Energy Focus:EMEA May 2016

ENERGYFOCUS EMEA

Issue No.15 www.emea-energy.net

T H E B U S I N E S S M A G A Z I N E F O R E N E R G Y L E A D E R S

ALSO IN THIS ISSUE:

MAERSK OIL:EXCITEMENT BUILDS AS CULZEAN GAS MEGAPROJECT ADVANCES

Shell SA / Westermeerwind / TANAP / E.ON

EDITOR’S LETTER

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EDITOR’S LETTER

www.emea-energy.net / Issue No.14 / 3

Welcome to our latest edition…Joe Forshaw

EDITOR [email protected]

Hal HutchisonSALES MANAGER

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Sophie BolderstoneSENIOR PROJECT MANAGER

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Sam HendricksSENIOR PROJECT MANAGER

[email protected]

Shaun CousinsPROJECT MANAGER

[email protected]

Shannon JamesPROJECT MANAGER

[email protected]

Daniel ScottPROJECT MANAGER

[email protected]

Alex KanePROJECT MANAGER

[email protected]

Jane LarkmanACCOUNTS MANAGER

[email protected]

Harvey TarltonSENIOR DESIGNER

[email protected]

//Firstly, we have to send our condolences to those who have been

affected by the chopper crash on assignment for Statoil on April 29th. Tragedies like this are hard to stomach and affect the entire industry. We hope that all parties involved get the help that is needed and the process is as smooth as possible.

In the May edition of Energy Focus, we look at a hugely important project in the UK North Sea from Maersk Oil. The Culzean gas project, located off the coast of Aberdeen, is a HPHT development that requires immense skill and expertise. The technology and engineering used comes from all over the world with the goal of extracting 250-300 million barrels of oil equivalent and production set to start in 2019. Reports suggest that the project could supply around 5% of the UK’s total gas consumption by 2020/21. The first steel was cut for the billion dollar topsides in April and the project is now pushing forward.

We also look at three other exciting but different projects. The Westermeerwind project in the Netherlands, the Hywind floating offshore wind project in Scotland and the Trans-Anatolian Natural Gas Pipeline Project which will bring gas from the Shah Deniz fields in Azerbaijan to European consumers.

These are all projects that incorporate certain ‘world firsts’ and when complete we will look back on them as an example to follow.

If you have any major investments, successes or world firsts to talk about, tell us right now. We’re online @EmeaEnergy

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Joe ForshawEDITOR

GET IN TOUCH +44 (0) 20 8123 7859

[email protected] www.emea-energy.net

CONTENTS

12/MAERSK OIL:

Excitement Builds as Culzean Gas Megaproject Advances

Maersk Oil and co-ventures JX Nippon and BP are readying themselves for an extremely busy time as progress with the Culzean Gas Megaproject in the UK North Sea gathers pace…

06/NEWS:The Month that was...A round up of some of the latest news stories in the industry.

8/FEATURE:COR POWEROne of the next big things in clean energy is wave power. Unlimited, clean, cheap and worldwide; the ocean is the perfect source of energy.

50/EXHIBITION CALENDAR:Key Upcoming Events Across the IndustryOur regular update to help you keep track of important events and exhibitions taking place across the industry.

12/

4 / Issue No.15 / www.emea-energy.net

CONTENTS

22/WESTERMEERWIND OFFSHORE WINDFARM:The Dream of Wind PowerThe product of more than 20 years’ labour by farmers Tjitte de Groot and Pieter Meulendijks, Westermeerwind is a 144MW wind farm being developed in the shallow waters of IJsselmeer, the Netherlands’ biggest lake.

26/E.ON CLIMATE AND RENEWABLES:Making Clean Energy BetterHeadquartered in Essen, Germany, E.ON Climate and Renewables is responsible for the industrial-scale renewable energy activities which E.ON undertakes. Its operations encompass the development, building and operation of large renewable energy assets, primarily in Europe and North America.

32/HYWIND:Renewable Energy Without BordersHywind is Statoil’s floating wind turbine concept, designed to capture wind energy offshore while minimising any environmental impact.

38/TANAP:Significant Change In the PipelineAn ambitious natural gas construction project, the Trans Anatolian Natural Gas Project aims to bridge the gap between Azerbaijan’s offshore gas fields and Turkish and European consumers. The TANAP Project, along with the South Caucasus Pipeline (SCP) and the Trans-Adriatic Pipeline (TAP) will combine to form the elements of the long awaited Southern Gas Corridor.

42/SHELL SOUTH AFRICA:Shell Looks to Coffee to Fuel Consumer Demand Shell South Africa is perhaps the most recognised fuel brand in the country, if not the world. But positioning the brand as the frontrunner in the industry doesn’t come easily. The company is working hard to improve and increase its customer offerings and that has been demonstrated in the past few years by a thriving relationship with Vida e Caffé.

26/ 22/


42/


NEWS ROUNDUP

STATOIL IN MOURNING

//MANY FAMILIES HAVE BEEN HIT, AND WE HAVE LOST GOOD COLLEAGUES AND FRIENDS//

Alexey Miller, Chairman of the Gazprom Management Committee, recently made a working visit to Armenia as a member of the delegation headed by Russian Prime Minister Dmitry Medvedev.

The meeting with Hovik Abrahamyan, Prime Minister of the Republic of Armenia, addressed, inter alia, bilateral cooperation in the energy sector. The parties commended Gazprom for its contribution to the development of the Armenian gas industry.

Particular reference was made to the General Gas Supply and Gasification Scheme of the Republic of Armenia developed by Gazprom. It was noted that the implementation of the Scheme would help modernize Armenia’s gas transmission system and ensure a substantially more reliable gas supply to consumers.

Alexey Miller and Vardan Arutyunyan, Chairman of the Management Committee and Director General of Gazprom Armenia, signed an Addendum to the Contract for Russian gas supply to Armenia from 2014 to 2018.

“We are strengthening cooperation with our Armenian partners. Gazprom is promptly responding to the increasing gas demand in Armenia and is ready to ramp up the supply of natural gas, including from Iran under swap deals. Moreover, the Company will further contribute to the development of Armenia’s gas transmission infrastructure,” said Alexey Miller.

GAZPROM READY TO SUPPLY ARMENIA

On Saturday 30th April, Statoil’s President and CEO, Eldar Sætre, and executive vice presidents Margareth Øvrum and Arne Sigve Nylund visited the centre for next of kin in Bergen following the crash of a CHC Helicopter en-route from Gullfaks B to Bergen

“Today, Statoil is a company in mourning. We were hit by one of the most severe accidents in the history of the Norwegian oil industry. Many families have been hit, and we have lost good colleagues and friends,” said Eldar Sætre.

The company will continue to support those who need it most, those who are directly affected, families, colleagues onshore and on the platforms. Statoil will also assist next of kin who are not present at the centre, and colleagues on Gullfaks B. Personnel with experience from following up people in crisis are available for those who need it.

“Today, we are one family. We will stand together as one united industry, and do everything in our power to take care of the affected families,” Sætre said.


NEWS ROUNDUP

Siemens has received an order for the supply, installation and commissioning of 60 direct-drive offshore wind turbines, each with a capacity of six MW. The customer for the project is a consortium between the German power provider E.ON based in Essen, and the Norwegian oil and gas company Statoil headquartered in Stavanger. When it comes online in 2019, the Arkona offshore wind farm’s total capacity will be sufficient to supply up to 400,000 German households with ecofriendly electricity. E.ON will have responsibility for building and operating the wind farm. Siemens and E.ON will be jointly responsible for service to the wind turbines for an initial two year period.

