COMMUNITIES

Transcription

COMMUNITIES

Volume 04
PETRONAS Upstream Magazine
We’re SAFE
and we KNOW it
Our Commitment To Strict International
Standards
COMMUNITIES
TRANSFORMING KERTIH AND BINTULU
LET THERE BE LIGHT
POWERING THE PENAN COMMUNITY
WITH MICRO-HYDRO
E DIT O R’S NO TE
FOCUS
AND
RESILIENCE
OUR ASSETS ARE ALWAYS SAFE
PETRONAS’ record for the past four
decades show that our assets are
safe and we know it. In this issue, we
talk about how we are committed to
continually ensuring that we adhere to
strict international standards and best
practices in safety and asset integrity
management wherever we operate,
both locally and internationally, and
why we do it.
DRILLING
Today’s global oil
and gas environment
remains challenging,
amidst depressed
prices, oversupply, and
deferred investments.
PETRONAS Upstream continues to
revise our growth strategies with
consideration of current profitability
and affordability. We continue
to weather the storm by doing
well operationally in production,
LNG sales, strategic initiatives,
optimising capital and operational
expenditure, as well as placing
utmost importance on health, safety,
and environment.
Like other oil and gas companies,
impairments coupled with lower
crude and LNG prices have also
put a strain on us. Nonetheless,
PETRONAS prides itself on our focus,
resilience, and experience in riding
out various storms for the past four
decades.
TRANSFORMING COMMUNITIES
This fourth issue of flow looks at how
PETRONAS continues to fulfill our
mandate of developing communities
where we operate. We look at how
our operations in Kertih, Terengganu,
have transformed a sleepy fishing
village into a bustling hub with
various economic opportunities.
Meanwhile, our transformation of
Bintulu, Sarawak, has made Malaysia
the second largest LNG exporter in
the world.
Internationally in Iraq, PETRONAS
has embarked on several sustainable
long-term projects, working towards
a brighter future for both the business
and the community. Meanwhile, in the
hinterland of Sarawak, our awardwinning micro-hydro project brought
24-hour electricity to a remote Penan
village for the first time.
LOOKING FORWARD
Each and every one of us at PETRONAS
remains focused in our delivery and are
resilient in overcoming the challenges
ahead. Our mindset is tuned for
continuous improvement, anchored on
delivering value, while staying positive
and energised.
We have climbed up many steps to
be where we are today. And during
this tough time, we continue to look
forward.
Dato Wee
Dato’ Wee Yiaw Hin
Executive Vice President & CEO
PETRONAS Upstream
1
TABLE OF CONTENTS
01
Editor’s Note
Focus and resilience
04 News Briefs
A new deal for PETRONAS Floating LNG, more milestones reached with LNG
Train 9, and other exciting news
06
Feature Focus
Note and News
FIND INSIDE
Kertih’s transformation from its
humble beginnings
10 The Heart of LNG
How Bintulu supports the second
largest LNG exporter in the world
22
Cutting Costs
Integrating into One
A recipe for the future: Pengerang
Integrated Complex
Standards
COMMUNITIES
LET THERE BE LIGHT
WITH MICRO-HYDRO
MAR 2016
Sunset at the
PETRONAS LNG
Complex in Bintulu,
Sarawak.
Contractors play
their part
Corporate Social Investment
18 We’re SAFE
and we KNOW it
2
Mini Story
14 Volume 04
Cover
Feature Focus
Transforming Communities
A brighter future for both the business
and the community in Iraq
From Fishing Village to
Bustling Hub
24
Powering the
Penan Community
How PETRONAS Wired
a Remote Penan Village
in Sarawak’s Hinterland
Special
28
We’re Safe and We Know It
Asset integrity management:
the cornerstone of PETRONAS’
operations
33 Best in Class
Progress Energy’s mission of
“Safe, Responsible, 100% Reliable,
Lowest Cost Production”
Technology
36
The InField Liner®
Towards a “Zero High Risk
Pipeline” by 2020
International
First Fruits of a Long
Labour
Achieving First Oil and First Gas in Indonesia
Unconventional
40
DRILLING
44
First Cargo
Gladstone LNG
Project and
PETRONAS
Australia Reaches
Major Milestone
Go with the flow
Petroliam Nasional Berhad
(PETRONAS)
PETRONAS
[email protected]
3
NEWS BRIEFS
NEW DEAL FOR PFLNG 1
Train 9 Project Marks
Safety Milestone
The PETRONAS LNG Train 9
Project in Bintulu crossed a
significant milestone on 3 October
2015 by achieving 30 Million Safe
Manhours without Lost Time
Injury (LTI).
PETRONAS signed a Gas Sales
Agreement (GSA) in April 2015 to
supply PETRONAS LNG Ltd. (PLL)
with the gas produced by PETRONAS
Floating LNG (PLFNG) 1 for a period
of 20 years.
The GSA was signed at the PETRONAS
Twin Towers by Adif Zulkifli, Vice
President of Malaysia Petroleum
Management (MPM) and Ahmad Adly
Alias, Vice President of LNG Trading &
Marketing.
According to the agreement, gas
supply as produced by PFLNG 1 will
be delivered to PLL by PETRONAS,
and PLL shall subsequently market
the gas supply to various end buyers.
As PETRONAS’ first FLNG facility, the
PFLNG 1 enables PETRONAS to secure
additional LNG to meet growing
demands, and enhances the company’s
reputation as a global LNG player.
adopted by PETRONAS LNG 9 Sdn.
Bhd. (PL9SB) and JGC Corporation.
of the collective efforts of everyone in
the team, all of whom duly deserves
credit.
Pandai Othman, CEO of PL9SB
and Project Director, said that the
project’s performance is the result
The 9th LNG Train is expected to
begin operations this year.
The feat was accomplished as a
result of the Incident and Injury
Free (IIF) programme that was
Constructive Collaboration
PETRONAS LNG 9 Sdn. Bhd. (PL9SB)
marked yet another significant
milestone on 17 December 2015
following a Gas Sales Agreement
(GSA) with PETRONAS.
Under the agreement, gas supply will
be delivered by PETRONAS from several
identified Production Sharing Contracts
(PSC) to meet the requirements of
PL9SB for a 20-year term.
“This is an example of our Shared
Success value, where the teams
negotiate and collaborate for the
greater good of PETRONAS. Both
teams have indeed accomplished that,”
said Pandai Othman, CEO of PL9SB.
Additionally, PL9SB also signed a LNG
Sales and Purchase Agreement (LNG
SPA) with PETRONAS LNG Ltd. (PLL) for
the supply of 3.6 million tonnes of LNG
from the Train 9 facility over the course
of 20 years, commencing in January
2017.
The agreement demonstrates the
significance of Train 9 LNG volumes
in meeting regional demand and also
PETRONAS’ capability to capture
increased margins and new LNG
markets.
4
MAR 2016
NEW S BRIEFS
“SAYANG BAKAU”
The “Sayang Bakau” programme was
launched on 3 October 2015,
signifying the first phase of Sabah
Gas Terminal’s (SBGAST) mangrove
rehabilitation efforts. The programme
is part of SBGAST’s commitment
towards the sustainability of Corporate
Social Investment (CSI) initiatives.
mangrove samplings at Kampung
Penampang Baru, Tuaran, Sabah.
An exhibition showcasing different
local mangrove species, SFD’s
mangrove conservation efforts, and
an ‘Adopt A Sapling’ donation drive
was also held to raise environmental
awareness.
The programme was introduced
by SBGAST with Sabah Forestry
Department (SFD)’s partnership and
support from Upstream Strategic
Communications (USC), Sabah
Labuan Regional Office (SLRO) and
Sabah Operations (SBO). Nearly 100
volunteers from various departments
had participated in planting 1000
Besides the “Sayang Bakau”
programme, PETRONAS has plans
to develop the activity and introduce
other initiatives in phase two of its
CSI programme activation in Tuaran.
PETRONAS Strengthens Presence in Iraq
The JOA signing re-affirms the
commitment of Contractor Parties’
respective rights and obligations
regarding the operations and
related activities under the Garraf
Development & Production Service
Contract (DPSC), which includes
the joint exploration, appraisal,
development, production and
disposition of petroleum from the
Garraf Contract Area.
PETRONAS Carigali Iraq Holding BV
(PCIHBV) inked a Joint Operating
Agreement (JOA) between
Contractor Parties JAPEX Garraf Ltd
(JAPEX) and North Oil Company
(NOC) on 25 October 2015 in
Sulaimanya, the Republic of Iraq.
DRILLING
The Contractor Parties had agreed
with the terms and conditions of the
JOA, in which NOC had given their
approval on 18 January 2015 and
subsequently, JAPEX on 26 January
2015.
Central Diyarbekir First Oil
On 29 October 2015, PETRONAS
Carigali (Turkmenistan) Sdn Bhd
(PC(T)SB) witnessed a breakthrough
when first oil was achieved at Central
Diyarbekir Drilling Platform (CDDP-A).
CDDP-A is the last phase of the
Diyarbekir field development, which
started production since 2006. Central
Diyarbekir extends the Diyarbekir field
life, adding value to the company and
Turkmenistan respectively.
As evidence to the AIM ZeR0
commitment, CDDP-A recorded
zero fatalities and less than 0.2 Total
Recordable Cases Frequency (TRCF)
with nearly 10 million man hours. PT(T)
SB had invested USD 1 billion within
the last three years, representing the
biggest upstream offshore investment
in a highly complex and challenging
environment in Turkmenistan.
First Successful Underbalanced Drilling Project
executed Underbalanced Drilling (UBD)
project for PETRONAS Carigali Sdn Bhd.
The Anding Utara 3 (AU3) well, located
in Block PM6/12, offshore Peninsular
Malaysia was the first successfully
The well’s objective was to prove the
true production rate of Anding fracture
basement using Underbalanced Drilling
(UBD) technology to determine the
undamaged production capability and
the productivity index while drilling,
in order to characterise the reservoir
inflow performance versus depth.
Among the main challenges faced were
high temperature environment risk and
well location with high risk of punchthrough and rapid leg penetration.
The AU3 plan was successfully
implemented due to extensive shallow
gas analysis and meticulous risk
assessment. It saved USD 22.8 million
(30.9% lower than planned), was ranked
“Best-In-Class” in both WCPF and
DDPTF, and scored a World Record
for Deepest 20’’ Casing While Drilling
(1002m).
5
FEATURE F OCUS
From Fishing
Village to
Bustling
Hub
By Brigitte Rozario
6
MAR 2016
F E AT URE FO CU S
It used to be a small fishing village. The livelihood of
the Kertih population mainly came from the fishing
industry. On leaving school, youngsters could
either follow in their fathers’ footsteps by becoming
fishermen, or they would have to leave Kertih and
head for the bigger towns … or even Kuala Lumpur
to earn an income.
