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Delivering on LNG Solutions
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Saudi Polymers NCP project surpasses 75 million man hours without a Lost Time Injury
Woodside’s North Rankin 2 Redevelopment
Celebrating 50 years in Saudi Arabia WorleyParsons’ extensive track record In Kingdom Q1
March 2011
www.worleyparsons.com/hydrocarbons
The content Published by WorleyParsons Level 12, 333 Collins Street Melbourne VIC 3000 Australia
p.10
Managing Editor Phil Toohey Vice President, MarCom
Focus on Saudi Arabia
Produced by WorleyParsons Strategic Marketing Group, Australia
50 years of project execution in-Kingdom has underpinned strong relationships and shared business objectives
Contributing Writers Special thanks goes to Ed Smith, Chris Mole, Graham Hill, Andy Cole, Kevin Rickert, Simon Dowding and Woodside
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Contact Information www.worleyparsons.com hqmagazine@worleyparsons.com
Safety First for the North Rankin Redevelopment Project One of the world’s largest integrated offshore decks is being designed and installed on the North West Shelf of Australia
p.14 Delivering on LNG Solutions Greenfield, brownfield or floating LNG, WorleyParsons is a world leader in this critical global market Issue 1 Q1, March 2011
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hqmagazine hydrocarbons quarterly
Front cover image: Shaybah Development, Saudi Aramco Photos supplied by: Saudi Aramco, Woodside, BP Petroleum and Saudi Polymers NCP. All reasonable efforts have been made to trace copyright holders.
p.3 From Brian’s Desk
p.6 Global Awards
A welcome to our readers on the very first edition of Hydrocarbons Quarterly (HQ) Magazine
p.4 Focussing on Zero Harm
Saudi Polymers NCP Project surpasses 75 million man hours without a Lost Time Injury
p.5 Safety Roundup
Singapore Parallel Train; Booster Compression Station Project; MIPS (Major Integrity Project)
Recent customer project and contract awards
p.18 Office Intel
WorleyParsons China Leadership Academy takes off; Martinez Office Hosts CII Research Teams; Waste Heat Recovery Research; Thanks a Million Award; and Recent Appointments
From Brian’s desk Welcome to the first edition of the WorleyParsons Hydrocarbons Quarterly (HQ) magazine. Our aim for this publication is to share with our customers and partners the latest capability, developments and achievements by the WorleyParsons hydrocarbons team. Last month we aggregated the years of service from all the WorleyParsons acquired entities and discovered that in 2011 we have accumulated 1,500 years of experience. I suspect that this rich history of project design and delivery has underpinned WorleyParsons’ standing in the latest Engineering News Record (ENR) rankings – top five in refining and petrochemicals, offshore and underwater facilities, pipelines and industrial petroleum. ENR recorded our business as the No. 2 international design company and No. 4 for total construction management/program management fees. We are very grateful to our customers for the trust they have placed in WorleyParsons.
As we commence 2011 the world energy market continues to aggressively review new investment and operation efficiency strategies. The global markets are beginning to display signs of recovery and the necessary energy to feed industry is being reactivated.
This edition of HQ Magazine focuses on our LNG capability, our extensive track record in Saudi Arabia, and the Safety in Design effort by the team on the North Rankin offshore facility in Western Australia. We have also taken some time to look at our Saudi Polymers NCP project, located in the Al-Jubail Industrial City where the team has surpassed 75 million man hours LTI free – an exceptional effort by all the stakeholders. I encourage all readers to send me feedback to assist us to tailor HQ Magazine to your needs. Stay safe
Brian Evans Managing Director Hydrocarbons
From Brian’s desk hq Magazine
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Focussing
on Zero Harm Saudi Polymers NCP project team reached a remarkable achievement surpassing 75 million man hours without a Lost Time Injury. Project Director, Kevin Rickert, shares his experience and insight into the key contributing factors for this success and the future for Saudi Polymers NCP project. Saudi Polymers NCP South Plot at night In December 2010, Saudi Polymers NCP project located in Al-Jubail Industrial City, Kingdom of Saudi Arabia, surpassed 75 million man hours without a Lost Time Injury.
3. Repeated discussions with contractor management teams working at site to ensure they understand the importance of an accident free worksite.
Q: Kevin, congratulations on the team achieving 75 million man hours without a Lost Time Injury. What do you see as the key to achieving this outcome?
4. Thorough training for all staff on safe work practices, before they are allowed to work on the jobsite.
The key to achieving this level of safety performance is reaching a state of awareness where all workers and supervisors on the project are fully trained in the requirements to perform their job safely each day. With more than 22,000 workers on site, you have to create an environment where it is mandated that everyone is responsible for their own safe behavior and that of their co-workers. Any behavior to the contrary is to be considered unacceptable. For our workers to reach this mindset there were five key components: 1. An Owner supported program commanding nothing less than an accident free worksite, with a view that all accidents are preventable. Saudi Polymers support has been exceptional. 2. Zero tolerance attitude for failure to report a safety incident or take appropriate corrective action.
