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Emerging Trends
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contents INTERVIEW Unconventional Hydrocarbon Can Play a Big Role VOL. 10 NO. 1 DECEMBER 2012 – JANUARY 2013 MUMBAI ` 150
in Securing India’s Energy Security
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Shale Gas - The Indian Story
Mittravinda Ranjan (mittra_ranjan@jasubhai.com) Sneha Sinha (sneha_sinha@jasubhai.com) Rakesh Roy, Mahesh Kallayil D P Mishra, H K Krishnamurthy, N G Ashar, Prof M C Dwivedi Mansi Chikani, Rakesh Sutar Abhay Dalvi, Abhijeet Mirashi Dilip Parab, Girish Kamble V Raj Misquitta (Head), Arun Madye
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Shale Gas – The Indian Story
Sudhir Vasudeva Chairman & Managing Director ONGC
The dramatic revolution in the hydrocarbon sector led by emergence of shale gas in USA has furthered the belief that the Earth has enough energy potential in its store and it is technology that is constraint. Shale rocks that occur thousands of meters deep were known to be housing large gas reserves but till recently, were ignored or just passed through while drilling for conventional oil & gas because of lack of technology Though the gas content and saturation in shales is leaner than the conventional reservoirs, the large geographical and vertical expanse (hundreds to thousands of sq. kms and thousands of meters thick, multiple zones) of the shales within stratigraphic column of the sedimentary basins present shales as the next generation gas source, now that fracking techniques are available and have been proven to be cost-effective in the USA.
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Oil and Natural Gas Corporation Limited (ONGC) has signed a Memorandum of Understanding ( M o U ) w i t h Co n o c o - P h i l l i p s to launch a joint venture pilot project to explore the viability of shale g a s r e s o u r c e s i n t h e c o u n t r y. S u d h i r Va s u d e v a , C h a i r m a n & Managing Director, ONGC, explains why monetising shale gas assets remains a challenge in the country, the factors that need to be addressed, shale gas polic y and more. www.oswindia.com
Monetising shale gas assets is a challenge on account of the following factors: • Shale gas E&P is a narrow margin business game hence efficiency of operations is the key word in making it successful. A shale gas well D&C cost (drilling and completion) costs approx. USD 2.3 million and at gas price of USD 6.0/mcf it gives an IRR of 16 per cent. • Shale gas monetisation are long term plays and works best on economies of scale and on a life cycle approach. • Shale gas operation is more of an engineering play than a geological play and mastering complex field operations and its associated logistics is pertinent in monetising of shale gas reserves. • Well stimulation design & execution is critical to shale gas success. It requires technical and engineering excellence of a high order, particularly toward ‘fracking’ as approximately half the cost of well goes into well stimulation. • It requires lager tracts of barren land [Non – arable and preferably uninhabited] on account of the high spread of drilling and ‘fracking’ activity. This could potentially be a problem for India due to its high population density. Offshore World | 4 | DECEMBER 2012 - JANUARY 2013
Fur ther, land acquisition may be an issue for easy access on account of small tracts of individual land holdings. ‘Fracking’ requires a plentiful supply of water and though modern technology has ensured that upto 80 per cent of water can be reused, water requirement is still substantial as is its efficient disposal. This again could be a most relevant issue in the Indian context. Production cost is likely to be higher initially compared with that of conventional gas production and hence an appropriate gas price will have to be discovered. Shale (F&D) gas finding and development cost has been estimated to be between USD 3-4 per mmBtu (Million British Thermal Units) in established fields and between to USD 6-9 in the exploratory areas. A large network of gas pipeline is essential for efficient capture and transmission of shale gas.
Shales become pertinent to us in India as so far we have been striving to close the gas ‘demand – supply’ gap by importing gas as LNG and through pipelines from Turkmenistan, Iran, Qatar, Bangladesh and Myanmar. While the LNG route is operational, but relatively expensive, the pipeline route remained mired in geo-political considerations. It would therefore be germane to study the Indian shale gas scenario. India has taken initial steps in data collection and its preliminary interpretation to capture data for mapping the shale gas development programme for the country. MoP&NG has entered into a MOU with US Department of State in November, 2010 in pursuit of characterisation and assessment of shale gas resources in India. Main areas of cooperation envisaged under MOU are: Shale gas resource assessment; Technical studies; Regulatory framework consultations; Investment promotion through exchange of experiences and best practices. Under the MOU, USGS experts were to carry out technical studies for shale resource assessment of
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Indian sedimentary basins based on the data provided by DGH. Technical personnel of DGH and National PSU’s (including ONGC) engaged in the field of oil and gas exploration were to interact on behalf of Mo P&NG with different US agencies mainly USGS and US Department of State for this purpose. Subsequent to signing of MOU, a number of workshops and study tours have been organised facilitating interaction between India and US experts. USGS has already come out with their assessment of shale gas resources in three Indian on-land basins namely Cambay, KG and Cauvery. As per USGS study, the three basins together, hold 6.1 tcf of technically recoverable gas reserves based on their methodology. ONGC and DGH consider that USGS estimates need to be re-evaluated as the shale gas potential of these basins appears to be much higher as is indicated by the EIA study of four Indian basins which includes the above three basins and Damodar basin that has come out with a figure of 63 tcf of technically recoverable gas reserves. A pilot project on shale gas was undertaken by ONGC in 2010 to assess the potential of the Barren Measure Shales of Damodar Basin. The pilot project was carried in technical collaboration with Terra Tek Labs (specialised shale gas agency, USA) and executed by M/s Schlumberger Asia Services Ltd. The entire project is to be completed in seven phases. Four wells have been drilled so far and detailed analytical core–log studies have been generated. Interpretation, testing zone selection, ‘frack’ design & gas in-place estimation has been carried out by Terra Tek, USA. Two wells each, in the Raniganj and North Karanpura were also drilled in the CBM Blocks of ONGC. Under the pilot project one well was taken up for customised hydro-fracturing in three stages in the Barren Measures Shale Formation. During testing all the three stages exhibited gas flare at surface for more than 12 hours each separately. The pilot project was helpful in knowledge transfer through collaborative mode and absorbing the basic expertise in shale gas potential assessment, exploration principle, practices, methodologies, technologies and exploitation concepts besides computing the gas in-Place volumes.
also generate substantial data whose interpretation would be helpful in deciphering the genetic shale types, the typical geochemical and petro-physical characteristics to further strategise the exploration plan in long term.
capacities, along with water storage, handling and disposal issues, large pool of geoscientists, engineering and operational manpower to support the shale gas development are areas where capacity building is essential.
O N G C h a s a l s o e nte re d i nto a M o U w i t h a n experienced international oil and gas major of USA, M/s Conoco-Phillips as per which a joint pilot project in potential areas would be launched once the initial exercise of technical screening is completed.
The shale gas development in USA took a shape in 1980’s and gathered momentum around 2000; but actual commercialisation did occur during 2005-06. Thus approximately 25 years elapsed in transforming the Barnett shale gas prospects from infancy to full-fledged commercially viable shape. But the similar progress was attained in Marcellus Shales and other subsequent upfront opportunities in less than seven years. This could be accomplished because of the existence of infrastructural support and rich experience developed during Barnett development. The lesson for us in this observation is that though our initial endeavours toward development of shale gas may face severe challenges and take relatively larger periods, once we are well positioned on the learning curve, operational efficiencies will inevitably kick-in and help us reduce cost and achieve operational excellence. It would therefore be worthwhile for Indian operators to commence work toward initial capacity building as well as learning to use technology now, as so far except ONGC no other company has ventured toward acquiring the requisite experience through shale gas pilot projects. Though some Indian companies have acquired shale gas assets overseas, this may not be of much help in operating in India as shales vary across geographies and customised solutions will need to be devised for each location.
A draft Shale Gas Policy has been released by the Mo P & NG and is presently under examination by various stakeholders. In order to attract potential bidders from the country and overseas, a comprehensive and attractive policy is needed to be put in-place covering the aspects of MWP, lease period, acreage area, overlap with conventional reservoirs, production sharing, incentives, tax holidays, facilitation regarding smooth land acquisition processes, environmental concerns and appropriate fiscal system. Further, in order to attract quality participation from multinational investors, sufficient technical data and details should be generated on the prospectivity of Indian shale gas reserves for which more studies should be undertaken. Shale gas monetisation is a narrow margin business and unless gas prices are drastically revised upwards (at USD 6.00/mcf of gas, IRR in Barnett shale is 27 per cent and at USD 4.00 it is 11 per cent); it would be difficult for potential operators to commit large resources. In addition, field operations require a very fast and professional approach toward drilling and completion of wells on a fast cycle basis for which Indian operators will need to acquire the requisite expertise. Commercial exploitation of shale gas needs very large number of wells at closer space and this could potentially be a problem for India with high population densities. Therefore, in order to reduce the land requirement, pad drilling is recommended wherein multiple horizontal wells can be drilled from a single location.
ONGC is further committed to a 10 wells pilot project in two places commencing from June 2013. In the first phase about 20 wells will be drilled. This would
In addition, a ‘factory approach’ is recommended to contain operational costs wherein all the facilities are lined like an assembly line that can be deployed at a short notice, thereby obviating the need to mobilising equipment from a far-off areas. Large pumping
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Once the shale gas policy is adopted, shale blocks could be offered as early as 2013; however it is hoped that the MWP will provide approximately five-seven years for surveys, data generation and pilot drilling given the paucity of quality data and expertise available within the country on shale reservoirs. Beyond this period, it will further take some more time to consolidate operations before commercial production commences. In conclusion, the Indian shale gas story is yet in its infancy and though it appears promising, considerable effor t needs to be invested now i n l e a r n i n g a b o u t t h e n e w te c h n o l o g y a n d proactively investing in physical and intellectual sw capacity building.
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interview
“Unconventional hydrocarbons can play a big role in securing India’s energy security” The unconventional hydrocarbon resource CBM (Coal Bed Methane) can play a complimentary role in meeting energy needs in India. CBM availability is marginal as of now, compared with the total energy demand in the country, says Prashant Modi, Managing Director, Great Eastern Energy Corporation Ltd (GEECL). The awareness of gas use as an alternative to using costly and dirty fuels is low in the country, and Modi sees this as a challenge.
Prashant Modi Managing Director Great Eastern Energy Corporation Ltd
What is the total CBM production in India at present & what role can this resource play in India’s energy basket in the years to come? Current commercial production of CBM (Coal Bed Methane) comes from GEECL. Total production of CBM by GEECL amounted to 14.73 mmscfd (0.42 mmscmd) CBM can play a complementary role in meeting energy needs. As of now, compared with the total energy demand, CBM availability is at best marginal which can supplement in select areas. As Asia’s first company to develop CBM assets, what were the main challenges that GEECL had to address at various stages of clearances, exploration, development, production & development of the assets?
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Getting routine environmental clearances continue to be long drawn out and these remain inhibiting factor, in starting even exploratory drilling. • What prompted GEECL to set up its own pipeline infrastructure in Raniganj & challenges did GEECL encounter while setting up the same? GEECL decided to lay its own dedicated pipeline to supply its gas production as there was no other pipeline network available. Gas cannot be supplied efficiently without pipelines up to the consumer end. • As a CBM producer what kind of support do you expect from the Government? To abide by the production sharing contracts with the operators and ensure free market pricing for gas as mentioned therein. Further, all approvals should be through a single window system.
Offshore World | 8 | DECEMBER 2012 - JANUARY 2013
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What are the major challenges in monetising CBM resources in India & which country has most successfully developed their assets and if India can emulate the same model? The CBM areas generally have no pipeline network and developing a customer base is a critical challenge. There is low awareness of gas use as an alternative to using costly and dirty fuels. What is the current mechanism for CBM utilisation & pricing in India & to what extent can this fill for import substitute? May we have your comments what best should be done by the government to encourage faster monetization of this resource? CBM contract allow free market pricing and government must ensure this. Pricing remains the biggest incentive for investment in this sector. In CBM, there is no cost recover y and we pay Royalty/PLP on the sales as soon as the commercial production commences. So, it is my interest to increase production at the earliest as we need to recover the cost. What are the other challenges that need to be addressed for smooth & fast execution o f d e ve l o p m e n t o f C B M p r o j e c t s i n the country? Clearances by various agencies of the government should be given before any areas are mandated to operators. This will immensely improve the investment environment and hasten the process of investment. There has been an ongoing debate on whether oil & gas companies in the coming days should be liable to pay the government an agreed amount depending on the level of
output or not. May we have your opinion on production-linked payment (PLP) system in the prospective PSCs. Do you think it will be a better proposition than cost recovery? Yes. Royalty and PLP contracts appear to be the better option. Please apprise us about the progress on Raniganj & Mannargudi blocks. Currently, we are producing 14.73 mmscfd (0.42 mmscmd) of CBM gas from Raniganj (South) block. We have already drilled 132 wells. The block has about 2.35 TCF of gas in place. To exploit the potential, we have to drill a total of 300 wells. The Mannargudi Block covers an effective area of 667 sqkm. and 0.98 TCF of gas in place as per DGH. We are waiting for some final clearances to start the work. How is GEECL responding to the changing market dynamics and realigning its growth
strategies? What are the challenges ahead of GEECL? Having achieved a certain level of production, GEECL is seeking to ramp up operations by developing its current assets in the most time efficient manner. Further, we will look for new acreages which will be acquired only if those are economically viable. We will not acquire just for the sake of getting acreage. With India slowly moving towards exploring shale gas assets & development of CBM already in progress, what difference do you feel these resources will have in the long term in securing the energy supplies in India and in the overall cost of gas? Shale gas has been an absolute game changer for the US. Can we expect something like that for India & what are the challenges that India will have to address to go full throttle to exploit the unconventional resources? Unconventional hydrocarbons can play a big role in securing India’s energy security. These are new areas and therefore have to be carefully nurtured. Shale gas can become a major source of energy, provided these assets are developed to their full potential. However, for these to be tapped and used, pipelines should be developed. Shale gas production peaks initially and therefore before any major development of shale resources, pipelines should be planned and sw put in place in advance of production.
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features Refining Trends
Margins Define the Winner Indian refining industry has done exceedingly well in establishing itself as a major player globally. India is emerging as a refinery hub and refining capacity exceeds the demand. The last decade has seen a tremendous growth in the refining sector. Vinayak Pai, Managing Director, KBR Technology, India, talks about refining sector in country. Selection of crude and level of integration is the key to the refining margins, Pai highlights.
With degrading quality and fluctuating prices of crude oil, increased global focus on environment and therefore need for producing cleaner fuels, delivering financial results to the shareholders has become a challenge for the refining industry. Under these circumstances, the gross margin of refineries depends on several factors such as efficient operations, flexibility to process opportunity crudes and the ability to produce a high value product slate. To sustain profitability in the current competitive environment, the refiners continuously need to reexamine what really creates value in their market segment. They also need to look at evolving technologies with emphasis to produce more high value products through higher conversions. There have been four main operating models in place in the refining industry: upstream integration, merchant refiner, downstream integration and vertical integration. Traditionally, vertical integration, including upstream and downstream integration, has been thought to better position owners to capture value by making the most of advantages across the value chain. However, with pressure on improving margins and sustaining profitability in volatile markets, the financial viability of each asset and each region has become the key. On the other hand, standalone refineries with no related downstream units nearby may find their operations inefficient due to some stranded streams and transportation costs of low value products. In such cases, the refiners may be tempted to install downstream units selectively. CHANGES IN FEED AND PRODUCT PATTERNS The changing patterns in quality of available crude oils, the demand for refined products and to some extent due to increased concerns about the environment, there is a continued pressure on refinery margins, and as a result, smaller refineries especially in developed countries are shutting down and larger refineries are being expanded and modernised. The increased demand is expected more from the developing countries especially for diesel. The availability of shale gas is playing an increasing role in the energy mix. As a result, new fertiliser plants are being announced in the US. VALUE DRIVERS Slate flexibility, scale and technology are going to be the main value drivers for the www.oswindia.com
refineries in the years to come. The refineries need to adapt the technologies that allow operational flexibility to change crude baskets. A balanced approach is called for as too much flexibility may result in inefficient operation and increased capital costs. Although refining business is a volume game, it is the margins that pose the big challenge and define the winners. Refining margins are subject to substantial uncertainties and are impacted by global fluctuations in regional feed and product pricing structures. New globalising trends like changing transport-fuel supply and demand balance, geographical shift in consumption, soaring crude-oil prices, depressed natural gas prices and impending regulations, pose interesting challenges to the very survival of many small and medium sized refineries. As refining inputs have declined in quality, demand for high-quality refined products have increased. HEAVY OIL UPGRADING Refinery economics are largely impacted by three basic factors: crude cost, type of products produced and disposition of low-value, stranded streams. Out of these factors, the cost of crude is the single most important factor in setting refinery margins. This is the primary reason for the recent surge in refinery upgrades targeted at processing opportunity crudes – cheapest crude available to any refinery on a given day. This consists of heavy or extra heavy crudes, bitumen derived crudes, high-acid/high-metals naphthenic crudes or high metals-containing, paraffinic, heavy inland crudes. Aided by low crude oil prices and high natural gas prices, the delayed coker has been the technology of choice for resid upgrading. However, with high crude prices and low natural gas prices, slurry-phase hydrocracking is emerging as the preferred approach for upgrading residue streams via hydrogen addition. The principles of slurry phase hydrocracking essentially overcome the limitations of fixed-bed and ebullated bed technologies and provide for substantially higher conversion of the residuum. The combination of lower cost ‘opportunity crudes’ and the need to produce high quality distillate selective products will remain important considerations for refiners when making high-dollar investment decisions. sw
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guest column
Towards a Global Industrial Stature
Pothen Paul Ex-Chairman Aker Power Gas
A number of forecasts and opinion of exper ts suggests that India will see a tremendous investment chemical, petrochemical and oil and gas sector in future. However, as the fac t remain, the overall environment for investments in the country remains unpredictable as a number of problems and issues are pending to be addressed. Pothen Paul shares his perspec tive on Indian Industrial Sector and the issues affecting Indian economy. www.oswindia.com
For a nation that had lost much of its swagger in the past three years because of a steady flow of negative news, Moody’s classification of India’s sovereign credit rating, “stable” was undoubtedly a breath of fresh air. Moody’s rating and Goldman Sachs’s upgrade of Indian equities however cannot hide the fact that there are many interrelated problems, afflicting the Indian economy. Among them: • Unsustainably high budget and foreign trade deficits of 5.5 per cent and 4.2 per cent of GDP. • Persistently high inflation in excess of 7 per cent. • High interest rates. • A tumbling Rupee which has lost 20 per cent and 30 per cent of its value against USD and the Chinese Yuan. • Dismal growth of the industry sector in general and within it, a near nil growth of manufacturing sub sector. • Low GDP growth of 5.5 per cent. • Consequently, a low rate of employment generation.
population, making it grossly inefficient. For all practical purposes the services sector remains the sole employment generator. In short, the industry sector and more specifically the manufacturing sub-sector are not carrying their weight. The latter in fact accounts for a mere 14 per cent of the national economy as against 33 per cent of China, 28 per cent of South Korea, 20 per cent each of Japan and Germany and 25 per cent of even Indonesia.
These problems are compounded further by political and bureaucratic inertia, corruption and crony capitalism, making India one of a few nations that lost out on competitiveness; in India’s case its ranking slipped by three slots to 59th place well behind China’s 29th. Obviously investment sentiments have taken a beating, and even cash rich private sector companies and PSU’s are adopting a wait and watch attitude. Reliance is a rare exception, spending USD 12 billion for expanding its petrochemical complex. Foreign direct investments (FDIs) too have tanked from a high of USD 42.5 billion in 2008 to USD 31.5 billion in 2011 and the trend this year seems much worse.
IMPORTS OUTPACING EXPORTS Now let us look at India’s foreign trade. Not being a strong manufacturing economy; India has had a patchy export trade record. Fortunately trade deficits were more or less getting evened out by remittances from Indians working abroad, FDIs and portfolio investment inflows. But of late the situation has become quite alarming because the growth of imports is significantly outpacing the sedate growth of exports. For instance, while exports fetched USD 290 billion last fiscal, imports were miles ahead at USD 470 billion, leaving a big gap of USD 180 billion to fill. Unfortunately, the flow of FDIs after hitting a peak of USD 42.5 billion has dropped as much as 65 per cent, thus reducing its potential for bridging the trade gap. The net outcome is an uncomfortably high current account deficit, the Re on a downward spiral and a looming threat of credit rating downgrade. Unfortunately, scope for pruning the import bill is limited because crude oil (80 per cent of our needs are met through imports) and gold (nearly a 1000 tonnes) alone account for as much
UNEMPLOYMENT AND UNDEREMPLOYMENT Because, India blessed with a relatively young population, has to create 12 to 15 million productive jobs a year, the present situation is truly untenable. Currently, the agriculture sector which produces just 17 per cent of India’s GDP is forced to carry the burden of engaging 50 per cent of its employable Offshore World | 14 | DECEMBER 2012 - JANUARY 2013
Put another way, India which has 1/6th of world’s population, accounts for just 2 per cent of global manufacturing output whereas USA produces 20 per cent, China 18 per cent and Japan 11 per cent or so. Not a happy situation for nation aspiring for a global leadership role. It hurts even more when one recalls that in the early seventies, both India and China were at the same level; in fact China just emerging from relative isolation had nothing more than inefficient and highly polluting early Soviet era factories.
as 40 per cent of India’s annual import bill and coal, fertilisers and edible oil, another 10 per cent. So at a national level we need to introspect as to why India is able to capture only 1.6 per cent of export trade for manufactured products, as against 15 per cent of China (worth USD 1772 billion). In fact, when India’s exports were floundering in recent months, China’s went up, largely because of the strengths of its manufacturing sector and a strategic shift towards innovation-driven high end technologies where competition is limited. China has already become a world leader in mobile telephone switching systems and solar panels and is well on its way to making its presence felt in high speed trains, ship building and aircraft manufacture. INDUSTRIALISATION STRATEGY What China did to leapfrog from a very modest and outdated industrial base of the seventies was to acknowledge its weaknesses and decide that the simplest way to upgrade its manufacturing base, speed up the generation of employment and raise the living standards was to create an enabling environment and wholeheartedly welcome foreign direct investments, preferably through joint ventures. This philosophy enabled China to attract FDIs year
after year at a rate unheard of in modern times. Since acquisition of product and manufacturing technologies was accorded high priority, all major purchases from abroad were invariably linked to know how transfers. For instance, as China’s airlines placed major orders for aircraft, tied to each of them were knowhow transfers for domestic manufacture of different parts. Not surprisingly, having consciously built the skillsets and ecosystem, they now assemble Airbus 320 aircrafts in totality and will most probably launch a home grown airliner in less than three years. Regretfully India has little to show as evidence of any such strategic thinking. It is also an unfortunate fact that when countries, both developed and developing, are actively courting foreign firms for investments, we continue to be suspicious of them and their intentions. The recent debate on FDI in retail tells it all. INNOVATE OR PERISH Post the industrial revolution, no country has become wealthy and attained global leadership stature without a strong manufacturing base. It is also true that manufacturing muscle power is not sustainable without a strong culture of innovation. Unfortunately
India with an annual R&D spend of USD 40 billion or just 2.9 per cent of the global outlay of USD 1350 billion fares very poorly in this area. Even within this meagre sum, private sector’s contribution is less than 25 per cent. On the other hand USA and Europe together account for 55 per cent of the global outlay and China is creditably placed with a 14 per cent share, which explains the latter’s successes of late in the cutting edge technology space. In India too we are starting to see few innovation driven success stories and Bajaj Auto is one such. But it may take at least five to ten more years for the Indian manufacturing sector to showcase a strong, innovative and export worthy product pipeline. Till then, it will do India much good to go out of its way to persuade overseas enterprises attracted by its large domestic market, to set up factories and make India one of their export hubs. It is wise to remember that but for the likes of Hyundai, Renault-Nissan and Ford making their Indian operations, export hubs, India’s trade deficit would have been much worse. It is even wiser to accept that being business enterprises, their first priority will be to do what is good for them. But as long as India too sw gains, it is a win-win formula.
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Offshore World | 15 | DECEMBER 2012 - JANUARY 2013
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features Revamping Old Platforms
Challenges in Offshore Platform Re-Vamp Projects Execution Majority of Oil and Gas production around the world are from matured fields which are in the process of depletion. Compared to ongoing Greenfield projects, revamp of existing facilities are more in numbers. Economic situations force the operators to exploit the possibilities of oil and gas recovery beyond the designed life. The article details the challenges encountered in the successful execution of Offshore Platform re-vamp projects.
The platforms which undergo re-vamps are generally 20-25 years or older. A fundamental differentiator with brown field projects, irrespective of the extent of modifications, retrofits and upgrades, is the interdependencies, while combining the existing facility and the new/modified facility in mechanical and process terms. More challenges are encountered in conversions from MODU (Mobile Offshore Drilling units) to MOPU (Mobile Offshore Production Units), Water injection platforms to Production platforms etc, where space and weight shall be limited to that of existing facility. Wherever required, a study of any additional safety requirements shall be performed to ensure safety of new facility. Revamp projects will have a very ambitious execution schedule to minimise the disruption of ongoing operation and accommodate within the weather window. The shutdowns are generally planned phase-wise so that the operation is not completely halted. Safety consideration in design as well as execution shall be given high importance in revamp projects. Interface with operations staff to take care of the operations requirements is an essential component for the customer satisfaction. Work-scope at offshore, which involves high risk as well as cost, shall be reduced by eliminating inaccuracies in design. There are various stages for these
3D Laser Survey input from existing facility
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kinds of projects where care can be taken to ensure successful completion of the project within the stipulated time frame. PLATFORM SURVEYS Generally a pre-bid survey is conducted which gives a fair idea about the status of the platform and the critical issues which can arise during detail engineering. This survey helps the bidders to assess the prevailing conditions and factor-in, while bidding. Pre-engineering survey plays the most important role in the successful execution of the project. A proper analysis of data required for engineering versus data available is an important pre-requisite so that the survey can be focused towards collection of unavailable data. Such surveys are conducted by experts from each discipline who can take any critical decisions regarding design and will ensure that all the important information is gathered from platform during the survey. Pre-engineering sur vey mainly comprises of structural assessments for any extensions of platform or installation of new equipment, feasibility of
PDMS Model with necessary modification
Offshore World | 16 | DECEMBER 2012 - JANUARY 2013
accommodating the changes envisaged during revamp, and existing data collection. Acquisition of existing data or drawings of old platforms is always a challenge. If the drawings or documents, of the existing platform are not available, it shall be ensured that all the minute information is gathered during the survey. Although, in some cases, the existing documents and drawings are available; those may not be updated to the extent of changes that happened during the life of the platform. Accurate and faster acquisition of data is very important to ensure that the long delivery items are ordered in time. Error prone manual surveys can be replaced with 3D laser surveys to fetch accurate data which is very useful in getting information at inaccessible locations. This can also plug the gaps of inaccuracies in as-built drawings. 3D laser survey can be used as an input for constructing a 3D model. 3D laser survey data can also be converted to an intelligent model. Pre-construction survey shall be conducted prior to the initiation of construction on the platform. This shall ideally be after the preparation of all the critical construction drawings. The intention of this survey is the physical verification of the construction drawings with respect to the existing facility. The dimensions and locations of structural extensions, locations of existing equipment versus the new equipment, which is going to be placed at the same location, tie-in points of pipes from where the lines are extended or tapped are some of the important check points during this survey. This is an opportunity for capturing any change, which may also require additional material procurement.
