April'17 Digital Edition - Pipeline Oil and Gas Magazine by Piepline Oil and Gas Magazine

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APRIIL 2017 7

ALGERIA

LIBYA

KUWAIT

Sonatrach, Eni pledge to boost investment in Algeria’s energy sector

Libyan oil output rises to 700,000 bpd after port fighting ends – NOC

Amec Foster Wheeler wins Kuwait contract

Libya’s oil production has reached 700,000 barrels per day (bpd), the National Oil Corporation (NOC) said, recovering from a drop earlier this month caused by fighting at two key oil ports. “We are working very hard to reach 800,000 barrels by the end of April 2017, and, God willing, we will reach 1.1 million barrels next August,” NOC Chairman Mustafa Sanalla said. The NOC said in a separate statement it hoped to produce 55,000 bpd in the coming weeks from the Abu Attifel and Rimal fields, which are currently closed for maintenance.

UK’s Amec Foster Wheeler has won a petrochemical contract in Kuwait by Petrochemical Industries Company (PIC), a subsidiary of the Kuwait Petroleum Company (KPC), for the integration project between its Olefins III, Aromatics II and ZOR Refinery in the Gulf state. The contract covers Front-End Engineering Design (FEED) leading to Project Management Consultancy (PMC) for the project. The new petrochemical facility will be integrated with the new Al-Zour 615,000 barrels per day refinery, which will be one of the largest refineries in the region.

Algeria’s Sonatrach and Italy’s Eni are strengthening ties to boost investments in Algeria’s energy sector, including in offshore and solar operations, officials from both companies said. “This is a symbolic Eni meeting to show how important Algeria is to us,” Eni Chief Executive Claudio Descalzi said during the visit to BRN. “We have invested 11 billion euros ($11.8 billion) in Algeria since 2010, it represents 30 percent of our investment abroad,” Descalzi said.

YEMEN Petsec Energy to restart production in Yemen Australia’s Petsec Energy announced a contract for supply of oil tanker loading equipment for the An Nagyah oilfield production restart in Yemen. The purchase of the oil loading hardware is a key component of preparations for the restart of production and delivery of crude via a trucking operation from the company’s An Nagyah Oilfield within the Company’s Damis Block S-1 Production Licence in Yemen.

April 2017

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IRAN

Gazprom Neft commissions 3 new wells in Iraq

Korea’s Hyundai Engineering signs $3.2bln Iran deal

Gazprom Neft Badra, a subsidiary of Gazprom Neft, has commissioned three new production wells at the Badra field in Iraq. Total production across all three wells is running at 23,000 bpd, with daily production at the field totalling 77,000 barrels. The production wells BD-2, P-14 and P-10 are all operating under free-flow production. Gazprom Neft commissioned four new wells at the Badra field in 2016, producing a total 30,500 bpd.

South Korea’s Hyundai Engineering Company (HEC) has signed a €3 billion (US$3.2 billion) contract with Iran’s Ahdaf Investment Company for construction of the second phase of Kangan Petro Refining facility in Iran’s southwestern Bushehr province. The deal agreed was based on an Engineering, Procurement, Construction and Financing (EPCF) basis. Arefi said the first phase of the Kangan project was 30 per cent completed with an investment of nearly 120 million euros. The facility will be built over a 2 year period.

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IRAQ

Continuous innovation, from pore to pipeline. QATAR PGNIG to increase LNG imports from Qatar Polish Oil and Gas Company (PGNiG) has signed a side agreement to the existing Sale and Purchase Agreement (SPA) with Qatargas to bring in an extra 2 million tonnes of LNG per annum from Qatar. Under the terms of the agreement, Qatargas will increase the volume of LNG currently supplied to PGNiG to two million tonnes per annum (MTPA) which is equal to about 2,7 billion cubic meters of gas after regasification. The new agreement will come into effect on 1 January 2018 and will run until June 2034.

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In 1927, Conrad and Marcel Schlumberger used their new electrical well logging technique to identify formations in the Pechelbronn oil ﬁeld in the Alsace region of France—a ﬁrst in the oil and gas industry. T day Schlumberger continues to innovate To by introducing pioneering technologies delivered with technical expertise gained from decades of experience.

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Editor’s Comment March has been another testing time for the oil industry as oil prices have dropped throughout the month amid renewed concerns of a supply glut, despite OPEC efforts to curb crude output. The big question for the cartel is whether to extend a 24-nation agreement — made last year — to cut oil production in the first half of 2017 beyond June. An OPEC joint committee met in Kuwait at the end of March Julian Walker and said that they would review extending the Editor-in-Chief oil cut deal but as prices fall to the US$50 mark Saudi Arabia has had to reassure the market that rising U.S. shale production will not halt any gains from the OPEC output cuts. We cover the latest OPEC movements on p10. There was some positive news coming out of the region this month with McDermott International making headlines with its big MoU deal with Saudi Aramco which will see the global integrated EPCI player move its operations to Saudi Arabia by 2021. (Read more on p12). Meanwhile internationally, Wood Group has agreed to take over its fellow UK energy firm, Amec Foster Wheeler, in deal worth US$2.7 billion. Our cover story this month ties in with dmg’s global energy’s next major event, Gastech, which is taking place on 4-7 April in Tokyo. We look at the importance of LNG to Japan’s energy sector and how in the quickly changing landscape, major Japanese companies are positioning themselves for the LNG of the future. We have exclusive insight from JERA, Tokyo Gas, Mitsubishi Corporation and Mitsui & Co. After dmg’s global energy recently launched a successful EGYPS in February, we have coverage and interviews from the event including a key interview with Baker Hughes Egypt country director on p18. We also spoke exclusively to Reflex Marine’s COO. EGYPS will be returning next year in February and you can read all about this year’s show on p44. Pipeline Magazine will be at Gastech so if you are exhibiting or attending the show, please do get in touch.

Associate Publisher: Scott Woodall Sales Director: Raed Kaedbey Editor-in-Chief: Julian Walker Editor: Nadia Saleem Contributors: Dani Alkalay Neil Frain Adam Forni Marketing Executive: Rakhi Singh Admin Assistant : Anita Menezes Art & Design: Alden Guevarra

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ENERGY IN FOCUS

JAPANESE OIL DEMAND, 2010-22

5.0 4.5

LPG

4.0

Naphtha

3.5

Motor Gasoline

3.0 2.5

Jet & Kerosene

2.0

Diesel

1.5

Other Gasoil Residual Fuel

1.0

Other Products

0.5 2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

SOURCE: IEA OIL OUTLOOK 2017

OPEC COUNTRIES EXPORT REVENUES FELL TO $450 BN IN 2016, FROM $1.2 TRILLION IN 2012

GLOBAL OIL DEMAND EXPECTED TO GROW ON AVERAGE BY 1.2 MB/D EACH YEAR TO 2022

TOTAL NON-OPEC SUPPLIES ARE EXPECTED TO RISE 3.3 MB/D BY 2022

LOSING APPROXIMATELY 375 KB/D THROUGH THE FORECAST, JAPANESE DEMAND WILL BE JUST 3.6 MB/D BY 2022

SOURCE: IEA OIL OUTLOOK 2017

SOURCE: IEA

SOURCE: IEA OIL OUTLOOK 2017

“(FOR) SHORT-TERM MARKET

“WE ARE USING NEW,

“WE ARE DELIGHTED TODAY TO

SAUDI ENERGY MINISTER KHALID AL-FALIH, CERAWEEK, HOUSTON

DARREN WOODS, CHAIRMAN & CEO, EXXON MOBIL

PATRICK POUYANNÉ, CHAIRMAN AND CEO OF TOTAL

CONDITIONS, THERE IS CAUSE FOR CAUTIOUS OPTIMISM AS WE SEE THE “GREEN SHOOTS” OF THE RECOVERY, DRIVEN BY A BETTER OUTLOOK ON FUNDAMENTALS COUPLED WITH THE HISTORIC PRODUCTION AGREEMENT OF THREE MONTHS AGO.”

April 2017

ABUNDANT DOMESTIC ENERGY SUPPLIES TO PROVIDE PRODUCTS TO THE WORLD AT A COMPETITIVE ADVANTAGE RESULTING FROM LOWER COSTS AND ABUNDANT RAW MATERIALS.”

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SEE OUR STRATEGIC ALLIANCE BECOMING REALITY. THESE NEW PARTNERSHIPS TOGETHER WITH A REINFORCED TECHNOLOGICAL COOPERATION SHOULD CREATE SIGNIFICANT SYNERGIES AND VALUES.”

NEWS

REGIONAL

OPEC said committee to review extending oil cut deal The Joint OPEC and non-OPEC Ministerial Monitoring Committee (JMMC) agreed in Kuwait to review whether their deal of production cuts should be extended for another six months after reporting a conformity of 94 per cent so far this year, OPEC said. OPEC and non-OPEC participating countries’ conformity of 94 per cent is an increase of 8 percentage points over the January 2017 performance, OPEC said in a statement. “This demonstrates the willingness of all participating countries to continue their cooperation.” OPEC and 11 other leading producers including Russia agreed in December to cut their combined output by almost 1.8 million barrels per day (bpd) in the first half of the year. The original deal was for six months starting Jan. 1, with the possibility of a sixmonth extension. The December accord, aimed at supporting the oil market, has lifted crude to more than $50 a barrel. But the price gain has encouraged U.S. shale oil producers, which are not part of the pact, to boost output, causing renewed pressure on oil prices and stock inventories. The JMMC pointed out factors such as low seasonal demand, refinery maintenance, and rising non-OPEC supply that have slowed down the positive impact of the production adjustments on inventory drawdowns. At the same time, the liquidation of positions by financial players in

April 2017

the market was also observed. The committee’s statement said that it felt that the end of the reﬁnery maintenance season and a noticeable slowdown in the US stock-build, as well as the reduction in ﬂoating storage, will support the positive efforts undertaken to achieve stability in the market. “In view of the above, the JMMC requested that the JTC with the OPEC Secretariat review the oil market conditions and revert to the JMMC in April 2017 regarding the extension of the voluntary production adjustments as stipulated in the Declaration of Cooperation, in order to ensure market stability,” the OPEC statement said. Chairman of JMMC, Issam A. Almarzooq, Minister of Oil and Minister of Electricity and Water of the State of Kuwait, said stocks remain high over the past couple of weeks,

particularly in the US, where a seasonally rising trend has hit new historically high levels, he said, adding that some traders also liquidated their long positions (causing downward pressure on prices) and Brent prices have dropped from the mid-50s to the low-50s. Volatility has also increased. “While investments may be returning in some of the industry’s short-cycle projects, there is little investment going into the longcycle projects that are the baseload of the industry,” he said. Almarzooq said Saudi Arabia and Angola carried out production cuts beyond expectations, but other countries had to take their conformity to the agreement more seriously. “We need to see conformity across the board. We assured ourselves – and the world – that we would reach our adjustment to 100 per cent conformity,”Almarzooq said.

While investments may be returning in some of the industry’s short-cycle projects, there is little investment going into the long-cycle projects that are the baseload of the industry… We need to see conformity across the board,” said Chairman of JMMC, Issam A. Almarzooq, Minister of Oil and Minister of Electricity and Water of the State of Kuwait.

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NEWS

REGIONAL

McDermott signs deal with Saudi Aramco

McDermott International has signed a memorandum of understanding with Saudi Aramco to build a fabrication and marine complex at Saudi Amarco’s new maritime facility at Ras Al Khair in Saudi Arabia. The deal for a long-term land lease at the new maritime facility currently being developed by Saudi Aramco will see McDermott build new state-of-the-art facilities, increased automation and an optimised layout to increase McDermott’s abilities to service its growing Middle East and Caspian markets. The future fabrication facility at Ras Al Khair is expected to provide up to 16-million manhours of capacity, up from 8-million manhours at McDermott’s current Jebel Ali facilities, with a gradual transition from McDermott’s operations in Jebel Ali expected by the mid-2020s. “We are excited about this strategic move and believe it expands and

strengthens our ability to service all our growing Middle East markets and our decades-long leadership position with Saudi Aramco and in the Middle East,” said David Dickson, McDermott’s President and Chief Executive Ofﬁcer. McDermott expects to expand its capabilities and capacity in the region to serve its customers in offshore and subsea markets throughout the Middle East, Caspian and other markets in the Eastern Mediterranean Sea and offshore India and East Africa. Dickson added: “When we look at our next 50 years of business in the Middle East, we see strong beneﬁts to moving our business operations to Saudi Arabia, including the opportunity to modernize our facilities, move closer to Saudi Aramco and other key customers in the region as well as provide McDermott’s world-class training programs to Saudi Arabia’s talented workforce to further enhance McDermott’s Middle East operations.”