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hq Magazine Focussing on Zero Harm
5. Daily emphasis to the worker on safety awareness and the importance to perform today’s work safely. Q: What initiatives have the project team put in place? Many contractor initiatives have been put in place during the project. Some of these initiatives are based around testing and inspection of tools and equipment, award and recognition of workers, weekly safety meetings and major site clean ups which involve removing scrap and unwanted materials that could potentially cause injury to our workers. Additionally, Program Management Team (PMT) safety discussions are held every month. The most recent were quite varied, ranging from excavations and barricading, to drilling dangers and PPE, the safe use of power tools, driving on site, and weather conditions. It’s these types of initiatives and discussions on a monthly basis that keep the focus squarely on safety and achieving Zero Harm.
Global Safety Roundup
Marian McLean, Global HSE Director
Our hydrocarbons sector is experiencing a significant uplift in activity and renewed engagement between suppliers, fabricators and constructors. While this resurgence of investment is very positive for project delivery it also demands ongoing vigilance in the quest for Zero Harm. Some of the Safety Milestones achieved by the WorleyParsons team reached in this last quarter include: Q: What have you got planned for the next phase of the project? As all project managers know, the last 10-15% of the project is the most difficult. As we get close to finishing, we begin to introduce some additional risks to the work site environment. Some of these risks are: •
Electrical circuits are energized
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Chemicals, inert gases, and hydrocarbons are introduced into pipes and vessels
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Utilities piping systems such as steam and nitrogen become pressurized
As we go forward into these final stages, we need to focus on the risks of working in a ‘live’ plant. We will continually emphasize the need to be aware of these new risks and how to perform in a safe manner in this different environment. We continue to be vigilant in achieving our objective of Zero Harm.
Singapore – The WorleyParsons JV delivering the Singapore Parallel Train project achieved 20 million man hours without a Lost Workday Case in September, 2010. Kuwait – The Booster Compression Station project for the Kuwait Oil Company recently reached 5 million man hours without a Lost Workday Case in September, 2010. Nigeria – MIPS (Major Integrity Project for Mobil Producing Nigeria) reached 3 million man hours without a Lost Workday Case in August, 2010. The WorleyParsons OneWay™ Independent Assessment team visited Lagos, Nigeria in early December and were very impressed by the local team’s efforts to meet the 99 OneWay™ expectations, incorporating policies, standards and procedures.
“The last 10-15% of the project is the most difficult.” Kevin Rickert, Saudi Polymers NCP Project Director
Focussing on Zero Harm hq Magazine
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BP EPMS Global Agreement Award for Onshore Developments
Global awards
Canada
Sullom Voe terminal in Shetland, Scotland, part of the BP EPMS Global Contracts Agreement © BP p.l.c
WorleyParsons is pleased to announce the award by BP of an Engineering and Project Management Services (EPMS) Global Agreement (GA) to provide engineering and project management services for BP’s onshore facilities developments. WorleyParsons has been selected as one of two companies to provide onshore EPMS under a four year contract. This award is in addition to the global agreements for BP’s offshore facilities and the subsea facilities recently awarded to our deepwater specialists, INTECSEA.
“ Three global agreements with BP places our business in a unique position and provides us with a great opportunity. The ability of our proven project delivery systems to be utilized across all of BP’s assets in a consistent manner is important for customers. Common execution systems enables one less variable in the customers’ project portfolio leading to better management and assessment of progress against investment strategy.” Brian Evans, Managing Director, Hydrocarbons 6
hq Magazine Global awards
Our Canada operations were recently awarded the contract for the engineering, procurement, fabrication and construction (EPC) of the field facilities at the Husky Oil – Sunrise Energy Project. Our construction group, WorleyParsonsCord, will be responsible for execution of the project scope that includes eight SAGD well pads, gathering lines and underground pipelines comprising the field facilities portion of the project. Modularization work will take place at the WorleyParsonsCord Blackfalds module assembly facility. MEG Energy has awarded WorleyParsons Canada a Master Services Agreement to support the MEG Energy Christina Lake SAGD Facility. The alliance team are currently focussed on sustaining asset work to maintain and increase the production of the existing facilities and designing the field facilities for MEG Energy’s Phase 2B SAGD Project.