Challenges in Execution of Offshore Platform Revamp Projects •
• • •
Challenges are encountered in conversions from MODU (Mobile Offshore Drilling units) to MOPU (Mobile Offshore Production Units), Water injection platforms to Production platforms etc, where space and weight shall be limited to that of existing facility. Acquisition of existing data or drawings of old platforms is always a challenge. Non-availability of any small item which is noticed at the fag end of the construction phase jeopardises the execution plan. Methodology of dismantling of existing equipment as well as installation of new equipment shall be studied in detail. The challenge is to arrive at a feasible option which will not damage the existing equipment as well as the new equipment with the limited space available.
Incase of replacement of equipment, care should be taken to ensure that the new equipment, that is installed in the existing location should match or be within the foot-print and weight of the existing equipment. This is important to maintain the existing work area around the equipment as well as the tie-in points should be same as existing. If the load of new equipment is exceeding the existing equipment, structural feasibility shall be analyzed critically. A study of methodology of new equipment installation shall be carried out to ensure that any offshore surprises are avoided.
>> Pre-engineering survey plays the most important Judicious planning and logistics management of accommodation barges, barges role in the successful execution of the project. A proper for transporting equipment and other materials will help timely completion of analysis of data required for engineering versus data project and curb the expenses. available is an important pre-requisite so that the survey can be focused towards collection of unavailable data. CONCLUSION KEYS TO SUCCESS Accurate estimate of material like steel, pipe, valves and fittings, cables etc for construction plays a very major role in the success of such projects which have a stiff execution schedule. Non-availability of any small item which is noticed at the fag end of the construction phase will jeopardise the execution plan. Such situation can only be managed by air-lifting of the items which have fallen short, which is an expensive proposition. Estimation of construction material and placement of order shall be closely monitored to avoid any last minute rush. Constructability study shall be carried out to have a smooth phase of construction. Methodology of dismantling of existing equipment as well as installation of new equipment shall be studied in detail. The challenge is to arrive at a feasible option which will not damage the existing equipment as well as the new equipment with the limited space available. This study will help in deciding the requirements of any additional structural extensions or mechanical handling facilities. There are instances where pipes, cable trays etc. which are not part of the revamp are affected, as they require to be dismantled to facilitate removal of existing equipment and installing the new. This forms an additional scope of work and shall be captured during this study. An initial study using 3D model prior to the survey is always advantageous.
In re-vamp projects of offshore platforms all the tasks fall in critical path. Meticulous planning, feasibility studies, faster placement of orders, accuracy in design and quantification of material are the major contributors for the success of offshore sw platforms re-vamp projects.
Shiju Varghese Engineering Manager – Piping Aker Solutions E-mail: varghese_shiju@hotmail.com
Offshore World | 17 | DECEMBER 2012 - JANUARY 2013
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guest column
How best to repair the world’s aging pipelines? There is no escaping the fact that many of the subsea pipelines around the world are reaching the end of their natural life. Indeed, some are probably already working beyond this point. The majority were brought in to service in the 1970s in places like Europe’s North Sea and the ‘Mumbai High’ fields in India, and as such will need more rigorous maintenance in the coming years.
Paul Hughes Global Subsea Market Leader Hydratight
The Nor th S ea, and more recently ‘Mumbai High’, have seen a rapid expansion of oil and gas extraction activities, due mainly to demand for oil and gas having risen significantly as consumer habits altered and the incomes of the world’s population rose. It is estimated that around 25 per cent of subsea pipelines are now operating beyond their intended lifespan. Th i s c re ate s a n u m b e r o f p ro b l e m s f o r t h e industry. Firstly, there will become an increasing need for a larger propor tion of budgets to be spent on maintenance, which naturally cuts into bottom lines.
Paul Hughes, Global Subsea Market Leader at Hydratight, explains how organisations have an obligation to maintain their aging pipelines and how they can best go about achieving leak free pipelines, in t h e e nv i ro n m e n t a l l y s e n s i t i ve subsea environment. A Chartered Engineer with 10 years experience in the subsea engineering field, Paul discusses the advantages of using mechanical connectors for pipeline repair. www.oswindia.com
Secondly, in light of a number of high profile incidents, political and environmental pressure has grown on organisations to ensure that they maintain pipelines and joint integrity. The industry needs to ensure that incidents like this don’t happen again, in order to repair its badly tarnished image in some quarters of the mainstream media. Finally, it is worth noting the cost implications of an unscheduled shutdown. These can run into millions of dollars in lost production time per day if a platform is taken out of action for any period of time, meaning that a leaking pipeline cannot be ignored until routine maintenance checks are carried out. Offshore World | 18 | DECEMBER 2012 - JANUARY 2013
It is likely therefore that at sites across the world many pipeline repairs will have to take place in the coming years. But, the big question is; how should these repairs be done? As a rule it would normally be suggested that in shallow water welding would be the way to go when tackling a repair. This is not always the case, with some people within the industry subscribing to the view that pipelines can be wrapped with repair clamps, composites and epoxy materials. In our experience though, this kind of repair should be limited to smaller, more localised repair jobs. Surprisingly to me, welding still remains the principal method used by most organisations for repairs in deeper water. At depths of up to a couple of hundred meters it is usually relatively simple to arrange for divers to come and carry out work, but beyond this problems start to arise. However beyond that the equation suddenly becomes significantly more complex. The need for hyperbaric chambers, specialised rigs and the fact that due to a number of factors repairs rarely have the longevity of the original fitting, mean that financial and speed advantages of welding suddenly don’t seem so great. So what is the solution? We believe that now, and in the future, more and more pipeline repair work will be done using mechanical connectors. Indeed, since Mumbai High has been actively explored, mechanical connectors have become an increasingly popular tie-in method. Mechanical connectors are by no means a new technology. They have been in use since the 1920s, however for a number of reasons, ranging from
Pre deployment trail and site integration testing of the Coupling Installation Frame (CIF)
sealing problems and issues with materials, which included inflammable elements, they were largely obsolete by the 1970s.
accurate enough to ensure that further damage wasn’t done whilst installing them, many in the industry were rather mistrusting of the technology.
anyone in the industry to jeopardise safety, and as an organisation we know this from our conversations with other businesses working in the field.
However since the end of the 1980s the situation has changed significantly and much work has been done to improve both systems and sealing materials, making connectors a real alternative to traditional welding methods.
Welding seemed to be the ‘chosen son’ in terms of method of repair, and although attitudes are gradually shifting, there are still elements within the industry that seem unwilling to shift from this paradigm.
But is it possible for mechanical systems do the work of typical welded ones?
Organisations such as our own, have led the field in graphite sealing systems, which overcome many of the fire-safe and shelf-life disadvantages of the polymer and elastomeric seals previously used. Indeed there has been almost a development of an industr y within an industr y, specialising in mechanical connectors.
In reality, many connector systems, through well over 15 years of painstaking research now offer a number of benefits, that welding cannot; particularly in deep-water exploration sites. Systems available now offer strength and safety benefits, above those offered by welding and in every case less damaging to the metal structure of the joint, and which are far more placement-tolerant.
Even up until the turn of the last century many engineering papers were dismissive of the use of mechanical connectors. Often citing a belief that they weren’t as durable as welds, and that the mechanical systems used for installation were not
Modern diverless connection methods for welding or mechanical connection use the same highly-accurate systems. These were not available 15 years ago, and have given rise to increased confidence in the application of connectors. It is not in the interest of Offshore World | 19 | DECEMBER 2012 - JANUARY 2013
Yes. In our own experience and through rigorous product testing of our own range, it is certified in place of welds (DNV, Lloyds, API, ABS, ROK) on pipes up to 42 inches in diameter and on pressure ratings up to ANSI Class 2500. We have also shown that we can create a joint at least as strong as a weld. We can only speak about our own product, but its designed connection life is at least 30 years. Over the years we have installed approaching 2,500 connectors around the world in the past 2 decades, many of them diverless, and they have a 100 per cent leak-free record. D o m e c h a n i c a l co n n e c to r s o f f e r a d va nt a g e s over welding? www.oswindia.com
In many instances they do. The benefits of welding are only really apparent at lower depths. Mechanical connectors require no welding, which means no specially trained divers; they cannot introduce the common problems of welds, including contamination and the requirement for pre and post weld treatments and inspection. Indeed, pressure testing is made significantly easier by using connectors, with all of our connectors having pressure-test facilities built in. Other major advantages include the negation of the need for specialised machining and preparation tools or careful shaping of the joint, and most importantly, complex requirements such as hyperbaric chambers are not required to install them. Mechanical connectors, fitted diverless on largediameter lines, do admittedly require heav y placement and alignment rigs, but this would be the same when using welding as a method too. In practical terms, it could be argued a weld rig requires greater accuracy, as the need for bringing pipes together within a millimeter of each other is apparent, and they must be held in this position until the weld has cooled. Mechanical connectors have much wider installation tolerance and as soon as the system is tensioned, the connection is at full strength. Mechanical connector systems offer a range of elements - pipe-to-pipe connectors, pipe-to-flange connectors, riser connectors, subsea and topside connectors, end caps and special tees amongst many more, to cater for all manner of emergencies and repairs that may arise.
A Hydratight engineer examines a mechanical connector prior to delivery
longer welded lines together, by staging them at intervals along sections of pipeline. Our own experience suggests that the usage of connectors is particularly cost effective when fields are over 100km out to sea. This is due to the complexities associated with organising manpower and the sheer logistical nightmare that such a welding operation can involve.
>> It is likely therefore that at sites across the world many pipeline repairs will have to take place in the coming years. But, the big question is; how should these repairs be done? A number of organisations also now routinely hold mechanical connectors in storage, for use as and when emergencies occur. Connectors can also be used on lines that need to be connected and then disconnected, which is another advantage of using them, as they can be reused a number of times. There has been a lot of talk within the industry about the usage of mechanical connectors to tie
An example of what is achievable from our own operations with modern connectors comes from using one of our products on a Nor th Sea gas platform. The estimated welding time for four twoinch flange adaptors was 50 hours, added to around 240 estimated hours for another five 12in couplings and one flange adaptor. Whilst a very experienced welding team may have been able to reduce this time, by using connectors the work was completed
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Offshore World | 20 | DECEMBER 2012 - JANUARY 2013
in 70 hours, and with fewer personnel. Each hour that a platform is down costs money, and by reducing the down time, connectors helped the organisation in question limit their losses. Whilst welding will invariably still play a significant role in the future of the pipeline repair industry, undoubtedly the case for the use of mechanical connectors is growing ever stronger as operators look to improve profitability and more importantly sw safety on platforms.
features Power Generation
Driver Options for Offshore Applications Offshore oil and gas production requires both electric and mechanical power for various applications. In general, the electricity is generated on the platform by gas turbine driven generators. Traditionally, gas turbines have also been the driver of choice for, compression and larger pump services. An alternate approach is, to use electric motor drivers for these applications. In this case, the power for the electric motor and the utility power is supplied by larger gas turbines used as a central power generation plant. This article discusses evaluation considerations to aid in decisions to go with either solution.
Offshore oil and gas production requires both electric and mechanical power for various applications. In general, the electricity is generated on the platform by gas turbine driven generators. Traditionally, gas turbines have also been the driver of choice for, compression and larger pump services. An alternate approach is, to use electric motor drivers for these applications. In this case, the power for the electric motor and the utility power is supplied by larger gas turbines used as a central power generation plant. This is sometimes referred to as the “All Electric� solution. There are several important factors to be evaluated when considering options and selecting the optimum solution for this type of application.
for CO 2 injection might also be used. Other topside equipment, such as crude oil pumps, heaters and others, use electric power [1].
Offshore oil and gas production use a variety of production platform and FPSO designs, depending generally on water depth. In many instances, the necessary electrical power is generated on the platform, and this is one of the assumptions for this study. There are other scenarios, where power is generated onshore, or surplus power from other platforms is used. We also will not consider situations where an existing electric power generation system can be used, for example for conversions.
The fundamental choice for the compression equipment is, to either drive the compressors with gas turbines, or to use constant speed electric motors or variable speed electric motor configurations. The former choice will lead to smaller gas turbines for power generation. There are choices for different electric motor drives. Some use constant speed motors, while others allow to vary the speed of the driven compressor, either by feeding the motor through a variable frequency drive (VFD), or by using a variable speed gearbox. Electric motor drive systems have to be carefully evaluated to be able to start, in particular if the intent is to start a compressor from pressurized hold. Constant speed drives require the electrical system to supply the large inrush current necessary during start, unless softstarters or reduced voltage starters are used.
Since the topsides of any of these systems have to be planned and designed based on data with a high uncertainty, and further, since the design parameters (such as flow, vapor and liquid composition, and pressures) can and will change significantly over the life of the project, flexibility is one of the paramount requirements. Typical offshore or gas field applications show a fast ramp up of power requirements (and oil production), with a slow decline in later years. While not a paramount requirement, but yet important in any technical design, is the requirement of simplicity. The best engineering solution is generally the one that is the least complex, least costly, most reliable, most durable, and most maintainable. This is especially true for remote locations such as offshore platforms. The production facilities on a platform may include gas turbine driven generators, compressors for gas gathering, flash gas compression, gas boost or gas export. Enhancing the oil yield may require water injection (using high pressure water pumps), compressors for gas lift or compressors for gas re-injection. Compression
Any possible solution has to be evaluated based on first cost, cost of operation (this includes maintenance, and fuel cost if applicable), emissions (this also depends on pertinent regulations as well as operating company guidelines and can include one or more of NO x,CO,CO 2,UHC,VOC and particles), reliability, availability, and flexibility. Depending on user philosophy, Total Cost of Ownership, which includes all the above factors at a discounted level, may be used to compare different alternatives.
First cost and cost of operation depend largely on the amount of installed power. Kurz and Sheya [1] have shown, that in general, any electric motor driven solution will increase the amount of gas turbine power. This sounds paradoxical, but it is due to fact that there are significant system losses to generate electricity, bring it from the generator to the compressor drives, and feed the variable frequency drives and electric motors. If constant speed motors are used, the power supply has to be oversized to be able to start the motors. Constant speed compressors that can only be controlled by throttling or recycling have to be significantly oversized. Otherwise changing operating conditions (for example, changes in gas composition) will require costly and time consuming modifications to the compressor or its gearbox [2].
Offshore World | 21 | DECEMBER 2012 - JANUARY 2013
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Offshore Gas Compression in an Oil Field
The difference in installed power between platforms with gas turbine driven compressors, compared to electric motor driven installation, increases as the total power consumed by gas compression increases. In other words, platforms where a large amount of the power is consumed by the compressors tend to favor gas turbine driven compressors on the basis of first cost and maintenance cost. While the maintenance for the electric motors is relatively low, the power generating gas turbines have to be significantly larger for all electric solutions. It is a valid assumption that the gas turbines for either solution can operate using a common fuel conditioning system. The fuel is typically associated gas from the oil production. The high voltage electric motors require a relatively complicated power distribution system with multi-tiered voltage power distribution and motorized, non-arcing switchgear. If the electric power demand exceeds about 10 to 15 MW, systems with multiple voltage levels become necessary; a high voltage system (11 or 13kV) will have to be installed in addition to the 4-6.6 kV medium voltage system on the platform. Speed control is achieved through Variable Frequency Drives (VFDs), requiring isolation transformers, and either air cooling systems or above 6MW, water cooling systems (coolers, pumps, and piping). Ubiquitous harmonics will define the use of harmonics filters. Enough space needs to be planned for the motor control center and switchgear. This will later become important in the www.oswindia.com
evaluation, because deck space is at a premium for any platform. Weight is of importance as well, since it defines the structural and buoyancy requirements of the platform. Included in the considerations are the first cost of the required equipment, the installation costs, the total system weight and space requirements and its impact on platform design and fabrication cost. For example, when taking the entire electric system into consideration, the footprint and weight is likely higher than a turbine mechanical drive. A typical, 10MW electric motor with the VFD system weighs about 30,000kg for the Motor and 30,000kg for the VFD, while a 10MW gas turbine weighs about 8-10,000 kg. The weights mentioned are understood without skid and ancillary systems. The space requirements for a 10 MW VFD are about 1.5m x15m, with a height of 2.5m in addition to the motor-compressor train. The footprint of a typical electric motor driven skid is typically 12m by 3m, while a gas turbine skid would have a very similar, footprint of 15m by 3m. Figure 1 outlines the weight and size comparison. The weights and footprints in this comparison include the skid and ancillary system for the gas turbine. The electric drives, depending on the configuration, include the VFD, transformers, gearboxes, and the motors, respectively. It should be noted that,
Offshore World | 22 | DECEMBER 2012 - JANUARY 2013
there is a slight advantage on a cost per MW basis for larger turbines. This is often outweighed by the fact that electric drives require more installed power. The availability and reliability of electric drives is often assumed to be better than for gas turbine drives. Taking into account comparisons for entire systems including availability and reliability of the entire electrical and power generation system reveals that this is not true for many installations. Rather, the largest impact on reliability and availability of the entire system comes from the amount of spare units available. This applies to compressor drives and generator sets alike. The available data does not indicate an advantage for electric drive systems, under comparable conditions. Also, availability is driven not only by the frequency of machinery failure but more so by the time it requires to repair the problem. There are large differences between different manufacturers, and different service arrangements. Published availability data, including time to repair the problem is difficult to find. The decision for any one of the described architectures is a difficult one. We have described a number of criteria that relate to first cost and life cycle cost of a project, including considerations such as the changing operating conditions platforms and FPSO’s see over their design life. One of the key findings is that an electrified solution will always require more installed gas turbine power than a solution where the mechanical equipment is driven by gas turbines. Offshore platform with gas turbine driven compressors for gas boost.
in addition to the weight and size of the compressor drives, electric drives also will increase the size and weight of the platform power generation. Weight and size of the installation have a significant impact on the overall platform cost. System Option 1
All Gas Turbine
Electric Drive Electric Drive Electric Drive - Variable - VariableConstant Speed Frequency Speed Gear
Driver System 55,000 kg 60,000 kg Weight
60,000 kg
40,000 kg
Driver System 30 m 2 Footprint
32 m 2
26 m 2
41 m 2
The main drivers for life-cycle costs for the equipment are first cost, fuel cost and maintenance cost. Any comparisons regarding economics have to be made on an overall system level, where weight, footprint, complexity, as well as reliability and availability have to be considered. Comparisons that stay at the component level will lead to incomplete results and incorrect conclusions. Sparing of equipment will improve equipment uptime, but again this has to be sw seen in the context of the entire platform. REFERENCES 1. Kurz, R., Sheya, C., Gas turbines or electric drives in offshore applications, ASME Paper GT2005-68003. 2. de Norman et d’Audenhove, F., et al, 2012,’Fixed speed compressors operation in offshore production platforms’, Turbomachinery Symposium, Houston, Tx.
1
Driven compressors not included (same for all scenarios). Figure 1: Comparison of Size and Weight for nominally 10MW drivers
Even routine, planned maintenance can be disruptive for the platform operation. Maintenance requirements for the electric motor by itself are lower than the requirements for a gas turbine. However, the entire system (power distribution, VFD’s) adds to the maintenance requirements for electric motors and should be included in any evaluation. These systems are usually custom designed, and therefore may cause significant downtime due to parts availability.
Rainer Kurz Manager - Systems Analysis Solar Turbines Incorporated E-mail: Kurz_Rainer_X@solarturbines.com
It has been argued, that the maintenance for a larger number of smaller gas turbines can be more disruptive than for a smaller number of larger engines, because the maintenance events occur more frequently. However maintenance costs are roughly proportional to installed power, and fired hours, although
Praveen Singhal Sales Manager, O&G Solar Turbines Incorporated E-mail: Singhal_Praveen@solarturbines.com
Cynthia Sheya Principal Project Manager Solar Turbines Incorporated E-mail: sheya_cynthia@solarturbines.com
Offshore World | 23 | DECEMBER 2012 - JANUARY 2013
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features Case Study
Successful CDU/VDU Project Execution During MRPL Phase III Expansion Mangalore Refinery and Petrochemicals Limited (MRPL), a subsidiary of Oil and Natural Gas Corporation Limited (ONGC) operates a petroleum refinery at Mangalore, Karnataka. The Refinery has two existing Crude Distillation units with downstream Hydro-crackers and other refinery units.
CDU/VDU UNIT AND FACILITIES The unit broadly consists of crude pre-heating section, two stage desalting, post heating section for heat recovery, crude heater, crude distillation column, crude column overhead system, crude column product withdrawal, and cooling system, vacuum distillation column, vacuum column overhead system, ejector system, vacuum column product withdrawal, and cooling system, Naphtha stabiliser column to recover fuel gas and LPG, Naphtha splitter column, product caustic wash, and water wash system wherever required, LPG Amine treating unit, LPG Mercaptan removal unit, and Kerosene treating unit. The following products meeting various specifications leave the unit battery limit Fuel gas, LPG, Light Naphtha, Middle range Naphtha, Heavy Naphtha, Kerosene, Diesel, Heavy Diesel, Vacuum Gas Oil and Short Residue.
CDU/VDU UNIT – PROCESS MRPL Phase III CDU/VDU unit is designed to handle range of API crudes. Essentially, unit is designed for BH –AH type of crudes. The unit has been designed to meet challenges associated not only with variation in crude fractions but also processing high acidic TAN (Total Acid Number) crude. The unit has also aims for providing extensive heat recovery system around the crude preheat trains - leading to more number of heat recovering equipment in the unit. The processing of wide variation of crude led to designing the system with extensive flexibility with provision of bypassing facility across most of the heat exchanger in case of any leakages. Metallurgy selected for this unit is exotic (SS 316L with restriction on minimum concentration of Molybdenum) and proper selection of piping as well as equipment MOC has proved to be a challenge. This also resulted in challenges to procurement strategy and sourcing the exotic materials in quick time. In a single plot area (ISBL)- assimilation of two technology suppliers’ packages have been taken care (EIL and UOP). The new Crude and Vacuum Distillation Unit (Unit No. 310 /311) of MRPL Ph-III Refinery Project is designed to process 3.0 MMTPA of Arab Heavy (AH) and Mumbai High (MH) Crude.
The unit consists of the following main processing facilities sections:
CDU/VDU UNIT – PROJECT HIGHLIGHTS – KEY PROJECT STATISTICS
MRPL’s Phase III expansion plans primarily focus on Upgradation of low value products to high value products, increase in capacity to 15 MMTPA by addition of a new 3.0 MMTPA crude unit, to process cheaper crudes (Sour/Heavy and High TAN), production of petrochemical feed stocks, viz Propylene, Maximise distillate yield, upgrading entire HSD into BS III/IV grade.
1) Feed Treatment Facilities • Electric Desalter: 3.0 MMTPA. Distilation Facilities • Atmospheric Distillation Unit - to match 3.0 MMTPA crude distillation capacity. i. Pre-flash Drum: 3.0 MMTPA. ii. Crude Column/Stabiliser/Naphtha Splitter. • Vacuum Distillation Unit: To match 3.0 MMTPA crude distillation capacity. 2) Product Treatment Facilities • LPG Amine Section: To match 3.0 MMTPA crude distillation capacity. • Light Naphtha Caustic wash: To match 3.0 MMTPA crude distillation capacity. • Medium Naphtha Caustic wash: To match 3.0 MMTPA crude distillation capacity. • Heavy Naphtha Caustic wash: To match 3.0 MMTPA crude distillation capacity. www.oswindia.com
No. Description
Qty.
1
Unit area
5 acres approx.
2
Piling
1650 nos
3
PID’s
85 nos
3
No. of equipment
500 nos
4
Wt. of all equipment
3500 MT
5
No. of lines
4500 nos
6
I/O counts
2500 nos
7
No of orders
710 nos
8
Concrete qty.
25,000 cu,m
9
Steel qty.
3000 MT
10
Piping qty.
4,00,000 inch meter
Offshore World | 24 | DECEMBER 2012 - JANUARY 2013
CDU/VDU UNIT – PROJECT HIGHLIGHTS – SAFETY • Safety track record at CDU/VDU has been very good and appreciated by MRPL. • 9.5 million Man-hours put in at CDU/VDU site by contractors and Jacobs staff. • Commissioning of CDU/VDU done in very safe and incident free manner. • More than 300 training programmes covering 5000 workmen and staff done in addition to special campaigns like ‘Hand safety’ and ‘Electrical safety’.
VALUE PLUS SUGGESTIONS 1) Value Plus No. 01 – Shifting of Analyser to safe area: Process Stack Analyser for Fired Heater is located in safe area and is provided with split AC without any pressurisation as per the norms.
1) Safety Training Metrics
However, Pressurisation is not required if Analyser shelter located in safe area. We have suggested the same to client and they have agreed to this suggestion. –Value Plus savings – ` 25 lakhs.
Topics
Cumulative (from May’09)
Safety Induction
6,987 nos.
Tool box talks
8,519 nos.
Safety training programme
342 nos.
Method Statement
674
Risk Assessment
10
Safe Plan of Action (SPA)
1,102
Tender specification required pressurisation system for Analyser Shelter even though located in Safe Area.
2) Value Plus No. 02 – Moving Satellite Rack Room (SRR) closer to the sub-station: Initially SRR room was located outside CDU/VDU phase III plant area. It was located at east side of CDU/VDU plant area.
2) Safety Monitoring Metrics Reports
Cumulative
Safety Observation Reports (SOR)
8,384
Positive SOR
291
ELCB report (Earth Leakage Circuit Breaker)
158
Field Safety Audit Report
122
Scaffold Inspection
1,912
PPE Inspection
130
3) Safety Performance Report Company
Work hours Recordable Lost Time Lost Time Incidents (RI) Incident Incident (LTI cases) Rate (LTIR)
Jacobs Engg
176,368
Nil
Nil
0.0
Labor force
9,259,591
1
1
0.02
Total
9,435,959
1
1
0.02
OVERALL COSTING – INDIVIDUAL HEAD HEAD
TOTAL COST (in lakhs) % of total
STATIC EQUIPMENT (FEG)
7170
16.00
PIPING BULKS
7325
16.25
ROTARY EQUIPMENTS & PACKAGES(MEG)
13605
30.25
ELECTRICAL
1510
3.25
INSTRUMENT
2250
5.00
PROCESS
325
0.75
WORK CONTRACTS
12830
28.50
TOTAL (with taxes or without taxes?)
