The Shah Gas Development Project A Lifecycle Approach to the HSEIA Process

Richard Callahan, Medhat Salem Ahmed Al Habsi, Richard Singleton and Ian Ross Edward, Al Hosn Gas, UAE

Tipu Jibran-Zafar and Ala Al Shaibani, Al Hosn Gas, UAE

INTRODUCTION The Shah Gas Development (SGD) project is a circa $10 billion complex investment project with non linear multi-package/multi-rig operations. The project presents HSE challenges atypical of normal exploration and production operations due to the naturally high sourness of the feed gas (approximately 23% H2S). The SGD project heralds a new era for production of sour gas reserves that were previously considered unfeasible and too technically challenging to process safely and reliably. As part of ADNOC Group Companies, Al Hosn Gas requires a detailed Health, Safety and Environment Impact Assessment (HSEIA) to be carried out for all project phases. These phases include: FEED, Engineering Procurement and Construction (EPC), Operations, and Decommissioning. Al Hosn Gas have developed a lifecycle approach to the HSEIA process that provides a new and innovative methodology for the management of Major Accident Hazards (MAH) through focusing on HSE Critical Equipment and Safety (HSECES) integrity that provides significant safety and efficiency benefits to the end user. It demonstrates the safe systems of work and organisation required to effectively identify, manage and maintain risks to a tolerable and As Low As Reasonably Practicable (ALARP) level. This paper describes how this lifecycle approach has been successfully applied to the SGD program for the drilling campaign (drilling, well testing and clean-up operations) through a systematic and gated verification and review process. The benefits of this lifecycle approach to the HSEIA process include:

• A greater focus on MAHs and HSECES integrity thus significantly reducing the overall risk picture;

• Ensuring interdependencies between MAH assessment and detail well engineering design are identified and managed;

• Minimizing overall lifecycle costs through procurement of HSECES against approved performance standards i.e., QA/QC of HSECES from day one;

• Greater flexibility for managing HSEIA process associated with multi-package/multi-rig operations thus providing optimum efficiency;

• Reduction of turnaround in ADNOC EHS Division approval process i.e., SGD Program HSEIA Phase II approvals have been achieved approximately 14 days from submittal.

The proceeding sections describe the SGD drilling programme, development of the HSEIA process, its rationale, components, challenges, accomplishments and vitality towards managing HSE risk throughout the lifecycle of the SGD program as well as demonstrate its applicability in the oil and gas industry.

1 PROJECT OVERVIEW Al Hosn Gas is developing the Shah sour gas reservoir under SGD Project. With the sourness of the gas at approximately 23% H2S, the SGD Project represents a new era in gas development in Abu Dhabi. The FEED for the SGD drilling phase of works was undertaken during 2009-2010. Following the design review in early 2010, the scope of SGD Project has been optimized and the project programme has now entered drilling operations phase.

1.1 Site Location Shah Gas Field is located approximately 180 km south-west of the Abu Dhabi City and near the Liwa Crescent in the Emirate of Abu Dhabi. The field is located in the central part of Shah Region (figure 1), which is part of the Rub al Khali (Empty Quarter), one of the largest sand deserts in the world.

Figure 1 – Shah Gas Development Project Location

1.2 Scope of the SGD Project

The scope of the overall SGD Project includes the following activities and systems:

• Early Works – Site Clearing and Preparation. The activities associated with site clearing and preparation at the well pads, gas processing facility, and construction of the access road, e.g. cut and fill, infrastructure placement, road construction etc. associated with the early works at the Shah site to prepare the site for later construction activities.

• SGD Drilling/Well Operations (the focus of this Phase II HSEIA Report). The Shah Gas Development will target the four carbonate reservoirs in the upper Jurassic sequence known as the Arab A, B, C, and D.

• SGD Gas Gathering Downstream of Wellhead. This system includes collection piping and associated valves, pigging stations, chemical injection, independent flare, leak detection and isolation systems. The gas gathering system interfaces with the gas processing system at the outlet of the Slug Catcher.

