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World Expo 2016

International Exhibition & ConferenceFebruary 2016 | Mumbai, India

Advanced TechnologiesLeaders Speak: Oil & Gas World Expo 2014 >> Pg 6

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contents

OIL & GAS WORLD EXPO 2014

Transcending Boundaries 6

– Sudhir Vasudeva, Former CMD, ONGC

‘While there can be room for power politics but there shall not be politics on power’ 10

– A K Jha, Technical - Director, NTPC

‘Pricing should be driven by market, energy security will automatically come’ 13

– ‘A K Balyan, MD & CEO, Petronet LNG Ltd

INTERVIEW

‘The enormity of GGSR leverages proximity of petroleum products in Northern parts of India’ 22

– Prabh Das, Managing Director & Chief Executive Officer, HMEL, Bathinda

GUEST COLUMN

Sensor Technology to Enhance Gas Detection Safety in Asia Pacific 15

– Wilson Tan

FEATURES

Completions Evaluation for Hydraulic Fracture Monitoring in Unconventional Resources 17

– Sudhendu Kashikar

Achieving Predictable Operational Efficiencies 20

– Philip Wade

Slurry Phase Hydrocracking: Bottoms Upgrading for Today’s Market 25

– Steve Mayo, Mitra Motaghi & Rahul Ravi

Different Energy Commodities on Different Paths 31

– Niteen Jain & Nazir Moulvi

NEWS FEATURE

Iranian Gas Export through Pipeline 33

– Hedayat Omidvar

LNG - Fuelling the Future 38

– Rakesh Roy

India Awards 46 Blocks in NELP-X 40

– Rakesh Roy

MARKETING INSIGHT

Lowdown on Indian Refining Sector 41

– Mittravinda Ranjan

TRENDS

News 43

Products 50

Events Diary 55

PROJECT UPDATE 53

BOOKSHELF 56


LeaderSpeak

Transcending Boundaries “Oil & Gas World Expo is one of the most impor tant events in the Western India,” complemented Sudhir Vasudeva, Chairman & Managing Director, ONGC & General Chairman Oil & Gas World Expo 2014. In his address, he expressed grave concerns regarding the rising energy demand and identified five critical key areas that must be addressed for resurgence of India’s oil & gas industr y during the inauguration of Oil & Gas World Expo 2014 in Mumbai. Excerpts…

Recent news about India over taking Japan as the th i rd largest c rude o i l impor ter is a matter of deep concern, which somehow was not covered well by the media. In my belief, such news should f ind place in the headlines if not for anything but to enhance awareness in people about the ex tent of energy consumption, which is going to cause a lot of problem as we move for ward. Ear l ie r, the 4 th la rgest energy and o i l consumer , Ind ia has now become 3 rd l a rg e s t o i l i m p o r t e r w i t h 3 . 8 6 M B O P D a n d e xc e e d e d J a p a n’s c r u d e impor ts of 3.64 MBOPD by 6 per cent. China is the largest consumer of oi l and impor ts 6.3 MBOPD followed closely by USA with impor ts of 6.24 MBOPD crude impor ts.

Ind ian economy i s expec ted to grow at 4 .9 per cent accord ing to latest r e p o r t s , w h i c h i m p l i e s g r e a t e r e n e r g y i n t e n s i t y a n d h i g h e r c o s t o f conver t ing energy into GDP, not a good indicat ion for growing economy l i k e I n d i a . A l t h o u g h I n d i a i s b e c o m i n g a r e f i n i n g h u b a n d e x p o r t e r o f p e t ro c h e m i c a l s , h o we ve r g ro w i n g c r u d e o i l c o n s u m p t i o n d e s p i te a s l o w i n g e c o n o m y i n d i c a t e s h i g h l y i n e l a s t i c n a t u re o f o u r d e m a n d i n India . D iesel has cont inued to be a b ig contr ibutor to the subs idy despi te t h e f a c t t h at t h e G ove rn m e nt h a s d e c i d e d m a ki n g d i e s e l p r i ce s m a r ke t determined gradual ly.

The other side that in news that is going to add to the woes is the energy forecasts by BP Energy Outlook & IEA. New BP Energy Outlook 2035 repor t suggests that global energy consumption is l ikely to grow by an average of 1.9 per cent per year f rom 2012 to 2035. Internat ional Energy Agenc y

( IEA) , in i t s latest market o i l repor t has ind icated an increase in g lobal o i l demand over the last 18 months dr iven by economic recover y in the d e ve l o p ed wo r ld. Ag en c y ha s f o reca s ted t h at g l o ba l o i l d e ma n d wou l d touch 92.5 MBOPD by the end of 2014, an increase of 1.3 MBOPD over last year’s demand.

Market Shifts Most of OECD countries have recovered from the pain of recession and are back on the path of growth and few countries like Syria, Iraq and Iran have increased their production. However rising oil demand will continue putting spanner in the expectations of softening crude oil prices in the near future. India’s current oil impor t bill stands at USD 164 billion per year which is already 10 per cent of GDP thus putting more pressure on the already stressed current account deficit. I am an optimist and strongly believe that we have the capacity and capability to overcome such crisis. We are well aware about the widening demand supply gap in oil & gas that forms nearly 40 per cent of our primar y energy basket and the policy makers are equally aware of the requisite steps. At the moment, I want to draw attention emphasise upon the fact that there is no room for compromises if we are really aspiring to grow as we are.

The Ministr y of Oil & Natural Gas has taken several actions in the recent past, which clearly indicates that Indian oil & gas sector means business. On one hand the Ministr y instituted Rangarajan Comiitee and Kelkar Committee to comprehensively sor t out the issues plaguing the growth of industr y and on the other hand taken initiatives l ike simultaneous exploration in Pre NELP and

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NELP blocks along with the announcement of NELP-X round and shale gas policy. The Government has also chalked out priority l ist of fur ther reforms and pursuing on war footing to bring in new hope and enthusiasm in the industr y. Couple o f months back , the M in is ter fo r O i l & G as addressed the audience o f journa l i s t s, investors and analys ts fo r candid assessment o f what was a i l i n g t h e A s s o c i at i o n o f O i l & G a s O p e rato r s (AO G O ) . At t h at t i m e, i f somebody would have ca l led and asked about the indust r y out look , we would have sa id that i t was pess imis t i c. B ut exac t ly one year down, the out look has become ‘caut ious ly opt imis t i c ’. The M in is ter and the S ecretar y asked that what should be done fur ther to remove the word ‘caut ious’ to be ‘opt imis t i c ’ and promised work ing on the prescr ibed so lut ions dur ing the nex t t wo to three months to ach ieve long term ga ins. In the las t t wo months, most o f that has been done inc lud ing rev i s ion o f gas pr i ces and a n n o u n ce m e nt i f s h a l e g a s p o l i c y w h i c h i s m a k i n g t h e i n d u s t r y m o re v ibrant. Also the cabinet committee has taken the bold dec is ion of c lear ing a lmost 79 b locks that were s ta l led for couple o f years and ushered new e r a o f c o n f i d e n c e a m o n g s t t h e i n v e s t o r s . G o v e r n m e n t i s a l s o g i v i n g s ign i f i cant at tent ion to se t t ing up in f ras t ruc ture fo r gas t ranspor tat ion which includes LNG re -l iquefac t ion terminals, gas distr ibution net work , and t ransnat iona l p ipe l ines.

Unbearable Subsidy Burden Th e c o n c e p t s o f e n e rg y c o n s e r v a t i o n o r e n e rg y s u f f i c i e n c y a re m u c h below the levels that are desired; and thanks to the government largesse i n t e r m s o f o f f e r i n g s u b s t a n t i a l s u b s i d i e s o f f e re d t o t h e c o n s u m e r s . Increas ing subs idy burden i s a matter o f grave concern to the o i l & gas indust r y caus ing s leep less n ights. Las t quar te r we were burdened wi th ` 1 3 7 9 6 c r o r e s u b s i d i e s w h i c h c l e a r l y m e a n s s u b s i d y b u r d e n o f ` 50,000 crore this year too that wil l leave the E&P companies with a margin of USD 2 for oi l production. The fear of subsidies offered to the fer t i l iser industr y is looming at large due to increase in gas prices or on account of LPG cylinders, where capping has been increased from 9 to 12 that will account for ` 5000 crore subsidies.

The subsidy burdens are becoming unbearable for the upstream companies a n d e r o d i n g t h e s t r e n g t h t o i n v e s t m o r e i n E & P a c t i v i t i e s a n d t h e m o ra l e o f wo r k f o rce a s we l l a s t h i s d i re c t ly i m p a c t s t h e p e r f o r m a n ce i n c e n t i v e s . D e s p i t e t h e h a r d w o r k p u t u p t o w a r d s m a i n t a i n i n g a n d s u s t a i n i n g p r o d u c t i o n f r o m v e r y o l d o i l f i e l d s , t h e e m p l o y e e s d o n o t g e t t h e i r p e r f o r m a n c e p a y s , w h i c h i s e x t r e m e l y d e m o r a l i z i n g for them.

Wh i l e o p e rato r s a re e n co u ra g e d a n d m o t i vate d by re f o rm s b e i n g t a ke n by the M in is t r y o r recommendat ions by R angara jan commit tee towards increas ing gas pr ice or change f rom cost recover y mechanism to revenue shar ing mechanism, subs id ies have cont inued be ing the major concern

for the E&P upstream companies. I am glad to share that with repeated requests f rom our s ide, the government has dec ided to ac t and a l ready moved the note to CCEA to provide ONGC & OIL India , USD 65 per barre l o f production rather than USD 56 per barrel. Once our revenue streams stabil ise, ever yone would come to know about our per formance and we wil l be able to generate suf f ic ient funds to suppor t our out lays and may be even the future expansion plans.

Moving For ward At t h i s j u n c t u re , h i g h e r e m p h a s i s o n e x p l o rat i o n a n d u rg e nt f o c u s o n i nve s t m e nt s, g re ate r e f f o r t s a n d m o re re s o u rce s i nto s t re n g t h e n i n g t h e d o m e s t i c e n e rg y b a s e t h ro u g h m o re e x t e n s i v e e x p l o r a t i o n o f I n d i a n s e d i m e n t a r y b a s i n s a re n e e d o f t h e h o u r f o r I n d i a n o i l & g a s s e c t o r. Fu r t h e r o ve r s e a s f o r a y s f o r s o u rc i n g e q u i t y o i l a re e q u a l l y i m p o r t a n t to ra m p u p t h e d o m e s t i c p ro d u c t i o n f o r s o u n d n at i o n a l e n e rg y s u p p ly s i t u at i o n w h i c h w i l l m i t i g ate t h e d e gre e o f u n ce r t a i nt y a n d a s s o c i ate d r i sks with overseas ventures due to geopol i t i ca l d is turbances to s igni f i cant ex te nt. S e co n d, I n d i a n e e d s u n a m b i g u o u s, t ra n s p a re nt a n d s t a b l e p o l i c y f r a m e wo r k a n d c re a t e m o re e n a b l i n g a n d c o n d u c i ve p o l i c y re g i m e t o e n co u ra g e o i l & g a s p l aye r s. M o s t i m p o r t a nt ly, t h e re f o rm s h ave to b e we l l t i m e d a n d i n co rp o rate d i n t h e p o l i c y re g i m e l i ke t h e re ce nt d e c i s i o n o f s h i f t i n d o m e s t i c g a s p r i ce to m a r ke t l i n ke d p r i ce w i t h e f f e c t f ro m Ap r i l i s a we l co m e m ove. Th i rd, g a s i s t h e f u t u re f u e l f o r I n d i a w i t h l a rg e d e m a n d s u p p ly g a p. I n f a c t I n d i a n e e d s to c re ate re q u i re d i n f ra s t ru c t u re i n g a s a n d re l ate d b u s i n e s s t h at i n c l u d e s s e t t i n g u p L N G i n f ra s t ru c t u re a n d t r a n s n a t i o n a l p i p e l i n e s e t c . f o r a l l i n c l u s i v e g r o w t h o f c o u n t r y w i t h t h e l a s t m i l e c o n n e c t i v i t y t o re a c h o u t t o t h e g a s c o n s u m e r s a t a f f o rd a b l e co s t .

R e s e a rc h & D e v e l o p m e n t i s c o r n e r s t o n e f o r s e c u r i n g e n e rg y s u p p l i e s o f f u t u re w h i c h re q u i re s k n ow l e d g e s h a r i n g a c ro s s w i d e r g a m u t o f o i l & g a s i n d u s t r y p l a y e r s r a t h e r t h a n b e i n g b o t t l e d u p i n c o u n t r i e s o r rest r ic ted within companies. India needs to pursue more focussed R&D in col laborat ion through global a l l iances to gainful ly deploy technology for e f f ic ient and safe monet isat ion of resources. Whi le we are contending with the real i t y of b ig changes taking place in Indian o i l and gas industr y, we must integrate the energy of youth to leverage the creat ive potent ia l and enterpr ise of our countr y more so dur ing the t ime when youth are looking at the sec tor.

W i t h t h i s , I c o n c l u d e t h i s o i l a n d g a s e x p o t r a n s c e n d s t h e b o u n d a r i e s o f t h e e v e n t a n d t h i s w i l l f i n a l l y a c t a s c a t a l y s t f o r t h e g r o w t h o f t h e o i l a n d g a s i n d u s t r y a n d a b o v e a l l t h e e c o n o m y o f the countr y.

>>Indian economy is expected to grow at 4.9 per cent according to latest reports, which implies greater energy intensity and higher cost of converting energy into GDP, not a good indication for growing economy like India.

Off shore World | 1 | OCTOBER - NOVEMBER 2013 www.oswindia.com

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Energy security mandates optimum utilisation of both available as well as scarce resources through 360 degree approach that involves all stakeholders of the energy value chain from energy production to power generation, transmission & distribution along with all systems working efficiently; balancing demand and supply sides most effectively to provide affordable power to the achieve desired growth rates and meeting individual energy needs.

Although India is the 6th largest country in terms of power generation, per capita consumption stands at 800 units per capita, which is very low as compared to the world average of 2400 units per capita. Industry is the largest consumer of energy and accounts for 38 per cent of consumption, while agriculture and domestic consumers form 22 per cent each, commercial 8 per cent and miscellaneous 10 per cent of India’s energy pie.

Thermal power has a dominant share in India’s energy basket and comprises 65 per cent of countr y’s power generation followed by hydropower 22 per cent, renewable sources like wind, solar & biomass 10 per cent; and nuclear energy which accounts for 3 per cent of total power generation.

Under the 11th Five Year Plan, India added record capacity of 54,964 MW of capacity and envisages augmenting the capacity by 85,000 MW by the end of 2017. Thermal energy will continue dominating the energy sector as setting up gas based plants would still be a challenge due to scarcity of availability.

Government has set ambitious target of scaling up renewable capacity from current 27,000 MW and add another 30,000 MW. India has committed to producing 30,000 MW of nuclear power by 2032. Thus the power por tfolio of India is well diversified in terms of fuel mix which mitigates the risk of the energy security to a ver y large extent.

In India, mainstream capacity comes from coal based stations. However, the irony of situation is that despite having the 5th largest coal reserves globally, India has to still depend on imports to meet the coal requirement of power plants. In order to meet the augment the targeted capacity by 2017, power plants would require around 688 million tonne per annum (MTPA) by 2017 and projected supplies are likely to be short by 159 MTPA which would require India to rely on coal imports for the supply deficit. Over the past five years, while power generation capacity has increased at CAGR 14 per cent, coal supplies have grown only at 6 per cent CAGR. Bottlenecks in land acquisitions and receiving environmental clearances and issues such as payment crisis have proved to be major deterrents for the growth of power sector. There are also logistics issues related to moving coal production from the mines because of lack of railway connectivity that India’s national company, Coal India Ltd (CIL) is facing. The Government has entrusted CIL & NTPC with the work to develop the rail lines to create the necessary logistics supply chain for movement of coal to power stations.

Demand supply gap has compelled the power producers to enter the fuel supply agreements for 65 per cent of Plant Load Factor (PLF) capacity as against the

LeaderSpeak

‘While there can be room for power politics but there shall not be politics on power’

Energy security is a critical issue for India because of continuously increasing dependence on imports to meet the ever widening demand- supply gap. A K Jha, Director - Technical, National Thermal Power Corporation (NTPC) & Chairman Central Advisory Board (CAB) EnerTECH World Expo 2014, expressed, “It would be an idea worth exploring that whether we can have a combine ministry of energy rather than having separate ministries for Coal, Gas and Power etc” while inaugurating the power and energy exposition held concurrently during the Oil & Gas World Expo 2014. Excerpts …


promised coal linkage for 85 per cent PLF. As a result, out of 89 generating stations, only 55 are working below their full capacity.

On the other hand, gas based power plants of 15000 MW capaci t y are a lso stranded due to gas def ic i t. Post gas discover y in KG basin, power producers had shown lot of interest in establ ish ing fuel l inkages for the proposed gas based power plants however this request was turned down by the regulators who dec ided to a l locate the gas on the bas is of pr ior i t y depending on the complet ion of power projec t. This was in s tark contrast with the ex ist ing pol ic y for thermal p lants where the coal l inkages were mandator y to even get environmental c learances. NTPC decided had to put the plans of capacity addit ion of 5000 MW gas based plant on back burner, however many private players forged ahead with the plan and now the ent i re capaci t y i s s t randed and capita l b locked! ! In fac t, NTPC’s ex is t ing gas based capaci t y of 4000 MW is a lso running at 13 PLF due to gas shor tage and the government has dec ided not to prov ide ay c learances for set t ing up more gas based capaci t y unt i l 2016.

Poor f inancial health of Distribution Companies (DISCOMs) is another major constraint due to which power companies have to resor t to load shedding. The paradox is that dur ing load shedding consumers generate thei r own energy using diesel generators at the rate of ` 18-20 per unit. Cumulative loss to DISCOMs has reached figure of ` 2,40,000 crore in 2012 and combined debt reached ` 1,90,000 crore as most of DISCOMs had opted for shor t term loans to meet their operational cost requirement. In 2001, the Government d id come up with one t ime sett lement pol ic y scheme for dues with the hope that in 15 year t ime, by 2016 the DISCOMS would become f inancial ly v iab le. B ut in 2012, G overnment announced the f inanc ia l res t ruc tur ing package for debt r idden distribution entit ies however, for long term healthy growth, it is crit ical for DISCOMs to reduce the losses. As a matter of fact, prac t ice of fo l lowing annual tar i f f rat ional i sat ion according to changing input cost by State Electricity Regulators instead of past practice non division of tar i f f for years together and t imely payment of subsidy announced by the s tate for cer ta in sec t ion o f consumers can pos i t ive ly impac t on the health of DISCOMs.

Out of 195 al located coal blocks to publ ic and pr ivate sec tor companies, s o m e a re u n d e r s c r u t i n y b y t h e co u r t s , w h i c h i s a n o t h e r m a j o r i s s u e , a s s u c h a s s e t s s t a n d gre at c h a n ce o f b e co m i n g No n Pe r f o rm i n g A s s e t s ( N PA) f o r b a n k s, ca p i t a l i nve s to r s a n d d e ve l o p e r s. S u c h d i s t re s s a s s e t s m ay l e a d to t h e p e rce p t i o n o f p owe r p ro j e c t s a s h i g h r i s k i nve s t m e nt s which may lead to interest hikes for project f inancing, escalating the cost of power generat ion and eventual ly impac t ing the tar i f f for the end user or consumer.

Indian government’s ef for ts to speed up nuclear energy capacity addit ion though joint venture of central PSU with Nuclear Power Corporation of India Ltd (NPCIL) are also on hold due to the amendment required in Atomic Energy Act. Moreover, the clearance of nuclear l iabil ity bi l l is taking long t ime which is proving to be a major deterrent towards the interest of foreign nuclear power equipment suppliers due to high risk and l iabil ity for the manufacturer. NTPC has already entered the JV with NCPIL for construction of 2X700 MW nuclear power stations in Har yana.

Way ForwardIn today’s context, it is impor tant to have an integrated energy policy but that is not enough unless there is integration in implementation of policy by all the concerned depar tments at all levels - in tandem.

It would be an idea wor th exploring that whether we can have a combine min is t r y o f energy rather than hav ing separate min is t r ies fo r Coa l, G as and Power etc. There i s a lso the need to speed up of sett ing up nuclear plan to address the twin issues of CO2 emission & the ris ing impor ted fuel co s t a n d a m e n d m e nt to t h e Ato m i c En e rg y Ac t n e e d s to b e ex p e d i te d. Ear ly commerc ia l f low of energy bet ween S outhern gr id and rest o f the countr y wil l help in balancing the power cost in the two different regions. Fu r t h e r s t re n g t h e n i n g o f i nte r - re g i o n gr i d s a re n e ce s s i t y to e n s u re t h e f re e f l o w o f p o we r i s d o n e t h e n we a re a b l e to a vo i d b l a c ko u t a s we witnessed in 2012.

C h a l l e n g e s o f h a v i n g l a rg e a m o u n t o f re n e w a b l e e n e rg y i n t h e g r i d , ava i l a b l e f o r o n l y l i m i te d h o u r s a n d f o re c a s t i n g i t s ava i l a b i l i t y n e e d s t o b e a d d r e s s e d t h r o u g h i m p l e m e n t a t i o n o f s m a r t g r i d . T h i s w o u l d requi re our D ISCOMs to be f inanc ia l ly v iab le and technica l ly competent f o r e f f e c t i ve i m p l e m e nt at i o n a n d m a n a g e m e nt o f s m a r t g r i d s towa rd s consumer benefit.

A p p o i n t m e n t o f c o a l r e g u l a t o r t o f i x r e a s o n a b l e p r i c e t o c h e c k t h e e l e c t r i c i t y p r i c e s s h o u l d b e c o n s i d e r e d g i v e n t h e f a c t t h a t I n d i a n c o n s u m e r s a r e e x t r e m e l y p r i c e s e n s i t i v e . A c o m m i t t e e t o f i n a l i s e rai lway goods tari f f would also be a good move to keep a check on cross s u b s i d i e s w h i c h a d d s s u b s t a n t i a l l y t o t h e p o w e r c o s t a n d c a n n o t b e totally eliminated.

Last but not the least, political leadership should agree that while there can be room for power politics but there shall not be politics on power; and then only India can think of taking quantum leap to 800 unit per capita power consumption as compared to the world average of 2400 unit per capita to be truly in the category of developed nation.

>>Thermal power has a dominant share in India’s energy basket and comprises 65 per cent of country’s power generation followed by hydropower 22 per cent, renewable sources like wind, solar & biomass 10 per cent; and nuclear energy which accounts for 3 per cent of total power generation.

Offshore World | 13 | February - March 2014 www.oswindia.com

High economic growth would lead to increase in the energy consumption of the country. So oil & gas sector of a country like India, a developing economy coupled with more than 1.25 billion people, needs to resurgence in a manner that the energy needs can be met. Coal remains the dominant fuel in the Indian energy mix with a robust 53 per cent share in the primary energy consumption, followed by crude oil at 30 per cent and gas at 9 per cent. Other sources include 5 per cent hydroelectricity, 2 per cent renewable and 1 per cent nuclear energy.