45015 lakhs
100.00
As per this location estimated cable length required between substation (MCC) and SRR is estimated around 370 metre per run. It was suggested to change the location of SRR inside the CDU/VDU plant area and close to sub-station. This change of location resulted in saving of cable length around 320 metre per run. Value Plus savings – ` 26 lakhs. 3) Value Plus No. 03 – Pile Reinforcement: Design of pile reinforcement was submitted by contractor for the load case ‘Tension with bending’ was considering the equivalent area of inscribed square in 500 mm dia pile. This was done on account of non-availability of design charts (for circular sec tion for Tension with bending case) in SP-16. This approach was too conservative. The main bars derived accordingly in each pile as ‘9 nos – 20 dia’ Jacobs suggested a more economic design based Limit State Design concepts considering full diameter and that the same are in use in the industry. Design was revised to main bars in each pile as ‘4 x 20 mm dia + 4 x 16 mm dia’. Reinforcement bar requirement was reduced by 130 tons which gave an Value Plus Savings of about ` 55.00 lakhs 4) Value plus No. 04 – Evaluation & Inclusion of additional vendors to project vendor list for (a) Machine Monitoring System and (b) Desalter packages: Tender was issued to vendors initially for (a) Supply and installing of machine monitoring system and (b) supply of Desalter package as per project vendor list. Offers received against both enquiries were significantly high. Additional vendors therefore were evaluated and included to the vendor list. Tenders were re-issued on a competitive basis to all including the additional vendors. – Value Plus savings – ` 950. 00 lakhs.
Offshore World | 25 | DECEMBER 2012 - JANUARY 2013
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BEST PRACTICES DEPLOYED & TECHNOLOGICAL IMPROVEMENTS ON PROJECT – HIGHLIGHTS. No.
Category/Work
Description of work
Benefits
1
Alternate technology – Usage of alternate method of weld overlay practice for Cladded Pipes.
Most of the cladding ie, bonding of SS plates to CS plates – was hitherto being done by the process of explosion bonding. Explosion bonding was being done only at select vendors and was taking time. Also transporting plates back and forth from manufacturer’s works was proving to be cumbersome and time taking. b) Alternate method of cladding was introduced for pipes by way of weld overlay process. c) Vendors outside India were identified for doing cladding by the weld overlay process using high speed precision weld overlay machines. This was followed by development and approval of welding procedures – to comply with special exotic metallurgy ie, SS316L (2.5 per cent Mo) bonding.
Alternative technology/ solution identified. Competition introduced giving cost benefit. Improved delivery time.
2
Best Practice – Integrated approach to Column fabrication and Column Internals erection.
a) Combined meeting between Equipment/Piping/Process/Column-vendors/ Internalsvendors/Client – helped faster resolution of column internal layout issues. b) All inputs required for engineering were generated internally thus avoiding too much dependence on vendor data and consequential time delay. c) Clash with internals and nozzles were avoided by securing the tentative orientation from vendors for internals and making it suitable for proper pipe routing. Substantial savings in time as emails and telephonic discussions were avoided and issues were resolved in person. Re-engineering and re-work avoided at site.
Less interface issues between column vendors and column internals vendor.
Best Practice – Transport of two nos process columns in one piece to site. (i) Atmospheric column and (ii) Vacuum column – Over-coming transport challenges.
a) CDU/VDU columns were falling into the Over Dimensional Consignment (ODC) category and length of largest column was 60 m and max. dia was 6 mts. Transportation was done on barge (sea) and trailer (road). b) Involvement during selection of competent transportation/logistics agencies capable of handling ODC cargo done. Timely erection of equipment thereby avoiding retention of high-cost and heavy-duty cranes that are needed for erection of this equipment. c) Route surveys done at both ends prior to dispatch. d) Approvals from roads/railway/electricity/ports/bridges and other authorities planned and taken in advance. A new ODC road was constructed by the client to move all the ODC consignments of the Phase III project. ODC consignments were to cross railway tracks with special permission from railway authorities and within time slot given. As Konkan is one of the busiest rail routes the time slot provided was not more than two hours for each crossing. e) For overcoming the time constraint, client had designed and pre-fabricated a special structural platform. This was placed over railway tracks using crane provided by the client for each crossing. Since the time duration available for crossing was limited, the positioning of the crane, placement of the platforms had to be done safely in the quickest time to maximise the time available for the crossing. These structural platforms which are in smaller pieces could be easily handled and quickly assembled. Both the ODC consignments were transported through these tracks safely within the allocated time given by railways.
Incident/ accident free transportation of columns to site.
JE Global - Best Practice – Usage of Jacobs Materials Management System (JMMS) tool on MRPL CDU/VDU project.
a) JMMS which is used globally in Jacobs was introduced in Indian project. JMMS is windows based and can be easily implemented at multiple locations and at site. b) JMMS is a very robust planning, tracking and reporting tool for materials management. c) Material Traceability throughout project’s lifecycle is possible with JMMS. d) Helped in providing focused expediting efforts – made it possible to identify the critical materials from a construction perspective which are needed urgently at site and which will enable ensure continuity and complete major chunks of work at site.
Time and cost savings. Also easy availability/ retrieval of information in single database.
3
4
Considerable time saving.
Early release of large piping fronts associated with columns.
Focused efforts possible. Skill enhancement.
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Offshore World | 26 | DECEMBER 2012 - JANUARY 2013
5
Best Practice – Usage of Prefabricated closed couple hook-ups
a) Used for Flow and pressure transmitter - this has resulted in minimum instrument Fewer welding joints at impulse pipes ie, impulse piping from process tapping to transmitter is kept minimum. site and consequently less b) These hook ups were modeled in 3D model and reviewed in the presence of pre- radiography. fabricated hook up vendor to ensure proper installing at site later. Fewer fittings used. Thus lower leakage chances.
6
Technology improvement – Transmission of signals to DCS is designed through Field bus signals Forged steam and condensate manifolds SRR flooring above the cable cellar.
a) The control and monitoring of instrument signals were through Field bus technology instead of conventional 4-20mA transmission. b) Field bus implementation (FF), the transmission of instruments signals was done in two wires bi-directional for group of around 8 to 12 instruments. In conventional way of transmission (4-20mA0 we have to use 16 to 24 cores of cable. Hence due to FF implementation the quantity of cables are reduced. FF platform provides more info. on Instrument Diagnostic and this will help in easy maintenance. Forged steam and condensate manifold were used instead of site fabricated manifold. This helped in speeding up of the small bore piping work during the last stages of the project reducing site work. To avoid false flooring and associated problems related to false flooring, concrete floors of suitable design was implemented.
Cost savings due to cable reduction.
Innovative construction practices – a) Maximising construction output during rains. b) Breakthrough in Piling with varying ground conditions.
a) Considering Mangalore is very high rainfall area and spread over four to six months, covering up entire pipe-rack of more than 250 m length with tubular steel and GI sheets was carried out. b) Proper drainage was planned to ensure that water does not stand on the plot. Maximum possible underground construction work was completed before start of rains. c) Based on rock that was met during piling these piles were to be terminated. However during the work execution floating rock/boulder was suspected. Additional soil investigations were immediately done and same was confirmed. Therefore special rotary tools were quickly deployed to pierce through the floating rock/boulder and terminate pile in solid rock below. Early deployment of special drilling/cutting tools enabled major time savings. Structure where this work was being done was 118 m tall RCC chimney and was critical.
Large piping fronts got released with time savings.
Strategic Shift in execution methodology – Change in Mode of Project Execution from LSTK/PMC to hybrid mode ie, EPCM + Packages.
a) Project originally envisaged as LSTK/PMC project with PMC overseeing the job. In view of the high costs associated with LSTK/PMC mode, established on basis of actual offers received, alternate project execution methods like EPCM mode was considered. b) Considering the substantial cost savings that will accrue, client later decided that project will be by Hybrid mode (EPCM + Packages). c) Enabled faster project completion before the scheduled deadline - for client to take financial benefits. Active client involvement with closer/tighter project monitoring is possible. Lastly incorporating engineering changes / modifications during the implementation of the project becomes possible.
Major cost savings to client.
Best Practice – Project management.
The project monitoring was done very closely by both Jacobs and Client. Involvement of client on a daily basis at HO and at site resulted in close follow up and quick decision making. Stationing of client representatives at critical stages project at HO and vendor shops helped in expediting the deliverables. Client’s rigorous involvement along with the Jacobs to expedite the vendors helped in timely delivery of the project supplies. Focused interface meetings with client, Technology suppliers, PMC and departments concerned helped in flawless execution of interface activities. Focused daily site meetings from the initial stages of the project, twice daily meetings during last stages of the project with site contractors with the participation of the client helped in expediting the site work.
7
8
9
Offshore World | 27 | DECEMBER 2012 - JANUARY 2013
FF platform has helped in speeding up loop checking procedure. Time saving.
Pump foundations were possible to construct. Main cable trench and pipe-trenches construction became possible. Proper load transfer from super-structure to foundation was ensured.
Major projects which have cost as prime driver can be considered for implementation by – EPCM mode or EPCM + Packages method ie, Hybrid mode of execution.
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MID-COURSE CORRECTIONS 1) Statutory compliance: Initially LP steam drum and the Exchanger were ordered on different vendors. However approving statutory authorities considered this to be a complete package and informed that LP Steam Drum and Exchanger along with the associated piping risers and down-comers need to be construed as one system/package. Thus approval needs to be sought from the approving statutory authorities by only one manufacturing agency. Therefore LP steam drum order was cancelled and re-ordered on the Exchanger vendor to comply with the statutory requirement without jeopardising on the overall delivery schedule. CDU/VDU Columns & Tech Structures
2) Additional small bore contractor introduced: Total quantum of small bore piping was nearly 60,000 inch meters (nearly 15 per cent of total piping work). Also delay in supply of pumps and instruments affected timely release of fronts for small bore piping associated with these. This led to a bunching effect as small bore piping fronts associated with instruments and pumps got quickly released in short span of time. Considering the large quantum and sequence of work a separate contractor exclusively for small bore piping was introduced.
5) Mechanical erection contract: Major order of mechanical erection and piping contract had to be re-tendered for due to some bidders quoting who had failed in the past and had potential to derail the project schedule. To make up for the lost time due to re-tendering, temporary facilities like paved area for spool fabrication, construction power facilities were kept ready prior to contractor’s mobilisation to site.
Having an additional contractor essentially meant that the main contractor could focus on large bore and critical process lines (including cladded lines) so that large piping systems could be completed and cleared for hydro-test in quick time.
6) Hiring of DG sets: To expedite the precommissioning of the unit sufficient capacity DG sets were hired and installed in the project site. This helped in plant lighting thereby increasing the output of construction during night, start and expedite the precommissioning activities of motors, SRR and substation. ACTIONS TAKEN TO PROVIDE SMOOTH WORK FRONTS AT SITE 1) Pump foundations: There are about 150 pumps in the plant and most of them below the pipe rack and adjacent to the column grids of the pipe rack. It was decided that engineering should be completed with all pipe rack and pump foundations in the same foundation network, leaving only the frame details at top on hold till pump details were available. This helped in completing the underground works without waiting for vendor finalisation/inputs for pumps.
View of Battery Limit Piping
3) Augmentation for instrument and electrical installation work: Difficulty of instrument and electrical contractors to mobilise resources, materials, necessitated a) additional manpower supply contract (b) direct purchase of materials in his scope, (c) additional supervision from PMC and (d) more resource deployment from client for loop checks etc. Therefore material like instrument tubes, valves, fittings, hoses etc. could be made available to the instrument contractor in good time and the lack of manpower from the contractors end did not impact the schedule adversely. 4) Delay in inputs for engineering: During licensor selection for ATF, necessitated a prolonged discussion with the potential licensors with respect to finalising terms and conditions, requirements etc, which resulted in considerable delay in selecting the package. This resulted in civil contractor waiting for fronts. This was overcome by assumptions; lay out decisions, elevation of equipment being adjusted with skirt length changes etc. www.oswindia.com
2) CDU/VDU columns and associated critical activities: Supply, erection and subsequent works around the columns dictate the completion of the project. This is due to the requirement of hold on structure/foundation in the vicinity of columns for the erection of columns. The central stair tower, ejector structure and equipment there-in, equipment foundations, underground pipe lines, cable trenches were all coming up in the hard stand area (viz lifting trajectory) of the erection crane. About 400 MT of structural work, 50000 in mtr of piping in the vicinity of all piping including large bore Cladded pipes) were coming up in this area. Construction time was saved considerably by adopting the following engineering/ construction approach rather than the conventional approach: • Complete all the foundation and underground piping work in the area in advance. • Elevate the hard stand level for the crane by about one meter above the foundation. • Level of structure, to provide adequate cushion. • Modularise the structure for ejector and central stair tower so that erection and site welding time was substantially reduced. For this splice joints were
Offshore World | 28 | DECEMBER 2012 - JANUARY 2013
•
specially designed, keeping in view the capacity of crane, Appurtenances of the columns like platforms, large dia pipes were attached along with the equipment prior to erection. The heavy duty crane, which was brought in specifically for the column lift was retained to complete the lift-up of all large dia pipes and heavy pieces before dismantling the boom.
3) Piping and mechanical erection work: Piping material front and contractor resources - As in any ISBL unit in a refinery, the piping works at site was the single most important activity that decided the overall completion schedule. The CDU/VDU unit has about 4, 00,000 in mtr of piping. The overall line count was about 4,500 lines. Significantly, there was a substantial amount of small bore piping (roughly about 60,000 in mtr). This can be gauged from the fact that a total quantity of 115 km of pipe was consumed for the 4, 00,000 in mtr piping. As a strategy substantially higher quantum of pipe material were purchased at the bulk MTO stage although engineering was in progress and a detailed MTO could not be worked at that stage. This was with the client understanding and also suggestion for the same. This helped to a large measure as at all stages of piping fabrication the material front availability was in healthy state and contractor was comfortable fabricating spools in full. Cladded pipes which have a long delivery schedule (about 8 to 10 months) were also ordered in advance both from (a) delivery point of view as well as (b) contingency requirement for future during operations and maintenance. 4) Heat Exchanger Building: The heat exchanger building which houses most of the heat exchangers is a 90 X 15 metre building and with two floors. The construction sequence and schedule was indicating that the roof slab of the building was getting completed after the arrival of many exchangers which are to be located below the roof slab. A proposal was put up to client to convert the RCC slab to a composite slab of steel beams and concrete. Providing decking sheet in roof enabled us to avoid shuttering and scaffolding work. It thus became possible to take the equipment directly into the building even if the slab was not complete. The proposal was accepted by client immediately and it benefited the schedule substantially as equipment erection and piping work could be started before slab completion.
5) Maximising Construction Output during monsoon: The average rainfall during the monsoon periods in this region is more than 4000 mm. It was decided in consultation with client to provide a safe working environment so that following activities could be carried out during monsoon unhindered. • Piping Works: - Of the total piping, 32 per cent of pipes are to be laid on pipe rack. • Fire Proofing: - Steel structures to be fire proofed. • Cable Trench: - Cable-trench activity at grade below pipe rack to be taken up. • Pipe Trench: - Underground pipe trench at grade below pipe rack to be taken up. • Pump Foundations: - Pump foundations below pipe rack to be taken up. Considering the above work a proposal was put up to cover the pipe rack with tubular structure and G.I sheets. Similarly all the trenches and underground pipes completed were connected together and rainwater collected and discharged to the outside. No
Work Description
Unit
Quantity
1
Above Ground Piping Erection – Pipes of all sizes
IM
46,900
2
Welding
ID
48,000
4
Civil RCC
Cum
2559
5
Structural Erection
MT
310
As planned above works could be achieved which otherwise could have affected schedule. Cost incurred in covering the pipe-rack was small as compared to benefits by way of (a) work fronts released and (b) work output achieved. This decision has helped the project as it can be seen from the rain fall statistics of Monsoon 2010 which started from last week of May 2010 and extended up to 15th of December 2010 and had witnessed nearly 5000 mm of rain in the period. Details of works executed with above arrangement during monsoon from 15 th May sw 2010 up to 15 th December 2010.
C L Sankar Narayanan Associate Director (Projects) N Seetaram Das General Manager (Projects) Jacobs Engineering India Pvt Ltd Movement of ODC consignments on top of the railway track
Offshore World | 29 | DECEMBER 2012 - JANUARY 2013
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features Energy Review
Assorted Price Movement for Energy Commodities In the past two months (December 2012 to January 2013), supply concerns largely supported the price rise in crude oil and its derivates, in contrast the other energy commodities witnessed price fall albeit in varied proportion. Overall, in the aforementioned period, NYMEX crude oil futures registered the maximum price rise of 9.7 per cent, whereas, CER futures prices on ICE-ECX platform declined the most by a significant 80.6 per cent on rising uncertainty over the future of CDM (Clean Development Mechanism) and increasing supply glut.
Light sweet crude oil (WTI) futures on NYMEX (CME) started the period under review (December 2012 – January 2013) at USD 89.09 per barrel. Release of upbeat economic data from China and mixed ones from US helped oil prices to maintain the uptrend, albeit briefly into the month. Later, demand concerns as wrangling continued in Washington over a deal to avert automatic tax increases and spending cuts next year in US, pushed oil prices down. Further, disappointing US economic data (private-sector jobs and nonfarm payrolls) dulling demand prospects for crude oil, also helped in lowering oil prices. Strengthening of dollar, a much bigger-than-expected jump in US gasoline supplies and concerns over political strife in Italy eventually pushed crude oil futures prices to the period low of USD 85.21 on December 11, 2012.
monetary policy helped the recovery in oil prices. Later, with US Federal Reserve announcing a new bond-buying program and the Organisation of the Petroleum Exporting Countries keeping its production ceiling unchanged, oil prices moved up. However, an unexpected climb in US crude supplies, reported weekly, denied a sustained rise in oil prices. Crude-oil prices later drew support from signs of strength in the Chinese economy (improved Purchasing Manager Index data) and from on-going violence in Syria that fed concerns over oil supplies from the Middle East. Further, oil prices continued to move up albeit with some brief drawbacks. While overall optimism that US politicians will be able to strike a deal to avert the fiscal cliff helped oil prices move up; few sessions witnessed mild fall on uncertainty over striking of deal. Moreover, other factors such as upbeat economic data releases from US (for instance, gauge of confidence among home builders rose in December to the highest level since April 2006) and decline in US oil inventories (reported weekly), continued to support the
Later, optimism on the outcome of decisions from the upcoming meet of world’s key oil producers (OPEC) on production and the US central bank’s meet on
100
330 NYMEX Heating oil (USd/gal) - LHS
NYMEX Gasoline (USd/gal) - LHS
NYMEX WTI crude oil (USD/barrel)
ICE Rotterdam Monthly Coal (USD/MT)
310
95
290
90
270
85
80
250 12/3
/201
2
12/1
0/20
12
12/1
7/20
12
12/2
4/20
12
12/3
1/20
12
1/7/2
013
1/14
Futures price movement - December 2012 to January 2013
www.oswindia.com
/201
3
1/21
/201
3
1/28
/201
3
Source: Bloomberg
Offshore World | 30 | DECEMBER 2012 - JANUARY 2013
0.75
7.5
0.6
6.5
ICE-ECX CERs (Euro/tonne) - LHS
0.45
5.5
NYMEX Natural gas (USD/mmBtu) ICE-ECX EUAs (Euro/tonne) 0.3
4.5
0.15
3.5
0
2.5 12/3
/201
2
12/1
0/20
12
12/1
7/20
12
12/2
4/20
12
12/3
1/20
12
1/7/2
013
Futures price movement - December 2012 to January 2013
1/14
/201
3
1/21
/201
3
1/28
/201
3
Source: Bloomberg
oil prices. Later, oil prices briefly traded range-bounded as market participants’ awaited decision of US law makers on averting fiscal cliff. Finally with the onset of New-Year, US policy makers passed a last-minute budget deal to avert the fiscal cliff of billions in spending cuts and tax hikes. This in addition to hefty drop in US crude supplies (reported weekly) helped the rise in oil prices. Notwithstanding some resistance on strengthening of dollar, oil prices continued to move up in chequered steps. Notably, US House approving only a three-month suspension of the debt ceiling and news of limited capacity in the newly expanded Seaway Pipeline connecting the delivery hub of NYMEX crude oil futures contract resulted in some trading sessions witnessing oil price decline. This decline was largely reversed with some upbeat global economic data releases. By end of January, oil futures prices moved to multi-months high and also the two-month period high of USD 98.24 on January 30, 2013 largely due to supply concerns on a refinery closure on the US East Coast and unrest in Egypt, a key transit hub for oil through the Suez Canal and the Suez-Mediterranean pipeline. Finally, crude oil futures closed the period under review at USD 97.49, marking an overall rise of 9.7 per cent. The rise in crude oil prices was also reflected in the price rise of oil derivates such as heating oil and gasoline. Additionally, news that Hess Corp. plans to sell its US terminal network and close it’s Port Reading, N.J., refinery by the end of February, also supported the price rise. Overall, futures prices of both gasoline and heating oil on NYMEX platform saw a rise of 9.6 per cent and 2.9 per cent respectively in the past two months. Among other energy commodities, ICE Rotterdam monthly coal futures prices moved down by 3.9 per cent plagued by an oversupplied market and waning coal consumption from China. Additionally, weak demand for thermal coal in US as well as electric utilities switched to cheaper natural gas, didn’t helped the sentiments. Similarly, mild weather dampening demand sentiments along
with strong US gas production easing supply concerns, if any, pushed natural gas prices down. Additionally, comparatively comfortable gas stockpiles in US resulted in fall in natural gas futures prices by 6.2 per cent on NYMEX platform over the past two months. In emission market segment, major price plunge continued in both European Union allowances (EUA) and certified emission reductions (CER). On ICE-ECX platform, in past two months, EUA futures prices dropped by 46.6 per cent, whereas CER futures dropped by a significant 80.6 per cent. Prices have been plunging as it is becoming clear that the EU’s Emissions Trading Scheme (ETS) is over-allocated all the way to 2020, mainly due to the impact of Europe’s economic troubles on emissions. Experts opine that energy efficiency projects encouraged by high carbon prices caused almost half of Europe’s glut of permits and a plan to temporarily withhold allowances will only exacerbate the oversupply by 2020. Price decline was also supported by a vote in the European Parliament with Industry, Research, and Energy (ITRE) committee opposing a scheme known as “backloading” - or supporting prices by extracting allowances from the market and reinjecting them later. Meanwhile, Europe is slated to ban offsets from projects registered after 2012 in all but the least developed countries, which sw no longer include China. Niteen M Jain Senior Analyst, Department of Research & Strategy Multi Commodity Exchange of India Ltd E-mail: niteen.jain@mcxindia.com Nazir Ahmed Moulvi Senior Analyst, Department of Research & Strategy Multi Commodity Exchange of India Ltd E-mail: nazir.moulvi@mcxindia.com
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features Case Study
BARTEC Ensures Right Temperatures at EPC-2 Island Kashagan BARTEC has been awarded for the engineering, procurement and construction management of heat tracing on EPC-2 island of Kashagan project. For keeping the plant operating under the worst conditions, the target is to maintain a strategic pipe network. The case study details the advantages of the used parallel heating cables, PSB and HSB, the self-limiting property of which prevents overheating even when the cables are overlapped, and much more.
Kashagan, 80 km south-east of Atyrau in the North Caspian Sea, is the largest oil field discovered over the last thirty years world-wide and extends over a surface area of approximately 75 km by 45 km. Its development represents one of the greatest challenges faced by the petroleum industry, given the deep, high-pressure reservoir, the high sulphur content, the shallow waters that freeze in winter and the marked shifts in temperature (from -36째C to +43째C). The potential daily average production amounts to 1.2 million barrels, with estimated reserves of 38 billion barrels. Due to the previous successful realisation of different offshore applications, BARTEC has been awarded for the engineering, procurement and construction management of heat tracing on EPC-2 island of Kashagan project. The target is to maintain a strategic pipe network, in order to keep the plant operating under the worst conditions. Heat tracing was also used for the freeze protection of the helideck. The used cable was the self-limiting parallel heating cable PSB as well as the self-limiting parallel heating cable HSB. The convincing advantage of these two kinds of cables is their ability to be used in explosive atmospheres without any
temperature limiter. Consequently, costs for further components could be saved. More than 10,000 m are installed. Both cables have a CTP resistive element between two parallel copper conductors which regulates and limits the heat output of the heating cable according to the ambient temperature. This output regulation is carried out automatically along the entire length of the heating cable according to the prevailing ambient temperature. As the pipe temperature rises, the heat output of the cable is reduced. This selflimiting property prevents overheating even when the cables are overlapped. A temperature limiter is not required, not even in explosion hazardous zones as on EPC-2 Island. Thanks to the parallel power supply the heating cable can be cut to any required length. This feature considerably simplifies project planning and installation. The heating cable is cut and terminated in accordance with the local requirements directly on the construction site. The protective outer jacket of either fluor polymer protects the inner copper braiding from corrosion and chemical attack. The copper braiding serves as earth conductor and also increases the mechanical stability of the cable. Under the protective braiding are two synthetic jackets providing electrical insulation. The inner of the two jackets is thermally fused to the heating element (bonded jacket). The system provider BARTEC did not only provide the heating cables and the connection kits but also the control technology required to offer a complete solution from one hand. The used DPC temperature controller was implemented in combination with Pt100 sensors. It is particularly suitable for pipe sensing and ambient sensing. Whenever the set temperature value at the sensor is exceed or fallen below, the output relay will automatically switch on or off. BARTEC can also configure as SRAP, which consist to calculate the necessary power in function of the ambient temperature. The available power is calculated taking into account the worst case, the instantaneous power id depending on the instantaneous ambient temperature. The necessary power under -36째C ambient is not the same under -10째C ambient, for a winterising this power would be less than the half. The client can also appreciate that the regulating system, modulate the power in order to avoid overheating and reduce the energy costs of heat tracing.
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In order to ensure a reliable design, the engineering has been per formed by working with the 3D model. By working in 3D, BARTEC was able to “see” the plant before it has been built. The location of junction boxes could be defined taking into account the future preventive maintenance and any inspection of the system which use to occur on a yearly base. Fur ther from the engineering and the supply of the heating technology products, BARTEC also provided skilled personal in order to assist with the installation, to exchange knowledge, and to save clients time so that they can dedicate about their activity, letting BARTEC care about the heat tracing and coordination with other sub-contractors like thermal insulation and power distribution. Prior to enter EPC-2 Island, a specific training was mandatory for the BARTEC specialists, the Basic Off-Shore Safety Induction and Emergency Training (BOSIET). This intensive three-day experience included the training how to proceed with different dangerous types of incidents which can occur during offshore activities. After the successful completion of this training, they now have the permission to work on any offshore plant worldwide.