“ WorleyParsons is excited to be working with Husky Oil on the Sunrise project. Our integrated EPC project delivery model combined with our strong construction performance will lead to the successful delivery of this project.” John Grill, WorleyParsons CEO
Europe and Africa In line with our Hydrocarbons strategy for growth across Europe, WorleyParsons has been successful in securing the detailed design and procurement services for the Jasmine Area Development in the North Sea. This part of the Jasmine project is a significant win, following our successful performance in the concept and feasibility phases last year. Across Northern Europe the need for specific hydrocarbons project execution expertise in Arctic, remote, deepwater and heavy oil fields is significant. WorleyParsons global leadership in these four capability areas provides customers with a single point solution. These solutions are being delivered for Statoil’s Bressay North Sea Heavy Oil development and Gazprom’s Shtokman Phase 2 and 3 development in the Barents Sea.
In Kazakhstan, WorleyParsons has continued our commitment to localization by creating joint ventures with two key local providers – KGNT and KING. After working closely with KGNT on the Kashagan Full Field Development Project and TCO’s Sulphur Expansion project, WorleyParsons and KGNT have developed a partnership for in country EPC project delivery. Kazakhstan’s leading design institute, KING, has also entered a partnership agreement that will include a significant investment by WorleyParsons in skill transfer and professional development for our local teams.
Middle East Our business in the Middle East is growing at a rapid pace and these recent wins showcase the strong presence of WorleyParsons across the region and our ability to tailor delivery solutions to meet our customers’ needs: •
FEED contract for Qatar Petroleum Power Supply Upgrade
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FEED contract for Kuwait Oil Company Lower Fars Heavy Oil project
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EPCM for PDO’s Amal Steam Surface Facilities in Oman
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EPCM services for PDO’s Al Noor MGI/Sakhiya Miniflood project
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Extension of GUPCo’s (EGPC) Engineering Services Agreement
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Extension of the Oryx GTL Improve Technical Services contract in Qatar
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Select, Deliver and Improve services for PetroDara (EGPC)
PDO production facility in Oman Global awards hq Magazine
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North Rankin Offshore Platform
Safety First for the North Rankin Re The redevelopment of North Rankin A (NRA) and the construction of North Rankin B (NRB) platforms on the North West Shelf of Australia will maximize the recovery of low–pressure reserves from the surrounding gas and condensate fields. At the forefront of the design phase of this multifaceted project has been the incorporation of many ‘Safety in Design’ features to protect workers during both the installation period and the operational phase. The project will extend the field life to around 2040 and support the Venture’s onshore gas commitments to supply customers post 2013. 8
hq Magazine Safety First for the North Rankin Redevelopment Project
WorleyParsons is providing support to the engineering, procurement and construction management services in joint venture with Woodside Petroleum for the AUD5 billion North Rankin Redevelopment project (NR2). The project will extend the field life to around 2040 and aims to recover low pressure gas from the North Rankin and Perseus fields on the North West Shelf of Australia. The design and construction of the new NRB platform incorporates some of the key health, safety and environment initiatives implemented in the project. NR2 represents one of the most complicated and intricate projects undertaken by WorleyParsons and its joint venture partners.
Safety in Design In order to minimize the time the construction team spends offshore in a remote environment, the topsides of NRB is being assembled on land and will then be transported as one unit and positioned onsite using floatover installation. This procedure draws on the extensive offshore development and operational experience of the WorleyParsons team. The method allows final preparation of facilities and services, and pre-commissioning, to be performed safely on dry land or at the quayside, rather than onsite. NRB will be amongst the largest open water floatover installations carried out anywhere in the world to date.
“ This is a landmark project for both Woodside, as operator of the North West Shelf Project and WorleyParsons. The AUD5 billion North Rankin 2 (NR2) project is key to unlocking the low–pressure gas and condensate reserves of the fields of the North West Shelf.” Andy Cole, WorleyParsons Hydrocarbons Director, Australia and New Zealand
legs will be aligned with, and joined to, the substructure legs. When completed, both platforms will be operated as a single, integrated facility, making it one of the world’s largest.
edevelopment Project By contrast, the original NRA platform at the North Rankin field was assembled onsite; 1,500 ton sections were lifted into place by crane barges and connected together over an extended hook-up period. For NRB, the complete 24,000 ton topsides will be transported by specialized barge from HHI’s shipyard in South Korea. The barge will position the massive deck above a substructure installed in approximately 125 m of water. Ballast will be added to lower the barge and during this process the deck
“ Executing the detailed design from four work centers has been a challenge, but strong commitment to procedures and interface management has resulted in an outstanding outcome. Everybody understood how their work package impacted on other teams and ensured all decisions resulted in a ‘best for project’ outcome.”