India has now become 3rd largest oil consumer worldwide exceeding Japan. The countr y’s share in oil consumption now stands 4.2 per cent of the total oil produced worldwide. The countr y must be conscious that this energy is coming at a cost, at a much higher cost and consider the Indian economy’s a f f o rd a b i l i t y to b e a r t h e m u c h h i g h e r p r i c e s i n a c c e s s i n g t h e e n e rg y ; therefore i t is not only the consumption but also the conser vation that is equally impor tant.

India’s per capita oil consumption is very low - just about 142 to 143 kg per person compared to China which is more than double of India - about 360.07 kg, and nowhere near the developed countries like the US & Japan about 2612.33 kg and 1713.1 kg, respectively.

Again per capita gas consumption in India stands very low - about 45 cubic meters per person, which is less than half of China, and far away from the developed economies like the US & Japan. Over the last two and half years, the country has been seeing a remarkable reduction in overall gas consumption due to the decrease of domestic production despite of a growth on the primary energy mix.

India’s LNG Import profile is highly dependent on Qatar which contributes nearly 79 per cent of the total. The country must widen its portfolio in quickly diversifying the supply sources in getting LNG from other regions of the world from the energy security point of view.

Role of Natural GasCurrently, India is the 13th largest gas consumer (55 BCM), and 4th largest gas/LNG importer globally after Japan, Korea and Spain. India would marginally increase the domestic production in the coming year, but dependency on import gas would continue. Resurgence in oil & gas sector, and taking petro products and gas to the consumers becomes very important. So there is one area, which should be epidemic to that resurgence, is the pipeline network infrastructure development.

Over next years, there will be substantial increase in natural gas demand from power, fertiliser and industrial sectors. Currently, power and fertiliser sectors are the two

LeaderSpeak

‘Pricing should be driven by market, energy security will automatically come’

For a countr y like India, a developing nation with a vast population, to ensure energy availability and accessibility to all at affordable price and guarantee uninterrupted and smooth supplies within the framework of inclusive growth is always a challenge. According to Dr A K Balyan, Managing Director & CEO, Petronet LNG Ltd, “In making the ability to meet the growing energy demand of the countr y, we need to find out the way how can we achieve it, looking it within the countr y, looking it outside the countr y.” Edited excerpts from Balyan’s presenta tion delivered during the inaugura tion of Oil & Gas World Expo 2014… Dr A K Balyan, Managing Director & CEO, Petronet LNG Ltd receives ‘Outstanding

Achievement (Natural Gas) - Oil & Gas 2014 Leadership & Excellence Award’ from L N Gupta, Secretary, Oil Industry Development Board, MoPNG.


biggest contributors to natural gas demand in India and continue to account for more than 65-70 per cent of gas consumption both domestic and LNG put together. But one sector - City Gas suggests a sustained increase in the level of natural gas consumption in the countr y in the coming years, where several hundred cities have been identified for supplying gas in the next couple years time. This sector will cer tainly drive the pipeline industr y in the countr y.

Demand Supply Projections & GapIndia’s natural gas demand, which stood at approximately 227 MMSCMD in 2012-13, is forecasted to see steep increase to around become three folds reaching 713 MMSCMD in 2029-30. On the supply side, it is cer tain that over the next several years, E&P effor ts will result in an increase in the availability of natural gas in the countr y, but it is not possible to visualise a situation where increase in domestic gas production will be able to completely meet incremental domestic demand going for ward. The demand supply gap will increase steadily and is expected to be around 482 MMSCMD in period 2029-30.

The question is that how will the countr y meet the supply demand gap? The answer would be high dependence on gas impor ts which can be achieved by two ways – one is transnational pipelines and the other would be establishing LNG linkages.

Though there has been some progress on the front of transnational pipeline projects that have been in a limbo for quite some time, but even these projects are not going to result in dramatic changes to the bridge the demand supply gap. Even with these pipelines in place the landed volumes are going to be of the order of 30-35 MMSCMD while the shor tfall would stand at approximately 400 MMSCMD. In such scenario, LNG would perhaps be the best bet to bridge the supply deficit and this is cer tainly showing signs of resurgence in the oil and gas sector.

LNG SourcingCurrently, LNG is impor ted in India through mix of long term and shor t term l inkages and spot basis. India currently has long term contrac ts bet ween Petronet LNG and RasGas, Qatar for 7.5 MMTPA and Petronet LNG and Mobil Australia Resources Limited for 1.44 MMTPA from Gorgon Project, Australia, GAIL and Chenniere Energy, USA for 3.5 MMTPA and GAIL and Gazprom, Russsia for 2.5 MMTPA.

LNG Regasification Capacity As on date, India’s LNG re - gasif ication capacity is 23.00 MMTPA (10 MMTPA at Dahej, 5.00 MMPTA at Hazira, 3.00 MMTPA at Dabhol, and 5.00 MMPTA

at Kochi). The proposed terminals at Gangavaram, Mundra, Ennore is l ikely add 15 MMPTA to raise the capacity 45 MMPTA by 2016 and the possible in the west- coast, Kakinada, Pipavav wil l add total of 12.50 MMPTA by 2020 and thus the countr y ’s total capacity is l ikely to raise to 62.5 MMPTA by 2020 with each or majority of exist ing LNG terminal in India having the option to expand fur ther. I t would be a good solution for the countr y ’s energy demand. The challenge remains how the countr y can get contracts for affordable, larger quantity of the gas into the countr y.

Gas Transpor tation Infrastructure Pipeline infrastructure is the ner vous system of the gas business in India. I n d i a , c u r re nt ly, h a s a n e t wo r k o f m o re t h a n 1 3 , 0 0 0 km o f n at u ra l g a s t ransmiss ion p ipe l ines wi th a des ign capac i t y o f a round 330 MMSCMD, and there i s proposal to add equal number km of p ipel ine in t wo -three y e a r s t i m e , b u t t h e s e re q u i s i t e i s s t i l l i n a d e q u a t e , a n d a l a rg e r a re a wo u l d s t i l l n e e d m o re p i p e l i n e c o n n e c t i v i t y. Th i s p i p e l i n e n e t wo r k i s ex p e c te d to ex p a n d to a ro u n d 2 8 , 0 0 0 k m w i t h a to t a l d e s i g n ca p a c i t y of around 731 MMSCMD in nex t 5-6 years, putt ing in p lace most of the National Gas Grid that would connect al l major demand and supply centers in India.

The east, west and south - each region of the countr y, need adequate pipeline network to take the gas from the terminals to the different markets of the countr y and that wil l definitely enhance the development of the gas market in the countr y.

Way For wardWhile the countr y is emerging as major LNG market of future, the countr y needs to work towards developing an India specif ic index from LNG point of view. This would faci l i tate more business and more resurgence in the gas business, with al l round development in LNG terminals, gas storage, and gas pipelines on national and transnational basis to attain desired sustainable growth. Also this would help the countr y in terms of affordabil ity of the pricing because this would be reflecting the Indian economics’ affordabil ity level.

India would also need to take strategic decisions to attract global players and ensure they par ticipate in infrastructure development. Creation of robust City Gas Network across countr y is of utmost impor tance for the smooth supplies of natural gas and to ensure the al location of gas to ever y corner of the countr y. Last but not the least; the countr y needs to work towards the mindset of consumers on pricing. Pricing should be driven by market forces and ultimately i t wil l lead to energy security of the countr y. A comprehensive approach, which can meet suppliers’ expectation on one side and meet consumers’ price expectation on other side, needs to be f irmed up.

>>Coal remains the dominant fuel in the Indian energy m i x w i t h a ro b u s t 5 3 p e r c e n t s h a re i n t h e p r i m a r y energy consumption, followed by crude oil at 30 per cent and gas at 9 per cent. Other sources include 5 per cent hydroelec tricity, 2 per cent renewable and 1 per cent nuclear energy.


Twenty years ago, we all bought computers with little understanding of inner component workings or the clever technology that actually made our device per form so well and effectively. Today, thanks to a highly effective global marketing campaign from a leading processing chip manufacturer, who taught us to ‘look inside’ our PCs, we now all appreciate t h a t o u r c o m p u t e r s a re o n l y e v e r a s g o o d a s their processing capacity, regardless of any other impressive functionality they might offer.

This is a good analogy for the gas detection industry; there is much focus on the gas detection solution i tsel f and al l the value such a device can br ing in terms of enhancing safet y, reducing costs or providing simplified use, but the sensor component itself is equally impor tant.

A gas detec tor i s compr ised o f essent ia l ly t wo co re e l e m e nt s ; i t s s e n s o r, w h i c h p ro v i d e s t h e means of ident i fy ing and quant i fy ing a cer ta in g a s i n t h e s u r r o u n d i n g a t m o s p h e r e a n d i t s hardware/software, which uses this data to deliver real-time concentration readings and trigger alarms, if pre-defined levels are reached. Both aspects are critical and without a high-quality sensing element, a gas dete c tor i s no th i n g m ore th an e lec t r i ca l components and so f t ware that has no rea l use or value.

Failure is Not an OptionIn reality, a sensor has a ver y hard job to under take – not only must it detect gas risks, but it must do so consistently in all environmental conditions it may be subjected to. The sensor must also be selective o n l y to t h e g a s i t i s d e te c t i n g b e c a u s e c ro s s -inter ference can cause inaccurate readings. Added to these aspects is a need for a sensor to be able to protect itself from compounds that can adversely affect its detection; namely ingress by par ticulates or water and also potential ‘poisoning’ from reactive compounds in the atmosphere that could adversely affect its per formance.

Sensor Technology to Enhance Gas Detection Safety in Asia Pacific

Wilson Tan, Business Leader for City Technology in Asia Pacific, is a gas sensing exper t well-versed in the importance of high quality sensing principles and why they are so essential to high per formance g a s d e te c t i o n . Wi l s o n Ta n t a l k s t o O f f s h o r e W o r l d a b o u t t h e challenges facing many industries, like offshore oil and gas, where the considerable dangers make highly sensitive sensor detection even more important than ever.

guest column

In today’s ever-more safety conscious World, the protection of assets and personnel is always top of mind for businesses but industries like off-shore oil and gas demand the highest levels of per formance and enhanced safety, owing to the sizeable explosive and toxic risks presented by the myriad of gases present. These include diverse Hydrocarbons l ike M e t h a n e (C H 4) a n d tox i c g a s e s l i ke H yd ro g e n Sulphide (H 2S) , Carbon Monoxide (CO) , Carbon Dioxide (CO2) and Sulphur Dioxide (SO2) and also Oxygen (O2) depletion.

The applications for gas detection in the upstream industr y are d iverse. Dr i l ler s tands, mud return l ine receiver tanks and pi t rooms, compressors, pipelines and seals all require flammable, H2S and O2 monitoring. Water supplies need flammable and H2S, CO2, SO2 and NOx toxic gas detection to monitor run off gullies.

HVAC venti lation systems and air intakes require f lammable and tox ic c ross- duc t remote sensor mounting for effective monitoring. If H2S is being removed from crude mix on a platform, dehydration and temporary refuge area/H2S refuges should also be monitored for flammables and toxics including CO2, SO2 and H2S.


P l a t f o r m p r o c e s s e s a r e d e s i g n e d t o d e l i v e r m a x i m i s e d y i e l d a n d g a s d e t e c t i o n m u s t b e capable o f de l iver ing not on ly h igh sens i t iv i t y b u t m a x i m i s e d u p t i m e a n d s t a b i l i t y ; j u s t o n e nuisance a larm that requires a process shutdown o f 6 0 m i n u te s o n a n o i l r i g p ro d u c i n g 1 5 , 0 0 0 BPD, can equate to a revenue loss of USD 60,625 ( b a s e d o n a 2 4 h o u r p r o d u c t i o n d a y a n d a p r i c e o f U S D 9 7 / b a r re l – b a r re l p r i ce s o u rce : Financ ia l Times) .

Geological and Environmental ImpactsA s i d e f r o m t h e o b v i o u s a s s o c i a t e d i n d u s t r y r i s k s , i t i s wo r t h n o t i n g t h at re g i o n a l f a c to r s in As ia Pac i f i c can have a cons iderab le impac t a n d i n c r e a s e t h e d a n g e r s , m a k i n g s e n s i t i v e , accurate, high per formance detection even more imperative to worker safety. Although fracking is an on-shore activity, i t does provide a good example of envi ronmental impac t. Shale gas reser ves in the Asia Paci f ic region t ypical ly ex ist in deeper wel ls that can also feature increased geological complexity and this can cause higher levels of H2S to be present. The abundance of CH4 also makes f lammable sensor per formance key to application safety. Added to this are other local factors such as the locat ion of shale gas reser ves, which are predominant ly in the ar id west and southwest, w h e r e t e m p e r a t u r e s a r e h i g h a n d h u m i d i t y is low.

g a s s e n s o r s to wo r k i n . Th e re i s t h e p o te nt i a l f o r i n g re s s b y c o m p o u n d s a n d w a t e r v a p o u r /sea spray that must be prevented us ing f i l ters, s inters and smal l capi l lar ies. Ambient condit ions c a n c h a n g e d ra m at i c a l l y a n d te m p e rat u re c a n f l u c t u ate co n s i d e r a b l y i n a s i n g l e d a y i n a r i d locat ions. S ensors f rom lead ing manufac turers should be designed and tested to respond to such co n d i t i o n s , wo r k i n g b e t we e n - 4 0 ° C a n d 5 5 ° C making them capable o f meet ing the needs o f Asia Pacif ic. They should include technologies and components that al low the sensor to adapt quickly t o l a rg e t e m p e r a t u re f l u c t u a t i o n s e f f e c t i v e l y s o d i u r n a l f l u c t u a t i o n i n a r i d l o c a t i o n s i s not an issue.

Other Sensor Challenges Humidity is a par ticular concern for Electrochemical Cel l (ECC) sensors, which use an aqueous system that is potential ly susceptible to humidity effec ts. Leading- edge ECC sensors should be able to work e f fec t ive ly bet ween across a wide range o f RH conditions, meeting the demands of even the most cha l lenging locat ions through the i r inte l l igent component design, which must prevent dr ying out or saturat ion.

A c c i d e n t s h a p p e n a n d d e v i c e s c a n e a s i l y b e d ro p p e d, s o s e n s o r s n e e d to b e h i g h l y ro b u s t a n d c a p a b l e o f w i t h s t a n d i n g i m p a c t s a n d m e c h a n i c a l v i b r a t i o n s . D r o p t e s t s s h o u l d b e per formed f rom 6.7 f t/ 2 m to meet cer t i f icat ions a n d a s e n s o r m u s t b e a b l e t o w i t h s t a n d t h e force of such an impac t as wel l as h igh levels of ambient v ibrat ion.

S e n s o r s m u s t a l s o b e a b l e t o m i n i m i s e t h e e f f e c t s o f c r o s s - i n t e r f e r e n c e , w h i c h c o u l d c a u s e i n a c c u r a t e r e a d i n g s a n d n u i s a n c e a l a rm s. Th e re a re va r i o u s co m p o u n d s t h at ca n impac t per formance inc lud ing cer ta in a lcohols w h e n d e t e c t i n g H 2S a n d t h e s e e f f e c t s m u s t be negated.

Long l i fe sensors are a cons iderable advantage b e ca u s e t h e y ca n h e l p to ex te n d m a i nte n a n ce

i nte r va l s . Th i s ca n h ave a d ra m at i c i m p a c t o n yo u r o n g o i n g c o s t s a n d a g o o d m a n u f a c t u re r w i l l h a v e s o l u t i o n s t h a t c a n o f f e r e x t e n d e d o p e r a t i o n a l l i f e , h e l p i n g y o u t o m a k e f u t u re s av i n g s ove r t h e p ro d u c t l i f e o f yo u r p o r t a b l e gas detector.

A quick response is a lso imperat ive; even when rapid concentration changes are experienced. An example is hydrocarbon cracking processes within a ref iner y where large levels of CO can be released and must be detected without delay.

S o m e t h i n g t h a t i s o f t e n o v e r l o o k e d i s t h e impor tance of repeatabil ity ; you need to be able t o re l y o n yo u r m a n u f a c t u re r ’s p ro c e s s e s a n d controls so that each sensor you use works exactly as it should, ever y t ime. Take a holist ic approach to selecting a manufacturer and be sure that their production pract ices can del iver consistent high quality results.

Why Knowing What’s Inside is so ImportantTh e s e n s o r yo u u s e i s s o m u c h m o re t h a n t h e l itt le unseen component inside your gas detector. I t ’s the d i f fe rence bet ween nuisance -a larms or maximised accurate detec t ion per formance; the dif ference between reduced ongoing device care re q u i re m e nt s o r a m o re f re q u e nt m a i nte n a n ce regime need; the difference between adaptabil ity t o c h a n g i n g e n v i r o n m e n t a l f a c t o r s o r a n inabil ity to per form in harsh locations. And most impor tant of a l l, i t ’s the di f ference bet ween an engineer going home safe to his/her family after a hard day’s work or not.

Yo u w i l l a l r e a d y b e a w a r e t h a t t h e s e n s i n g te c h n o l o g y yo u u s e p ro te c t s t h e l i ve s o f yo u r employees, but you may not have considered the effec t i t could have on your business ef f ic ienc y. Make sure you provide as much consideration to the sensor in your gas detection device as you do to the device func t ional i t y i tsel f – i t save l ives AND also saves money in the long run, so take the t ime to consider ‘what’s inside’ YOUR’ gas detector and choose wisely.

What to Look for in a SensorI am often asked what to consider when selec t ing the r ight sensor solut ion. The oi l and gas industr y p r o v i d e s t h e i d e a l c o n t e x t t o h i g h l i g h t t h e c o re a t t r i b u t e s n e e d e d, b e c a u s e i t re p re s e n t s s o m e o f t h e m o s t c h a l l e n g i n g l o c a t i o n s f o r

>> In reality, a sensor has a very hard job to undertake – not only must it detect gas risks, but it must do so consistently in all environmental conditions it may be subjected to. The sensor must also be selective only to the gas it is detecting because cross-interference can cause inaccurate readings.


Fracture Evaluation

features

Completions Evaluation for Hydraul ic Frac ture Monitoring in Unconventional ResourcesToday ‘fracture evaluation’ is performed using various simulations that use microseismic data to qualitatively calibrate the model. This article demonstrates new developments that enable valuable information to be extracted by combining contextual information such as geology, well logs, treatment data, etc with deterministic analysis of the microseismic measurements, providing quantification of the hydraulic fracturing.

M icrose i smic i s now an accepted technology used to moni tor hydrau l i c f rac tur ing. I t i s used to measure the geometr y, locat ion and complex i t y o f the f rac tures. A l though mic rose i smic moni tor ing has added va lue in understanding hydraul ic f rac tures, there is s t i l l s igni f icant informat ion and value that can and should be ex trac ted f rom any microseismic monitor ing p ro g r a m m e . M o s t o f t h e m i c ro s e i s m i c a n a l y s i s p e r f o r m e d t o - d a t e i s qual i tat ive and has provided l imited value in opt imis ing complet ions.

To fully optimise the completion and fracture treatment, i t is impor tant to understand various aspects of fracturing treatment such as – differentiating propped and un-propped fractures, fracture growth and geometry, fracture overlap between stages and wells, stress shadowing effects, and treatment efficiency. Currently this is achieved by a qualitative comparison of microseismic points with s imulation models.

F i g u r e 1 s h o w s a n i d e a l i s e d p r o c e s s f o r c o m p l e t i o n s a n d f r a c t u r e o p t i m i s a t i o n . To d a y ‘ f r a c t u re e v a l u a t i o n’ i s p e r f o r m e d u s i n g v a r i o u s

s imulat ions that use microseismic data to qual i tat ively cal ibrate the model. Th i s a r t i c l e w i l l d e m o n s t ra te n e w d e ve l o p m e nt s t h at e n a b l e va l u a b l e i n f o rm at i o n to b e ex t ra c te d by co m b i n i n g co ntex t u a l i n f o rm at i o n s u c h as geology, wel l logs, t reatment data, etc with determinist ic analys is of the microseismic measurements. The resul t of th is determinist ic analys is provides quantif ication of the hydraulic fracturing. Some of the key aspects of th is analys is are :• Frac ture geometr y - height, length, andaz imuth• Frac ture complexi t y andtor tuos i t y• Frac ture coverage(over lapbetweenstages andwel ls)• Charac ter isat ionof f rac ture mechanisms(dip-s l ip, s t r ike -s l ip, etc.)• Ident i f icat ionandavoidanceof geo-hazards suchas faul ts

Completions Evaluation AnalysisThe completions evaluation analysis provides a mechanism to better cal ibrate a n d b u i l d u n d e r ly i n g g e o - m e c h a n i ca l a n d re s e r vo i r m o d e l s ; i m p rov i n g fo recas t ing o f f rac ture p lacement and produc t ion he lp in g to acce le rate opt imisat ion of future wel ls and t reatment des igns.

This d is t inc t process of Complet ions Evaluat ion cons ists of a workf low and tools to per form diagnost ic analysis of microseismic data, enabl ing accurate evaluat ion of the f rac ture t reatment.

I t i s des igned to prec ise ly charac ter ise the f rac ture net work growth and complexity, while providing a methodology to evaluate the wellbore spacing, stage lengths, cluster spacing, and treatment parameters. The basic workflow is out l ined in Figure 2 .

>> To fully optimise the completion and fracture treatment, it is important to understand various aspects of fracturing treatment such as – differentiating propped and un-propped fractures, fracture growth and geometry, fracture overlap between stages and wells, stress shadowing effects, and treatment efficiency. Figure 1: Completion and Fracture Optimisation


The workflow consists of the following steps:1. ComputeamagnitudecalibratedProductiveDiscreteFractureNetwork(P-DFN)and

Productive-StimulatedReservoirVolume(P-SRVTM)2. Quantify optimum well spacing, stage lengths, and treatment efficiency based on

P-DFN and P-SRV3. Quantify permeability for the P-SRV and predict long term production

Magnitude Calibrated DFNTo accurately define a distributed fracture network, it is essential to start with a microseismic data set that enables computation of the absolute magnitude of each event. There are special processing techniques that preserve the signal amplitude and enable computation of the absolute magnitude. Once acquisition has commenced and magnitude calibrated, microseismic point sets are created, a DFN is modeled onto the microseismic events in two steps: 1. Through source mechanism analysis, strike and dip of the failure plane are identified

for each individual event. The geometry of each individual failure plane is then determined through the magnitude of an event, incorporating rock and fluid propertiesresultinginaDiscreteFractureNetwork(DFN),showninFigure3.

2. Length, height, and aperture of the fractures are obtained using a methodology incorporating the magnitude of a microseismic event, the rigidity of the reservoir rock, the injected fluid volumes, and, if available, fluid efficiency. Using a relationship between the aperture of the fracture and its length, along with an assumed aspect ratio for a layer cake medium, the geometry of the three-dimensional fracture is obtained and a fracture volume can be computed.

Assuming that the total detected seismicity is directly related to the injected fluid volume, and that the change in volume is completely accommodated by the seismic failure, minus leak-off, the calculated fracture volume should equal the injected fluid volume.