Today, it is a very different future for
the children of Kertih, Terengganu.
The once floundering village
now has an airport, a port, a mall,
housing developments, and many
more amenities. The children
grow up knowing they can gain
employment in several different
industries, including oil and gas.
The quaint village is now a bustling
hub, offering opportunities for
business and employment, thanks
to the entry of PETRONAS.
(POM), explains that when PETRONAS
was established in 1974, it started with
the initial Production Sharing Contract
(PSC) with Esso Production Malaysia
Inc. (now ExxonMobil Exploration
and Production Malaysia Inc.), one of
several PSCs given out by PETRONAS.
“Initially, we started with oil for export,
then in 1983, we constructed the crude
oil refinery for domestic usage.
“That’s when we incorporated
PETRONAS Gas Berhad, and later
built gas processing plants, supplying
natural gas to the power sector, the
non-power sector and also for export,
mainly to Singapore,” explains Mazri.
The PETRONAS Kertih Refinery was the
first oil refinery owned, constructed and
operated by the company’s whollyowned subsidiary PETRONAS Penapisan
(Terengganu) Sdn Bhd, which started
operations in 1983.
To develop oil and gas fields or facilities
offshore and onshore, PETRONAS is
well aware that it needs to comply with
the authority’s requirements. These
authorities include the Department
of Occupational Safety and Health
(DOSH), Department of Environment
(DOE), and local authorities.
“We work hand in hand with the
authorities to make sure they know
exactly what we are doing and share
our progress with them. Everywhere
we go, we believe in engaging the
authorities early to smoothen and
DRILLING
Mazri Mohd Ali, General Manager of
Petroleum Operations Management
“We started out with oil as our core
business, but later, we diversified
because with oil and gas, we knew we
could maximise the end-to-end value
if we nurtured the product.
7
FEATURE F OCUS
Kertih before and after PETRONAS
accelerate any approval process,”
says Mazri.
in Peninsular Malaysia as well as
petrochemical plants.
Since its inception, PETRONAS has
invested a substantial sum into Kertih
for both its Upstream and Downstream
operations. Collaborating with PACs
and other international oil companies
has proven fruitful as PETRONAS has
since ventured into managing its own
offshore operations. Kertih is the hub
that channels and adds value to oil
and gas from the Malay Basin off the
East Coast, a vital link in Malaysia’s
integrated oil and gas value chain.
The petrochemical plants are
integrated with the shared
infrastructure facilities, including
PETRONAS’ Gas Processing Plants,
which processes over 2,000 million
standard cubic feet per day (mmscfd)
of raw gas. KIPC is supported by a
storage and distribution terminal with a
throughput of approximately 2.7 million
tonnes per annum (tpa).
Thanks to the development of Kertih,
PETRONAS’ production profile has
expanded in the past 32 years. Initially,
the refinery processed about 40,000
barrels of light, sweet crude oil per day.
Now, it is about 100,000 barrels capacity.
PETRONAS’ operations in Kertih
now include the Kertih Integrated
Petrochemical Complex (KIPC), located
within the PETRONAS Petroleum
Industry Complex (PPIC). It is an
important link in the company’s gas
value chain. This is where the gas
feedstock from the fields offshore
Terengganu is turned into natural
gas to support the power demands
8
MAR 2016
The gas supports the overall PETRONAS
Chemicals Group (PCG) plants
downstream. The plants within KIPC
produce ammonia, benzene, butanol,
butyl acetate, carbon monoxide,
ethanolamines, ethoxylates, ethylene,
ethylene glycols, glycol ethers, oxogas,
paraxylene, polyethylene, propylene,
and acetic acid.
Mazri’s face lights up as he relates how
Kertih has turned into a “city of lights”
from its humble beginnings, referring
to the mesmerising lights emitted
from PETRONAS’ complex. Being a
Kuala Terengganu boy, he used to see
the flares from the gas processing
plants when he travelled by bus or car
through Kertih during his school days.
He used to wonder what the flares
were and why the fires danced and
flickered 24 hours a day.
Little did he know he would one day
be in-charge of taking care of the PMO
Terminal operations there.
The growth of the oil and gas sector in
Kertih has been symbiotic with that of
the manufacturers and suppliers who
support the oil and gas industry.
“In addition, the development of oil
and gas becomes a nucleus or catalyst
to other sectors’ development. For
example, the Kertih airport and housing
developments, schools, amenities,
supply base and even a port to export
the crude and chemical products.
“This is the secondary and tertiary effect
of oil and gas development. That is how
Kertih was transformed,” he says.
Being a responsible corporation,
PETRONAS naturally believes in
community development, knowledge
sharing and talent development.
“We normally don’t shy away from
community development, knowledge
sharing and social responsibility. It
F E AT URE FO CU S
DRILLING
is the same in Kertih as it is in Bintulu
and Miri because this is PETRONAS’
philosophy of giving back to the
people and community, helping school
children, and extending ourselves to
those in need. These are the concepts
we promote as far as corporate social
responsibility (CSR) is concerned,”
shares Mazri.
The corporation’s staff have also rolled
up their sleeves and helped clean up
homes, buildings and mosques when
floods have hit Terengganu and Kelantan
in the past. Not surprisingly, PETRONAS
is also involved in environmental
conservation projects there.
record and entering the Malaysia Book
of Records for the longest beach
clean-up, along a 11.3km stretch from
Kemasek to Kertih.
With its propitious history in Kertih,
PETRONAS is very much a respected
and valued member of the community.
Likewise, the corporation sees a bright
future in this Terengganu town.
“If there is no gas, there is no power.
In Peninsular, we cannot afford to
be without power as it supplies not
just to the residential areas but also
to key industrial areas. Because of
that, the supply of gas coming from
offshore Terengganu will continue to
come in because we need to sustain
the requirements and growth of the
nation’s power supply, especially in
Peninsular Malaysia.
“There are big volumes coming from
Kertih to also support the overall PCG
plants. So, it will continue, not just to
support the oil and gas industry, but
also to grow and develop. I would say
Kertih will continue being one of our
key hubs in Malaysia,” sums up Mazri.
The ecoCare Environment Education
Centre launched in 2013 is a prime
example, which helps in knowledge
and information sharing among the
community. Established in collaboration
with the Malaysian Nature Society
(MNS), this centre is the first-of-itskind in the East Coast of Peninsular
Malaysia which educates the public on
mangrove protection and conservation.
PETRONAS has also been involved
in turtle conservation and beach
clean-up efforts. Last year, the
company contributed to setting the
The Mesra Mall in Kertih
9
FEATURE F OCUS
The
HEART Of
Lng
By Brigitte Rozario
10
MAR 2016
F E AT URE FO CU S
PETRONAS first set foot
in Bintulu more than
37 years ago. There have
been many changes to
the seaside town since
June 14, 1978, when
the company, alongside
Shell BV and Mitsubishi,
struck a partnership to
undertake Malaysia’s
first LNG (liquefied
natural gas) project, a
project that was at that
time the most costly and
ambitious undertaking
in Malaysia.
This collaboration was the culmination
of a detailed study and negotiations to
develop Malaysia’s gas resources for
export to Japan, and led to the birth
of Malaysia LNG Sdn Bhd (MLNG), with
three trains. The project marked the
beginning of a fruitful “relationship”
with Bintulu.
Demand has been tremendous
since then, resulting in the birth of
joint venture companies MLNG Dua,
with another three trains, in 1992,
and MLNG Tiga in 1995, with two
additional trains.
Malaysia’s first liquefaction plant in
Bintulu was completed on 7 August
1982, and the first consignment
departed on 29 January 1983, for the
Japanese market.
The PETRONAS LNG Complex
in Bintulu comprises the three
LNG plants. The world-class LNG
production complex is spread over
276 hectares of land, receiving gas
supply from Upstream facilities
offshore Sarawak.
The first plant was a demonstration
of Malaysia’s national and integrated
approach to the development of the
natural gas industry. It represented a
huge investment and was an important
project for national development, with
the Government of Malaysia declaring
it a national project.
With eight production trains, the
complex is one of the world’s
largest LNG production facilities in
a single location, and delivered a
record-breaking 25.7 million tonnes
per annum (mtpa) in 2013, with a
world class standard of 99.1% plant
reliability.
DRILLING
FEATURE F OCUS
Bintulu before PETRONAS’ entry
Train 9 is being developed and is
expected to be ready early this year.
Meanwhile, the PETRONAS Floating
LNG (PFLNG) 1, followed by PFLNG
2 are set to be operational by Q1 of
2016 and 2018 respectively. Once
on-stream, these projects will add an
additional 6.3 million tonne capacity
to the Group’s LNG production in
Malaysia.
Malaysia is now the second largest
LNG exporter in the world, after
Qatar. PETRONAS has reliably
delivered over 8,400 LNG cargoes
over 30 years, supplying to our
long term buyers in Asia as well as
meeting demand across the world.
Bintulu has grown by leaps and
bounds since Malaysia’s oil and gas
custodian forayed into that part of
Sarawak. PETRONAS’ large presence
has brought a lot of development
and changes, along with many
opportunities for the townsfolk.
Mazri Mohd Ali, General Manager of
Petroleum Operations Management
12
MAR 2016
PETRONAS LNG Complex at night
(POM), who has seen the growth of
Bintulu, shares his thoughts on the
opportunities there:
“Sarawak had already started producing
oil before PETRONAS existed. When
PETRONAS was established in 1974,
the government vested PETRONAS
with the authority to exploit oil and
gas. When the company came to
Bintulu, we could see it offered a big
gas opportunity. However, unlike
Peninsular Malaysia and despite the
abundance of opportunity and supply,
Sarawak state did not have much
requirement for gas.
So, we thought about what we could
do with the opportunity. That’s when
we had the idea of converting the gas
to LNG. Our main objective was to
liquefy and export to countries like
Japan and Korea. While Kertih was
mainly for power supply, Bintulu was
meant for the LNG business.
Since MLNG’s first shipment, we have
always maintained a 100% successful
delivery rate to our customers. With
one of the best-managed and
operated LNG plants in the world, we
provide world class LNG liquefaction
facilities.
In this case, we are talking about a
two-pronged approach to world
class facilities. Firstly, there is the
development and construction
of the plant. At PETRONAS we
have our own technical standards
and these are further supported
by international standards or
specifications. We know that if we
use PETRONAS standards plus all
these international levels, our plant
will be “world class”.
The second prong is the way we
operate – it must also translate
to world class standards. As far
as operations are concerned, we
have our own standard operating
procedures, such as our Health,
Safety & Environment (HSE)
management system. These help
us greatly in ensuring the plants are
operating safely at an international
standard.
F E AT URE FO CU S
Aerial view of PETRONAS LNG Complex
DRILLING
Being world class is not just about
having the highest production
numbers; you also need to have the
best safety standards.
