbaijan

-

Execution

Shah Deniz Stage 2 Development

Azerbaijan

25,000,000,000

Execution

Forouzan and Esfandiar Offshore Fields Development

Iran

396,000,000

Execution

North Azadegan Oilfield Development

Iran

1,760,000,000

Execution

South Azadegan Oilfield Development

Iran

2,500,000,000

Execution

South Pars Phase 12 Development

Iran

7,650,000,000

Execution

South Pars Phases 13 & 14 Project

Iran

5,000,000,000

Execution

South Pars Phases 15-16 Onshore & Offshore Development

Iran

2,900,000,000

Execution

Akkulka Shallow Gas Exploration Project

Kazakhstan

-

Execution

Blocks A & E

Kazakhstan

-

Execution

BNG Contract Area

Kazakhstan

100,000,000

Execution

Galaz Contract Area

Kazakhstan

-

Execution

Kashagan Offshore Oil Project

Kazakhstan

136,000,000,000

Execution

Kyzyloi Gas Field Development

Kazakhstan

-

Execution

Palyanovskaya Tight Oil Project

Russia

-

Execution

Sakhalin-1 Chayvo Field Development

Russia

5,800,000,000

Execution

Sakhalin-1 Project

Russia

20,000,000,000

Execution

Two New Blocks - March 2014

Russia

-

Bidding

Vankor Oil and Gas Field Development

Russia

-

Execution

Zapadno Chumpasskoye Field

Russia

-

Execution

Caspian Region

www.oswindia.com

Offshore World | 54 | April - May 2014

events diary Subsea Asia 2014

Oil & Gas Myanmar 2014

Date: 11-13 June 2014 Venue: Kuala Lumpur Convention Centre, Kuala Lumpur, Malaysia Event: Subsea Asia 2014 will take place at the Kuala Lumpur Convention Centre (KLCC) in Malaysia and will be Asia’s 4th SUBSEA Conference and Exhibition. The Subsea Asia Conference, organised by Subsea UK, will take place on 11th June 2014 and the Subsea Asia exhibition will open its doors on the 12th June 2014. The Subsea Asia event is Asia’s most specialised engineering event and an ideal platform to network and to discuss the latest innovations within the subsea industry within Asia, as well as being an opportunity to meet with companies involved in the deepwater oil and gas industry within Asia. Subsea Asia 2012 conference included a local overview from Malaysian NOC, PETRONAS, as well as technical presentations from companies including: First Subsea, Hallin Marine, Nautronix, SMD, Subsea 7 and Welltec.

Date: 15-17 October 2014 Venue: Myanmar Convention Centre, Yangon, Myanmar Event: Myanmar’s hydrocarbons sector is high in demand for technology and knowledge is substantial. The Oil & Gas Myanmar (OGM) exhibition will be a comprehensive showcase for petroleum geosciences, exploration & production and refining products and services.

Oil & Gas Myanmar 2014 is an exhibition focused on Oil and Gas Exploration, Production and Refining and will be held in Myanmar Convention Center on 15-17 October 2014 hosting worldwide representatives from all areas of the oil & gas industry.

The venue offers a two level exhibition and conference room space for up to 100 companies. With a selection of co-located seminar rooms the centre is ideal in being able to offer product focused seminars alongside a trade show environment.

For details contact: Malaysian Exhibition Services Suite 1401, 14th Floor, Plaza Permata, Jalan Kampar, Off Jalan Tun Razak 50400, Kuala Lumpur Tel: + 603 4041 0311 Fax: + 603 4043 7241 Email: enquiry@mesallworld.com

For Detail Contact: SINGAPORE EXHIBITION SERVICES PTE LTD Carol New Singapore Tel: +65 6233 6638 ogm@sesallworld.com

Moscow Refining, Gas & Petrochemicals Week Date: 15 - 18 September 2014 Venue: Lotte Hotel, Moscow, Russia Event: The Moscow Refining, Gas and Petrochemicals Week with its traditionally technically-strong programmes, unrivalled access to the major players in the Russian Downstream sector and the highest quality networking opportunities.The 5 days of intensive networking and engaging presentations will be attended by over 500 attendees with over 80 respected speakers.

Offshore Energy Exhibition and Conference 2014 Date: 28-29 October 2014 Venue: Amsterdam RAI, the Netherlands Event: The 7 th edition of Offshore Energy conference will host between 500 and 600 exhibitors and is expected to attract over 10,000 professionals from all over the world. Both the exhibition and the extensive conference program of Offshore Energy 2014 will address the technical, operational and commercial challenges associated with industry growth.

The pragmatic event will be a major affair of Heads of Refining, Petrochemicals and Gas Processing from Major Oil Companies, General Directors of Regional Refineries, Petrochemical and Gas Plants, Heads of Technical Departments, Chief Engineers, Chief Technologists, Project Directors, Design Institutes, Engineering Contractors, Technology, Solutions & Equipment Providers, Industry Consultants and Analysts, Government Agencies.