• Gas Processing Facilities. A new gas plant will be installed in the Shah Field. The plant will include processing, treating, and sulphur recovery facilities.

• Ruwais Harbour Expansion. Expansion of the existing harbour involves dredging and disposal of the spoils.

• Solid Sulphur Handling System. The existing sulphur handling infrastructure in Abu Dhabi is not adequate to handle the large quantities of sulphur from the SGD Project. New facilities for granulating, storing and loading solid sulphur into ships will be developed.

• Sulphur Transportation. A new transportation system is required to move the sulphur produced in the new Shah plant and the existing/planned Habshan (Habshan 1 and 2) plants to the new Solids Handling System.

• Shah Product Pipelines. New product pipelines are needed to transport the sales gas, condensate, and NGL from the Shah plant.

2 DRILLING OPERATIONS The Arab reservoir comprises four carbonate sections; the Arab A, B, C and D, with the Arab C being the primary target due to its thickness and excellent reservoir quality. The reservoir is extremely sour, containing approximately 23% H2S and 9% CO2 and bottom hole temperatures of approximately 150ºC. SGD Phase 1 development plans include twenty (20) high angle/horizontal wells in the Arab formations. The high angle portion of the well (through the Arab A/B) will be perforated and stimulated. The long horizontal (through the Arab C or in some cases the Arab D) will be left as open hole and stimulated. Production from all zones will be comingled and will commence upon completion of the Shah gas plant which will be under construction during the initial phase of the development drilling. The well fluid is a three phase mixture of sour gas, sour hydrocarbon liquid, and some produced water. The well fluid also contains some elemental sulphur that is dissolved in the hydrocarbon condensate. The Shah Arab Field contains gas with a high H2S content, and grouping of wellheads at well pads away from public areas is proposed in order to minimize the footprint of the Gas Gathering System and reduce the risk of a release.

3 RATIONALE FOR THE AL HOSN GAS LIFECYCLE HSEIA PROCESS The objectives of the HSEIA are specified in the ADNOC Codes of Practice (CoPs). The HSEIA report must demonstrate in relation to the subject project, facility, site or activities:

• That all HSE hazards have been systematically identified in the Hazards and Effects Register [Ref 1]. inclusive of relevant risk classification (e.g. High, Medium and Low) or in accordance with principles that are compatible with those provided in ADNOC CoP ‘HSE Risk Management’ [Ref 2].

• That all Significant (adverse) Environmental Impacts have been identified, suitably analysed and assessed for significance. It must be demonstrated that relevant control, mitigation and recovery measures are proposed (for projects), are implemented (for existing facilities or operations) or an implementation plan exists.

• That all MAH have been identified and suitable control, mitigation and recovery measures are proposed (for projects) or are implemented (for existing facilities or operations). It must be demonstrated that operation can be achieved within the ADNOC quantitative criteria for risk tolerability and ALARP must be demonstrated in accordance with principles that are compatible with those provided in ADNOC CoP ‘HSE Risk Management’ [Ref 2].

• That all High Occupational Health Risks have been systematically identified and suitable actions to mitigate these risks and to protect employees from these risks have been or will be taken, in accordance with ADNOC CoP on Occupational Health Risk Management [Ref 3].

• That Emergency Response Plans (on-site and off-site where necessary) in relation to Major Accident Hazards have or will be prepared based on credible emergency scenarios, with the necessary stakeholder consultation. Refer to ADNOC Manual of Codes of Practice: ‘Code of Practice on HSE Administration Systems’, [Ref 4].