Safety is very important in
PETRONAS. We make sure we meet
the safety requirements as per the
company’s performance standard. As
much as possible, we don’t want to
see any incidents happening in our
backyard.
In addition to that, last year we had
two big milestones. For Upstream,
it was the handover of the Bintulu
Integrated Facility (BIF) from Shell to
PETRONAS Carigali Sdn Bhd (PCSBSKO), making PCSB the new Sarawak
Integrated Network Operator for
Sarawak’s gas supply and demand.
BIF’s journey started back in 1979
as a crude oil terminal with only
three crude tanks in operations,
and over the years, the facilities
expanded to cater for the integrated
gas supply and demand network,
accommodating both LNG and
non-LNG customers. As a result, this
had significantly magnified the plant
operation dimensions.
The other was PCSB taking control of
Sarawak Shell Berhad’s 50% stake in
MLNG Dua, giving the company 90%
equity in the LNG plant, which Shell
had operated since 1993.
But, we are not just concerned
with the business of LNG in Bintulu.
We also want to give back to the
community.
At PETRONAS, the concept is
the same, no matter where we
go. We would like to add value
to resources for the wellbeing of
society. Environmental conservation,
economic contribution, education,
human capital development – these
are all important corporate social
responsibility (CSR) projects to us.
In fact, in Bintulu, PETRONAS has
worked with the Sarawak Forestry
Corporation (SFC) to drop thousands
of artificial reef balls off the coast
of Similajau National Park, in the
hope that it will allow the marine
life there to flourish. Since 2013,
some 1,500 artificial reef balls have
been deployed at a cost of RM4.6
million (USD 1.1 million). A haven
for sea life, these reef balls create
a rich fishing ground for the local
fishing community whilst providing
protection for the shoreline.
My first trip to Bintulu was in 1998. It
has changed a lot since then. It used
to be a very small town with a few
shops and buildings. You could count
the number of buildings! Bintulu has
transformed since then because of
the LNG industry. There are now big
housing developments, a port and
support industries.
Bintulu is very important to Sarawak
and PETRONAS. In fact, it is going
to continue being important to
PETRONAS because MLNG, MLNG
Dua, MLNG Tiga, and Train 9 are
all located in Bintulu. The town
will continue to be our LNG hub,
supporting our position as the second
largest LNG exporter in the world.”
13
FEATURE F OCUS
Since venturing into Iraq in 2010,
PETRONAS has put into practice the
same values that define our operations
in Malaysia and abroad. Ensuring that
the communities around our areas of
operations are able to develop through
sustainable opportunities and
investment is an integral part of
responsible resource management. As
part of this business practice, PETRONAS
Transforming
has embarked on several sustainable
long-term projects with a core focus on
education, capability building and skills
development, working towards a brighter
future for both the business and the
community in Iraq.
14
MAR 2016
F E AT URE FO CU S
FEATURE FOCUS
PETRONAS is engaged
in the entire spectrum
of upstream exploration
and production activities
in four oil fields in Iraq
through PETRONAS
Carigali Iraq Holding B.V.
(PCIHBV), its whollyowned subsidiary.
PCIHBV is responsible for
managing the company’s
investments in the Garraf,
Majnoon, Badra and
Halfaya oil fields.
DRILLING
Communities
P E T RO N A S U p s t r e a m M a g a z i n e
15
FEATURE F OCUS
PETRONAS’
Initiatives
INFRASTRUCTURE
Road Construction and
Reconstruction in Garraf
will provide the local
community with more
than 100km of asphalt
roads. As of 2015, 20
new roads have been
completed.
The New Bridge Project
involved constructing a
110m alternative bridge
and 3km asphalt road to
ease travelling between
Rifa’i and Qalat Sikar.
EDUCATION
School Refurbishment
and Painting Projects
benefitted 4,400 students
and teachers by providing
a more conducive
learning environment.
MAR 2016
Established Garraf Mobile
Basic Health Care Services,
enabling more than 1000
people to receive free
medical check-ups.
Water Distribution Projects
Provided two Reverse
Osmosis water stations
for the long-term supply
of clean and consumable
water for the 4,000 people
living in the al-Dela and alIbrahim villages. Provided
drinkable water via three
water tankers across 30
villages, benefitting more
than 31,000 individuals.
CAPABILITY
Established the Garraf
Vocational Training
Centre (GVTC). The centre
provides systematic and
up-to-date vocational
training for more than
150 locals per year in
various trades to increase
their employability and
increasing skilled workers
for the local industry.
Training courses include
the Electrical Wiring &
Maintenance Technology
Programme, Refrigeration
& Air-conditioning
Maintenance Technology
Programme, Sewing, and
Basic English.
Contributed seven
cabins for lecture rooms
to Sumer University to
support and encourage
the adoption of higher
education within the
community.
Contributed 300 new desks
to the Al-Sahza Secondary
Girls School, Rifa’I,
benefitting 900 children.
16
HEALTH
Contributed cabins
to be used as a clinic,
providing permanent
healthcare infrastructure
for the Sada Al Sawafi
community.
F E AT URE FO CU S
Interviews
SHEIKH THAMER FLEYEH
‘‘
from Albu Ali Village
‘‘
These roads have become the backbone of the village and links us to the
main road and neighbouring villages. Before PETRONAS paved it, the road
was not useable in the rainy season, but now it can be used all year.
Sheikh Thamir (right) with a PETRONAS representative.
Nazeeh Hameed
from Al-Jado’a
Sabah Jawad
A Farmer From Albu
Hamza Village.
‘‘
Village (Health practitioner
in Al-Ghadeer Clinic)
‘‘
DR
New houses are being built
everywhere and the roads
have many more vehicles
than before. All this is
thanks to PETRONAS and its
investments.
Nazeeh Hameed (far left) with staff from
Al-Ghadeer clinic.
People used to drink river water
or buy water from the city before
PETRONAS’ water distribution
project started. Thanks to the
reverse osmosis water project, we
have observed a decrease in water
related illnesses such as diarrhea
from 15 cases per day to only one
or two cases.
‘‘
Since PETRONAS started its
operations, I have noticed a
considerable improvement
in the wellbeing of the
area. Most of the villages
surrounding the oil facilities
have at least one person
working in the operations,
which is lifting the average
income per household.
G
Ahmed Mikhelif
‘‘
from Albu Nazzal Village
(Ibn Hayan teacher)
‘‘
PETRONAS has constantly
supported our school and other
schools in the area. Our school was
constructed from mud and did not
have a waterproof roof. Since then,
PETRONAS has donated four cabin
classrooms and constructed two
brick classrooms and toilets. The
yard has also been backfilled and
can be used when it rains.
Since the classroom additions,
the percentage of absences has
reduced and the pupils are scoring
higher results in the end of year
exams. We can also continue our
studies during rainy days.
Ahmed Mikhelif (right) speaking to a
PETRONAS employee.
‘‘
Sabah Jawad (middle) with his son, Ali,
speaking to a PETRONAS representative.
P E T RO N A S U p s t r e a m M a g a z i n e
17
FEATURE F OCUS
INTEGRATING
INTO ONEA RECIPE
FOR THE
FUTURE
The Merriam-Webster Dictionary defines ‘Integrated’ as ‘to form, coordinate, or
blend into a functioning or unified whole’, from the Latin word integrat which
means ‘made whole’. And that is what PETRONAS’ Pengerang Integrated Complex,
its biggest investment to date in Southeast Asia; aims to do.
Consisting of the Refinery and
Petrochemical Integrated
Development (RAPID) project, along
with its associated facilities i.e. the
Pengerang Co-generation Plant (PCP),
Re-gasification Terminal 2 (RGT2),
Air Separation Unit (ASU), the Raw
Water Supply Project (PAMER), the
Pengerang Deepwater Terminal 2
(PDT2) as well as Central and Shared
Utilities and Facilities, the mammoth
Pengerang Integrated Complex (PIC)
sits in an area approximately 6,242
acres huge in Pengerang, Johor.
These developments are evolving
parallel as they not only complement
18
MAR 2016
each other but each are a necessary
part of the whole. RAPID as the heart
of PIC needs its facilities as aortas
with its many bloodlines to provide
the necessary nourishing blood for
it to function at optimum, pumping
out life to the surrounding areas and
its communities. So in a sense, PIC is
integrating not only among its projects
but also to its circumambient people.
Blending to a unified whole; as per
PIC’s motto, Together, We Deliver.
PIC is more than just another
PETRONAS project. It is a game
changer for PETRONAS, and the nation
as a whole.
On April 3 2014, PETRONAS gave PIC
its Final Investment Decision (FID),
citing the project met “PETRONAS’
criteria for long-term profitable and
sustainable growth”. In October of
last year, PIC was listed by PETRONAS
President and Group CEO, Datuk
Wan Zulkiflee Wan Ariffin as one of
the three long-term investments
PETRONAS will be focusing on in
moving forward and cementing
its position as a fully-integrated
multinational oil and gas corporation.
PIC is the catalyst to further
strengthen PETRONAS’ position as
a key player in the Asian chemicals
F E AT URE FO CU S
F E AT URE F O CU S
KOTA
TINGGI
PASIR
GUDANG
DESARU
PENGERANG
JOHOR
Johor
Bahru
SINGAPORE
PENGERANG INTEGRATED
COMPLEX (PIC)
PCP
ASU
RAPID
PIC
UF
300,000 bpd Crude Oil
SPV2
RGT2
RAPID
CONFIGURATION
PETROCHEMICALS
LPG &
Naphta
Euro 4M Mogas & Diesel)
Euro 5 (Diesel)
REFINERY
STEAM CRACKER
Commodities
Differentiated
Special Chemicals
PETRONAS’ Largest
Downstream Investment in
Malaysia
19
FEATURE F OCUS
Associated Facilities
LNG
PCP
Pengerang
Cogeneration
Plant (PCP)
PCP will
ensure PIC’s
requirement
for reliable
supply and
competitively
priced steam
and power is
met, as well as
supply to the
national grid.
PDT2
UF
PAMER
RGT2
ASU
Pengerang
Deepwater
Terminal (PDT2)
PDT2 will
handle the
storage for
import of
feedstock
(crude oil) and
export of
products
(petrochemical
& petroleum
products).
Utilities and
Facilities (UF)
UF will provide
central and
shared utilities
and facilities
services.
Raw Water
Supply Project
(PAMER)
PAMER will
supply reliable
and sustainable
raw water for
PIC and public
consumption.
Regasiﬁcation
Air Separation
Unit (ASU)
ASU separates
atmospheric air
into its primary
components,
typically
nitrogen and
oxygen, to
deliver
industrial gases.
market, focusing on differentiated and
specialty chemicals and capturing the
growing demand from automotive,
pharmaceutical and consumer products
sectors. Domestically, PIC will contribute
towards meeting the growing demands
for petroleum products, meeting
international standards for the Malaysian
market, i.e. Euro 4M (Mogas) and Euro
5 (Diesel) specifications.