There are a number of initiatives incorporated into the design of NRB to ensure the safety of personnel working and living on the platforms. The design of NRB incorporates blast and firewalls to separate the new platform’s personnel living quarters (PLQ) from hazardous environs. Part of the modifications to NRA include the two 100 m bridges that will join the two platforms. Safety is enhanced by the use of grated lower decks in the process areas which increases natural ventilation. The PLQ’s, which are located on the southern end of the platforms, are predominately ‘up wind’ of the process facilities based to the prevailing wind platforms. Fire water deluge systems have been relocated and updated and can be used for equipment cooling in addition to protecting the escape routes leading to new freefall lifeboats. NRB will provide additional offshore gas compression. This will allow a lower inlet pressure at the wellhead; lower inlet pressure facilitates greater extraction while maintaining the necessary delivery pressure at the onshore LNG processing facility. The new platform will also provide condensate pumping for other fluids extracted from the NRA wells. An alternative approach would have been the construction of an entirely new platform over another part of the field and new processing trains on the mainland. As construction now progresses, the project team has completed the detailed design phase and is now supplying construction support services from both home office and onsite in HHI’s yard in Korea. At its peak, the project design team had more than 400 people (more than half being WorleyParsons’ personnel) operating from four global work centers: Perth; London; Beijing; and Jakarta. The team has completed more than 2 million working hours on the project with very few safety incidents. So far, the total recordable case frequency rate (TRCFR) for the project is 0.26. This is an exceptional performance when compared to other major projects in the region and is a clear demonstration of the commitment to health and safety by the team.
Paul Dragovic, WorleyParsons Topsides Engineering Manager, North Rankin 2 Safety First for the North Rankin Redevelopment Project hq Magazine
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35 20 +USD25b
major projects executed in the past
WorleyParsons’ office locations In Kingdom
years with TIC totaling
• Upstream oil and gas production • Gas processing • Sulphur recovery • Refining • Petrochemicals First Middle East project in
1952 1,300 personnel In Kingdom
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hq Magazine Focus on Saudi Arabia
Focus on
Saudi Arabia WorleyParsons has grown in Saudi Arabia from a high quality, engineering focussed business, to a comprehensive project solutions provider operating across all customer segments: Hydrocarbons; Minerals and Metals; Power; and Infrastructure and Environment. Ed Smith, WorleyParsons Saudi Arabia Country Director, takes a closer look at the evolution of the company in Saudi Arabia and the dynamic nature of the market in the Middle East. WorleyParsons has some 50 years experience in the Kingdom of Saudi Arabia. This invaluable legacy has allowed the company to develop skills, knowledge, networks, and a track record of excellence that has laid the foundation for ongoing success in this dynamic part of the world. The oil industry of Saudi Arabia is primarily focussed along the east coast bordering the Persian Gulf. The region is estimated to contain 264 billion barrels almost one quarter of the world’s known oil and gas reserves. Development began in the 1930s when oil was first discovered near Dammam where the earliest wells delivered barely 1,000 barrels per day. Today, the industry pumps out approximately 12.5 million barrels per day from around 14 major oil fields. Saudi Aramco, the government agency for the industry, has plans to increase the production capacity to 15 million barrels per day by 2020. From Select studies, through front end design and engineering to multi-billion dollar EPC project delivery and program management, WorleyParsons has a strong track record inKingdom. This breadth of capability is required when addressing the greenfield and brownfield challenges associated with the expansive developments planned for the Kingdom. Focus on Saudi Arabia hq Magazine
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On the Couch Ed Smith, WorleyParsons Saudi Arabia Country Director
Ed, it’s an exciting time in Saudi Arabia at the moment with the government seeking to maintain resource development. You’re right, it is an exciting time. Saudi Arabia has not experienced the same degree of downturn experienced by most of the world during the global economic crisis. Furthermore, for any slowdown that did occur, we are seeing recovery at a rate much faster than elsewhere in the world. The key driver in both of these trends in Saudi Arabia’s ability to use its vast oil and gas resources as a shock absorber through subsidized energy and raw material pricing. Many of the Kingdom’s energy sector investment decisions use marginal costs for those decisions rather than fully loaded life-of-asset costs. The end result is an environment that has a strong competitive advantage over the rest of the world and is capable of still attracting major capital infrastructure investments. Have you seen evidence of the government’s commitment to the transfer of skills to local personnel and the optimization of Saudi Arabia as a low cost engineering services provider as a key part of the Kingdom’s strategy?
Fractionation Towers at Saudi Aramco Hawiya Refinery
The commitment is there although it is not yet applied evenly across all industry sectors. WorleyParsons Arabia is a committed participant in the Saudization efforts, both supporting active ‘localization’ (maximizing the number of local hires, minimizing the number of expats) in its operations around the world. I believe that in Saudi, the training and transfer of skills has to be built upon a mix of affirmative action and on the ability of Saudi’s to compete on a skills basis with peers from the expat community if it is to be effective in the long term. Expecting and accepting anything less would not be productive for the Kingdom in the long term and would detract from the plans to be a low cost engineering center.