Saudi Aramco said that the selection of McDermott was the result of a rigorous evaluation process which followed extensive negotiations with several world-class players in the offshore EPCI services ﬁeld. The move also demonstrates McDermott’s support of Saudi Arabia’s Vision 2030 and Saudi Aramco’s In-Kingdom Total Value Add (IKTVA) program. The IKTVA program intends to expand KSA-based business operations to help drive domestic value creation and maximise long-term economic growth, diversiﬁcation, job creation and workforce development, to support a rapidly changing Saudi economy. Saudi Aramco said that the project is part of its plan to expand its local supply chain, which will improve the company’s agility while driving additional economic and human capital development, as well new employment opportunities in the Kingdom of Saudi Arabia in support of the goals of “Vision 2030.”

Iran agrees on oilfield supplies with Pergas consortium Iran has agreed with Pergas – a consortium of international oil and gas companies for the surveying of two oilfields, a consortium official said. The studying agreement between National Iranian South Oil Company (NISOC) and Pergas International Consortium covers Karanj (Asmari, Pabdeh, and Khami oil deposits) and Shadegan oilﬁelds (Asmari and Bangestan reserves), according to Masoud Besharati, head of the Tehran ofﬁce of Pergas, the country’s Shana news agency reported. The consortium, comprising of 11

April 2017

European, Canadian and Asian firms as well as the Sharif University of Technology, is also involved in oil and gas investments, training, and transferring of technology. Based on the deal, the consortium will have six months to submit the result of its studies on the fields to the NISOC. Over 60 companies are currently in talks with the NISOC for cooperation with the company under the new framework of the contracts, Iran Petroleum Contracts (IPCs), which are part of efforts to sweeten the terms offered on oil

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development deals. OPEC’s No. 3 oil producer set up the new framework in hopes to draw foreign companies and boost output after years of under-investment during international sanctions, which were lifted a year ago.

APR AP RIIL R L2 20 017 0 17 1 7

US Wood Group wins Mad Dog Phase 2 contracts Wood Group has won two separate contracts worth US$80 million related to BP’s Mad Dog 2 project providing engineering services to further develop deepwater production. The contracts were awarded by Samsung Heavy Industries to provide detailed engineering and procurement services for the topsides for BP’s Mad Dog Phase 2 floating production unit.

MEXICO BHP Billiton, Pemex firm up deal on deep-water oil project in Mexico Australia’s BHP Billiton and Mexico’s Pemex have signed a deal to complete work on the significant Trion discovery located in the deep-water Gulf of Mexico offshore Mexico. In December 2016, BHP Billiton successfully bid to acquire a 60 per cent participating interest in and operatorship of blocks AE-0092 and AE-0093 containing the Trion discovery. The agreement includes a commitment to deliver a Minimum Work Program, which consists of drilling one appraisal well, one exploration well and the acquisition of additional seismic data.

April 2017

BRAZIL Total and Petrobras finalise strategic alliance France’s Total and Brazil’s Petrobras have signed definitive contracts in relation to the package of assets contemplated in the Strategic Alliance announced on the 21st of December last year. The final contracts seals the Strategic Alliance between the two companies creating new partnerships in the Upstream and Downstream sectors, together with a reinforced technical cooperation covering operations, research and technology.

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ANGOLA Chevron starts production at Mafumeira Sul offshore Angola Chevron Corporation announced its subsidiary, Cabinda Gulf Oil Company (CABGOC) Limited, has started oil and gas production from the main production facility of the Mafumeira Sul project offshore Angola.

RUSSIA OMV acquires stake in Russian gas field Austriaâ&#x20AC;&#x2122;s OMV has signed an agreement to acquire a 24.9 per cent share in the Yuzhno Russkoye natural gas field located in Western Siberia from Uniper SE for US$1.8 billion. The Yuzhno Russkoye field is one of the largest gas fields in Russia, situated in the Yamal- Nenets region. Current plateau production of the field amounts to 25 billion cubic meters per year. The deal is set to close by the end of the year end.

CASPIAN SEA KBR awarded engineering services contract in Caspian Sea KBR has been awarded a two-year engineering services contract by the North Caspian Operating Company (NCOC) covering conceptual studies and pre-front-end engineering services for its projects in in the Kazakhstan zone of the Caspian Sea.

MOZAMBIQUE ExxonMobil acquires interest in Mozambique

AUSTRALIA

ExxonMobil is to acquire from Eni a 25 per cent indirect interest in the natural gasrich Area 4 block, offshore Mozambique for US$2.8 billion. Eni currently holds a 50 per cent indirect share in the block through a 71.4 per cent stake in Eni East Africa, which owns 70 per cent of the Area 4 concession.

Subsea 7 wins Sole project offshore Australia

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Subsea 7 has announced that it has been awarded a big contract by Cooper Energy for the Sole Development Project, offshore Australia. The Sole gas field is located in the eastern part of the Gippsland Basin, approximately 40km offshore Victoria, Australia.

April 2017

NEWS

INTERNATIONAL

Wood Group bids to takeover Amec Foster Wheeler Aberdeen-based Wood Group has bid to takeover fellow UK energy services company Amec Foster Wheeler in a deal worth US$2.7 billion (£2.16). Under the terms of the deal, Amec shareholders will end up with 44 per cent of the larger group. The deal will create the UK’s biggest energy ﬁrm. The management of Wood Group - chief executive Robin Watson, ﬁnance chief David Kemp and chairman Ian Marchant - will continue in their roles following completion of the deal. Ian Marchant, the Chairman of Wood Group said: “The Combination represents a transformational transaction for Wood Group, which accelerates our strategy and creates a global leader in project, engineering and technical services delivery across a range of industrial sectors.The Combination extends the scale and scope of

April 2017

our services, deepens our existing customer relationships, facilitates further development of our technology-enabled solutions and broadens our end market, geographic and customer exposure.” Amec Foster Wheeler, itself the product of a 2014 merger, was due to raise £500 million through a rights issue next week, although this has now been suspended. Wood Group said it expected annual cost savings to reach at least £110 million, while the one-off costs would be around £190 million.

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NEWS IN BRIEF Marathon Oil buys $1.1bln worth of Permian Basin assets Marathon Oil has signed a deﬁnitive agreement to acquire approximately 70,000 net surface acres in the Permian Basin from BC Operating and other entities for US$1.1 billion. The acquisition includes 51,500 acres in the Northern Delaware basin of New Mexico, and current production of approximately 5,000 net barrels of oil equivalent per day (boed). The BC acquisition is expected to close in second quarter 2017 with an effective date of Jan. 1, 2017. The major highlights of the Permian Basin acquisition includes approximately 900 million BOE of total resource potential with 1,700 total upside locations from both tighter density and secondary targets

KEY INTERVIEW

BAKER HUGHES

BAKER HUGHES AIMS TO PLAY KEY ROLE IN EGYPT’S MODERNISATION PROGRAM Sameh Hussein, country director and general manager, Egypt, Libya and South Sudan Africa GeoMarket at Baker Hughes speaks to Pipeline Magazine’s Nadia Saleem about Egypt’s regulatory changes and the company’s role in developing the country’s oil and gas infrastructure Where do you see the most opportunity for Baker Hughes to be involved in as Egypt plans to develop its oil and gas sector?

“We see our role as a strategic partner to our customers and other stakeholders to help develop the massive amounts of reserves in this country in the most efficient and economic manner possible.”

April 2017

Baker Hughes’ Egypt provides technology and service solutions that help operators build better wells, optimise production and increase their ultimate recovery. Over the last few years, the industry has faced a very low-price environment and our customers have looked to discounts and technology to stay proﬁtable. We’re starting to see the role of technology expanding in this country, which provides a lot of opportunity for the service sector. Our business in Egypt is unique in that we offer a very broad portfolio of products and services, almost all of which we provide at a global scale. This enables us to serve the recent oil and gas discoveries. For example, our drilling and completions solutions,

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such as Kymera drill bits, AutoTrak rotary steerable systems or our DeepShield safety valve, help improve efﬁciencies and are all proven in this country. And our reservoir, completions, and artiﬁcial lift services help maximise production in oil developments. As development plans continue, we are well positioned to support the growth by providing integrated solutions, and we are committed to developing new technology to meet the challenges of today and into the future.

What is the importance of Egypt business for Baker Hughes? Egypt has been and will continue to be an important market for Baker Hughes. We have a rich history in this country. We’ve been here since 1910 and our drill bits were used to drill the ﬁrst oil well in Egypt. Since then we’ve grown our footprint by tapping into the local talent base to

BAKER HUGHES

KEY INTERVIEW

enhance our expertise and grow our product and service portfolio. We believe technology innovation and adoption is key for future development and success of this industry. We see our role as a strategic partner to our customers and other stakeholders to help develop the massive amounts of reserves in this country in the most efﬁcient and economic manner possible.

What are your views on Egypt’s changing regulatory environment? We believe that the regulatory environment is heading in a healthy direction for the Egypt oil and gas industry. Many of the changes are expected to make a positive economic impact on the E&P and service sector. Programs such as the modernisation initiative will help attract more external investors, increase oil and gas development and open up opportunities for local talent. At Baker Hughes, we are committed to helping increase the value this industry provides. In fact, we’ve already started discussions with the government about how we can support the key pillars of the program. We’ll support the “upstream and midstream” strategy through technology development and transfer and we will support the “people” aspect through training programs and partnerships. We believe this is positive and are looking forward to seeing this program’s impact.

How are Egypt’s changes impacting Baker Hughes’ business? These changes are opening up new opportunities for partnerships with our customers, government and local talent. We are also identifying new investment opportunities. The more we understand the industry’s needs, the more we’ll be able to accelerate innovation for the beneﬁt of our customers and other stakeholders.

How is Baker Hughes involved in the upcoming upstream projects in Egypt? We are working closely with the key stakeholders I mentioned above to understand their challenges and objectives, so we can tailor our efforts to help meet them. Baker Hughes is focused on improving well construction and ensuring costs are minimised by reducing non-productive time (NPT). For example, we drilled six wells for a customer using our AutoTrak drilling system, leading formation evaluation services, logging while drilling and seismic while drilling services, as well as the Kymera hybrid drilling bit. We drilled all sections to

total depth with zero NPT in record time, and our FE services were able to pinpoint the amount of recoverable reserves to help increase ultimate recovery. We’ve also achieved recent success with our liner hanger systems, saving our customer US$1 million through the use of this technology. Because of this success, we were recently awarded a 100 percent share of an offshore project to provide lower completions, including liner hangers and isolation valves. Further, we are applying artificial lift and chemical technologies in oilfields to ensure new wells are reaching initial production as well as getting more oil from existing fields.

How would you define the mindset in Egypt for adopting new technology? Historically it has been challenging since many view the unknown as risky, however

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operators are starting to look more towards technology to reach their objectives. At Baker Hughes we have a stringent technology development and testing process. Most of the time, new technology has been proven in the ﬁeld in another part of the world before we would provide it here in Egypt. Thorough testing and results ease the adoption process. Further, it is our responsibility as a service company to collaborate with our customers, anticipate their needs and provide the solutions to meet those needs as quickly as possible. It is also important for them to understand the value technology can bring to their operations, and that is where we come in. As the market outlook improves and the business landscape in Egypt evolves, it is more important than ever to build partnerships between all members of the oil and gas value chain. We are in the initial phase of discussions with customers and we are applying similar models and approaches we have in other countries. The EGYPS 2017 event has built a lot of momentum and we’re hopeful we will start seeing actions and implementation.

What is your outlook for Egypt’s oil and gas market and potential challenges? Though there are challenges to doing business in Egypt, there are fewer obstacles than other places throughout North Africa. We believe that Egypt has the potential to become the oil and gas hub for the entire Mediterranean. The recent discoveries, wealth of human capital, technology and infrastructure, coupled with clear strategic initiatives set forth by the government will help the industry transform.