Launched by the Prime Minister in May
2011, PIC is also a key project under
Malaysia’s Economic Transformation
Programme (ETP) which aims to
establish new engines of growth
for Malaysia to meet future energy
requirements and catapulting Malaysia
into a high-income nation by 2020.
Given the stamp of approval by Johor’s
beloved monarch, His Royal Highness
Sultan Ibrahim Ismail ibni al-Marhum
Sultan Mahmud Iskandar who graced
RAPID’s ground-breaking ceremony
in May 2012, this project is one for the
people and a must-succeed for both
PETRONAS and Malaysia.
Before PETRONAS first mooted
Pengerang as a viable project site, few
outside of Johor had heard of it. Located
at the most southern tip of Johor and
literally at the very end of Peninsular
Malaysia, it is here, that PETRONAS is
laying the foundation for Malaysia to
leapfrog into a new morrow.
20
MAR 2016
Terminal (RGT2)
RGT2 provides
reliable natural
gas supply to
both PIC and
the Peninsular
Gas Utilisation
(PGU) system.
The project is currently in full
construction mode. Massive structures
are literally stamping their mark on
Pengerang’s red soil, slowly but surely
reaching up to the blue clear skies. The
workforce is many and varied; different
nationalities working side-by-side in the
relentless hot sun to bring PETRONAS’
vision and Malaysia’s hope into reality.
Realising the potential social impacts
a large international workforce
might bring to the surrounding
community, PIC commissioned a
Social Impact Assessment (SIA) study
to look into mitigating potential
social problems. Through the findings
and recommendations of the SIA,
several measures were put in place at
Pengerang for the local community.
For the community at large, PIC
has set up a Grievance Mechanism
process; where Pengerang locals can
ask questions, raise issues, and bring
up community matters related to the
project through emails, a local line,
as well as easily-available drop boxes
within their area.
These included bringing the
community leaders together in a
weekly meeting; the Community
Leaders Committee (CLC) which
PIC chairs and where all manners of
community issues and problems are
discussed along with participation from
relevant state authorities. CLC
functions as the focal platform for the
leaders of the different segments in
the community, e.g. women leaders,
village heads, youth representatives,
to sit down together and prioritise
programs and developments that are
sustainable, long-term and beneficial
to the community.
PIC is expected to bring massive
multiplier and spin-off effects to its
surrounding communities, all of which
spell substantial employment and
entrepreneurship opportunities for the
people of Pengerang. With the project
progressing well on schedule towards
the first Refinery start-up in Q1 2019,
the change ‘tsunami’ is building now,
with jobs currently available for skilled
technical workers and will eventually
open for professional positions.
By benchmarking against the
International Finance Corporation
(IFC) standards as outlined in the SIA,
all developments within Pengerang
is inclusive of the community within
and surrounding it, and that the locals
have an informed say in ensuring all
sustainable developments brought
about by the project is shared for the
benefit of all.
Working hand-in-hand with the
State government, #ForPengerang
was established in February of 2015
F E AT URE FO CU S
to increase participation of local
content within the project through
job creations, entrepreneurships,
human capital development as
well as development of auxiliary
industries. Auxiliary businesses such
as food and beverage outlets, laundry
businesses, telecommunications and
sundry shops are just a few of the
businesses necessary for the booming
Pengerang, which will go a long
way towards improving their quality
of lives.
The community programmes also
focuses heavily on education and
entrepreneurship. Believing firmly in
the concept of growing your own
Plot Area
6,242 acres
62x
Klcc
Kuala lumpur
city center
timber, for PETRONAS a sustainable
future for energy starts with nurturing
young minds with knowledge that
inspires and empowers. Through
their Signature as well as customised
programmes e.g. The Young Scientists
@ Pengerang, schoolchildren from
ages 8 to 16 are exposed to learning
programmes, motivational talks, stays
at Universiti Teknologi PETRONAS
where they learn how to program and
experiment in state-of-art laboratories
as well as financial aids for the needy.
PETRONAS’ hope is that these will
help to strengthen their interest in
Science, Technology, Engineering and
Mathematics (STEM), and create future
cosmopolite of PETRONAS.
Earthwork
Construction Manpower
80,000,000 m
3
2.5x
50,000-60,000
workers
6x Pengerang
population
To blend into a unified whole. PIC is
blending this once sleepy, at-theend-of-the-world village into a new,
modern catalyst for a transformed
Malaysia. The locals are certainly
eager for the metamorphosis as they
look forward to new beginnings
with hope and expectations. For
PETRONAS, the project will certainly
bring new exigencies and with them
experiences, and PETRONAS is
firmly committed to the successful
delivery of the project. This is the
perfect blending for a new future
for all.
Together, PETRONAS and
Pengerang will indeed, deliver.
Structure Steel
150,000 mt
TwIN TOwERS
4x PETRONAS
KlIA
Plot Area
6,242
acres
3,500x
fOOTBAll
fIElDS
PIC IN A NUTSHELL
Refinery and Petrochemical
Integrated Complex (RAPID)
Has a capacity of 300,000 barrels per day
(bpd) while the Steam Cracker will have
a combined annual production capacity
of more than 3 million tonnes per annum
(MTPA) of Ethylene, Propylene and C4C6 olefin products. The Refinery and
Steam Cracker provides feedstock for the
Petrochemical Plants.
Pengerang Co-generation Plant
(PCP)
Designed to generate 1,220 megawatt
(MW) of electricity and 1,480 tonnes per
hour of steam, PCP will provide reliable
steam and power to meet requirements
of plants within PIC and supplement the
Peninsular Power Grid. (400 MW June
2017-December 2018, 600 MW from
January 2019 onwards).
Air Separation Unit (ASU)
The ASU plant separates atmospheric
air into its primary components (Oxygen
and Nitrogen) and supplies gaseous
oxygen and nitrogen to PIC. It will have a
capacity of 1,600 tonnes-per-day (TPD)
of oxygen and 1,800 TPD of nitrogen.
Pengerang Deepwater Terminal 2
(PDT2)
PDT2 will offer LNG unloading and
reloading, storage, handling and
regasification; with a capacity of 3.5
MTPA and connected to the Pengerang
Gas Pipeline. RGT-2 will provide primary
gas supply to RAPID, PCP and the
Peninsular Gas Utilisation grid to augment
the availability of gas in the country.
Liquid Bulk Terminal (SPV-2)
SPV-2 will undertake the development,
construction and operation of the
facilities required for the handling,
storage and distribution of crude oil,
petroleum, chemical and petrochemical
feedstock, products and by-products
to and from the RAPID complex. The
storage facilities will have a capacity of
approximately 1.7 million cubic metres
(m3) and a deepwater jetty with eleven
berths.
Raw Water Supply Project (PAMER)
“Projek Air Mentah RAPID” or PAMER will
supply 230 MLD of raw water to RAPID
and 30 MLD of raw water for public
consumption by May 2016. Comprises
of an intake and raw water pumping
station, flood detention pond, switch
station, transformer yard, pipelines, main
dam and saddle dam, Booster Pumping
Station and Terminal Reservoir.
Centralised and Shared Utilities
and Facilities (UF)
PIC’s requirement for utilities, site
development and other infrastructure
facilities takes into consideration
the requirements of the whole
complex, which will be supported by
comprehensive utilities and facilities for
air system, fuel system, firewater, flare,
tankage and storage among others.
21
MINI STORY
CUTTING
COSTS
Contractors play
their part
By Abdul Hadhi
22
MAR 2016
M IN I STO RY
“Challenge project costs as if you were paying
with your own money.”
Carl Hunter
Partners are contributing significantly to
PETRONAS’ drive to cut costs amid subdued
demand and lower prices. Flow caught up
with Carl Hunter – team leader for the CAPEX
initiative at Kebabangan Petroleum Operating
Company (KPOC) - on the role production sharing
contractors (PSC) are playing.
CORAL 2.0 is a great platform to
do this,” he added.
This resulted in savings of RM340
million (USD80 million) or 23%
- after detailed benchmarking
of yard upgrades, crane usage,
manpower and related items.
DRILLING
Hunter believes that a key factor
in successfully lowering costs is
creating a mindset of ownership
among partners and to “challenge
project costs as if you were paying
with your own money”.
Refusing to accept high costs
and cost recoverable has already
reaped substantial savings of
RM550 million (USD130 million)
for KPOC from non-market vendor
negotiations.
Separately, the cost of eight
procurement/service packages
was reduced by RM90 million
(USD21 million) or 33% from the
initial sole source bids after each
package was checked through
benchmarking despite initially
difficult contract negotiations.
KPOC’s role in the CORAL 2.0
capex cost driver benchmarking
initiative involves providing regional
and local data for the group’s
database, especially benchmarking
commercial bids early enough to
aid in contract negotiations. “If the
cost is too high, the benchmarking
will aid management to drive down
costs in a transparent way with
the contractor/vendor,” explained
Hunter who was seconded by
ConocoPhillips to KPOC for the
Kebabangan (KBB) gas project
off Sabah from 2008. The other
partners in KPOC are PETRONAS
and Shell.
Implementation wasn’t always
smooth. A major challenge was
to bring transparency of detailed
information where it was not
previously practised. But doing so
and sharing a broader range of
experiences among the partners
has been key to executing the KBB
project on schedule and below
budget.
Hunter highlighted another
initiative – lower manpower and
maintenance rates for long term
service agreements (LTSA) - which
could result in estimated annual
savings of RM250 million (USD59
million) if applied successfully to
other such contractors as well.
Hunter emphasised the need
to be “adaptive to change by
not accepting past practices as
the norm and instead challenge
ourselves to be more efficient in
innovative ways”. “PETRONAS
Having not seen similar levels
of transparency, teamwork and
avid participation in driving
down costs in other international
governments, Hunter described
working with PETRONAS as a
great experience.
23
Powering
THE
PENAN
Community
How Petronas Wired A Remote
Penan Village In Sarawak’s Hinterland
By Johannes Ridu
CO RP O RAT E S O C IA L IN V E S TME NT
“The local community must have ownership of the
project. We want them to take care of the pipeline.
They must also own it.”
Hamidi Ramli
Stakeholder Relations Senior Manager
ALL his life, Penan
headman Ajang Pen,
55, had been relying on
kerosene lamps to light
up his modest home at
Long Kerangan. Never
in his wildest dreams did
he think that one day
his 30-door longhouse
would have 24-hour
electricity.
Long Kerangan is located deep in
the hinterland of Baram district in
northern Sarawak and surrounded by
primary jungle. This Penan settlement
of about 120 people is accessible only
by a logging track from the nearest
rural township of Long Lama Bazaar
80km away. A journey from Miri to
Long Kerangan typically takes five
to six hours – three hours by road
from Miri to Long Lama Bazaar and
another three hours on a bumpy and
dangerous logging track.