Magnitude Calibrated Productive Stimulated Rock VolumeEvents in the hydrocarbon-bearing target zone aremost likely to represent rock failure that contributes to production in the long term. Estimating the propped

fracture length and volume is performed by filling the DFN set with proppant from the wellbore outwards on a stage-by-stage basis. The packing density of the proppant is variable and can be adjusted based on the specific gravity of the proppant and available fracture models. The default value is approximately the density of loosely packed sand. Proppant filling is constrained by tortuosity of the flow path using a

Figure 3: Distributed Fracture Network and Productive Stimulated Rock Volume

Figure 2: Completions Evaluation Workflow

proprietary method. The fracture volume inside the respective stage DFN is filled with proppant until all proppant that was pumped is accounted for. The estimated propped half-length is determined by taking the distance between the last fracture that contains proppant and the center of the stage at the wellbore.

InordertocalculatethetotalStimulatedRockVolume(SRV),athree-dimensionalgridisappliedtothetotalDFN.Everygrid-cellcontaininganon-zerofracturepropertyisincludedinthemagnitudecalibratedSRV.ThetotalSRVisdependentonthesizeof the model cells and can be adjusted based on known reservoir flow properties. It represents the total rock volume that was affected by the treatment. In order to discern between the part of the SRV that is assumed to be drained over the lifetime of the well, the same workflow is applied to the proppant filled DFN. The subset SRV


Sudhendu KashikarVice President - Business Development Microseismic IncE-mail: [email protected]

that is calculated from the part of the DFN containing proppant then represents the Productive-SRV that is expected to contribute to production in the long term, as illustrated in Figure 3.

Wellbore Spacing and Stage Length EvaluationOne of the most important aspects of evaluating a hydraulic fracture treatment is to determine the effectiveness of the treatment as measured by the fracture growth and fracture complexity. Key parameters of the fracture growth can be determined directly using a sub-set of fractures that are filled with proppant or the P-DFN. Selecting fractures that are filled with proppant allows accurate determination of the effective propped fracture growth in all directions from the wellbore. It is these propped fractures that will ultimately control the long term production from the well and should be used to determine the required well spacing and stage lengths.

Figure 4: Stage-by-Stage Vertical Fracture GrowthFigure 6: Fracture Volume

Figure 5: Stage-by-Stage Horizontal Fracture Growth

Figure4(a)showsthestage-by-stageanalysisoftheverticalfracturegrowthwhileFigure4(b)showstheaverageverticalgrowth for theentirewell. It clearlyshowswhere the stages with fracture growth are effective, and the stages with limited fracture growth are less effective. Combining this with other contextual information – such as structure, geology, and stress regimes enables a better understanding of the treatment effectiveness in creating the desired fracture geometry.

Figure5showsthefracturegrowthinthehorizontalplane.Inthisinstance,thereisa very clear bias of the fracture growth towards the west. This bias may be caused by several factors such as geology, structure, stress shadow from previous wells, depleted zones,etc.Analysingthisdatawithreferencetocontextualinformationwillenabletheengineer to better diagnose the fractures as well as improve design for future wells.

Another aspect of evaluating the fracture growth is to look at the cumulative fracture growth as a function of pumped fluid and proppant volume. The fracture surface area can be estimated from the absolute seismic moment of any event. The seismic moment isameasureofthesizeofafracture,basedontheareaoffracture,theaverageamountof slip, and the force that was required to overcome the friction holding the rocks

together. Figure 6 shows a cumulative fracture volume plot as a function of normalised pumped volume. A linear increase in the fracture volume as seen at the start of the pumping indicates generation of new fractures or opening of pre-existing fractures resulting in additional open fracture area. The sudden increase in the fracture volume at point ‘X’ indicates potential activation of a much larger pre-existing fracture. After pumping about 75 per cent of the fluid, a reduction in generation of a new fracture volume can be seen. During this period, it is possible that existing fractures are being opened by the pumped fluid and proppant. The cumulative fracture volume plot thus provides a very useful diagnostic tool to evaluate whether new fractures are being created, or if existing fractures are being opened.

SummaryCompletions Evaluation provides a deterministic analysis of microseismic data. This, in conjunction with contextual information, provides a valuable tool in evaluating the effectiveness of hydraulic fracturing treatment. This analysis allows operators to finally answer the questions- where did the proppant go? How far do my propped fractures extend? How many stages do I need? With this analysis, it can be determined if hydrocarbons are being left behind, if there is over-spending on the number of wells, and the optimum number of stages required in completing each well.


Factory Drilling

features

Achieving Predic table Operational EfficienciesAs development of oil & gas reservoirs requires intensive, efficient drilling programmes, many operators are turning to ‘Factory Drilling’ for maximising drilling efficiencies to address wellbore-related Non-Productive Time (NPT) issues and for more optimally & faster drilled. The drive for speed is placing more stress on drilling equipment, especially downhole equipment. The article explains on predictive analytics as a solution to identify NPT issues like mud motor failure early that can help operators to minimise the risk and cost to operations and improve drilling efficiency by mitigating damage to downhole drilling equipment.

Operators are increasingly focused on maximising dri l l ing eff ic iencies in land operat ions, and many are turning to fac tor y dr i l l ing. Whi le fac tor y dr i l l ing h e l p s i s o l ate a n d a d d re s s we l l b o re - re l ate d No n - Pro d u c t i ve Ti m e ( N P T ) i ssues and a l lows for more opt imal ly and faster dr i l led wel ls, the dr ive for speed is p lac ing more st ress on dr i l l ing equipment, especia l ly downhole equipment. The more companies turn to fac tor y dr i l l ing pr inc iples and the total volume of wel ls cont inues to increase, the more supply chain concerns are necess i tat ing steps to mit igate damage to equipment. To address these issues, operators are looking for ways to reap the benef i ts of fac tor y dr i l l ing whi le minimis ing the r i sks, and many are turning to predic t ive analyt ics as a solut ion.

Using predictive analytics to identify NPT issues l ike mud motor fai lure early can help operators to minimise the risk and cost to operations and improve dri l l ing eff ic iency.

The Benefits of Factor y DrillingFa c to r y d r i l l i n g o p e rat i o n s e m p l oy s p e c i a l i s e d r i g s d e s i gn e d to m a x i m i s e d r i l l i n g e f f i c i e n c y a n d re d u ce d r i l l i n g t i m e a n d a s s o c i ate d co s t s . Th e s e h i g h ly m o b i l e u n i t s a re o p t i m i s e d f o r r i g m ove s a n d p a d s k i d d i n g, a n d a re o p e rate d by ex p e r i e n ce d c re w s f a m i l i a r w i t h a dva n ce d a u to m at i o n te c h n o l o g y.

M a ny o i l a n d g a s re s e r vo i r s re q u i re f a c to r y d r i l l i n g to re d u ce t h e t i m e a n d c o s t o f d r i l l i n g. Fo r a n o i l c o m p a n y, N o n - P ro d u c t i v e T i m e ( N P T ) c a n a c c o u n t f o r U S D 5 0 , 0 0 0 p e r i n c i d e n t , s o w h i l e d r i l l i n g e f f i c i e n c y de l ivered through fac tor y dr i l l ing techniques i s impor tant, i t i s equal ly i m p o r t a n t t o e n s u re t h a t d r i l l i n g o p e r a t i o n s c o n t i n u e u n i n t e r r u p t e d t o a v o i d t h e c o s t o f n o n - p r o d u c t i v e t i m e l a p s e d w h i l e o p e r a t i o n s are down.

Factor y dri l l ing is typically applied to high-volume operations with repeated well designs and known downhole risks where the same f it-for-purpose rigs and drill ing techniques are used. One of the most significant benefits of factor y dri l l ing is that standardisation is al lowing land operators to ‘engineer out’ common wellbore -related NPT issues such as twist off, dif ferential st icking, mechanical st icking, and mud losses. But even as wellbore-related NPT has less impact on the overall well operations’ drill ing cost, operators are pushing the per formance envelope across the entire dri l l ing system, causing previously less common types of NPT issues to be the latest cost impact/per formance barrier.

The Challenges of Factor y Drilling The development of many oi l and gas reser voirs requires intensive, ef f ic ient dr i l l ing programmes focused on reducing t ime -based costs in economical ly marginal f ields. General ly speaking, fac tor y dri l l ing supply chain issues with personnel and equipment, and premature equipment wear and fa i lure thru driving equipment too hard or long to see continuous marginal improvement pose a major chal lenge to the equipment used in fac tor y dr i l l ing.

Wh i l e f a c to r y d r i l l i n g h e l p s i s o l ate a n d a d d re s s we l l b o re - re l ate d n o n -pro du c t i ve t i m e ( NP T ) i s su es an d a l l ow s fo r m ore o pt i m a l ly an d f as te r

>> Factory drilling operations employ specialised rigs designed to maximise drilling efficiency and reduce drilling time and associated costs. These highly mobile units are optimised for rig moves and pad skidding, and are operated by experienced crews familiar with advanced automation technology.

Case StudyFactor y dril l ing operations, for example, have reduced the average time to dril l a well from 22 days to 7-9 days in Mexico. In Russia, a similar approach impacted dril l ing efficiency where dril l ing rate increased from 19,685 ft a month to more than 32,808 ft a month reducing time and cost. (Reference from a recent ar ticle o f Dr i l l ing Contrac tor) Th e a r t i c l e s p e c i f i e d t h a t b e t t e r d r i l l i n g t e c h n i q u e s , s u c h a s f a c t o r y d r i l l i n g, a c c o u n t f o r s i g n i f i c a n t t i m e re d u c t i o n i n w e l l s t h a t 3 y e a r s a g o m i g h t h a v e a v e r a g e d 3 0 - 3 5 d a y s t o d r i l l a 1 0 , 0 0 0 - f t v e r t i c a l s e c t i o n a n d 1 0 , 0 0 0 - f t h o r i z o n t a l l a t e r a l s e c t i o n a n d n o w m i g h t average 17-23 days.


Philip WadeChief Operating OfficerVerdande TechnologyE-mail: [email protected]

drilled wells, the drive for speed is placing more stress on drilling equipment, especially downhole equipment. And the more companies turn to factory drilling principles and the total volume of wells continues to increase, the more supply chain issues are necessitating steps to mitigate damage to them.

One equipment-related form of NPT is wear and tear on downhole equipment, prompting the need for more robust tool sets, especially in regard to critical measurement while drilling (MWD) and mud motor systems. And of these two systems, it is mud motor damage which frequently is the limiting factor for fur ther incremental drilling improvement in established factory drilling projects. One operator has noted that mud motor damage accounts for 35 per cent of its NPT, and can cost USD 150,000 per incident.

Getting Ahead of Mud Motor FailuresBy using predictive analytics such as case based reasoning (CBR), land operators can identify key indicators of potential mud motor failure early and take action before drilling operations are impacted or costly tool damage occurs.

In one mud motor damage/fa i lure example, there are measureable ear ly symptoms of damage sustained ahead of an outright failure that is observable using Mechanical Specific Energy (MSE), a well-established concept that links standard sur face sensor measurements to downhole dri l l ing per formance. Sustained oscillation of MSE can be indicative of micro-stalling behavior down hole, which can result in pre-mature motor failure. These oscillations can be difficult to detect with the human eye but can be easily identified using properly designed and calibrated mathematical algorithms. Identification of operations currently exhibiting these symptoms enables real-time mitigation to prolong BHA life.

Companies with wel l- establ i shed fac tor y dr i l l ing operat ions looking for co nt i n u o u s i n c re m e nt a l i m p rove m e nt a re b e g i n n i n g to u n d e r s t a n d t h e p owe r o f t h i s a p p ro a c h a n d a re l e a d i n g t h e c h a rg e i n u s i n g p re d i c t i ve a n a ly t i c s a n d C B R to s t ay a h e a d o f d ow n h o l e to o l d a m a g e o r o u t r i g ht fa i lures, and others wi l l need to fo l low sui t to recognise the benef i ts th is technology and approach provides as fac tor y dri l l ing becomes the prevalent dr i l l ing process or wherever downhole too l damage i s the predominate NPT cost.

Using this mathematical approach with a CBR system, once the possibi l ity of symptomatic mud motor damage has been identified, other failure modes (such as chunking, debonding, thermal fatigue, issues related to dri l l ing f luids, or a plugged motor) can be determined and addressed before it affects operations.Using this approach, i t may also be poss ible to l ink MWD tool fa i lure to osci l lat ing MSE, or s imilar damaging patterns, which then addresses another costly downhole component issue.

What Next?There i s t remendous oppor tunit y for companies looking to break ground in shale p lays i f they understand the r i sks and how to ef fec t ive ly mit igate them. Many are looking at fac tor y dr i l l ing as a way to tap into shale p lays, and i t i s a technique that they can use successful ly i f they understand that cont inuous ef f ic ienc y wi l l require new technologies to ass ist in cost control and per formance improvement. As they look to achieve that opt imizat ion, land operators can uti l ise predic t ive analytic technologies such as Dri l lEdge™ mud motor capabi l i t y to monitor for the indicators of premature downhole too l damage, to qu ick ly recognise the cont inuous improvement fac tor y dr i l l ing provides to maximise thei r produc t ion.

>> Companies with well- established fac tor y dri l l ing operations looking for continuous incremental improvement are beginning to understand the power of this approach and are leading the charge in using predictive analytics and CBR to stay ahead of downhole tool damage.


interview

How do you evaluate India’s refining capacity? What are the key drivers? India is an impor tant player on the global refining map accounting for about 4.5 per cent of the refining capacity of the world, and this fraction is expected to get bigger in 2017. With Indian refineries going for accelerated capacities, the footprint of India on the global refining map as a major player is wor th taking note of. The refining industr y in India is all set to see an increase in margins and product por tfolio.

The rapid increase in refining capacities to cater to domestic demand with a competitive edge, the capability of producing high-end products, the value addition to provide the industry a supply security are key drivers for the industry.

How do you maintain the gross refining margins of HMEL refinery amidst high volatility in feedstock pricing and subsidy burdens? What strategies do you undertake to maintain the positive momentum? The Guru Gobind Singh Refinery (GGSR) is a zero bottoms, energy efficient, environmental friendly, high distillate yielding complex that produces clean fuels

‘The enormity of GGSR leverages proximity of petroleum products in Northern parts of India’

Rationale behind commissioning of the 9-MMTPA Guru Gobind Singh Refinery (GGSR) operated by HPCL-Mittal Energy Limited (HMEL) at Bathinda in Punjab is to leverage the proximity of the deficit in petroleum products in the Northern parts of the country. Prabh Das, Managing Director & Chief Executive Officer, HMEL, Bathinda, talks about the opportunities & challenges and the future trends of refinery businesses in the country in an exclusive interview with Offshore World. He further articulates the expansion plans, new product mixes, marketing & distribution strategy, and the future refinery configuration of GGSR.

and polypropylene meeting Euro IV specifications by processing heavy, sour and acidic crudes.

Our Bathinda refiner y is a state-of-the-ar t complex refiner y that has the ability to process relatively economically priced tough (heavy and sour) crudes that are selected through the best-in-its-class LP software that has been tuned to deliver the best possible margins for the given refiner y configuration. We are continuously on the lookout for and regularly under take low investment Gross Refining Margins (GRM) improvement projects which would help the company in per forming well in volatile scenarios. HPCL-Mittal Energy Limited (HMEL) is committed to maintaining high standards of safety, health and environmental care at all its operating locations, always ensuring that its operations have no negative impact on the safety, health and environment standards. HMEL has established a long term goal of zero injuries, incidents/accidents and environmental violations. The company has a strong focus on preserving the environment, sustainable development, safe work place and enrichment of the quality of life of employees, customers and the community.


>>The biggest challenges currently facing the Indian refining and petrochemical industries include the squeezing GRMs, capital intensive nature of new projects, high rates of interest, volatility in exchange rates, plateauing of growth rates of certain fuel products.

GGSR received the BS OHSAS 18001:2007 cer ti f ication in Januar y 2014 given by the Brit ish Standards Institution (BSI) for Occupational Safety Management system. The BSI is the world authority on management systems and having been cer ti f ied with 18001:2007, it is symbolic of HMEL’s testament to committed quality of sound Health, Safety and Environmental practices.

What are the current biggest challenges ahead and how are you gearing up to address the same? The biggest chal lenges current ly fac ing the Indian ref in ing and petrochemical industr ies inc lude the squeezing GRMs, capi ta l intens ive nature of new projec ts, h igh rates of interest, volat i l i t y in exchange rates, p lateauing of growth rates of cer ta in fuel produc ts. However,

HMEL has a long term of f take, which gives i t an assured market.

What are the current capacity and the product mix of the refinery? How do you plan to expand the product basket and marketing & distribution strategy for the new products in India and foreign countries? Our current refining capacity is 9 million metric tonnes per annum (MMTPA). However, we are able to run the refinery at a higher level.

The product mix is always worked up based on economic viability and demand in the market place. Northern India faces a deficit in petroleum products, and The Guru Gobind Singh Refinery leveraging on its proximity to the northern states namely Punjab, Jammu & Kashmir, Himachal Pradesh, Uttarakhand, Uttar Pradesh, the National Capital Region of Delhi and parts of Haryana and Rajasthan is ideal to fill the fuel deficit that the region faces.

We are marketing all liquid products by supplying the same to HPCL or their nominated companies. The three solid products i.e. Polypropylene (PP), Sulphur and Pet coke are being marketed by HMEL directly. These products have been well received

by the industries in North as well in other parts of the country. While Sulphur and Petcoke are mainly consumed within Northern region, PP is being marketed on an all India basis through our network of distributors in all parts of the country. HMEL is currently focussed on meeting the demand in the domestic market.

However, we continue to explore opportunities for export based on economic viability. We export our Naphtha production, as at present there is limited domestic demand. A small quantity of Pet coke is also exported to Nepal and Pakistan to seed the market looking at opportunities for these products in the near future in those regions.

Product evacuation of all liquid products from the refinery is done by rail, road and through dedicated pipelines. Solid products are evacuated through rail and a very minimal quantity is transported through road. Most of the product evacuation is through pipeline in the most efficient manner.

May we have your comments on value addition at the refinery and integration with petrochemicals unit as an economic growth driver? How are you implementing this at

The typical slate for name plate capacity (MMPTA) of HMEL

- Light Disti l late: 2.1

- Middle Disti l late: 4.5- High/Solid Disti l late: 1.5


HMEL refinery and how will this improve the overall profitability of the refinery? The nine MMTPA, Guru Gobind Singh Refiner y is the single largest investment and f irst Oil and Gas industr y to be set up in the state of Punjab, India. The ref iner y has brought in r ich economic benefits in terms of industrial isation and development of suppor t industries in the state of Punjab. A recent study by University Business School (University of Punjab) has established signif icant growth in State GDP if associated downstream industr y comes up in the state.

The ref iner y includes a world class mother polypropylene plant for developing several medium and small scale industries. Ver y few refineries in the countr y have the capacity to produce polypropylene. HMEL’s ref iner y has created a big potential for industrial isation of the area. I f capital ised, it could lead to development of petrochemical industr y in Punjab bringing prosperity to the state. HMEL has been engaging with the Government to real ise this potential. So far production of these granules is mainly located in Gujarat and Maharashtra. The ref iner y has been a game changer of sor ts leading to product security, direct and indirect employment oppor tunit ies and higher tax revenues for Punjab and nearby States with the potential for new investments to develop a downstream industr y and make Bathinda a major petrochemical hub.

Petrochemical and other value addit ion units such as Aromat ics manufac tur ing fac i l i t ies enhance the prof i tabi l i t y of re f iner ies to a great ex tent as petrochemicals and aromat ics command a s igni f icant premium over l iquid and gaseous fuel produc ts. For instance, the petrochemical polypropylene is so ld at a premium over l iquid fuels. This i s prec ise ly the reason why HMEL chose to set up a polypropylene plant with a capaci t y of over 400KT per annum.

How are you addressing the factors influencing refinery configuration in future – convergence of refining & petrochemical

operations, energy optimisation, achieving environmental protection, economies of scale and feedstock flexibility?HMEL’s ref iner y has been set up keeping factors such as convergence of ref ining and petrochemical operations, energy optimisation, achieving environmental protection, economies of scale and feedstock f lexibi l ity. I t is a zero bottoms, energy eff ic ient, environment-friendly, high dist i l late yielding complex ref iner y that produces clean fuels meeting Euro-IV specif ications. It has one of the highest Nelson Complexity Indices in the region and is designed to process a wide variety of crude oils including heavy, sour and other oppor tunity crudes. It fol lows a stric t compliance to l iquid and sol id waste management norms. World class environmental fr iendly technologies such as sulphur recover y units, hydro-treaters, desulphurisation units, state - of-the -ar t eff luent treatment plant, vapour recover y systems and low NOx burners in the furnaces have been implemented at our ref iner y. The ref iner y has a blending faci l i ty to process fuels between 15 API – 55 API.

Addit ionally, keeping economies of scale in mind the ref iner y and associated faci l i t ies for crude receipt and transpor t have been developed in such a manner that they can be expanded to 18 Mil l ion Metric Tonnes per Annum. The ref iner y ’s Delayed Coker Unit (DCU) produces petroleum coke and ensures that the ref iner y draws maximum value from the bottom of the barrel.

The environmental impact assessment repor t for ref iner y was prepared by the National Environmental Engineering Research Institute (NEERI), the institute renowned for assessing the environmental impact on the Taj Mahal. Post conducting st ipulated procedures, the Punjab State Pollution Control Board has also granted a No Objection Cer ti f icate (NOC) to our ref iner y.

A green belt around the ref iner y has been developed with the help of the Punjab State Forest Depar tment.

HMEL is one of the f ive ref ineries in the world to commence integrated operations from day one. The implementation of Manufacturing Execution Systems (MES) integrates information from the various components of the MES, Enterprise Resource Planning (ERP), and control systems within the ref iner y and delivers a consolidated, s ingle view of the data. The new technology enables HMEL to analyse key corporate business processes including, planned versus actual investments, production, key per formance indicators, among others. The system generates near real-time information for HMEL business executives to use to make more intell igent decisions around optimising productivity and margins.

What are the new and niche products the refinery is producing currently or in the pipeline? Our ref iner y has the capabil ity to make specialty products such as Hexane and Mineral Turpentine Oil (MTO). Hexane is mainly used as solvent in the solvent ex traction units for vegetable oi l. I t is also used by the pharmaceutical industr y as a solvent. MTO is a clear, transparent l iquid which is a common organic solvent and is used in painting, decorating, dr y cleaning etc. Addit ionally, ours is one of the few refineries in India that has the capabil ity to produce eight grades of polypropylene which have a wide variety of f i lm, injection moulding and woven & non-woven fabric manufacturing applications. The new product in the pipeline is asphalt which is primari ly used in road construction, as the glue or binder mixed with aggregate par ticles to create asphalt concrete. The ref iner y has been operating at ful l capacity.

What are the other external future unforeseen challenges the Indian refiners will have to be prepared for? How should the Indian refining industry counter the same? Unconventional hydrocarbons can play a big role in securing India’s energy security. These are new areas, and therefore have to be carefully nur tured. Shale gas and solar power can become a major source of energy, provided these assets are developed to their full potential. Indian refiners will need to gear up for the impact of change in the upcoming unconventional energy scenario.