By competently handling this project, BARTEC succeeded in laying the foundations for further cooperation. The safety technology provider has once again proven its competence to meet the requirements on a variety of markets worldwide. sw
Eric Specht Project Manager Heating Technology, BARTEC S.r.l. E-mail: Eric.Specht@bartec.it
ITT Completes Acquisition of Bornemann Pumps Germany: ITT Corporation has completed the acquisition of Joh. Heinr. Bornemann GmbH (Bornemann Pumps), a leading global provider of highly engineered pumps and systems for the oil and gas industry, as well as the industrial, food and pharmaceutical sectors. This Strategic acquisition expands ITT’s portfolio of highly engineered pumps, systems and aftermarket capabilities for global oil and gas and other attractive end markets. “Our acquisition of Bornemann Pumps and its leading edge technologies will further position ITT as a leader within the global oil and gas industry,” said Denise Ramos, chief executive officer and president. “We look forward to unlocking powerful new opportunities to serve customers through expanded global operational and service platforms.” Robert J Pagano Jr, President of ITT’s Industrial Process business, said, “The acquisition of Bornemann Pumps represents a significant milestone in the continuing growth of our business. Their twin-screw technology and multiphase applications expertise align strategically with the Industrial Process business, complement our Goulds Pumps brand and expand ITT’s presence in global oil and gas markets. We are also excited by the advantages we will gain by bringing together two teams with shared values and a commitment to quality, performance and customer satisfaction.” Rabindranath Burman, Country Head and Managing Director of ITT Corporation India Pvt Ltd, added: “The acquisition of Bornemann Pumps represents a significant milestone in the continuing growth of our business. Their twin-
screw technology and multiphase applications expertise align strategically with the Industrial Process business, complement our Goulds Pumps brand and expand ITT’s presence in global oil & gas markets. We are also excited by the advantages we will gain by bringing together two teams with shared values and a commitment to quality, performance and customer satisfaction.” The transaction was valued at EUR 206 million. Bornemann specialises in manufacturing multiphase pumps finds lot of application in oil and gas fields. The core of the Multiphase Boosting Systems is formed by the twin screw pumps. The two engineered rotor sets work with no metal-to-metal contact. They deliver a close to constant capacity against the downstream backpressure. The pressure is not dependent on the speed of the pump and the characteristics of the fluid being transferred. Fluid mixtures of up to 97% gas content, 100% on short term basis, may be pumped without overheating the machine. The necessary liquid is stored in the enlarged housing and partly recirculated to the inlet, assuring an equal distribution of the heat and heat transfer to the ambience. Sudden changes from high gas contents to pure liquid flow – normally called slugs – are handled. Bornemann Multiphase Boosting Systems are applicable for oil and gas fields and find applications in on- and offshore, with small discharge capacities, with tail-end production, new field developments, and aside of the existing infrastructure where an exchange of separators and associated equipment is required.
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features Transportation
Global Monitoring of Marine Fuels and Machine Condition The new sulfur emission regulations for ocean going vessels present a serious challenge for the maritime industry. Lower sulfur contents in the fuel oil is likely to cause increased machine wear. Therefore timely, exact, and frequent measurements of the sulfur and wear metal concentrations on each vessel is desirable in order to avoid legal infractions, and unnecessary machine wear. This article presents the use of Energy Dispersive X-Ray Fluorescence (EDXRF) for this purpose, combined with a GPS-based global reporting system that enables the fleet management to optimize also for bunkering and machine maintenance.
Scientific studies have shown that vessel exhaust emissions contains harmful air pollutants, like sulfur oxides, which are associated with a broad array of adverse impacts that harm human health and the environment. To reduce pollution coming from vessels the International Maritime Organization (IMO) revised the MARPOL Annex VI in 2008 and established new limits on emissions of sulfur oxides and other pollutants. The new limit in areas other than designated Emission Control Areas was set to 3.5% sulfur from 2012, and will be reduced to 0.5% sulfur from 2015. In special designated Emission Control Areas (ECA) the limit was set to 1% from 2010, but will be reduced to 0.1% from 2015. The ECA included the Baltic Sea from 2006, and the North Sea from 2007. In 2012 the North America ECA was defined as within 200 nautical miles from the coasts of North America and Canada. The Caribbean sea ECA will join by 2014. The European Commission directive 2005/33/EC from 2010 mandates the use of fuel oil containing maximum 0.1% of sulfur for ships berthed for two or more hours at any port in the European Union. PROPERTIES AND EFFECTS OF LOW-SULFUR FUEL The viscosity of low sulfur fuel oil is extremely low compared to the viscosity of heavy fuel oil and marine diesel oil. Internal leakage in the fuel oil pumps, and increase in flowability of fuel from the injection nozzle are likely to occur. The resulting effect on various equipment is a cause of concern. Since the lubricity of fuel oil depends on the viscosity, the lubricity of low-sulfur fuel oil is low. Consequently, abnormal wear is likely to occur in the sliding/contact parts of e.g. pumps. The International Council on Combustion engines (CIMAC)1 listed the following concerns associated with switching between heavy fuel oil and distillate fuels with low sulfur content in coastal waters. Low lubricity: shore side distillate fuels have specific requirements for minimum lubricity which is usually met by inclusion of additives. Marine distillate fuels have no such requirements. www.oswindia.com
Delivery-side thermal issues: Heavy fuel oil must be heated to 150 0C to flow due to its high viscosity. Marine distillate fuel if introduced too fast at ambient temperature could cause the fuel pumps to seize due to a combination of thermal contraction and low lubricity. Fuel compatibility: When switching from heavy fuel to a low aromatic distillate fuel, some of the heavier asphaltic materials could be precipitated from the heavy fuel. If this happens, fuel filters could clog and fuel pumps could stick, causing sudden loss of power. CIMAC cited the last issue as the most important as it relates to the potential mixing of two fuels in a common tank which can occur during fuel switching. METHODS TO MONITOR SULFUR AND WEAR METAL CONCENTRATIONS IN FUEL OIL Oil analysis spectrometers have become the primary analytical tool for the analysis of wear metals, contaminants and additives in lubricating oils during the last 50 years. The principle behind spectrometry is that atoms, e.g. sulfur or iron, when properly excited by light or X-rays, emit or absorb unique spectral radiation whose intensity is proportional to their amount. The main building blocks of a spectrometer is the excitation source, the optical system, and the readout system. Spectrometers for oil analysis fall into two categories: atomic absorption spectroscopy (AAS)2 and atomic emission spectroscopy (AES)3.
>> The viscosity of low sulfur fuel oil is extremely low compared to the viscosity of heavy fuel oil and marine diesel oil. Internal leakage in the fuel oil pumps, and increase in flowability of fuel from the injection nozzle are likely to occur. The resulting effect on various equipment is a cause of concern.
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Ship A
Ship B GPS satellite
Compact Analyzer Onboard Ocean Going Vessel
GPRS Data Transfer
Compact Analyzer Onboard Ocean Going Vessel GPRS Data
Transfer Web Remote data management; review, process, decisions
Commercial EDXRF instruments have been around since the 1970’s. With the PC as its platform, X-ray fluorescence spectroscopy became a simpler and low cost alternative to atomic spectroscopy. In X-ray fluorescence an electron is ejected from its atomic orbital by the absorption of an X-ray photon whose energy is greater than the energy with which the electron is bound to the atom’s nucleus. When an inner orbital electron is ejected, an electron from a higher energy level orbital falls to the lower energy level orbital, and simultaneously a photon, the X-ray fluorescence, is emitted. The energy of the emitted photon equals the difference between the energies of the two orbitals. Each element has its own set of energy levels so that the X-ray fluorescence spectrum is characteristic of it. Hence it is possible to determine the identities of the elements present. The number of photons per unit time is proportional to the amount of the corresponding element.
Figure 1
AAS uses a flame to dissociate molecules into atoms, and a primary light source from which the atoms absorb specific spectral lines. The disadvantage of AAS is the need for primary source radiation for each element to be analysed. AES uses inductively coupled plasma (ICP)4 which is created by the flow of ionised inert gas, e.g. argon that reaches temperatures of 8,000-10,0000C. The oil sample is aspirated into the plasma where the atoms present are totally dissociated and excited sufficiently to emit radiant energy.
EDXRF can be used for almost all elements of interest to the petroleum industry, and in particular for marine oil analysis in the shipping industry. Sulfur, wear elements, additives, and contaminants can be analyzed down to single parts per million (ppm) level. E.g. by periodically monitoring the trends of wear element concentrations, EDXRF analysis can help to determine whether parts are failing. The monitoring of what remains of certain oil additives may indicate the remaining sw service life of the oil. REFERENCES:
The main advantage of the ICP technique is performance: accuracy, precision and detection limits are excellent. Secondary excitation effects are minimal since the samples are diluted prior to aspiration.
1. CIMAC Bulletin, No 1, Use of low sulfur fuels in coastal waters, 2004 2. Atomic Absorption Spectroscopy, Robinson, J.W.; Anal. Chem. vol 32(8); pp17A-29A; 1960. 3. Atomic Emission Spectrometry. Principles and Instrumentation. Twyman, R.M.; Elsevier Ltd., 2005.
The ICP also lends itself to analysis of almost any material that is dissolvable into a fine spray. Automation of the sample introduction is possible.
4. Inductively coupled plasmas in analytical atomic spectrometry, Montaser, A; Golightly, D.W.; VCH Publisher, New York, 1987. 5. Quantitative X-ray Spectrometry, 2nd ed. Jenkins, R.; Gould, R.W.; Gedcke, D.; Marcel
The primary limitation of ICP is the sample preparation by dilution. This timeconsuming step can lead to accuracy errors. A well-trained person with experience in basic laboratory procedures is required. Used oil samples are not ideally suited for the sample introduction system, and a certain amount of care and cleaning is required.
Dekker, Inc. New York, 1995.
AES and AAS suffer from a well-documented particle size limitation in being unable to analyse particles larger than 10 μm that are important indicators of wear. In conclusion atomic spectroscopy requires a laboratory environment with trained personnel to function properly. EDXRF – A USER FRIENDLY ANALYTICAL METHOD X-ray Fluorescence spectroscopy5 is a simple analytical method for direct measurements of atomic elements in a wide range of materials, solids, powder and liquids. The great advantage of XRF is that the method is fast, accurate and reliable, anyone can operate it, and no sample preparation or special laboratory environment is required.
Hélène S. Gutman Ph.D., CTO – Xenemetrix Ltd E-mail: helene.g@xenemetrix.com
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Marketing Initiative
BIM beyond Designing and Detailing Building Information Modelling (BIM) is often mistakenly considered as design and detailing software. Nowadays, it is even preferred as an effective tool in managing construction�, says Nirmalya Chatterjee, Chief Operating Officer, Tekla India. “The entire purpose of BIM was to make the construction process more efficient and eliminate as many uncertainties as possible before starting the construction process.�
Discuss the technological evolution in the areas of structural designing. The use of IT in construction has made available a trustworthy, synchronised, and consistent digital representation of the building for design-decision making, high-quality construction, document production, construction planning and performance predictions. Technological advances and new software have altered the face of engineering design sector. In days gone by, the Indian building design and construction industry has shown a escalating interest in two topics: Integrated Project Delivery (IPD) and Building Information Modelling (BIM). At the same time, construction companies themselves have become increasingly open-minded about technology due to an immeasurable pressure on developers, contractors and architects to ensure projects are delivered on time and within budget. Earlier the construction processes were quite fragmented, with involvement of different project parties overseeing different stages such as the sales and tendering, design, detailing, production, delivery and erection/installation. IPD provides the opportunities to alleviate the fractured and contentious nature of information and communication between project stakeholders seamlessly, while BIM offers the technology to deliver coordinated design and construction information in a new, intelligent, and 3D visual environment. The rush of attention in and around IPD and BIM has, in many cases, diluted their respective value propositions. Especially in the case of Building Information Modelling, designers and contractors alike have seen the marketplace flooded with competitors that tout the use of internal rendering tools and spatial analysis systems (i.e. clash detection) as value-added services to their clients. While these admittedly are exciting advancement in technologies, they in no way to innovate past the standard scope of services included in design documentation and construction responsibilities. www.oswindia.com
Could you highlight on the different technologies available in the market today? The industry is still learning about BIM and how to utilise software in the best possible way. Steel industry leads the way for the rest of the construction disciplines. The leading and biggest construction and engineering companies are aware of and use the most advanced solutions, but getting owners and small and medium-sized subcontracting companies involved is still a challenge and depends much on the awareness and requirements of project owners as well as short-term financial benefits. Nowadays BIM is even preferred as a construction management tool. The use of BIM goes beyond the design phase of the project and takes an important role during the construction phase of a project as well as the post construction phases and facility management. The entire purpose of BIM was to make the construction process more efficient and eliminate as many uncertainties as possible before starting the construction process. Participants in the building process are constantly challenged to deliver successful projects despite tight budgets, limited manpower, accelerated schedules, and limited or conflicting information. Innovations in BIM boast of capabilities to ease the pain of project delivery. The concept of Building Information Modeling is to build a building virtually prior to building it physically, in order to work out problems, and simulate and analyze potential impacts. Furthermore, along the project anticipation and ease of project delivery, the overall safety of the project will improve due to the elimination of uncertainty. The work site is safer because more items will be pre-assembled off site and trucked to the site keeping the on-site trades to a minimum. Waste will be minimised on-site and products will be delivered when needed and not stock piled on site. This will make a great impact in the way a construction project is managed and will bring along a safer jobsite and more accurate construction with a more sophisticated design process, which will allow sub contractors from every trade to input critical information into the software before the beginning
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of the actual construction. Tekla Structures Customers are gaining benefits of a complete BIM solution that address the whole projects need. How do you see the acceptance of modern technology as far as Indian construction industry is concerned? There is now more and better knowledge about BIM is available in the construction industry, but it’s still often mistakenly considered as design and detailing software. Real BIM goes much beyond and is actually more a methodology that is enabled by and incorporates new design and collaboration technology. As more and more project participants in India have started adopting BIM technology, further awareness is required regarding software interoperability and compatibility and how to share and distribute the building information models of different disciplines using model servers. What are the prime barriers in adopting the latest technologies? The emergence and adoption of BIM represents an industry wide paradigm shift. The reluctance to implement the new technology might be due to several factors with the biggest ones being the switching costs, which are related to learning a new technology, and the cost of the BIM software in relation to how much value it adds and what services it provides. The paradigm shift that relates to constructing and designing buildings in a new way requires a new approach throughout the value chain and it is certainly not done overnight. It seems that customers are sceptical whether a single BIM can work in practice due to practical variability in different phases and projects of construction modelling. For example, customers argue that project requirements are different for each project and the requirements determine the best application. Thus, project teams rely on purpose-built models since they are optimized for specific project needs. For an owner, contractor and designer, learning the new technology does not represent the biggest problem but rather the investments in changing the culture, processes are high, and the actions are difficult to implement. Despite of the recent developments in BIM, the construction industry players are aware of two risks that might be involved in adopting a single BIM technology. There is a risk that project team is not collaborative which is one of the factors which guarantees the efficiency of the BIM technology. The second risk relates to technology: the project participants Significance and advantages of 3D BIM Technology: • • • • • • • •
BIM Technology makes construction more sustainable, minimises wastage of material, power and transportation, costly reworking and documentation Accurate material lists and scheduling to financial and material management systems directly from the model Leaner process with less waste and better possibilities for controlled recycling of extra materials in the factory Interoperability with the best solutions Wider usage of structural model in the construction process Increased productivity, elimination of waste, and more sustainable construction and buildings Direct communication with machinery to integrate design to production without error-prone key-in Preconstruction moved off site, fewer errors on site.
Experiencebased design with physical models
Drawing and copying by hand
Compulsory construction drawings
Blueprints
CAD Modeling and simulation Interoperability Model server
~1500
1775 1900 We are back to using ‘physical’ models, but virtually
1985 2000 2010
Construction Process Development
need to be reliant that the tool is accurate and that it has been updated. Despite the resistance, industry players should recognize that BIM has an important role in creating and coordinating objects as a source of intelligent information about a construction. If industry players, even small ones are trained to use BIM technology and they become BIM-enabled sub constructors, BIM will gain more traction and has potential to becoming an industry standard sooner than thought. Could you discuss about the Tekla’s initiatives in diminishing such barriers? In order to diminish such barriers Tekla has already launched two new technologies to address the construction industry: Tekla BIMsight Tekla BIMsight is a professional tool for construction project collaboration. All disciplines of the construction workflow can combine their models, check for clashes, mark up & share the information using the same easy-to-use 3D environment. Tekla BIMsight can play a big role by consolidating project information from all stages, allowing project participants to identify and solve issues already in the design phase before the actual construction. By minimising error, construction firms save on unnecessary material, labour costs and achieve significant improvements in productivity and quality. Tekla BIMsight is free to use & the same can be downloaded from the website www.teklabimsight.com Tekla Construction Management module Tekla Structures, Construction Management Module manages and track project status. Users can communicate and manage information from supply to installation. Since building information consists of both business and process information, this configuration offers more than just reviewing project data created by others. Customized views allow the user to create and change information attached to building objects. Project history can be accessed and presented graphically or in text format. Clashes can be highlighted so that problem areas are easier to identify. To educate construction professionals on BIM technology, Tekla India has already opened up Tekla Center of Excellence – a unique training center concept in few cities like Mumbai, Pune, Bangalore and Chennai and expanding possibilities of opening training center throughout India. Tekla India is targeting to produce 500 qualified professionals trained on BIM sw technology by the Year 2012. For any further info contact: Tekla India Marketing Team Email – info.india@tekla.com; Phone – 022 61387777
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India GAIL Commissions LNG Terminal at Dabhol, plans to Double Capacity by 2016 Dabhol: GAIL India has started commercial operation of the 5-million-tonne capacity liquefied natural gas (LNG) terminal at Dabhol facility in Maharashtra and plans to double its capacity by 2016 in a phased manner, said B C Tripathi, Chairman of GAIL India. GAIL had imported a shipload of LNG for commissioning the Dabhol terminal in March 2012, but the operations had to be aborted midway after two successive equipment failures.
B C Tripathi, Chairman, GAIL India
“The Dabhol terminal will serve as a gateway for entry of natural gas to the southern and western parts of the country. The company is planning to import about half a dozen LNG cargoes in next three-four months,” Tripathi said.
GAIL has long-term LNG import contract with Russian energy major Gazprom. Tripathi said that the focus of the company is to complete construction of break-water facility, which will help in expanding the terminal’s capacity to 7.5 mmtpa in next two years and finally to 10 mmtpa in 2016. The terminal is operated by Ratnagiri Gas and Power Private limited (RGPPL), a joint venture of GAIL and state power utility NTPCBSE. India is focusing on import of gas as it has faced a steep fall in domestic output. The country has two operational terminals at Dahej and Hazira. “Commissioning of Dabhol terminal at this crucial juncture shall facilitate higher volumes of LNG imports for securing energy for the country,” Tripathi said. Gail expects that the break-water facility will be completed this financial year. The company had mechanically completed the terminal two years ago.
Oil & Gas Sector Expects a Positive Note in 2013 New Delhi: The regulatory regime related to operating oil and gas E&P blocks is expected to be tweaked in 2013. As 2012 saw little progress in solving key issues pertaining to the domestic oil and gas industry such as lack of clarity in regulation, inviting fresh investments to exploration blocks and increasing domestic gas prices, the sector expects 2013 will be a game-changer for the sector. British energy giant BP Plc is planning to invest around USD 7 billion (` 385.50 billion) in the Reliance Industries Ltd (RIL)-operated D6 block at the Krishna-Godavari (KG) basin, off the Andhra coast. But there are apprehensions in the industr y that the plan is holed up in bureaucratic formalities.
Mukesh Ambani-led RIL operates the KG-D6 block with a 60 per cent stake, while BP has 30 per cent interest. Niko Resources of Canada has the remaining 10 per cent stake. Domestic gas prices expect to see some upward revision in the near future, which will not only provide a better revenue realisation to E&P companies with gas finds but also bring significant revenue to the government. Year 2012 saw the biggest investment abroad in the sector by ONGC Videsh Ltd (OVL), the foreign arm of the state-run explorer Oil and Natural Gas Corp, acquired an 8.4 per cent stake in a Kazakhstan oilfield from ConocoPhillips for USD 5 billion (` 275.30 billion). More such deals are expected in 2013.
Shell to Expand LNG Biz in India New Delhi: LNG is the right story for Shell in India, said Mumbai-born Yasmine Hilton, Chairperson, Shell Group of Companies in India. Shell’s 3.6-million tonnes a year Hazira re-gas terminal is being expanded to 5 mtpa in 2013. “We want to take this to 10 mtpa. We have the Yasmine Hilton, Chairperson, Shell knowledge and capability to do that,” she added. Group of Companies in India On the East Coast, Shell is setting up a floating storage and re-gas facility of 5 mtpa with provision to expand to 10 mtpa with an Anil Ambani Group company and Kakinada Port. The “target is to deliver 10 mtpa LNG to India,” Hilton added. On mid-stream activity (building pipeline networks for gas transportation), Hilton said, “We could look at building a network. You never say never. But, is it our core competence. Is it what we have done in the other markets in the world? We do it (midstream activity) where we need to do it.” www.oswindia.com
On investments in downstream — oil retail and refining — Hilton said, “Look at the current business environment in downstream. We are the only international company which has the licence to do 2,000 service stations in the country. But, we have only 68 sites open today. We need a level playing field to expand in India. We have not grown as fast as we would have liked to. Shell has not been aggressive in upstream business.” On exploration opportunities in India, Shell is interested in the next policy change that allows open acreage. “We think that would be more interesting. Open acreage means we can bid for the area we want,” Hilton said. Besides open acreage, a set-up where better risk reward sharing and better acknowledgement of technology expertise is present definitely interests Shell. The Government has been talking about a new regime and Shell has given its inputs. The company will explore what open acreage offers and then assess the product sharing contract (PSC).
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news Govt Approves Power COs Proposal on Diverting Natural Gas to Other Plants New Delhi: Accepting plea of power companies, the Oil Ministry has approved to allow power companies to divert natural gas from one to another to achieve optimal operations. The ministry has accepted the plea of power firms that complained that their plant load factor (PLF) had dropped below the economic level of power generation because of acute gas shortage, relaxing the stringent policy that restricts fuel supply to specific units. As per this approval, if domestic natural gas is allocated to different plants of a power company, the company will now be allowed to club the entire allocated gas and use it in one or more plants to improve PLF. Gas supply can be shuffled only between those plants that had originally been allocated gas, not to a new plant built by the company. Also, the company would also have to take approval of the distribution company.
This arrangement would be availed among plants of a common owner and the power ministry would ensure compliance. The company would have to convince the power ministry that the diversion of gas would improve PLF with corresponding increase in total generation of electricity vis-a-vis preclubbing period. The oil ministry has decided to relax allocations guidelines after domestic gas output fell sharply because of steep decline in natural gas production from Reliance Industries’ KG-D6 block. Reliance supplies its gas to government-specified industrial units at a regulated rate, which is much lower than the price of imported gas. The government has a policy for allocation of cheaper gas to priority sectors. Any drop in output affects pro-rata cut on fuel supply based on priority.
OVL Strikes Oil in Colombia New Delhi: ONGC Videsh Ltd (OVL), the overseas investment arm of Oil and Natural Gas Corporation (ONGC), announced that it has struck oil in the very first well it drilled in Colombia. Initial assessment of the well drilled in the block CPO-5 produced oil varying in rate from 120 barrels of oil per day (BOPD) to 300 BOPD. The oil is heavy in nature with API gravity of about 14.
commerciality of the oil find, extended production testing will be taken up in due course for the remaining object within Upper Mirador Formation at a depth of 9,533 feet.
The CPO-5 block is located on land in llanos basin of Colombia and is under phase 1 of exploration having commitment of drilling two exploratory wells, in which OVL is the operator of the block having 70 per cent participating interest.
Meanwhile, the company is gearing up to make the initial drilling of the second commitment well in the block in January. The results from the two wells will lead to increase in exploratory efforts in the block which has an inventory of exploration leads based on the studies made so far. OVL was awarded the block in the 2008 bidding round in Colombia with 100 per cent participating interest.
The first of the two commitment wells — Kamal-1X was drilled on October 2012, up to the target depth of 10,500 feet. To assess the potential and
In 2010, 30 per cent of the participating interest in CPO-5 block was divested to Petrodorado.
Cairn Gets EAC Nod to Raise Rajasthan Output New Delhi: Cairn India has been allowed to increase its output from Rajasthan oilfields by up to 2,00,000 barrels of oil per day (bpd) and associated gas from 35 to 40 million standard cubic feet per day.
Cairn India is the operator with 70 per cent participating interest. Iits joint venture partner, ONGC, has remaining 30 per cent participating interest.
The Expert Appraisal Committee (EAC) under the Environment Ministry has allowed the oil and P Elango, CEO, Cairn India gas major to increase oil production at Mangala Processing Terminal in Rajasthan.
Explaining the scenario, P Elango, CEO, Cairn India, said that there is resource base potential to ramp up production to these levels after further exploration activities are undertaken. The potential resource for the Rajasthan block is now estimated at 7.3 billion barrel of oil equivalent (boe) gross in-place. The Rajasthan recoverable risked prospective resource has increased from 250 million boe gross to 530 million boe gross primarily due to generation of additional leads and prospects.
After detailed deliberations, the Committee found that the final Environmental Impact Assessment (EIA) /Environmental Management Plan (EMP) report adequate and suggested to stipulate following specific conditions along with other environmental conditions while considering for accord of environmental clearance.
“Next year (2013-14), we would carry out exploratory drilling. The results would be presented before the management committee. Post this, production revamp programme would be finalised. Cairn India has lined up a capital expenditure of nearly USD 2 billion for the next two financial years. Out of this, USD 1.2 billion would be spent for the Rajasthan block,” Elango said.
Offshore World | 39 | DECEMBER 2012 - JANUARY 2013
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Decks Cleared for GAIL Pipeline in Kerala: Oommen Chandy
Oommen Chandy, Chief Minister of Kerela
Thiruvananthapuram: Decks have been cleared for laying the underground KochiMangalore-Bangalore LNG pipeline of GAIL India Ltd in Kerala, Said Oommen Chandy, Chief Minister of Kerela. “The normal compensation GAIL gives is 10 per cent of the fair value of the land. They have raised it to 30 per cent, and the width of the land to be taken has been reduced from 20 to 10 m,” Chandy added.
“The land will continue to remain with the people but they will not be able to do any construction. However, they can carry out farming,” he told. The total land to be acquired in Kerala for the 505-km pipeline is around 18 acres. GAIL expects to complete the project in six months. This is the second phase of the ` 2,915-crore project which ran into trouble over the compensation amount to be paid to landowners in Kerala. The first phase of the 48-km pipeline project in and around Kochi is over. Kerala expects to earn ` 500 crore in tax revenue annually once the project is completed.
CCEA Awards Remaining Exploration Blocks
India Must Ink Long-term Oil Deals with Exporters
New Delhi: The Cabinet Committee on Economic Affairs (CCEA) has approved the award of remaining exploration blocks under ninth bid round of New Exploration Licensing Policy (NELP-IX), after rejected Ishar Gasoil’s bid for three blocks that were offered under ninth bid round due to company having negative networth.
New Delhi: As Asia’s third largest economy, struggling to match its resources with its needs, India needs to acquire oil assets abroad and if feasible, enter into long-term bilateral development and supply agreements with oil-exporting countries to meet its future energy needs at a low cost.