Ajang said he had been resigned to
the fact that his village will never
get electricity supply – at least
not in his lifetime. “We understand
that it is too expensive and
uneconomical for conventional
means of bringing electricity to our
village, which is very remote,” he
admitted.
But despite its remoteness, Long
Kerangan is blessed with beautiful
streams and a cascading waterfall
known as Ong Layuh, which has a
perfect vertical drop, ideal for the
development of a micro-hydro
project.
That hydro potential might not
have been realised, had PETRONAS
not embarked on a 512km SabahSarawak Gas Pipeline project (SSGP)
in 2008 to transport dry gas from
the Sabah Oil and Gas Terminal
(SOGT) in Kimanis, Sabah to the
Malaysia LNG plant at Tanjung
Kidurong in Bintulu, Sarawak. Part
of the pipeline crosses the vast
25
Let there be light!:
A group of schoolgoing Penan children
studying under the
bright light powered
by the micro-hydro
Many hands make light work
Tutoh-Apoh basin in Ulu Baram, and a
significant portion of it is laid less than
4km from Long Kerangan. The SSGP
project would entail the oil giant to
fulfil its corporate social responsibility
to the communities directly affected
by the project including Long
Kerangan.
So in June 2014, PETRONAS
collaborated with TONIBUNG,
an NGO with expertise in green
technology project development,
to conduct a feasibility study in the
Tutoh Apoh area for a pilot microhydro CSR project in Sarawak. The
team discovered that the Ong Layuh
waterfall near Long Kerangan was
the most suitable as it provides a
constant water flow of 18 litres per
second, enough to power a 10kW
turbine. “There is sufficient volume
of water and good topography with
100m head (elevation),” said Tengku
Ahmad Zariman Tengku Zainal Abidin,
a PETRONAS manager who took part
in the feasibility study.
“A micro-hydro with a generation
capacity of 10 kW is more than
26
MAR 2016
enough to power a longhouse
of 30 doors,” added Hamidi
Ramli, PETRONAS Stakeholder
Relations senior manager, who was
instrumental in the realisation of this
CSR project.
Civil work on the project started in
September 2014. The construction
was done through “gotong-royong”
teamwork between the Long
Kerangan community, PETRONAS
and TONIBUNG, involving 5km piping
work that runs from the longhouse to
Ong Layuh waterfall. The project was
successfully completed a year later
at a cost of RM230,000 (USD55,000)
and commissioned on 26 Oct 2015,
bringing round-the-clock electricity
to the longhouse for the first time.
“Even right now, I still cannot believe
that we have a 24-hour electricty….it
was never in my wildest dreams,” said
the beaming Ajang when met during
the official launching of the project
on Oct 27.
There were many grateful and happy
faces when the longhouse received
24-hour electricity for the first time
on Oct 26. On that day, the children
played, sang and danced under the
fluorescent lights of the longhouse
veranda. The older folks and youth
participated in karaoke sessions till
the wee hours of the morning. It was
the first time karaoke music broke the
silence of the jungle in Long Kerangan.
For the project team, there were
almost no words to describe their
satisfaction and sense of fulfilment in
bringing this project to reality. “Seeing
their happy faces is already a big bonus
for me,” Hamidi said.
The micro-hydro project is a potential
game changer in Sarawak’s rural
transformation programme. It is already
showing an impact to the community
of Long Kerangan. With 24-hours
electricity, their school-going children
who are studying at SK Kevok and SK
Long Bedian primary schools, located
a few miles away from their homes,
are now able to do their revision and
homework at night. The extra hours of
study they get will certainly increase
their chances of succeeding in school.
CO RP O RAT E S O C IA L IN V E S TME NT
“With better education, these
children can change their lives for
the better and the future of their
community,” Hamidi stressed.
The community will also be
connected to the outside world
via televisions and radios powered
by the micro-hydro. As such, the
electricity supply can be a catalyst
for socio-economic transformation
in this Penan settlement.
This pilot project also
complements the Federal
government’s programme to wire
up to 95% or 10,500 rural homes in
Sarawak in 2015.
GIVING BACK TO SOCIETY
The micro-hydro project at Long
Kerangan is one of the many
PETRONAS CSR projects implemented
since 2009 to benefit the local
community in Sarawak affected by the
SSGP project.
From 2009-2015, PETRONAS invested
more than RM15 million (USD 3.6
million) on CSR activities conducted
in Lawas, Limbang, Baram and Bintulu.
A large chunk of the money was
spent on improving public utilities and
amenities for affected communities.
The funds were spent on upgrading
roads, schools, community
Preliminary design
• Head= 100m
• Flow= 18 litres/sec
• Power output= 10 kw
• Turbine type= Pelton
• Total penstock length= 1500m
• Penstock size 4” PN12
• Total distribution cable length=
1500m
• Distribution system= Single Phase
• Total household= 120 people,
in 30 houses
INTERNATIONAL RECOGNITION
The micro-hydro pilot project has
won the CMO Asia’s 5th Asia Best
CSR Practices Award 2015 under the
category of Community Development,
presented in Singapore on 12 August
2015. According to CMO Asia’s
website, the award is “Asia’s highest
recognition of corporate organisations
that have a significant and positive
impact on the lives of the people
around them. CSR programmes
consider company’s commitment
to and respect for communities,
environment and people.”
halls, building new bridges, and
constructing water gravity feeds.
Bedian, SK Long Seridan, SK Long Teran
Kanan, SK Long Bemang, SK Ubong
Imang, Long Luping, Long Sukang, Long
Tuma and Ba’Kelalan. The company
also upgraded the school libraries of
SK Long Kevok, SK Long Bedian and SK
Long Seridan.
That’s not all. PETRONAS also
supports the preservation of Orang
Ulu traditional culture and sports by
sponsoring sports and community
cultural events such as the Lun
Bawang’s Pesta, the Kayan’s Pesta Air at
Long Lama Bazaar, and many more.
JOB OPPORTUNITIES FOR LOCALS
CSR contributions are not always
sustainable. Therefore, PETRONAS is
getting the local communities to be
involved in the maintenance, safety and
security of the 421km long pipeline that
sits on Sarawak soil. To date, at least 10
contracts are awarded to local vendors
which employ hundreds of local people
to maintain the pipeline’s Right Of Way
(ROW) and the 18 Block Valves located
in Sarawak.
By giving them jobs, PETRONAS hopes
the affected community will have
greater sense of ownership for the
project. “The local community must
have ownership of the project. We want
them to take care of the pipeline. They
must also own it,” says Hamidi.
PETRONAS also donated machineries
such as generator sets, chainsaws,
water jets, rice grinding machines, as
well as building and piping materials
to the affected communities that
include the Penan, Kayan, Lun
Bawang, Kelabit, Berawan, Brunei,
Kedayan and Iban.
Apart from that, PETRONAS also
conducted education programmes
such as the PETRONAS Science
Educamp for pupils of SK Long
Ong Layuh Waterfall: The project involved a
5km piping work that runs from the longhouse
all the way to the water source.
27
SPE CIAL
WE’RE
SAFE
AND WE
KNOW IT
By Sreerema Banoo
28
MAR 2016
S P E CIAL
Yong Sai Chung
DRILLING
Asset integrity
management is the
cornerstone of
PETRONAS’ operations,
for it does not just
affect the production
capacity of the oil
and gas operator, but
also its people, asset,
environment and
reputation.
PETRONAS subscribes to the ethos
of ‘Design Right, Construct Right and
Operate Right’, and this has translated
to strong and robust asset integrity
management at the multinational oil
corporation.
Yong Sai Chung, who is Head of
Health, Safety & Environment (HSE)
at PETRONAS’ Upstream Business,
does not believe that there can be
any greater focus than this. “I don’t
think we can afford to just focus on
one aspect and forget the others,” he
says, reiterating that asset integrity is
the fruit of good design, construction,
operations and maintenance.
Asset integrity, he explains, is firstly
concerned with ensuring that facilities
and assets that are designed and built
by the oil and gas operator is able to
perform its business function. “And
secondly in the course of carrying
out its function, it must ensure
safety whereby no harm comes to
the people, asset, environment and
reputation of the company,” he adds.
Over the years, asset integrity
management has increased in
importance, in part due to increased
awareness of its impact. “The impact
of asset integrity failure can range
from minor, for example a gas leak
which is detected quickly and is
addressed, to catastrophic,” he says,
citing the Piper Alpha disaster in 1988
which killed 167 people and involved
billion of dollars in losses, and repair
cost, and is considered the deadliest
oil rig accident to date. Piper Alpha
was a North Sea oil production
platform operated by Occidental
Petroleum (Caledonia) Ltd.
“As the key to managing major
incident risks, asset integrity
management continually evolves
to incorporate international best
practices and standards. This is
vital in addressing the concerns of
various external stakeholders such
as NGOs, as well as conforming
to stricter regulatory requirements
especially on the health, safety and
environment (HSE) aspect of the
industry,” adds Yong.
To this end, the oil and gas
company boasts stringent and high
standards where asset integrity
management is concerned. “We
have the PETRONAS Technical
Standards, Project Management
Processes, as well as the
Operational Readiness Framework
to provide check and balance as
well as a robust inspection and
maintenance system to ensure
that on the day-to-day basis,
the asset’s integrity is taken care
of,” he says, adding that at every
stage of the asset or project, the
management of its integrity is a
priority.
29
SPE CIAL
“At the detailed design stage, the
engineering department will need
to refer to PETRONAS Technical
Standards, or any other industrial
standard which is applicable,
and these standards define how
asset integrity must be managed
throughout the lifecycle of the asset.
“Then along the way there are many
‘gates’ that are put in place, and
various reviews to ensure that all
the hazards are addressed. At the
construction stage, we ensure that
whatever has been in the design
documentation will be implemented
and this is where quality assurance
and quality control inspection
teams come in. Finally, during the
operation phase, we ensure that all
the inspection and maintenance
programmes are implemented,” he
explains.
Leave no room for error
Although there are systems embedded
within the organisation to ensure
30
MAR 2016
that asset integrity management is
robust, PETRONAS is not one to rest
on its laurels. Yong discloses that in
2012, the management realised that
because the company had inherited
many older assets, it undertook an
audit of its facilities. “A specialised
team went to all the Upstream assets
to ensure that the asset integrity is
intact as well as to identify if there was
anything else we could do.”
Based on the audit, the Upstream
Business rolled out the Technical
Integrity and Process Safety (or TIPS)
programme at the end of 2012.
The RM30 billion (USD 7 billion)
programme, which runs until 2018,
looks at the gaps and deficiencies
raised in the audit and ensures that
asset integrity is maintained at the
highest level.