>>Unconventional hydrocarbons can play a big role in securing India’s energy security. These are new areas, and therefore have to be carefully nurtured. So Indian refiners will need to gear up for the impact of change in the upcoming unconventional energy scenario.


Resid Conversion Technology

features

Slurry Phase Hydrocracking: Bottoms Upgrading for Today’s MarketThe article focuses on the significance of resid processing methods which has emerged as a big concern for many refineries as they struggle to improve product qualities and refinery margins simultaneously while dealing with their large residuum pool. The authors shares insights into the Residuum Landscape and advocates on ‘Slurry Phase Hydrocracking’ which has not enjoyed widespread acceptance as the technology as choice for resid upgrading.

In the face of high crude oil prices, low natural gas prices, and ever increasing produc t qual i t y regulat ions, re f iners are presented with an unprecedented s i t u at i o n o f i m p rov i n g m a rg i n s by re - e va l u at i n g t h e i r re s i d p ro ce s s i n g opt ions. The abi l i t y to re l iably e l iminate fuel o i l produc t ion, maximise high qual i t y d is t i l late y ie lds, and achieve a lmost complete convers ion to h igh value t ranspor tat ion fuels, i s essent ia l for susta in ing the value of insta l led assets in the years to come.

In its s implest form, ref ining is a process of changing the carbon to hydrogen rat io of natural ly occurr ing crude oi ls. At a molecular level, the operat ion of al l ref ineries in the world is essential ly targeted at conver t ing low hydrogen to carbon rat io feedstocks into high hydrogen to carbon rat io t ranspor tat ion fuels. Changing the H/C (Hydrogen/Carbon) rat io bet ween feedstocks and products can only be accomplished through the rejection of carbon molecules or the addit ion of hydrogen molecules.

Carbon re jec t ion is favoured by low crude pr ices and high hydrogen pr ices. Under these condi t ions i t i s more economica l to re jec t the res iduum as petroleum coke, whi le producing the required t ranspor t fuel volumes by incremental c rude o i l process ing. Conversely, hydrogen addit ion is favored by h igh crude pr ices and low hydrogen pr ices, when i t i s more economical to upgrade near ly ever y molecule o f res iduum to t ranspor t fue ls, whi le

a lso maximis ing t ranspor t fuels produc t ion f rom the base crude capaci t y.In the United States, shale gas produc t ion has had a dramat ica l ly reduced t h e p r i ce o f n at u ra l g a s, re l at i ve to c ru d e o i l , o n a co m p a ra b l e e n e rg y b a s i s . Th i s p ro v i d e s a re l a t i ve l y l o w co s t s o u rc e o f h yd ro g e n i n m a n y geographica l reg ions. Conver t ing inexpens ive hydrogen into h igh va lue l iquid transpor tat ion fuels by hydrogen addit ion to low H/C rat io feedstocks prov ides a good economic re turn . Economic ana lys i s c lear ly po ints to a t rans i t ion f rom carbon re jec t ion to hydrogen addit ion at USD 50-60/barre l c rude, even when cons ider ing natural gas pr ices of USD 10/MMBTU. Lower natural gas pr ices provide an even more s igni f icant ta i lwind to hydrogen addit ion economics. As the new gas produc t ion techniques spread to other par ts of the wor ld, projec t ions are that hydrogen addit ion economics wi l l remain favored for many years to.

Another s igni f icant fac tor in bottoms upgrading economics i s the problem of s t randed st reams. Many ref iner ies are l i t tered with low value st reams that must be blended of f, d isposed or sold at loss in order to accommodate processing equipment l imitat ions f rom a di f ferent era. The bulk of operat ing ref iner ies around the world have l i t t le or no res iduum process ing capabi l i t y and produce large volumes of h igh sul fur fuel o i l and bunker fuel. Fa l l ing demand for these undes i rable produc ts wi l l cont inue into the future and a l ready negat ive margins for these st reams wi l l only get worse.


Regulator y pressures on residuum outlets such as marine bunker fuels are expected to worsen in the future. As world governments move towards cleaner bunker fuels, refiners will be forced to find new ways to deal with their large residuum pool. It is a task that is becoming more pressing as oil producers bring to market increasing amounts of heavy crudes, which cost less, but feature substantial increase in resid content. While shale oil production has provided a temporar y respite from declining average API and rising sulfur contents, most projections do not expect shale oil production increases to offset the increasingly heavy sources of crude oil production from new discoveries and reser ve development.

Not only refinery products but also by-products must be considered when evaluating bottoms upgrading process technology. The market for coke from delayed cokers is highly dependent on availability of local outlets for the material, such as power plants. An abundance of coke on the market creates prices that only marginally cover costs or are negative. Combined with the economic considerations are the environmental considerations of burning or disposing of this low H/C material.

On the produc t s ide of the economic equat ion, the gasol ine to d ist i l late rat io cont inues to move in favour of d is t i l late on a wor ldwide bas is. Even

i n m a r ke t s w h e re F l u i d Cat a l y t i c Cra c k i n g ( F CC ) u n i t s a re t h e p r i m a r y co nve r s i o n p ro ce s s a n d g a s o l i n e t h e p re d o m i n a nt t ra n s p o r t at i o n f u e l , r i s i n g wo r l d w i d e d e m a n d i s d r i v i n g i nve s t m e nt s a i m e d at m a x i m i s i n g p r o d u c t i o n o f h i g h c e t a n e , u l t r a l o w s u l f u r d i e s e l . T h e r i s i n g D / G ( D i e s e l / G a s o l i n e ) r a t i o i s f o r e c a s t t o c o n t i n u e , w i t h m o s t o f t h e incremental increase in t ranspor tat ion fuel volume for future years coming f rom dist i l late.

This i s an impor tant considerat ion for ref iners, when making long-term, h i g h C A P E X i n ve s t m e n t d e c i s i o n s . Cu r re n t e c o n o m i c s c l e a r l y p o i n t t o hydrogen addit ion as opposed to carbon rejection especial ly for increased dist i l late production.

To d ay, t h e m a r ke t i m p o s e d c h a l l e n g e to re f i n e r s i s to f i n d a hyd ro g e n a d d i t i o n b a s e d re s i d co nve r s i o n te c h n o l o g y w h i c h s u p p o r t s t h e s t ro n g economics o f near complete convers ion, h igh se lec t iv i t y towards d iese l, Euro V qual i t y and high operat ing re l iabi l i t y – a l l at a reasonable capi ta l investment and st rong ROI . A convinc ing case for s lurr y bed hydrocracking as the technology choice for today ’s market condit ions wi l l be la id out in th is paper.


The Residuum LandscapeResiduum oi ls can be broadly c lass i f ied by thei r contaminant metal (Ni + V ) and Conradson Carbon R es idue (CCR) content. These t wo parameters broadly def ine the sui tabi l i t y and t ype of convers ion technology which can be appl ied to these heav y o i ls.

More recently, ebullated bed hydrocracking technology has been the choice for hydrogen addition to residue with higher levels of metals and CCR. Conversion is higher than prior technologies but still limited to less than 80 per cent conversion and in some cases, significantly less. The nature of the e-bed conversion process creates an unstable asphaltene phase which usually limits overall conversion by causing severe fouling in downstream equipment. Introducing aromatic solvents and high recycle rates can help maintain asphaltene solubility and reduce fouling but these solutions have a cost and there is still an upper limit on the level of asphaltene conversion which can be achieved.

Slurr y phase hydrocracking offers the greatest potential for a robust residue conversion technology which encompasses the entire residue landscape. Only coking is as immune to high levels of CCR or metals content in the feed and, being a hydrogen addition process, slurr y hydrocracking has the advantage over coking of ne near complete conversion of the residuum to high value products.

O n e s u c h s l u r r y p h a s e t e c h n o l o g y i s Ve b a Co m b i C r a c k i n g ( V CC ™ ) , a commercial ly proven bottoms upgrading technology suitable for conver t ing 95 wt% of res idues into h igh qual i t y d is t i l lates.

VCC™: Veba Combi Cracking The origin of slurry phase hydrocracking and the VCC™ process dates back to 1913, when Freidrich Berguis was awarded his first patents for the process of liquefying coal. The 1931 Nobel laureate had demonstrated that liquid products can be produced by simply subjecting coal to a high enough temperature and hydrogen pressure.Us ing these pr inc ip les, 12 commerc ia l un i ts were bu i l t and operated in G e r m a n y b e t w e e n 1 9 2 7 a n d 1 9 4 5 , p ro d u c i n g a b o u t 1 0 0 , 0 0 0 B P S D o f t ranspor tat ion fuels f rom coal and coal tar. Af ter WWII , several of these units were d ismantled and sent to Eastern block countr ies. The remaining units, inc luding the s ix operat ing t ra ins at Gelsenki rchen, were conver ted to 10,000 BPSD t ra ins for process ing re f iner y vacuum res idues. The f i r s t t rue VCC™ units were developed in the 1950’s when an integrated second s t a g e f i xe d b e d re a c to r wa s a d d e d to t h e s l u r r y p h a s e re a c to r. I t wa s real ised that mi ld hydrof in ishing of the s lurr y phase produc ts could resul t in h igher qual i t y d is t i l late. This integral ly coupled combinat ion of s lurr y phase hydrocracker and tr ickle bed hydrof inisher was the or igin of the VCC™ process as i t i s known today.

F i x e d b e d h y d ro p ro c e s s i n g i s s u i t a b l e f o r p ro c e s s i n g a t m o s p h e r i c o r vacuum res idue with modest amounts of metals and CCR and mainly for desul fur isat ion rather than convers ion. Convers ion is t ypical ly 15-20 per cent and fur ther convers ion of the produc ts in other uni ts i s necessar y. No n e t h e l e s s, o p e rat i n g p re s s u re s a re h i g h , i n c re a s i n g i nve s t m e nt co s t s and operat ing costs can be h igh as wel l due to cata lyst deac t ivat ion f rom metals and coke.

Res id FCC (RFCC) i s a seemingly at t rac t ive way to conver t res id with no u n c o n ve r t e d p ro d u c t t o d e a l w i t h . U n f o r t u n a t e l y, t h e m o re h yd ro g e n def ic ient the feedstock the more of i t forms coke on cata lyst. This sets a l imit on the amount or heaviness of the res idue processed in the RFCC whi le keeping regenerator temperatures at an acceptable level. Cata lyst coolers and other methods of heat removal can improve the range of feedstock process ing poss ib le but RFCC is s t i l l ver y l imited.


These or iginal VCC™ units operated on res idues unt i l 1967 when ver y low crude o i l pr ices and the end of government subs id ies forced the units to be shutdown and subsequent ly d ismantled. Low crude o i l pr ices make i t uneconomic to add hydrogen to res idue, in par t icular for th is per iod when outlets for res idue, such as fuel o i l, ex isted. VCC™ technology went dormant for a per iod unt i l v iable economics would once again sur face.

The tr igger for resurrec t ion of VCC™ was the hike in crude oi l prices result ing f rom the o i l embargo of the 1970’s. Economics of hydrogen addit ion and h i g h co nve r s i o n o f re s i d u e s t u r n e d p o s i t i ve a n d Ve b a O e l co n s t r u c te d a 3500 BPD in B ot t rop, which s tar ted up in 1981. In addi t ion, 200, 3 .5 a n d 1 B P D p i l o t p l a nt s we re b u i l t f o r d e ve l o p i n g t h e te c h n o l o g y. O ve r i ts operat ing per iod, s igni f icant improvements were made to the process through equipment des ign modif icat ions and operat ional adjustments. Two units were l icensed by Veba to ut i l i se VCC™ technology, but, once again, o i l pr ices fe l l to levels which would not suppor t projec t economics. B ott rop was decommiss ioned and shutdown in 2001 a f ter a per iod of susta ined low oi l pr ices.

Following BP ’s acquisition of Veba and a rise in crude oil prices from increasing market demand rather than exogenous events, VCC™ was added to BP ’s Vision 2030 por tfolio and the BP Advanced Refining Program. In 2008 a new 1 BPD VCC™ pilot plant was designed, built and commissioned at BP’s research facilities

VCC™ Process Flow

in Naper ville, USA. In 2010, BP and KBR agreed to a marketing, licensing and engineering alliance to promote the technology.

Slurr y Phase HydrocrackingWhile s lurr y phase hydrocracking has been re l iably prac t iced for several decades, it has not enjoyed widespread acceptance as the technology of choice for resid upgrading. Even with its strengths of high asphaltene conversion and dist i l late selectivity, the specif ic set of economics suppor ting VCC was elusive unti l recently. Higher hydrogen consumption and CAPEX compared to alternative resid conversion technologies was not economically justi f ied without susta ined h igher c rude and produc t pr ices. The appropr iateness of any technology choice must be weighed against the prevalent market condit ions, and its relevance is deeply rooted in the principles of molecule

>>Converting inexpensive hydrogen into high value liquid transportation fuels by hydrogen addition to low H/C ratio feedstocks provides a good economic return. Economic analysis clearly points to a transition from carbon rejection to hydrogen addition at USD 50-60/barrel crude, even when considering natural gas prices of USD 10/MMBTU.

VCC™ Produc t Proper ties


management. Embedded in th is approach is the core bel ie f that ref in ing margins are maximised by selectively maximising the value of ever y molecule in naturally occurring crude oils in ever y stage of processing. Vacuum residues can be broadly classif ied by SARA analysis (Saturates, Aromatics, Resins and Asphaltenes). These proper ties set the severity of operation (pressure and temperature), hydrogen uptake, and capital investment required to conver t the material. Since asphaltenes are the most hydrogen deficient par t of the resid and contain vir tually al l the impurit ies, the decision to conver t them or remove them can be complex.1. Will crude oil prices remain high? 2. Are outlets for byproducts, such as pet coke or fuel oil, available?3. Is hydrogen inexpensive relative to crude? 4. Are markets for high quality distillate products growing?

The economics o f not upgrading, par t ia l ly upgrading or fu l ly upgrading high C/H molecules is substantial ly influenced by: crude price, natural gas price, and capital investment. Historical low crude oi l prices, high natural gas pr ices, and unt i l recent ly, an acceptable margin for fue l o i l re lat ive to l ighter products al l had an inhibit ing effec t on the value of upgrading asphaltene molecules. I t was both economical and convenient to discard these molecules as coke or as unconver ted res idual fuel o i l. Whi le s lurr y hydrocracking technology was sound, the market and regulator y landscape d id not suppor t the addi t ional cap i ta l and operat ing cost to br ing i t to commercial application.

The past decade has seen a shift in the market dynamics affecting residue upgrading – crude oil prices have been sustainably higher, natural gas prices are lower, the market for high quality dist i l late is strong and growing and there is a shrinking market for fuel oi l and petroleum coke. Conversion of asphaltenic molecules to l ighter products can now be economically justi f ied.

S lurr y phase hydrocracking is the preferred choice for these new market conditions and specif ically VCC™ since it has been developed through decades of innovation.

A comparison of the net present value (NPV ) of three technology routes derived from upgrading a ref iner y residue as a function of bench mark crude price shows a remarkable trend in favor of slurr y phase hydrocracking. Both the economic and regulator y trends are heavily weighted in favor of VCC™, and the current and future market condit ions are al igned with the inherent features of this technology.

The economic evaluation for one Nor th American ref iner y clearly shows that the net present value of the ebullated bed process exceeds that of the delayed coker at a bench mark crude price of $85/bbl. This is primari ly because of the lower conversion of e-bed, larger volume of lower value unconver ted residuum, and the production of aromatic dist i l late products that need retreatment. On the other hand, the net present value of VCC™ exceeds that of the delayed coker at a bench mark crude price of $50/bbl, making it the clear choice for hydrogen addit ion technology.

ReliabilityThe va lue of any technology can only be ex t rac ted i f re l iable long term o p e r a t i o n s c a n b e s u s t a i n e d. I n t h e c a s e o f VCC ™ , t h i s re l i a b i l i t y c a n

>> The bulk of operating refineries around the world have little or no residuum processing capability and produce large volumes of high sulfur fuel oil and bunker fuel. Falling demand for these undesirable products will continue into the future and already negative margins for these streams will only get worse.

Comparison of 1st Stage Yields


o n l y b e a c h i e ve d i f h i g h a s p h a l te n e s co nve r s i o n c a n b e a cco m p l i s h e d w i t h o u t f o u l i n g t h e u n i t . A m o l e c u l a r e v a l u a t i o n o f r e s i d u u m w i l l re ve a l t h at t h e a s p h a l te n e s a re h e l d i n s o l u t i o n b y t h e a ro m at i c i t y o f the solvent phase.

T h e b a s i c c o n v e r s i o n c h e m i s t r y f o r s l u r r y p h a s e h y d r o c r a c k i n g i s essent ia l ly thermal in nature and re lat ive ly s imi lar to that seen in other carbon re jec t ion processes. The condensat ion chemist r y assoc iated with these cracked molecules, which would normal ly lead to coke format ion, i s i nte r ru p te d by t h e h i g h hyd ro g e n p a r t i a l p re s s u re . Th e re f o re , u n l i ke a t y p i c a l t h e r m a l co n ve r s i o n p ro ce s s e s , t h e re a c t i o n s y s te m p ro d u ce s a v e r y h i g h l e v e l o f l i g h t e r p r o d u c t s w i t h l i t t l e c o n d e n s a t i o n o r coke format ion.

A s c o n v e r s i o n p r o g r e s s e s , t h e s i d e c h a i n s t h a t h o l d a s p h a l t e n e s i n solut ion are easi ly cracked causing them to lose solvenc y, and eventual ly p re c i p i t ate. An a n a l o g y ca n b e m a d e to t h e o p e rat i o n o f a s o lve nt d e -asphalt ing process. In that case, when the asphaltenes are dissolved in a l ight paraff inic solvent, phase separation occurs, result ing in precipitation as pitch.

Unconver ted asphaltenes prec ip i tate and adhere to equipment sur faces – the wal ls of the reac tor, p ip ing, heat exchanger, etc. This severe foul ing l i m i t at i o n l e a d s o t h e r re s i d hyd ro c ra c k i n g te c h n o l o g i e s to re d u ce t h e i r per pass convers ion or to resor t to rec yc le wi th the addi t ion o f a la rge volume aromat ic solvent s t ream in an attempt to keep these unconver ted asphaltenes in solut ion.

VCC™ technology operates with stabi l i t y and high convers ion in a mode t h a t e l i m i n a t e s f o u l i n g. Th i s i s s u e h a s b e e n re s e a rc h e d o v e r s e v e r a l decades dat ing back to the or igins of the technology. O ver 1 ,000 patents a n d o v e r 2 , 0 0 0 f i l i n g s w e re m a d e , c o v e r i n g t h e e n t i re l a n d s c a p e o f cat a ly t i c a n d a d d i t i ve o p t i o n s. Th e s e e f f o r t s l e a d to t h e d i s cove r y a n d c o m m e r c i a l i s a t i o n o f a n o n - c a t a l y t i c , n o n - m e t a l l i c a d d i t i v e w h i c h a l l b u t e l i m i n a t e s f o u l i n g t e n d e n c i e s a n d a l l o w s u n p re c e d e n t e d h i g h asphaltene convers ion.

Asphaltene molecules are adsorbed to the h igh sur face area of the addit ive where the required res idence t ime is made avai lable for the asphaltenes to cont inue to crack . The l ighter, c racked produc ts are re leased f rom the a d d i t i ve s u r f a ce a n d t h e h e av i e r, u n co nve r te d a s p h a l te n e s, co nt a i n i n g a l l the contaminant metals, remain on the addit ive. Later, the addit ive i s removed from the process along with the captured unconver ted asphaltenes and any contaminant meta l s. Th i s chemis t r y i s poss ib le because o f the

h igher operat ing pressures of VCC™ which a l low the unit to operate in a non- catalyt ic mode by inhibi t ing condensat ion chemistr y.

Th i s co m b i n at i o n o f h i g h hyd ro g e n p a r t i a l p re s s u re a n d n o n - c at a l y t i c addit ive system is unique to VCC™ and is a major reason it has decades of rel iable operation at high (>95%), once -though conversion, with no signs of fouling. Hydrogen addit ion needed to meet f inal product quality is met by adjust ing the t r ickle bed hydrof inishing condit ions. This separat ion of thermal convers ion of res idue f rom the catalyt ic convers ion of conver ted material is key to the technology. Each stage does the job for which it was des igned and this e l iminates the issues of ten seen when us ing catalysts for res idue convers ion. The re l iabi l i t y of the process has been proven by operat ing fac tors that have cons is tent ly exceeded 90% over many years of operation.

ConclusionCurrent market and regulator y condit ions substantial ly favor investment in hydrogen addit ion technologies. Slurr y phase hydrocracking in general and VCC™ technology in specif ic, are ideally posit ioned to exploit the new market condi t ions. With VCC™ near complete, once through, d i s t i l late se lec t ive conversion to high quality f inished products can be rel iably achieved with high on-stream factors.

> > S l u r r y p h a s e h y d r o c r a c k i n g o f f e r s t h e g r e a t e s t potential for a robust residue conversion technology which encompasses the entire residue landscape. Only coking is as immune to high levels of CCR or metals content in the feed and, being a hydrogen addition process.

Steve MayoDirector - VCC TechnologyKBR Technology, HoustonE-mail: [email protected]

Rahul Ravi Senior Technical Professional - ProcessKBR Technology, IndiaE-mail: [email protected]

Mitra Motaghi Business Development ManagerKBR Technology, HoustonE-mail: [email protected]


Energy Watch

features

D i f f e r e n t E n e r g y C o m m o d i t i e s o n D i f fe re nt Pat h sContinuing with past few months’ convention, energy commodities continued to exhibit mixed price movement in the past two months of January and February 2014. Interestingly the two energy commodities from emission segment traversed complete opposite path. In above mentioned period, European Union allowances (EUA) futures prices (traded on ICE-ECX platform) rose the most amongst energy commodities by 45.3 per cent, whereas CER (Carbon Emitted Reduction) futures prices (traded on same platform) dropped the most i.e. by 18.8 per cent (albeit with low prices base).

Amidst reports of increased oil production in Libya and strengthening of US dollar, NYMEX (CME) crude oil (light sweet) futures started the month of January 2014 at USD 95.44 per barrel, down by 3.03 per cent from previous months close. News from Libya that protesters ended months-long blockade at a major oil field in the country’s south as well as Libya’s National Oil Corporation stating that southern El Sharara oil field had restarted with production of 60,000 barrels per day helped the bearish sentiments. Further, two other oil fields in the east of Libya also reopened about a week ago after being blocked for several months. Notably, oil prices continued to decline as rising production pressure outweighed support from a larger than expected drop in US crude oil supplies. Consequently, NYMEX crude oil futures registered its eventual two-months (January-February 2014) low of USD 91.24 per barrel on January 9.

Subsequently, oil prices reversed as China, the world’s second largest crude oil importer, showed an increase in its oil import data. Later, a sharp decline in the US dollar also benefitted dollar denominated prices for crude oil. The upward trend in crude oil prices then continued to gain momentum with weekly reports releases showed persistent decline in US crude oil inventories.