Whilst the above robust methods and procedures for assessing HSE hazards are already in place by ADNOC, a framework to dynamically manage HSE risk in such a complex and challenging operation as the SGD Program was deemed essential: Identifying this potential opportunity to establish a new benchmark, Al Hosn Gas developed an innovative HSEIA development process in close cooperation with the ADNOC EHS Division to achieve the following objectives:

• The need for a process that is self perpetuating and compartmentalises HSE risk for a project phase;

• The need to demonstrate to regulators and stakeholders of a process that can be employed to verify and validate risk studies;

• A simple and flexible approach that could be applied to any phase of the SGD program (FEED, well operations and testing, EPC, plant operations etc);

• A step-wise evergreen process with embedded HSE elements; • Confirm that adequate assurance processes exist within Al Hosn Gas to

demonstrate throughout the SGD program that all MAHs and high risks have been identified, assessed and suitable management controls are put in place to ALARP;

• Confirm that an iterative Hazards and Effects Register (HER) is developed including environmental aspect register and health risk assessment, that defines hazard management controls and recovery measures from project inception to well-testing and handover;

• Confirm the identification and recording of all HSECES for all aspects of the SGD programme are adequately defined in the project documentation and are procured and maintained to meet the design criteria;

• Provide a framework that contains elements that serve as review Gates to verify whether all HSE risk have been addressed, reviewed and their management to ALARP endorsed by senior management;

• Provide a framework that is iterative and evergreen in nature; and • Remain in line with ADNOC (CoP) Codes of Practice on HSEIA requirements.

4 STEP-WISE AND RISK-BASED APPROACH The culmination of the above objectives is the Al Hosn Gas lifecycle approach to the HSEIA process. The systematic and gated verification and review process governing the approach used for the SGD program for drilling, well testing and clean-up phase are listed below and presented in figure 2.

Drilling Operations

Procurement, Inspection &

Testing

Well Testing & Handover

HSE Critical Positions & Tasks

Quality Management

Detailed Well & Well Test Design

& Engineering

Project Initiation &

Control

MAH & HSECES Identification

1

2

3

4 5

6

7

8

Al Hosn Gas Lifecycle HSEIA ApproachDrilling, Well Testing & Cleanup Phase

Evergreen Process

Gates Review

Gates Review

Gates Review

Figure 2 – Al Hosn Gas HSEIA Lifecycle Approach

1. Project initiation and control 2. Major Accidents Hazards and HSECES 3. HSE Critical Positions and Tasks 4. Detailed Well Design 5. Procurement, Inspection and Testing 6. Drilling Operations 7. Quality Management; and 8. Well Testing and Handover.

The Al Hosn Gas lifecycle HSEIA process reduces the overall risk picture from activities associated with drilling and well testing operations in the following ways:

• The first three elements of the process “Project Initiation and Control”, “MAH & HSECES identification” and “HSE Critical Positions and tasks” evaluate HSE risk at the very outset of the development cycle thus minimizing overall lifecycle costs through procurement of HSECES against approved performance standards i.e., QA/QC of HSECES from day one;

• The process defines “value engineering and detail design” and “procurement and inspection” as separate elements. This improves the risk profile by implementing HSECES verification, inspection and testing prior to well operations; and

• The process defines “quality management” as a separate element. This improves the HSE auditing process by generating HSE non-conformance reports and linking HSE audits to the Company HSEMS thereby creating a cycle of continuous improvement.

The process also provides for inter-linkages between quality management and procurement thus effectively integrating supply chain logistics in the lifecycle and improving operational efficiency. An example of this is the well integrity management system designed to manage the well and associated equipment to cover the life of the well from design to abandonment. This includes monitoring and inspection as required and is developed in conjunction with equipment suppliers, facilities personnel and Al Hosn Gas planning engineers. The process elements and gate reviews provide tangible barriers that establish “Holds” from preventing the development to proceed to the next stage until an assessment and strategy to manage HSE risk to ALARP is demonstrated. Examples of this continual evergreen risk management approach for the drilling campaign include:

• Preparation of flare management strategy and procedure for well testing and clean-up operations that: o strives towards ultimate elimination of hydrocarbon flaring, o minimises impacts on health, safety and environment from Company

operations to ALARP and o upholds Company HSE policy and sustainable development objectives

• HSE Case development for multiple non linear rig operations consisting: o Assessment of MAH (COMAH) and HSECES integrity o Bowtie analysis o Update of Environmental Impact Assessment and Occupational Health Risk