“We will enhance, renew, rejuvenate
and do whatever is necessary to
ensure that all our assets are safe, and
more importantly, we know this for a
fact…our motto is our assets are
safe and we know it. The programme
also does not just address the physical
condition of the assets but also gaps
in the processes,” he says.
This ongoing TIPS programme
emphasises the continued assurance
that PETRONAS assets are safe, by
focusing on technical integrity and
enhancement of an existing Process
Safety Management Programme for
the Upstream business, in order to
strengthen Safety Critical Elements
management.
Yong, whose department is
responsible for the TIPS programme,
says HSE is integral to the
conversation about asset integrity.
“Every level of management has
meetings under HSE or TIPS to
monitor the effectiveness of our
processes and programmes on
managing process safety and asset
integrity.
“One of the things we learned from
the audit was that the profile (of asset
S P E CIAL
DRILLING
integrity management) was not
raised high enough…we know that
we have a process in place and the
assumption was that the process
can work without any attention or
pressure. But we need to tell our
people that it is important…the key
lesson is that there is no room for
error. We cannot assume or take
things for granted,” he adds.
Upholding asset integrity is however,
not without challenges, namely
balancing between profitability and
investment, as well as having the
necessary resources to undertake
asset integrity related activities
particularly in an environment
as dynamic as that of the oil and
gas industry. This is an area that
is especially pertinent for older or
aging assets.
“Managing asset integrity at different
phases of the asset’s life is not a
straightforward, mechanical process,”
he explains. The organisation, he
adds, must first decide if it wants to
keep the asset or retire it. If it is the
former, asset integrity assurance
activities need to be carried out,
including asset life study and
rejuvenation, as well as continuing
to implement inspection and
maintenance activities to prevent the
deterioration of the asset condition.
The current retreat in oil prices is
also posing a challenge, but Yong
prefers to see the situation as
presenting opportunities to think
outside the box. “We have to find
cost effective ways of doing things
without sacrificing the intent and
goals of asset integrity,” he adds.
People play a key role
Following the rollout of the TIPS
programme, Yong says there has
been a visible reduction of major
fire and major Loss of Process
Containment compared to pre2012. “But this is not reflective of the
real changes that have happened,
because the statistics are the result
of changes in the causes, for
example in how the system works
and how people behave.
TIPS aims to cultivate a value
driven safety culture in PETRONAS.
This involves the willingness
to learn, adapt, and implement
reforms, operating by safety
guidelines, practicing a “no-blame”
culture, being ready to face the
unexpected, reporting own errors
and near misses, and managers
who are aware of critical issues.
“There is now more emphasis
on doing everything right
according to procedures, greater
transparency via management
meetings that focus on asset
integrity and process safety, and
people are more courageous
in intervening and stopping
production or work when
they have detected something
wrong,” he says, adding that the
organisation will continue on its
journey of improvement.
31
SPE CIAL
The organisation’s robust asset
integrity management framework
and process safety aside, people, he
reiterates, play a paramount role.
“What makes all these come alive is
the human touch,” says Yong, adding
that strong leadership is crucial. In
PETRONAS, asset integrity is one of
the key performance indicators of the
Executive Vice President.
He adds that PETRONAS’ record for
the past four decades show that its
management of its assets have been
commendable.
“We have reached the level of ‘wellmanaged’—the question is to sustain
this and do better. We believe that
being really good in this area is
our licence to operate and we will
continue to give emphasis to this area.
We expect that after 2018, the new
standards and enhanced systems will
be business as usual. If we make it
work as per intent and design, then it
will work,” he says.
32
MAR 2016
QUICK FACTS ON ASSET INTEGRITY MANAGEMENT
• Asset integrity management enable assets to perform its intended
functions for the business.
• Asset integrity doesn’t just affect production capacity but also
people, asset, environment and reputation.
• Robust asset integrity programmes look at the asset’s entire lifecycle
– from commissioning, operation, maintenance, repair to ultimately
discontinuation or abandonment of the asset.
• Monitoring and review is a key element in asset integrity
management – enabling the organisation to know how it is doing
and the intervention required.
• The impact of asset integrity failure can range from minor issues to
catastrophic ones.
• Health, Safety & Environment (HSE) and asset integrity are
interrelated – not paying attention to asset integrity will have a
heightened impact on HSE.
• People play a paramount role in asset integrity management, be
it their attitude or mindset, and whether they see it as a priority.
Strong leadership is vital.
S P E CIAL
BEST IN
CLASS
By Sreerema Banoo
Asset integrity is integral to Progress Energy
Canada Ltd’s operating strategy as the
company develops the necessary
infrastructure to deliver on its mission
of ‘Safe, Responsible, 100% Reliable,
Lowest Cost Production’.
DRILLING
SPE CIAL
development business in the oil
and gas industry, says PECL’s Asset
Integrity Risk Management Process
is evolving to look at the entire
lifecycle of its assets whether they
are pipelines, pressure equipment
or tanks from design, construction,
commissioning, operation,
maintenance, repair, to ultimately
the discontinuation or abandonment
of the asset.
“PECL is currently in the
implementation stage of an
Enterprise Asset Management
programme to allow us to effectively
manage our assets and safeguard
our personnel, the community and
the environment. Risk is continually
changing with our assets due to the
nature of our operations, therefore it
is imperative that our Asset Integrity
Risk Management Process is robust
enough to meet these demands.
Mark Fitzgerald
Asset integrity is a key element to
Progress Energy Canada Ltd’s (PECL)
operating strategy and plan to
achieve best in class North American
health, safety, regulatory and
environmental performance, says
Senior Vice President, Production &
Facilities Mark Fitzgerald.
A robust asset integrity programme
is also a key priority for PECL as the
organisation develops the systems,
processes and operating expertise
necessary to deliver on its mission
of ‘Safe, Responsible, 100% Reliable,
34
MAR 2016
Lowest Cost Production’. “Incidents
and injuries are outcomes that can
be prevented by proper planning,
hazard identification and elimination
of critical unplanned maintenance.
A robust asset integrity programme
is a component in the Health, Safety,
Regulatory and Environmental
Management System (HSRE MS)
currently being developed at PECL,”
he adds.
Fitzgerald, who has more than
25 years of experience in field
operations, production, and
“We are exploring a web-based
risk management programme for
pipelines that will enable us to meet
regulatory compliance, reduction in
pipeline incidents, implementation
of the appropriate control programs,
and optimisation of costs while
ensuring the health and safety of our
employees and the environment,”
he says.
Fitzgerald points out that PECL has
multiple work sites and thousands
of contractors at peak times, spread
across a very large and diverse
geographic area. “It is difficult to
create a centralised control point
for all activity as can be done in
S P E CIAL
“As PECL is developing the longer term operating
strategy and HSRE MS, each is being developed in
close cooperation with PETRONAS,”
Mark Fitzgerald
Senior Vice President, Production & Facilities
large petrochemical, refining or
offshore operations,” he says. As such,
PECL’s systems and processes must
ensure that controls and competent
supervision are in place across all
sites, and that the application of these
controls and processes are consistent
and applied in a manner that aligns
with the operating strategy and
HSRE MS.
“In addition, PECL uses multiple
contracting companies, and as part
of our HSRE culture, we accept
ownership for their safety when on
our sites. Aggressive and sophisticated
contactor management processes are
key. Senior leadership is very visible
throughout the organisation and with
our contractors, to clearly deliver the
message that the health and safety of
personnel on our sites is paramount
and PECL will not reduce that focus,”
he adds.
DRILLING
PECL, which is owned by Malaysia’s
national oil corporation, PETRONAS,
produces more than 750 million cubic
feet equivalent of natural gas per day
in northeast British Columbia and
northwest Alberta. PETRONAS also
owns Pacific NorthWest LNG, which is
planning to build a world-scale LNG
export facility on Canada’s west coast,
near Prince Rupert, British Columbia.
The facility would liquefy and export
natural gas produced by PECL.
Fitzgerald says that PETRONAS
has been very clear and supportive
in the priority given to HSRE, and
actively supports PECL’s review and
improvement processes. “As PECL
is developing the longer term
operating strategy and HSRE MS,
each is being developed in close
cooperation with PETRONAS,” he
says, adding that both PETRONAS
and PECL leadership are committed
to HSRE.
“From that, a relentless commitment
to continuous improvement and
open and honest learning ensures
that performance consistently
improves. PETRONAS is clear and
supportive by recognising that we
must be willing to share and discuss
the bad news and not hide from
our mistakes but learn from them,”
he says.
He adds that both companies share
a strong partnership and continue to
work closely together to align and
learn from each other. “PETRONAS
provided PECL excellent insights
and an objective and honest analysis
of PECL performance which helps
ensure there are no ‘blind spots’. The
sharing of incidents, learnings, and
risks helps both organisations ensure
top tier performance,” he says.
35
TECHNOLOGY
The InField Liner®:
A PETRONAS
OFFSHORE
PIPELINE
REHABILITATION
TECHNOLOGY
An integral part of PETRONAS Upstream’s
infrastructure is its vast network of pipelines,
totaling more than 3,300km in length.
Pipelines play a vital part of the operations,
allowing valuable products to be transported
from one point to another. Implementation
of new technologies will considerably move
PETRONAS Upstream’s pipeline integrity
management towards achieving a “Zero High
Risk pipeline” by 2020.
36
MAR 2016
In 2013, Technology, Technical Global
together with Production Malaysia
delivered a new technology allowing
the benefits of economical operations
and maintenance by enabling pipelines
to operate beyond its design life.
The new technology developed
is called “InField Liner® (IFL)”. IFL
is a reinforced composite liner,
inserted into existing pipelines to
rehabilitate and extend pipeline life.
The technology also encompasses the
method of installing the liner offshore.
As of now, there has not been any
technology or material per se that can
T E C H N O LO GY
be used to rehabilitate existing offshore
pipeline. This technology is niche and
is a first of its kind in the world.
About the IFL Technology
IFL is a three-layer reinforced
composite liner, where the inner layer
of the liner, which is in direct contact
with the product of the line, is made
out of PVDF (polyvinylidene difluoride),
known for its versatility and toughness.
This allows the liner to be used in
both sweet and sour hydrocarbon
conditions, with temperatures up to
1200c. The liner core is made from high
strength Kevlar® fabric. The Kevlar®
fabric is specially weaved to allow
for the liner to take a maximum load
of 25 tons during pulling. The outer
layer of the liner is made out of TPU
(thermoplastic polyurethane).
DRILLING
O
The technology kicked-off from an
R&D project started in March 2011,
in collaboration with Anticorrosion
Protective Systems (APS L.L.C.). The
project was executed in three phases,
which encompass Material Research
and Development in Phase I, Onshore
Demonstration in Phase II and Offshore
Demonstration in Phase III. It is during
the R&D course that the liner was
tested to meet stringent oil and gas
environment conditions, in accordance
with the API Recommended Practice
15S “Qualification of Spoolable
Reinforced Plastic Line Pipe”, and
API 17J “Specification for Unbonded
Flexible Pipe”, with further reference to
the applicable ASTM test standards and
NACE standards.