Data releases such as a rise in retail sales, better-than-expected US manufacturing reports helped the bullish sentiments in oil prices. Another development from China, wherein China’s central bank provided emergency funding support to commercial banks via a repurchase program, in hopes of easing fears of a credit crunch, provided support to crude oil prices. Moreover, rise in natural gas prices to multi-year highs on severe winter

Source: Bloomberg

70

77

84

91

98

105

250

270

290

310

330

NYMEX Heating oil (USd/gal) - LHS NYMEX Gasoline (USd/gal) - LHS

NYMEX WTI crude oil (USD/barrel) ICE Rotterdam Monthly Coal (USD/MT)

Source: Bloomberg

Futures price movement (January - February 2014)


Source: Bloomberg

Niteen M JainSenior Analyst, Department of Research & StrategyMulti Commodity Exchange of India LtdE-mail: [email protected]

Nazir Ahmed Moulvi Senior Analyst, Department of Research & StrategyMulti Commodity Exchange of India LtdE-mail: [email protected]

conditions in US, helped the rise in crude oil prices. Intermittingly though the price rise faced some checks largely on concerns over energy demand from emerging markets and release of downbeat Chinese economic data (HSBC/Markit China manufacturing Purchasing Managers Index). Overall oil prices continued to move north helped by a data release showing drop in US jobless claims - indicating improving labour market and strength in equities market supporting an upbeat outlook for energy demand. Meanwhile, world’s second largest consumer of oil, China, also showed high imports in oil for January. Further with series of winter storms striking US raised heating demand for oil and hence upside pressure on crude oil prices. Consequently, NYMEX crude oil futures moved up to the two-month high of USD 103.80 per barrel on February 19.

Following the high price, crude oil prices dipped due to concerns that an economic slowdown in China may dull the outlook for energy demand, as a data release indicated contraction in Chinese manufacturing sector. Rise in weekly crude oil inventories in the US also forced crude oil prices to recede. However, at the fag-end of the month of February, violent clashes in the Middle East and North African regions leading to shutting down of a major oilfield, El Shahara in Libya, increased supply concerns. Amidst this, MCX crude oil futures closed the month of February at USD 102.59 registering a rise of 4.2 per cent in two-month period.

Unlike the price rise seen in crude oil, futures prices of its two popular derivates i.e. heating oil and gasoline (on CME-NYMEX platform) registered change of 0.4 per cent and 0.1 per cent respectively in two-month period. On the other hand, the other major energy commodity natural gas futures (traded on NYMEX-CME platform) witnessed a rise of almost 9 per cent in its prices two-month period. Fall in US gas inventory levels, freezing temperatures throughout much of the United States amidst series of severe winter storms, buoying gas demand, helped the rise in gas prices. Significantly, NYMEX natural gas futures prices moved to USD 6.493 per mmBtu on February 24, 2014, the highest price since 2009. Later, by end of

the month of February, with winter nearing end, some rise in natural gas futures prices withered away.

In emission market segment on ICE-ECX platform, European Union allowances (EUA) futures as mentioned above, registered highest price rise amongst energy commodities at 45.3 per cent. The price rise was primarily due to optimism as European Parliament approved a proposal to fast track efforts to prop up prices. Lawmakers voted in support of a request from the European Commission to shorten the scrutiny period required before it can withhold the first of 900m permits from the market from 2014-16 to 2019-20. In other words, the measure known as ‘backloading’ will tighten the market balance significantly, after a period of abundant supply of emission allowances (EUAs) and dwindling prices. On the other hand, CER prices continued to move down, in the process registering a fall of 18.8 per cent (albeit on a low price base).

Lastly, ICE Rotterdam monthly coal futures prices moved down by 5.5 per cent in two month period of January-February 2014. Mild weather in Europe pulling down demand, weather outlook suggesting that the mild winter will go directly into a mild spring amidst prospects of improved supply availability from Colombia from April led to the fall in coal prices.

3.50

4.50

5.50

6.50

7.50

0.20

0.25

0.30

0.35

0.40

0.45

ICE-ECX CERs (Euro/tonne) - LHS NYMEX Natural gas (USD/mmBtu) ICE-ECX EUAs (Euro/tonne)

Source: Bloomberg

Futures price movement (January - February 2014)

(The views expressed by the authors are their personal opinions.)

www.oswindia.comOffshore World | 33 | February - March 2014

Over view of Pipeline Projects

No Projects Tit le R e q u e s t e d G a s Vo l u m e o r Transmitting Lines Capacity

T h e L a t e s t Status

Commencement Date

Gas –Sale Contracts 1 Turkey 7-10 Gas expor t has been launched since 2001 and has annually reached nearly 10 BCM from 2007

2001

2 A z e r b a i j a n g a s s w a p w i t h Nakhchivan

0/3-0/35 Exchange Operation is under way 2005

3 I r a n i a n g a s - A r m e n i a n electricity bar ter

1/1-2/3 The contract has been signed and the national G a s C o m p a n y u n d e r t o o k t h e e x e c u t i v e operations

2007

Gas-Purchase Contracts 1 Turkmenistan-Phase1 2-8 In progress -

2 Turkmenistan-Phase2 To 14 In progress Since 2007

C o n c l u d e d c o n t r a c t s a n d s u b j e c t t o b e expor ted

1 Pakistan 21/5 Gas Sale and Purchase Agreement signed 2013-2014

2 Swiss EGL 0/3-1/5 wi th in phase12-4 within phase2

G a s S a l e a n d Pu rc h a s e Ag re e m e nt s i g n e d operation Agreement signed

2010-20092012-2011

P r o j e c t s b e i n g negotiated

1 30 The negotiations adjoumed by Indian par ty 2013-2014

2 13/7 Term Sheet signed 2011

3 28 Term Sheet signed 2013

4 28 MOU init ialed and confirmed FA signed and Term Shett proposed

2013

5 8/6 Te r m s h e e t s u b m i t t e d b y t h e m i n i s t e r s entourage to Kuwaiti par ty

3 y e a r s e v e r s i n c e t h e contract

6 ---- M O U s i g n e d b y t h e I r a n i a n a n d Tu r k i s h m i n i s t e r s o f o i l a n d t G a s i n A n k a r a , Th e prel iminar y feasibi l ity studies carried out

-------

7 ---- Under consideration -------

8 5/5-13/7 MOU&CA signed 2015

news features

Iranian Gas Expor t through Pipeline

Gas Export Projects via PipelineOverview of Pipeline Projects

Iran holds the second largest gas reserves in the world with over 27.5 trillion cubic meters (TCM) of natural gas. The article explores the current projects of Iran’s Natural gas export statistics through pipeline routes to regional and global markets.

Hedayat OmidvarMember of IGU Marketing CommitteeHead of Communication Affairs with Science & Research Centers,Research & Technology Dept., National Iranian Gas CompanyEmail: [email protected]

www.oswindia.com Offshore World | 34 | February - March 2014

Persian Pipeline Project (Exporting Gas to Europe IGAT9)So as to posses a more contributive and par ticipator y role in potential markets those of European countries and more potently carr y out transactions in the realm of energy as one of the major suppliers of gas in this continent the construction of this gas in this continent the construction of this gas pipeline under the name of IGAT9 was brought into being. This pipeline ex tends 1863 km from Asaluyeh (South Pars Gas Field) to Bazargan border and the other pipeline routes namely Nabucco Pipeline and Persian pipeline can potentially expor t Iranian gas from there on. Given some anticipation into account this pipeline is to annually expor t 30-35 BM3. To sell this amount of gas some negot iat ions are under way with countr ies namely Greece, Austr ia , I ta ly, Germany, Switzerland and so are talks with France and Spain in the coming future. In view of the policies made, this Project is set to be designed and executed using the foreign investors capabilities and the domestic contactors.

Pipeline Project of Gas Transfer to AustriaThe project is to export gas to Austria via pipeline. This project intends to step inside the Nor thern and Western market of Europe as well as to contribute Nobbaco Consortium.

This project was launched in 2006 and the gas is to be delivered to Econgas Company after the execution of phases those of studies and pipeline construction.

Pipeline Project of Gas Transfer to Pakistan and India (IPI) The issue of exporting gas to India and Pakistan dates back to 1990. The tensions in between India and Pakistan made the project fail to noticeably proceed till early of the decade. National Iranian Oil Company embarked upon some studies backed by International companies so as to have a pipe construction route that best fits either through onshore, offshore, littoral lands or deep waters recognised.

In so doing, Australian B.H.P Company conducted the feasibility studies and upgrading in 2003 and the former in 2001 out of which onshore pipe construction was picked up as the superior alternative. Pursuant to that, National Iranian Gas Export Company announced its readiness to deliver gas in Pakistan and Pakistan-India border. The second course of

Pipeline Project of Gas Transfer to KuwaitThe agreement signed by the ministers of the two countries in 2000 gave bir th to a contract concluded to expor t gas to Kuwait via pipeline. Accordingly, having several course of talks concerned with the allocated gas fields, methods of investment, and the administration of feasibility studies held, the draft of the contract and buy-sell Term Sheet for the year 2004 got signed by the two par ties. The two sides - kept pursuing the talks in order to get all the ar ticles of the contract finalized. However, in view of the events those of the drastic changes in the structure of energy global price, disputes over the price formulae, governing rules, price revision mechanism and finally Kuwait’s refusal to stay on course, led the talks to be left dormant.

Pipeline Project of Gas Transfer to SwitzerlandThis p ipe l ine i s a f te r expor t ing gas to EGL Company in R omania , I ta ly and Switzer land wi th in t wo phases tota l ing 5 .5 BCM in one hand and consolidating Iran’s presence in European markets. This project was launched in 2006 and it was ordained that the contract be concluded after the condition of feasibi l ity study within the framework of the fol lowing table.

Project Specifications

Gas Feed South Pars Gas Field-IGAT9

Requested Volume Phase 1:0/3-1 BCM/YPhase 2:4 BCM/Y

Deliver y Location Bazargan Border

GAS Expor t Duration 25 Years


Gas Feed South Pars Gas Field-IGAT9

Requested Volume 5 BCM/Y

Deliver y Location Bazargan Bordre or Hub BaumGar ten

GAS Expor t Duration 25 Years

tri-lateral talks chasing the gas export to India and Pakistan commenced in 2003. Three companies partook in the talks those of National Iranian Gas Export Company representing iran, Inter State Gas Systems Limited representing Pakistan, Indian Oil Company Limited and Gas Authority India Limited representing India. price formulae finalised.

In view of the correspondence between the two countries and Kuwait’s letter issued on NIGEC’s comments over the agreed-upon Term Sheet, the second course of talks got started. In the second run of talks, while reconsidering the new formulae of gas price, Kuwaiti party was provided with the amended draft of the Term Sheet.

Gas Feed Assalouyeh

Requested Volume(Pakistan) 7/8 BCM/Y

Requested Volume(India) 10/9 BCM/Y

Delivery Location Border of Iran & Pakistan

Commencement Date 2013-2014


Gas Feed Assalouyeh

Requested Volume 3/1 BCM/Y

Delivery Location Rasolzoor in Kuwait

Gas Export Duration 3 years ever since the contract finalised

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Pipeline Project of Gas Transfer to OmanTh i s p ro j e c t a i m i n g at ex p o r t i n g g a s to O m a n v i a p i p e l i n e d ate s b a c k to a l m o s t s i x ye a r s a n d b e ca m e t h e s u b j e c t o f co n s i d e rat i o n f o r b o t h countr ies ever s ince. There a f ter, three agreements were s igned by the t wo par t ies in 2005 and 2006. These talks paral le led with the negot iat ions concerned with the expansion of K ish and Hengam gas f ie lds by I ranian of fshore Company ( I .O.O.C) and NIGEC with Omani o i l company regarding the feas ib i l i t y s tudies so as to t ransform mm3 of expor t gas to LNG. 30% of the l iquef ied gas belongs to I ran in return of the process ing fee. Due to some agreements over the pr ice of the expor t gas and the Kuwait i ’s low pr ice proposal made the ta lks dormant and then the second course o f ta lks began to reach a reasonable pr ice for both par t ies. The i ssues

Pipeline Project of Gas Transfer to BahrainA s p e r t h e f i n a l i s a t i o n M O U b e t w e e n t h e o i l m i n i s t e r s o f Te h r a n & B r a h i n , B a h r a i n w i l l r e c e i v e n e a r l y 2 8 m m 3/ d a y a n d w i l l i n v e s t n e a r l y 4 b i l l i o n d o l l a r i n p h a s e s 1 5 a n d 1 6 S o u t h Pa r s g a s f i e l d s in return.

Savex ProjectS a v e x p r o j e c t s t a n d i n g f o r S a v e t o E x p o r t p r o j e c t , w a s b r o u g h t i n t o b e i n g s o a s t o o p t i m i s e f u e l c o n s u m p t i o n a n d i n c r e a s e t h e e f f i c i e n c y o f t h e r m a l p o w e r p l a n t s . T h i s p r o j e c t a l s o a i m s a t e x p o r t i n g t h e s a v e d g a s a n d a b s o r b i n g i n v e s t m e n t u t i l i s i n g f o re i g n investors’ resources.

Domestic Necessities for Execution of Savex• Theever-decreasingvolumeofhydrocarbonresourcesandtheimpor tance

of it ’s optimum consumption.• Thetechnologytransferenceof modernpowerplants.• R e d u c i n g e c o l o g i c a l c o n t a m i n a t i o n s a n d

green house gases. • ThemountingenergycrisisandthegrowingglobaldemandforgasandLNG.• P r o g n o s t i c a t i n g t h e a s c e n d i n g t r e n d o f t h e a d d e d

v a l u e o f n a t u r a l g a s r e s o u r c e s a s c o m p a r e d t o o i l i n t h e decades ahead.

• Thenegativebalanceof powerproductionandconsumption inviewofthe growing domestic consumption.

Anticipation of Annual Revenue of Savex (Quote in 200$)• Intensifying the eff ic iency of the power plants result ing in saving 36

MM3 of gas per day.• Everymill ionBTUofgasis pricesat$12andtheconvergencecoeff icient

ever y cubic meter to thousand BTU equals 36.• 36MM3ofthegassavedx365daysx36coeff icientx$12=$5.6bil l ion


Gas Feed Kish Gas Field

Requested Volume 10/2 BCM/Y

Deliver y Location Sea Border of two countries

Gas Expor t Duration 2013


Gas Feed South Pars Phases 15-16

Requested Volume 10/2BCM/Y

Delivery Location Sea Border of Iran & Bahrain

Gas Export Duration 2013

namely Oman’s investment p lan in K ish f ie lds, t ransformat ion of I ranian g a s t o L N G , t h e e s t a b l i s h m e n t o f a I r a n i a n ¬ - O m a n i j o i n t c o m p a n y, p r i c e a n d t h e f o r m u l a e o f I r a n i a n g a s a r e a l l o n t h e t a b l e i n t h e s e ongoing ta lks.

Methods to Increase Output Per formance and Reduce Lass• Us ing Turbo expanders and producing elec tr ical energy in pressure

¬reduction stations.• Optimising gas turbines within gas-boosting stations at distribution

and expor t gas pipelines.• Optimising the design and the equipment of steam and gas turbines

in non-power plant industries.• Replacing the thermal power plants withmodern cycle combination

and steam power plants.

Activities Carried out in Savex ProjectAn agreement has been concluded and a joint group has been formed with some European companies so as to have arrangement made to in i t iate feasibi l i t y studies. The study phase of the projec t is expec ted to last 9 months. Once the study phase of the project gets terminated, the operational phase wil l get star ted.

gas in Pakistan and Pakistan-India border. The second course of tri-lateral talks chasing the gas export to India and Pakistan commenced in 2003. Three companies partook in the talks those of National Iranian Gas Export Company representing iran, Inter State Gas Systems Limited representing Pakistan, Indian Oil Company Limited and Gas Authority India Limited representing India. Manifold trilateral meetings have been run on the level of the counterpart deputies of the ministries of oil and energy accompanied with some work teams from the three countries which helped them get the price formulae finalised.


news features

LNG – Fuelling the Future

Source: Vision 2030, Natural Gas Infrastructure of India

Source: Vision 2030, Natural Gas Infrastructure of India Source: Vision 2030, Natural Gas Infrastructure of India

India’s Natural gas reserves are limited. As of end of 2013, India has 1354.76 billion cubic meters (BCM) of confirmed natural gas reserves.

Reserves of Natural Gas in India (BCM)

It is expected that domestic production in India is to reach 230.00 MMSCMD by 2029-30 against a projected demand of 746.00 MMSCMD. Keeping in view the scarcity of domestic gas gap of 485.9 MMSCMD, the article explains the natural gas consumption, the viability of using imported natural gas & RLNG for various industries, LNG trend dynamics, and economics viability of R-LNG in the country.

1100.99 1075.15 1054.58 1089.97 1115.27 1148.57 1278.06 1330.24 1354.76

2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3

Sector Wise Projected Gas DemandCurrentely, India is the 13th largest gas consumer (55 BCM) and 4th largest LNG importer globally. The natural gas demand is all set to grow significantly at a CAGR of 6.8 per cent from 227 MMSCMD in 2012-13 to 443 MMSCMD in 2019-20. Power and Fertiliser sector remain the two biggest contributors to natural gas demand in India and continue to account for more than 55 per cent of gas consumption.

Gas Demand (MMSCMD)

Sector 2012-13 2013-14 2014-15 2015-16 2016-17 2019-20

Power 86 104 122 139 157 202

Fertilizer 60 60 60 72 97 106

City Gas 15 16 17 18 22 36

Industrial 20 20 22 25 27 35

Petchem/Refineries/Internal

Consumption

38 40 42 44 47 54

Sponge Iron/Steel 7 8 8 8 8 10

Total Realistic Demand 227 248 272 307 358 443

Consolidated Natural Gas Supply Projection Development of unconventional resources of gas has been scare in India due to lack of data, low intensity of exploration, pricing regulatory policy and lack of domestic infrastructure & expertise. Hence, domestic natural gas production is unlikely to keep pace with the increasing demand. It is expected that domestic production is to reach 230.00 MMSCMD while pipelines will add only 30 MMSCMD to the supply by 2029-30 against a projected demand of 746.00 MMSCMD. A gap of 486 mmscmd (131 million tonnes per annum) is expected between demand and supply by 2029-30, representing an enormous opportunity for LNG.

The LNG Opportunity: Current Scenario The share of LNG in total natural gas consumption in India reached 25.5 per cent in FY12 and increased to 30 per cent in FY13. The total natural gas consumption in India in 2012-13 was 127.80 MMSCMD, in which RLNG contributed 41.60 MMSCMD (~32 per cent) of the total gas.

Source 2016-17 2021-22 2026-27 2029-30

Domestic Sources 156.7 181.6 210.6 230.1

Gas Imports (Transnational Pipelines)

0.0 30.0 30.0 30.0

Total Supply (MMSCMD) 156.7 211.6 240.6 260.1

Total Demand (MMSCMD) 378.7 517.7 655.4 746

Gap (MMSCMD) 222 306.1 414.8 485.9

Gap (MMTPA) (LNG Opportunity) 59.9 82.6 112.0 131.2

Sector Domestic Gas (MMSCMD)

RLNG (MMSCMD)

Total

Fertilizers 30.4 5.8 36.2

Power 31.0 8.4 39.4

CGD/CNG 6.7 7.3 14.0

Refineries 2.0 8.6 10.7

LPG 6.0 0.4 6.4

Petrochemicals 3.5 1.4 4.9

Sponge Iron/Steel 1.1 3.5 4.6

Court Mandated Consumers 1.0 2.9 3.9

Small Consumers 2.4 0.0 2.4

Other Users 0.8 3.3 4.0

Internal Consumption in Pipelines 1.5 0.0 1.5

Total 86.4 41.6 127.8

India LNG Consumption (2012-13)


Source: Petronet LNG

- Rakesh Roy

LNG Consumption Industry-wise Currently, Refineries are the largest consumers of LNG in India, accounts for 20.8 per cent as a cheaper substitute of naphtha used in the production of hydrogen. The fer tiliser sector accounts for 20.1 per cent of LNG consumption used as a cheaper & more alternative for naphtha.

City gas distribution (CGD) is the third largest consumer of LNG with a 17.6 per cent share. The power sector accounts for 14 per cent of LNG con-sumption and others like Petrochemicals, LPG, Sponge Iron/Steel, etc accounts remaining 27.5 per cent of LNG consumption of the countr y.

India’s Re-gasification CapacityCurrently the natural gas demand far exceeds domestic supply in India and the situation is likely to prevail in future as well. Given that there are very few new domestic sources available, additional demand is likely to be catered through RLNG in future or through transnational pipelines in absence of any large domestic discoveries. As of December 2013, LNG re-gasification capacity of India is 23.00 MMPTA, of which 10.00 MMPTA at Dahej, 5.00 MMPTA at Hazira, 3.00 MMPTA at Dabhol and 5.00 MMPTA at Kochi.It is expected to reach 47.50 MMPTA by 2016 and 62.50 MMPTA by 2020 with the capacity expansion of existing and the planned & possible LNG terminals on India. India LNG Import Profile (2012-13)

In the year 2012-13, India imported total 13.7 MMPTA LNG & Qatar is the largest exporter of LNG to India contributing 80 per cent (10.9 MMPTA) of the total.

Country Imports (MMPTA) % Share

Algeria 0.4 3%

Egypt 0.6 4%

Nigeria 1.4 10%

Qatar 10.9 80%

Yemen 0.4 3%

Total 13.7 100%


news features

It is projected LNG import is all set to reach from 44.6 MMSCMD by 2012-13 to 214.00 MMSCMD by 2029-30.

44.6 143.0 188 214 214


LNG Imports (MMSCMD)

Location Capacity (MMPTA) Owned By

2013 2016 2020

Existing

Dahej 10.00 15.00 20.00 Petronet LNG

Hazira 5.00 5.00 5.00 Shell & Total

Dabhol 3.00 5.00 5.00 GAIL

Kochi 5.00 5.00 5.00 Petronet LNG

Total 23.00 30.00 35.00

Under Construction

Total - - -

Proposed

Gangavaran 5.00 5.00 Petronet LNG

Mundra 5.00 5.00 Adani/GSPC

Ennore 5.00 5.00 IOCL

Total 15.00 15.00

Possible

West Coast 2.50 Hiranandani

Kakinada 5.00 Shell or GAIL

Pipavav (FSRU) 2.50 5.00 Swan Energy

Total 2.50 12.50

Grand Total 23.00 47.50 62.50


news features

India Awards 46 Blocks in NELP-X

Source: Directorate General of Hydrocarbons (DGH), Govt of India Compiled by Rakesh Roy

The oil ministry has zeroed in on 46 onshore and offshore hydrocarbon blocks which have auctioned in the tenth round of New Exploration and Licensing Policy or NELP-X. The blocks which have been finalised include 17 onland, 15 shallow water and 14 deepwater in 13 prospective sedimentary basins of India for exploration of Oil & Natural Gas, covering an area of 166,053 sq km. These 46 blocks are falling in basin of Gujarat-Kutch, Gujarat- Saurashtra, Mumbai, Kerela-Konkan, Cauvery, Krishna Godavari, Mahanadi-NEC, Andaman, Bengal, Punjab plain, Rajasthan, Cambay & Deccan Syneclise. The 46 blocks have already received statutory clearances. The blocks on offer are lower than the earlier indicated number of 86.