“This is the first order for our large direct-drive offshore wind turbines for a project in the Baltic Sea,” stated Michael Hannibal, Offshore CEO of the Siemens Wind Power and Renewables Division. “This is also the second offshore wind farm that we will be erecting for E.ON in German waters. We are pleased that E.ON and Statoil have once again chosen one of our offshore wind turbines for a new offshore wind power plant so we can continue our very good partnership with these two companies.”

Siemens has already supplied 80 wind turbines for the E.ON project Amrumbank West in the German North Sea. In December 2015, Siemens announced that it would deliver five wind turbines of the six MW class to Statoil’s Hywind Scotland project.

The Arkona offshore wind power plant is to be erected around 35 kilometers north-east of the island of Rügen. Over an area of approximately 40 square kilometers, 60 wind turbines will be erected on monopile foundations in ocean depths of between 23 to 37 meters. Installation of the offshore wind turbines will begin in the summer of 2018. A team consisting of service technicians from Siemens and E.ON will be responsible for servicing and maintenance of the wind farm for an initial period of two years. This service agreement also includes round-the-clock remote monitoring of the wind turbines from the Siemens Remote Diagnostics Center in Brande, Denmark.

E.ON has begun selling its E.ON Aura electricity storage system in Germany. The system is available immediately at www.eon-aura.de. The all-in-one solution consists of a storage device, the E.ON Aura app, and, if desired, an E.ON Aura PV system, and the E.ON Aura electricity tariff. The German energy supplier worked closely with Dresden-based SOLARWATT GmbH to develop the system.

E.ON Aura’s charge efficiency of 93 percent makes it one of the most efficient storage devices on the German market. The system can increase a home’s energy self-sufficiency rate—that is, the proportion of self-produced electricity the home consumes—from about one third to around 70 percent. “With a storage capacity of 4.4 kilowatt-hours, E.ON Aura can meet the entire electricity needs of a three- to four-person family during the evening and night hours,” Robert Hienz, Managing Director of E.ON Energie Deutschland, explained. The system is therefore perfectly tailored to the average German household’s energy consumption.

E.ON BEGINS SELLING ELECTRICITY STORAGE SYSTEM IN GERMANY

SIEMENS WINS ORDER FOR OFFSHORE WIND POWER PLANT IN THE

GERMANY

BP recently reported its results for the first quarter of 2016. Underlying replacement cost profit for the quarter was $532 million, compared with $196 million for the previous quarter and $2.6 billion for the first quarter of 2015. Compared with the previous quarter, lower costs throughout the Group more than offset the impact of significantly weaker oil and gas prices and refining margins.

Bob Dudley, BP group chief executive, said: “Despite the challenging environment, we are driving towards our near-term goal of rebalancing BP’s cash flows. Operational performance is strong and our work to reset costs has considerable momentum and is delivering results. Furthermore, development of our next wave of material upstream projects is well on track.”

The Brent oil marker price averaged $34 a barrel in the quarter, compared with $44 in 4Q 2015 and $54 in 1Q 2015, and refining margins were at the lowest quarterly average for over five years. Brent prices have so far averaged $40 in the second quarter.

“Market fundamentals continue to suggest that the combination of robust demand and weak supply growth will move global oil markets closer into balance by the end of the year,” added Dudley.

BP ANNOUNCES FIRST QUARTER RESULTS

FEATURE

WAVE POWER IS BECOMING A REALITY

One of the next big things in clean energy is wave power. Unlimited, clean, cheap and worldwide; the ocean is the perfect source of energy. The only challenge to date has been creating a convertor that can harvest energy at a commercial rate. Sweden’s CorPower Ocean has the answer.

//Harnessing the energy potential of our oceans has long been a goal of big

energy companies, but it has often proved to be expensive and tedious thanks to the extensive research and high unique solutions that are required to gain results.

The sea is harsh – it’s a well-known fact – the forces of nature are strong and any device that is tethered to something is easily breakable. Strong waves will smash, twist, break and capsize equipment, and as for those who try and service wave power installations – it’s a challenging role and needs specialist, expensive skills.

Because of this, the big energy companies have steered away from wave power and are waiting for a viable solution to be developed by a smaller, innovative company that has the necessary expertise to create a prototype, test and find out if it can be commercially successful.

In the past, many attempts have been made to harvest wave energy and in 2008, the Aguçadoura Wave

EDITORIAL BY: Joe Forshaw

Park was opened in Portugal; the world’s first experimental wave farm.

The concept of wave power is simple – using a wave energy converter (WEC) to transport energy created by wind waves, and the capture that energy to use for electricity generation.

Wave power differs slightly from tidal power as with wave power, a floating device is usually placed on the ocean surface to take advantage of the movement created by waves. Tidal power usually sees turbines placed under the water, fixed to the seabed, turned by the movement of the tide. Atlantis Resources is currently developing a tidal power farm off the coast of Scotland.

One company that thinks it has the answer is CorPower Ocean AB, a Stockholm-based wave energy specialist that has, since 2009, been working on developing effective WECs.

The company is run by CEO, Patrik Möller and he believes they have developed the perfect system, based on the human heart.

“Wave power represents a huge untapped resource of clean energy,” he said at ECO14 London. “The real challenge is to design a device that’s robust enough to survive the toughest storms and at the same time, generate enough energy to pay back investment into those systems.

“So far, wave energy convertors have been too large and too costly compared to energy output and this has prevented commercial harvesting – this is something we are changing.

“CorPower has developed a complex, high-efficiency wave energy convertor inspired by the pumping principles of the human heart. We use a method called phase control to get these buoys to oscillate in resonance with incoming waves. This allows a large amount of energy to be harvested with a small buoy.

“Our patented control technology strongly amplifies the response of these buoys in incoming waves and makes a large response and its linear motion is then transferred into electricity using a new type of mechanical drive train which is located inside the device, protected from the oceans.”

In essence, a heaving buoy will sit on the ocean surface gaining power from the surge and heave of waves. It is connected


CORPOWER OCEAN

© Twitter - Patrik Möller

has proven this method to work very reliably. Compared to the current state-of-the-art wave power, this technology allows us to use buoys that are half the size but generate five times the amount of energy per ton of energy on an annual basis,” Möller said at the investor event.

“Importantly, when the storms roll in, we de-tune the devices, making them move out of sync with incoming waves which reduces the loads and gives good survivability without the need for huge dimensions.

“ These small buoys have a low capex per kilowatt and a compact format allows an effective


//SO FAR, WAVE ENERGY CONVERTORS HAVE BEEN TOO LARGE AND TOO COSTLY COMPARED TO ENERGY OUTPUT AND THIS HAS PREVENTED COMMERCIAL HARVESTING//

to the ocean floor by a mooring line but given enough freedom for high natural frequency of oscillation. The internal motion comes from a proprietary cascade gear box which is durable and the generators and power electronics are standard components known from the wind industry, enabling well known grid connection architecture. The concept that allows this idea to be commercially viable involves combining hundreds or even thousands of units, driving down unit cost of production and allowing for significant energy generation.

“Extensive testing in Portugal

FEATURE

operations and maintenance using standard vessels,” he said.

In 2014, global investment in clean energy was reportedly close to its highest point at $310 billion and both developed and developing economies were ploughing money into the development of clean energy. China invested $89.5bn in the sector in 2014 (up 32%), Brazil $7.9bn (up 88%) and India $7.9bn (up 14%). Corporates and

governments have increased their support for clean technology and there is now some of the most innovative thinkers in the world working in the clean-tech sector. However, fossil fuels are still subsidised in many countries and competition in the industry is fierce.

Can CorPower, and wave energy as a whole, offer a solution that will attract large-scale investment and become a


CORPOWER OCEAN

seriously viable source of energy for the future? Möller certainly thinks so.

“It all boils down to the cost of energy, which is expected to compete with offshore wind in the near-term and more established energy sources as the volumes increase,” Möller said.

“By 2018, we should be ready to ship commercial units to multiple customers.”