Ishar Gasoil’s bids for three blocks – RJ-ONN-2010/1, GV-ONN-2012/1 and CB-ONN-2010/2 were rejected after considering the submissions made by the company, the view of Directorate General of Hydrocarbons (DGH) and recommendations of an Empowered Committee of Secretaries.
“As India’s status as oil consumer will grow in the world in the next decade and limited oil reserves pose a threat, the country should use this period of relative calm in oil markets to acquire oil assets overseas and if feasible enter into long-term bilateral development and supply agreements with oil-exporting countries,” said Vikram Dhawan, Director at Equentis Capital.
CCEA awarded Block RJ-ONN-2010/1 to a Consortium of GAIL, Bharat Petro Resources (BPRL), BF Infrastructure (BFIL) and Monnet Ispat & Energy (MIEL). Block CB-ONN-2010/2 went to a consortium of Deep Energy LLC (DEL), Deep Natural Resources (DNRL) and Safal WSB Energy (SWEPL). Since there was no other bidder for the block GV-ONN-2012/1, this block will not be awarded at all.
Cautioning the policymakers against higher prices in long-term, Dhawan said that the current trend of stable or lower prices will not last long as it has been the result of softer demand and supply surge. He said that OPEC (Organisation of the Petroleum Exporting Countries) may also step in support declining prices of oil in the long-term.
ONGC Pays `2961 crore Interim Dividend of 2012-13 GAIL to Enter into Gas Shipping Segment to Government Mumbai: GAIL India is planning to enter into gas shipping business segment New Delhi: Oil and Natural Gas Corporation Limited (ONGC), the state-owned oil and gas company, has paid an interim dividend of ` 2961 crore to the Union government for the year 2012-13. Petroleum Minister M Veerappa Moily formally received the payment of interim dividend from Sudhir Vasudeva, Chairman and Managing Director of ONGC, payable to the Government of India by the company for the year 2012-13. This represents dividend payment at 100 per cent of the equity Capital held by the government in ONGC. Vasudeva also briefed the Minister about various activities of the company. The Minister noted the issues facing the Navratna PSU. He emphasised the need for quick decision making to expedite resolution of the issues. www.oswindia.com
with the aim of bringing gas from its USA’s Sabine Pass fields and the Gazprom’s Shtokman project from the Arctic region. In 2011, GAIL had signed a pact to source LNG from the Sabine Pass project’s fourth train in the USA Louisiana state for 20 years. This agreement includes sourcing of 3.5 mt gas from these fields annually. The field is slated to begin commercial production by late 2016 or in the beginning of 2017. B C Tripathi, Managing Director and Chairman of GAIL India, said, “We are planning to make a foray into the liquefied natural. “The Sabine Pass LNG deal is on f.o.b. (free on board) basis, and we need to ship the gas on our own,” Tripathi said. “A team has been visiting various shipyards around the world to check availability before ordering new LNG vessels,” Tripathi said, adding each of such vessels could cost Rs 700-800 crore.
Offshore World | 40 | DECEMBER 2012 - JANUARY 2013
news OVL’s De-Kastri Oil Terminal Achieves Best Oil Terminal of Russia New Delhi: The Oil & Natural Gas Corp’s (ONGC) overseas arm ONGC Videsh Ltd (OVL) announced that the De-Kastri Oil Terminal of its Sakhalin-1 oil & gas project, located near the De-Kastri settlement in Ulchi District of Khabarovsk Krai, has bagged the Best Oil Terminal Award of Russia in 2012. The award was announced at the VII International Oil Terminal Congress 2012 held in St Petersburg. The terminal is used to storage and export the crude oil produced from the Sakhalin-1 fields. Oil is transported to the terminal from the Sakhalin-1 onshore production facilities at northeast of Sakhalin Island via a 226-km pipeline. The oil terminal, which has been in operation since 2006, is the largest of its class with a single point mooring facility being to safely load the tankers in heavy ice conditions.
India Talks with Niger to Explore Oil & Gas New Delhi: India is stepping up efforts to explore hydrocarbon resources in Niger, as Indian companies look towards overseas oil & gas exploration to meet growing energy demand in Asia’s third largest economy. India will soon send oil and gas experts to the West African nation. Minister of State for Petroleum P Lakshmi told the visiting Minister of Energy and Petroleum of Niger, Foumakore Gado, at a meeting that Indian companies are interested in exploring oil and gas blocks and investing in the country’s oil marketing infrastructure. Gado welcomed Indian companies to invest in the country. He also sought Indian technical expertise in the sector. In response, Lakshmi said that Indian state-owned units like ONGC, GAIL and IOC could provide technical training to the Niger’s hydrocarbon sector personnel.
P Lakshmi, Minister of State for Petroleum and Natural Gas, GoI
India’s trade with Niger stood at USD 57.34 million during 2010-11, and India’s exports to Niger was worth USD 46.88 million.
Since the start of the operations, the terminal has been offloaded 550 tankers with 51 million tonnes of Sakhalin-1 produced oil, which makes it one of the largest ports of Far East Russia. OVL has 20 per cent stake in Sakhalin-I project, as it is operated by Exxon Neftgas Ltd which has 30 per cent interest. Russia’s Rosneft has 20 per cent stake and Japanese consortium SODECO has the remaining 30 per cent. This is the second time that the De-Kastri Terminal has received an award from International Oil Terminal Congress. Earlier in 2009, it was recognised as the terminal of the year for its economic, environmental and social performance.
The Shale Revolution’s Shifting Geopolitics New Delhi: The shale energy revolution is likely to shift the tectonic plates of global power in ways that are largely beneficial to the West and reinforce US power and influence during the first half of this century. It strengthens the United States, reduces China’s energy dependence, and generates a major global stimulus, while potentially destabilising both the Russian Federation and Saudi Arabia. Yet most public discussion of shale’s potential either focuses on the alleged environmental dangers of fracking or on how shale will affect the market price of natural gas. Both discussions blind policymakers to the true scale of the shale revolution. The real impact stems from its effect on the oil market. Shale gas offers the means to vastly increase the supply of fossil fuels for transportation, which will cut into the rising demand for oil — fuelled in part by China’s economic growth — that has dominated energy policymaking over the last decade.
Defence Ministry Declares RIL’s KG-D6 Block as ‘No-GO’ Area Mumbai: Ministry of Defence has classified Reliance Industries Ltds (RIL) and its partner BP Plc’s KG-D6 gas fields and gas discovery area NEC-25 are among 14 oil and gas blocks as ‘No-Go’ area, barring any exploration or production activity. Ministry of Defence has either withdrawn or withheld clearances for 47 oil and gas blocks, of those 14 oil and gas blocks that have been declared ‘No-Go’ areas. RIL-BP’s KG-DWN-98/3 or KG-D6 block has been declared as ‘No-Go’ area as it overlaps with a proposed Naval base. KG-D6, which was awarded to RIL in 2000 by the Cabinet after clearance from all ministries concerned, had been producing oil since September 2008 and gas from April 2009. RIL-BP’s Mahanadi basin block NEC-OSN-97/2 (NEC-25), where sizable gas discoveries have been made, too has been classified as ‘No-Go’ area as it is close to missile launching range/air force exercise area.
Defence Ministry has been declared other 12 ‘No-Go’ blocks which are with state-owned ONGC, Cairn India and Australia’s BHP Billiton, and reasons cited for withdrawing clearance including being close to missile launching range, overlapping with proposed Naval base, with the Naval firing range and Air Force exercise area. These companies have already invested USD 15 billion since 2000 and the Ministry of Defence has now withdrawn or withheld clearance to them. The newly constituted Cabinet Committee on Investment (CCI), which was constituted to expedite the clearance for infrastructure projects of Rs 1,000 crore or more, is likely to consider on giving clearance to these 47 oil and gas blocks where the Defence Ministry has either withdrawn clearances or put stringent conditions.
Offshore World | 41 | DECEMBER 2012 - JANUARY 2013
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Oil Companies Seek Compensation for Losses on Petrol New Delhi: Oil marketing companies (OMCs) of public sector have sought compensation from the Government the worth of ` 50,000 crore as part of the unmet revenue loss incurred by them during the current fiscal for selling petroleum products below cost. So far, these companies have been partially compensated by the Government in the form of subsidy. They are seeking remaining compensation of ` 25,000
crore for the first six months and ` 25,000 crore for the third quarter of the current fiscal. “We have written to the Government to compensate us,” R S Butola, Chairman, Indian Oil Corporation, said. This is inclusive of the loss the companies incur on the sale of diesel below the cost price. The companies were allowed to increase the price of diesel in small doses from January 17 till the loss on fuel sale was neutralised.
ONGC Receives Global Recognition as Oil Majors Named in Green Ranking New Delhi: In spite of operating in a sector which is intrinsically polluting, State-run oil and gas major Oil & Natural Gas Corporation Limited (ONGC) has received global recognition for its environment friendly initiatives as it was named in the 386 th position in the Newsweek Green Rankings of 2012 Global 500 list. This particular accomplishment by India’s Energy anchor is extremely praiseworthy in Indian context as the few Indian companies ranked higher than
ONGC are mostly from IT and banking sector, which have lesser environmental footprints and impacts due to the inherent nature of their business. This is a major honour for the Indian oil major given that it is only among a select group of global oil majors that feature in the list which was published on October 2012.
Dynamic Offshore to Deploy Exploration Rig for ONGC Mumbai: Dynamic Offshore Drilling, the Cyprus-based rig operating group, has entered into a five-year contract with Oil and Natural Gas Corporation (ONGC) to deploy a newly built exploration rig for drilling oil and gas wells for ONGC. The rig is to be deployed in the Western offshore part of India. The USD 205-million rig had christened as ‘Dynamic Vision’. The jack-up rig would sail out of Keppel Group shipyard and would be on site for drilling oil and gas wells from February, said Naresh Kumar, Chairman, Dynamic Offshore Drilling. “India’s growing energy demand is driving the country to actively increase its offshore oil and gas production,” he said. “The Indian oil and gas sector would require 55 rigs for drilling in the offshore basins over the next two years,” Kumar added.
“Dynamic Offshore plans to order another newly built rig for deployment by 2016, and is negotiating to lease two more rigs from international owners,” said Kumar. “We are currently negotiating for leasing or acquiring more rigs for drilling in India,” said Kumar, adding that Dynamic Offshore has bid last month for contracting two more rigs to ONGC. “Dynamic Vision is our first newly built offshore rig,” he added. The company currently operates a drillship and a jack-up rig under contracts with ONGC. These two rigs were leased from international rig owners. Going forward, Dynamic Offshore would increase its fleet, and expand operations to Southeast Asia and West Asia, he said.
ONGC, NTPC among Energy Majors Involve in CSR Activities New Delhi: Exploration giant ONGC is stepping up efforts to join hands with top private hospital chains such as Fortis, Apollo and Max to provide healthcare, while power major NTPC will lay pipelines and do some drilling to make septic tanks and clean toilets around its power stations.
India’s biggest power utility NTPC is also aligning its CSR activities to government’s developmental programmes such as Nirmal Bharat Abhiyan. The company also plans to build community and individual toilets around its existing power stations.
State-run ONGC has already identified land in several states such as Gujarat, Assam and Uttar Pradesh to provide specialised health care, and it plans to nominate its own executives on the boards of these hospitals.
NTPC has planned to provide about 800 independent toilet rooms around its Kudgi power project - 200 each in four villages - with pipeline and septic tanks or soak pits to each residence. The company spends 2 per cent of their net profits in CSR activities, which also includes health and family welfare works. The company is also planning to provide separate toilet facilities for boys and girls in village schools with water supply facilities.
For such activities, ONGC has a budget of Rs 500 crore a year, as it is committed to spend 2 per cent of its net profit in corporate social responsibility (CSR) activities. The company uses this budget for several social and community development activities such as education, skill development and environment-oriented projects around its projects. www.oswindia.com
The department of public enterprises, which regulates affairs of central public sector companies including ONGC and NTPC, has made it mandatory for all state-run firms to annually spend minimum 2 per cent of their net profits in CSR activities.
Offshore World | 42 | DECEMBER 2012 - JANUARY 2013
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news Power and Fertiliser Cos to Allow Swap Gas
M Veerappa Moily, Union Minister for Petroleum and Natural Gas
Hyderabad: An installed capacity of 6,500 MW in Andhra Pradesh has been lying idle for many months now, pushing the State into an unprecedented power crisis, due to nonavailability of gas. Gas-starved power generating stations in the state will now purchase fuel from external sources under the new ‘Swapping Policy’ brought by the Union Petroleum & Natural Gas Ministry.
“In western India, we have supplied some gas to fertiliser projects. Here we have to give to power projects. We may swap it. We will allow the companies (power and fertiliser) to swap gas with the consent of respective state governments,” said Union Petroleum and Natural Gas Minister M Veerappa Moily.
“I have now worked out a new formula on swapping the price,” Moily added. “Rules are already finalised (for gas swapping) and we will apply them now. The swapping will be for a higher price only,” he said. Moily said that an LNG terminal has been opened at Dabhol and one cargo has already come. “Oil has also come. GAIL will pump that oil into the system. I think slowly I am trying to organise the system,” he added. On gas allocation (for different projects), Moily said that the Empowered Group of Ministers had already fixed the priorities. “We have to go according to the formula. Unless it is changed by the EGoM, I can’t change (it) myself. Fertiliser gets the top-most priority,” he said.
CCI Urges Defence and Oil Ministries to Sort out Issues Cabinet to Consider Integrated LNG Terminal at Ennore
Manish Tewari, Minister for Information and Broadcasting
New Delhi: The Cabinet Committee on Investment (CCI), headed by Prime Minister Manmohan Singh, has urged both the Ministries of Defence and Petroleum & Natural Gas to sort out issues pertaining to approvals for 39 oil and gas exploration blocks, where exploration projects are stalled due to objection by Defence Ministry.
Manish Tewari, Minister for Information and Broadcasting, said the two Ministries have been asked to revert in a month’s time to the committee. “Certain problems (in the oil and gas sector) were identified and the ministry of petroleum and natural gas has been tasked with the responsibility of sitting down with the ministry of defence and resolving the problems with regard to 39 blocks,” Tewari added. The petroleum ministry sought a directive from CCI for waiver of the stringent conditions attached to defence ministry clearances for 32 blocks. The defence ministry classified the areas of another 14 blocks as no-go for exploration activities. The petroleum ministry earlier got clearance for 27 out of a total of 78 blocks. State explorers like ONGC and private-sector companies including Reliance Industries and Essar had committed to exploration programmes after obtaining various government clearances. The oil ministry said that non-clearance of the blocks could lead to contractual disputes and even exodus of foreign investment. The government earlier this month set up the CCI for fast-tracking clearances for projects worth more than ` 10 billion.
Chennai: The ` 4,320-crore integrated liquefied natural gas (LNG) terminal, including the regassification plant, at Ennore near Chennai is all set to be commissioned after the Union Cabinet is likely to consider approving the abounded project. The project was initiated more than ten years ago. A regassification plant reverts the physical state of liquified natural gas (LNG), which is transported as liquid in ships. The Shipping Ministry, which had already cleared the project, has sent the project to the Cabinet for approving. Once the Cabinet gives its approval, the Ennore Port Ltd will issue a letter awarding the contract to Indian Oil Corporation (IOC), which is constructing the terminal. After that, it is IOC’s responsibility to proceed with the project. IOC had signed an agreement with the Tamil Nadu Industrial Development Corporation for the project, which will be spread across 132 acres. The LNG project had been under consideration at least for over a decade, initially by Tidco as part of its Petrochem Park project and later by Ennore Port Ltd.
CAG Audit Casts Shadow on RIL’s Investment Plan New Delhi: The pending approvals for the controversial KG-D6 gas fields’ budget and investment plans by Reliance Industries (RIL) has received a major jolt after the Comptroller and Auditor General (CAG) informed the Oil Ministry that Reliance was not co-operating with the auditors due to differences over the scope of the audit. Reliance wants a pure financial audit that is prescribed in its contract, but the CAG wants to conduct a more comprehensive audit. The Director General of Hydrocarbons (DGH) has been refused to issue approval letters for the block’s work plans and budget since 2010-11. The government, however, is optimistic that the matter would be sorted out. The matter was earlier regarded as ‘resolved unambiguously’ and the oil ministry had decided to quickly approve RIL’s past and current investment plans. However, the latest audit from CAG has put the RIL’s investment plan in stake. In a letter to the Oil Ministry, RIL complained that the national auditor had unexpectedly introduced the concept of ‘propriety audit’, which the company feels goes far beyond the financial audit mentioned in its contract.
Offshore World | 45 | DECEMBER 2012 - JANUARY 2013
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Petroleum Ministry Proposes to Hike Price of Hardy Oil Gets Extension of Cauvery Block Exploration Domestically Sold Gas New Delhi: Hardy Oil, the UK-based oil and New Delhi: Petroleum Ministry will go to the Union Cabinet with a proposal for nearly doubling the price of domestically produced natural gas to USD 8-8.5 per mmBtu from the present USD 4.2 mmbtu, after getting comments on its draft note. In the draft note to the Cabinet, the oil ministry has proposed raising price of gas produced by state-owned ONGC and OIL during current year itself and that for Reliance Industries in 2014. The draft is now under supervision with user ministries like power and fertiliser for their comments. After consultations with all the ministries with speculation suggestions, then the oil ministry will present it to the cabinet. The ministry in a draft Cabinet note proposed accepting the Rangarajan Committee recommendation of pricing natural gas at an average of international hub prices and cost of imported LNG instead of present mechanism of market discovery. It wants this pricing formula to apply to all forms of natural gas conventional, shale and coal-bed methane (CBM). Also, the price determined shall be applicable to all consuming sectors uniformly. The ministry wants the new pricing guidelines to apply from 2013 itself on all domestically produced gas, barring cases where it is either governed by a definite formula prescribed in the Production Sharing Contract (PSC) or the government had previously fixed a tenure for the same. The only exemption will be RIL that the company would get the new price only from April 2014 upon expiry of the fixed five-year term. State-owned Oil and Natural Gas Corp (ONGC) and Oil India Ltd (OIL) can, however, get the new rates this year itself for gas they produce from fields given to them on nomination basis by the government. The Rangarajan panel recommendation price may not apply to BG Groupoperated Panna/Mukta and Tapti fields as the current rate for the fuel produced from these are derived from a pre-defined formula detailed in the PSC. However, Cairn India’s eastern offshore Ravva gas price may be revised as per the committee’s recommendations.
Govt to Sell its Stake in Oil India New Delhi: The government has cleared nod to sell 10 per cent of its stake in Oil India. After the disinvestment, the government’s stake in Oil India will fall from 78.43 per cent to 68.43 per cent. The government is expected to raise roughly ` 2,500-3,000 crore from the sale that will bring it closer to its divestment target of ` 30,000 crore this fiscal year. So far, the divestment of public sector companies has garnered ` 6,900 crore. “Proposal has been cleared. The disinvestment will take place through offer for sale (OFS) route. Roughly the government will raise ` 2,500-3,000 crore,” said Petroleum Secretary G C Chaturvedi. www.oswindia.com
gas explorer, has won an arbitration proceeding to get an extension on its exploration licence in a Cauvery basin block. Hardy now would allow carrying out appraisal activities on Cauvery basin block where it had made a gas discovery, named Ganesha, for a further three years from the date on which the block is restored. The Ganesha Ian MacKenzie, CEO, Hardy Oil discovery was made in 2007, with the Ganesha-1 well flow testing at a rate of 10.7 million cubic feet per day, and is estimated to hold contingent resources of about 130 billion cubic feet. Work on the block had halted as Hardy carried out a formal dispute resolution process to extend the expiry date of the licence. “As operator of the CY-OS/2 Block, we are looking forward to recommencing our efforts to appraise the Ganesha-1 natural gas discovery,” said Ian MacKenzie, CEO, Hardy. “The award has resolved a key uncertainty and allows us to put in place a business plan for this asset as we have done with the other licences in our India focused portfolio. The award is a positive first step as we build momentum through the implementation of our 2013 campaign.” Hardy, which holds 75 per cent in the CY-OS/2 licence, has also been awarded recovery of costs incurred as a result of the arbitration. State gas utility GAIL India has the remaining 25 per cent. The block is located in the northern part of the Cauvery Basin immediately offshore from Pondicherry covers about 859 sq km. The licence comprises of two retained areas with the Ganesha-1 natural gas discovery located in the northern area, which comprises an area of approximately 300 sq km.
Technip Consortium Bags Offshore Platform Contract in India Mumbai: Technip in a consortium with India-based AFCONS Infrastructure and Malaysia’s TH Heavy Engineering has won a EUR 220-million (USD 298-million) contract for the Heera Redevelopment process platform from Oil & Natural Gas (ONGC) in the Arabian Sea, at approximately 70 kilometers South-West of Mumbai. The scope of work covers engineering, procurement, fabrication, transportation, installation, hook-up, and commissioning of the HRD process platform, shifting of the existing cable in the seabed, installation of a new bridge connecting the existing HRC process platform, the strengthening of the existing bridge, and the modification on an existing HRC process platform to ensure interconnections between all the process lines and the utilities. Technip’s operating center in Mumbai, India will execute the overall engineering and procurement of tagged equipment of the project. The topsides will be designed for the float-over installation using the Group’s proprietary Unideck integrated deck installation system with the support of Technip’s operating center in Paris. The project is scheduled to be completed in the first semester of 2015.
Offshore World | 46 | DECEMBER 2012 - JANUARY 2013
news Hiranandani Keens to Build LNG Terminal in Bangladesh Oil India, OVL Seek to Acquire Stake in Videocon Assets
Darshan Hiranandani, Director of Hindustan Electricity Generation, Hiranandani Group
Mumbai: Hiranandani Group, the Mumbai-based construction major, is in the race to get the contract for constructing Bangladesh’s first liquefied natural gas (LNG) terminal in Moheshkhali Island in the Bay of Bengal. If the group wins the contract for the 5-million-tonne (mt) facility, it may well be the first LNG terminal to be set up abroad by an Indian private company. The proposed floating LNG storage and regasification unit will have a regassification capacity of 500 million cubic feet a day (mcfd).
Darshan Hiranandani, Director of Hindustan Electricity Generation, Hiranandani Group firm, confirmed the development. “We were informed a few months before that we had been shortlisted to build the terminal. According to our information, the other firms were global players like Golar LNG Energy, Astra Oil and Excelerate Energy and Samsung C&T Corp.” Bangladesh, facing a shortage of 500 mcfd gas a day, is also planning to set up a 115-km pipeline, linking Moheshkhali to Ring-Main in Fouzdarhat to supply to the clients in the Chittagong area. “This project is very important for the Bangladesh economy and (we) want to implement it sooner. After each passing year, the demand for petroleum and natural gas is increasing in our country and we don’t have a terminal now,” told Ghulam Muhammed Quader, Bangladesh Commerce Minister. If the group wins the Bangladesh project, it would give India a strategic advantage over China in the Indian Ocean. The group is already setting up an 8-mt LNG terminal at the Dighi port in Maharashtra for captive use for its coming power plants and to cater to consumers in the power and fertiliser industry.
New Delhi: Oil India in alliance with ONGC Videsh Limited (OVL) is set to make a bid for acquiring 10 per cent stake of Videocon Energy Ventures in Mozambique’s Rovuma basin. ExxonMobil, PTTExploration and Production Public Company Limited (PTTEP), Shell, BP and China’s Sinopec are also in the race. Aiming to repay its debt, Videocon plans to raise around USD 3 billion (around ` 160 billion) from the transition. Videocon had paid USD 75 million for the stake in Mozambique’s Rovuma-1 area in 2008. Anadarko, the operator of the basin, has 36.5 per cent stake in the Rovuma basin. BPRL, the exploration and production arm of Bharat Petroleum Corporation, holds 10 per cent stake in the basin. While Mitsui, Cove Energy and Mozambique ENH each holds 20 per cent, 8.5 per cent and 15 per cent, respectively in the basin. Early this year, Anadarko announced recoverable gas in the range of 35 trillion cubic feet (tcf ) to 65 tcf from the basin. The operator has already formed marketing teams, which will be talking to companies in Japan, South Korea, Taiwan and India to sell gas from the basin. To begin with, the consortium plans to sell only 10 million metric tonnes in two trains. The two trains that the consortium will put in place would initially require around USD 18-20 billion, of which it would raise around USD 14 billion in long-term loans. The rest will be brought in by the consortium members in individual capacity. Further investments would be taken care of from the revenues the project brings.
Cabinet to Decide SPV for TAPI Gas Pipeline New Delhi: The four promoter countries of TAPI gas pipeline – Turkmenistan, Afghanistan, Pakistan and India, pumping USD 5 million equity each – have decided to float a Special Purpose Vehicle (SPV) to keep the transnational project alive. The USD 9 billion gas pipeline has been at loggerheads for some time now on the issue of who leads it. India will be represented by state-owned gas utility, GAIL India Ltd. The Union Cabinet headed by Prime Minister Manmohan Singh will consider on formation of the Dubai-based SPV. It would also consider GAIL joining the SPV as India representative. The SPV is being considered for the project as no multinational company is willing to participate in the project unless they get a share in Turkmenistan’s rich gas fields. While Turkmenistan, Afghanistan and Pakistan are of the view that the four promoters could build and operate the pipeline on their own, but India has insisted that the project be taken up only if a multinational company leads it.
India does not want to be at the mercy of Afghanistan and Pakistan for its gas needs and also feels that none of the nominee companies of the four countries has the financial and managerial capability to execute the project. The multinational firm would be responsible for safe delivery of gas through the 1,680-km pipeline from Turkmenistan that will traverse through militancyinfested areas in Afghanistan and Pakistan. The 1,680-km will carry 90 million cubic metres a day (mmcmd) gas and was scheduled to become operational in 2018. India and Pakistan would get 38 mmcmd each, while the remaining 14 mcmd will be supplied to Afghanistan. Global energy majors like Exxon Mobil and Chevron are willing to lead the construction of the pipeline only if they get a share in the Turkmenistan gas field. Turkmenistan has so far refused as its national laws do not permit foreign equity in oil and gas fields on land. It has agreed to grant service contracts to the overseas investors but that has not impressed the global majors who are unwilling to take financial and operational risks for a less profitable construction and service contract.
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Oil PSU Stocks Draw Foreign Investors’ Interest New Delhi: Foreign institutional investors (FIIs) are changing their outlook towards India’s oil and gas sector. Even before the government announced a partial diesel decontrol in mid-January, FIIs had raised their stake marginally in oil marketing and upstream companies. FIIs are now looking more positive toward the Indian public sector oil and gas companies, which is important given the fact that they had shunned Oil and Natural Gas Corp’s (ONGC) offer for sale in March 2012. The top funds that have stepped up buying in oil marketing companies (OMCs) include Vanguard Group Inc, Brandes Investment Partners, Bank of New York Mellon and DNB Asset Management. The names of these funds figure in the latest shareholding pattern filed by the companies.
government-owned OMCs share the risk associated with a largely ad-hoc mechanism for subsidy reimbursement. The diesel deregulation per se would translate into a 30-60 per cent reduction in under-recoveries for the financial year 2014-15 (versus FY12-13). Investors expect that government oil companies might put out a road map to capitalise on the large network of petrol pumps they had across the country and develop them to take advantage of retail play. Indian Oil, HPCL and BPCL put together own 30,000-40,000 petrol pumps across the country.