April 2017

GEO FOCUS

JAPAN

LNG AT THE FOREFRONT OF

JAPAN’S ENERGY FUTURE LNG is seen as a cornerstone fuel for Japanese energy companies and will continue to play a key role in supplying Japanese energy needs

s the world’s largest importer of LNG – importing nearly one third of all global supplies – Japan relies on stable and trustworthy supplies of LNG. The total LNG trade reached 244.8 metric tons (MT) in 2015, up 4.7 MT from the previous year. This marks the largest year for LNG trade in the industry’s history, even though Japanese import prices fell drastically between January and December 2015. Despite this, the start of new projects contributed to the buoyancy of the sector and the industry has remained vibrant, continuing to grow. Currently Asia accounts for more than half of global LNG imports, with Japan, South Korea and China leading the way and accounting for just over half of the global market share. Japan will remain the largest LNG buyer in the world through to 2025 according to the latest research from BMI Research. The number of importers of LNG is growing steadily with the emergence of Jordan, Pakistan, Poland and Egypt taking in LNG cargoes. Malaysia, Singapore, Thailand and Pakistan have emerged as the newest players on the importing playing ﬁeld. They currently account for a small share of the total Asian LNG imports, however, as a combined force, including the remainder of the newest markets, they have the potential to increase their import levels. A number of factors have played a signiﬁcant role in the arrival of these countries including declining domestic production, the growth of industrial sectors and intensive economic growth. Another key contributor is the

April 2017

switch away from coal ﬁred generation to address carbon emissions in the developed world, and local pollution issues in the developing world. Following liberalisation of its electricity market, which has led to new competition among electric utilities, Japan’s retail gas market is also planned to be liberalised in

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2017, which makes this year one of the most pivotal in the country’s energy market. Major utilities such as Tokyo Gas and JERA (a joint venture between Tokyo Electric and Chubu Electric) are leading the way in driving new international partnerships with Asian customers seeking to drive improved terms and conditions in their fuel procurement. JERA, the Japanese energy giant, purchased LNG from United States for

Host

2017 CALL FOR PAPERS NOW OPEN FINAL DATE FOR ABSTRACT SUBMISSIONS TUESDAY 2 MAY 2017

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TECHNICAL CONFERENCE PROGRAMME CATEGORIES: DRILLING AND COMPLETION TECHNOLOGY E&P GEOSCIENCE FIELD DEVELOPMENT GAS TECHNOLOGY HSE

IOR/EOR OFFSHORE AND MARINE OPERATIONAL EXCELLENCE PEOPLE AND TALENT PETROLEUM ADVANCED ANALYTICS

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GEO FOCUS

JAPAN

the first time at the beginning of January this year. JERA believes the purchase of U.S LNG will contribute to a stable supply in Japan through the diversification of procurement regions and LNG price Indices. Hiroki Sato, senior executive vice president, JERA in an interview with Pipeline Magazine said: “We are striving to maintain our world top-class offtake volume, and so we are keen to develop our trading business within the global market. We have begun to make major strides, and this is clearly evident following our announcement of the binding SPA with Centrica, and the acquisition of EDF Trading’s coal business with possible wider collaboration platforms including LNG. LNG and gas is a very challenging business, but we will continue to establish beneficial partnerships. As part of its business strategy, the company aims to double its revenue from 2,200 billion JPY to 4,600 billion JPY, and to make a 14-fold increase in net income between 2016 and 2030. In terms of its business and operational activity, JERA aims to maintain its LNG transaction volume from 30 to 40 million metric ton per annum, investing in a total of 12 projects worldwide, and nearly doubling its LNG transport vessels, from 16 to 30.

April 2017

Hiroki Sato, JERA “In terms of our key international joint ventures, we are looking to invest in several greenﬁeld LNG projects, such as within Eastern Africa and North America. For us, they are key areas that we would like to see the development of the projects. We are also interested in further developing business networks within India, China, Taiwan and Singapore as we foresee that they will be big players in the future,” he added.

Cornerstone fuel Japanese gas consumption hit record levels in January this year. Tokyo Gas

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reported that usage in the capital city reached over 60 million cubic metres. Japanese government forecasts predict that the demand for natural gas in the country will fall due to the shift in the balance of energy consumption. Over the last two years, Japan has imported around 88 million tons of LNG, but current government calculations show that this figure is expected to fall to 60 million tons by 2030. As a result, a growing number of Japanese businesses are diversifying in order to ensure continued growth. Tokyo Gas, plans to expand its global presence. As one of Japan’s largest LNG buyers, the company has recently announced a number of international projects, including an exchange agreement that will enable the energy provider to reduce shipping times and costs, and the signing of a memorandum of understanding (MoU) with PT. Miura Indonesia to establish a strategy for industrial and commercial customers in Indonesia. Shigeru Muraki, executive adviser of Tokyo Gas Co told Pipeline Magazine: “The new American business model which separates supply, transport and liquefaction, is a signiﬁcant shift away from the traditional integrated LNG

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JAPAN

projects. There seems to be multiple new LNG projects planned in the US, followed by some potential LNG projects in East Africa, Russia, Canada and Alaska. In the past we participated in a number of upstream projects in Australia. Upstream investments provided us with a proﬁt, but our minor share meant that we didn’t have full control. US LNG projects look different as we can liquefy our gas and transport it by ourselves. I believe our investments in the US will give us a lot of new opportunities in the upstream business.”

Part of greener future

Shigeru Muraki, Tokyo Gas

Koichi Wada, Mitsubishi Corporation

The generation of renewable energy has accelerated, but how the existing grid system will accommodate the influx, and the reliability of this energy generation method is yet to be confirmed. While demand management and digitalisation technologies will support the grid system, natural gas will still have to be one of the major sources of energy to accommodate the fluctuation in the supply of renewables. Muraki added: “With the global energy

sector moving towards a greener future supported by the Paris Agreement in 2016, I strongly believe LNG will continue to play a significant role in Japan’s future. Oil will peak by 2030, and demand for natural gas will increase in the next two decades because of new markets and new sources of energy. Governments will veer away from the installation of new coal fire power stations as they will be very difficult to maintain both financially and politically,

especially in light of the push to end global warming.” Koichi Wada, Division COO, Natural Gas Business Division, Mitsubishi Corporation said: “While Japan needs to realise the national energy mix 2030 to meet the Paris Agreement’s INDC, there exist uncertainties for (a) nuclear power resumption, (b) cost reduction for renewable energies, (c) coal power restriction and (d) technical innovation

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April 2017

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JAPAN

such as battery technology. Natural gas has an advantage from environmental and supply-diversiﬁcation perspectives and could compensate if the targets of other fuels are not achieved. In this context, we see that natural gas could potentially have a higher share in the mix target of 2030 and the trend might continue until 2040.” Hirotatsu Fujiwara, chief operating officer of Energy Business Unit II of Mitsui & Co., underlined the importance of a stable LNG supply in order to fulfil future energy demand in Japan. “LNG and gas will continue to play an important role long-term in a low-carbon global economy. As there are limited indigenous sources of gas, Japan will continue to import a substantial volume of LNG” He also stated that regardless of the fact it is forecasted that renewable energy may grow at a steady 2 per cent per year, fossil fuels, especially LNG, will continue to be a significant source for meeting energy demand even in 2040. When you take into account what energy source can provide an affordable solution

Hirotatsu Fujiwara, Mitsui & Co. to the need for constant, stable and flexible source of energy, Mitsui believes natural gas and LNG will continue to play an important role in Japan’s energy mix. The Japanese government introduced a new energy policy in 2015 which aims to reduce greenhouse gas emissions by increasing the proportion of renewable energy and nuclear power generation. The reduction target for greenhouse gas emissions is set at 26 per cent by

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GEO FOCUS

2030 compared to the level of 2013. The proposed power generation mix is LNG 27 per cent, coal 26 per cent, nuclear 20-22 per cent, and renewables 22-24 per cent. However, it is uncertain whether this target can be achieved completely. While we see a gradual restart of the nuclear power plants, we also see strong opposition from local governments and residents. As for renewable energy, we must keep in mind that it is still under subsidy, and production fluctuates due to weather conditions. Fujiwara added: “When we consider which energy source can provide an affordable solution to the need for constant, stable and flexible source of energy, we believe natural gas and LNG will continue to play an important role in Japan’s energy mix.”

Outlook Japan’s dependency on imported energy has resulted in a number of initiatives that are designed to increase efficient operation, whilst connecting and engaging players within the sector.

Tel: +9714-8865119 / Fax: +9714-8865118 Email: sales@sso.ae / info@sso.ae Website: www.shreesteeloverseas.com

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April 2017

INDUSTRY REPORT

PLANT SECURITY

SHELL P28 Shell’s Sensabot robot can overcome hazardous environments and can work in difﬁcult and hostile industrial facilities

EATON P29 Talks about designing rugged HMIs for reliable performance in the oil and gas industry

INDUSTRY REPORT

PLANT SECURITY

VIDEOTEC P31 Complete detection and assessment solution for outdoors from SightLogix

ADVERTORIAL

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INDEPENDENT SAFETY-SYSTEMS

he cyber security threat has expanded from its origins in the home and office PC environment to the oil and gas industry and more specifically into Industrial Control Systems. According to a 2015 survey, conducted by IBM, manufacturing sites are more likely to experience a cyber-attack than the financial services sector, which is a surprising and sobering revelation. There are a multitude of ways of achieving cyber security in industrial facilities. Safetyrelated automation solutions must not only provide functional safety, they also need to ensure cyber security. In terms of differentiation, the objective of functional safety is protecting people, machinery and the environment, in that the environment must be protected from the plant. Cyber security focuses on data availability, integrity and conﬁdentiality: the plant must be protected from the environment. Only the combination of functional safety and information security ensures the overall safety of the plant. To achieve the highest level of safety and security, it is of importance for companies in the process industry to implement the requirements of standards IEC 61511 and IEC 62443 for functional safety and cyber security after separation of the basic process control system and safety system. The concept of the HIMA safety controllers, which operate independently of the respective process control systems, take the requirements of both standards into account. Their proprietary operating system speciﬁcally designed for safetyoriented applications runs on HIMA’s autonomous safety controllers. It includes all functions of a safety PLC and excludes all other functions. It is therefore immune to typical attacks on IT systems. The operating systems of the controllers are tested for resistance to cyber-attacks during the development process. In HIMA’s controllers, the CPU and the communication processor are separate, ensuring high operational security even in the event of an attack on the communication processor. The controllers allow several physically separate networks to be operated

Smart safety controllers for process automation by HIMA combine functional safety and cyber security SIL 3 certiﬁed HIMatrix® is one of the fastest safety controls in the world Figures © HIMA Paul Hildebrandt GmbH

on a single communication processor or processor module. This effectively prevents direct access to an automation network from a connected development workstation. The SILworX® conﬁguration, programming and diagnostic tool runs in a Windows environment and works in a manner as independent as possible from Windows functions. This concept enables secure operation without interference from other programs or updates. It provides maximum protection against operator errors and creates a set of proven data components for programming the safety PLC. SILworX® allows automatic import of conﬁguration data from outside systems into the proven data set via interfaces. In addition, the programming tool supports two-level user management. This allows user permissions to be set individually,

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providing optimal protection for both the application and the safety system. Despite the fact of operating independently, HIMA systems can be easily integrated into all leading process control systems. HIMA takes care of the PLS-SIS integration and enables the desired functionalities. The integration is achieved by means of powerful, manufacturer-wide communication standards. SIL 3 certified safety controllers HIMax® and HIMatrix® significantly reduce planning, engineering and service costs for companies. Applications in the process industry are not only safer over the lifecycle of the plant, but also simpler, more flexible and more economical.