The 2014 technical program will once again feature an international faculty of speakers covering a broad palette of topics. Meetings range from high caliber panels and technical sessions to annual meetings of industry organizations and masterclasses, catering to professionals from board level to operational level and young talents.

For details contact: Euro Petroleum Consultants 44 Oxford Drive, Bermondsey Street London, SE1 2FB, UK Tel: +44 20 7357 8394 Fax: +44 20 7357 8395 Email: conferences@europetro.com www.europetro.com

For details contact: NAVINGO BV Westerlaan 1 3016CK Rotterdam The Netherlands Tel: +31 (0)10 2092600 Fax: +31 (0)10 4368134 Email: me@navingo.com Offshore World | 55 | April - May 2014

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book shelf

Strongly advocating a world systems approach to managing oil and gas projects and programs, the book covers quantitative and qualitative techniques. It addresses technical and managerial aspects of projects and illustrates the concepts with case examples of applications of project management tools and techniques to real-life project scenarios that can serve as lessons learned for best practices. An in-depth examination of project management for oil and gas projects, the book is a handbook for professionals in the field, a guidebook for technical consultants, and a resource for students.

RISK GOVERNANCE OF OFFSHORE OIL AND GAS OPERATIONS Editors: Preben Hempel Lindøe, Michael Baram & Ortwin Renn Hardcover: 450 Price: USD 95.98 Publisher: Cambridge University Press Book Bo Description: This book evaluates and compares risk regulation and safety management co for fo offshore oil and gas operations in the United States, United Kingdom, Norway, and Australia.

S ItI provides an interdisciplinary approach with legal, technological, and sociological perspectives on their efforts to assess and prevent major accidents and improve safety performance offshore. Presented in three parts, the volume begins with a review of the technical, legal, behavioral, and sociological factors involved in designing, implementing, and enforcing a regulatory regime for industrial safety. It then evaluates the four regulatory regimes that encompass the cultural, legal, and other contextual factors that influence their design and implementation, along with their reliance on industrial expertise and standards and the use of performance indicators.

The final section presents an assessment of the resilience of the Norwegian regime and its capacity to keep pace with new technologies and emerging risks, respond to near miss incidents, encourage safety culture, incorporate vested rights of labor, and perform inspection and self-audit functions. This book is highly relevant for those in government, business, academia, and elsewhere in civil society who are involved in offshore safety issues, including regulatory authorities and industrial safety professionals.

COMMISSIONING OF OFFSHORE OIL AND GAS PROJECTS Authors: Trond Bendiksen and Geoff Young Paperback: 244 Price: USD 58.50 Publisher: AuthorHouse

GAS AND OIL RELIABILITY ENGINEERING Author: Eduardo Calixto Hardcover: 520 Price: Usd 99.95 Publisher: Gulf Professional Publishing

BBook Description: The book describes the uutmost importance of thorough planning aand preparations to streamline the execution of your projec t, in order to avoid the spectacular cost and schedule overruns often encountered on today’s mega-projects in the oil and gas industry. It explains, in practical terms, which strategic principles, tools, techniques, structure and organization you need to have in place to assure yourself that your project will meet the cost and schedule targets. The book focuses on the all-important Commissioning phase, the stage of the game where all the poor planning and preparations manifest themselves as costly delays. The book should be mandatory on all project managers’ desks, and in all management students’ curriculums.

Book Description: The advent of reliability B engineering tools coupled with the cost of oil e and a gas operations has changed the paradigm of o maintenance technology. A simple strategy of efficient replacement of failed equipment/ component has been transformed into a more complex but proactive approach for keeping equipment running at peak efficiency concept of “total process” reliability engineering and maintenance. Applied Oil and Gas Reliability Engineering: Modeling and Analysis is the first book to apply reliability value improvement practices and process enterprises lifecycle analysis to the Oil and gas Industry. With this book in hand, engineers also gain a powerful guide to the most commonly used software modeling tools which aid in the planning and execution of an effective maintenance program.

P R O J E C T M A N A G E M E N T F O R T H E O I L A N D G A S I N D U S T R Y: A WORLD SYSTEM APPROACH Authors: Adedeji B Badiru and Samuel O Osisanya Au HHardcover: 781 PPrice: USD 102.98 PPublisher: CRC Press BBook Description: Project management for oil and gas projects comes with a unique set of challenges that include the management of science, technology, and engineering aspects. Underlining the specific issues involved in projects in this field, Project Management for the Oil and Gas Industry: A World System Approach presents step-by-step application of project management techniques. Using the Project Management Body of Knowledge (PMBOK®) framework from the Project Management Institute (PMI) as the platform, the book provides an integrated approach that covers the concepts, tools, and techniques for managing oil and gas projects.

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Offshore World | 56 | April - May 2014

RNI No: MAHENG/2003/13269. Date of Publcation: 1’st of every alternate month.

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