Total Area : 166,053 Sq.kmDeepwater : 94,364 Sq.kmShallow water : 47, 745 Sq.kmOnland : 23, 944 Sq.km

14.42%

28.75%56.83%

www.oswindia.comOffshore World | 41 | February 2014 - March 2014

Lowdown on Indian Refining Sector

Since the deregulation of sector in 1998, India’s refining sector has witnessed paradigm shif t and India has gained signif icant prominence in the global market as net expor ter petrochemicals.

While giving a lowdown on the country’s refining sector, L N Gupta, Secretary Oil Industry Development Board, Ministry of Petroleum & Natural Gas, Government of India acknowledged the last decade as the period of fastest growth for India’s refining sector and there has there has been a sizable increase from 62 MMTPA in 1998, country’s refining capacity stood at 215.06 MMTPA by the end of 2012.

Indian PSUs star ted phased capacity addit ion to meet the growing product demand with emphasis on upgradation of product qual i t y and bottom of barrel along with enhancement of complexity factor.

Currently, Indian public sector companies comprise approximately 63 per cent of countr y ’s total ref ining capacity while 37 per cent of capacity i f owned by private sector companies. By the end of 2013-14, with the Paradip & Cuddalore grass root ref ineries, countr y ’s ref ining capacity is projected to reach around 236 MMTPA which is expected to increase to 333 MMTPA by 2022.

Currently India has surplus refining capacity of 60 MMTPA which is equivalent to 38 per cent of i ts consumption. This sector has grown at 5 per cent CAGR over the last couple of years and accorded impressive expor t earnings of USD 59.3 bil l ion during 2012-13.

Amidst Highly Volatile Markets Crude prices saw maximum swing during 2008 when per day barrel rate peaked to al l t ime high. Globally, over 70 ref ineries have closed on account of fai l ing to maintaining high profitabil ity so far.

World over, refiners are walking tight rope for maintaining the Gross Refining Margins (GRM) in the era of highly volati le markets and f luctuating crude prices. Repor t by McKinsey & Company suggests notes that Indian ref iners need at least USD 5-6 per barrel to cover the operating cost and an additional USD 7-8 per barrel to generate an adequate return on capital. Energy is pivotal issue for the ref iners since it is the largest component of OPEX and accounts for average of 34 per cent in America, 58 per cent in Europe, 69 per cent in Asia Pacif ic and 81 per cent in India. As a par t of long term sustainable growth strategy, ref iners are using cheap petcoke to produce power taking several energy saving measures to opt imize energy usage. In addit ion to carr ying out the yield and optimization studies across hydrogen units, the refiners are emphasizing on adoption of energy savings technologies, deriving cheap energy out of petcoke, low level heat recover y and improving power generation eff ic iency. Petcoke gasif ication using CBFC technology for power generation has gained notewor thy momentum as ref iners have been able to achieve remarkable decl ine in the energy costs hence improving GRM. Deploying CFBC technology to produce power is one of the common routes

Marketing Insight

From total capacity of 62.8 MMTPA in 1998, Indian Refining sector has increased three folds to 215.6 MMTPA at present and will increase to 310 MMTPA by the end of 12th Five Year Plan in 2017. Industry experts deliberated over the Emerging Trends & Technologies in the Indian Refining Sector during the recently convened “International Refining Conference” organised during the Oil & Gas World Expo 2014. We bring you the lowdown on emerging technologies & trends in Indian refining sector based on the deliberations that were organised during one and a half day meet. Mittravinda Ranjan Reports...

Refiner No. of Refineries Capacity as on 01.10.2012

IOC Group 10 65.70

BPCL group 4 30.50

HPCL group 3 23.80

ONGC/MRPL 2 15.06

Total PSU 19 135.06

RIL (Pvt.) 2 60.00

Essar (Pvt.) 1 20.00

Total Private 3 80.00

Total 22 215.06

www.oswindia.com Offshore World | 42 | February 2014 - March 2014

which involves typical investments of approximately ` 700 crore for 2X300 TPH CFBC boilers , 2X37 MWH STGs result in signif icant saving in power and steam cost which results in improving GRM of USD 1.3 per barrel and fuel savings of ` 2.4 crore per day.

R e f i n e r s a re a l s o a d o p t i n g va r i o u s ro u te s to i m p rove G R M s r i g ht f ro m enhancing capabilities to process different crude mixes such as - High Sulphur Crudes, Heavy Crudes, High Acid crudes, Unconventional Crudes etc. HMEL, BORL and PDRP ref ineries are designed for 100 per cent HS crude. Refiners are fur ther widening the produc t basket through cont inuous addit ion of oppor tunity crudes by sett ing up ref ineries with higher complexit ies.

The SaviourChanging market dynamics are dr iv ing the sh i f t in technology t rends , some of them include - preference of HCU over FCC, use of hydroprocessing a n d m i l d h y d r o c r a c k i n g t o m e e t p r o d u c t d e m a n d & q u a l i t y , R F C C operation to shift towards petrochemical mode , reforming to shift towards h i g h o c t a n e o p e r a t i o n , U s e o f A l k y l a t i o n & D i m e r i z a t i o n t o m e e t M S q u a l i t y, H y b r i d s e p a r a t i o n s ( M e m b r a n e s / D i v i d e d Wa l l C o l u m n f o r l i g h t e r p r o d u c t s ) , M u l t i f u n c t i o n a l R e a c t o r s ( C a t a l y t i c D i s t i l l a t i o n U n i t s ) , a n d H yd ro g e n G e n e rat i o n Pro ce s s ( S i n g l e St a g e ) e tc . to n a m e a few.

Diesel & gasoi l leads the pack in ref ined produc t demand and maximum demand wil l come from the BRIC nations. Indian ref iners have consistently improved the processes in accordance with the auto fuel policy and introduced BS IV auto fuels in 13 major c it ies in 2010 which wil l be ex tended to 50 addit ional cit ies by 2015.

However the refiner y - petchem integration is one of the most preferred routes for the ref iners. Complete integration of ref iner y, aromatics & petrochemical complex with super-site concept to sustain global competit iveness. Addit ion of value added specialty products widens the product slate and enables the ref iners to balance the oi l and petrochemical products in l ine with market oppor tunit ies and leads to better profit real ization.

Lowdown on the Future

• Bottomupgradingtodistillatesorvalueaddedproducts• RefineryResiduetocleanfuel• HydrogenProductionfromPetcoke• AdvancedProcessControl&Optimization• UpgradationofFCCstreamstoPetrochemicalfeedstocks• ImprovingefficiencyofLPGStoveby5-10%• Wastetofuelusingrefineryspentcatalyst• Non-HDSbaseddesulphurizationtechnologies• Bio-refining• Catalyst/Additivedevelopment• Newprocessdevelopment• Scale-upofmultiphasereactors• Separationtechnologies(ProgressiveDistillation,DividedWallColumn)• Processintensificationforlargescaleapplication• AlternativeEnergySource• Developmentofhighperformancelubricants• Developmentoftechnologyforfuelfromplastic• CoaltoLiquid,GastoLiquid(GTL),CO2 Capture Technologies

Gazing into the Cr ystal Ball Future refineries would be high capacity, fully automated, integrated & energy e f f i c ient, ZLD, env i ronmenta l compl iance f rom carbon capture. R e f iners wil l be compelled to maintain ref ining margins above benchmark ref ining margins which can only be achieved through technological inter ventions for meeting product quality with minimum hydrogen consumption, processing heavy crudes optimizing ref iner y costs, emission control and exploring ways to curb water footprint.

Indian refiners have significantly invested in capacity increase and reasonably in research & development and are geared up to play a notable role in the international market. However in the changing scenario l ike availabil ity of cheap feedstock l ike shale gas in the US, Indian refiners could find themselves in the t ight spot lest they address the energy issues to cut down the overall OPEX and maintain the GRMs.

S M Vaidya, D eput y Genera l Manager, Panipat Ref iner y & Petrochemical Complex , IOCL reiterated A T Kearney’s statement based on global ref iner y study, “With one in f ive oi l ref ineries expected to cease operations over the nex t f ive years, choosing the right operating model and level of integration wil l be crucial for sur vival and sustained profitabil ity”.

Marketing Insight

www.oswindia.comOffshore World | 43 |February-March 2014

Moily Picks Saurabh Chandra as Petroleum Secy

New Delhi: Petroleum Minister M Veerappa Moily has managed to have the final say in deciding the new Petroleum Secretary. Based on his choice, the Union government has approved the name of Saurabh Chandra as the replacement for Vivek Rae. Chandra is a 1978-batch officer from the Uttar Pradesh cadre, currently serving as Secretary, Department of Industrial Policy and Promotion.

He becomes the topmost officer of the petroleum ministr y at a time when it is to launch two key initiatives - the revision of domestic natural gas prices due from April 1, and the 10th round oil and gas block auctions under the New Exploration Licensing Policy (NELP).

India Crude Import from Iran on RiseNew Delhi: Aftermath the easing of sanctions against Iran following a US-EU deal on Tehran’s nuclear programme, India has started doubling its monthly crude purchase from Iran, with imports about 3 million tonnes (mt) in January 2014. India will also build a container terminal at the Chabahar port in Iran at a cost of USD 174 million to handle the extra load of tankers and container ships carrying oil to India.

India

India to Drive Global Oil Demand by 2020: IEA

Subsidy Groan for PSUs in 2013-14

ONGC Makes Four Discoveries in 3Q of FY14

News Delhi: India is set to become the biggest driver of global oil demand by year 2020, according to International Energy Agency (IEA). In a report, IEA stated that the growth in global oil demand is expected to remain moderate due to global economic weakness as well as more fuel-efficient technologies. Supplies are likely to get a fillip from shale gas & oil and deep & ultra-deep drilling campaigns. This means the world is likely to have a stable pricing regime in the crude oil in next 5-7 years. India needs to utilise this period in ensuring stable and long-term energy security.

India’s haphazard policy making in the fields of subsidies, strategic petroleum reserves, natural gas sourcing, pipeline infrastructure, NELP etc has left it susceptible to energy shocks, the report said. The report also said that the Indian government’s policy to encourage exploration and exploitation of shale gas would be a distant dream due to land acquisition pose key hurdles in exploiting shale reserves in the country. As a result, India will continue to depend on imported energy - be it crude oil or liquefied natural gas (LNG) - in the foreseeable future.

New Delhi: ONGC’s share of the subsidy burden in 2013-14 is likely to touch 34 per cent from 31 per cent last year, while Oil India’s share may go up to 5.5 per cent from 5 per cent. These two upstream oil companies are likely to bear more of the petroleum subsidy burden in 2013-14 than initially estimated. This is because the Government has restricted its share of the burden to 60 per cent, the oil marketing companies (Indian Oil, HPCL and BPCL) are not likely to contribute, and GAIL’s burden has been capped. At ` 85,480 crore, the revised estimate of the Government’s petroleum subsidy for 2013-14 works out to 60 per cent of the total estimated petroleum subsidy for the year (` 1,43,000 crore). This is the same proportion as last year.

Due to the rupee’s weakness since June 2013, under-recoveries on fuel sales have been significantly higher than envisaged at the beginning of the fiscal. The oil marketing companies, which incur the under-recoveries in the first place, are likely to be spared from subsidy sharing to prevent them from slipping into losses.Ergo, the remaining 40 per cent of the burden, once again, will fall on the upstream companies (ONGC, Oil India) and GAIL. But GAIL’s burden for 2013-14 has been restricted to ` 1,400 crore. This means more burden on ONGC and Oil India.

Mumbai: ONGC has made Four (on-land: 3, offshore: 1) new oil & gas discoveries during the Third Quarter of 2013-14. Exploratory well MBOS51NAA#1 in NELP block MB-OSN-2005/1, Western offshore basin was drilled to a depth of 3,385 m. Interval 2,549.5 to 2,555 m in Tertiary Daman formation on testing through produced gas 250,107 m3/day and condensate 255 barrels/day through 3/8 inch choke. Another interval 2,515.5-2,526.5 m also in Tertiary Daman formation on testing through produced gas 209,734 m3/day and condensate 180 barrels/day through 3/8 inch choke. This is the 2nd discovery in this block after earlier notified discovery MBOS51NBA#1. These discoveries in close vicinity of C-37/ C-39, B-9 areas will enhance the overall gas potential of the area.

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In April-December 2013, India imported 6.88 mt (metric tonne) of crude, or an average of 1.15 mt a month. The jump in crude imports could eventually raise India’s oil imports from Iran back to levels prior to sanctions of 21 mt annually. India will end 2013-14 by importing about 11 mt of crude. If sanctions had continued, this would have been reduced by another 15 per cent.

Saurabh Chandra, Petroleum Secy, MoPNG

Indian PSUs’ Gas Reserves at Mozambique Raises Mumbai: Gas reserves in Mozambique’s Rovuma basin have been upgraded to 45-70 trillion cubic feet from 35-65 tcf where Indian firms hold a 30 per cent stake. ONGC has invested USD 4 billion in the project. BPCL, which also holds a stake along with Oil India, informed the stock exchanges that Anadarko, the operator of the block announced this month that reserves estimates had been scaled up. The field is expected to ship out its first LNG cargo in 2018. ONGC Videsh Ltd (OVL) bought 16 per cnet in this project for USD 4 billion, Oil India took another 4 per cent for close to a USD 1 billion. State run fuel retailer BPCL already owns a 10 per cent in this project. The gas reservoir is seen as the third largest potential producer of liquid gas after Australia and Qatar.

www.oswindia.com Offshore World | 44 | February-March 2014

New Delhi: With India slated to become the third largest energy consumer in the world by 2020, B N Talukdar, the newly appointed DGH, has called for creating a more investment fr iendly environment to produce more oi l and gas in the countr y.

He said that the countr y have to create more investment fr iendly environment, enable suitable regulations in place so that a much

more vibrant domestic energy sector evolves, in his f i rst message since taking over as Director General of Hydrocarbons. He also added that we have to think of incentivizing the E&P companies for developing and applying advanced technologies necessar y to explore, develop and produce energy to meet the growing demand of the progressing nation. He said that only 7 sedimentar y basins out of a total 26 basins in the countr y are on production today. There is a big challenge lying before us to explore for oi l and gas in al l the basins within a st ipulated t ime frame so that maximum numbers of basins are put on production to reduce the huge gap between the demand and the indigenous production in the countr y.

New DGH Emphasises on More Investor Friendly Environment

NIO to Collect Geophysical Data of KG Basin

HPCL to Acquire Australian Gas fields

Iran Needs More Bank Accounts to Export Crude to India

Two Key Mins had Opposed Gas Price Hike Tripura Power Project Finally to Get Gas

Vishakhapatnam: Oil and Natural Gas Corporation (ONGC) has been awarded a project worth ` 17.94 crore to collect geophysical data from its oil fields in the Krishna-Godavari basin to National Institute of Oceanography (NIO), a constituent laboratory of the Council of Scientific and Industrial Research (CSIR).

The project is being implemented by a joint team of scientists both from CSIR-NIO Regional Centre at Vishakhapatnam and Goa. VSN Mur ty, Scientist-in-Charge & Principal Scientist, NIO, Vizag, said that CSIR-NIO wil l carr y out sur veys involving multi-beam bathymetr y, magnetic, high-resolution sparker. I t wil l also determine water column temperature and sal inity up to a depth of approximately 900 m. The data wil l help ONGC in laying pipelines for transpor ting oil and gas from their G-4, D and E oi l and gas f ields, and the development of other offshore production faci l i t ies.

New Delhi: Prize Petroleum Co, the upstream arm of state -run ref iner Hindustan Petroleum Corp Ltd ( HPCL), has signed an agreement with Austral ian exploration f irm AWE to acquire minority stakes in two gas f ields and a gas infrastructure faci l i ty for 85 mil l ion Austral ian dollar.

Prize Petroleum will acquire 11.25 per cent stake in T/L1 license that includes Yolla producing field and purchase 9.75 per cent stake in T/18P permit including Trefoil development field in Australia. The shallow water fields are located the Bass basin between mainland Australia and Tasmania. Origin Energy is the operator of the fields where AWE and Toyota Tsusho are major par tners.

New Delhi: To increasing trade, especially crude import from Iran, India needs to allow Iran to open accounts in banks other than UCO Bank and from all the major port cities. Aftermath the Iran deal with the world powers eased the way import crude from Iran, but still not very clearly spell out the procedures in case of insurance cover for vessels carrying Iranian cargo to and from that country.

Two Iranian ship under writers (Kish P & I Club and Moallem Insurance Co) have been given six months ex tension by the Director General of Shipping (DGS) from 28th December 2013, while asking for a ` 2,300 crore bank guarantee in rupees to pay for damages in the event of a mishap occurring in the Indian waters. I ran has sought some more t ime to resolve this issue.At the moment, the National Iranian Tanker companies l ike Hafiz Dar ya Shipping Lines and Safiran Payam Dar ya Shipping Lines carr y crude to India. I ranian supplies of crude fel l to 13.3 mil l ion tonnes (mt) in 2013 against 18.1 mt in the previous year and is l ikely to touch only 11 mt by March 2014. At the moment, Iran maintains a rupee account with UCO Bank in Kolkata from where Indian exporters are paid against their shipments of various goods. With the relaxed condition of the sanction, Iran feels that trade will increase and to facilitate easy payments to exporters in India, it needs to operate from more banks in addition to UCO Bank in Kolkata. This is not an unfair or impractical demand, and the Ministry of Finance must immediately permit the opening of accounts with banks of their choice operating from all the major port cities like Mumbai, Mangalore, Cochin, Chennai, Vishakapatnam, Paradip and Kolkata, in addition to other cities that they may choose. In any case, almost all banks are government-owned, and Ministry should not waste time in meeting this reasonable request.

New Delhi: The power and fer tiliser ministries had opposed the gas price hike, cited that a hike would result in a huge financial burden for the sectors that are among the main users of gas. The key two ministries, in their obser vations to Rangarajan committee, had made it clear that the cost of raising gas prices would be enormous on these two sectors. The increase from USD 4.2 per unit to 8.4 per unit would put the financials of gas-based power plants under strain and according to some estimates the burden could be as high as ` 30,000 crore annually. The burden on the fer tiliser sector would be an additional ` 10,000 crore as subsidy.

Mumbai: State-owned ONGC has finally agreed to supply natural gas to the 101-MW capacity Monarchak power plant that is being set up by government-run NEEPCO in western Tripura. ONGC plans to start supplying gas to Monarchak power plant from this year end and need seven to eight months to complete the technical works to provide the gas,” said Oil and Natural Gas Corporation (ONGC) Group General Manager V P Mahawar. The state-run North East Electric Power Corporation (NEEPCO) is setting up 101 MW capacity power project at Monarchak in western Tripura, 70 km south of Agartala, at a cost of ` 9.50 billion (nearly USD 150 million).

B N Talukdar, DGH, GoI


New Delhi: India became the third-largest oil importer in the world overtaking Japan in import volume, behind China and the US. In the first nine months of 2013-14, India had imported a little over 3.8 million barrels of crude oil a day.

The International Energy Agency (IEA) estimates India will become the world’s largest oil importer by 2020 against the view of Indian government that the country will have achieve energy sufficiency by 2030, making imports unnecessary. India’s oil consumption will rise inevitably as its economy grows larger. By the 2030s, India will need about eight million barrels a day, going by expected GDP and population growth. As of now, India produces slightly less than 0.5 million barrels of crude a day and will have ramping up domestic production 16 times more in the next 15-20 years then that will border on the miraculous. It is also difficult to imagine an energy substitution process that drastically reduces the need for crude. This would require major technological breakthroughs.

Most likely, India’s import dependency will rise substantially, to around 95 per cent of consumption. This is likely even if domestic sources are tapped efficiently; unconventional shale and coal-bed-methane are developed; massive substitution results via renewable, etc.

Most First World nations are net oil importers. None of the importers offer subsidies on a commodity they must import. All ensure fuels are priced at market prices and most add punitive taxes to ensure there isn’t wasteful utilisation. Indian policy should have gone the same way. There should have been an attempt to empower Indian oil and gas explorers and producers. Policy should also be designed to encourage consumers to be as frugal and efficient as possible.

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Energy Sufficiency by 2030 a Distant Dream for India

FinMin Pitches to Bring DGH under Budgetary Funding New Delhi: To make more professionalism and objectivity to the functioning of Directorate General of Hydrocarbons (DGH), the upstream oil regulator, the Finance Ministr y has pitched for its direct budgetar y funding and consequent statutor y status.

I f the move wil l get sanction from cabinet, the DGH wil l have to depend on the f inance ministr y for funds, instead of the petroleum ministr y, to which it is currently attached.

The ministr y wrote to Oil Ministr y call ing for statutor y status to DGH as it per forms sovereign functions that are technical in nature. The ministr y feels that rather than being funded by the Oil Industr y Development Board (OIDB), the DGH should be funded through the government’s own budget as is the case with other independent regulator y authorit ies.

The oil ministr y has responded that it was in favour of maintaining status quo and is awaiting fur ther feedback from the f inance ministr y. Sources say the oi l ministr y ’s f inance wing is in favour of the f inance ministr y proposal, but the exploration wing wants to maintain status quo.

If funded through the budget, the DGH wil l be required to form a board of directors and appoint professionals in key posit ions. Currently, Oil and Natural Gas Corporation (ONGC) and Oil India (OIL) f i l l up most of the top posit ions in the regulator.

New Fuel Efficiency Norms to Minimise Oil Impor ts New Delhi: The Bureau of Energy Eff ic iency had calculated that the new fuel eff ic iency standards from 2017 would help the countr y reduce oi l consumption by 2.22 mil l ion tonnes of oi l equivalent (mtoe) as compared to the business as usual scenario by 2017 and 10.5 mtoe by 2022.

The fuel eff ic iency norms are par t of the ‘demand management’ that the government had professed for years in order to regulate the volume of oi l impor ted. It also feeds in to the Energy Eff ic iency mission under the National Action Plan on Cl imate Change.

The sett ing of standards for fuel eff ic iency of appliances and automobiles is usually preceded by mandator y labell ing of the products to ensure consumers are informed. But in the case of cars, the labell ing was opposed strongly with the industr y instead promoting its own parallel scheme.

With the standards being forced through, the labell ing is expected to be nex t on the anvil. Labell ing would enable the potential buyers to see where each model of the car in the market stands in comparison with other options in the same weight range.

Alongside, sources in the ministr y said, there would be a need for opening up the data on testing of vehicles for mileage and other related numbers to public scrutiny to also build confidence in the consumers.

Right Pricing Needed for Energy Security: Ex OilSecNew Delhi: As the countr y impor ts 75-80 per cent of crude oil and is impor ting more gas and more coal despite having its own reser ves, you have to l ink the oi l & gas price with international prices, said Vivek Rae, Former Oil Secretar y to justi fy the gas price hike by saying getting pricing right for oi l and gas is the key to attaining energy security.

He said that i f you run a regime where the domestic prices are ar t i f ic ial ly suppressed and get lower than international prices, i t ’s a huge penalty on domestic production and huge burden on f iscal deficit.