This is a company with a fantastic innovation; a real game changer. Keep an eye on CorPower and see how long it takes them to put up an array of WECs close to your coast

//WAVE POWER REPRESENTS A HUGE UNTAPPED RESOURCE OF CLEAN ENERGY//

© CORPOWER

//The UK energy market, just like markets around the world, is a changing one. People are

demanding that more comes from less; that power is ethically produced; that the lights never go out; and that energy doesn’t cost the earth. It’s a problem that the energy companies have had for some time and one which for a long time had no real answer. But today, the

//WE WILL BE HARNESSING TECHNOLOGY TO DEVELOP A 21ST CENTURY FACILITY WITH THE ABILITY TO REMOTELY MONITOR CRITICAL EQUIPMENT 24 HOURS A DAY, AND ENABLE OFFSHORE COLLEAGUES TO ACCESS REAL TIME DATA AND IMMEDIATE TECHNICAL EVALUATION AND ONSHORE SUPPORT//

energy mix is spread; we get power from oil, gas, wind, nuclear, biomass, the sun, the sea and many other sources. Today, energy is changing; not just in where it comes from, but also how we get it and how we use it – this is a good thing, it stimulates growth and innovation and gives platforms like Energy Focus a reason to exist. But nevertheless, even with all the invention

and progress into new energy sources, the world’s major economies and many of the emerging economies are still based around traditional fossil fuels – oil, gas and coal.

In the UK, renewable energy is certainly on the rise; there’s wind and solar farms going up all over the countryside and around the coast, but the bulk of supply still comes from fossil fuels, coal and gas, and this will remain the case for some time to come.

Interestingly, many commentators have stated that gas production from UK North Sea fields has declined since 2000 and remaining resources are becoming more difficult and hence more expensive to find and extract. However, in 2008 the industry received a massive boost when Maersk Oil and its partners discovered the Culzean gas condensate field.

BUSINESS PROFILE


MAERSK OIL

and this £3 billion investment comes on the back of massive government support for the sector.”

Maersk Oil and its partners are investing around £3 bn (USD $4.5 bn) in the development, with more than 50% committed to investments in the UK. Over the projected life of the field, it’s anticipated that £2.1 bn (USD $3.3 bn) in operating expenditure will be spent in the UK domestic market. The Culzean field aligns with the UK’s commitment to increased gas-fired electricity generation and is expected to support an estimated 6,000 UK jobs and create more than 400 direct jobs.

Maersk Oil CEO, Jakob Thomasen said: “Culzean is an important development for the UK and also for Maersk Oil and our co-venturers. We are pleased the field will support UK


Culzean’s reserves are estimated at 250-300 million barrels of oil equivalent and production is expected to start in 2019 and continue for at least 13 years, with plateau production of 60,000-90,000 barrels of oil equivalent per day.

Maersk Oil operates Culzean which is located in Block 22/25a, and the other development partners include JX Nippon and BP (Britoil). Reports suggest that Culzean could supply around 5% of the UK’s total gas consumption by 2020/21.

In August 2015, development of Culzean was approved by the UK Oil & Gas Authority and was welcomed by Chancellor of the Exchequer, George Osborne MP who said: “…the North Sea is open for business. Already the UK’s oil and gas industry supports hundreds of thousands of jobs across the country

economic growth as well as extend understanding of HPHT (High Pressure, High Temperature) development. Culzean is the latest in a series of large investments by Maersk Oil in the North Sea where we are active in Denmark, Norway and the UK – reflecting our commitment to the future of the North Sea region.”

Andy Samuel, Chief Executive of the Oil & Gas Authority said: “Maersk Oil and partners’ £3 billion investment to develop the Culzean discovery is excellent news for the UK during a period when the decline in global oil prices has created difficult operating conditions for this critical sector of our economy.”

The UK currently runs a number of gas power stations and has more plans for the future as the government

Continues on page 17 >>>

MAERSK OIL


//READ CASED HOLE – ZEROTIME

AFRICA NEEDS SATELLITES FOR GROWTH AND PROSPERITY

Well intervention specialist, READ Cased Hole launches its latest logging technology, ZeroTime, at SPE ICoTA Coiled Tubing and Well Intervention Conference & Exhibition in Houston. ZeroTime from READ Cased Hole (READ) is an innovative and pioneering new service line that allows companies operating in the oil and gas industry to acquire accurate, high definition data in order to understand downhole conditions and, as a result, make informed decisions to maximise efficiency.

READ is the specialist in production and integrity evaluation, delivering fast and reliable cased hole log data analysis. Thanks to the current climate in the energy industry, efforts to minimise costs and maximise efficiency are at the forefront of everyone’s mind.

The benefits of ZeroTime include maximising operational efficiency, minimising risk and operational cost so that qualified decisions can be made quickly and with confidence.

“We are thrilled to be launching ZeroTime at ICoTA in Houston this year and look forward to the opportunity to position ZeroTime as the “go-to” solution when it comes to safe and efficient logging while working. A number of our clients have seen the benefits of ZeroTime, but it’s still early days – we are confident that more operators will see it as the reliable technology to acquire fast, actionable intelligence to help save valuable time and resource,” says READ CEO, Roy Martin.

ZeroTime has proven itself after being used in rigorous operations in the North Sea where it completed 800 successful surveys in customer wells. During these operations, ZeroTime demonstrated a saving of circa 24 hours per operation by eliminating the need for dedicated logging runs.

Technical Manager, Maurillio Addario says: “With ZeroTime, we’re allowing intervention into the well, which would otherwise serve a purely mechanical purpose, to also be an intelligent run.

“The sensors deployed by ZeroTime are capable of withstanding all the challenges that come with a mechanical run in terms of g-forces, tensile and compressive stresses. Not only that but delivering uncompromised data quality when compared to a dedicated logging run and even preserving pump-through capabilities when deployed in drill-pipe or coil.

“The immediate benefit of ZeroTime survey(s) to the operator comes in the form of minimised operational risk, maximised operating efficiency and minimised intervention cost. The risk element for example; there is risk associated with every downhole run - it can be human error or equipment failure, and reducing a number of separate runs means reducing the chance of something going wrong. Furthermore, ZeroTime

can eliminate the need for a dedicated wireline set up with a dedicated crew, which would greatly minimise associated risks and costs to the operator.

Addario is confident that this versatile system can be used in any environment: “While ZeroTime has been primarily used in the North Sea, it provided us an insight into how reliable ZeroTime is and we are now working on a number of projects focussed on taking ZeroTime worldwide.

“The sector as a whole is suffering just now but there is an extremely important synergy between this product line and the mechanical fracking operations that are happening in North America for example. ZeroTime is a perfect fit for such operations as it would be able to deliver a much clearer picture of the condition of the wells without adding any extra rig time.”

With regards to the launch of ZeroTime at ICoTA, Addario says: “The reaction at SPE ICoTA in Houston was fantastic. We had a very good reception. At these times of low oil prices, there’s been a refocus on minimising cost and risk and ZeroTime aligns with this need.

“It quickly became clear that there is an appetite for ZeroTime in the industry.”

A select number of multinational operators and global oil and gas companies have used ZeroTime and the fact that the service offers ‘logging-while-working’ highlights the huge savings to be had.

“ZeroTime does not require any extra time whatsoever – it works at the same time with the mechanical run, so this is a two for one scenario, where the client gets the advantage of valuable data and fast decision making ability.

“Maersk Oil is an existing client that uses ZeroTime logging while working technology and the experience has been very successful,” says Addario.

Whether deployed on slickline, coiled tubing or drill pipe ZeroTime technology integrates straight into the bottom-hole-assembly using standard connections, maintaining tension, compression, torque and pump-through characteristics. The assembly requires no special treatment and can be kept at the wellsite for the duration of campaign activities, with READ’s specialist engineers mobilizing on demand, as and when required, for each well in the sequence.