April 2017

INDUSTRY REPORT

PLANT SECURITY

SHELL’S ROBOT CAN OVERCOME HAZARDOUS ENVIRONMENTS Last year Shell launched its first resident mobile robot certified to work in difficult and hostile industrial facilities and Adam Serblowski, robotic engineer Shell programme, talks about the importance of this platform for Shell and the wider industry

he Sensabot is equipped with sensors, cameras and wireless communications that enable the company to remotely control the infrastructure with an operator who handles the robot from a safe place. The Sensabot system is the culmination of seven years of work with leading robotics experts from across the world, including Carnegie Mellon University in the USA, the UK’s Soil Machine Dynamics (SMD) and Improvia in the Netherlands. Serblowski said: “Sensabot came about because there was a recognition that for high H2S ﬁelds there are a lot of challenges with putting people out there. The biggest

April 2017

advantage of the Sensabot is that you don’t need to put people in potentially hazardous situations anymore. With a robot people can virtually walkthrough a facility at a safe distance, while also lowering the costs of day-to-day operations. In general it is about moving workers away from the actual hazardous areas and keeping them in a safe environment.” The robot will work in remote or unmanned oil and gas facilities and is designed to work for six months without requiring maintenance. Operators will be able to use Sensabot as their eyes and ears on the ground to check equipment and respond to alerts faster whilst gathering accurate real time data. Robots play an important part in the oil and gas industry by taking the invaluable role of inspection, monitoring, and surveillance of complex structures in oil and gas, and, thereby, averting any disasters that may occur otherwise. He added: “We view Sensabot as a platform. We have done all the work to get all these individual certiﬁed components and how it all ﬁts together. We are evaluating the deployment of Sensabot in a variety of regions and we are talking about assets all around the world, including in the Middle East. We do not have any concrete deployment plans for the region yet. We are in a commercialisation stage with the

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king for partners to Sensabot and we are looking obot.” help us commercialise the robot. on of To enable a smooth integration e robot Sensabot into operating assets, the yment comes with an innovative rapid-deployment container and powerful private 4G-LTE system that could provide connectivity to up to 5000 devices including industrial smartphones, -tablets, people-and material-tracking and condition monitoring equipment. In industrial locations the 4G LTE is cheaper and provides more reliable coverage than other types of industrial wireless networks. Serblowski commented: “We are proud to be using a private 4G-LTE networks - a first within the industry. We are also proud of our quick deploy container. If we look at wifi the coverage per radio is considerably less than the coverage you get with a single LE radio. So we are reducing the foot print needed to support the network of the robot.” He concluded: “Robotics has been around in one form or another for decades. In the last decade we have been looking more and more at modern robotics. It is a way for us to achieve our goal of enhancing safety and improving process at the same time. We don’t view robotics as a competitive advantage for us, it is about building that eco system. If Sensabot took off and we found a commercialisation company that opened up a large market and resulted in an uptake by other oil companies, ultimately this will bring the price down and lead to a service industry for parts. That is going to benefit us more than having a special robot just for Shell.”

PLANT SECURITY

INDUSTRY REPORT

DESIGNING RUGGED HMIS FOR RELIABLE PERFORMANCE IN THE OIL AND GAS INDUSTRY By: Dani Alkalay, director of marketing – Americas, MTL Products at Eaton’s Crouse-Hinds Division

uman machine interfaces (HMIs) and visualisation units present mission critical data across many industries, enabling users to make decisions and take actions about their process and equipment to work more efficiently. They are especially important in the oil and gas industry where understanding rig performance and operation is key primarily to safety but also to improving profitability. With the cost of oil at the lowest it’s been for more than five years, operating efficiently has never been so important. The cost of rig downtime is exceptionally high, estimated at up to US$500,000 per day offshore, so it is clear to see that increasing

reliability and uptime goes a long way to increasing productivity and proﬁtability. Choosing the right electrical equipment, which includes HMIs and visual displays is vital to achieving this, and in this article Dani Alkalay from Eaton, reviews the latest HMI technologies, advising how engineers and operators can have both increased productivity and improved proﬁt, without compromising on safety and reliability.

Understanding the application When designing and specifying HMI systems, instrumentation and electrical engineers need to ﬁrst and foremost understand the application and where and how the equipment will be used. There is a wide variety of applications for HMIs within

the oil and gas industry, for example, on the rig ﬂoor of a reﬁnery, on-shore versus off-shore, from permanent installations in a plant to truck-mount displays. Within the upstream exploration segment rugged

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April 2017

INDUSTRY REPORT

PLANT SECURITY

and hazardous area approved visual devices are designed for directional drilling, measurement / logging while drilling (MWD/ LWD), cementing, fracking, coil tubing, blowout preventer, mud logging, choke control, casing and production monitoring. In designing and specifying, there are many considerations to take, for example, what is the environment like? How will the equipment be mounted? Is it a permanent or rig-up/ rig-down installation? What is the lifetime expectation of the equipment? And what happens in case of failure? There are also a number of design priorities to address:

Computing power and connectivity

Computing power and bandwidth to run the most demanding distributed control system (DCS) or supervisory control and data acquisition (SCADA) software packages, without conﬁguration challenges is essential to a smooth operation. Having an available full client performing computing platform reduces the need to develop speciﬁc software for the HMI. For example, modern equipment such as the Azonix ProPanel PRO4500Z1 for Zone 1 environments features Intel Core i7 2655 processor, and the Azonix Barracuda 15 workstation for Zone 2 hazardous areas features the very latest Intel i7 2.5GHz processor and up to

8GB of dynamic random access memory (DRAM) to deliver increased processing power compared to alternative technologies. There is also a trend within the industry for increased communication options. Workstations that are built with wireless and Bluetooth options and offer high speed communications enable installation ﬂexibility reducing the amount of cables required during rig-up and rig-down, therefore increasing productivity.

Ease of use

How easy it is to use the HMI is critical for ensuring the operator can run the process as smoothly and reliably as possible. Intuitive workstations with state-of-the-art touch panels and which feature either resistive or projective capacitive touchscreens make the HMI exceptionally user-friendly. In the oil and gas industry operators wear gloves in cold weather, so it is vital that touchscreens support glove touch capability for use in harsh and cold environments. Visibility of the screen in all working conditions is also important so users can see at quick glance the status of the process. HMIs are often positioned outdoors and can be in direct sunlight, so screens with an LED backlit display with proper optical protection can be read easily in sunny positions.

Ease of installation and integration

In oil and gas exploration equipment is commonly moved from one rig to another after completion of a job. As the drilling has to stop during the set up phase, reducing the downtime for transition is critical. Creating multiple mounting points, using connectors versus glands, supplying intrinsically safe I/O are all features integrated in Azonix products which lower installation costs and downtime, thus increasing rig uptime and process efﬁciency.

Ruggedness

As the industry continues to explore further aﬁeld in search of oil reservoirs, operating conditions can be extremely challenging. HMIs positioned outdoors need to be protected from the elements and electronics need to be reliable in extreme environments. Modern equipment provides reliable operation between -40ºC and 60ºC. The devices also need to be shielded against electromagnetic interference (EMI) and radio frequency interference (RFI) and to be able to withstand high shock and vibrations. Industrial grade parts and thermally designed cast aluminium housings protect electronics in extreme environmental conditions, which makes the HMI robust,

GROWING USE OF APPLIANCES THAT PROTECT PLANTS FROM CYBER-ATTACKS Eaton has launched its next generation Tofino industrial security solution. The 9202-ETS MTL security system provides a high level of network security for process automation applications. The MTL Tofino security system is easy to install compared with alternative systems and includes the latest configurator software to protect industrial networks from cyber-security vulnerabilities. This maximises plant uptime and process availability while protecting it from external network attack. “When Industrial Control and Supervisory Control and Data Acquisition (SCADA) systems were not connected they were considered immune to attacks, but the trend towards open standards such as Ethernet TCP/IP and web technologies has seen these systems affected by a growing number of threats,” said Roger Highton, product line manager, Eaton. “Traditional

April 2017

firewalls are not designed for control systems or industrial threats, thereby putting essential utilities at risk, and each year, the damage to critical infrastructure from network incidents and cyber-attacks runs into billions of dollars. The MTL 9202-ETS gives process managers in the power, utilities, oil and gas and water and wastewater industries a cost-effective security protection that is highly effective and quick to install.” It supports all popular industrial protocols with the Firewall Loadable Security Module (LSM) which compares network traffic against a set of rules. The new release includes the EtherNet/IP Enforcer LSM for deep packet inspection of EtherNet/IP (CIP) communications. Tofino can also be configured remotely with the Netconnect LSM, providing further flexibility to the user. Further LSM’s can also be specified such as the Modbus enforcer and OPC enforcer

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LSMs providing deep packet inspection for these key industrial protocols and the Event Logger LSM logs security events and sends alarms. The LSMs are available pre-installed or can be purchased separately. The 9202-ETS MTL security appliance delivers defence in depth for a wide range of DCS, PLC, SCADA, networking, and automation systems. As it does not have

PLANT SECURITY therefore increasing reliability and improved asset uptime.

Portable devices

How portable does the equipment need to be? Will it be ﬁxed to a station or does the engineer need to carry the HMI around with them on site? Data visibility is key here and there is a growing trend for portable devices that can be easily transported close to the application. A decade ago, portable devices were rare and cumbersome because of the power consumption of the electronics. However, the mobile product demand in the consumer market has driven chip companies to develop low power processors that have led to the design of more easily portable devices in the industrial platforms such as Eaton’s Azonix product portfolio.

Summary Intelligent HMI and display systems are making a real difference in the exploration of oil worldwide, giving decision makers critical data so they can improve the safety and productivity of drilling operations. Experts in HMIs and visual displays provide essential engineering resources, sharing computing and electronics knowledge that ensures faster integration and installation of rugged and robust systems for increased proﬁtability.

its own IP address, it sits as an invisible device on the network and is designed to stop threats without disrupting the critical process application. The Tofino system includes a number of templates for use with a wide range of automation protocols to further ease installation. In addition, it provides a number of rules and a test mode, so users can check the proposed configuration that will not interfere with the operation of the plant before putting the security appliance into operation. Tofino Configurator checks for missing or invalid rules and suggests solutions, thereby aiding set-up. The 9202-ETS MTL security appliance has a rugged hardware design suitable for use in harsh and hazardous environments. It has a robust metal housing for DIN rail mounting, -40°C to +70°C operating temperature ratings together with Class 1 Division 2 and ATEX Zone 2 hazardous area approvals. This ensures it will give years of reliable service, providing secure networks with security zones as per NERC, ANSI/ISA, and IEC standards.

INDUSTRY REPORT

COMPLETE DETECTION AND ASSESSMENT SOLUTION FOR OUTDOORS FROM SIGHTLOGIX SightLogix, a smart thermal camera manufacturer for perimeter intrusion detection applications, has integrated their SightTracker PTZ controller with Videotec’s ULISSE Compact HD PTZ. The combined solution gives users an accurate and cost-effective security solution for detecting, tracking and assessing intrusions in the outdoors. “By integrating the world’s smartest camera with Videotec’s industry-leading PTZ camera, customers get real-time detection along with the vital details they need to make the best security decisions,” said John Romanowich, SightLogix president and CEO. With this integration, SightTracker has been enhanced from supporting Videotec analog cameras to also control Videotec IP-based Compact HD PTZ cameras, using ONVIF profile S. When used in conjunction with SightLogix smart thermal cameras, customers can detect intruders very accurately over large areas and instantly verify targets with high quality HD video from Videotec ULISSE Compact domes. SightTracker solves the challenge of an operator trying to manually locate a target outdoors using a PTZ camera. SightTracker uses GPS-based target information provided by an associated SightSensor detection camera to automatically guide the ULISSE PTZ cameras to the precise location of detected targets and zoom in for greater detail, without any human intervention. Targets are visually displayed on the customer’s video management system, while their precise GPS location is presented on a SightMonitor topology map. The result is a comprehensive intruder detection solution that provides the “what and where” of an intrusion for making fast decisions while capturing the event for evidence. The integrated solution from SightLogix and Videotec has been proven in many real-world deployments. For example, at an oil refining facility, fixed SightSensor video analytic thermal cameras provide

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long-range detection around the reﬁnery’s perimeter, while SightTrackers automatically steer Videotec ULISSE PTZ cameras with infrared illuminators to light the target. The combination of systems creates a complete thermal detection and assessment solution over large outdoor areas without the need for visible lighting. Similar systems have been deployed to protect electric substations in Europe and North America for detecting intruders entering the facility while also sending alerts when onsite personnel get too close to high-voltage equipment. In these applications, accurate detection is combined with real-time video assessment to ensure that both security and safety requirements are met. The Ulisse Compact HD offers a full HD image coupled with fast and accurate positioning and a 30x motorised zoom lens. In low light environments the Videotec’s camera coverage is up to 600 feet. SightTrackers use GPS-based target information provided by an associated SightSensor detection camera to automatically guide the ULISSE Compact HD to follow detected targets for greater detail without human intervention. “The integration with SightLogix allows our customers to beneﬁt from enhanced situational awareness for securing outdoor infrastructure. Our collaboration provides security personnel new options for automated security built around Videotec solutions,” said Gianni Viero, vice president of sales at Videotec

April 2017

FEATURE

HEAVY OIL

STRATEGIC IMPORTANCE OF HEAVY OIL TO KUWAIT Pipeline Magazine’s Julian Walker got an exclusive insight into Kuwait Oil Company’s heavy oil strategy and why the resource is seen as such a strategically important resource for the sustainability of Kuwait’s oil industry Deputy Chief Executive Officer, (North Kuwait Directorate), of Kuwait Oil Company, Badria Ali Abdul Rahman How does the development of heavy oil resources fit into KOC 2030 strategy? The strategic plan of Kuwait Petroleum Corporation (KPC) and its subsidiaries, “2030 strategy”, lays out an ambitious future to explore, develop and produce oil and gas at a greater scale and complexity than at any time in the history of the Kuwait. The aim is to increase the strategic production target of Kuwait to 4 million barrels of oil per day, of which the 11 per cent will be achieved by developing the heavy oil resources in the North Kuwait Directorate. The heavy oil resources are pivotal for the sustainability of Kuwait’s oil industry, and one of the strategic development objectives for the country. The development of the heavy oil resources have been planned in two phases: • Phase I, known as “Building capability” phase, to build a strategic capability to produce 60 MBOPD, from 2018/19, maintaining it afterwards. • Phase II, known as “Gap Filler” phase, to grow KOC’s heavy oil production to 270 thousand barrels of oil per day by 2030.