India, he said, cannot buy oi l at USD 110 from international markets and sell i t at USD 50 to consumers and hope to sur vive. “Sooner or later you wil l go bankrupt.”

Domestically produced natural is currently priced at USD 4.2 per mil l ion Brit ish thermal unit while the countr y pays USD 16 for impor ting the same from abroad. From Apri l, al l domestically produced natural gas wil l be priced at an average of international hub price and cost of impor ting LNG into India. Rates according to this formula are l ikely to jump to USD 8 from current USD 4.2 per mmBtu.

“So i f you are impor ting this gas, you are paying USD 16, but i f you are producing here you get USD 4. So for an Indian entrepreneur ( it is prudent) to invest in Africa or Austral ia or Latin America, and bring that gas in India at USD 16,” he said. “It (domestic price) is a huge penalty to invest domestically.”


New Delhi: D K Sarraf, the New Chairman and Managing Director of ONGC, known for his overseas seal deals to the energy sector during his two-year tenure as managing director of ONGC Videsh Ltd (OVL), the oversea arm of ONGC. Now, as the new boss of the Oil & Natural Gas Corporation (ONGC), the parent of OVL, he expects the unit to drive growth at the company. Sarraf took charge as Chairman and

ONGC’s New Chief Bets on Overseas Growth Drive

UAE, India Tie up to Set up Strategic Petroleum Reserve New Delhi: In a bid to fur ther strengthen economic relations, India and the United Arab Emirates (UAE) have agreed to cooperate for sett ing up a strategic petroleum reser ve in India. Regarding this, top leaders of the two countries discussed the possible cooperation in India-UAE High Level Joint Task Force on Investments in Mumbai. The meeting was co- chaired by India’s Commerce and Industr y Minister Anand Sharma and chairman of Abu Dhabi Crown Prince Cour t Sheikh Hamed bin Zayed Al Nahyan.

The joint task force was established in Apri l 2012 as a platform to address mutual issues associated with exist ing investments between the two countries and to promote and faci l i tate cross-border investments. More than 30 government and private sector representatives from India and the UAE par ticipated at the meeting. During the meeting Sharma underl ined India’s status as a major destination for foreign investments and the oppor tunit ies that exist for the UAE, especial ly in infrastructure areas such as roads and highways, power and uti l i t ies, c ivi l aviation, por ts, renewable energy and urban infrastructure.

He also highlighted India’s desire to par ticipate in the hydrocarbon sector in the UAE, especial ly in the upstream petroleum sector, according to a statement released here by India’s commerce and industr y ministr y. Sharma said India sees greater oppor tunit ies for UAE investors as strategic par tners in the countr y ’s growth stor y.

Managing Director of ONGC from his predecessor Sudhir Vasudeva. Sarraf said his priorities to bring the promising block in the Krishna Godavari (KG) Basin to production. This deep-water block lies North of the basin next to Reliance Industries KG-D6 block.

Sarraf said the ONGC block has reserves of roughly two trillion cubic feet of gas and 117 million metric tonnes of oil. “We are expecting peak production of 25-30 mmscmd gas and 70,000 barrels of oil every day.”

IOCL to Acquire Stake at LNG Terminals Mumbai: IndianOil Corporation Ltd (IOCL), the public sector oi l giant, plans to acquire stakes in l iquefied natural gas (LNG) terminals at Mundra and Dahej in Gujarat and Dighi in Maharashtra, according to A K Marchanda, Executive Director - Business Development, IOCL.

IOC is looking at a 25 per cent stake in the ` 5,200- crore LNG project in Mundra, which is being set up by Gujarat State Petroleum Corporation (GSPC). In Dahej, Petronet LNG Ltd, India’s largest impor ter of l iquefied natural gas (LNG), operates an LNG terminal with a capacity of 10 mil l ion tonnes a year, which is expected to increase 15 mil l ion tonnes at an estimated cost of ` 2,950 crore by end-2016. The 8-MT LNG terminal at Dighi por t in Maharashtra is being set up by Mumbai-based Hiranandani Group.

IOC is in talks with three foreign companies for the proposed ` 4,512- crore LNG terminal project at Ennore; i t is also looking for shell gas in the US and other countries. Marchanda said the project has got the environment ministr y ’s clearance and the tender process wil l commence soon.

IOC has also signed an init ial deal with Dhamra Por t to build a f ive -mill ion-tonne -a-year LNG plant in eastern Odisha with an investment of around ` 5,000 crore. It could annually use 2.5 mil l ion tonnes of LNG from the Odisha terminal for its planned 300,000 barrels a day Paradip ref iner y and its exist ing Haldia and Barauni ref ineries, said Marchanda.

Kuwait Petroleum Eyes for Stake in Paradip RefineryGujarat Withdraws Approval for NELP-X BlocksNew Delhi: Kuwait Petroleum Corp (KPC) is in talks with Indian Oil Corp (IOC) for buying a stake in the state - owned f irm’s ` 29,777- crore Paradip ref iner y and a proposed petrochemical complex. IOC, which wil l star t commissioning the 15-mill ion-tonne -a-year ref iner y at Paradip, is wil l ing to offer no more than a 26 per cent stake in the project. The ref iner y has been built to process at least 40 per cent of toughest, heaviest and the dir t iest crudes l ike Maya of Mexico which are cheaper than the cleaner and easier varieties available from the Middle East.

The refinery will have a Nelson Complexity Index of 13, the highest in the world.The project will have to be spun off into a separate company if Kuwait is to participate in it. IOC plans to set up a ` 3,150 crore Polypropylene unit adjacent to the refinery.

New Delhi: In a major setback to oi l and gas block auction under 10th round of New Exploration Licensing Policy (NELP), the Gujarat Government has withdrawn clearance for the 9 areas fal l ing in the state, cit ing revenue sharing distribution between Center and State. Gujarat wants a share of revenues that the Centre wil l earn from the oi l and gas produced.

This share of the Centre’s revenue is addit ional to the royalty at the rate of 12.5 per cent of price real ised on the sale of crude oil and 10 per cent for natural gas that currently f lows to the state government. NELP-X auction is to be held under a production-linked revenue sharing model wherein oi l companies would have to pay the Government an agreed amount, depending on the level of output, and not on the investment in the exploration block.

D K Sarraf, Chairman and Managing Director, ONGC


New Delhi: Vijay Kelkar, Chairman of the expert panel on energy security, has stuck to his position that the existing regime for oil and gas contracts that governs oil and gas fields including Reliance Industries Ltd’s KG-D6 block should continue, and shrugged off allegations that parts of his report were plagiarised from a presentation from the Association of Gas and Gas Operators (AOGO).

Kelkar said the committee had requested AOGO to provide data and analysis of issues that affect the sector. These were included in its interim report, which was submitted to the government in January. The committee has also been accused of going beyond its terms of reference and making recommendations on what the contractual regime should be. In the existing system, the operator of a field first recovers the development cost and the government gets its share later.

The oil ministry had initiated a cabinet proposal to change this and adopt the system of revenue sharing, where the government gets paid a part of the sales proceeds the moment production starts. The change was proposed because in the revenue-sharing system, the government is not concerned about possible cost inflation by a contractor, and there would be no scope for controversies such as the one surrounding RIL’s KG-D6 block, where the company has been accused of overstating costs. The company has been penalised for spending excessively on infrastructure, which turned out to be surplus after gas output fell sharply.

India Agrees to Pay for Crude Oil on Iran’s Currency Choice

Israel Renews Offer to India to Explore Gas

India, Saudi Arabia to Deepen Energy Partnership

New Delhi: India has agreed to clear the pending crude oil payments of over USD 3 billion in a mode of currency of Iran’s choice. These pending bills are for the period starting February 6, 2013, when the Turkey route of payment for oil sourcing was halted following the Western sanctions on Iran.

Following the Western sanctions on Iran, India had put in place a rupee payment mechanism which allowed it to pay for 45 per cent of oil purchase in its local currency. The mechanism has so far been successful with very little money lying idle in Iran’s Rupee account held with UCO Bank.

India’s exports to Iran have almost doubled to USD 4.2 billion in the first 10 months of the current fiscal compared with USD 2.4 billion in the same period last fiscal. Also, India expects to buy 11 million tonnes of crude oil from Iran in 2013-14 and similar volumes in the next fiscal.

During the April-January period of the current fiscal, India imported 8.47 million tonnes of crude oil from Iran. Imports from Iran have fallen from 21.20 million tonnes (mt) in 2009-10, to 18.50 mt in 2010-11, 18.11 mt in 2011-12, and 13.14 mt (provisional) 2012-13.

New Delhi: Israel has renewed its offer to Indian oil and gas companies to exploit its huge offshore natural gas reser ves, according to Alon Ushpiz, Israeli ambassador to India, to a leading English newspaper by saying “I’d like to give my personal guarantee. The minute an Indian company, private or governmental, knocks on my door and expresses interest in gas, including in its production, we are open to discussions.” Israel is flush with natural gas after its discoveries of gas in the Tamar and Leviathan gas fields in the Mediterranean Sea.

These discoveries are expected to have a significant impact on the strategic balance in the West Asia. The Israeli government has decided to expor t 40 per cent of its gas. Recently, Australian company Woodside Petroleum Ltd inked a deal to acquire a 25 per cent stake in Leviathan gas field.

New Delhi: To transform the ‘buyer-seller’ relationship in the oil sector to one of deeper par tnership, India, Saudi Arabia seek more focusing on investments and joint ventures in third countries.

The recent visit of Saudi Arabia’s Crown Prince Salman bin Abdulaziz Al Saud to New Delhi boosted strategic ties and the two countries agreed to explore ways and means to transform their buyer-seller relationship.

Saudi Arabia is India’s four th largest trading par tner and almost one-fifth of India’s oil impor ts come from Saudi Arabia. However, investment flows between the two countries have been far below their potential.

Kelkar Wants Existing Regime for Oil Contracts

TAPI Likely to Head by US-based Consortium

US to Supply Gas to India

New Delhi: The USD 9-billion Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project is likely to see an America-based consortium leader. “Considering the terrorism-torn terrain of the project, we are looking for a US-based company with experience in building and operating the cross-country pipeline. Moreover, in a meeting held last month, the partners were keen to register Tapi Ltd in a place like New Jersey,” said an official source.

Despite several roadshows in Singapore, New York and London, global majors were not keen to participate as a consortium leader, due to the Turkmen government’s decision not to give participating stakes for the companies in hydrocarbon fields. Last February, the Indian government had given its nod to creation of Special Purpose Vehicle and for the participation of state-run GAIL (India) Ltd in the project. GAIL would invest USD 5 million. The project is expected to be operational by 2017-18. The Asian Development Bank is transaction advisor.

New Delhi: Shale gas expor ts to India from the US could pick up momentum in coming days, according to US India Political Action Committee (USINPAC). This follows the introduction of legislation — HR 6, the Domestic Prosp-erity and Global Freedom Act — in US Congress to expedite expor t of natural gas to American allies like India and Japan.

USINPAC said that over the past year, surplus production of LNG (l iquefied natural gas) in the US has given impetus to the prospect of LNG expor ts to countries as India, Ukraine, and Japan. The surplus is due to rapid advances in the technology and ex traction of shale gas and oil over the past few years.

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Alon Ushpiz, Israeli ambassador to India


International

Sunbird to Pursue More Gas Offshore South Africa

South Africa: Denver-based MHA Petroleum Consultants have completed an assessment of the Sunbird Energy operated block 2A offshore South Africa. The best estimate is 7.8 tcf (221 bcm) of prospective gas resources. The 5,000-sq km (1,930-sq mi) concession is currently in year five of a 30-year production right issued by South Africa’s Depar tment of Mineral Resources.

Sunbird commissioned the assessment last October, following field development concept studies by Wood Group Kenny and a grant toward a full-field development plan. The block includes the planned Ibhubesi gas project (IGP). The aim was to identify more exploration potential for additional gas volumes for IGP. To date, seven of the 11 wells drilled on the block have discovered commercial gas volumes.

Sunbird plans to star t additional geological studies this year to identify targets for future exploration drilling based on geological cer tainty, prospect size, and proximity to the IGP development.

PA Resources Updates Tunisian Offshore Programmes

Tunisia: PA Resources (PAR) has authorised new measures to extend the life of the Didon field offshore Tunisia. These include installation scheduled this spring of an electric submersible pump in a previously shut-in production well, and drilling of an infill well during the fall.

PAR’s other offshore concession contains part of the Zarat field, which overlaps into an adjoining license. The southern and northern tract partners are working to resolve legal and commercial issues for a Zarat Unitized Unit OperatingAgreement (UUOA). It is also formulating a full field life Unit Plan of Development (UPOD), taking into account Tunisia’s increasing gas supply demands and CO2 sequestration requirements.An agreed southern/northern tract Zarat UUOA and UPOD both should be ready for submission to the authorities for approval in mid-year.

Liwan Nears Start-up Offshore China

Ophir Energy Begins Drilling Offshore Gabon

New Deepwater Oil Play Offshore Mauritania

Kuwait to Raise Oil Output by 2015

China: Husky Energy says the CNOOC-operated Liwan gas project in the South China Sea is nearing production, with commissioning of the shallow water platform and gas plant under way. Final components of the deepwater infrastructure for the Liwan 3-1 field have been installed and commissioning is proceeding.

The Liuhua 34-2 field is due to be tied into the producing Liwan deepwater facilities over a six- to eight-week period in the second half of 2014. Negotiations continue for a gas sales contract for the Liuhua 29-1 field, where Husky anticipates first production during 2016-2017. Additionally, the company is evaluating a recent new natural gas discovery on the block, along with four previous finds from 2012. Husky has a 50% interest in the MBF discovery, west of the MBH field.

Gabon: Ophir Energy plc has begun drilling operations on the Padouck Deep-1 well on the Ntsina block, offshore Gabon, using the Vantage Titanium Explorer drillship. The Padouck Deep-1 well is the first well targeting the presalt play offshore in the North Gabon basin, and is located in a water depth of 835 m (2,740 ft) and has a planned TD of 3,500 m (11,483 ft). Operations are expected to take approximately 45 days.

Mauritania: Tullow Oil has discovered hydrocarbons with the first well in an exploration drilling campaign targeting deeper-lying plays offshore Mauritania. Frégate-1 was drilled to a depth of 5,426 m (17,802 ft) in the C-7 license. It encountered up to 30 m (98.4 ft) of net gas/condensate and oil pay in multiple sands. Tullow says the well represents a technical breakthrough by establishing a new oil play in deepwater late cretaceous turbidites. The company plans to integrate the results with its regional 3D seismic surveys.

Kuwait: Kuwait plans to raise its oil production capacity by 150,000 barrels per day to 3.4 million bpd by mid-2015. “Kuwait’s current production capacity is 3.25 million bpd. We plan to add another 150,000 bpd by mid-2015,” said Hashim Hashim, CEO, Kuwait Oil Company, which is responsible for exploration and production. The company also plans to add between 400,000 and 500,000 bpd to the countr y’s production capacity to fulfil Kuwait’s aim to raise output capacity to 4 million bpd by 2020, Hashim said on the sidelines of the global oil and gas conference. He said Kuwait currently pumps around 3.0 million bpd and could “increase production depending on market conditions”.

K r i s E n e r g y t o Wo r k w i t h S a n t o s O f f s h o r e B a n g l a d e s h

Bangladesh: KrisEnergy will par tner with Santos Sangu in an exploration block offshore Bangladesh. Santos operates the production-sharing contract (PSC) for block SS-11, covering 4,475 sq km (1,728 sq mi) in the Bay of Bengal over the Bengal fan. Both companies have a 45 per cent interest, with the remaining 10 per cent held by Bangladesh Petroleum Exploration & Production Co.

Most of the block is in shallow waters up to 200 m (656 ft), although the far thest southwest por tion extends to 1,500 m (4,921 ft). The PSC has an initial five-year term, with commitments to acquire and process 1,893 km (6,210 mi) of 2D seismic data and 300 sq km (116 sq mi) of 3D data, and to drill one exploration well.

Hashim Hashim, CEO, Kuwait Oil Company


InternationalIran Re-starts Offshore Drilling in Caspian Sea

Kazakhstan Aims at Oil Giants in New Flare up

Iran: Khazar Exploration and Production Co (KEPCO) has resumed exploration in the Iranian sector the Caspian Sea on the Sardar-e-Jangal field. According to Iranian news service Shana, a 16-in. liner is now installed in the second well, which is currently at a reservoir depth of 1,600 m (5,249 ft).

Yousef Etemadi, Director - Exploration Affairs, KEPCO, added that the liner hanger is installed in a 20-in. casing. Sardar-e-Jangal is thought to hold in-place oil of 2 Bbbl, with a 25 per cent recovery rate.

Kazakhstan: Kazakhstan is suing foreign oil majors developing its huge Kashagan oil field in the Caspian Sea, a tactic similar to those that secured the government large stakes in two of the three multinational energy projects on its territory. Repeated delays at the 13-year-old project, targeted to produce as much oil as Opec member Angola from a reserve almost as big as Brazil’s, have infuriated the Kazakh government.The consortium, led by Exxon, Royal Dutch Shell, Total and Eni as well as Kazakh state oil firm KazMunaiGas, may face Kazakhstan seizing a bigger stake in Kashagan or refusing to reimburse a big chunk of the USD 50 billion (Dh 183.5 billion) spent on bringing it onstream. The latter option is written into the Kashagan contracts. Production at Kashagan, the world’s biggest oil discovery in 35 years, began in September but was stopped just weeks later after gas was found to be leaking from its pipelines. Residual sour gas was then burnt in flares at Kashagan’s processing plants, polluting the environment.

Solid Test Results from Oil Discovery Offshore Oman

Oman: Masirah Oil says it is encouraged by test f low rates from its recent discover y in block 50 offshore Oman. The exploration well was dri l led to its f inal depth in the Cambrian formation. Main objectives were to demonstrate the presence of movable hydrocarbons and a working petroleum system within the block. Several zones in the well provided evidence of hydrocarbons. During a 48-hr test, hydrocarbons f lowed to the sur face with the well producing up to 3,000 stock tank b/d of l ight oi l with no water production. It is currently suspended. This was the f irst offshore oi l discover y east of Oman after more than 30 years of exploration.

news

Statement about ownership and other par t iculars about newspaper OFFSHORE WORLD to be publ ished in the f i rs t i ssue ever y year a f ter the last day of Februar y

I Maul ik Jasubhai Shah, hereby declare that the par t iculars given above are t rue to the best of my knowledge and bel ie f.

S ignature of Publ isherDate: 15 th Februar y 2014

1. Place of Publication Mumbai

2. Periodicity of its Publication BI-MONTHLY

3. Printer’s NameNationality1[(a) Whether a citizen of India?(b)If foreigner, the countr y of origin]Address

MAULIK JASUBHAI SHAHINDIANYESNOT APPLICABLE1100, Shanudeep, 10, Altamount Road, Mumbai 400 026

4. Publisher’s NameNationality1[(a) Whether a citizen of India?(b)If foreigner, the country of origin]Address

MAULIK JASUBHAI SHAHINDIANYESNOT APPLICABLE1100, Shanudeep, 10, Altamount Road, Mumbai 400 026

5. Editor’s NameNationality1[(a) Whether a citizen of India?(b)If foreigner, the country of origin]Address

Ms. MITTRAVINDA RANJANINDIANYESNOT APPLICABLE26, MAKER CHAMBERS VI, NARIMAN POINT, MUMBAI 400 021

6. Names and Addresses of individuals who own the newspaper and partners or shareholders holding more than one per cent of the total capital

JASUBHAI MEDIA PVT LTD.,26, MAKER CHAMBERS VI, NARIMAN POINT, MUMBAI 400 021Jasu Ramniklal Shah, Maulik Jasubhai Shah, Maulik Business Services Pvt. Ltd, (1100, Shanudeep, 10, Altamount Road, Mumbai 400 026), Jasubhai Business Services P Ltd., (26, Maker Chamber VI, Nariman Point, Mumbai 400 021

FORM IV


products

HEAVY-DUTY ENGINEERING PROFI HOISTS CONTRAFLAME UNDER DECK J D Neuhaus launched Profi 75 TI and Profi 100 TI hoists, offering SWL capacit ies of 75 and 100 tonnes respectively. Exist ing products in the Profi range cover l i f t capacit ies from 250 kg up to a ful l 60 tonnes, ideally suited to engineering environments.

The key component of these hoists i s a new ai r motor uni t, based on the wel l-proven J D Neuhaus motor-brake concept and incorporat ing

a patented integrated brake system, with a s tepped brake p iston and a re l iable se l f- lubr icat ing rotor. In the standard conf igurat ion of a 6 bar a i r pressure supply, the motor provides a 9 kW power output, adequate for the operat ion of e i ther hoist whi le s t i l l provid ing s igni f icant energy reduc t ions.

At ful l nominal l i f t capacit ies (75 or 100 tonnes), the compressed air consumed is 7.6 m3/min which represents in excess of 30% saving over the hoists being replaced. On lowering of ful l loads, the air consumed is 6 m3/min. The new hoists are designed with machiner y group classif ication according to ISO 4301/FEM 9.5 I I is M3/1Bm, which is good for 400 hours ful l load operation.

The l i f t ing speeds at fu l l load have increased f rom 0 .45 to 0 .53 m/min (Prof i 75 T I ) and 0 .35 to 0 .4 m/min (Prof i 100 T I ) . L i f t ing speeds wi thout a load increase f rom 0 .85 to 1 .33 m/min (Prof i 75 T I ) and f rom 0 .7 to 1 .0 m/min (Prof i 100 T I ) . The lower ing speeds at fu l l load have a l so benef i ted, increas ing f rom 1 to 1 .25 m/min (Prof i 75 T I ) and f rom 0 .8 to 0 .95 m/min (Prof i 100 T I ) . An overa l l weight sav ing o f 750 kg has been ach ieved for the Pro f i 75 T I , and 640 kg for the Pro f i 100 T I .

Some reductions in size par ticularly between the load bearing sur faces of the load and suspension hooks and also in sound levels during operation have also been achieved, with the new hoists registering 77 dB(A) at ful l load l i f t ing and 83 dB(A) on the lowering operation. Lif t ing and lowering motor l imiters incorporating a pneumatic pin valve design are also available as optional ex tras for both hoists.

For details contact:J D Neuhaus GmbH & Co KG58449, Witten-HevenGermanyTel: +49 2302 208-219 Fax: +49 2302 208-286E-mail : [email protected]

With the growth of offshore platforms operating in extreme environments, the need for under deck insulation systems that can cope with a combination of condensation, ice build-up, extreme heat and high humidity above the cellar deck is becoming paramount. Approved systems are designed to provide a number of operational and safety functions including thermal insulation (with typical U value ranges from 0.3 to 0.5 Wm²K); passive hydrocarbon pool and jet-fire protection per IMO classifications (eg, H60 and J120); blast resistance systems to withstand blast overpressures of 0.2 to 1.2 bar; noise reduction to a typical range of Rw 30 to 51 dB; impact resistance to withstand wave slam and ice build-up; and corrosion under insulation (CUI) longevity to maintain long term integrity and minimise the risk of CUI.