The challenges of operating in the region need to be kept in perspective. Any operating environment has a unique set of issues however, the dynamic nature of the Middle East means that it is an exciting and rewarding place to be. WorleyParsons is proud of its reputation in-Kingdom and we feel privileged to be here. The political structure of the Kingdom of Saudi Arabia is such that decisions on major projects can be made in comparatively short timeframes compared to most Western countries. Elements of the large oil and gas projects are amongst the largest, fastest and most sophisticated anywhere in the world. The scope of projects is beyond what most countries can pursue on their own in today’s financial climate. This makes
Finally, what are some of the biggest industry challenges being faced in the Kingdom? The number and magnitude of projects under discussion for the next ten years is staggering and so are the technical, procurement and construction resources necessary to turn those projects into reality. No matter how fast and aggressive the Saudization program might be, these large development plans will still far outstrip the number of expats available and willing to come to the Kingdom to work. There is a great opportunity for the Saudi officialdom to review the bureaucratic steps required for expat workers to come into the country. The Kingdom needs the world’s best project and operations personnel to optimize the opportunities.
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hq Magazine Focus on Saudi Arabia (continued)
Image courtesy of Saudi Aramco
“ The keys to our ongoing success include: the ability to move our managers globally; to build on their knowledge of what can be done within the company; knowledge of the regions; sharing resources and opportunities; and to able to respond quickly.” Ed Smith, Saudi Arabia Country Director
Building the Trust to Operate Like a ‘Virtual Company’ In 2002, WorleyParsons was awarded the Jubail Chevron Phillips (JCP) Project, a Petrochemical Complex located adjacent to its existing petrochemical complex SCP in Al-Jubail, Saudi Arabia. Part of the scope was to upgrade the existing SCP plant and infrastructure to increase its production of benzene and cyclohexane capacity by more than 50%. In 2006, WorleyParsons secured the Saudi Polymer Company’s NCP project – Olefins Petrochemical Complex Project. This project is an Olefins based expansion of the SCP/JCP site that will produce high density polyethylene, low density linear polyethylene, polystyrene and polypropylene products. Saudi Polymers NCP will be closely integrated with SCP and JCP, enhancing the operating efficiency of the entire facility. With a peak manning around 21,000 personnel, and approximately 100 million man hours when completed, Saudi Polymers NCP is a massive program requiring world class management, coordination and leadership. These characteristics are best exemplified by the efforts of the team with respect to HSE. Currently the Recordable Incident Rate is 0.09 which is an outstanding performance for the region, personnel mix and site complexity.
Beyond Hydrocarbons In the Minerals and Metals business WorleyParsons is actively engaged in two projects in phosphate and alumina. Other projects in prospect include metals production and additional phosphate opportunities. Saudi Arabia an increasingly competitive market as contractors seek to replace opportunities lost elsewhere in the world. WorleyParsons operates across all customer segments in the Kingdom including Hydrocarbons; Minerals and Metals; Power; and Infrastructure and Environment.
Sulphur and Mega EPCM Project Delivery In January 2009, Saudi Aramco Mobil Refinery Company Limited (SAMREF) selected WorleyParsons to execute its Clean Fuels Project at Yanbu Al-Sinaiyah, Saudi Arabia. The project encompasses significant modifications to SAMREF’s refinery in order to comply with future mandatory sulphur levels of 10 parts per million in gasoline and diesel. The overall project management and out-of-Kingdom scope of work will be executed in the Monrovia office with support from the Al Khobar office. The California based team are currently engaged in work supporting Saudi Aramco’s Ras Tanura refinery expansion on the country’s East Coast. George Doremus, Project Director, stated “As a long term supporter of SAMREF we are delighted to undertake such a significant role and support their strong commitment to protect the environment. This is the largest project SAMREF has executed since its start-up in 1984 and together with our team in Al Khobar we are committed to meeting our shared safety, quality, cost and schedule expectations.”
Power is another important customer segment and our work here includes partnering with the Saudi Electric Company for proposals to upgrade existing facilities and the construction of new facilities. We are also working on projects with independent power producers. The Saudi government is actively pursuing nuclear power and we are assisting in that process. The Infrastructure and Environment segment has us working on a diverse set of projects that include the construction of the causeway between Saudi Arabia and Bahrain, and housing and other commercial facilities throughout the Kingdom. The number and magnitude of projects under discussion by the Kingdom of Saudi Arabia for the next ten years is staggering. The technical, procurement and construction resources necessary to convert those projects into reality will be a major challenge for Saudi Arabia and the companies engaged to deliver these projects. WorleyParsons is well placed to respond. The WorleyParsons network of personnel in the Middle East ranges from Abu Dhabi to Dubai and beyond. The keys to our ongoing success include: the ability to move our managers globally; to build on their knowledge of what can be done within the company; knowledge of the regions; sharing resources and opportunities; and to be able to respond quickly.