April 2017

How has the low oil price environment impacted KOC’s heavy oil ambitions? As KOC’s heavy oil projects are classiﬁed as strategic projects, the development of heavy oil has not been

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impacted by the low oil price. The key to success for KOC is its rapid adaptation to global changes, taking strategic decisions in a timely fashion. Using a mixed workforce supported by IOCs and service companies to support

HEAVY OIL and help KOC become self-reliant, we have involved strategic partners in helping us adopt new technologies. The low-price of oil affects all producers and partners in our sector. The approach of KOC to tackle this situation has been a balanced one, optimising costs in the current operations and projects, while maintaining the level of investment in strategic projects with a long-term vision.

Is KOC maintaining the investment levels in the heavy oil projects? Yes. As KOC is proactively allocating resources based on key long-term projects, in advance of business needs, and in alignment with overall company’s priorities and objectives, we are maintaining the level of investment in heavy oil development projects. Kuwait is destined to remain a pivotal force amongst the oil exporting nations. Our national plans are aimed to maintain Kuwait’s solid rank as the seventh largest oil-exporter country.

Manager Fields Development (Heavy Oil), of Kuwait Oil Company, Ibrahim Abdulla Al-Sammak What technologies are you implementing in your heavy oil development and production projects? Putting always in mind the expected oil price fluctuations and the high cost associated with heavy oil development, KOC has launched several pilot programs to assess the more efficient exploitation strategies for our heavy oil which always consider the environmental impact, in addition to focusing on technologies that will lead to higher recovery with efficient

What are the main opportunities and challenges facing KOC’s heavy oil projects? Our main opportunities come from the decision of maintaining the level of investment in heavy oil projects, which triggers our sustainability into the future. The biggest challenges, given the complexity of the heavy oil operations, are the management of costs, the energy consumption optimisation and enabling long-term sustainability. A special challenge is to overcome the scarcity of experienced human resources. Our aim is to ensure the competency development of the young Kuwaitis, as they will be handling the future in the oil sector of the State of Kuwait.

What can attendees at MEHOC expect to hear from KOC at the Congress? We will showcase our recent progress in the development of heavy oil in Kuwait, covering the following topics: • Heavy oil development history in Kuwait • KOC heavy oil production strategy and targets • Ongoing piloting programs and projects in South Ratqa heavy oil ﬁeld • KOC HO phase I commercial project • Overview on a new explored heavy oil at Umm Niqa Field.

FEATURE

distribution. Hence, it is unlikely that a single recovery process would ideally suit our targets, and we will keep conducting pilot projects to assess the best way forward.

Can you provide an update on the Lower Fars Heavy Oil Project? On January 2015 Kuwait Oil Company (KOC) awarded contracts for US$4.1 billion, to execute the engineering, procurement and construction (EPC) of the Lower Fars project. The project encompasses a comprehensive set of segments, from upstream to downstream. It includes a steam injection facility, a central processing facility (CPF), a production support complex, a tank farm and pipelines. It is worth mentioning that a novel water treatment plant, and hazardous waste disposal treatment plant for water efﬂuent is being considered in the design. As the water supply inlet pipeline to the CPF from Utilities Development Company’s Sulaibiya water treatment plant, will utilise the reject water into the sea, to be as the source water for the steam generation. The project is currently in the detailed engineering and construction phase. The expected turnover is scheduled for May 2019.

What opportunities do you see for IOCs and technical service providers to get involved in Kuwait’s Heavy Oil Projects?

costs. We are evaluating the reservoir response to cold flow in horizontal wells, cyclic steam stimulation, and steam flood. The pilots consider vertical and nonconventional wells, different schemes and spacing. Various new artificial lifts were tested. Additionally, different steam monitoring technologies were tested such as 3D VSP (Vertical Seismic Profile) which was designed in a worldwide pioneer approach for shallow reservoirs. Other initiatives I want to mention are the application of solar energy to generate steam and co-generation, to substantially increase the efficiency of the system. However, the heavy oil resources in Kuwait are wide, and with a complex fluid

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KOC acknowledges the special nature and complexity of working on heavy oil development projects, which definitely require a skilled workforce, not yet available as this is the first project of its kind in the company’s history. We have established an Enhanced Technical Service Agreement (ETSA) with Shell, as a strategic initiative to develop the heavy oil resources of Kuwait along with intense focus on Kuwaiti staff development who are working closely with Shell technical staff. It is aimed to provide technical advisory support and assist in enhancing the production efficiency through technology and knowledge transfer. Our ETSA with Shell is already providing early wins, particularly for the optimisation of the development plans, in which we have to match tough production targets in tight timeframes.

April 2017

FEATURE

VALVES, PIPES, FITTINGS

INTERPIPE PUSHES INTELLIGENT PRODUCTS FOR A DEMANDING MIDDLE EAST MARKET Andrey Burtsev, commercial director for Middle East, Africa, and Asia markets at Interpipe speaks to Pipeline Magazine about new pipe technology to serve well-efficiency and growth in production in an increasingly complicated drilling environment What are some of your new technologies to serve the latest demand trends in pipes? At Interpipe, we strive to be in pace with the latest market trends. Complication of well drilling conditions have created the demand for more intelligent pipe products, with higher safety and efficiency requirements. As a pipe producer for the oil and gas industry, Interpipe constantly develops new steel grades and premium connections for this field. In 2016, the company signed a license agreement with JFE Steel Corporation in order to perform full-cycle production of the JFEBEAR premium connection for the CIS market. In addition, our own premium connection UPJ has been produced for more than 10 years and successfully applied in vertical and controlled directional wells. Interpipe’s R&D team is currently at the final stage of development of the gas-tight premium connection for tough environmental conditions. The team is also working on steel grades that exceed API requirements for increased H2S level. We also keep the construction industry in focus. Being the UL 852 certified producer,

April 2017

What innovation is taking place to improve operational efficiency?

we are constantly widening the product range for this area of application. In 2016, we mastered new pipe dimension of OD of half inch and three-quarters of an inch and SHC 40-80. This year we are on target to ﬁnish construction of a pipe galvanising line which will provide our customers with high quality, mill-galvanised products.

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Operational efficiency is crucial for the successful business performance. Innovation is a cornerstone of Interpipe’s business. The vertically integrated business structure allows us to control the quality on all stages – from steel melting to the shipment of finished products to our customers. Our state-of-the-art steel melting complex, Interpipe Steel, was built in 2012 and is fully automated and based on innovative technologies. Interpipe Steel ensures high levels of quality and operational efficiency. Over the last 10 years we have been developing and increasing our export capabilities. During 2012 and 2013, the company completed a huge investment programme, including launch of the new finishing line with automated non-destructive testing equipment. This year we are scheduled to commission another finishing line in order to enhance the production capacities. We develop our IT systems to control maintenance of the equipment, to monitor its availability and also to improve the traceability of each manufactured pipe.

TECHNICAL EGYPS CONFERENCE

2018 CALL FOR PAPERS NOW OPEN

EGYPT PETROLEUM SHOW

12 - 144 February 2018 Cairo Internationaal Convention Centre

2018 TECHNICAL CATEGORIES

Offshore Technology and Operations (OTO)

Project Management, Engineering Technology and Implementation (PMETI)

E&P Geoscience (GEO)

Oil, Gas and Unconventional Field Developments (OGUFD)

Drilling and Completions (DC)

Gas Processing Technology and Operations (GPTO)

Operational Excellence, Maintenance and HSE (OEMH)

Downstream: Reﬁning, Petrochemicals and Fertilizers Technology and Operations (DRPFTO)

Power Generation Technology and Operations (PGTO)

Marketing and Distribution of Reﬁned Products (MDRP)

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Deadline: Thursday 27 April 2017 EGYPS 2017 TECHNICAL CONFERENCE STATISTICS

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ABSTRACTS RECEIVED

Supported by

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Ofﬁcial Publication

FEATURE

VALVES, PIPES, FITTINGS

How are customers’ needs changing as they look to address an environment of volatile oil prices? Oil and gas companies continue to strive for a growth in production rates of existing wells. Consequently, this leads to raising the requirements necessary for well construction and equipment, especially pipes. In addition, there is a tendency of increasing in shale oil production, namely in America. As a result, now we are developing premium solutions in both directions, providing required performance characteristics and quality level.

What are the implications of digitalisation on pipes technology? Interpipe is building a uniﬁed IT system in key areas, including production and quality control, product traceability, maintenance, logistics, treasury and bookkeeping, and so on. For example, the company is one of Ukraine’s pioneers in launching an e-procurement system instead of paperbased tenders. Any supplier can accredit independently and receive information about tenders which are being processed. Digitalisation plays a major role in building

a supply chain. Our IT system organises production plans and orders so we can track an order’s progress at any point.

How do Middle Eastern clients’ needs differ from clients in other regions due to climate, shallow waters and EOR/deep drilling etc.? Being one of the biggest markets for pipe products, the Middle East is one of the most competitive markets, due to its openness to various suppliers, and is one of the most technically advanced markets with tough end-user requirements.

Different types of wells and oils require different approaches and technologies for oil extraction. For example, large amount of heavy oil is produced in the Kingdom of Saudi Arabia and Kuwait, by applying a steam injector in addition to producing oil well. This influences us as a pipe products supplier because thermal methods require high quality boiler pipes, which should be qualified by oil companies as well as OCTG. We manufacture required product range and are working to be approved for supplies, especially for KOC’s needs. In general, the conditions of drilling become more complicated, with the increase of high-deviation wells into high formation pressure. This poses the demand for new products with premium connections. By considering environment and individual customers’ needs, we can offer complex solutions. Our technical managers can consult clients on choosing proper pipes in accordance with well conditions and economic expediency, provide assistance during makeup process and running OCTG. In addition, we can organise a ‘just-in-time’ delivery to avoid the overflowing of their warehouses.

Available on-line visit our website

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April 2017

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FEATURE

VALVES, PIPES, FITTINGS

VALVES, ACTUATORS MARKET TO GROW STEADILY IN NEXT 4 YEARS – TECHNAVIO

Energy Assurance for Future Generations

Health Safety & Environment Services PHA (HAZID,ENVID,OHID), HAZOP SIL Assessments & Verification COMAH & HSEIA Sustainability Reporting Quantitative Risk Analysis Fire & Explosion Engineering Computational Fluid Dynamics Modelling Escape, Evacuation & Rescue Analysis

Offshore Risk Analysis

he global industrial valves and actuators market will grow steadily during the next four years and post a combined annual growth rate (CAGR) of around 6 per cent by 2021, market research analysts at Technavio said in the latest report on the sector. Technavio’s experts predict that the oil and gas industry will be one of the major end-user sectors of industrial valves and actuators, where the increased exploration activities to meet the rising demand for crude oil from several countries across the globe will be a major factor driving market growth. The oil and gas industry will also be the major revenue contributing sector to the market throughout the forecast period of 2017-2021, the analysts forecast. “Increased investments towards pipelines in the Americas, the Middle East, and APAC and the rise in exploration activities to identify new oil and gas ﬁelds in the African countries, will boost the market’s growth prospects during the next few years,” the report said. Actuators and control valves are anticipated to grow at a CAGR of about 4 per cent and 5 per cent, respectively by 2020, the report said. Meanwhile, the report estimated that in terms of geographical regions, EMEA will be the major revenue contributor to the market throughout the predicted period. According to Technavio analysts, though the decline in oil prices that induced oil and gas companies to reduce their capital expenditure will affect market growth; however, the rising demand for valves and actuators from the other industrial sectors such as power, chemical, pharmaceuticals, and food and beverage will boost the market’s growth prospects in this region. The sector could see further product customisation, improved after-sales service as well as further M&A activity. Since all actuator and valve manufacturers in the market offer a wide range of industrial valves and actuators to end-user industries, the competitive environment among the market players is intense. “To sustain the competition, valve and actuator manufacturers have the need to offer customized solutions based on end-user requirements. Additionally, they also have the need to engage in sales through distributors who act as intermediaries between original equipment manufacturers and end-users, which will help them increase their revenue shares,” it said.