Assessment (OHRA) • Quantitative risk assessments for Simultaneous Operations (SIMOPS) to

determine the risk exposure around drilling pads for different risk scenarios (completions, well testing, and drilling within the sour Arab formations etc)

5 TRANSFERABILITY OF THE APPROACH This lifecycle approach to the development of HSEIAs has been specifically designed so that it can tailored to effectively and efficiently manage MAHs and HSECES integrity for all project phases, business groups, ADNOC group companies, and the greater oil and gas industry. The systematic and gated verification and review process has been tested against the drilling and well testing phase and project EPC phase of the SGD program. The flexibility of the lifecycle approach to manage MAHs and HSECES integrity for these non linear multi-package/multi-rig operations is reflected in the minor adjustments to the process elements which are:

• Detailed well tests design change to detailed facility design; • Drilling operations changed to production operations; and • Well testing and handover changed to facility expansion or decommissioning.

While it is necessary that each lifecycle element must accurately reflect the development steps of the SGD program, it is the simplicity and flexibility of the rules

governing the process that make the approach widely applicable. To date, this approach has been successfully applied to the following SGD programs:

• Phase II Drilling, Well Testing and Clean-up; • Phase II Facility Engineering, Procurement and Construction; and • Phase III Facility Operations (future development).

6 SUSTAINABLITY The Al Hosn Gas HSEIA approach is a departure from the more traditional prescriptive methodology. It is dynamic process that focuses on providing assurance of MAH and HSECES integrity management for the life of the asset whilst upholding the ADNOC Codes of Practice. The approach is sustainable and innovative in the following ways:

• It is continuous and evergreen which means modifications to the well design or alterations in procurement strategy will automatically trigger an HSE case review till ALARP is demonstrated;

• Is overarching and not limited to providing a ‘snap-shot’ in time of HSE risk i.e. lifecycle philosophy;

• Is able to manage multi- EPC package/drilling operations with non linear schedules in an optimum manner without reducing the effectiveness of risk management programs;

• Reduces unnecessary duplication of HSE studies/reviews; and • Reduces the turnaround time for obtaining ADNOC EHS DIVISION approvals.

7 FUTURE ACTION PLANS The Al Hosn Gas lifecycle HSEIA process has been developed specifically for the SGD program. To date approvals from ADNOC EHS Division have been obtained for both the Drilling and Project HSEIA Phase II study reports. Following the success of the roll-out and the positive reception received ADNOC EHS Division the following objectives are proposed to reach a wider audience within the ADNOC Group, regional and international oil and gas industry:

• Full roll-out of the Al Hosn Gas HSEIA approach to all SDG development stages (commissioning, operations etc).

• Engagement with ADNOC EHS Division with a view adopting the approach for assuring MAH and HSECES integrity management for all applicable Group Company projects. i.e., potential for updating of ADNOC Codes of Practice.

• Sharing of knowledge with other ADNOC JVs engaged in the development of sour gas projects.

• Continue to presenting the HSEIA lifecycle approach at international conferences and workshops.

8 CONCLUSION

In order to eliminate, reduce, mitigate and manage H2S risks associated with SGD programme during drilling, well testing and clean-up operations, Al Hosn Gas has required an early and sustained focus on all aspects of health, safety and the environment. The approach is holistic and assesses impacts against each process element ensuring MAHs are captured and HSECES integrity is maintained for the lifecycle of the asset. The iterative and evergreen nature of the approach provides the opportunity for continuous improvement. The process elements and gate reviews provide tangible barriers that establish “Holds” from preventing the development to proceed to the next stage until an assessment and strategy to manage HSE risk to ALARP is demonstrated.

References

1. Code of Practice on Health, Safety and Environmental Impact Assessment (HSEIA) Requirements, ADNOC-COPV1-02, Version 2.0, September 2005.

2. Code of Practice on HSE Risk Management, ADNOC-COPV5-06, August 2009.

3. Code of Practice on Guideline on Occupational Health Risk Assessment (OHRA), ADNOC-COPV3-08. Version 1.0, September 2005.

4. Code of Practice on HSE Administration Systems’, ADNOC-COPV1-01, March 2005.