World News: Pembina Sets $2.1 Billion Capital Program

January 2016, Vol. 243, No. 1

Pembina Pipeline Corp. Board of Directors approved a capital program of $2.1 billion in 2016, which represents another record capital budget plan. Last year Pembina commissioned numerous large-scale, fee-for-service assets in its Conventional Pipelines and Gas Services businesses, which include its Phase II low- and high-vapor pressure pipeline expansions, the Saturn II gas plant and the Saskatchewan Ethane Extraction Plant, as well as the Resthaven gas gathering pipeline and two storage caverns.

These projects, once fully commissioned, represent $1.1 billion of capital investment and were largely completed on time and, on average, under budget. In addition, $600 million of new capital projects were announced in 2015.

“Our 2016 capital program is primarily directed toward progressing our various multi-year execution projects, which are largely underpinned by long-term, fee-for-service contracts,” said Mick Dilger, Pembina President and CEO. “We are commissioning a significant portion of our secured projects in 2016 – which includes our second Redwater fractionator, two large-scale gas plants, the expansion of the Horizon pipeline system and the expansion of the Vantage pipeline system, as well as other smaller scale projects across each of our business units.

“Including 2016 and looking forward, Pembina will have $5.3 billion of secured growth projects remaining to be brought into service,” said Dilger. “During 2016 we will also strive to reach our goal of $225 million of capital cost savings. So far, we have secured savings of over half of this amount. Pembina will bring virtually all of the remaining identified projects into service within the next 18 months.”

EXMAR Selected for India’s FSRU Terminal

EXMAR has entered into a binding agreement with Swan Energy Limited for the joint development and operation of the Jafrabad LNG Port project, to be located in the state of Gujarat, India. The port will be a 5 mtpa LNG receiving terminal, with one jetty-moored floating, storage and regasification unit (FSRU). The partners may expand the terminal to 10 mtpa through deployment of a second FSRU.

Detailed negotiations are underway with four potential users: Indian Oil Corp. Limited, Oil and Natural Gas Corporation Limited (ONGC), Bharat Petroleum Corp. Limited and the Gujarat State Petroleum Corp. Limited. A final investment is expected by mid-year.

Aging Offshore Structures a Concern in Middle East

The Middle East faces a substantial challenge to ensure hundreds of aging offshore oil and gas structures operate safely beyond their original design life, according to DNV GL. Constraining operational expenditure (opex) is vital to economically viable operations, said Anupam Ghosal, regional manager for the Middle East and India, Oil and Gas Division.

Of the 700-800 fixed platforms and bridges in the region, DNV GL believes over 70% are older than 25 years and some even exceed 40 years. Of that total, the United Arab Emirates has about 450.

“Life extension of aging structures and assets is moving firmly up the agenda for oil and gas operators in the Middle East,” Ghosal said. “Collaboration, joint innovation, best-practice sharing and research such as for CO2 injection for enhanced oil recovery, are prerequisites for smarter lifetime extension projects.”

McDermott Awarded EPCI Project Offshore Qatar

McDermott International, Inc. was awarded a brownfield contract by RasGas Company Limited for the engineering, procurement, construction and installation (EPCI) of a flow assurance and looping project consisting of 74 miles of 6- and 8-inch pipelines and topside modifications, offshore Qatar. Work is scheduled for completion in 2017.

 Technip Lands Contracts off Sarawak and Brazil

Technip was awarded subsea contract by JX Nippon Oil and Gas Exploration (Malaysia) Ltd. in the Layang field, Block SK10, offshore Sarawak, Malaysia, at a depth of 85 meters. The contract covers the engineering, procurement, fabrication, installation and commissioning of three flexible pipes totaling 9.9 km. The flexible pipes consist of two production risers and flowlines and one gas export riser and flowline, connecting shallow water platforms to a new FPSO. The project is scheduled for completion by mid-year.

In Brazil, Technip was awarded a contract from Libra Oil & Gas BV, a consortium led by Petrobras Netherland BV (40%) and partners: Shell (20%), Total (20%), CNOOC (10%) and CNPC (10%). The project includes the supply of flexible pipes for the Libra Extended Well Test field, located in the Santos Basin pre-salt area. Libra is Brazil’s biggest oil field to date and is expected to produce about 1.4 MMbpd by 2021. The field will be operated by Petrobras.

The contract covers the supply of high-end flexible pipes, including 8-inch oil production, 6-inch service and 6-inch gas injection flexible pipes. Designed to produce the first Libra field oil, these are the first 8-inch oil production pipes to be installed in a pre-salt area. Technip’s operating center in Rio de Janeiro will perform the project management and engineering. The flexible pipes will be produced at Technip’s manufacturing sites in Vitória and Açu, Brazil. Delivery is scheduled to start in the second half of 2016.

Automated Device Repels Birds from Offshore Installations

Offshore installations provide birds with a perfect landing spot. However, their presence is a globally recognized problem. Bird Control Group, CHC Helicopter and Total E&P Nederland, a subsidiary of French energy company Total, collaborated on an automated laser and sound system to repel birds in an animal-friendly manner.

The Aerolaser Helipad is an automated device combining laser and sound to keep birds at distance from helidecks. The system can be configured to the specific conditions of an installation and has minimal impact on the environment.

Steinar Henskes, CEO of Bird Control Group, said Total E&P Nederland shared its extensive offshore knowledge and gave financial support to develop the system. “By implementing this bird repelling system, Total is the first oil company in the world to integrate its offshore activities with nature in such a sustainable way.”

Penspen Wins Contacts in Bangladesh and Southern Africa

Penspen was been awarded a $4.3 million contract from Gas Transmission Company Limited (GTCL), a Petrobangla company, under the Ministry of Power, Energy and Mineral Resources of Bangladesh. The contract is for the Dhanua-Elenga and West Bank of Bangabandhu Bridge-Nalka gas transmission pipeline located in Bangladesh. Work on the 67-km, 30-inch, high-pressure system will begin in 2016 and take two years to complete.

Oil Majors Eye Iran as $30 Billion of Projects in Play

Total SA, Royal Dutch Shell Plc and Lukoil PJSC are among international companies that have selected oil and natural gas deposits to develop in Iran as the holder of the world’s fourth-largest crude reserves presents $30 billion worth of projects to investors. Total has been in the forefront of discussions and Eni SpA is also looking to invest, Oil Minister Bijan Namdar Zanganeh said. Shell, Total and Lukoil indicated fields they would be interested in developing.

Iran pitched 70 oil and natural gas projects to foreign investors at a two-day conference in Tehran as it prepares for the end of sanctions that have stifled its energy production. All banking and economic sanctions will be lifted by the first week of January, said Amir Hossein Zamaninia, deputy oil minister for international and commerce affairs.

“We are interested to come back to Iran when the sanctions are lifted and if the contracts are interesting,” said Stephane Michel, Total’s head of E&P in the Middle East. “We have worked in this country for a long time, so we know specific fields on which we’ve worked.”

Iran plans to boost total oil output capacity to 5.7 million bpd by the end of 2020, with the help of new production contributed through new energy contact models. The figure includes crude and condensate output. Iran could sign its first development contract in March or April.

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