Emergency Systems Survivability Analysis

Asset Integrity Management Services Asset Maintenance Management System Identification of HSE and Business Critical Equipment and Systems / Safety Critical Equipment Functional Safety Management System implementation Reliability Studies such as (RAM, RCM, RBI, FTA etc.) Condition Assessment (Rotating, Static Equipment, Electrical & Instruments) Conformity Assessments / Fitness for Service Residual Life Cycle Assessment Certification Services (Third party during EPC Phase) Design Appraisals

Bell Energy, Abu Dhabi P.O. 47215, Abu Dhabi, UAE (T) +971 (2) 6761932 (F) +971 (2) 6761900 (W) www.bell-energy.com (Email) uaeoffice@bell-energy.net

Australia | Canada | India | UAE | UK | USA

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April 2017

FEATURE

VALVES, PIPES, FITTINGS

GOODWIN AXIAL VALVE INTRODUCTION GATHERS PACE By: Neil Frain, sales manager, Axial Isolation and Control, Goodwin International

fter a successful product launch of our brand new range of actuated Axial Isolation and Axial Control Valves at both ADIPEC and Valve World (Dusseldorf) in 2016, Goodwin is now moving into the approval and qualification phase of our development. National and international oil, gas, petrochemical and refining end users in the Middle East are of significant strategic importance to our plans. By engaging directly with these customers and showcasing our new product range, this approach is proving very rewarding with several product qualifications applied for and a number of others pending. Whilst actively launching and showcasing the new product range, there has been considerable work undertaken at the manufacturing facility in terms of endurance, flow and acoustic testing.

Goodwin is making rapid progress. It is worth noting, that the principle of operation, actuation mechanism, body joint and sealing technology are common for both designs, therefore the durability and reliability of both platforms can be assured on the basis of the same testing regime. Indeed the Safety Integrity Level of the Goodwin Axial valves is assessed on the basis of these tests.

Capacity and acoustic testing Additional to the endurance testing, the Axial Control valve is subject to further tests to determine the key characteristics of the valve in terms of capacity and noise. The test is designed around IEC 60534 and focusses on improving prediction of inservice performance. Optimisation of capacity, pressure control and noise for a given set of installed conditions is the key to ensuring that a

Endurance testing The focus of this test programme is on the durability of mechanical and sealing components. The test valve is rapidly closed against ﬂow, pressurised to generate differential seat pressure and then opened against differential pressure in order to simulate an ESD event. The stroke speed is <2 seconds which is in line with the typical requirements of High Integrity Pressure Protection Systems (HIPPS). The test valve is subjected to the same test over a large number of cycles in order to determine the expected life of the valve. During this test, actuation forces and valve seat leakage are both accurately monitored to detect any sign of degradation. With the facility operating 24/7 in order to accelerate the mechanical ageing of the valve,

April 2017

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control valve is correctly selected for any given application. All of the above testing has been conducted on bespoke in-house designed, manufactured and commissioned testing facilities. By conducting these tests inhouse, Goodwin gains a deep understanding of the performance of the valves and can experiment with design improvements in shorter timescales and at lower cost. Goodwin offers economical engineering solutions for standard and severe service applications, which require streamlined ﬂow, precision ﬂow control, high pressure let down and low noise. As such, the Goodwin Axial Isolation and Axial Control valves represent a logical choice for cost conscious customers who require competitive deliveries and pricing. Goodwin will be available for discussion at both the GPA (Gulf Processors Association) and EIC Connect events in Abu Dhabi during May 2017.

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ADIPEC OFFSHORE & MARINE EXHIBITION

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FEATURE

POWER GENERATION

THE NEW DISRUPTIVE FORCES

IN UPSTREAM OIL AND GAS By: Adam Forni, senior research analyst, Navigant Research

ower generation in upstream oil and gas (O&G), traditionally led by diesel generator sets (gensets), is transitioning to new energy sources, methods, and business models. While the arguments for diesel—including broad fuel availability and ease of transport and storage—have not changed, technological advances, regulations, and macroeconomics are expanding the options available to exploration and production (E&P) companies. At the same time, new business models are emerging that cut costs, boost efficiency, or otherwise improve operations in this energy-intensive industry. Technology, fuel availability, and regulations each play a part in deciding which source of power is best for a given site. In upstream O&G, safety and power reliability are paramount, meaning the battletested diesel engine was often the prime mover of choice. Technology is changing this; natural gas gensets are attractive thanks to improved reliability in recent years, even as falling battery prices quickly make that technology a viable and disruptive resource on the oil field. The availability of cheap natural gas, both at the wellhead and via the burgeoning liquefied natural gas industry, is making the economics of that fuel more attractive. And emissions regulations—especially in the developed world—are becoming ever tighter. Taken together, these developments are changing the upstream energy landscape and presenting both threats and opportunities.

This recovery has a new look As O&G prices rebound, E&P activity is forecast to grow in 2017, and along with it demand for the key prime movers: diesel, dual-fuel, and natural gas gensets, and turbines and microturbines. However, upstream power generation looks set to evolve during this recovery. The catalysts of this change come from three key areas: efﬁciency, ﬂexibility, and new value streams.

April 2017

Efficiency. With plummeting profit margins in the lean years of 2015 and 2016, E&P companies focused on cutting costs everywhere, from manpower to energy use. Digitisation, automation, and incorporation of new energy technologies are all improving production efficiencies. In one example of new energy technologies, specialty storage companies like FlexGen are deploying batteries and other storage devices to oilfields to improve generator operations. Storage can allow designers to rightsize the system, preventing waste engine cycling, cutting fuel consumption and sometimes eliminating redundant prime movers entirely. This represents a disruptive threat to incumbent prime mover vendors but brings efficiency gains to the energy value chain at large. These efficiency gains will be welcome to counteract the high energy intensity of unconventional O&G production. For example, in North America, the home of unconventional production, the energy intensity of O&G production in 2015 was 3.3 GJ/tonne of hydrocarbon—more than double the global average. As these intensive methods spread, efficiency will be in even higher demand. Flexibility. The rise of unconventional production in North America has also sped up average project lifecycles. Fracked wells have a much steeper decline curve than traditional wells, meaning their production lifetime is shorter. This encourages a shorterterm perspective on investments, often making grid power extensions less attractive (if even available) and rental generators more attractive. As fracking spreads to new regions including China, Latin America, and elsewhere, demand for flexible generation will grow. New Value Streams. Opportunity exists for stakeholders that look at old problems in new ways. Flaring, the intentional burning of natural gas coming from the wellhead, is one example to consider. In 2015, 147 billion cubic meters of gas were burned in this manner, representing about $20

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billion worth of energy up in smoke (based on average prices). With more efficient generators and controls, greater incentives to cut emissions, and continuing rural electrification, the wasted energy of the past is becoming the microgrid business model of the future. Other wellhead conversion technologies (including gas-toliquids) are improving as well. Places like Nigeria and Indonesia have high flare rates, and both governments have recently made moves to encourage more efficient use of such resources. As with all disruptive forces, these changes are both a threat and an opportunity. Incumbent vendors of prime movers should consider partnerships with storage, microgrid, and other distributed energy resource players. This includes solar PV and other renewables, though only for certain cases due to their limited flexibility. Stakeholders should also reevaluate the nimbleness of their supply chains to ensure opportunities are captured—whether with a rental, capital sale, or energy as a service offering—as the industry’s pace quickens. Stakeholders should also be on the lookout for new value streams for their products as technology, commodity prices, and regulations all change the industry. Many of these opportunities provide a mix of costcutting, energy-saving, and environmental benefits; a welcome combination in this dynamic landscape.

Adam Forni is a senior research analyst contributing to Navigant Research’s Energy Technologies program, with a focus on distributed natural gas. Forni has broad technical experience covering electrical systems, mechanical systems, energy efﬁciency, and ﬁnancial modeling.

HOSTED UNDER THE PATRONAGE OF HIS EXCELLENCY SHAIKH MOHAMMED BIN KHALIFA BIN AHMED AL KHALIFA MINISTER OF OIL, KINGDOM OF BAHRAIN

MIDDLE EAST

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HEAVY OIL CONGRESS

11 - 12 April 2017 | Gulf Hotel, Kingdom of Bahrain

ACCELERATING GROWTH IN THE HEAVY OIL VALUE CHAIN

INNOVATION

• TECHNOLOGY • STRATEGY

Register today for the region’s leading heavy oil congress www.meheavyoil.com/conferenceregistration HEAR FROM HEAVY OIL EXPERTS ABOUT: Advancements in EOR technologies enabling effective extraction of heavy oil Dissecting the key pillars of growth – Innovation, Strategy, and Technology – to better understand the future of the heavy oil industry Maximising production from depleting brownfields, and obtaining valuable return on investment Examining investments and advancements being made into research and development in the heavy oil industry Advancements in upgradation of refineries processing heavy oil, and how refineries can continue to produce high-quality finished products in the same facility

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30% of the world’s heavy oil resources are in the Middle East and it is imperative for us in the region to explore this oil. We are proud to host the 2nd Middle East Heavy Oil Congress in Bahrain on 11-12 April 2017 where we will discuss the importance of ongoing innovation in exploring, producing and refining heavy crude oil efficiently.

His Excellency Shaikh Mohammed Bin Khalifa Al-Khalifa Minister of Oil Kingdom of Bahrain

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BIN HAMOODAH

FEATURE

BIN HAMOODAH SEES PROMISING GROWTH PROSPECTS IN UAE B

in Hamoodah Trading and General Services (BHTGS) has been bringing international energy sector brands to the United Arab Emirates for the last fifty years and has seen its business grow along with the economy of the country. Osama Saeed, general manager of BHTGS, speaking to Pipeline Magazine, says the greater diversification plans for the UAE will open up opportunities for industrial growth. “The UAE economy has proven to be among the strongest economies regionally and the most promising globally – it will continue to remain attractive in 2017 amid recovering oil prices and growth in public and private sector activities,” he said. The Gulf country saw a shakeup of its primary revenue generating sector of oil and gas as crude prices plunged for almost two years to nearly half its value and have only just begun to stabilise. The government was quick to push for a greater economic diversification plan – Vision 2021, whereby dependence on oil will be pulled back significantly and contribution of non-oil sector has already reached 69 per cent. UAE’s GDP is forecast to grow between 4 to 5 per cent in the 2017 – 2020 period from approximately 3 per cent in 2016. The economic forecasts and growth assumptions are based on the current oil exports, which revolve around an average oil price of US$37 per barrel in 2016 and is projected to rise to $50 per barrel by 2017. “Today’s oil prices that we think of as low

are actually near the real average price of a barrel of oil,” Saeed said. The UAE government has shifted its orientation to the knowledge economy based on research and innovation and despite the decline in oil prices and therefore public revenues, it has continued following an expansionary policy in spending, where the private, public and government sectors pumped more investments in the economic activities and sectors to ﬁnance strategic projects and infrastructure. These projects include the expansion and modernisation of the national network of airports and the Etihad Rail network, roads, transportation, energy, tourism facilities, e-infrastructure and e-logistics and ﬁnancial services. Saeed said the Bin Hamoodah group will

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continue to drive the progress of their business and also that of the UAE with intelligent investments “The UAE has become one of the most dynamic marketplaces in the world.” BHTGS has the ultimate goal of representing world class foreign brands in the country, while providing the best service to customers and the best value to partners. “Through our commitment to these ideals, the BHTGS portfolio now includes industry leaders across a range of sectors such as oil and gas, power, water, rail, construction and IT, which have become integral to the growth of the UAE,” Saeed said. He said the opportunity for joint ventures and acquisitions in the UAE has always been an attractive – and lucrative – proposition for investors and BHTGS has the local knowledge, financial expertise and available assets to realise that potential. “Our commitment to representing world class brands in the UAE is unwavering and the prospect of increasing our investment in new business is more attractive than ever,” Saeed said. Bin Hamoodah group’s fundamental business principals are perfectly in line with their pledge to contribute to the UAE economy and reflect its values of progress, innovation and the entrepreneurial spirit. “As we see the country’s infrastructure develop even further and our economy diversifies even more, the opportunities for intellectual and industrial growth are endless,” he said.