“There isn’t an equivalent identical proposition out there,” says Addario.

READ’s innovation is set to become an important part of the industry and its proven success in reducing cost, maximising efficiency and creating an informed decision making means that ZeroTime is a package with benefits for everyone.

www.zerotime.info - www.readcasedhole.com

MAERSK OIL

access real time data and immediate technical evaluation and onshore support. The technology will minimise time spent on plant and enhance safety and efficiency. Maersk Oil estimates this digital toolkit can save more than USD $10 m annually.”

CULZEAN - HPHTThe Culzean field is a HPHT field and accessing the gas and exporting is not a simple process.

“The Culzean reservoirs sit beneath all the traditional reservoirs that play in the North Sea. They also sit beneath what’s called the chalk package which makes it very difficult to see seismically through all the reservoirs, then through the chalk, then down to the Culzean reservoirs themselves,” Urquhart explains.

“Culzean sits due east, 260 km off the coast of Aberdeen. It sits in the central North Sea. It’s a classic HPHT provenance where we’re sitting down in the Jurassic and Triassic intervals.

“The slightly unusual thing about HPHT is that we’re required to start the drilling a number of years before the platform facilities are installed. As it takes about nine months for each well to be drilled, in order for us to have three wells available to meet the capacity requirement start-up, we need to start the drilling approximately two years before the main topside is installed,” explains Engineering Manager, Stuart McAuley.

In a HPHT well, the environment is hostile. Temperatures, pressure and forces are extreme.

Subsurface Manager, Claus Bjerregaard says: “Culzean is a unique


MAKING EVERY TRIP COUNT.

ZeroTime™ is a game-changing logging-while-working solution that eliminates stand-alone diagnostic surveys by adding intelligence to routine trips in hole. ZeroTime™ enables operators to plan their next move in total confidence with zero-added rig time.

- Minimise risk

- Maximise efficiency

- Minimise costs

www.zerotime.info

looks to cement the backbone of its longstanding stable and secure supply.

CUTTING STEELIn April, the first steel was cut for the billion dollar topsides. A ceremony for the first of the three topsides modules took place at the Sembcorp Marine Offshore Platforms (SMOP - formerly known as SMOE) Admiralty Yard in Singapore.

Jakob Thomasen was present at the event along with a number of stakeholders and he initiated the steel cutting for the project – which is now considered a Megaproject.

“Starting the fabrication of the topsides is an important milestone,” he said. “When the field begins to produce in 2019, Culzean will become a key contributor to Maersk Oil’s ambition to become a Top 5 operator in the North Sea in the 2020s, and provide around 5% of UK gas demand at peak production. Maersk Oil and co-venturers’ investment will also support employment in both the UK and Asian supply chains.

“Our focus for the next three years is working with our partners and suppliers to deliver the project from fabrication right through to commissioning safely, on time and within budget.”

Culzean Project Director, Martin Urquhart said: “We will be harnessing technology to develop a 21st century facility with the ability to remotely monitor critical equipment 24 hours a day, and enable offshore colleagues to

<<< Continues from page 15

//MAERSK OIL AND PARTNERS’ £3 BILLION INVESTMENT TO DEVELOP THE CULZEAN DISCOVERY IS EXCELLENT NEWS FOR THE UK DURING A PERIOD WHEN THE DECLINE IN GLOBAL OIL PRICES HAS CREATED DIFFICULT OPERATING CONDITIONS FOR THIS CRITICAL SECTOR OF OUR ECONOMY//

reservoir and a unique project to be on. It is a deep reservoir at 15,000 feet; it’s a prolific sandstone reservoir. It’s high pressure, high temperature at 13,500psi. The reservoir sits next to a salt diaper. From a subsurface perspective, sometimes you have to pinch yourself and remember that 13,500 psi and 350 degrees is quite amazing.”

Because of the unique set of challenges presented by this project, Maersk has had to look to the Far East for some of its steel tubulars.

“The complexities of the drilling program are driven by the challenges of the pressures and temperatures, that’s what makes this type of field unique in its development and why it’s a challenge to the industry and not just Maersk Oil to be able to deal with the temperatures, not only when you’re drilling but also when you’re producing. Because of the dimensions of the well, we’re limited with the wall thickness that we can use to gain strength so we’re also asking the industry to supply steel that’s very strong and that particular product will come from Japan where there’s some very bespoke steelmaking capacity that’s dedicated to making very high-end oil field tubulars,” explains Wells Project Manager, Andrew Lough.

SAFETY – PRIORITY #1As with any new development, or any offshore project, safety is at the heart of all plans that are tabled by Maersk Oil. The design of the platform is a product of safety and functionality.

“Personal safety is key and the most important input as to how we lay out the platforms,” says McAuley. ITC Global brings boundless broadband to even the

most complex offshore operations.

With the world’s leading satellite network from Panasonic, ITC Global delivers custom solutions for highly connected remote operations. Our unmatched capacity supports communications for the most extreme offshore projects, at any distance, on any scale. High-performance throughput and global coverage deliver seamless connections to people, places and projects that matter most – for smarter operations in the toughest environments.

For more information, visit itcglobal.com.

A Panasonic Company

Big operation.Biggest network.

ITC Global brings boundless broadband to even the most complex offshore operations.

With the world’s leading satellite network from Panasonic, ITC Global delivers custom solutions for highly connected remote operations. Our unmatched capacity supports communications for the most extreme offshore projects, at any distance, on any scale. High-performance throughput and global coverage deliver seamless connections to people, places and projects that matter most – for smarter operations in the toughest environments.

For more information, visit itcglobal.com.

A Panasonic Company

Big operation.Biggest network.

“The basic idea is that we keep the high pressure as far away from where people are living and working as possible and therefore we have the well head platform separated from the main central processing system by a 150m bridge. The main central processing system is then separated from the ULQ by another 100m bridge and this effectively gives us the maximum separation between the high-pressure wells and the accommodation.”

In 2016, the wellhead jacket will be installed. In 2017, the other two jackets will be installed which will allow drilling activities to commence. In 2018, the CPF and the ULQ will arrive and that will complete the platform layout.

“Subsea will have a number of structures and one large gas export line that will either be 20 or 22 inches and it will head over the tie in point called T5. Then there will also be a pipe in pipe system to carry the

liquids from the central processing platform across to the FSO. There’ll be a flexible riser up to the boat,” says Urquhart. A GAS FUTURE This project is hugely important for the UK energy mix and, according to WoodMac research, is the largest gas field sanctioned since East Brae in 1990. Of course, all involved are excited and enthusiastic.

“Culzean comes on stream as a

BUSINESS PROFILE


MAERSK OIL

For the next four years and beyond it will be all hands on deck in the North Sea as development activities ramp-up and the project moves through various different phases. Maersk Oil Geoscientist, Katie Milroy says that now is an extremely exciting time and activities are all geared towards achieving the goal of production in three years’ time.

“We’re past the evaluation stage. It’s an exciting stage where


number of gas fired power stations are developed within the UK to back up our move away from coal so it’s a very important project on a number of fronts in terms of energy policy and energy security,” says Urquhart.

“Culzean is a significant opportunity and will deliver significant value and gas to the UK market in the year 2020 - it’s exciting to be a part of such an important project for the UK gas supply.” says Bjerregaard.

we are going ahead, we’re drilling the development wells, the platforms are going ahead and we’ve got a plan for first gas in 2019,” she says

MAERSK OIL

+44 12 2424 2000 @maerskoil

www.maerskoil.com


© WESTERMEERWIND

BUSINESS PROFILE

February of this year brought the announcement from Siemens that two thirds of these 48 wind turbines, each of 3 MW, had been fully and successfully installed. At the same time, the first group of eight wind turbines were also transferred to Westermeerwind, enabling over 26,000 households to benefit from renewable power obtained from the wind farm even while under construction. The combination of Westermeerwind’s extremely windy location and the quality of the chosen turbines means that the generated power is of excellent quality. The turbines of what is the largest near shore wind farm in the Netherlands are divided into two rows along the Westermeer dike and one row along the Noordermeer dike, alongside an onshore transformer station, the combination of which will look to produce wind power for some 160,000 households at full capacity.