Focus on Saudi Arabia (continued) hq Magazine
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Delivering on LNG WorleyParsons combines our wide project experience across many industry sectors to develop innovative liquefied natural gas (LNG) project implementation methods, such as modular execution, to give cost and schedule certainty to customers. The company’s engineering, procurement and construction management services continue to be a core component of our support to the oil and gas industry around the world. Despite gas developments taking place in more remote and hostile environments, and LNG projects having to compete with new sources of supply such as shale gas and coal bed methane, WorleyParsons has the experience and skills to meet the challenges of the changing global LNG market. We are active in assessments for customers of their unconventional gas portfolios and in consideration of the impact of the changing LNG liquefaction and re-gasification markets. This portfolio management approach is being sought after by our customers with increasing frequency. The liquefied natural gas (LNG) sector is a complex one in which to operate. Gas sources are difficult to find and develop; new fields are often in remote or harsh environments. The costs of processing and distributing LNG are higher than other fossil fuels due to the added complexity of the pre and post production processing required, including liquefaction plants, specialized storage, re–gasification facilities, and adequate distribution networks. Despite this, a growing global demand for LNG, particularly across Asia, still makes gas a commercially attractive market. WorleyParsons has been involved in the LNG sector for more than 30 years and in Australia and Europe it forms a core part of the company’s business. Extensive global gas processing and sweetening experience and infrastructure track record, coupled with strong overall design and project execution capability, enables WorleyParsons to produce LNG facilities that are safe, reliable, efficient and cost effective. 14
hq Magazine Delivering on LNG Solutions
Solutions
QatarGas LNG facilities at Ras Laffan
Sourcing, Processing and Delivering LNG With LNG activities spanning more than ten countries and covering the full lifecycle of asset development, WorleyParsons is currently involved in the Evaluate, Define or Deliver phases of more than 30 per cent of the world’s future LNG production. The company also has long term asset services contracts covering 40 per cent of the world’s existing LNG capacity. Our personnel are present at seven LNG locations providing Improve services to 23 LNG trains. However, natural gas fields are hard to find and new ones are often in extreme environments, like the Arctic or in remote locations hundreds of kilometres offshore. WorleyParsons sees these as opportunities that play to the company’s capabilities and strengths. Using global workshare techniques to ensure project efficiencies, WorleyParsons combines our experience across many industry sectors, working with a variety of technology providers, to develop innovative and novel approaches to the challenges associated with
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Trains under long term asset services contracts
locating, designing, permitting and constructing LNG facilities. WorleyParsons’ experience of the logistics of building, supplying, and servicing equipment in the Arctic, is a strong competitive differentiator. The company has designed and built LNG plants in modules which were then shipped to site and connected together. Designing offshore and floating production facilities presents special challenges where space is always a premium, and equipment and structures move under tidal or storm effects. WorleyParsons has extensive knowledge and heritage in meeting these demands. Other factors driving studies of floating liquefaction plants are fewer environmental and planning constraints. Also, there are cost savings from no longer having to pipe the gas to shore. Once a facility has been built and commissioned, WorleyParsons is also able to partner with companies providing complementary
17 14 Greenfield trains
FLNG projects
services in order to support the continuing operation of a plant and with others that supply the trained staff to perform the highly specialized operational and maintenance work required in a LNG production facility.
Marketing LNG Worldwide demand for LNG is forecast to increase by 50 per cent by 2020 and more than double by 2030. Asia will remain the largest market for LNG, and by 2030 it is estimated that more than two-thirds of worldwide production of LNG will be consumed in that region, led by countries including Japan, China and Korea. Global production capacity is expected to rise from 200 million tons per annum (mtpa) today to 340 mtpa by 2020. Qatar is currently the leading supplier of LNG, but Australia with estimated reserves of more than 150 tcf could rival the Arab state by 2020, when projects already under development and construction start production. Delivering on LNG Solutions hq Magazine
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On the Couch Chris Mole, Global Leader, WorleyParsons LNG
Chris, what differentiates WorleyParsons in the LNG market? I believe WorleyParsons’ extensive offshore track record and heritage has enabled the development of innovative offshore LNG concepts for production, liquefaction, shipping, receiving and re-gasification. This extends to the FPSO experience which, coupled with LNG experience, has produced several floating LNG (FLNG) concept selection and development studies and provides a platform for continued deeper involvement in this emerging market. Many businesses are solely interested in the Greenfield aspect of the LNG market but WorleyParsons remains committed to servicing what we design and deliver. Major investments of the magnitude required for LNG developments require committed contractors and I think we measure up very well in that aspect. WorleyParsons’ geographic diversity provides a unique insight into the LNG export and import markets. Today, Japan, South Korea and Taiwan are the leading LNG importers representing more than two-thirds of world LNG imports. Indonesia, Malaysia and Algeria have been the leading LNG exporters for last decade or so, with Qatar emerging as a major player in recent years. What are the major technology or business challenges the LNG market faces? I think supply contract periods of 20 years and longer that