April 2017

FEATURE

EGYPS

EGYPS REVIEW

EGYPT PETROLEUM SHOW

EGYPS ROUNDS UP ON HIGH NOTE TO ATTRACT FOREIGN INVESTMENTS

gypt Petroleum Show, in its ﬁrst edition in February saw an array of international, local and national oil and gas companies participate, share views and discuss partnerships, to successfully round up the three-day event in Cairo amid a throng of visitors. EGYPS 2017, had over 800 conference delegates, more than 320 regional and international exhibiting companies and about 30 participating countries, dmg events, the show organiser said. The show included a Strategic Conference, EGYPS Young Professionals roundtable, Technical Conference Sessions and Women in Energy Conference. The next edition of the show is set for February 12-14 2018. A strong opening of the show by Egyptian President Abdel Fattah El-Sisi, accompanied by Minister of Petroleum and Mineral Resources, Tarek El-Molla, proceeded wellattended conference sessions where International Oil Companies (IOCs) and National Oil Companies (NOCs), discussed Egypt’s plans to revamp and fast-track the development of the country’s oil and gas sector. After years of post-revolution economic slowdown and rising energy demand, the country is in the midst of economic reforms, necessary for receiving a US $12 billion IMF loan to help turn around the country. The prime investment target is developing its energy sector. The event saw many discussions

April 2017

take place between IOCs and NOCs on investments and cooperations and consultation. The country is also working on a new investment law, which will focus on the diversiﬁcation of incentives and guarantees for investors, as Egypt looks to attract foreign investment to help develop its new gas discoveries. Representatives from IOCs said they expect the show to help build momentum behind advancements in Egypt’s oil and gas laws, regulations and investments procedures, which would then help

to streamline foreign investment in infrastructure and propel partnerships. “We have had fruitful discussion with regulators here - the country needs good infrastructure for gas and authorities have done a lot to attract the investors,” said Marc Benayoun, CEO of Edison Spa. Speakers from Egypt’s government at the conference invited international companies to invest in the country’s oil and gas projects.

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These projects fall under Egypt’s plan to become an energy hub for Europe and Africa, in partnership with Greece and Cyprus. “Last week, Egypt signed with Cyprus for cables between the countries - this is part of Egypt’s strategy to become an energy hub,” Mohamed El Masry, chairman of Egyptian Natural Gas Holding Company (EGAS) said on Feb. 15 at EGYPS. At the centre of Egypt’s plans to become an energy hub, is the recent discovery of Zohr gas field, the biggest offshore gas field in the Mediterranean, estimated 30 trillion cubic feet (tcf). The country is speeding up the development of major gas discoveries with a stated goal of achieving energy self-sufficiency by 2020-21 with a production target of 7.5 billion cubic feet. Italy’s Eni, which discovered the gas field, will begin producing about 1 billion cubic feet a day from Zohr at the end of 2017 and BP will add production of about 450 to 500 million cubic feet a day, according to Tarek El Molla, Egypt’s minister of petroleum and mineral resources. Khaled Hashem, president of Honeywell Egypt, which has been active in the country for more than 30 years, said the event takes place at an opportune time. “Egypt has key ongoing projects and there is a need for Honeywell to be a part of it - it’s very exciting. We’re already working with them to make sure this happens,” he said.

EGYPS

EGYPS REVIEW

EGYPT PETROLEUM SHOW

FEATURE

REFLEX MARINE LOOKS TO EXPAND ITS EGYPT OPERATIONS IN EFFICIENT OFFSHORE TRANSFER

eflex Marine provides safe access solutions to the offshore oil and gas and marine industry. Best known for the FROG transfer carrier, which is now an industry benchmark, the company continues to innovate to improve solutions for the industry. With global offices, Reflex Marine has been at the forefront of development in marine transfer for the past two decades and is involved in over one million safe transfers each year. Sandra Antonovic, Chief Operating Officer at Reflex Marine speaks to Pipeline Magazine’s Nadia Saleem about new opportunities in Egypt and the Middle East.

What attracted you to Egypt and what are your plans for expanding business here? Egypt is a natural hub for a company like Reﬂex Marine. While we do like to grow our global operations and client base, we are very much aware of the importance (and necessity, really) to adapt to each region and sub-region. Having a unique geographical position connecting Middle Eastern countries in the Arabian Gulf, Black Sea and Eastern Mediterranean with the rest of the Europe and the World, Egypt quickly became a focal point of our regional and global strategy. Egypt brings industries together and it makes it easy for companies like Reflex Marine to see the potential beyond oil and gas. Egypt offers opportunities in marine sector, tankers and shipping, but also in offshore civil construction and beyond. We will remain focused on Egypt. We chose Egypt to be the first country in which we exhibit our products this year – it’s a strong message, both regionally and globally.

Egypt is a perfect combination of oil and gas and maritime industry to close the circle of everyone working offshore. For us to be able to expand in all those offshore sub sectors is very special; it is both a challenge and an opportunity.

Where do you see potential for growth? We are already active in the Red Sea and the Nile Delta – we will keep improving and growing our focus there. We plan to focus a lot on Suez as well, and we will soon be launching another product very suitable for the tanker and marine sector. We remain focused on helping companies working offshore improve their operations by bringing down the cost, and by improving safety and efﬁciency.

What are your views on the changing regulatory and tax environment in Egypt? We understand that things changed in a way that can impact our business. We are doing our best to support our local partners, and we adopted a very ﬂexible, locally driven market and commercial approach.

Can you provide us with a business update for Egypt? We are working with local partners and together we market our products and services. The base of our global approach – ﬁnding local partners and recognising the local culture, customs and way of doing business – is working really well in Egypt. Exhibiting at EGYPS gave us the opportunity to present our products and spend more time talking to people from the industry. It also gave us the opportunity to further embrace local culture and keep learning. Our local partners are a great support to us, and together we are helping companies offshore by bringing down their costs and improving the safety of their crew transfer operations.

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What are the key challenges you’re facing? Local administration and regulatory bureaucracy is not always clear, but that’s the case with a lot of countries. Once you accept that, it becomes easier to adapt.

What are the opportunities you are looking at in the Middle East region? Middle East will always be one of the main drivers of offshore industry. Our biggest opportunity is working together with local and national companies, helping them in their journey to remain global inﬂuencers and leaders. Safe offshore transfer is and should be at the forefront of that journey.

What are the new products you showcased at EGYPS? WAVE-4, our latest product, was showcased at EGYPS. WAVE-4 summarises our efforts to support companies bring their cost down while not compromising on safety of their crew transfers but rather improving them.

April 2017

TOOLS AND TECHNOLOGY

Global tubing launches new coiled tubing product Global Tubing has launched a new coiled tubing product, Duracoil that has improved tubing fatigue life, predictability and resistance to abrasion minimises downtime due to pipe failures. It is also less susceptible to preferential corrosion and Microbial Induced Corrosion (MIC) than conventional coiled tubing. “Global Tubing is leading the coiled tubing industry by introducing the most advanced product to the market,” said Neal Lux, president of Global Tubing. “Coiled tubing operations are increasing in complexity, and Duracoil is the optimal solution for challenging completions, complicated interventions and well services in harsh downhole environments.” Global Tubing utilises its patent pending process, Halo Induction

Technology, to manufacture Duracoil, quench and tempered coiled tubing. Other products utilise a two-step manufacturing process that requires additional handling during manufacture which can damage the tubing and produce an unpredictable final product. Halo Induction Technology is an inline production process that prevents such damage while providing superior consistency and manufacturing reliability. Global Tubing said that it is confident that Duracoil will provide improved efficiency, safety and durability in the field for coiled tubing operations worldwide. The development and introduction of this engineered product represents the most significant advance in coiled tubing technology in the last 30 years.

GustoMSC introduces new selfpropelled jack-up design The NG-5500X-LD is the latest design in GustoMSC’s series of self-propelled jack-up designs, the NG series. Based on the proven and seasoned NG2500X and NG-1800X designs, the NG-5500X-LD is a solution for light drilling and well intervention in a large number of mature fields in the Southern North Sea, Middle East and South East Asia. The conditions of these fields are characterised by water depths of up to 50 to 80 meters pending the region. Until now this was the domain of classic drilling jack-ups and tender barges with associated day rates and operational restrictions. With the light drilling cantilever, the NG-5500X-LD bridges the gap between the successful shallow to midwater service units and the full-fledged drilling rigs. The unit can remain offshore when adverse weather conditions occur, resulting in more workable days, greatly enhancing efficiency and a minimum of non-productive hours during operational charters. With the excellent maneuverability (DP2), diagonal pre-loading, fast transit (up to 8 knots) and maximum safety and accuracy when

April 2017

making use of the Variable Frequency Drive controlled jacking system, the NG-5500XLD enjoys all benefits of the successful GustoMSC NG series. The light drilling rig will ensure high utilisation as it can serve a variety of brown field needs, such as light drilling, well intervention and plugging and abandonment. The large clean main deck (approx. 1,200 m2) allows for flexible use while the cantilever featuring the X-Y Skidding System provides a large drilling envelope of 60 ft x 26 ft. This envelop ensures access to a vast majority of brown field platform layouts seen in the Southern North Sea, Middle East Gulf and South East Asia.

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TECHNOLOGY IN BRIEF New dimension in breathing air supply from Bauer Bauer‘s new Verticus & Mini- Verticus series is at the core of the firm’s new portfolio. These systems were developed as an all-new platform, offering unlimited interfaces for applications in the future. The compressors already incorporate connectivity to a smartphone or tablet, allowing operators to control and monitor the system remotely. The new series set the standards of the future for stationary high-pressure compressor systems. The series combines the quality and reliability of the preceding stationary compressor series with an all-new design, smartphone connectivity through the Bauer app, online air quality monitoring and ergonomic features. Although compact, the new MiniVerticus benefits particularly from the new design. Its identical housing now conceals more advanced engineering: the highest-end model now incorporates a more powerful compressor block, boosting its maximum free air delivery by over 20 per cent to 320 l/min. In addition, numerous accessory models from the larger Verticus series, such as the B-Control II control unit, are now also available. The system supports remotecontrol operation and control using the Bauer app. It also features an ultra-reliable, high-precision smart internal online measurement system that monitors compliance with all toxin limit values in the air around the clock and automatically shuts down the system in case of doubt. It is significantly quieter to run, and offers ergonomic design and ease of operation.

TOOLS AND TECHNOLOGY

Baker Hughes releases industry’s first adaptive drill bit Baker Hughes has released its TerrAdaptadaptive drill bit, which can deliver dramatic improvements in drilling economics by using automation to mitigate downhole dysfunctions that cause inefficient drilling and costly tool failures. With the industry’s first selfadjusting depth-of-cut (DOC) control elements, the TerrAdapt bit automatically changes its aggressiveness based on the formation through which it is drilling to mitigate vibrations, stick-slip and impact loading. For operators, this means faster, more consistent rates of penetration (ROP), longer bit/tool life and significantly reduced non-productive time and invisible lost time. The vast majority of well intervals are drilled through a variety of formations containing layers of different rock types, however, current polycrystalline diamond compact (PDC) drill bit designs feature a fixed DOC control setting that is optimised for only a single rock type. A fixed-DOC bit will drill smoothly in some areas but will perform erratically and inefficiently in others because of vibrations that occur when the bit transitions between different rock types, causing stick-slip. During stick-slip events, the bit’s bite becomes too aggressive, causing it to “stick” and stop rotating, while

the drillpipe behind it continues to wind up like a spring until the bit releases, or “slips,” and begins spinning uncontrollably. These stick-slip events dramatically increase drilling costs by reducing ROP, and can seriously damage the bit and other expensive mechanical and electrical bottom hole assembly (BHA) components. When this happens, operators have to make extra trips to replace the bit/BHA, or continue to drill with diminished performance. The TerrAdapt bit incorporates selfadjusting DOC elements that autonomously extend to create an optimal DOC based on the formation, preventing vibrations and stick-slip when the bit transitions between rock types or sections. When the risk of stick-slip has passed, the elements retract, enabling drilling to resume at a maximum