37
TECHNOLOGY
never been done anywhere in the
world under offshore conditions
is a testament to the creativity and
hard work of our engineers and
technology managers.
Liner folding and banding
Phase I started with the testing and qualification of reinforced plastic liner
product in accordance with the API Recommended Practice 15S “Qualification of
Spoolable Reinforced Plastic Line Pipe”, with further reference to the applicable
ASTM test standards, API 17 series, and NACE standards. The testing and
qualification procedures were undertaken, and during the course of the project,
various configurations of the liner have been tested including:
• Alteration of the configuration of plastic, composite layers and jacketing,
so as to provide improved performance capabilities (permeability, chemical
resistance, temperature resistance etc.)
• Alteration of the fiber reinforcement, so as to provide improved tensile
capabilities
• The production of a non-standard diameter insert, so as to provide a liner that
will provide a close fit to the host carbon steel pipeline
A predictive installation software was also developed during the initial phase that
enabled accurate calculations of the pulling loads required for the installation
of the IFL, and hence determine viability for any given pipeline length and
configuration. This software model has been extensively tested and calibrated
during the onshore demonstration conducted in Phase II. The IFL liner is modeled
to be feasible over distances of up to 10km.
Subsequent to the achievement in Phase I, an onshore demonstration was
conducted successfully on a full scale eight-inch pipeline in September 2012. The
Phase II Onshore Prototype testing sequence included full 24 hour hydro-testing
of the liner under in-pipe and extracted conditions.
IFL Offshore Demonstration and Liner Installation
The concept of lining pipelines are known and practiced onshore. However,
installation of the liner to an existing offshore pipeline is a major challenge. Sabah
Operations embarked together on this technology and was committed to being
the first asset to demonstrate this technology.
The final phase of the technology development and the “proof of the pudding”
was the offshore demonstration conducted at SBO Samarang pipeline in
2013. The pulling and inflating of the liner into an existing pipeline which has
38
MAR 2016
It all started at the production facility
whereby the produced IFL is verified
in compliance with the requirements
set in the defined Quality Assurance
Processes, witnessed and verified
by a third party inspector (TPI). Liner
verification is done again during the
liner folding and banding process
whereby the transported liner is
transferred onto the installation drum,
being folded and secured by banding.
This process was done at the Labuan
onshore yard where most of the
preparations were made.
The offshore activities were
scheduled from mobilisation through
demobilisation. In comparative to the
schedule, a primary loss of seven
days was incurred due to poor
conditions and inability to transfer
and set up equipment, considering
platform access and logistics
limitations.
Before inserting the liner into the
host pipeline, the inside of the
pipeline was first cleaned to remove
deposits, wax, scales, water and
oil. A gauge plate was then pulled
through the pipeline to ensure the ID
of the host pipe was suitable for liner
insertion. Typical areas of concern are
significant changes in pipeline wall
thickness, ovality, fittings, solids in
the line, excessive weld penetration,
or anything else that reduces the
ID. Finally, a section of the liner was
pulled through the pipeline acting
as a test piece, and on its exit, was
visually examined for damage.
Full insertion of the liner was then
initiated. The liner was pulled through
the pipeline using the liner insertion
winch positioned on SMJT-E, the end
section of the pipeline being lined.
The liner was fed from a vessel to
the riser flange of the insertion point,
which was at SMP-A.
T E C H N O LO GY
platforms whose age surpasses 40
years, requiring careful planning and
coordination in terms of equipment
layout and installation decisions, and
delicate design considerations to
work around brown field challenges.
IFL Installation in West Lutong
Once the insertion was completed, expansion heads were attached to both ends
of the liner and pressure was applied to expand the liner to a tight fit within the
host pipeline. The liner was then allowed to rest for a period of 12 hours before
being cut for assembly of the end connectors. End connectors were fitted to both
ends of the liner to seal the liner and connect to the existing pipe work. After the
end connectors were connected, the lined host pipeline was hydrotested before
resumption of services.
The replacement was completed
just in time prior to reaching the
predicted pipeline integrity end of life,
successfully extending the life of the
four pipelines for another 20 years,
amounting to approximately RM200
million (USD48 million) CAPEX cost
saving, with predicted RM3.3 million
(USD780,000) in annual OPEX savings
in comparison to conventional
carbon steel, delivering a novel EPCIC
solution in 11 months what would
normally take the conventional
replacement a minimum of 13 months
to complete.
Technology Future
DRILLING
The successful demonstration and deployment of IFL in Samarang with Zero HSE
incident, has proven and achieved the R&D project’s primary mission: having
delivered a technically and economically viable alternative to the “like-for-like”
replacement of deteriorated offshore pipelines. This has resulted in cost savings
of RM14.2 million (USD3.4 million), offsetting the expenditure for new carbon
steel pipeline replacement with the R&D cost.
Technology Acceptance - SKO-BDO-Southern Cluster Experience
SKO Pipeline Rehabilitation Team identified PETRONAS-owned InField Liner® (IFL)
technology as the best solution to provide production assurance for West Lutong
field over its production life, offering a Pipe-In-Pipe corrosion-resistant, nonmetallic plastic liner into an existing aging carbon steel pipeline. Rehabilitating the
pipelines by inserting the IFL in an existing carbon steel pipeline was exceptionally
faster and cheaper, providing corrosion resistant and pressure containing layer,
even to a pipeline with more than 80% wall loss.
The project kicked off in January 2014 with Front End Engineering Design (FEED),
taking merely 11 months until commissioning of the IFL on 3 December 2014,
with zero HSE incidents and within planned shutdown window duration. This
unfathomable exploit did not come easy – working with a tight deadline, poised
to strictly follow PETRONAS Project Management Guidelines (PPMS), Technical
Authority requirements and standards, and to obtain budget for this ‘innovative
endeavour’ – all whilst gaining the adequate competency for the new technology,
establishing team chemistry, expediting delivery and managing all technical and
business stakeholders altogether.
Rehabilitation involved modification on six platforms and four pipelines, all
successfully completed within 22 days of shutdown. The team had to work with
From the demonstration in SBO and
deployment in SKO, the product’s
worthiness and installation efficiency
has been proven. This technology
has gained much interest by oil
and gas operators after PETRONAS
Technology Ventures Sdn Bhd
(PTVSB) and Anticorrosion Protective
Systems (Malaysia) Sdn Bhd
entered into the commercialisation
agreement October last year.
This value creating technology will be
leveraged for another eight pipelines
of sizes 6”, 8” and 10“ in the 2016
work program. On the R&D front,
Technology is busy working on the
IFL 2.0 to extend the application
envelope to longer lengths (>4km)
and severely corroded pipes, with
improved system components and
overall systems costs.
For any queries on IFL technology,
please contact En. Ahmad Ridhuan b
Abdullah (ahmadridhuan@petronas.
com.my), Head, Technology
Deployment and Delivery,
Operational Technology and
Deployment, Technology, Technical
Global.
39
INT E RNAT IONAL
First Fruits of a Long Labour:
PETRONAS
ACHIEVES
FIRST OIL AND
FIRST GAS IN
INDONESIA
18
40
MAR
MAR2016
2016
IN
INTTEERN
RNAT
ATIO
IONAL
NAL
DRILLING
PETRONAS recently
marked a major
milestone in its
Indonesia operations
with the achievement of
first oil and gas from two
of its largest operated
upstream projects: the
Bukit Tua and Kepodang
fields.
Located in the Ketapang Work Area,
35 km north off the coast of Madura
Island, East Java, the Bukit Tua field is
an integrated oil and gas project and is
expected to produce 20,000 barrels of
oil per day (bopd) and up to 50 million
of gas. Oil from the field will be
exported from a Floating Production
and Storage Offloading (FPSO) facility
while gas will be transported through
a 110 km export pipeline to the ORF
in Gresik.
The Kepodang field at Muriah Work
Area is located 180 km northeast
of Semarang in Central Java and
is expected to deliver 116 million
of gas.
Both fields are expected to contribute
towards fulfilling the energy demand
of the country, particularly in East
Java and Central Java.
“Achieving first oil and first gas in
Indonesia is a significant milestone
for PETRONAS as it demonstrates our
commitment to contribute towards
Indonesia’s energy demand and
potential growth of the country’s
energy sector,” said Hazli Sham
Kassim, Country Chairman of
PETRONAS Indonesia and President
of PC Muriah Ltd and PC Ketapang
II Ltd, during the ceremony held to
mark this milestone.
PPEETTRROONNAAS SUUpps st rt er ea ammMMa agga az zi ni nee
19
41
INT E RNAT IONAL
“With the first production from these two fields, PETRONAS’ contributions
to state revenue next year is estimated at USD45 million dollars and is expected
to further increase as they continue to develop and explore new wells.”
IG Nyoman Wiratmaja Puja
Director General of Oil and Gas from the Ministry of Energy and
Mineral Resources of Indonesia
“We are pleased to be part of this
journey, which was only possible
with the continuous support from
the Indonesian government and SKK
Migas,” he added.
Wiratmaja (far right) in the control room at the Onshore Receiving Facility (ORF)
Wiratmaja (centre) officiating the first oil first gas ceremony while other guests of honour look on
42
MAR 2016
The ceremony was held at the
Onshore Receiving Facility (ORF)
in Gresik, East Java, Indonesia.
Director General of Oil and Gas from
the Ministry of Energy and Mineral
Resources of Indonesia, IG Nyoman
Wiratmaja Puja presided over the
ceremony. Also present at the event
were PETRONAS Vice-President of
Production International, Chen Kah
Seong, and Chairman of SKK Migas,
Amien Sunaryadi.
“With the first production from these
two fields, PETRONAS’ contributions
to state revenue next year is estimated
at USD45 million dollars and is
expected to further increase as they
continue to develop and explore new
wells,” said Wiratmaja, expressing his
pride on how PETRONAS has achieved
first production despite the pressure
of world oil prices.