we have traditionally seen will become less evident and this has the potential to drive a new level of innovation into the market. Servicing India, China and the emerging need across the Middle East are relatively new challenges for the LNG market and we see them as great opportunities. s much as things change in the LNG market some things stay A the same, and I think the design and delivery challenges today continue to focus around safety, security, capacity and flexibility. There is no doubt that energy reforms and legislation will significantly impact on the growth of the market but predicting the impact remains a challenge. Finally, what are the keys to success in LNG? Ultimately all successful LNG plans are based on a robust business case and a strong contracting model. The keys to successful delivery of the projects are widely known across the contracting community and they usually start with people. Modularization is increasingly important and, as we have shown on our Pluto project, it makes a substantial difference to the overall project economics. Accessing remote and previously stranded gas supplies requires innovation, but there needs to be certainty of outcome for the investment to occur. I think WorleyParsons is well positioned to assist customers in these decisions. 16
hq Magazine Delivering on LNG Solutions (continued)
Aerial view of Pluto LNG plant LNG production and marketing costs are high, including the need for long term sales agreements (that might last 20-25 years) to be negotiated between customers and suppliers. This makes it more difficult to put together the value chain for a LNG plant, resulting in fewer investment decisions being made to build new facilities. In expectation of increased demand in the United States, six LNG plants were commissioned and built in Qatar in the past decade. Technology advances, combined with favorable market conditions in America, caused an increase in domestic shale gas production which meant that the anticipated market disappeared; the resulting projected surplus LNG production capacity will remain for several years. However, one of the advantages of LNG plants is that gas fields usually have other hydrocarbon products associated with them. The supply into the Qatari plants contains significant volumes of natural gas. These products often account for up to 60 per cent of revenue from LNG plants. The current high oil price means that the Qataris can sell their NGL by–products with a greater profit margin which allows them to sell their LNG at a lower price. While there is currently an excess in production capacity, growing demand elsewhere in the world means that by 2014 excess LNG production will be absorbed. To meet LNG requirements beyond
World’s first pre-assembled LNG modularization plant that date, investment decisions to build new plants need to be taken now because it can take four or more years to design, build and commission a LNG facility.
State of the Art LNG Modularization Project WorleyParsons has been working with Woodside for more than 30 years as one of its primary service providers for the Australian oil and gas producer’s onshore and offshore assets. WorleyParsons Western Operations Location Director, Ian Wilkinson, said “The long-term relationship with Woodside was integral to WorleyParsons’ business in Western Australia. The importance of the Woodside relationship is mentioned at every staff induction in WorleyParsons, so I suppose you can say they are a part of our culture”. Ian Wilkinson recently completed a three year tenure managing the joint venture responsible for Woodside’s onshore assets, which included a contract to undertake the feasibility and preFEED studies for Woodside’s Pluto foundation project.
to the FEED and EPCM phases for the onshore component of this 4.3 mtpa LNG facility. The Greenfield project includes a single LNG production train, a fractionation unit, an acid gas recovery unit, gas purification units, tank storage facilities, a boil-off gas compressor, loading berths, gas turbine power generation units, utilities, a jetty, and supporting infrastructure. In Thailand, 264 modules and pre-assemblies were fabricated at Laem Chabang, “It was a great performance by the project team in the fabrication yard”, Ian Wilkinson said. The workforce peaked at 12,000, and in excess of 54,000 tons of steel was fabricated. Over a period of 16 months, 49 shipments transported 264 pre-assemblies to Karratha. The team also successfully modularized four 930 ton gas turbine generators.
The project required a combination of world class solutions in LNG, modularization and construction. Success in this phase led Delivering on LNG Solutions (continued) hq Magazine
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CHINA
USA
WorleyParsons China Leadership Academy
Martinez Office Hosts CII Research Teams
As a critical step in motivating and retaining our people, the WorleyParsons China Leadership Academy has been set up for the development of our middle and senior managers. The Academy will serve as an assessment and development center for competence management, as well as provide first class leadership access and training for key personnel in all of our operations in China.
WorleyParsons has been an active member of the US based Construction Industry Institute (CII) since 1988 supporting over 50 research committees. Along with the many advantages of collaboration with our customers and peers, WorleyParsons feels that our participation in this environment along with utilization of the research and metrics that it provides, has helped augment our work processes and provides a life-long learning opportunity for our project delivery professionals.
The Academy’s Opening Ceremony was held in Beijing, China, in the last quarter of 2010. In attendance was WorleyParsons CEO, Mr. John Grill who said “I felt the initiative was an extraordinarily important one which would help our personnel grow and step forward. We need to be encouraging of everyone to show all facets of leadership and by demonstrating leadership they will provide for themselves the opportunity to run different parts of the organization”. The first session of the academy was held in October, in Beijing. There were 36 attendees at the session, ranging from department leaders to function managers. The training covered a variety of topics including WorleyParsons culture and values, business strategy, risk management, mega projects execution, and legal issues in bidding practices in Chinese investments.