OMCs in India such as Indian Oil, HPCL, BPCL never attract FIIs due to their under-recoveries. ONGC was also not favoured by investors due to its subsidy-sharing agreement with the government. All these three
While experts believe the next quarter shareholding filing will give a broad picture of FII buying in oil and gas companies, their stake in HPCL rose from 6.24 per cent to 7.31 per cent in December itself. The FII stake in BPCL rose from 9.4 per cent to 10.04 per cent during the month, while in Indian Oil, it rose from 1.04 per cent to 1.38 per cent. After staying away from the ONGC offer for sale last year, FIIs raised their stake from 5.55 to 5.79 per cent in the company.
Govt Grants Maharatna Status to BHEL and GAIL
States Urge Centre for Increasing Coal, Gas Supplies
New Delhi: The Union Government has approved the grant of Maharatna status to Bharat Heavy Electricals Ltd (BHEL) and Gas Authority of India Ltd (GAIL), giving authorisation to the two public sector enterprises to have more operational freedom for carrying out activities in the country as well as overseas.
New Delhi: Power ministers of states took up issue of lack of allocation adequate coal supply from the domestic miner coal India for state power utilities and urged Union Minister of State for Power (Independent Charge) Jyotiraditya Scindia to discuss the issue with the Prime Minister. At the 6 th Conference of Power Ministers of States and Union Territories, the ministers expressed concern over fuel uncertainty affecting the power sector and urged the Centre to augment the availability of coal and gas by increasing indigenous production and creating a suitable policy framework.
Maharatna scheme is aimed at giving enhanced powers to the boards of identified large-sized Navratna Central Public Sector Enterprises (CPSEs) so as to facilitate expansion of their operations, both in domestic as well as global markets. In the case of BHEL and GAIL, they can exercise their Maharatna powers only after having requisite number of non-official directors on their respective boards. The concerned administrative ministries of the two CPSEs have been asked to take immediate steps to appoint requisite number of nonofficial directors on the boards of BHEL and GAIL so that the boards could exercise the delegated Maharatna powers. As per existing norms, Maharatna entities should have at least four non-official directors. Among others, the Maharatna status allows companies to ‘incur capital expenditure on purchase of new items or for replacement, without any monetary ceiling’. Also, these CPSEs should not depend upon budgetary support or government guarantees. With the Maharatna status, the resources for implementing their programmes should come from their internal resources or through other sources, including capital markets. “However, budgetary support to implement government sponsored projects of national interest and government sponsored research and development projects will not disqualify CPSEs from retaining their Maharatna status and for such projects, investment decisions will be taken by the Government and not by the concerned CPSE. One of the eligibility criteria to be given the coveted status is that the company should have an average annual turnover over Rs 250 billion during the last three years. There are now seven Maharatna companies - ONGC, Indian Oil, GAIL, BHEL, NTPC and CIL. www.oswindia.com
The ministers concerned that availability of adequate coal which was the key for sustaining power supply and accelerated capacity addition in a sector dominated by thermal power. The ministers expressed view that without availability of coal quantity, as committed by Coal India Ltd, the power sector faced a bleak and uncertain future, which was a matter of grave concern for all the stakeholders and required urgent remedial action. State power ministers expressed that unavailability of adequate coal and gas would affect not only the value chain of the power sector – generation, transmission and distribution – but also the exposure of funds given to this sector by financial institutions. Considering this had a direct impact on the financial health of the distribution sector and the Government’s efforts in achieving the goal of providing sustainable electricity to all consumers, the States wanted the Prime Minister’s intervention. The conference also deliberated on several issues related to providing affordable and adequate power to consumers and making electricity accessible to all consumers, particularly in inhabitations that are not gridconnected. Resolutions were made for timeline implementations of Rajiv Gandhi Grameen Vidyutikaran Yojana, Restructured Accelerated Power Development and Reforms Programme, distribution reforms, planned and secured transmission system, as well as energy efficiency initiatives.
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news Essar Energy Refining Margins Rise on India Capacity Addition New Delhi: Essar Energy said an expansion in refining capacity and the ability to better process lower-cost heavy crude oils helped firm up refining margins in the third quarter. Essar Oil, India’s second largest private refiner, said current price gross refining margin rose to USD 9.75 per barrel at its Vadinar refinery in the western Indian state of Gujarat, up from USD 2.82 per barrel last year. Refining margin at its Stanlow refinery in the United Kingdom rose to USD 5.59 per barrel from USD 2.45 a barrel a year earlier. The company’s oil refining unit, Essar Oil, said last month that EBITDA grew over 8 times to 12.42 billion Indian rupees (USD 231.95 million) for the quarter. Margins at Vadinar rose thanks to an expansion of refining capacity to 405,000 barrels per day from 300,000 barrels, combined with an increased
ability to refine heavier low-cost crude oils into high-value products like diesel and jet fuel. At Stanlow, margins rose as the company improved current-price refining margins by USD 1 per barrel. Essar is aiming to improve current-price refining margins by USD 3 a barrel by 2014. Essar Energy, 77 per cent-owned by privately held Indian conglomerate Essar Group, also said it was working towards meeting conditions laid down by India’s federal government that would allow it to mine coal from the Mahan coal block in the central state of Madhya Pradesh. The company received forest clearance for the Mahan coal block in October, bringing Essar a step closer to supplying coal to its captive power project in Madhya Pradesh.
INPEX Acquires Interest in Bay of Bengal Block Mumbai: Japan’s INPEX has agreed to acquire a 26 per cent participating interest in the exploration block KG-DWN-2004/6 (the Block) in the deep water of Krishna Godavari Basin in the Bay of Bengal, offshore India.
Under the terms of the deal, ONGC, India’s state-owned oil and gas company, will continue to operate the block with a 34 per cent interest, while INPEX will hold a 26 per cent stake in the project.
The company will buy the stake in the block from India’s largest national E&P company, Oil and Natural Gas Corporation Limited (ONGC).
This is the first case for INPEX to participate in oil and gas exploration activities in India since its business integration between the former INPEX and Teikoku Oil Co in 2008.
Cairn India Eyes on South Africa’s Offshore Block Mumbai: PetroSA, the South Africa’s National Oil Company, and Cairn India Group have signed farm-in agreement for exploring for crude oil and natural gas in the offshore Block 1 in the Orange Basin on the west coast of South Africa. The Block 1 covers a large area of 19,922 km 2 and is currently in the initial stages of exploration. It has an existing gas discovery and identified oil and gas leads and prospects. Located in the geologically proven Orange Basin along the northwestern maritime border of South Africa with Namibia, the block is on trend with the discovered Kudu and Ibhubesi gas fields. Cairn India will, through a wholly owned South African subsidiary, hold a 60 per cent interest in the block and will be the Operator, with PetroSA holding the remaining interest.
PetroSA is well poised to grow into a leading integrated African energy company. The company seeks to nurture strategic alliances with experienced international companies across the oil and gas value chain. The partnership with Cairn India starts an exciting new chapter and represents another positive development in that direction. This is a step forward in achieving Cairn India’s strategic goal of growing its resource base by acquiring exploration and appraisal assets outside the Indian sub-continent. The Orange Basin is an emerging hydrocarbon province with potential for material oil and gas discoveries. Block 1 will be an anchor exploration asset in South Africa and will augment Cairn India’s existing portfolio.
GAIL Partners with EDF for US Gas Assets Mumbai: India’s GAIL Ltd has partnered with EDF, a unit of French group, to scout for natural gas assets in the United States as demand in India grows. C Tripathi, Chairman and Managing Director, Gail India, said: “We will be working together for gas trading, gas sourcing and acquisition of gas based assets,” ahead of a visit of Oil Minister Veerappa Moily to the United States. GAIL has signed an agreement with EDF Trading, as Govt enhanced GAIL’s financial powers to allow the firm to take investment decisions of up to 50 billion rupees (USD 940 million) without going to the government, Tripathi added.
GAIL India imports about 80 per cent of its crude needs, and has been scouting for oil and gas assets overseas to satisfy rising local demand and expanding refining capacity. “There are significant opportunities in the North American gas markets and we are pleased to be partnering with GAIL, one of the world’s leading gas companies, in jointly developing this business,” said John Rittenhouse, Chief Executive of EDF Trading. “We are looking forward to building a long term relationship with GAIL,” he said.
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Americas FMC Technologies Secures BP’s Subsea Contract Cuba: FMC Technologies, a provider of technology solutions for the energy industry, has secured an order from BP to manufacture and supply of subsea equipment that support water injection in the Thunder Horse field.
Tore Halvorsen, FMC Technologies’ Senior Vice President, Subsea Technologies
The Thunder Horse oil field is located in the Mississippi Canyon area of the Gulf of Mexico, 150 miles (240 kilometers) southeast of New Orleans in approximately 6,300 feet (1,920 meters) of water.
FMC Technologies’ scope of supply includes two manifolds and associated controls equipment. In addition, the scope includes several pipeline end terminations, flowline and well jumper kits and umbilical termination assemblies. Deliveries are scheduled to commence in the first half of 2013. “FMC Technologies is pleased to continue supporting BP as they further develop Thunder Horse,” said Tore Halvorsen, FMC Technologies’ Senior Vice President, Subsea Technologies.
Petrobras Confirms Oil Discovery in Espírito Santo Basin Brazil: Petróleo Brasileiro SA (Petrobras) has announced oil strike from an extension to the post-salt Indira discovery in Espírito Santo basin. The delineation well – 1-BRSA-882-ESS or Arjuna – is 1,330 km (826 mi) offshore Espírito Santo state and 0.9 km (½ mi) northwest of the discovery well. The Paleocene to Santonian oil reservoirs have a total thickness of 200 m (656 ft) and are approximately 3,679 m (12,067 ft) deep, at a water depth of 2,143 m (7,029 ft). A formation test will assess the productivity of the reservoir. As verified in the discovery well, the oil found is of good quality (29º API). The consortium of concession BM-ES-22A (block ES-M-527), made up by Petrobras (75 per cent), as operator, and Vale (25 per cent), will proceed with the activities and investments set out in the Discovery Evaluation Plan approved by Brazil’s National Petroleum, Natural Gas and Biofuels Agency.
ABB Bags Jurong Shipyard’s Electric Supply Contract Brazil: Jurong Shipyard Pte Ltd has awarded a USD 160 million order to ABB for the design, supply, supervision of installation, testing and commissioning of the main electrical systems for seven drillships that will operate offshore Brazil. The seven vessels are the first in a series of high-efficiency drillships designed for ultra-deepwater operations and to be built by Estaleiro Jurong Aracruz at its shipyard in Espirito Santo, Brazil. The scope of supply includes complete electrical systems including generators, distribution switchboards, transformers, drives, and motors to power the ships’ thrusters and drilling systems. www.oswindia.com
US Congressmen Seek Investigation of Shell Barge USA: A group of US congressmen has sought for an investigation of Royal Dutch Shell PLC’s Arctic offshore drilling operations as salvagers looked for a way to retrieve a company drill ship that ran aground off an Alaska island during a fierce year-end storm. The Anglo-Dutch oil major refused to comment about the long-term future of its controversial Arctic programme, which has so far seen it invest nearly USD 5 billion without even drilling into potentially oil-bearing rocks. The House Sustainable Energy and Environment Coalition (SEEC), which comprises more than 50 Democratic Representatives, called for US authorities to investigate the grounding of the Kulluk rig and a series of other problems that have blighted Shell’s Alaskan operations over the past year. Salvage teams were yesterday preparing to attempt to regain access to the rig, which ran aground off Sitkalidik Island on New Years’s Eve after being hit by a storm while it was being towed to Seattle for maintenance. Snow, which was falling yesterday morning in Alaska, could hinder the attempts, a spokesman for the Unified Command managing the incident said. Salvage visits to the rig earlier in the week revealed water-tight hatches had been breached, and both the service and emergency generators had been damaged, leaving it without power. The rig is carrying thousands of gallons of diesel, lubrication oil and hydraulic fluid but as of yesterday there were no signs of any leaks.
Karoon Strikes Oil at Offshore Brazil Brazil: Karoon Gas Australia Ltd has confirmed an oil discovery offshore Brazil at the Kangaroo-1 well. The well is in blocks S-M-1101 and S-M-1165. Kangaroo-1 was drilled to 3,049 m (10,000 ft) and found a 25-m (82-ft) gross oil column in an Eocene reservoir 300 m (984 ft) downdip from the seismic defined trap crest. Wireline testing is ongoing and a drillstem test is under consideration. Karoon plans wells two and three, Emu 1 and Bilby 1, for its Santos basin drilling programme. These wells will be in blocks S-M-1102, S-M-1137, and S-M-1166. The blocks are 112 km (70 mi) off the Santa Catarina region of Brazil south or Rio de Janeiro in 400 m (1,312 ft) water depth. While Karoon holds 100 per cent interest in the blocks, it has an agreement with Pacific Rubiales Energy Corp to divest 35 per cent interest in blocks S-M1101, S-M-1102, S-M-1037, AND S-M-1165. Pacific Rubiales also has an option to take 35 per cent of block S-M- 1166.
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news GE Oil & Gas Secures Petrobras Contract
Latin America Awaits Major Oil and Gas Investments
Brazil: GE Oil & Gas has secured a USD 500 million contract to supply turbomachinery equipment and services for four new floating production, storage and offloading (FPSO) units of Petrobras, a world leader in deep-water oil production.
Brazil: With major oil and gas opportunities in countries with independent licensing agencies such as Brazil, Colombia and Peru, plus new frontiers with discovery and further oil potential along the Transform Margins of French Guyane and Suriname, large and expanding pre-salt reserves in Atlantic basins, and exploration ventures and company investors growing across Latin America, the 19 th Latin Upstream 2013 in Rio de Janeiro (the longest running oil/gas meeting in South America) will again be a landmark event, along with an in-depth Strategy Briefingon the Continent taking place prior to the main Conference.
The four FPSO units, P-74, P-75, P-76 and P-77, will be deployed in the Cessão Onerosa region of the Santos Basin’s offshore pre-salt fields, in the Brazilian state of São Paulo. GE Oil & Gas will supply the main turbomachinery equipment to the four new FPSOs of Petrobras. GE’s technology will generate primary energy for the FPSOs by using gas turbines and advanced generators, moving gas through pipelines using compressors and re-injecting CO2 and natural gas back to the well to enhance the recovery of the oil. As a part of the contract, GE will source technology from its own businesses, such as Power Conversion and Power & Water, to complete the delivery. In addition, the supply will include 16 powergen turbogenerators composed of PGT25+ gas turbines and electric generators and 8 turbocompression trains driven by LM2500+ gas turbines. GE will also deliver 32 electric motor driven compressors for gas main, export services and CO2 re-injection. GE will also provide technical support for installation and commissioning the start-up, as well as extensive services, which include repairs, dedicated local field service engineers and customer training. The company will carry out packaging, testing, logistics and sourcing operations for its supplies in Brazil, and the installations, where these operations will be held, will start in early 2013. As part of the contract, GE will conduct 9,600 man-hours of training that is required to operate and maintain the equipment.
Petrobras Confirms Commercially of Offshore Campos Oil Fields Brazil: Brazil’s Petrobras has declared two offshore oil fields in the Campos Basin offshore Brazil, holding an estimated 350 million barrels of oil commercially viable. The Aruanã and Oliva areas in concession BM-C-36, block C-M-401, in the post-salt of Campos basin. In the proposal sent to the National Petroleum, Natural Gas and Biofuels Agency (ANP), Petrobras suggests that the Aruana and Oliva fields would be renamed Tartaruga Verde and Tartaruga Mestica, respectively. Aruanã is estimated to hold 230 MMboe and Oliva to hold 121 MMboe. The Tartaruga Verde accumulation is 127 km (79 mi) from the city of Macaé, off the coast of Rio de Janeiro state. It is in 976 m (3,201 ft) of water at a depth of 2,993 m (9,817 ft). Tartaruga Mestiça is 0.5 km (3/10 mi) northeast of Tartaruga Verde in 934 m (3,064 ft) of water and at a depth of 2,870 m (9,416 ft). Both contain 27º API oil in Albian-age carbonate reservoirs.
The 19 th Latin Upstream Conference to be held at the Copacabana Sofitel Hotel in Rio de Janeiro in Brazil from 15-17 May in 2013 and will highlight the most significant opportunities for companies, state oil players, governments and investors, majors, independents, service/supply companies, financiers and traders. The Conference is Latin America’s premier and longest-established international oil and gas business and deal-making exploration event, with an annual attendance of 250 senior-level state and corporate attendees. It focuses on Latin America’s oil, gas and energy landscapes and strategies and evaluates in-depth a range of near to long-term exploration, development, investment and strategy perspectives now in play. The meeting also shows how private and state oil/gas companies and governments will reshape Latin America inside the world’s upstream game. Despite resource nationalism initiatives in Argentina, Bolivia, Ecuador and Venezuela, Latin America accommodates numerous acreage openings, new oil/ gas and LNG projects, plus huge gas developments in gas-prone onshore and offshore basins, and a rising corporate deal-flow. New frontiers offer major oil and gas opportunities. During the Conference key speakers of major corporate and state players focus on Latin gas-LNG and GTL ventures, mature exploration zones, heavy oil and deepwater potential, new plays and opportunities and Latin giants like Venezuela, Brazil and Mexico. Prior to the 19 th Latin Upstream, the 9 th Latin Petroleum Strategy Briefing on May 15 th will provide key insights and an in-depth examination of the competitive upstream oil and gas-LNG strategies in exploration and development in Latin America, and the strategies of corporates, governments and state oil players on the continent.
Petroamerica Confirms Oil Strike in Las Maracas-7 Colombia: Petroamerica Oil Corp has confirmed the production test results from its Las Maracas-7 well in the Las Maracas Field, Los Ocarros Block, Colombia. The well encountered potential net oil pay in the Mirador, main Gacheta and basal Gacheta reservoirs. The basal Gacheta sand and the main Gacheta sand were production tested yielding maximum rates of approximately 1,500 barrels of oil per day (bopd) and 2,500 bopd, respectively. The well is now on production flowing naturally from the basal Gacheta sand. This well has now been placed on production, and the Las Maracas field was producing approximately 9,400 bopd. The Mirador reservoir will be produced later on in the life of the field.
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Africa Fluor-JGC JV Bags Mozambique LNG FEED Mozambique: The 50:50 joint venture of Fluor Corporation and JGC Corporation has been awarded a front-end engineering and design (FEED) contract by Anadarko Moçambique Area 1 Limitada for an onshore natural gas liquefaction facility in the Republic of Mozambique. The project will be located in the Cabo Delgado Province, 2,000 km northeast of Mozambique’s capital, Maputo. Fluor will book its portion of the contract in the first quarter 2013.
The feedstock comes from offshore production facilities at Offshore Area 1, operated by Anadarko, and Offshore Area 4, operated by Eni. The first LNG cargo is targeted for 2018.
The FEED will deliver designs for the initial phase of the Mozambique LNG project of four trains, each train capable of producing 5 million metric tonnes per annum of liquefied natural gas (20 MMTPA total). The project has the potential to expand its capacity up to approximately 50 MMTPA of LNG in the future. This facility is the first LNG project in Mozambique.
Anadarko Moçambique Area 1, Limitada consists of Anadarko Petroleum Corporation (36.5 per cent), Mitsui E&P Mozambique Area 1, Limited (20 per cent), Empresa Nacional de Hidrocarbonetos (15 per cent), BPRL Ventures Mozambique B.V. (10 per cent), Videocon Mozambique Rovuma 1 Limited (10 per cent) and PTT Exploration & Production Plc (8.5 per cent).
Peter Oosterveer, President of Fluor’s Energy & Chemicals Group
“In the region, this is an important and strategic win for both joint venture parent companies,” said Peter Oosterveer, President of Fluor’s Energy & Chemicals Group. “We brought together a talented and experienced team that leverages the combined strengths of JGC’s industry-leading LNG experience with Fluor’s 50-plus year reputation for executing large complex projects in sub-Saharan Africa.”
Afren to Expand Offshore Oil Production in Nigeria Nigeria: Afren plans to develop Okoro field extension oil discovery in offshore Nigeria that the company discovered last year. Afren and partner Amni International Petroleum Development Co proved the extension with a well drilled 2 km (1.2 mi) east of the Okoro main field. It encountered net pay of 549 ft (167 m) of light oil in reservoir sands with average porosity of 30-35 per cent. Last summer, the partners drilled a development well on the extension (Okoro-14) from the field’s existing wellhead platform, which was later brought onstream at 5,000 b/d via the Okoro FPSO. Available wellhead slots on the platform will be used to gain early production information to optimise a fullfield development. This could involve drilling up to eight more production wells. This year the partners intend to drill one infill producer/side track to maximise sweep efficiency of the main field reservoirs, and to start fabrication of a new wellhead platform for full development of Okoro field extension.
early production from the Ebok NFB discovery via the existing facilities. That well has been drilled and is currently being prepared for long-term production. Performance data will again be used to optimise development. Additionally, the partners have brought onstream a new horizontal production well drilled into a previously undeveloped reservoir in Ebok’s central fault block. Three more production wells and a water injector will be drilled on the field this year. Last year, Afren completed processing and interpretation of a 348-sq km (134-sq mi) ocean-bottom cable 3D seismic survey over the entire Ebok/ Okwok/OML 115 lease area. The data will assist an appraisal programme ahead of any development.
Elsewhere off Nigeria, the jackup Adriatic IX transferred to Afren’s Ebok field in November. Its schedule includes drilling a development well to establish
In November, the company and partner Oriental spudded the Okwok-10 appraisal well to assess additional oil potential in an undrilled fault block. The well encountered 72 ft (22 m) of net oil pay in the D Series reservoirs that have proven oil-bearing elsewhere on the Okwok field and which are also in production at the nearby Ebok field.
Kosmos to Drill Offshore Morocco
Tullow Extends West Leo Contract
Morocco: As per its 2013 planned capital programme, Kosmos Energy is preparing for additional geological studies of offshore Morocco and further processing and interpreting of 3D data of already acquired Agadir basin blocks.
Ghana: Tullow plc, the multinational oil and gas exploration company, has extended the contract for Seadrill’s ultra-deep-water semi-submersible rig West Leo for two more years from May-2016 to May-2018. The West Leo is expected to carry out operations in West Africa until the end of its contract.
Funds are also set aside for completion of the company’s acquisition of an extra 37.5 per cent stake in the Essaouira block. The company is targeting first drilling offshore Morocco in late 2013. Off Mauritania, the company expects to start a large 2D seismic survey during the first half of the year, followed by a 3D seismic programme later in 2013. Offshore Suriname, the company anticipates additional spending connected to processing and interpretation of a 3D seismic survey acquired late last year. www.oswindia.com
The potential contract revenue for the extension is estimated to approximately USD 450 million based on 97 per cent utilisation and includes a performance bonus arrangement. This brings the total estimated contract value to USD 1.13 billion. In line with the omnibus agreement terms and conditions between Seadrill and Seadrill Partners, Seadrill is obligated to offer the West Leo to Seadrill Partners at a fair market price.
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news PXP to Participate Exploration Play Offshore Morocco Eni Confirms Commerciality of Oil Discovery in Ghana Morocco: Plains Exploration & Production Company (PXP) announced that it has entered into a definitive agreement to participate in the significant and highly prospective exploration play offshore Morocco. Subject to customary closing conditions including the receipt of Moroccan governmental approvals, PXP will make a cash payment of USD 15 million to farm-in to Pura Vida Energy’s 75 per cent working interest in the 2.7 million acre Mazagan permit area offshore Morocco. PXP will earn a 52 per cent working interest and act as operator in exchange for funding 100 per cent of the costs of certain specified exploration activities that will include a commitment to fund and drill two wells, and if agreed, various additional exploration operations subject to a maximum of USD 215 million. The first exploration well will primarily target the Toubkal prospect and is expected to be drilled in 2014. The Mazagan permit area lies off the coast of Morocco in the Essaouira Basin and includes numerous Mid Miocene and Lower Cretaceous prospects identified based on recently reprocessed 3D seismic data. An independent resource assessment completed by DeGolyer and MacNaughton in September 2012 estimated the gross unrisked mean prospective recoverable resources at over 7 billion barrels, including the 1.5 billion barrel gross unrisked mean prospective recoverable resource Toubkal Mid Miocene prospect.
Chevron, ONHYM Sign Petroleum Agreement Morocco: Chevron Corporation announced that its subsidiary, Chevron Morocco Exploration Ltd, has signed petroleum agreement with Morocco’s Office National Des Hydrocarbures Et Des Mines (ONHYM) for three offshore areas.
Ghana: ENI, the Italian energy company, has confirmed commercial potential after undertaking drilling at its first appraisal well of the Sankofa East oil discovery in the Offshore Cape Three Points (OCTP) block in the Sankofa East discovery area offshore Ghana. The result is important because it confirms the commercial standing of the oil discovery in the OTCP block and the strategic importance of the block for further industrial and economic development in the country. Sankofa East 2A has been drilled 8 kilometers south west of the discovery well Sankofa East X1 and confirmed the extension of the oil accumulation in the Cenomanian sequence. Eni estimates the overall potential of the discovery to be around 450 million barrels of oil in place with recoverable resources of up to 150 million barrels. The data acquisition confirmed the hydraulic communication in the oil prone reservoir between the discovery and the appraisal well. Sankofa East 2A well, which reached a total depth of 4,050 meters, was drilled in 990 meters of water. The well encountered 23 meters of gas and condensate gross pay (17 meters net), and 76 meters of gross oil pay (30° API, 32 meters net) in good sands of cretaceous age. Eni has immediately commenced plans for the commercial exploitation of the oil reserves. There are also ongoing engineering studies for the development and commercialisation of the gas reserves of the block in accordance with the principles sanctioned in the Memorandum of Understanding recently signed by Eni, Vitol and Ghana National Petroleum Corporation (GNPC). Eni estimates overall recoverable resources in the OCTP block of approximately 450 million barrels of oil equivalent including gas, associated liquids and oil.
TGS Starts 3D Seismic Acquisition Offshore Liberia
“We look forward to participating in exploration activities in Morocco, which provides Chevron an opportunity to advance our growth strategy in frontier basins,” said George Kirkland, Vice Chairman, Chevron Corporation. Once awarded, Chevron will acquire seismic data and conduct studies in deepwater areas known as Cap Rhir Deep, Cap Cantin Deep and Cap Walidia Deep located between 60 and 120 miles (100 to 200 kilometers) west and northwest of Agadir, Morocco. The areas encompass approximately 11,300 square miles (29,200 square kilometers) with average water depths ranging from between 330 feet to 14,700 feet (100 meters to 4500 meters). Ali Moshiri, President, Chevron Africa and Latin America Exploration and Production Company, said, “This is an opportunity for Chevron to expand its already strong presence in the region and allows us to acquire further knowledge about promising geology in an emerging area.” Chevron Morocco Exploration Ltd has a 75 per cent working interest in the three areas, with the Office National Des Hydrocarbures Et Des Mines holding the remaining 25 per cent.