In the weeks which followed,

Siemens set about transferring the remaining turbines to Westermeerwind in batches, with construction completed at the beginning of March. “At this time Westermeerwind Wind Farm is the largest nearshore wind farm in the Netherlands,” explained Willie Wienholts, Project Manager at Siemens. “It took one year to install the foundations, cables and turbines for the Westermeerwind Wind Farm, as planned. The first foundation pile was driven into the bottom of the IJsselmeer in March last year, and the last pile in May. During the summer months the electricity cables were laid and the transformer station on land was completed. Siemens installed the first complete wind turbine in September on its foundations and now, six months later, the final one. Siemens will also maintain the wind farm during the coming 15 years.”

The three-bladed direct drive wind turbines from the Siemens D3


© WESTERMEERWIND

platform are equipped with 53m long B53 quantum blades, which are made of fibreglass-reinforced epoxy. These are pitch-regulated wind turbines, with a 79.5m hub height and 9,144m² of swept area, and are designed to provide cheaper electricity in moderate-to-high wind conditions, such as those found at Westermeerwind. The turbine foundations are placed at a 3m to 7m depth in the lake water on a 5m diameter, and less than a month after the installation of the final instrument, after an extensive testing phase had been negotiated, Westermeerwind achieved perhaps its most important milestone to date. On March 29th it was reported that all wind turbines were

producing their maximum power output of 3MW per turbine, meaning that the wind farm generated its maximum capacity in power production - some 144MW - even with part of the wind farm still in the testing and commissioning phase. The final stages of testing and commissioning are now being completed by Siemens, and when these works are completed, the final sections will be handed over to Wind Farm Westermeerwind.

This project has been labelled a wind farm both for, and by, the polder where it is located. Residents of the Noordoostpolder, Urk and Lemsterland all look out across the IJsselmeer, which is why Westermeerwind’s founders

decided early on that residents and agrarians from the Noordoostpolder would benefit from the project, through either bond and share schemes. In addition, 32 residents who were unable to realise their small-scale wind projects because of the municipal policy for linear arrangements, will be able to invest a maximum of one megawatt in the wind farm. As soon as the entire Noordoostpolder Wind Farm, which comprises Westermeerwind, NOP Agrowind and Zuidwester, is in use, the villages of Creil, Espel, Rutten, Tollebeek and Nagele will all be eligible to receive an annual Wind Fund from the project

//SIEMENS INSTALLED THE FIRST COMPLETE WIND TURBINE IN SEPTEMBER ON ITS FOUNDATIONS AND NOW, SIX MONTHS LATER, THE FINAL ONE//

WESTERMEERWIND OFFSHORE WINDFARM

+31 (0)527 61 61 67 [email protected]

www.westermeerwind.nl

WESTERMEERWIND OFFSHORE WINDFARM


E.ON CLIMATE AND RENEWABLES

Making a Statement With Announcement

of World’s Largest Offshore Wind Farm

Denmark’s DONG Energy holds a significant position in the European Energy market, contributing to some of the EU’s most

important economies. The company looks set to increase its stake in the market after making some big announcements in

the past few months…


PRODUCTION: Timothy Reeder

BUSINESS PROFILE

//E.ON Climate and Renewables (EC&R) currently operates some

5.2 GW of renewable generation capacity, which places it as the world’s eighth largest company in onshore wind. It boasts a technology portfolio which covers onshore and offshore wind and photovoltaic (PV) solar power, among which is one of the world’s largest onshore wind parks in Roscoe, Texas, US, whose turbines collectively offer a 781.5-megawatt capacity. Since its formation in 2007, EC&R has invested huge sums not only into the continuous expansion of its portfolio, but also to further industrialise the sector and its operations, with the aim of reducing the cost of renewable generation to make it an ever more viable alternative.


It was as a result of this policy of continual investment that saw cake as the order of the day in February of this year, offered to each of E.ON’s approximately 2,500 employees at the campus in Essen as the company reached a major milestone. The confectionary marked the moment that E.ON’s investment in renewables surpassed the €10 billion mark - more than that committed by any other German company - over the course

of its existence since 2007. This landmark amount was brought about following an upgrade to Amrumbank West wind farm in the North Sea, which is the company’s first commercial wind project in Germany, to lift its generating capacity from 288 to 302 MW. Over the best part of the last decade E.ON has continued to invest heavily in onshore and offshore wind power, hydro and solar power, as well as biomass and

//OUR RACE BANK OFFSHORE WIND FARM IS EXPECTED TO BE FULLY OPERATIONAL IN 2018 AND WILL HAVE A CAPACITY OF UP TO 580 MW, PROVIDING ENOUGH GREEN ENERGY TO POWER OVER 500,000 UK HOMES//


other renewables. “We’re proud of what we’ve accomplished,” stated Michael Lewis, CEO of E.ON’s renewables business. “We’ll continue to invest and to work hard to make renewables competitive and therefore as cost-effective as possible for our customers.”

E.ON has the world’s 12th-largest onshore wind portfolio, the renewable energy generated by which makes a substantial contribution to climate protection. E.ON’s green generation fleet has so far helped to mitigate the emission of more than 60 million metric tons of carbon, which is around the same figure as that which a major city such as Berlin emits in six years. EC&R’s portfolio comprises a renewable generation capacity of around 5,200 MW across Europe and North America, while

in Europe and the US it operates onshore wind farms with a capacity of more than 4,000 MW. EC&R is also heavily involved in the field of offshore wind energy, and is keen to maximise what it sees as great potential within this technology.

Amrumbank West is one such offshore wind project, and with investment in the development set to total € 1 billion it represents a significant arm of E.ON’s plans within the sector. The offshore wind farm is situated 35 km north of Helgoland and has an installed capacity of 302 MW, which is enough to supply about 300,000 households with renewable energy while, simultaneously, helping to reduce CO2 emissions by more than 740,000 metric tons. E.ON CEO Johannes Teyssen was able to officially put this landmark


//OUR RACE BANK OFFSHORE WIND FARM IS EXPECTED TO BE FULLY OPERATIONAL IN 2018 AND WILL HAVE A CAPACITY OF UP TO 580 MW, PROVIDING ENOUGH GREEN ENERGY TO POWER OVER500,000 UK HOMES//

BUSINESS PROFILE

development for EC&R into operation at an event at Hamburg’s harbour museum in February this year, saying: “Every energy has its time, and the time for expanding offshore wind is definitely now. Offshore will be needed if we want to achieve the targets of the energy transition.” Making clear the importance of wind power to meeting further energy demands, he added that E.ON would remain committed to this field and particularly on cutting the cost of renewable energy generation.

Hamburg’s First Mayor Olaf Scholz was also present at the event, and explained the project ’s significance: “Amrumbank West is another lighthouse project for wind power at sea, which must be followed by further offshore wind projects to make sure the energy industry and industrial policy potential of offshore wind

is not left untapped. Clean power is needed all over Germany and green electricity from the North Sea gives the German energy transition the necessary support.”