The Enhanced Work Packaging research committee recently met at our Martinez, California office. This team is comprised of owners and contractors along with our US/LAC Vice President of Construction Services, Jim Vicknair. The charter is to develop the best practices for work packaging in our industry. The unique team of customers and competitors allows for a good analysis across industry on practices and expectations. This model of work packaging, utilized extensively in WorleyParsons, supports a very detailed approach to up-front development of the construction sequence, methods, and strategy. This provides direction on milestones and priorities for engineering and procurement deliverables.
Center: John Grill, WorleyParsons CEO with Mr Karl Qiu, President, WorleyParsons China Jim Vicknair, US/LAC Vice President, Construction Services and his research team
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Industry Research Waste Heat Recovery Research Implementing cost effective operations and meeting legislative requirements in the chemical processing market are at the forefront of our customers’ minds. Key areas of interest have been increasing energy efficiency and incorporating innovation into the design of any combustionrelated system that produces fluegas. John Barnhart, Global Leader of Petrochemicals, and his colleagues Ali Bourji, Jimmy Winningham and Alan Winstead have recently published a number of papers directly addressing these issues in industry journals Chemical Engineering and Hydrocarbon Processing. The impact of adding an organic Rankine cycle system to generate power offsite to enable operators optimize the overall economics of combustion-related systems and emissions controls has been the primary research focus. Ali Bourji, Senior Technical Director and Jimmy Winningham will present a paper on the subject at the March AIChE conference in Chicago.
CANADA United Way ‘Thanks a Million’ Award For the second year in a row, WorleyParsons Canada was awarded the United Way ‘Thanks a Million’ award. The award recognizes annual workplace campaigns that raise over $1 million for the United Way of Canada, which goes a long way in changing the lives of many while building stronger communities across our nation. The United Way is only one of the many ways in which WorleyParsons is a community leader in Canada. When asked about the importance of giving back to the community, Chief Operating Officer, Randy Karren responded, “It’s the attitude we have always seen in this company. The community is where we work, live, and make our money. We have to take care of it”. Jacob Kellerman, Senior Vice President, Edmonton, summed it up with the secret of our success: “The secret is that we employ the right people”. And from the United Way of Canada and our communities: thanks a million WorleyParsons!
Recent Appointments Stephen Becket Global Manager of Construction Stephen, currently based in Abu Dhabi, has been Manager of Construction for the Asia and Middle East region since 2009. He brings over 30 years of diverse civil and military engineering experience, most of which has been in a managerial and project management capacity. Steven Lee Senior Vice President, INTECSEA Asia and Middle East Steve has been the Location Manager of WorleyParsons Services Malaysia since August 2009 and prior to that he was the Operations Director of INTECSEA Malaysia. Steve joined heritage INTEC in 1996 as a Lead Pipeline Engineer. He will be responsible for the business operations of INTECSEA offices in Asia and Middle East, including Kuala Lumpur, Singapore, Jakarta and the newly formed Shenzhen office in China. Allan Hedley Singapore Location Manager Allan has worked for over five years in Oman, first as Manager of Projects/Engineering Manager, then as EMC Contract Manager, and subsequently as Country Manager, a position he has held for the last three years. Andy Cole Regional Director, Hydrocarbons Australia and New Zealand
From left to right: Jacob Kellerman, Senior Vice President, Edmonton; Victor Lin, Workshare Manager; Connie Yuen, Process Engineer; Randy Karren, Chief Operating Officer, WorleyParsons Canada Ltd
Andy has more than 20 years of professional engineering experience in Australia, UK, SE Asia and the Middle East. He has a strong background in front end feasibility studies together with the preliminary and detail design phases for various offshore projects. His previous roles include Global Director of Select Services and Executive Director of Consulting Practices.
Office intel hq Magazine
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Asia and Middle East Graham Hill Executive Director, Hydrocarbons
E: graham.hill@worleyparsons.com
Australia and New Zealand Andy Cole Regional Director, Hydrocarbons
E: andy.cole@worleyparsons.com
Canada Mike King Senior Vice President, Business Development
E: michael.w.king@worleyparsons.com
USA and Latin America Doug Eberhart Vice President, Hydrocarbons
E: doug.eberhart@worleyparsons.com
Europe and Africa David Herman Global Hub Local Office
Director, Hydrocarbons
E: david.herman@worleyparsons.com
hqmagazine hydrocarbons quarterly
To contact HQ magazine please email hqmagazine@worleyparsons.com
Q1
March 2011
www.worleyparsons.com/hydrocarbons