Liberia: TGS has commenced acquisition of a 3D multi-client survey, Sunfish, which covers up to 7,800 km 2 of highly prospective acreage in the Harper Basin, offshore Liberia. “This survey provides excellent data coverage for the source prone, syn-rift and early postrift sequences, in this highly prospective area Stein Ove Isaksen, Senior Vice offshore Liberia. TGS has been active in acquiring President, Eastern Hemisphere for TGS data over the West Africa Transform margin for the past decade and this survey demonstrates TGS’ ongoing commitment to grow the seismic data library in Africa,” commented Stein Ove Isaksen, Senior VP Eastern Hemisphere for TGS. TGS is chartering the 12 streamer Polarcus Asima for this survey. The charter will last for approximately six months. Data processing will be performed by TGS and will be available to clients in Q4 2013, prior to the Liberia 2013 Bid Round. The survey is supported by industry funding.
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Russia & EU Do Away with Fuel Subsidies: World Bank Chief Switzerland: While discussing ways to tackle climate change issues at the World Economic Forum (WEF), World Bank Chief Jim Yong Kim has asserted that countries should do away with subsidies for fossil fuels to help mitigate the impact of climate change, he also said that removing them would be ‘politically difficult’. Citing the example of Tunisia, Kim said that fossil fuel subsidies do not help in protecting the poor. “The other issue is that we have fossil fuel subsidies. I was just in Tunisia and they are struggling to find a way to limit fossil fuel subsidies. (They said) that fossil fuel subsidies help richer people who drive cars. “We should be removing fossil fuel subsidies in every country in the world,” the World Bank President said.
World Bank Chief Jim Yong Kim
Aker to Tie-in Sleipner in North Sea to Dagny Platform Norway: Aker Solutions has been awarded a second call-off project under the Sleipner modification portfolio agreement by Statoil, involving tie-in of gas production from the Dagny platform in the Norwegian North Sea to the Sleipner facilities. The Dagny field is 30 km (18.6 mi) northwest of Sleipner East. The USD 118-million contract involves modifications on Sleipner A. Aker Solutions’ offices in Stavanger, Bergen, and Mumbai, will perform the main engineering scope, with prefabrication handled at the company’s yard in Egersund, Norway. Work is under way and the contract is expected to be completed in 2016. The first call-off project, awarded in 2010, involved tying in the Gudrun facilities to Sleipner.
Gazprom Expects Deepwater Firsts for Black Sea Gas Pipeline Russia: Gazprom has held a meeting with Russian pipe manufacturers, concerning requirements for the South Stream pipeline project. This will provide a new route for supplies of Russian gas to Europe, with part of the pipeline crossing the southern part of the Black Sea. According to Gazprom, South Stream will be the first offshore gas pipeline construction project anywhere to feature pipes with a 39-mm (1.5-in) wall thickness designed for an operating pressure of 27.73 MPa (4,022 psi). Additionally, it claims, the water depth of up to 2,250 m (7,382 ft) will be a record for installation of 32-inch diameter pipes.
Participants at the meeting discussed results of tests on experimental large diameter pipe batches designed for South Stream’s offshore section. The results and production specifications were verified by DNV, confirming the feasibility of their production and application during the offshore pipelay. There were further discussions on the possibilities of creating largediameter Х100-Х120 pipes to withstand operating pressure more than 11.8 MPa (1,711 psi) with reduced metal consumption; threaded pipes with leak-proof thread for offshore and onshore gas production; and pipeline fasteners of up to 56-in. diameter for operating pressure of up to 28.45 MPa (4,126 psi).
Shah Deniz Partners to Acquire Stake in TAP Switzerland: The Trans Adriatic Pipeline (TAP) consortium and shareholders – Axpo of Switzerland (42.5 per cent), Statoil (42.5 per cent), and E.ON Ruhrgas of Germany (15 per cent) – have struck an agreement with three of the partners in the Shah Deniz field in the Caspian Sea. This stipulates how the TAP joint venture will be governed by an enlarged shareholder group comprising Statoil, E.ON and Axpo, and Shah Deniz coowners SOCAR, BP and Total. The field trio could take a combined stake of up to 50 per cent. Statoil is also a partner in Shah Deniz.
TAP is one of three planned offshore/onshore pipelines in the running to take gas to Europe from the Shah Deniz II project in the offshore Azeri sector. The others are the Trans Anatolian Pipeline (TANAP) and the South Caucasus Pipeline (SCP). TAP would transport gas from the Caspian region via Greece and Albania and across the Adriatic Sea to southern Italy and onto Western Europe. The project could provide 10-20 bcm/yr (373-706 bcf/yr) of transportation capacity, with options for physical reverse flow of up to 80 per cent, and development of natural gas storage facilities in Albania.
Gassco Unveils Record Gas Reached from Offshore Norway to Europe Norway: Gassco, the operator of offshore pipeline systems, has unveiled that gas exported from fields offshore Norway to terminals in Germany, Belgium, France and the UK reached a record 107.6 bcm (3.8 tcf ) last year. “That reflects high and stable output from the Norwegian continental shelf and strong demand, which confirms in turn that gas from Norway is more attractive than ever,” said Brian Bjordal, CEO, Gassco. Deliveries to Norway’s domestic www.oswindia.com
consumers, however, were down in 2012 to 1.4 bcm (49 bcf ), compared with 1.6 bcm (57 bcf ) in 2011. Shipments of liquefied natural gas and condensate from the west coast processing plants at Kårstø and Kollsnes (via Vestprosess) totaled 7,960,847 metric tonnes (8,775,332 tonnes) in 2012, down from 7,993,309 metric tonnes (8,811,115 tonnes) the previous year.
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South East Asia
Malikai Oil Field Development Plan Gets Green Signal Technip, MMHE Get Malikai Deepwater TLP Contract Malaysia: Development plan for the deepwater Malikai oil field at offshore Sabah in Malaysia is set to moving forward after the oil field developers – Shell Malaysia, PETRONAS Carigali and ConocoPhillips Sabah Ltd – have made the final investment decision to develop the field. The field, in waters up to 500 m (1,640 ft) deep, is part of the Block G production-sharing contract awarded by PETRONAS in 1995. Operated by Sabah Shell Petroleum Co, it is the country’s third deepwater project. The gas field development will require 17 wells drilled from a 23,500 metric tonne (25,904 tonne) Tension-leg Platform (TLP) production facility. This will be the first TLP to be fabricated and installed in Malaysia. The contracts for the engineering, procurement, and construction of the TLP have been awarded. Shell and ConocoPhillips each hold 35 per cent interest in the development while PETRONAS Carigali has the remaining 30 per cent.
Malaysia: A joint venture of Technip and Malaysia Marine and Heavy Engineering has won a contract from Sabah Shell Petroleum to engineer, procure, and construct a TLP for the Malikai deepwater project offshore Malaysia. This TLP will be installed 110 km offshore Sabah, Malaysia, at a water depth of approximately 500 m. The TLP will weigh approximately 26,000 metric tons, incorporating a topsides with facilities to process 60,000 b/d of oil and 1.4 MMcm/d (49.4 MMcf/d) of gas, and a hull. The tendons will be fabricated in the US Gulf of Mexico, and transported to Malaysia for installation at the Malikai field. Technip will lead the joint venture, with engineering and procurement to be carried out at its center in Kuala Lumpur, Malaysia. Hull and moorings engineering will be performed in Kuala Lumpur by Technip MHB Hull Engineering. The Malikai TLP will be constructed and commissioned at MMHE’s fabrication yard at Pasir Gudang in Johor, Malaysia. The work is scheduled for completion in mid-2015.
Keppel FELS Delivers Jackup to Asia Offshore Drilling Afren Starts 3D Seismic in Offshore Seychelles Singapore: Keppel FELS, a subsidiary of Keppel Offshore & Marine, has delivered the new build jackup rig, AOD I, to Asia Offshore Drilling FELS in Singapore. AOD I has been delivered 29 days ahead of schedule and with a perfect safety record. The rig now mobilises to the Arabian Gulf for a contract with Saudi Aramco offshore, with operations due to start in April. This was the first of three KFELS B Class jackup rigs under construction that Asia Offshore Drilling commissioned from Keppel FELS. They are designed to operate in water depths of 400 ft (122 m), drilling depths up to 30,000 ft (9,144 m), and to accommodate a crew of 150. They will feature ‘fit for purpose’ off-line pipe handling and stand building, enhanced mud systems as well as improved deck layouts, greater capacities and upgraded safety equipment.
Seychelles: Afren East African Exploration (EAX), a wholly owned subsidiary of Afren plc, has commenced a major 3D seismic survey offshore in the Seychelles in the Indian Ocean, the first 3D survey to be conducted in the country. The programme comprises two surveys in the company’s license areas A and B, which extend over 14,319 sq km (5,528 sq mi). The first programme, covering 600 sq km (231 sq mi), is on the southern portion of the licenses over the Bonit prospect. It will be followed by a survey on the northern section of the license area, covering 2,750 sq km (1,062 sq mi). Here there appears to be prospectivity in both Cretaceous and Jurassic intervals. Afren, the operator, holds 75 per cent stake in the block and Avana petroleum has the remaining 25 per cent.
CNOOC Forecasts to Startup 10 Fields in Offshore China China: China National Offshore Oil Corporation (CNOOC) is targeting net production in the range of 338-348 million barrels of oil equivalent (MMboe) range in 2013, while the net production for 2012 is estimated to be 341 to 343 MMboe in 2012.
Zhong Hua, Chief Financial Officer, CNOOC
The company expects to bring on stream 10 new oil and gas fields offshore China, including the Liwan 3-1, the country’s first large-sized
deepwater gas field. Another highlight should be the startup of the Suizhong 36-1 Phase II adjustment project, which relates to fields already in production. In 2013,
CNOOC expects to drill about 140 exploration wells, acquire about 15,400 km (9,569 mi) of 2D seismic data and 24,800 sq km (9,575 sq mi) of 3D seismic, and to pursue further deepwater exploration. The company aims to maintain its reserve replacement ratio of more than 100 per cent. The company expects its total capex to reach USD 12-14 billion, with exploration, development and production accounting for about 19 per cent, 70 per cent and 11 per cent, respectively. Zhong Hua, Chief Financial Officer, CNOOC, said: “While the operating cost for the energy sector keeps rising up, the company will continue to execute stringent cost control and prudent financial policy. Meanwhile, we will maintain a robust capital expenditure plan to support our production and reserve growth in the future.”
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Aramco Launches Jackup Rig to Drill Offshore Saudi Saudi Arabia: Saudi Aramco has launched the latest state-of-the-art jackup rig for drilling. Keppel FELS in Singapore completed the rig three months ahead of schedule. It is the second rig owned and fully operated by Saudi Aramco, and the first designed and purpose built for service on fields offshore Saudi Arabia. The rig will be able to accommodate 114 personnel. Its jackup legs are more than 400 ft (122 m) long, allowing it to operate in the deepest Saudi
offshore fields of Marjan, Karan, Arabiya, and Hasbah, with capability to drill to subsurface depths of up to 30,000 ft (9,144 m). Other features include six plus one engines/generator sets, which can be used to power the entire rig. Additionally, there is an emergency generator for backup. The 54-motor jacking system should allow the rig to carry a greater load than normal 36-motor rigs. Its water cooling system should facilitate faster heat removal than traditional rig air cooling systems.
Kreuz Wins Southeast Asia Subsea Contract Singapore: Singapore’s Kreuz Holdings Limited, an integrated subsea service provider for the oil and gas industry, announced that it has been the recipient of subsea installation contract awards worth USD 15.5 million for projects in Southeast Asia. This comprises a USD10.0 million project from a third party client, a leading offshore customer, and USD 5.5 million contracts from the Swiber Group. The USD 10.0 million project is scheduled for immediate commencement with completion in the first quarter of 2013, while the USD 5.0 million contracts
are slated for commencement in the second or third quarter of 2013 with completion in the third quarter of 2013. Kurush Contractor, Executive Director and CEO of Kreuz commented, “These positive wins are our first in this new year of 2013, and reflects Kreuz’s favourable standing in the oil and gas industry. Kreuz will continue to seek opportunities in winning new work to increase the Group’s order book, establish new relationships, and enhance our track record and utilisation of assets.”
Lamprell Completes Construction of Greatdrill Chaaya PTTEP Awards Mozambique LNG FEED Contract UAE: Lamprell, a leading provider of diversified engineering and contracting services to the onshore and offshore oil & gas and renewables industry, announced that it has completed the construction of the jackup rig ‘Greatdrill Chaaya’ and its delivery to Greatship Global Energy Services Pte Ltd (Greatship). The Greatdrill Chaaya, weighing 10,394 tonnes at delivery, is a LeTourneau Super 116E (Enhanced) with a self-elevating, 477 ft leg design. To allow the unit to operate in India’s offshore water, Lamprell modified the spud can design in order to reduce the soil bearing pressure.
Thailand: PTT Exploration and Production Public Company Limited (PTTEP) revealed that PTTEP AI, a subsidiary of PTTEP, and its joint venture partners have awarded Front End Engineering Design (FEED) contracts for both onshore LNG (liquefied natural gas) construction and offshore installation for its newly acquired block ‘Rovuma Offshore Area 1’ in Mozambique which contains the vast natural gas resources discovered currently estimated to hold between 35 and 65 plus trillion cubic feet of recoverable natural gas.
Peter Whitbread, CEO, Lamprell
With this delivery, the Group has now completed a total of 12 new build jackup drilling rigs, 5 of the ‘LeTourneau Super 116 E’ design and 7 of the ‘Friede & Goldman Super M2’ design. The Group has 7 more LeTourneau rigs at various stages of construction. Commenting on the delivery, Peter Whitbread, CEO, Lamprell, said: “I am pleased to be marking the completion and delivery of this rig to Greatship. We proceeded on the basis of an aggressive fabrication schedule and so we have achieved an excellent result with this completion as per the client’s requirements and on budget. It is further evidence of Lamprell’s capabilities and competencies in this core business. We are proud that Greatship has chosen to partner with Lamprell for this latest addition to their jackup fleet and we hope to continue building on this relationship in the future.” www.oswindia.com
The competitive Onshore LNG FEEDs will be performed by 3 consortiums comprised of (1) a joint venture comprised of JGC Corporation and Fluor Transworld Services (2) a joint venture between an affiliated company of CB&I and Chiyoda Corporation, and (3) International Bechtel Co, which will deliver of a full engineering, procurement and construction plan, and a lump sum turnkey price for an initial LNG development that will include two liquefaction trains for the Rovuma Offshore Area 1 joint venture with capacity of 5 million tonnes of LNG per annum (MMTPA) per train, as well as associated common facilities. The FEEDs will also develop an overall LNG Park plan allowing the capability to produce approximately 50 MMTPA in the future years. The competitive Offshore Installation FEEDs will be performed by another 3 consor tiums comprised of (1) Technip USA, Inc (2) a joint venture comprised of Subsea 7 (US) LLC and Saipem SA, and (3) a joint venture comprised of McDermott, Inc and Allseas USA Inc, which will deliver of a full engineering, procurement, installation and commissioning plan for subsea production systems.
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Middle East Total Inks Exploration Pact in Cyprus Cyprus: French company Total has signed two production sharing contracts (PSCs) with the Republic of Cyprus to explore oil and gas reserves in plots 10 and 11 in the island’s Exclusive Economic Zone (EEZ).
Arnaud Breuillac, Senior Vice President, Middle East at Total Exploration & Production
The PSCs were awarded as part of the second offshore exploration licensing round, launched by the Cyprus government in 2012. The licenses extend over 2,572 sqkm and
2,958 sqkm respectively, southwest of Cyprus, in water depths ranging from 1,000 to 2,500 meters. The exploration programme will begin with seismic surveys. “We are delighted with this new exploration acreage, where we will be conducting an extensive seismic programme, shooting 3D seismic on Block 11 and 2D seismic on Block 10. Each block is targeting a different play”, commented Arnaud Breuillac, Senior Vice President, Middle East at Total Exploration & Production. “This acreage acquisition is aligned with Total’s ambitious exploration strategy focused on new acreage and plays.”
OPEC Crude Oil Production Dips to 30.4 mn bpd in January 2013 Saudi Arabia: Crude oil production from the Organization of the Petroleum Exporting Countries (OPEC) has dipped to 30.45 million barrels per day (bpd) in January 2013 from 30.65 million bpd in December 2012, further fall in volumes fron Saudi Arabia, according to a survey of OPEC and oil industry officials and analysts by Platts. Saudi Arabia reduced output to 9.25 million bpd in January from 9.45 million bpd in December. The January level was the lowest since an estimated 9.05 million bpd in May 2011. Lower Saudi output in recent months largely reflected the seasonal reduction in direct burning of crude oil for electricity. The January estimate is down some 750,000 bpd from the recent production peak last August. “This report is yet another affirmation that Saudi Arabia is willing to narrow what had looked like a big gap between supply and demand almost completely
from its own production,” said John Kingston, Platts Global Director of News. “All data a few months ago was pointing to a gap that looked large; now, it’s a lot smaller. And the biggest factor in closing that gap has been a reduction from Saudi Arabia.” Other smaller output reductions came from Algeria, Kuwait, Qatar and Libya, the latter affected by a strike at the Zueitina terminal which damped exports. Combined, the total volume of output decreases were 300,000 bpd. However, this was partly offset by production increases totaling 100,000 bpd from Angola, Iraq and Nigeria. The January production total leaves OPEC output 450,000 bpd greater than the oil-producing organization’s notional 30 million bpd output ceiling, in place since January 2012.
CIS Acquires Al-Shaheen Weatherford’s Installation Egypt Govt Approves Further Development of Services Contract Nefertiti Project Qatar: Conductor Installation Services (CIS), an Acteon company, has acquired a USD multi-million contract via an agreement with Al-Shaheen Weatherford, a joint venture between Al-Shaheen Holding (a subsidiary of Qatar Petroleum) and Weatherford Holding BVI (a subsidiary of Weatherford International Ltd) to provide conductor-driving and cold-cutting services for approximately 55 wells located offshore Qatar on behalf of a major operator in the region. The three-year contract, which features two one-year options to renew, will be carried out by CIS personnel from its base of operations in Doha, Qatar. CIS will use state-of-the-art 90 kJ hydraulic hammers to drive the 20-inch conductors that will create part of the foundations of the new wells. To ensure that work proceeds as planned, CIS will supply a complete set of 90 kJ hydraulic hammers, as well as a backup set and buffer set, in the event that two separate operations must be carried out simultaneously. CIS anticipates that the first installation operation will take place at the end of Q1 2013.
Egypt: Egypt’s government has approved further development of the offshore Nefertiti oil field in the Gulf of Suez, after it successfully completed the appraisal well. Dana Petroleum, the Scotland-based oil & gas company, in partnership with Japan-based oil and gas company INPEX, successful completed the exploration of Nefertiti-2X well at the end of 2012. That well tested at a maximum stabilised flow rate of 1,850 bpd with an electrical submersible pump. When the field comes onstream around mid-year, it should produce about 2,500 bpd. Dana’s Managing Director in Egypt, Nick Dancer, said, “The Nefertiti field is a first for Dana in that it is an offshore field that we have explored by drilling extendedreach wells from an onshore location. Whilst increasing the complexity of the wells, it reduces the drilling and subsequent development costs and reduces development time as well as protecting the offshore environment including a number of coral reefs.” “I’m delighted we’ve been given the green light to progress the development, and also undertake further drilling in the area to test a different play concept in the Nefertiti field,” Dancer added.
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BG Group Sanctions WDDM’s Phase 9 Development Egypt: BG Group has sanctioned a next phase of development for the West Delta Deep Marine (WDDM) concession in the Egyptian sector of the Mediterranean Sea. Since 1994, BG Group has discovered 14 gas fields in the concession. Produced gas heads to Egypt’s domestic market, Egyptian LNG at Idku, and the Damietta LNG plant. In 2010 BG started work on the Phase 7 facilities, comprising a new 68-km (42 mi), 36-inch offshore pipeline and associated onshore gas reception facilities, a slug-catcher adjacent to the two existing WDDM pipelines, and
five new compressors. Flow through the new pipeline started in 2011, with the compression plant becoming operational in January 2012. Last June, gas production from the Phase 8b deepwater development project came onstream. This is an extension of the existing deepwater subsea infrastructure and involved tying in eight subsea wells. Once completed, WDDM is due to have 51 subsea wells in service. According to BG, Phase 9 is next in line, taking in additional infill wells, new development wells, and further workovers.
Lamprell to Build Dev Drilling’s New Jackup Rig UAE: Lamprell has received an order to construct a new jackup rig for Dev Drilling Pte Limited, a Jindal Group company.
Hamriyah yard, with construction forecast to take 18 months. This is the second rig the company is constructing for Dev Drilling’s parent company Jindal Group, the first being due for delivery this November.
The fully outfitted and equipped LeTourneau rig will be of a Super 116E Class design, capable of operating in water depths of up to 350 ft (107 m) and with a rated drilling depth of 30,000 ft (9,144 m). Lamprell will build the rig at its
Jindal has an option for Lamprell to build a further jackup rig, exercisable within six months of the effective date of the contract.
Deepwater Tamar Project to Start in April 2013
Iran to Develop Forouz B Offshore Oil Field
Israel: Noble Energy has updated the status of its deepwater Tamar gas development in the Levantine basin offshore Israel. The Tamar jacket and topside facilities were installed in December and commissioning operations are under way. Production is expected to start in April 2013 and will be combined with Charles D Davidson, Noble Energy’s output from the nearshore Mari-B platform Chairman and CEO production to meet Israel’s growing domestic demand. Noble continues appraisal drilling of the deepwater Leviathan discovery with the Leviathan 4 well. Charles D Davidson, Noble Energy’s Chairman and CEO, said: “To support future growth, we intend to sanction this year another wave of major projects that will likely include a Phase 2 of Tamar in Israel and a Phase 1 of Leviathan also in Israel.”
Iran: Iranian Offshore Oil Co (IOOC) plans to develop the gas layer of the Balal oil field. Work to produce oil from Balal started in 2001. IOOC aims to extract 500 MMcf/d (14 MMcm/d) of gas from the field, where reserves are estimated at 6 tcf (170 bcm), with 183 MMbbl of condensate. Balal is offshore Lavan Island in the Persian Gulf. After blending its oil with crude from the offshore Salman field, production is sent to Lavan via a 100-km (62-mi), 14-inch pipeline for processing and export. Elsewhere in the region, Mapna Co has completed a 3D seismic acquisition programme over the offshore Forouz B gas field, ahead of a planned development. The location is close to Qeshm and Kish islands. Gas produced from Forouz B will be sent to Qeshm for processing to generate electricity on the island. Mapna signed a development contract with IOOC. Forouz B has in-place gas estimated at 28 tcf (793 bcm), and 180 MMbbl of gas condensate.
Kurdistan to Resume Oil Exports via Turkey Kurdistan: Iraq’s semiautonomous Kurdistan region is planning to restart controversial exports of crude oil and condensate through Turkey, the Kurdistan Regional Government (KRG) said.
to a row over payments with Baghdad. “We want to have an oil pipeline to ourselves,” said Ashti Hawrami, Kurdish Minister for Natural Resources. “It is currently in the works and we will continue until it is completed.”
A long-running dispute between Baghdad and Kurdistan caused the KRG to halt exports of some 200,000 barrels a day via the Baghdad pipeline. Crude from the Kurdistan region used to be shipped to world markets through a Baghdad-controlled pipeline to Turkey, but exports via that channel dried up in December 2012, from a peak of around 200,000 barrels per day (bpd) due
He said export volumes would amount to around 20,000 barrels a day of crude oil and 10,000 to 15,000 barrels a day of condensate. Kurdistan’s current production capacity is between 350,000 and 400,000 barrels a day of crude oil. He also said the KRG is in advanced discussions with at least three ‘significant’ oil companies that want to invest in Kurdistan.
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Australia/NZ
Tap Oil Reports Increase Gas Found at Tallaganda Vicinay to Supply Anchor Chains for INPEX’s Ichthys Offshore Western Australia LNG Project Australia: Following a review of a preliminary assessment, Tap Oil Ltd has reported the gross volumetric recoverable gas reserves to be 500 bcf in the WA-351-P part of the Tallaganda structure offshore Western Australia. This includes 222 bcf of P50 contingent and 278 bcf of P50 prospective resources. Tallaganda-1 was drilled in second quarter of 2012 and confirmed a gas discovery in the Triassic Mungaroo formation of the Tallaganda structure within WA-351-P. The structure straddles the adjacent WA-335-P permit to the south. A comprehensive suite of wire line logs, including formation image logs, a wire line pressure survey and formation fluid sampling program were acquired in the well.
Troy Hayden, Managing Director and CEO, Tap Oil
The southern portion of the Tallaganda structure that extends into WA-335-P has not yet been drilled. The geological assessment of the Tallaganda discovery and remaining block potential is continuing and there are no current plans to drill in WA-351-P in 2013. Both WA-351-P and WA-335-P are operated by BHP Billiton Petroleum Pty Ltd. “We believe there are a number of other prospects on-block within the Triassic Mungaroo formation that could be considered for further drilling to aggregate additional gas volumes,” said Troy Hayden, Managing Director and CEO, Tap Oil. “Additional leads and prospects have also been identified in the Jurassic and Early Cretaceous section.”
Eni Commits to Drill Blackwood Well Australia: MEO Australia Limited advises that Eni Australia Ltd (Eni), operator of exploration permit NT/P68, has provided notice under the NT/P68 Farm-in Agreement (FIA) dated 17 th May 2011 that it will proceed with the drilling of a well in the Blackwood area of the permit. The well will evaluate the 2008 Blackwood gas discovery. MEO has a 50 per cent participating interest in the well which will be 100 per cent funded by Eni including production testing. Eni has 18 months from the date of election to drill the well. Jürgen Hendrich, CEO and Managing Director, MEO Australia, commented on the announcement: “The election by Eni to commit to evaluating the Blackwood gas discovery is a key milestone in the context of the Farm-in Agreement and the potential for the Blackwood resource to underpin a commercial development.”
Australia: Vicinay, the Bilbao-based company, is to supply anchor chains for the mooring lines of INPEX-operated Ichthys LNG project in offshore northwest Australia. Vicinay is manufacturing more than 25,000 metric tonnes (27,558 tonnes) of chain for the 28 mooring lines for the central processing facility (CPF), the world’s largest semisubmersible Seiya Ito, INPEX President Director platform, and 15,000 metric tonnes (16,534 Australia tonnes) of chain for the associated floating production, storage and offloading (FPSO) vessel. First steel plates for the hull of the CPF were cut late last month at Samsung Heavy Industries’ plant in South Korea. When complete, the platform will measure 150 x 110 m (490 x 361 ft), with a displacement of 140,000 metric tonnes (154,323 tonnes), and gas export capacity of 1.7 bcf/d (48 MMcm/d). Seiya Ito, INPEX President Director Australia, said: “The CPF hull size is nearly at the limit of what the biggest shipyards can build in their dry docks today.” Earlier, first steel for the FPSO’s turret was cut in Singapore. The vessel will be able to store around 1.2 MMbbl of condensate. INPEX expects the facilities to sail from Geoje to Australia in late 2015, with first gas slated for end-2016.