To address these handling problems, Advanced Insulation has applied its ContraFlame technology to develop a lightweight under deck system that provides weight savings of up to 60% compared with traditional systems. The ContraFlame Under Deck Lightweight solutions also provide integrated thermal insulation, passive fire protection, blast resistance and noise reduction in a single certified system. This also takes full advantage of the proven CUI performance of Advanced Insulation’s ContraFlame and ContraTherm products, both in topside and subsea applications.

Advanced Insulation offers three unique ContraFlame systems for under deck protection. ContraFlame JF120 offers fully bonded integral thermal insulation and passive fire protection to J120; H60 blast overpressure to 4.2 bar; and thermal conductivity of 0.054 Wm-¹K-¹. It also offers typical U values 0.57 W/m²K; a system thickness of 90 mm; and weight of 31 kg/m². The ContraFlame MS400 bonded pre-formed panel offers integral thermal insulation and hydrocarbon fire protection to H120 and thermal conductivity of 0.032 Wm-¹K-¹. U values for ContraFlame MS400 are typically 0.229 W/m²K, with a system thickness of 107 mm and weight of just 14.3 kg/m². Finally, its ContraFlame JF120 acoustic bonded pre-formed panels offer integral thermal insulation and jet fire protection to J120 and H60; acoustic noise reduction to Rw 51 dB; and thermal conductivity of 0.054 Wm-¹K-¹. It also offers typical U values of 0.16 W/m²K; a system thickness of 226 mm; and weight of 52.4 kg/m².

For details contact:Advanced Insulation plcQuedgeley West Business Park , Bristol Road, Gloucester, GL2 4PA, U.K. Tel: +44 (0)1452 880880, E-mail : [email protected]


products

ELECTROMAGNETIC FLOW METERS

MINIFLASH FLASHPOINT TESTER

Magnetrol introduces the Polaris electromagnetic flow meter, which is capable of measuring liquids with a conductivity as low as 5 µS/cm in closed pipes. It is an accurate and repeatable flow meter that is suitable for a variety of water based and sludge flow applications. The POLARIS transmitter is backlit and rotatable with the capability of measuring forward and reverse flow rates, as well as total volume.

HART protocol allows the use of PACTware for configuration and diagnostics. The sensor can be flanged or wafer style and is available with an assortment of standard liners and electrode materials.

For details contact:Magnetrol International NVWorldwide Level & Flow SolutionsHeikensstraat 6 - 9240 Zele - BelgiumTel: +32 (0)52 45 11 11 | Fax: +32 (0)52 45 09 93E-mail: [email protected]

ASTM cleared the way for the new age in flashpoint testing to accept D7094 as a new method for testing diesel, fuel oils and kerosene according to the ASTM specifications D975, D396, D2880 and D3699. The positive impact of the new method on costs, safety and on resolving environmental issues will be impressive.

With the D7094 method, tests are performed through electric discharge in a completely closed cup. No open

flame is generated, because the flash point is detected by the pressure increase inside a closed system. The risk of fire and obstructive fumes are eliminated. D7094 testers are small and portable, making them suitable for use in laboratory or directly in the field.

Grabner Instruments developed the first MINIFLASH flashpoint analyzer. The new flashpoint method was standardized as ASTM D6450 method for 1 mL samples, and as ASTM D7094 method for 2 mL samples. Grabner Instruments MINIFLASH flashpoint testers are used in laboratories around the world for testing liquid or solid samples in the petrochemical, flavour and fragrance, chemical and/or waste industries.

For details contact:Grabner Instruments Messtechnik GmbH (A Member of the AMETEK Oil & Gas Business Unit)Dr Otto Neurathgasse 1, A-1220 Vienna, Austria Tel: +43 1 282 16 27-110 Fax: +43 1 280 73 34E-mail: [email protected]

Veer Appliances Pvt Ltd offers quality range of LPG gas burner precisely manufactured under the strict supervision of skilled professionals following the set industrial norms using latest testing machines and technology to wipe out all possible flaws. Offered product is better known for soft

pulsation free start and offers a wide adjustment facility with high constant combustion values.

For details contact:Veer Appliances Pvt LtdE-221, Sector-63,Noida, Uttar Pradesh 201 304Tel: 0120-2406431 | Fax: 91-0120-2406431

Th e F LU X U S F 7 0 5 a n d G 7 0 5 u l t ra s o n i c l i q u i d a n d g a s c l a m p - o n f l ow m e te r s a l l ow f o r a n i n h e re nt ly p re c i s e b i - d i re c t i o n a l , h i g h ly dy n a m i c f l ow m e a s u re m e nt o f vo l u m e a n d m a s s f l ow rate s o f v i r t u a l ly a ny g a s e o u s a n d l i q u i d m e d i a – e ve n at we t g a s a p p l i cat i o n s ( u p to a L i q u i d

Vo l u m e Fra c t i o n o f 5 % ) o r l i q u i d m e d i a ca r r y i n g h i g h co nte nt s o f s o l i d s.

With the t ransmitter being ATEX, IECEx Zone 2 and FM Class I , D iv 2 cer t i f ied – t ransducers for ATEX, IECEX Zone 1 and FM Class I , D iv 1 are avai lable - i t i s a lso the ideal f low meter for hazardous areas.

M o re o v e r, w i t h i t s s t a i n l e s s s t e e l e n c l o s u re ( 3 1 6 L / 1 . 4 4 0 4 ) i t i s h i g h l y c o r ro s i o n - re s i s t a n t a n d e s p e c i a l l y s u i t e d f o r a p p l i c a t i o n s O f f s h o re .

For details contact:FLEXIM Instruments Asia Pte Ltd. TT International Tradepark10 Toh Guan Road #06-01Singapore 608838Tel: +65 67 94 53 25Fax: +65 68 62 28 36E-mail: [email protected]

LPG GAS BURNER

NON-INTRUSIVE FLOW MEASUREMENT IN HARSH, CORROSIVE ENVIRONMENTS


products

OPEN CHANNEL FLOW METERS ELEC TROMAGNETIC FLOW METERS

ULTRASONIC FLOW METERS

Nivelco Instruments India Pvt Ltd offers an extensive range of flow measurement open channel flow meters. This range is available in 9 different sizes, compact types of parshall flumes made of plastic (PP), factory calibrated dimensions, reliable measurement with ultrasonic level transmitter and certification of measurement.

For details contact:Nivelco Instruments India Pvt LtdMalhar, Plot No: 18, S No: 2, Opp: Chandralok GardenNr Rajaram Bridge, Kar ve Nagar, Pune, Maharashtra 411 052 Tel: 020-25478313 | Fax: 91-020-25478313E-mail : [email protected] / [email protected] / [email protected]

TKUSHAL-200M are micro-controller based full bore type electromagnetic flow meters specially used for various industrial applications. These flow transmitters accurately measures the flow rate of conductive liquids and slurries in closed pipes. Due to simple and rigid design the flow transmitter is an obstruction less and maintenance free instrument in place of conventional mechanical flow

measuring device. The use of ‘Pulsed DC’ technology offers highest ability and better measuring accuracy in the form of electrical signal 4-20 MA DC linearly proportional to volumetric flow. The instrument is based on Faraday’s law of electromagnetic induction. A magnetic field is generated by the instrument in the flow tube. The fluid flowing through this magnetic field generates a voltage that is proportional to the flow velocity. Corresponding electrical output is provided with respect to measuring voltage.

For details contact:Akshat EnterpriseNo: 7/4539, Shop No: 7, Lakkad Kot Ni GaliOpp: Krishna Cinema Road Nr Torrent PowerDelhi Gate, Station Road, Surat, Gujarat 395 003 Tel: 0261-2450859 | Fax: 91-0261-2450859

B acked by enthusiast ic workforce, Aman Engg Works are able to put for th a comprehensive array of u l t rasonic f low meters. These f low meters are h igh in demand owing to thei r accurate resul ts, dependabi l i t y, versat i l i t y and

easy insta l lat ion. In addit ion to th is, the of fered array does not need any p ipe inser t ion and shut down t ime.

For details contact:Aman Engg WorksC-54/55, Focal Point Ex tensionJalandhar Punjab 144 004Tel: 0181-2603614, 2603616, 2603615Fax: 91-0181-2603617, 2292367

The Fuji Electric Portaflow C is a next-generation, portable ultrasonic flow meter utilizing transit time technology for the non-invasive measurement of flow rates in pipes. This compact and light weight instrument offers high performance and easy operation. Utilizing the latest electronics and digital signal processing technologies, the Fuji Electric Portaflow C offers high accuracy, quick response time, and outstanding anti-

bubble characteristics. In addition to standard flow measurements, the Portaflow-C is capable of heat quantity measurement allowing simple management for heating and cooling applications.

The Fuji Electric Portaflow-C can be used with various type of detectors applicable for small to large diameter pipe (13 to 6,000 mm/0.5 to 236”) and low to high temperature (-40 to +200 deg C). This flow meter is designed for 12 hours of continuous operation with its own built-in battery which is re-chargeable in 3 hours with the supplied power adapter. An SD memory card allows flow, velocity and total data to be stored for later recall. A universal USB port permits communication with a PC to facilitate configuring the Portaflow-C as well as saving and reading data files. A 4.7 inch colour graphic display creates an easy-to-use operator interface. Some of the most common applications of the Fuji Portaflow-C ultrasonic flow meter include: backup for an already installed flow meter system, water supply and sewage treatment, flow measurement systems, boiler water/feed water supplies, cooling water, cooling oil and de-ionized water for semi-conductor manufacturing, among others.

For details contact:Advanced MicrotechDev Chambers, 2nd Floor, Nr Vasant Cinema, Cinema RoadSurat, Gujarat 395 003 Tel: 0261-2427320, 2411283 | Fax: 91-0261-2411283E-mail : [email protected] / amtpower@aol. in

ULTRASONIC FLOW METERS

www.oswindia.comOffshore World | 53 | February -March 2014

project update

Media Barter with gulfoilandgas.com

Petrochemical Plants and Refineries

Projects DatabaseMajor Projects in the Middle East, Africa and Caspian Sea

Project Country Value ($) Status

Middle East

Bahrain Deep Gas Exploration Project Bahrain - Execution

NOGA - Awali Onshore Oil Field Development Bahrain 1,500,000,000 Execution

Dohuk License Area Iraq 40,000,000 Execution

Qaiyarah & Najmah Contract Areas Iraq - Execution

Tawke Oil Field Development Iraq 335,000,000 Execution

Zubair Oil Field Development Iraq - Execution

KOC - Wara Pressure Maintenance Project Kuwait 500,000,000 Execution

New Oil Gathering Centres Kuwait 1,000,000,000 Bidding

Block 3 & 4 Onshore Oman Oman 250,000,000 Execution

Block 61 - Khazzan and Makarem Gas Fields Development Oman 650,000,000 Execution

Offshore Block 50 Oman - Execution

Al-Shaheen Offshore Field Development Qatar 6,000,000,000 Execution

Block A Qatar 100,000,000 Execution

Dukhan Oil & Gas Field Development Qatar - Execution

Ahmar-1 Field Saudi Arabia - Planning

Al-Khafji Offshore Field Development Saudi Arabia 1,200,000,000 Execution

Khurais Light Crude Increment Program Saudi Arabia 3,000,000,000 FEED

Offshore Fields Maintain Potential Programme (MPP) Saudi Arabia - Execution

Dubai's Offshore Oil Fields UAE - Execution

North East Bab Field (NEB) UAE - Bidding

Saleh Offshore Field UAE - Execution

Thammama - F Nitrogen Injection Development UAE - Bidding

Africa Country Value ($) Status

Angola - Block 21 Angola - Execution

Cabinda North Block Angola 24,000,000 Execution

EGPC-lnternational 2013 Bid Round Egypt - Bidding

North El Burg Block Egypt 66,000,000 Execution

North West Gemsa Concession Egypt - Execution

Rift Valley Block Ethiopia - Execution

www.oswindia.com Offshore World | 54 | February -March 2014

TEN Project Ghana 4,900,000,000 Execution

Offshore Guinea Concession Guinea - Execution

Blocks CI-506 and CI-507 Ivory Coast - Study

Block 2A Kenya - Execution

Block L8 Kenya - Execution

BlockLB-15 Liberia - Execution

Banda Gas Field Mauritania - Execution

C-10PSC Mauritania - Execution

Mazagan Offshore Permit Morocco - Execution

Sidi Moktar Development Licence Morocco - Execution

Agadem Block Niger - Execution

OML 120 - Oyo Field Development Nigeria 600,000,000 Execution

OML 56 - Umusadege Field Nigeria - Execution

Tanzania - Block 2 Tanzania - Execution

Bir Ben Tartar (BBT) Concession Tunisia - Execution

Block 2 - Ngassa Prospect Uganda - Execution

Caspian Region Country Value ($) Status

Chirag Oil Project (COP) Azerbaijan 6,000,000,000 Execution

Neft Dashlari Field Development Azerbaijan - Execution

Shah Deniz Stage 1 Development Azerbaijan 4,000,000,000 Execution

Shah Deniz Stage 2 Development Azerbaijan 25,000,000,000 Execution

Gonbadli Sweet Gas Field Iran - Bidding

Khangiran Gas Field Iran - Execution

Sardare Jungal Gas Field Iran - Execution

South Pars Phase 12 Development Iran 7,650,000,000 Execution

Tabnak Gas Field Iran 16,500,000,000 Bidding

Yadavaran Oilfield Development Iran 2,000,000,000 Execution

Akkulka Deep Exploration Project Kazakhstan - Execution

Blocks A & E Kazakhstan - Execution

BNG Contract Area Kazakhstan 100,000,000 Execution

Galaz Contract Area Kazakhstan - Execution

Kashagan Offshore Oil Project Kazakhstan 136,000,000,000 Execution

Marsel Contract Territory Kazakhstan - Execution

Imilor Oilfield Russia 1,650,000,000 Study

Muromskij-2 License Russia - Execution

Nine New Blocks - January 2014 Russia - Bidding

Palyanovskaya Tight Oil Project Russia - Execution

Sakhalin-3 Kirinsky Block Russia - Execution

Vankor Oil and Gas Field Development Russia - Execution


events diary

Offshore Energy Exhibition and Conference 2014

Date: 28-29 October 2014Venue: Amsterdam RAI, the NetherlandsEvent: The 7th edition of Offshore Energy conference will host between 500 and 600 exhibitors and is expected to attract over 10,000 professionals from all over the world. Both the exhibition and the extensive conference program of Offshore Energy 2014 will address the technical, operational and commercial challenges associated with industr y growth.

The 2014 technical program will once again feature an international faculty of speakers covering a broad palette of topics. Meetings range from high caliber panels and technical sessions to annual meetings of industry organizations and masterclasses, catering to professionals from board level to operational level and young talents.

For details contact:NAVINGO BVWesterlaan 1 3016CK Rotterdam The NetherlandsTel: +31 (0)10 2092600Fax: +31 (0)10 4368134Email: [email protected]

Moscow Refining, Gas & Petrochemicals Week

Date: 15 - 18 September 2014Venue: Lotte Hotel, Moscow, RussiaEvent: The Moscow Refining, Gas and Petrochemicals Week with its traditionally technically-strong programmes, unrivalled access to the major players in the Russian Downstream sector and the highest quality networking opportunities. The 5 days of intensive networking and engaging presentations will be attended by over 500 attendees with over 80 respected speakers.

The pragmatic event will be a major affair of Heads of Refining, Petrochemicals and Gas Processing from Major Oil Companies, General Directors of Regional Refineries, Petrochemical and Gas Plants, Heads of Technical Departments, Chief Engineers, Chief Technologists, Project Directors, Design Institutes, Engineering Contractors, Technology, Solutions & Equipment Providers, Industry Consultants and Analysts, Government Agencies.

For details contact:Euro Petroleum Consultants44 Oxford Drive, Bermondsey Street London, SE1 2FB, UKTel: +44 20 7357 8394Fax: +44 20 7357 8395Email: [email protected]

Subsea Asia 2014

Date: 11-13 June 2014Venue: Kuala Lumpur Convention Centre, Kuala Lumpur, MalaysiaEvent: Subsea Asia 2014 will take place at the Kuala Lumpur Convention Centre (KLCC) in Malaysia and will be Asia’s 4th SUBSEA Conference and Exhibition. The Subsea Asia Conference, organised by Subsea UK, will take place on 11th June 2014 and the Subsea Asia exhibition will open its doors on the 12th June 2014. The Subsea Asia event is Asia’s most specialised engineering event and an ideal platform to network and to discuss the latest innovations within the subsea industry within Asia, as well as being an opportunity to meet with companies involved in the deepwater oil and gas industry within Asia. Subsea Asia 2012 conference included a local overview from Malaysian NOC, PETRONAS, as well as technical presentations from companies including: First Subsea, Hallin Marine, Nautronix, SMD, Subsea 7 and Welltec.

For details contact:Malaysian Exhibition Services Suite 1401, 14th Floor, Plaza Permata,Jalan Kampar, Off Jalan Tun Razak50400, Kuala LumpurTel: + 603 4041 0311Fax: + 603 4043 7241Email: [email protected]

APIC 2014

Date: 15-16 May 2014Venue: Pattaya Exhibition and Convention Hall (PEACH), Pattaya, ThailandEvent: In 1979, the East Asia Petrochemical Industry Conference (EAPIC) was originally founded by the petrochemical associations in East Asia – Japan Petrochemical Industry Association (JPCA), Korea Petrochemical Industry Association (KPIA) and Petrochemical Industry Association of Taiwan (PIAT). Over a period of more than two decades, presidents, chairmen, board directors and senior managers of the leading Asian petrochemical corporations convened to discuss issues confronting the industry. The responsibility to host the annual conference was equally shared by each of the founding association on a rotational basis.

The main objective of the conference is to spur mutual friendship and goodwill amongst the petrochemical industry players in Asia and around the world and thereby contribute to the advancement of the petrochemical industry in Asia.

For details contact:Petrochemical Industry Club, The Federation of Thai Industries (FTIPC)Queen Sirikit National Convention CenterZone D, 2nd Floor, D201/4 – 5New Rachadapisek Road, Klongtoey, Bangkok 10110Email: [email protected]


N E W T E C H N O L O G I E S I N T H E O I L A N D G A S I N D U S T R Y Editor: Jorge Salgado Gomes

Pages: 226 Publisher: InTechBook Description: Oil and gas are the most impor tant non-renewable energy sources in the global energy mix. In order to successfully exploring, producing and managing these resources in compliance with HSE standards are chal lenging tasks. New technologies, workflows and procedures have to be implemented.

‘New Technologies in the Oil and Gas Industr y ’, the insightful book, deals with some of these themes and explains some of the advanced technologies related to the oi l and gas industr y from HSE to f ield management issues. New technologies such as for geo-modeling, transient well testing and digital rock physics are also introduced in aiming to researchers, petroleum engineers, geoscientists and people working within the petroleum industr y. There are many more technical topics to be addressed in future books.

T E C H N O L O G Y O F O I L A N D G A S W E L L S D R I L L I N G B Y D O W N H O L E D R I L L I N G M O T O R SAuthor: Mikhail Dvoynikov Publisher: LAP LAMBERT Academic Publishing Paperback: 304Price: USD 63.90Book Description: This book is about devices that control, c reate and regulate weight on b i t and methods of operat ional (automat ic) control over dr i l l ing us ing downhole motor as a dr i l lb i t dr ive in the book . I t concludes sur vey resul ts analys is of equipment and technologies that focused on dr i l l ing opt imizat ion and automat izat ion of d i rec t ional and

hor izontal wel ls deepening. The dr i l l s t r ing operat ion whi le combinat ion dr i l l ing was h ighl ighted br ie f ly. The book represents methods and technique and a lso resul ts of exper imental ac tual weight on b i t evaluat ion and recommends how to carr y out an operat ional control of ax ia l weight on b i t. Also there i s an analys is of patent pool in sphere of motor working e lements improving. I t def ines the main engineer ing di rec t ions that increase

energy charac ter is t ic va lues of hydraul ic motors ; provide re l iabi l i t y assurance and cons istenc y of thei r operat ion in compl icated geological and technical condit ions. On the bas is of recognized di rec t ions the authors present the engineer ing solut ions, the resul ts of these solut ions sur vey and exper imental- industr ia l implementat ion.

RISK GOVERNANCE OF OFFSHORE OIL AND GAS OPERATIONS Editors: Preben Hempel Lindøe, Michael Baram & Or twin RennHardcover: 450Price: USD 95.98Publisher: Cambridge University Press

Book Description: This book evaluates and compares risk regulation and safety management for offshore oil and gas operations in the United States, United Kingdom, Norway, and Australia. It provides an interdisciplinary approach with legal, technological, and sociological perspectives on their efforts to assess and prevent major accidents and improve safety performance offshore. Presented in three parts, the volume begins with a review of the technical, legal, behavioral, and sociological factors involved

in designing, implementing, and enforcing a regulatory regime for industrial safety. It then evaluates the four regulatory regimes that encompass the cultural, legal, and other contextual factors that influence their design and implementation, along with their reliance on industrial expertise and standards and the use of performance indicators. The final section presents an assessment of the resilience of the Norwegian regime and its capacity to keep pace with new technologies and emerging risks, respond to near miss incidents, encourage safety culture, incorporate vested rights of labor, and perform inspection and self-audit functions. This book is highly relevant for those in government, business, academia, and elsewhere in civil society who are involved in offshore safety issues, including regulatory authorities and industrial safety professionals.

METALLURGY AND CORROSION CONTROL IN OIL AND GAS PRODUCTION AUTHOR: Rober t HeidersbachHARDCOVER: 296PRICE: USD 88.83PUBLISHER: Wiley

Book Description: This book is intended for engineers and related professionals in the oil and gas production industries. It is intended for use by personnel with limited backgrounds in chemistry, metallurgy, and corrosion and will give them a general understanding of how and why corrosion occurs and the practical approaches to how the effects of corrosion can be mitigated. It is also an asset to the entry-level corrosion control

professional who may have a theoretical background in metallurgy, chemistry, or a related field, but who needs to understand the practical limitations of large-scale industrial operations associated with oil and gas production. While the may use by technicians and others with limited formal technical training, it will be written on a level intended for use by engineers having had some exposure to college-level chemistry and some familiarity with materials and engineering design.

book shelf

p Highly accurate and reliable bidirectional gas and liquid flow measurement over a wide turndown ratio

p Extremly rugged and corrosion resistant stainless steel housing (316L / 1.4404) for the harshest environments - including Offshore (ATEX (IECEx) Zone 2, FM Class I, Div. 2 approved)

p Very cost efficient: - No pipe work, - No process shut-down, - Virtually no maintenance

p Highly zero point stable, drift free and independent of pipe size, material, line pressure and the medium (NIST traceable calibrated)

FLUXUS® 705 for Liquids and Gases

www.flexim.com

Oil & Gas exploration and processing I Refineries (up to 400 °C and beyond)Oil & Gas Storage & Transport I Chemical industries

Stainless Steel housed Clamp-On Ultrasonic Flowmeter

RNI No: MAHENG/2003/13269. Date of Publcation: 1’st of every alternate month.

Documents

OSW February March 2014