State Secretary Uwe Beckmeyer, meanwhile, referred to its commercial benefits: “Reliability and a continuous expansion are the cornerstones of the successful development of offshore wind energy. The project builds on previous offshore experience and demonstrates that the northern German cluster offers many competitive advantages: the geographical proximity of the companies involved in the project,

//EVERY ENERGY HAS ITS TIME, AND THE TIME FOR EXPANDING OFFSHORE WIND IS DEFINITELY NOW//


DR. JOHANNESS TEYSSENE.ON CEO & CHAIRMAN

networking opportunities and collaboration over longer periods.”

Electricity generated by the wind farm is transferred to the 690MW HelWin2 offshore converter station through eight km of cables, one of the ten hub projects undertaken by grid operator TenneT to transport offshore wind power to the German grid network. Following the success of offshore wind projects like Amrumbank West, E.ON announced in January that the first turbine foundation for its Rampion project in the UK had been successfully installed. Located in the English Channel, Rampion is expected to supply the equivalent of up to 300,000 homes, while reducing CO2

emissions by up to 600,000 tons a year. Despite the disruption that adverse weather conditions caused to preparing the seabed for the 116 turbines, the 400 MW development remains on schedule and supports E.ON’s strategy to concentrate on renewable energy, customer solutions and energy grids.

E.ON will now partner with Dresden-based SOLARWATT GmbH in order to develop its own electricity storage system. For several years SOLARWATT has marketed intelligent, complete solar systems that enable residential and small-business customers to generate their own electricity and heat, including last year’s award-winning storage system MyReserve.

E.ON’s models will efficiently store electricity generated by a home solar system, and thus help customers permanently reduce their electricity costs.

“An increasing number of our customers wants to become more energy autonomous,” explained E.ON Management Board member Bernhard Reutersberg. “ Together with SOLARWAT T we can offer them a complete solution that f its their individual needs. We aim to become a leading provider of electricity storage systems in Germany and to continually expand our palette of intell igent solutions for our customers.”



+49 2 11-45 79-41 70 [email protected]

www.eonenergy.com

//RELIABILITY AND A CONTINUOUS EXPANSION ARE THE CORNERSTONES OF THE SUCCESSFUL DEVELOPMENT OF OFFSHORE WIND ENERGY//



BUSINESS PROFILE


//Statoil has significant offshore experience in choppy waters, with the company’s

record of world-class offshore project installation stemming from understanding the conditions, sound project planning and execution, operation and professional quality surveillance. Statoil is now bringing this expertise to the development of new solutions for renewable energy through Hywind, a floating wind turbine concept which includes a steel cylinder, filled with a ballast of water and rocks, which extends 80-100 metres beneath the sea surface and is attached to the seabed by a three-point mooring spread. It is constructed to also support a wind turbine generator and withstand high winds and waves, all while producing electricity effectively. Its simple structure makes Hywind both relatively lightweight and very robust compared to other similar solutions.

Hywind’s excellent energy production and suitability for mass fabrication means that the concept could go on to reshape the very future of offshore wind. The technical potential for floating offshore wind globally is much higher than that for fixed structures, almost unlimited in scope, explaining why several developers are at present involved

in floating wind demo projects around the world. Statoil, meanwhile, developed and deployed the world’s first full-scale floating wind turbine of 2.3 MW, which was installed off the west coast of Norway in 2009. Near to the island of Karmøy, north of Stavanger, the 100% owned Hywind concept combined technology from the wind, oil and gas industry and drew upon Statoil’s wealth of offshore experience. A successful model test in 2005 entailed further development work on both the wind turbine and substructure design, and in May 2008 the go-ahead was given to build the world’s first full-scale prototype of a floating wind turbine.

The Hywind Demo prototype was verified through five years of operation, during which it displayed few operational challenges, excellent production output and well-functioning technical systems. Statoil expects floating wind turbines to have a potential for significant cost reductions compared to fixed turbines, as well as giving higher flexibility in turbine placement. Having successfully completed rigorous technical testing of the Hywind floating wind concept, the next step towards building larger commercial parks is to scale up and optimise the substructure

//BY DEVELOPING INNOVATIVE BATTERY STORAGE SOLUTIONS, WE CAN IMPROVE THE VALUE OF WIND ENERGY//

HYWIND


@ Helge Hansen - Statoil

BUSINESS PROFILE

the feasibility of multiple floating wind turbines in a region that has optimal wind conditions, a strong supply chain within oil and gas and supportive public policies.

A new battery storage solution for offshore wind energy will also be piloted at this, the world’s first floating wind farm, using a facility incorporated into its shore station to optimise electrical power distribution. The Batwing storage system will be developed in co-operation with Scottish universities and suppliers under a new Memorandum of Understanding (MoU) between Statoil, the Scottish Government, the Offshore Renewable Energy Catapult and Scottish Enterprise. Battery storage has the potential to negate the intermittency and to optimise the output of wind farms, which can in turn improve efficiency and result in lower costs for offshore wind by


coast of Scotland, approximately 30 km from Peterhead in Aberdeenshire, set to produce sufficient renewable energy for some 20,000 homes. It intends to demonstrate technological improvements, operation of multiple units and cost reductions in a park configuration. This is the logical next step towards achieving Statoil’s long term vision, of developing floating wind farms on a commercial scale and as such enable more markets to access the benefits brought by floating offshore wind. Floating wind represents a new and significant renewable energy source that will work alongside an existing and expanding range of alternative energy projects in Scotland, and demonstrate

design. This is where the Hywind Scotland Pilot Park comes in, a project intended to demonstrate not only that the costs can be significantly reduced, but also to prove the feasibility of developing large scale commercial parks. “The Hywind concept is a door opener for completely new renewable energy business opportunities, unlocking huge offshore areas for clean energy production. This is a direct result of Statoil’s extensive offshore oil and gas experience,” states Siri Espedal Kinder Senior Vice President Renewable Energy.

The Pilot Park will include five 6 MW wind turbines which will be placed at Buchan Deep off the east

//THE HYWIND CONCEPT IS A DOOR OPENER FOR COMPLETELY NEW RENEWABLE ENERGY OPPORTUNITIES//

@ Statoil

making electrical power available in times of high demand. This pilot installation in Scotland will provide both technological and commercial foundations for the use of Batwind in full-scale offshore wind farms, and in turn open up new commercial opportunities in a growing market.

Stephen Bull, Statoil’s senior vice president for offshore wind,

said, “Statoil has a strong position in offshore wind. By developing innovative battery storage solutions, we can improve the value of wind energy for both Statoil and its customers. With Batwind, we can optimise the energy system from wind park to grid. Battery storage represents a new application in our offshore wind portfolio, contributing

to realising our ambition of profitable growth in this area.”

The first part of the substructure for Statoil’s Hywind project has already taken shape as it gears up now to launch its seabed and UXO surveys along the cable route and project area, with the five huge turbines set to be fully installed in the water up to 360ft deep by next year

//THE HYWIND CONCEPT IS A DOOR OPENER FOR COMPLETELY NEW RENEWABLE ENERGY BUSINESS OPPORTUNITIES, UNLOCKING HUGE OFFSHORE AREAS FOR CLEAN ENERGY PRODUCTION//

HYWIND

+47 51 99 00 00 @statoilasa

www.statoil.com

HYWIND


@ Statoil

BUSINESS PROFILE

//The aim of the Trans Anatolian Natural Gas Pipeline Project, or TANAP, is to bring natural

gas produced from Azerbaijan’s Shah Deniz-2 gas field, and other areas of the Caspian Sea to Turkey, primarily, as well as on to other areas of Europe. It entails the construction of a pipeline to supply the gas from Azerbaijan, which currently has reserves of more than three trillion cubic metres, which commenced in March this year. With 19km of this running under the Sea of Marmara, the length of the main pipeline in Turkey will reach a total of 1850km, along with off-take stations and aboveground installations. The pipeline is slated to have an initial capacity of around 16 million cubic metres per year, which will be increased in subsequent phases to reach 24bcm per annum by 2023 and

boast an ultimate capacity of 31bcm per annum by 2026. Of this amount, only six billion cubic metres will be delivered to Turkey, with the rest continuing on to the European markets.