AWE to Drill Two Additional Offshore Wells New Zealand: AWE Ltd, an Australian-based oil and gas exploration and production company, announced that the PMP 38158 (Tui) Joint Venture has approved to drill two more wells – Pateke-4H infill development well and Oi exploration well – in offshore New Zealand in the second half of this year. Operator AWE has secured the Kan Tan 4semisubmersible drilling rig, operated by Frigstad Offshore, to drill both wells. The Pateke-4H will be an infill well targeting a northern extension of Pateke field. It is planned for a measured TD of 6,900 m with a 2,500 m horizontal section. The Oi exploration well targets a four-way dip closure created by a compaction drape over an underlying basement high, similar to structures at Tui, Amokura, and Pateke fields where it produces from F10 sandstones. Oi will be 13 km northeast of the Tui FPSO. Partners in PMP 38158 are AWE, Mitsui E&P Australia Pty Ltd, New Zealand Oil & Gas and Pan Pacific Petroleum with 42.5 per cent, 35 per cent, 12.5 per cent and 10 per cent, respectively stake interest.
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COMBUSTIBLE LEAK DETECTOR
GAS DETECTOR Gas detector is a transportable multi-gas monitor designed to protect all personnel working within a hazardous area. Units can be used singly or linked together to give area or fence protection. Extremely loud and clear alarms can be easily seen and heard, even at a distance. The high intensity LED clusters and panel warning lights pinpoint the hazard by flashing rapidly. Linked detectives also go into alarm mode, but until they detect the hazard locally, they flash more slowly. This allows workers to exit the area by the safest route. The alarm tones of detective can be customized to suit every situation and an audiovisual confidence blip indicates safe working. The unique tubular steel tripod design ensures that the detectors are effectively shielded from impact and water even when overturned. This makes detective suitable for use in the harshest field conditions. A large text display gives clear unambiguous information and as four gases can be shown simultaneously, multiple hazards are easily tracked. For details contact: Vedee Associates No: 31, 3 rd Floor, Sitaram Complex Opp: L&T Chiyoda, Chhani Vadodara, Gujarat 391740 Tel: 0265-3014720
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The Model CLD20 offers visual LED indication of leak level and automatically recalibrates when turned off and on. Flexible gooseneck and small sensor head allows use in tight, difficult to reach areas. For details contact: A L M Systems 304, Damji Shamji Indl Complex, 9, L B S Marg Kurla (W), Mumbai 400 070 Tel: 022-25126500, 25126700, 25126900
SINGLE POINT GAS DETECTOR Capital Controls India single point gas detector, Series 1610B provides continuous detection of chlorine or sulphur dioxide gas in a normally clean air environment. Model 1610B gas detectors are ideal for protection of personnel and property wherever chlorine or sulphur dioxide is unloaded, stored or used. Highly sensitive, the detector monitors gas levels below OSHA requirements for either chlorine or sulphur dioxide gas.
LPG LEAK DETECTOR
For details contact: Sannidhi Systems 1, A-Z Manzil Bldg Nr Little Flower Hosiptal Rammurthy Nagar Bengaluru, Karnataka 560 016 Tel: 040-42000471
Model CLD20 combustible leak detector unit provides accurate detection of Methane, Butane, Ammonia, Ethylene Oxide, Alcohols, Industrial Solvents and other combustible or toxic gases. Adjustable tick rate accelerates as the sensor tip approaches a leak and can be re-zeroed to pinpoint the exact location of the leak.
The risk of an LPG leak is high and prone to cause a heavy damage. This gadget detects the LPG leak at different levels and indicates the same.
The sensor responds immediately to the presence of gas, and quickly recovers after the gas has cleared. The sensor is also designed to eliminate false alarms caused by interference gases and environmental conditions.
When it reaches the critical level it flashes the red light with a siren, which gives the user an indication of danger.
Series 1610B design includes protection against radio frequency / electromagnetic interferences (RFI/EMI) typically present at industrial and municipal plants. The modular design for the gas detector provides easy installation of the receiver and sensor module. For details contact: Capital Controls India Pvt Ltd 15/AJ, Laxmi Indl Estate Link Road, Andheri (W) Mumbai 400 053 Tel: 022-40910000, 26360066
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products
GAS LEAK DETECTOR
LPG CONVERSION KITS Liquefied petroleum gas is mostly propane when used for automotive purposes. It is produced as a by-product of natural gas processing or oil refining, and is often used as a bottled gas for cooking and heating.
Somya Pyrotek Services offers LPG gas leak detectors that feature GD Series gas leak alarm that is a kind of wall-hung household gas alarm which is designed to detect concentration of combustible as well as toxic gases/vapours. It also helps in providing visual and audible signals when gas concentration reach es presetting level, thus remind you to take prompt favourable action. For details contact: Somya Pyrotek Services No: 102-A, T C Jaina Tower-3, A-1-Block Janak Puri, New Delhi 110 058 Tel: 011-25521363, 25541363
LPG AUTOMATIC SHUT OFF DEVICE Indus International offers LPG automatic shut Off device for lpg cylinders, which save life and gas as well. The shut off mechanism works on the bernoulli principle. A sudden increase in gas flow changes the pressure around the shut off element, lifting it up and causing it to plug the exit to the chamber and stop the flow of gas completely. The shutoff element will stay in this position until you push down on the gauge. The gauge pin then pushes the shutoff element back down into the chamber, so resetting it ready for normal operation. For details contact: Indus International E-133, Greater Kailash-1, New Delhi 110 048 Tel: 011-41633313
ROTARY SLIPS Rotary slips are used on oil field rigs to hold the tubular firmly in the rotary table while carrying out specific operations. The slips are denoted as per their usage/ handling of tubular, ie, drill pipe slips, drill collar slips, tubing slips and casing slips. These are then classified as per size of the tubular used and depth of the wells. For details contact: Autobahn Industries 819, 9 th Chopasni Road, Jodhpur, Rajasthan 342 003 Tel: 0291-2640339, 2435239
LPG is mainly used in cars and light vans. This means they have separate tanks for the LPG and petrol, and can operate on either fuel simply by flicking a switch. Running solely on LPG will however provide the greatest environmental and financial benefits although a small amount of petrol will be needed as most LPG vehicles start up on petrol and then switch over to LPG after a few seconds. In India the supply is as per BIS : 14861. For details contact: CNG Auto Point A-297, 298, Budh Vihar, Badarpur New Delhi 110 041 Tel: 011-26294316
OIL PURIFICATION & CLARIFICATION SYSTEM HMT manufactures compact oil purification and clarification system. Its application finds its best use in curbing expenditure of oil to its fullest advantages by recycling and reusing the spent oil through this recovery system. The oil purification and clarification system OPCS-01, Capacity : 1000 lph is well suited for purification and separation of water from mineral oil, as well as for separation of liquid mixtures, or for the purification of fluid from solid constituents (dirt, dust, etc). Separation of the two liquid phases from the solid content/impurities and separating the two liquid phases from each other too is achieved by choosing the suitable regulating disc. Separation of the solid content/impurities from the liquid phase is achieved by minor manual adjustment in the purification bowl. HMT’s unique bowl design makes it possible to use the separator both as purifier and as clarifier with minor adjustments only. For details contact: HMT Ltd H-2, MIDC, Chikalthana Indl Area Aurangabad, Maharashtra 431 006 Tel: 0240-2485008, 2485596 Fax: 91-0240-2485007
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OIL PURIFIER
OIL PURIFIERS
An oil filter is a filter to remove contaminants from engine oil, transmission oil, lubricating oil, or hydraulic oil. Oil filters are used in many different types of hydraulic machinery. A chief use of the oil filter is in internal-combustion engines in on- and off-road motor vehicles, light aircraft, and various naval vessels.
M Harakhji & Sons offers oil purifiers. This range of purifiers has gained wide appreciation in the market for their trouble-free operation and durability. Further, M Harakhji ensure to deliver the consignments within the postulated time period, with the aid of highly adept logistic personnel. For details contact: M Harakhji & Sons 255, Madhavdarshan Waghawadi Road, Bhavnaga, Gujarat 364 002 Tel: 0278-2424591, 2524407; Fax: 91-0278-2429503 E-mail: harakhji@gmail.com
HYDROCARBON RECOVERY SYSTEMS Membrane hydrocarbon recovery system is used in vapour separator. Vapour separator is an innovative and patented membrane based process for separating and recovering hydrocarbons from light gases such as nitrogen, hydrogen or methane. The enabling technology is a reverse selective membrane that preferentially permeates the larger hydrocarbon vapours compared to the smaller light gases. Hydrocarbon recovery system is used to recover valuable hydrocarbons and to purify the light gas for reuse within the process. Applications for vapour Separator are found throughout the refinery, petrochemical, fertilizers, natural gas industries. Vapour separator process combines membrane vapour separation with compression condensation. The feed gas is compressed and cooled, condensing a portion of the hydrocarbons. The liquid is recovered for reuse and the remaining gas, which still contains a significant amount of hydrocarbon is fed to the vapour separator membrane. The membrane separates the gas into two streams: a permeate stream containing most of the hydrocarbons and a residue stream which contains the purified light gas. The permeate is recycled to the inlet of the compressor while the residue stream is vented or reused. Some vapour separator systems are even simpler, consisting of only membranes. This reverse selective membrane allows large hydrocarbon molecules to permeate much faster than smaller molecules such as nitrogen, hydrogen or methane. The reverse selective effect is due to the higher solubility of large hydrocarbon molecules in the specific vapour sep polymer. For details contact: Mixrite Mixing Systems 22 New Apollo Estate, Mogra Lane, Andheri (E), Mumbai 400 069 Tel: 022-32935534, 28365726, Fax: 91-022-28365726 www.oswindia.com
Other vehicle hydraulic systems, such as those in automatic transmissions and power steering, are often equipped with an oil filter. Gas turbine engines, such as those on jet aircraft, require the use of oil filters. For details contact: Alang Hub Alang-Bhavnagar Talaja, Gujarat 364 001 Tel: 02842-235055
OIL PURIFIERS Shree Trading Co is listed at the apex in the list of the prominent oil purifier machine exporters. Va r i o u s c l i e n t s a re placing bulk orders for the oil purifiers - oil separator centrifugal as no alternative is available for the same in terms of qualit y and performance. Shree Trading Co sources the oil purifiers from the well-reputed vendors and also facilitates the clients with the availability of the hydraulic oil purifiers loaded with all the advanced features. For details contact: Shree Trading Co No: B-102, Adarsh Complex Jail Road, Nr Nilam Baug Bhavnagar, Gujarat 364 001 Tel: 0278-2522235
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products
GAS FLOW METER
OIL PURIFIER These meters are manufactured by using best quality raw material and sophisticated technology at the vendors’ end. Known for their digital quality, the meters offered are widely demanded by the customers. Vsquare Automation & Controls offers these meters in varied specifications in order to meet the
specific requirements of their customers.
The hnp-021 has been developed as a conditioner for hydraulic, lubrication and dielectric oils. It removes free and dissolved water, dirt, and free and dissolved air/gases. This portable unit is compact and easy to use. The hnp oil purifier provides a wide range of opportunities for cost savings including: increased equipment uptime, improved machine performance, reduced component replacement costs, reduced maintenance labour costs, and lower oil replacement and disposal expense.
For details contact: Vsquare Automation & Controls Survey No: 48/1, Narhe Road Manajinagar Opp: Aditya Institute of Management Pune, Maharashtra 411 041 Tel: 020-32345560 E-mail: sales@vsquareautomation.com / vsquareautomation@gmail.com
For details contact: Pall Corporation Sumer Plaza, 6 th Floor Cts 419, Village Marol Marol Maroshi Road, Andheri (E) Mumbai 400 059 Tel: 022-67995555
FLOW MEASUREMENT EQUIPMENT
OIL FILTER Oil filters provide optimum protection for the engine. Increasing engine performance and at the same time reducing fuel consumption places high demands on engine building.
KDM Instruments offers series of f l o w m e a s u re m e n t e q u i p m e n t made from premium qualit y raw m a t e r i a l s . T h e y a re w i d e l y demanded and used in the national and international markets. Their flow measurement equipment has various features like:broad dynamic flow range; choice of single, hands-free continuous or user-specified Burst measurements’ time intervals between measurements for checking personal sampling pump stability over a typical sampling period; and field-friendly, rugged and lightweight design featuring a large, illuminated liquid crystal display and intuitive menu navigation. For details contact: KDM Instruments No: 4/5, Sarva Priya Vihar New Delhi 110 016 Tel: 011-26961765, 26514107
Only clean oil can ensure that engine performance remains consistent. That is where the full effectiveness of MANN is really brought to bear. Oil filters reliably purify oils from dirt and solid particles such as dust, abraded metal, carbon deposits, soot particles, etc. For details contact: Asha Automine Pvt Ltd 101 Fortune Chambers Silicon Valley, Image Gardens Road Madhapur, Hyderabad Andhra Pradesh 500 081 Tel: 040-40030555, 40030556, 40030557
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LPG TANK
LPG BULLET TANKS Hari Krishna Enterprise offers superior qualit y LPG Tank, which is used to store LPG gas in large amount. These tanks are highly durable and are designed for the safe storage of LPG. These tanks are sourced from reliable vendors of the market. Also undertake
installation and fabrication work. For details contact: Hari Krishna Enterprise No: 214, Auto Point Nr Lodhawad Chowk Police Station Rajkot, Gujarat 360 002 Tel: 0281-3017680; Fax: 91-0281-3017680 E-mail: dharmeshjobanputra@yahoo.com / harikrishnaentp@gmail.com
LPG bullet tanks are the huge capacitive tank like structures which are named after its specifically designed shape in the form of bullet. These LPG bullet tanks are used for the purpose of saving the liquid petroleum gasses in a safe and efficient manner. These LPG bullet tanks are robustly manufactured by using top grade materials which are tough and tensile. Mukul Engg Works is offering these LPG bullet tanks at very reasonable range of prices. These LPG bullet tanks are very much purposeful in several industrial utilities. For details contact: Mukul Engineering Works A-60, MIDC, Addl Ambarnath East Thane, Maharashtra 421 506 Tel: 0251-2621846, 2620035, Fax: 91-0251-2621846
ONSHORE RIG Nextgen Oil & Gas Pvt Ltd provides onshore rig services that focus on drilling a surface hole from the starter hole to a pre-set depth, which is above the location of the oil trap. This drilling bit is attached to a drill-string, which is designed by using tubular elements and is screwed on with the advancement in drilling. The derrick or the working area on the rig is used for manipulating and suspending the drill-string.
LPG MULTI VALVES OMB Saleri Valves India Pvt Ltd offers quality range of LPG multi valves - ST 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. Features multi valve compatible with the following tanks - cylindrical 300, cylindrical 900, toroidal 00, toroidal 300, toroidal 370; equipped with thermal safety, PRD, manual tap, gas filter, check valve, cut-off valve, excess flow valve, over pressure device and 80% fill stop safety. 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 www.oswindia.com
The drilling can be started by using a large bit attached to the drill-pipe or collar. After it reaches a desired depth a new drill-pipe can be added for drill-string. Process should be repeated until a preset depth is achieved. Steel casing helps in casing the well-bore and is cemented and lowered for controlling fluids emitted from the well. Next drilling stage includes lowering of a small diameter drill bit into the bore of surface casing. The diameter of the cased hole decreases. Regular replacement of drilling bit is essential and it involves withdrawal of the entire drill-string. Drilling log, thus, maintained is of great value to geophysicists and geologists. For details contact: Nextgen Oil & Gas Pvt Ltd 109, Nigos Bldg, Cama Estate Opp: PNB, Goregaon (E) Mumbai 400 063, Tel: 022-26852197, 26852641
Offshore World | 66 | DECEMBER 2012 - JANUARY 2013
products
LPG GAS LEVEL INDICATOR
VERTICAL DRILLING RIGS
Blue Chip Marketing & Consultancy is one of the leading manufacturers of LPG gas level indicator. These indicators are manufactured by using quality raw material as well as cutting-edge technology.
In the field of geothermal energy, deep drilling rigs have a broader range of tasks to perform than drilling rigs for mineral oil and natural gas. Herrenknecht Vertical, a member of the Herrenknecht group, specialises in the construction of deep drilling rigs which it designs and manufactures to customers’ specific requirements.
These indicators are widely known in the industry for having features like sturdy design, longer service life, easy installation and low maintenance. For details contact: Blue Chip Marketing & Consultancy Work Shop No: 26/13 Nr Dagat Indl Estate Vadgaon Phata Vadgaon BK Pune, Maharashtra 411 030 Tel: 020-24354726; Fax: 91-020-24355611
At depths of 3,500 to 6,000 meters, it is possible to tap into geothermal energy resources paying particular attention to safety, commercial viability and environment protection. With ever dwindling natural raw materials and the move to renewable energy sources, this represents both an opportunity and a challenge.
OIL & GAS METERING SKIDS
For details contact: Herrenknecht India Pvt Ltd M-26 Commercial Complex Greater Kailash Part II, Ponneri Taluk, Tiruvallur Dist New Delhi 110 048 Tel: 011-29217675
WELL SERVICE Cryoquip India offers well drilling services to extract more oil and gas from the existing wells. This requires some enhancement and stimulation of the well to increase the flow of hydrocarbons. This enhancement thus prevents the need to drill another well.
R-Square Engineers hold expertise in manufacturing and supplying a wide range of oil and gas metering skids. Considering demands of clients, R-Square Engineers offers these in various dimensions and sizes. With the availability in various designs and constructions, these oil and gas metering skids’ flanges and fittings are widely used in various industries. Some of the salient features which make these oil and gas metering skids distinct from others are anti abrasive finish, dimensional accuracy, excellent moist resistance and sturdiness.
To carry out this stimulation, we need the ultra high pressure nitrogen converter. It had to be portable, compact and light weight enough to fit in restricted space for the well enhancement process.
For details contact: R-Square Engineers No: 904/10, GIDC Indl Estate Makarpura Vadodara, Gujarat 390 010 Tel: 0265-2643330, 2649649 Fax: 91-0265-2643330, 2649649
For details contact: Cryoquip India Plot No: 454, GIDC National Highway No: 8, Por Ramangamdi Indl Area Vadodara, Gujarat 391243 Tel: 0265-2830114, 2830115, Fax: 91-0265-2830112 Offshore World | 67 | DECEMBER 2012 - JANUARY 2013
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events diary 21 st World Petroleum Congress
Colombia Oil & Gas Exhibition 2013
Date: June 15-19, 2014 Venue: Russian Exhibition Venue, Crocus Expo, Moscow, Russia Event: The 21 st World Petroleum Congress and Exhibition (WPC Exhibition) and the World Petroleum Exhibition associated with the Congress will take place in Moscow, Russia at Crocus Expo on June 15-19, 2014.
Date: April 9-11, 2013 Venue: Cartagena Centro de Convenciones y Exposiciones Cartagena, Colombia Event: Colombia Oil & Gas Exhibition will provide the platform for international partners to meet with their Colombian counterparts, develop relationships and discuss opportunities and strategies for realizing project potential. The Colombia Oil and Gas Summit is the leading event, bringing together all the major stakeholders in Colombia and their International counterparts. Exhibiting at Colombia Oil and Gas will give you access to this lucrative market and allow you to benefit from the lucrative deals on offer in this region of great potential.
Since the first WPC event in 1933, it has grown to become the largest and most prestigious event in the global oil and gas industry and has been held every three years in one of its more than 65 member countries. In its 80 th Anniversary year the Congress is continuing to achieve new heights and further unite the members of the global petroleum community. The theme of the 21 st WPC is ‘Responsibly Energising a Growing World’. The Congress Programme Committee has prepared a wide-ranging Technical Programme to recognise the scientific, technological and professional achievements of the oil and gas industry. The largest Russian exhibition venue, Crocus Expo in Moscow, has been selected as the venue for the 21 st WPC. For details contact: World Petroleum Council Suite 1, 4 th Floor, 1 Duchess Street London, W1W 6AN Tel: +44 (0)20 7637 4958 Email: info@world-petroleum.org Kuwait Oil and Gas Summit & Exhibition Date: April 28-30, 2013 Venue: Kuwait Regency Palace Hotel, Kuwait City, Kuwait Event: The 2013 Kuwait Oil & Gas Summit & Exhibition, hosted by the Kuwait Petroleum Corporation (KPC), is one of the most important events related to the Oil & Gas sector in Kuwait. This leading event will start on 28 April 2013 and will bring together senior decision makers in the Kuwait and international oil and gas industry to highlight the opportunities and challenges of Kuwait energy in a global context, focusing on the development, diversification and growth of the economy. Focusing on innovation and international collaboration, the Summit will discuss the investment opportunities needed to meet KPC oil production targets and promote industry growth. For details contact: The CWC Group Limited Regent House, Oyster Wharf 16-18 Lombard Road London, England, United Kingdom Tel: +(44)-(20)-79780000 Fax: +(44)-(20)-79780099 www.oswindia.com
For details contact: The CWC Group Limited Regent House, Oyster Wharf 16-18 Lombard Road London, England, United Kingdom Tel: +(44)-(20)-79780000 Fax: +(44)-(20)-79780099 Nigeria Oil & Gas Technology Exhibition Date: June 4-6, 2013 Venue: Eko International Expo Centre, Victoria Islands, Nigeria Event: Being hosted at Victoria Islands New Expo Centre, Nigeria Oil & Gas Technology Exhibition is renowned trade fair for oil and gas exhibition. The 3-day show will offer unlimited business potential for capitalising emerging opportunities of Chemicals & Dyes sector. The show will be organised by The CWC Group Limited. For details contact: The CWC Group Limited Regent House, Oyster Wharf 16-18 Lombard Road London, England, United Kingdom Tel: +(44)-(20)-79780000 Fax: +(44)-(20)-79780099 Oil and Gas Kenya Date: 29 April - 1 May 2013 Venue: Kenyatta International Conference Centre (KICC), Nairobi, Kenya Event: Oil and Gas Kenya is an entirely business trade fair that opens up to trade representatives from different parts of the world. A broad classification of exhibitor categories will include drilling and well completion equipment, instrumentation and control technology, lifting equipment, cranes, winches, offshore platforms and environment management. However these categories can be further narrowed down to several other categories as well. For details contact: Expogroup, UAE Level 25, Monarch Office Tower, P.0. Box - 333840, One Sheikh Zayed Road, Dubai, UAE Tel: +(971)-(4)-3721421; Fax: +(971)-(4)-3721422
Offshore World | 68 | DECEMBER 2012 - JANUARY 2013
book shelf NONTECHNIC AL GUIDE TO PETROLEUM GEOLOGY, EXPLORATION, DRILLING & PRODUCTION, 3RD ED. [HARDCOVER] AAuthor: Norman J Hyne PPrice: USD 61.28 PPages: 724 pages PPublisher: PennWell Corp.; 3 edition (March 31, 2012) Book Description: In this popular text that has trained thousands in the petroleum industry for years, Dr Norman Hyne takes readers through upstream operations--from how oil and gas are formed; how to find commercial quantities; how to drill, evaluate, and complete a well--all the way through production and improved oil recovery. He uses lots of pictures, graphs, and illustrations to aid readers in understanding topics and to provide necessary visuals. OIL AND GAS ROYALTIES [KINDLE EDITION] AAuthor: Vernon Crumrine PPrice: USD 2.75 PPages: 6 pages PPublisher: Vernon Crumrine, Consultant; 1 eedition (June 3, 2011) Book Description: With our nation’s supply of domestic oil and gas reserves in decline, the frantic search for new supplies in previously unexplored areas means some landowners may share in sales l proceeds. d This short ebook provides just enough detail that anyone not familiar with the industry can still gain a working knowledge of the process. If I suddenly find one day that I am now one of the fortunate few who have become a royalty owner, what can I expect? Yes, companies are required by law to furnish royalty owners with certain information in a prescribed format, yet pitfalls for the unwary often still remain. OOIL VENTURES 101 [KINDLE EDITION] AAuthor: Robert Wellesley PPrice (INR): ` 259.80 PPages: 46 pages Book Description: Assembled by a team of seasoned and accredited oil ventures experts, this quick yet comprehensive read is perfect for those still ‘on the fence’ about oil venture investing.
Oil ventures are among the oldest, most stable and most lucrative investment vehicles available to the individual investor, one offering unrivaled tax benefits. OIL, GAS AND PETROCHEMICALS [KINDLE EDITION] AAuthor: Dr Theodore E Theodoropoulos PPrice (INR): ` 988.81 PPrint Length: 474 pages PPublisher: BookBaby; 1 edition (January 66, 2012) Book Description: In this book, Dr. Theodore Theodoropoulos deals with Oil, Gas and Petrochemicals and takes a detailed look on global energy sources, the OPEC, the OAPEC, oil and gas companies, petroleum and natural gas, LNG, coal, hydrocarbons, exploration plan, drilling and production, refinery, petrochemicals, oil margins, pricing oil and gas, reserves management, oil and gas fields, marketing oil and gas, trading oil products, LNG pricing, LNG shipping, pricing petrochemicals, downstream (plastics and chemicals), pipelines and storage, project finance, oil and gas transportation and energy for tomorrow. Obtaining sufficient knowledge can lead to greater respect and appreciation of these important sources of energy that affect our daily lives. The information contained herewith will boost and inspire those involved in the oil and gas industry and contribute to their understanding of their role in producing the oil and gas needed by the whole world. NEW TECHNOLOGIES IN THE OIL & GAS INDUSTRY AAuthor: Jorge Salgado Gomes PPrice: USD 9.99 HHardcover: 292 pages PPublisher: InTech Book Description: Oil and gas are the most important non-renewable sources of energy. Exploring, producing and managing these resources in compliance with HSE (Health, Safety and Environment) standards are challenging tasks. New technologies, workflows and procedures have to be implemented. k This book deals with some of these themes and describes some of the advanced technologies related to the oil and gas industry from HSE to field management issues. Some new technologies for geo-modeling, transient well testing and digital rock physics are also introduced. There are many more technical topics to be addressed in future books. This book is aimed at researchers, petroleum engineers, geoscientists and people working within the petroleum industry.
Offshore World | 69 | DECEMBER 2012 - JANUARY 2013
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ad index Sr. No.
Client's Name
Page No.
1
Dipesh Engineering Works
3
2
ITT Corporation
1
3
KSB Pumps Ltd
Inside Cover I
4
Magnetrol
7
5
OUTOKUMPU
9
6
Tekla India Pvt Ltd
5
ADVERTISE TO EXPAND your reach through
For Details Contact
Jasubhai Media Pvt. Ltd.
3rd Floor, Taj Building, 210, Dr D N Road, Fort, Mumbai - 400 001 Tel: 022-4037 3636, Fax: 022-4037 3635 Email: industrialmags@jasubhai.com www.oswindia.com
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Date of Publication: 1’st of every alternate month.
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