Rivertrace Technologies showcases new Oil-in-Water Monitor Currently undergoing sea trials in the Norwegian North Sea Sector, the monitor measures particulates in the sample stream on a continuous basis by passing the process fluid through a proprietary photo optical measuring cell, developed by Rivertrace Technologies. Using a combination of optical recognition algorithms and light intensity it is possible to differentiate between oil particles, gas/air bubbles and solid particulates in the range 0-500 microns. Unlike conventional monitors using light scatter or UV fluorescence, the PFM 107 requires no re-calibration if the oil varies from the standard calibration fluid, making

it an ideal monitor for offshore platforms, drill ships and FPSO’s. Flow and particulate characteristics can also be visualised live via remote access and via optional dedicated software on any Windows PC. Oil concentration, pressure, temperature and oil alarm status are displayed on an easy to read LCD touch screen display. Oil concentrations, alarms and any faults are logged and stored within the system to comply with the reporting requirements of IMO resolution MEPC 107(49) and can be accessed remotely or downloaded onto a PC via LAN or USB for further analysis. When connected to the internet it is possible for remote diagnostics to be performed by the manufacturer or an

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ROP. The elements also absorb any sudden shock to the bit face, significantly reducing damage to the TerrAdapt bit’s cutters and other BHA hardware and electronics. “I believe the TerrAdapt adaptive drill bit is going to deliver a step-change in our customers’ drilling efficiency,” said Scott Schmidt, vice president, Drill Bits at Baker Hughes. “Stick-slip, which has been costing them millions of dollars each year, can now be easily avoided. So, instead of worrying about how to handle stick-slip or figuring out how to deal with its consequences, our customers can focus on their real business—drilling fast, trouble-free wells.” In the Delaware Basin, a TerrAdapt bit recently demonstrated its value by increasing a customer’s ROP by 27 per cent compared to the average ROP on offset wells drilled through the same interbedded formations. The bit reduced torque variations by 90 percent, indicating dramatically reduced stick-slip—enabling the operator to drill 713 ft, or 27 per cent, farther and use significantly less energy than on the nearby wells drilled with traditional PDC bits. This TerrAdapt bit is the first in a new line of adaptive bits that Baker Hughes is developing to help operators address various drilling dysfunctions, improve performance and reduce costs. The TerrAdapt adaptive drill bit uses self-adjusting depth-of-cut (DOC) control elements to automatically adapt its aggressiveness to changing rock types and mitigate downhole dysfunctions.

approved service centre. The Smart PFM offers a choice of auto cleaning methods to ensure the accuracy is maintained at all times. Dependant of the utilities available you can choose from an air driven solenoid, electronic actuator or high power ultrasonic cleaning method. The cleaning is fully automatic and operates whenever the system senses contamination of the optical windows. Mike Coomber, Managing Director of Rivertrace said: “The Smart PFM 107 Oil-in-Water Monitor is the only PFM on the market that comes with a choice of cleaning options as standard, preventing fouling, the most common failure of any PFM. We are committed to ongoing development to ensure that these products remain at the forefront of available technology, and consistently push the boundaries for oil-in-water analysis.”

April 2017

PEOPLE

NEW APPOINTMENTS Petroplan appoints new CEO

Petroplan Group appointed Rory Ferguson as its new chief executive officer. Ferguson joins Petroplan from recruitment firm Lawrence Harvey, where he spent three years as group managing director, overseeing a period of rapid growth and developing a new leadership team. Prior to Lawrence Harvey, Ferguson spent four years at international recruiter Hydrogen, in which time he took the oil and gas team from inception to an international practice representing 20 per cent of the group’s gross profit. He has a BA in History from the University of Southampton, and also served as an officer in the British Army for four years. John Reeder, co-founder and chairman of Petroplan, commented: “We are delighted to have Rory on board, given his very impressive track record and over twenty years’ experience in recruitment. I and the rest of the board look forward to working with him as we broaden our scope and deepen the expertise we have under our roof.” Ferguson said: “I’ll be working with the board to build a strategy, which I’m confident will include an element of diversification. But we won’t be straying too far from our primary market, where I believe value remains in the longer term.”

Jim McIlvenny appointed Dow IMEAT president Based in the UAE regional headquarters, Jim McIlvenny was appointed Dow’s president for the India, Middle East, Africa and Turkey (IMEAT) region. McIlvenny takes the new position in addition to the responsibilities he has held as group senior vice president of Dow since 2010 and chairman of the Dow Sadara project office since 2011. McIlvenny has been responsible for leading Dow’s key, large-scale investments designed to meet the growth opportunities of tomorrow and to enhance the longterm profitability of Dow across various geographies. He joined Dow in Australia in 1982, and has since held a number of positions in chemical and performance products in the areas of technical service,

April 2017

sales, marketing, and business leadership. Heinz Haller, executive vice president and president of Dow Europe, Middle East, Africa and India said, “The Middle East is a strategic market for Dow and we believe Jim’s extensive knowledge and global experience will help enhance our operations in the region further. Jim is one of the industry’s best and most highly regarded senior executives, and has been at the forefront of one of the largest partnerships Dow has undertaken in the region: the Sadara Chemical Company. He has been a part of Dow for over three decades and his commitment and values make him the perfect ambassador for us in the region.”

safety and financial performance in 201314. He also led the development and implementation of key initiatives which led to the successful and efficient operation of the firm’s fleet of 14 FPSOs. Previous to this, he held the chief financial officer position at Remedial Offshore and regional CFO position at Technip. M² Subsea chief executive officer Mike Arnold said: “His (Bannerman’s) considerable finance and business expertise will play a key role in driving M² Subsea’s strategy forward, as we look to become a leading name in remote subsea intervention. His extensive track record in strategic deal making and commercial management makes him a valuable addition to the team.”

Gulf Petrochem Group Bolsters its European Bunkering Division Gulf Petrochem Group (GP) has strengthened its bunker trading team in Europe with the appointment of Maxime Cramer to the group’s Rotterdam office. He joins a team of bunkering traders headed up by Chris Todd in Europe’s largest bunkering port, Rotterdam. Maxime has in-depth knowledge and vast experience on both the customer and supply side of the business, having previously held trading positions with OW Bunker and Minerva Bunkers. The appointment of Maxime will further bolster GP’s global bunkering division which is currently headed up by Chris Todd, West of the Suez and Anil Keswani managing the same portfolio, east of the Suez. The Rotterdam office currently caters to the group’s global customers and provides them with the supply of marine fuel products such as 380cst and LSGO in the ARA region. The office is further looking to expand its barge fleet in Europe, add a new physical area and add another trading office in Europe during the course of this year.

M² Subsea appoints new chief financial officer M² Subsea, has appointed Stuart Bannerman as the company’s new chief financial officer. Bannerman brings more than 30 years of executive management experience to the fledging subsea business, having worked with several high growth oil and gas firms across the globe. In his previous role as chief operating officer for BW Offshore, he played an instrumental part in helping the company achieve record

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Wood Group appoints new European president Wood Group appointed Alan Johnstone as president of its Asset Life Cycle Solutions business in Europe. Joining Wood Group from his position as Amec Foster Wheeler’s managing director for upstream asset solutions, Alan brings almost three decades of North Sea, Southern North Sea and Caspian oil & gas experience. A long-standing member of Step Change in Safety’s leadership team and former co-chair of the organisation’s asset integrity steering group, Alan was chairman of the Offshore Contractors’ Association until August, 2016; a position he held for three years. Dave Stewart, CEO for Wood Group’s Asset Life Cycle Solutions business in the Eastern region, said: “Alan’s extensive expertise, robust knowledge and experience at the fore of many significant UKCS projects, positions him strongly to lead our European business. “We are relentlessly focused on excellence in our service provision, leveraging our broad technical expertise to deliver efficient and effective services that add value for our breadth of clients. Alan’s leadership will be integral to our continued success.” Alan said: “My focus will be on galvanizing the collective strength of Wood Group’s vast global capabilities and expertise to continue to deliver smart solutions that meet the needs of our clients, against the backdrop of an evolving industry landscape.”

EVENTS 2017

2017

JULY

APRIL

GAS INDONESIA SUMMIT (GIS) July 12 – 14, 2017 Jakarta, Indonesia www.gasindosummit.com

GASTECH Conference & Exhibition April 4-7, 2017 Tokyo, Japan www.gastechevent.com Middle East Heavy Oil Congress (MEHOC) April 11 - 12, 2017 Manama, Kingdom of Bahrain www.meheavyoil.com Jordan International Energy Summit April 2-3, 2017 Amman, Jordan www.jies-summit.com ShaleTech North America April 11-12, 2017 Calgary, Canada

Oil & Gas Africa July 11-13 2017 Cape Town, South Africa www.africaogp.com SEPTEMBER The Global African Investment Summit – Kigali September 5-6, 2016 Kigali, Rwanda www.tgais-kigali.com PetroChem Canada September 27-28, 2017 Sarnia, Ontario www.petrochemcanada.com Oil Sands Trade Show and Conference September 12 - 13, 2017 Fort McMurray, Alberta, Canada www.oilsandstradeshow.com

IRPC India April 18-20, 2017 New Delhi, India MAY The Canada LNG Conference and Exhibition May 16-18, 2017 Vancouver, Canada www.canadalngexport.com JUNE Global Petroleum Show 2017 June 13-15 2017 Calgary, Canada www.globalpetroleumshow.com

Intersolar Middle East October 25 - 27, 2017 Dubai World Trade Centre, UAE www.intersolar.ae NOVEMBER Abu Dhabi International Petroleum Exhibition & Conference (ADIPEC) November 13-16, 2017 Abu Dhabi, UAE www.adipec.com 4th East Africa Oil and Gas Summit & Exhibition (EAOGS) November 15-17, 2017 KICC, Nairobi, Kenya www.eaogs.com

CLASSIFIEDS

CanWeld Expo & conference September 13-14, 2017 Edmonton, Alberta www.canweldexpo.com OCTOBER European Autumn Gas Conference (EAGC) October, 23-25, 2017 Berlin, Germany www.theeagc.com

Swiss Made

MABI AG - Insulation machinery Werdstrasse 10 CH-5106 Veltheim / Switzerland

Tel.: +41 (0) 56 463 65 65 Fax: +41 (0) 56 463 65 66

e-mail: info@mabi.ch Internet: www.mabi.ch

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April 2017

SUPPLIER FOCUS

EXCEED

EXCEED RISING TO THE CHALLENGE Exceed founder and director, Ian Mills, talks about the firm’s strategy to meet industry challenges by entering new strategic partnerships and focusing on opportunities in the Middle East How long has your business provided services for the oil & gas sector? Founded on over 30 years of industry experience, Exceed was formed 12 years ago in 2005. Since our inception, Exceed’s Well Management and Performance Improvement divisions have serviced clients in more than 30 countries across ﬁve continents. We have a team of highly experienced drilling professionals and performance improvement coaches who manage projects across the entire well lifecycle. That ranges from conceptual design and planning, through to well completion, subsea ﬁeld development and decommissioning. Our business constantly progresses and evolves so that we can meet the needs of our international client base.

Kuwait and Oman and anticipate a growing demand in response to our local presence.

proactively managing client risk and cost exposure. • Continuing our internationalisation strategy to strengthen our global footprint through a network of local partners who share our values of integrity, performance delivery, and maximising value. This strategy has already resulted in a number of new strategic partnerships, local representation in 27 countries, and increased technical capability for our clients. It will continue to be a key driver for us throughout 2017. With the current industry focus on driving down costs and working smarter, our performance improvement and operations excellence solutions are more relevant than ever, offering clients low-risk combined with a guaranteed reward.

How are you maneuvering your firm to deal with the new energy landscape?

What are you looking towards in the coming year, in terms of your business outlook?

Every challenge creates opportunities. At Exceed, we’ve embraced the challenge and have responded with a three-pronged strategy to strengthen our organisation and our service offering: • Pursuing technical collaboration opportunities to diversify and extend our technical range of services through strategic alliances • Exploring innovative ways to create more cost-effective commercial models,

There is no doubt that this year will bring continued uncertainty and investment restraint across the globe. However, there are deﬁnite signs of improving market conditions leading to increased opportunities, particularly in the Middle East, as well as West Africa, North Africa and the Far East. Key to our success, and the success of any organisation, will be our ﬂexibility and readiness to respond quickly to opportunities as they arise.

What sectors are you focusing on? Exceed offers operations excellence, knowledge management, planning, engineering and execution expertise across the entire well life cycle from subsurface to petroleum engineering, well engineering, well construction, well optimisation, integrity management, and decommissioning.

Where are you located within the Middle East / GCC region? We have local representation in UAE, Qatar, Saudi Arabia, Kuwait, Oman, and Iran. We are actively pursuing potential projects in

April 2017

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