IN T E RN AT IO NAL
INDONESIA’S UPSTREAM OPERATIONS
KETAPANG - BUKIT TUA FIELD (COB)
PETRONAS : 80%
Signed date : June 1998
Farm in date : December 2000
Phase : Development and Production
20,000
BARRELS OF OIL
per day
5
50 MILLION
STANDARD CUBIC FEET
OF GAS per day
9
110km export pipeline
1 of the integrated development
DEVELOPMENT
WELLS
piping, in Indonesia
DRILLING
SLOTS
to an onshore receiving
facility (ORF) in Gresik
Exploration began in 2001 with
the drilling of Bukit Tua-1 well to
depth of approximately
2001
1st project in Indonesia
1,500 tonnes
T
by PETRONAS Carigali on stream
on 17 May 2015
TOPSIDES WEIGHT
11,400-14,200 ft
Surumana (OBO)
West Galagah Kambuna (COB)
Natuna SEA “A” (OBO)
PETRONAS
Signed date
Phase
PETRONAS
Signed date
Farm in date
Phase
: 60%
: November 2009
: Exploration
:
:
:
:
PETRONAS
Signed date
Farm in Date
Phase
15%
January 1999
October 2002
Production
:
:
:
:
20%
September 2006
March 2009
Exploration
NEW
Kuala Kurun (OBO)
PETRONAS
Award date
Phase
: 40%
: May 2015
: Exploration
WEST
NATUNA
NORTH
SUMATRA
Randugunting (OBO)
PETRONAS
Signed date
Phase
: 30%
: August 2007
: Exploration
DRILLING
SOUTH
SUMATRA
NORTH
WEST JAVA
Jabung (OBO)
PETRONAS
Signed date
Farm in date
Phase
:
:
:
:
EAST
JAVA
NEW
42.85%
February 1993
June 2002
Production
NorthMadura II (COB)
PETRONAS
Award date
Phase
: 100%
: May 2015
: Exploration
COB (Carigali Operated Block)
PETRONAS
Signed date
Farm in date
Phase
:
:
:
:
22.5%
December 1997
January 2004
Production
OBO (Operated by Others)
MURIAH - KEPODANG FIELD (COB)
PETRONAS : 80%
116
Signed date : May 1991
Farm in date : January 2004
MILLION
STANDARD CUBIC FEET
OF GAS per day
6
PRODUCTION
WELLS
200km (14” OD) export gas
pipeline to Tambak Lorok
power plant in Semarang,
Central Java, Indonesia
00
1
20
04
Farmed-in 2004 with the
drilling of Kepodang Sandstone
reservoir depth in between
9
WELLS
SLOTS
1
Phase : Production
st
installation carried out by
PETRONAS Carigali Float over installation
method for CPP Topside
1 st gas production by PETRONAS
on 22 August 2015
4,400 - 5,700 ft
PETRONAS first ventured into Indonesia’s oil and gas industry in 2000. The company is now involved in ten Production Sharing Contracts (PSC) and
operates four of the oil and gas blocks at various stages of development across Indonesia.
43
UNCONVE NT ION A L
First
Cargo
Gladstone LNG Project and PETRONAS
Australia Reaches Major Milestone
By Phoebe Wallman
Seri Bakti
A graphic showing the location of the
gas fields, where the pipeline runs and
the location of the LNG plant
CURTIS ISLAND
NORTHERN COMET RIDGE
QGC Interconnect
Bowen
Basin
SPRINGSURE
GLNG PLANT & PORT
GLADSTONE
Meridian Interconnect
ROLLESTON
ARCADIA
FAIRVIEW
Santos GLNG Interconnect
Fairview Hub 05
SCOTIA
Fairview Hub 04
Pipeline Compressor Station
INJUNE
WANDOAN
GAS TRANSMISSION
PIPELINE
COMET RIDGE TO
WALLUMBILLA
PIPELINE LOOP
TOWN
RUGS
ROMA
ROMA
Roma Hub 02
WALLUMBILLA
Surat
Basin
GAS FIELD
44
QLD
GLADSTONE
ROMA
BRISBANE
MAR 2016
Every day, fleets of Liquefied Natural Gas (LNG) carrier
ships sail across the oceans, catering to an increasingly
growing global LNG market. On 28 September 2015,
one of these ships, MISC’s Seri Bakti, arrived at Gladstone
Harbour in Australia.
The arrival of Seri Bakti was of great importance, as
its sole purpose was to facilitate delivery of the first
cargo from the Gladstone LNG (GLNG) Project. There
is no doubt that the first cargo sailing from Gladstone
Harbour on the Seri Bakti was the highlight of the year
for the GLNG Project and PETRONAS Australia. This
achievement was the culmination of seven years, 18.5
billion dollars, 500 wells, three hubs, 420 kilometres of
pipeline, and two LNG trains.
UN CO N V E N T IO NAL
CURTIS ISLAND GAS TRANSPORTATION PIPELINE
500
420
KM
2
Pipeline
LNG Trains
Wells
Aerial shot of Curtis Island LNG plant
To date, the GLNG Project has developed gas fields in
Australia’s Surat and Bowen Basins, built a 420 kilometre
gas transmission pipeline, constructed an LNG plant on
Curtis Island, and shipped its first cargo. In 2015 alone,
commissioning cargos had to be sold, contracts signed
and wells and hubs had to be safely and efficiently
commissioned. GLNG also had to manage third party gas
contracts and field turndown, and in doing so was able to
avoid virtually all flaring and contract penalties.
The GLNG Project
The GLNG Project is a partnership between four energy
companies: PETRONAS (27.5%), Total (27.5%), KOGAS
(15%), and local Australian producer Santos (30%). It is an
unconventional resource project producing natural coal
seam gas (CSG) for conversion into liquefied natural gas
(LNG) and sale to the world markets. When fully operational,
the GLNG Project will have the capacity to produce 7.8
million tonnes of LNG each year.
Coal is formed from plant matter under pressure over millions
of years. As part of that process, natural gas binds to the
surface of coal particles and is trapped in place by water
and ground pressure. By drilling a well and pumping away
the water to reduce the pressure, CSG can be extracted.
Like conventional natural gas, CSG is primarily comprised
of methane, so it can be used for industrial processes and
electricity generation, as well as cooking and heating. CSG
has been safely produced in Australia since 1996, when
commercial production began in central Queensland.
PETRONAS entered the Australian market via the GLNG
Project as part of the pursuit to become a global exploration
45
UNCONVE NT ION A L
GAS TRANSMISSION PIPELINE
1
50+
2000
4.3 km
36,000
PRIMARY
CONTRACTOR
VEHICLES
SUBCONTRACTORS
SEGMENTS OF PIPE
6
4
WORKERS’
CAMPS
LNG Plant
CURTIS ISLAND
2000
JOBS
MILLION
WORK
HOURS
UNDER-SEA TUNNEL
FROM THE MAINLAND
TO CURTIS ISLAND
61
120 7
EXCAVATORS
STORAGE
AREAS
ROADS
CROSSED
45
GLADSTONE
PIPELAY
MACHINES
2.5
MILLION
MEALS
ACCESS
AGREEMENTS
INDIVIDUALLY
AGREED WITH
120 LANDHOLDERS
FOR 142
PROPERTIES
GAS FIELDS
ROMA
A graphic showing what was involved with the construction of the LNG pipeline
and production player. The GLNG Project was PETRONAS’
initial entry into unconventional energy. In 2008, industry
analysts were projecting a large increase in LNG demand
and large increase in natural gas production from
unconventional sources. Then in 2011, FID for the GLNG
Project was approved.
together and pushed through a tunnel bored by a 277-tonne
tunnel boring machine. Having an undersea tunnel allowed
the pipeline to cross the Gladstone Harbour with minimal
impact to the coastal environment and with no disruption to
the local marine life.
Opportunities in New Technology
Challenges
But the GLNG Project has not been without challenges;
only one of which has been falling oil prices. One significant
challenge for GLNG was the construction of the 420km
gas transportation pipeline. The pipeline was needed to
deliver gas to the LNG Plant on Curtis Island at Gladstone.
The construction of this pipeline was split into three areas:
mainland Australia, marine crossing, and Curtis Island. The
challenge arose in the marine crossing. After initial plans for
an open cut approach were rejected by the Government
due to environmental concerns, the approach needed
to be changed. Following evaluation of various methods,
horizontal directional boring was selected as the best
option to meet the strict environmental approval criteria
from the government. This involved around 120 segments
of pipeline measuring 36 metres each being welded
46
MAR 2016
Fortunately the GLNG Project has brought opportunities
as well. Being an unconventional project, it is necessary to
use new technologies to drive costs down and maximise
production. One such technology recently implemented by
the GLNG Project is the utilisation of ball diversion methods
for multi-zone fracture stimulation. Typical multi-zone
fracture stimulation utilises packers or plugs to isolate the
different zones, which requires higher pump capacity and
a longer time. The ball diversion method sees fluid diverted
into multiple zones during hydraulic fracturing, reducing
the time needed to stimulate all the zones and the pumping
requirements. In this process, fracturing liquid is injected
into the well and initially enters the zone with the least
resistance through perforations in the casing. To redirect the
fracturing liquid to other zones in the well, balls are released
into the fracturing liquid that block the flow into the zone
UN CO N V E N T IO NAL
of least resistance and initiate fracturing in another zone.
This process is repeated for subsequent zones and the balls
dissolve or are easily cleaned out at the end of the job,
greatly reducing time and costs.
Another new technology being implemented by GLNG
is Land Amendment Irrigation (LAI) in the area of water
treatment. LAI involves spraying untreated CSG water, up
to a salinity of 4000 micro siemens, across a salt resistant
crop and then treating the soil chemistry by directly
applying Gypsum and bentonite to the ground soil. Water
and soil chemistry are intensely monitored to ensure that
government standards are met and no contamination
occurs. This new technology offers an opportunity for CSG
water to be used to irrigate crops suitable for feeding cattle
on drought prone lands, while at the same time saving the
cost of the reverse osmosis process. GLNG currently has
190 hectares of crops that have been successfully sprayed
with 1.6GL of untreated CSG water using the LAI method in
the past twelve months. This same technique has also been
used to manage water produced during various appraisal
activities.
In addition to cost savings achieved through the use of
new technologies, as a partner, PETRONAS has influenced
significant reduction in project costs. An example of this
was the sanctioning of the Roma 2B project. Initially, GLNG
proposed to develop the full field of infrastructure and wells
at a cost of USD 1.7 billion for 416PJs of gas or a cost of
$4.12 per GJ. Through a series of consultations, PETRONAS
successfully influenced GLNG to change their contracting
strategy from EPCM to a self-management system similar
One of the GLNG compression hubs
to what is utilised in North America. This change facilitated
improved cost visibility and control, as well as a move
towards smaller scope modular equipment. As a result, the
field was developed at a cost of USD 1 billion for 350PJs
of gas or a cost of $2.89 per GJ setting new levels of
performance at 30% less than previously budgeted levels.
2016 and Beyond
Looking forward through 2016, there are still a number
of key milestones for the GLNG project to achieve. These
include finishing construction and commissioning of
the second train at the LNG Plant on Curtis Island and
producing first commercial cargoes for both trains. Through
2016 and beyond, PETRONAS will continue to work with
GLNG to identify further cost optimisation opportunities
and more new technologies that can be utilised for a long
and successful future.
Seri Bakti escorted by tug boats in Gladstone Harbour
47
Volume 04
We’re SAFE
and we KNOW it
Standards
COMMUNITIES
LET THERE BE LIGHT
WITH MICRO-HYDRO

COMMUNITIES

Transcription

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