The TANAP will run from the Turkish border with Georgia, beginning in the Turkish village of Türkgözü in the Posof district of Ardahan, and traversing 20 provinces including Kars, Erzurum, Eskişehir and Edirne until it reaches the Greek border in the İpsala district of Edirne. From this point, the TAP (Trans Adriatic Pipeline) project, predicted to be complete by 2020, will then take the gas to Western Europe, connecting with the Trans Anatolian Pipeline at the Greek-Turkish border and crossing Northern Greece, Albania and the Adriatic Sea before coming ashore in Southern Italy, where it will connect

to the Italian natural gas network. “TANAP’s motto of ‘respect for people and the environment’ will mean that the 20 provinces along the route of the pipeline will receive significant contributions to their economic and social development,” stated a representative for the project. “We are also taking care to observe international standards, as protection of the environment, occupational health and safety are priorities in the construction and operation of the natural gas transmission lines.”

The third piece of the Southern Gas Corridor is the South Caucasus Pipeline, which was built to export Shah Deniz gas from Azerbaijan to Georgia and Turkey. It follows the route of the Baku-Tbilisi-Ceyhan crude oil pipeline through Azerbaijan and Georgia to


TANAP

Turkey, where it is linked to the Turkish gas distribution system. The initial capacity of the Trans Adriatic Pipeline, meanwhile, will be in the region of 10 billion cubic metres (350 billion cubic feet) of natural gas per year, with the option to expand the capacity up to 20 billion cubic metres. Engineering company Saipem, whose strong focus on oil & gas-related activities sees it enjoy a leading position in the Offshore Engineering & Construction businesses, was recently awarded the contract to undertake the engineering, construction and installation of the 65-mile section of the TAP set to run between the coasts of Albania and southern Italy. According to Ian Bradshaw, managing director of the Trans Adriatic Pipeline consortium, “while offshore construction raises specific challenges, Saipem’s robust technical bid, strong safety track record and experienced team of specialists reassure us that works will be executed to the highest standards and industry best practice.”

Construction work on the TANAP

project is expected to create more than 15,000 jobs, and upon completion it will be one of the world’s longest gas pipelines. The pipeline is scheduled begin to supply gas to Turkey in 2018, and will connect with both the expanded South Caucasus Pipeline and the Trans Adriatic Natural Gas Pipeline, to supply gas to Europe via Greece, Albania, and Italy by early 2020. The pipeline will traverse 20 provinces, 67 districts and 600 villages and will run for 19km below the Sea of Marmara. With the project estimated to cost USD $11bn, the TANAP will form the central section of the USD $45bn Southern Gas Corridor. “We plan to establish Turkey as the energy distribution hub of the region,” stated President Tayyip Erdogan at the groundbreaking ceremony of the TANAP project, held in eastern Turkey in March last year.

One of the most significant contracts to date in the timeline of the TANAP was awarded to WorleyParsons, which delivers projects and provides expertise in engineering,

procurement and construction, or EPCM. The five-year deal is for the supply of EPCM services and covers project management, planning, design, engineering, construction management and other services involved in the construction of the new pipeline and pipeline facilities, including its compressor stations. TANAP General Manager, H. Saltuk DÜZYOL, explained that, “this contract is critical to the success of this major link in the Southern Gas Corridor which is regionally significant to meeting future gas demand in both Turkey and the European Union. WorleyParsons is well qualified to perform the required services, and has demonstrated their commitment to working collaboratively with all project stakeholders to achieve the project objectives.”

TANAP

0312 999 11 11 www.tanap.com



Shell South Africa is perhaps the most recognised fuel brand in the country, if not the world. But positioning the brand as the frontrunner in the industry doesn’t come easily. The company is working hard to improve and increase its customer offerings and that has been demonstrated in the past few years by a thriving relationship with Vida e Caffé.

SHELL SOUTH AFRICA

Shell Looks to Coffee to Fuel Consumer DemandPRODUCTION: Joe Forshaw


BUSINESS PROFILE

//Back in 2013 in London, England, a young entrepreneur started a business that saw him turn

roast coffee beans into bio-energy. Coffee became a fuel and began to drive not only sleepy Londoners every morning, but also industrial boilers in large buildings. Coffee and energy have long been closely related; the caffeine-rich drink boosts your energy levels and keeps you focussed and awake. In South Africa, coffee and fuel have once again been closely linked and it’s thanks to two of the country’s most pioneering businesses in their respective fields. Instead of using coffee beans to create energy for generators, Shell South Africa and Vida e Caffé began a partnership three years ago that is now flourishing and providing quality fuel for South Africa’s people and their cars.

Shell has a strong retail network of conveniently located service stations across

South Africa and Retail Marketing Manager, Yaasier Abrahams says that having service stations that are welcoming and able to provide a quality Convenience retail offer including a strong branded coffee, has bolstered the company’s appeal.

“People’s lifestyles have evolved and consumers are looking for much more than just fuel when visiting a service station,” he says. “After conducting extensive research into the emerging trends in the South African market, Shell partnered with Vida e Caffé in 2013, as one of the strongest local coffee brands who were instrumental in establishing the coffee culture in South Africa over the past 15 years. Today Vida has over 50 high street stores outside of the Shell network and have become synonymous with a hip, vibey coffee experience entrenched in their Afro-Portuguese heritage.

“Over the past two years, Shell has

invested significantly in refreshing its Convenience Store network and we’ve worked with Vida e Caffé to develop a fit for purpose format for the forecourt environment. Today we have well over 100 Coffee bars across the Shell network with the rollout set to continue across the Shell Select footprint over the next few years.

“Vida e Caffé started in South Africa and it’s been a phenomenal success. Customers love it because they know they can get a quality coffee experience that they find in the high-street stores in more and more Shell forecourts across the country.”

The ‘coffee culture’ in South Africa has lagged behind the rest of the world but in the last two years, an upturn has been reported. Stats SA report that coffee shops have seen a 7.1% increase in income since 2014 with impressive growth across the country.


SHELL SOUTH AFRICA

Vida e Caffé CEO, Darren Levy says that coffee is certainly on the rise: “There is a surge in the number of people who are drinking coffee and this is impacting on product awareness and product quality. Africa and South Africa look set to be superb spaces for growth for the coffee industry with plenty of opportunities for great providers of great coffee,” he told Africabusiness.com.

Combining the quality product from Vida with the footprint of Shell has resulted in major successes for the business; Abrahams explains that feedback from customers has been positive.

“It’s been absolutely phenomenal,” he says. “I thinks it’s particularly because the Vida e Caffé brand is so strong locally. We’ve not had Starbucks, and McCafe by McDonalds is probably the closest to an international chain of coffee shops competing with our local brands that we’ve had in the market.”

And Shell isn’t just catering to certain customers in certain demographics. Offering coffee that suits different schedules, different prince points and different tastes is very important to the company so it has worked with Vida to create a new brand that focusses on quality coffee to suit various tastes and affordability levels but also provides an innovative food menu.

“We’ve also developed a secondary brand of Vida e Caffé called “Torrador by Vida e Caffé” and the Torrador brand gives you the quintessential coffee and experience but allows us to cater the food range to different trading environments given the positioning, equity, menu and price points of the Vida e Caffé brand. Depending on the trade areas, Torrador allows us to tailor the menus and price points to cater for things that suit the local market, particularly with regards to food,” Abrahams explains.

COMPLEMENTING EXISTING BUSINESS Many of the Shell service stations are home to Shell Select convenience outlets which offer 24 hours, seven days a week shopping accessibility. Select stores carry a range of standard convenience items and stock the leading brands so that you are guaranteed to purchase fresh, quality products. There’s also regular promotional offers that are always worth keeping an eye on.

Interestingly, Abrahams says that since rolling out the Vida e Caffé outlets, the purchase of other convenience items and related products has increased.

“Where we’ve put in the coffee shops, we’ve seen the basket size in the store increase and we’re also seeing an uplift in fuel volumes because we’re attracting more consumers from the

Tanker Services - 17years [144x100mm]P.indd 1 2016/04/14 10:31 AM


BUSINESS PROFILE

coming to a Shell Select store near you. “We’ve taken a phased approach

through segmentation; we’ve looked at where coffee would make the most sense, looking at national routes, looking at where the busiest sites are in terms of commuter traffic and what the consumer baskets are across the network, and we’ve rolled out there first. The rest of the network is soon to follow,” says Abrahams.

It is these offerings at the retail network that help set the business apart from its competitors (of which there is many) as the nature of the market for fuel in South Africa means that drawing people in with cheap fuel is not an option.

“In South Africa, the fuels market is regulated so the pump prices for petrol across all competitors is the same and this makes it difficult to attract new customers apart from making sure that you have a very strong brand and that you can leverage your global assets. We’ve got

different segment of the market. “With Vida e Caffé, their traditional

model is a full serve barista model and that’s what we’ve got across most of the network. For other sites, where you wouldn’t traditionally have a full serve barista coffee offer, we’re also looking to develop a self-serve offer – take a look at Shell sites in the UK; they all have Costa Coffee but they are all self-serve.

“The full serve model makes sense as we’ve also got bakeries in our stores and with an energetic barista and freshly baked goods, the customers are very well catered for,” he says.

RAMPING UP THE ROLL-OUTWith over 100 Shell forecourts already home to Vida e Caffé outlets, Shell has plans to continue rolling out the partnership with a targeted approach for the rest of the network. This means that the quality coffee experience could soon be

forecourt into our stores. The customer is spending more time in the shop whereas before customers might have just come for a ‘fill and go’.

“The good thing is that because the Vida e Caffé brand is so strong with local market, they’ve also developed a signature food range catering for breakfast, lunch and light meals that are appealing to the on-the-go consumers. If you look at the growth of the food category which has come with the Vida e Caffé experience, it’s been very encouraging,” he says.

Vida e Caffé in Shell Select stores, the same as in its own stores throughout the country, largely offers a full serve barista style sales model. This strategy has proved hugely popular in other parts of the world and it’s no different in South Africa. However, Abrahams is also keen to explore a self-serve model to again cater for a


SHELL SOUTH AFRICA

innovative marketing and offering quality service to customers, contributes to the building of a brand that holds significant weight with consumers all over the country and further afield.

FOOT ON THE GAS As a global company, headquartered in the UK and the Netherlands, Shell is constantly on the growth path. Currently, the growth and investment situation in the energy industry is not conducive to large scale advancement thanks to slumping oil prices but nevertheless, Abrahams is confident about the future of the South African market place thanks to an emphasis on investment into both new and existing infrastructure.

“Obviously, we’re looking for opportunities to grow all the time,

Shell V-Power Nitro+ performance fuels and our competition was an extension of that partnership in South Africa,” says Abrahams. “It had a fantastic response from consumers as the BMW and BMW M brands also have a strong heritage in the SA market and have a strong appeal with ordinary South African consumers.

“We’re partnered with one of the strongest coffee brands in SA, we’ve got both the Ferrari technical partnership as well as the BMW M endorsement for our V-Power fuels, so you can see that we’re starting build a very strong and compelling CVP both instore and on the forecourt,” he adds.

When people hear a name, they conjure up a set of impressions that influence how they think and buy, and those thoughts define a brand. All of the hard work being done by Shell in SA, building partnerships,

a 113 year heritage in the South African market and some of our other strong assets are our partnerships and fuel endorsements. We’re a technical partner to Scuderia Ferrari and that’s a long-standing relationship which has been going on since the 1960s and this reinforces the high quality fuels perception,” says Abrahams.

POWERFUL PARTNERSHIPS Away from coffee, Shell’s fuels are recognised as being amongst the best in the world. Along with the Ferrari technical partnership, another strong Global Brand in BMW M also recently endorsed Shell’s V-Power Nitro+ Premium Fuels in 2015.

In the summer of 2015, to celebrate the BMW M V-Power Endorsement locally, Shell held a giveaway competition, offering five BMW 3-series to five lucky winners over five weeks.

“Last year, BMW M-power endorsed



SHELL SOUTH AFRICA

+27 11 996 7000 [email protected]

southafrica.shell.com

SHELL SOUTH AFRICA

particularly as South Africa has a growing population and a growing economy. We’re certainly looking to expand and also reinvest in the existing network so our strategy is to look at how we can enhance the offers at the existing sites and make sure that we offer South African motorists a welcoming customer experience whenever they visit a Shell forecourt.

“South Africa is seen as one of the growth markets for the Shell group,” he says. “The group has taken a long-term view on the future of South Africa and recognised that this is one of the markets that is going to be seeing growth and where it can realise a good return so the investment is definitely there. Given the fact that we have invested in the network already, we’ve shown that that is helping to sustain the business within the country. With the investment in enhancing our Convenience Retail Offer in addition to our strong and established fuels portfolio, we’re doing our best to ensure that our customers keep coming back,” he concludes

// Today we have well over

100 Coffee Bars

EXHIBITION CALENDAR


KEY UPCOMING EVENTS ACROSS THE INDUSTRYOur regular update to help you keep track of important events and exhibitions taking place across the energy sector.

EUROPEAN NUCLEAR POWER18 -19 MAY 2016Platts is delighted to reveal that the 11th edition of the European Nuclear Power conference returns to London on May, 18-19, 2016 at the Hilton Canary Wharf hotel. As this event is designed for Europe’s leading utilities, project developers, technology providers, policy makers and financiers, Platts has sourced 35 key expert speakers to gather for frank discussion and unrivalled debate. This will include how to grasp new business opportunities in nuclear power across Europe and internationally.

OFFSHORE TECHNOLOGY CONFERENCE (OTC)02 - 05 MAY 2016The Offshore Technology Conference (OTC) is where energy professionals meet to exchange ideas and opinions to advance scientific and technical knowledge for offshore resources and environmental matters.Founded in 1969, OTC’s flagship conference is held annually at NRG Park (formerly Reliant Park) in Houston. OTC has expanded technically and globally with the Arctic Technology Conference, OTC Brasil, OTC Asia and d5.

ALL-ENERGY EXHIBITION & CONFERENCE 04 - 05 MAY 2016As an annual event, All-Energy brings together all sectors and elements of the renewables / sustainable energy industry and provides a platform for the industry’s business professionals, academia, finance community and government to drive innovation, business and investment opportunities across the sectors; buy and sell products and services; and engage in outstanding networking. The free-to-attend event covers the complete range of renewable and sustainable technologies and offers a multi-stream conference alongside.

//TABLE OF ALL EVENTS:

OFFSHORE TECHNOLOGY CONFERENCE (OTC) NRG Center, Texas, USA 02-05 May

SCOTTISH RENEWABLES HYDRO CONFERENCE Perth Concert Hall, Scotland 18 May

5TH ANNUAL SUBSEA POWER CABLES CONFERENCE The Hatton, London 17-19 May

MENASOL 2016 Hyatt Regency, Dubai 25-26 May

ALL-ENERGY EXHIBITION & CONFERENCE SECC Glasgow 04-05 May

PLATTS EUROPEAN NUCLEAR POWER Hilton London Canary Wharf, London 18-19 May

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02 - 05 May 2016

“The UK’s premier event for renewable energy and sustainable technologies”

02 - 05 May 2016

Documents

Energy Focus:EMEA May 2016