Issue 184 September
|
energy-oil-gas.com
Incorporating
Floating
new solutions WORLD-LEADING ENERGY SOLUTIONS PROVIDER, YINSON HOLDINGS BERHAD, PRIDES ITSELF ON BEING A RELIABLE, OPEN, ADAPTABLE, DECISIVE AND SUSTAINABLE PARTNER
A strong position
The Ecuadorian Government is now on side to support responsible mining activities and this has opened up significant opportunities
Wind ‘gold mines’
There is now a digital tool that can help identify the perfect sweet spot for locating offshore floating wind turbines
Extended collaboration: Ampelmann signs new, three-year contract with Brunei Shell Petroleum Gold mine expansion: ABB to provide services for Newmont’s Tanami Expansion 2 project
EDITOR Editors Chairman Andrew Schofield Managing Director Joe Woolsgrove Editor Libbie Hammond - libbie@schofieldpublishing.com Assistant Editor Will Daynes Staff Writer Alex McDonald
...It’s great to be able to welcome P66 Borger refinery to the magazine – we are really enjoying the opportunity to report on P66’s US refineries and very much look forward to shining the spotlight on some more of its operations in the future
Art Editor Fleur Daniels Advertising Designer Rebecca Side Operations Director Philip Monument Operations Manager Natalie Griffiths Sales Director Alasdair Gamble Sales Mark Cawston Alex Hartley Dave King Theresa McDonald Sam Surrell Web Sales web@schofieldpublishing.com Research Managers Ben Richell Kieran Shukri Editorial Researchers Mark Cowles Wendy Russell Richard Saunders Digital Subscriptions Iain Kidd - digital @schofieldpublishing.com
© 2020 Schofield Publishing Limited all rights reserved Schofield Publishing Ltd Corporate Head Office 10 Cringleford Business Centre Intwood Road, Cringleford, Norwich, NR4 6AU, UK T: (312)854 0123 T: +44 (0) 1603 274130
Energy, Oil & Gas Magazine
@EOG_magazine PLEASE NOTE: The opinions expressed by contributors and advertisers within this publication do not necessarily coincide with those of the editor and publisher. Every reasonable effort is made to ensure that the information published is accurate, and correct at time of writing, but no legal responsibility for loss occasioned by the use of such information can be accepted by the publisher. All rights reserved. The contents of the magazine are strictly copyright, the property of Schofield Publishing, and may not be copied, stored in a retrieval system, or reproduced without the prior written permission of the publisher.
Success stories Welcome to September’s issue of Energy, Oil & Gas. It’s great to be able to welcome P66 Borger refinery to the magazine – we are really enjoying the opportunity to report on P66’s US refineries and very much look forward to shining the spotlight on some more of its operations in the future. Of course, I would be remiss not to highlight the other fascinating companies we were fortunate enough to speak to including our cover company, Yinson Holdings Berhad (what a fantastic picture that is too!) In the story, Jahn Atle Høgberg, Yinson’s Senior Vice President of Business Development, discusses the company’s current position following 37 years of progress – it’s a great read, and you can find it on page 26. In the Clearwater Gas article (on page 42) Executive Director Chuck Warrington discusses the company’s guiding philosophy as well as learn how the business is determined to become a greener, more sustainable organization by the end of the decade. Starting on page 48, ZAP’s Vice President of Business Development, Shane Wilson reveals what makes the company unique in the larger EPC space and what have been the drivers of its success so far. With diversification on the horizon, more companies should be set to benefit from its range of engineering skills in the future. If you would like to see your story in the pages of EOG please do get in touch – I’d love to find out what makes your company tick!
EDITOR LIBBIE HAMMOND ENERGY,OIL&GAS
energy-oil-gas.com
1
REGULARS
4
Market Outlook Professor of Global Energy Michael Bradshaw analyses the oil and gas sector and the arrival of a
4
‘new energy age’
8
Wind Power A tool has been developed that can compute and visualize the financial feasibility of fixed and floating offshore wind sites in UK waters
12 News Some of the recent developments within the oil and
Market outlook
gas industry
14 Drilling If you are thinking of hiring a drilling rig, there are a number of considerations that can affect your choice
8
of equipment
16 Mining A look at Ecuador’s mining industry – the country’s resources sector is currently in the strongest position in its history
20 Flange Management Flange management is a niche area but one where a
Wind power
more sophisticated approach has moved rapidly in the last three years
16 12
Mining
2
ENERGY,OIL&GAS
energy-oil-gas.com
PROFILES
26
Yinson Holdings Berhad
36
42
Phillips 66 – Borger Refinery
Clearwater Gas System
48
54
ZAP Engineering and Construction Services
Cadent Gas Ltd
ENERGY,OIL&GAS
energy-oil-gas.com
3
A different
future?
THE ‘NEW ENERGY AGE’ ARRIVES EARLY. BY MICHAEL BRADSHAW
A
s anyone in the industry will tell you, oil and gas markets are both cyclical and volatile, which results from frequent mismatches between available supply and consumer demand. In some cases, geopolitical events have constrained supply, in others economic crisis has resulted in falling demand. When prices fall, companies cut costs and reduce investments; then, when prices rise, often because of those earlier cuts, they forget the hard times and rush ahead with investments setting up the preconditions for the next price
4
ENERGY,OIL&GAS
energy-oil-gas.com
crash. It is not long ago that talk was about peak ‘oil supply’ and $100 a barrel being the ‘new normal,’ but more recently talk is of ‘stranded assets’ and oil prices being ‘lower forever.’ Thus, even before the current Covid-19 pandemic there were reasons to the think that the oil and gas industries were entering a new phase that we might call a ‘New Energy Age.’ In recent years, two driving forces have gathered pace creating what Jeremy Bentham, the Head of Shell Scenarios, has called an era of ‘radical uncertainty.’ The first is the ‘Shale Revolution,’ in North America, first in gas and then in oil,
MARKET OUTLOOK
that has heralded an age of fossil fuel abundance, challenging market equilibrium for both oil and gas. The second is climate change and the low-carbon energy transition that is accelerating as a result of the falling costs of renewable power generation and storage and the increasing traction of climate change policies post the 2015 Paris Agreement. In this coming New Energy Age, it is not hydrocarbons that will be in short supply, rather it is growing demand for them. Today fossil fuels clearly dominate the global energy system, according to BP, in 2019 they accounted for 84.3 per
cent of global primary energy consumption and renewables only five per cent. However, before the recent oil price crash and the ‘great lockdown’ associated with the Covid-19 pandemic, both oil and gas markets were under stress. After failing to drive US shale oil to the wall in 2014-15, OPEC brokered a wider coalition, OPEC+, to manage production. This resulted in both stabilising the oil price and sustaining at a more acceptable level for ‘Producer Economies.’ Unfortunately, that higher price also encouraged a surge in US oil production, added to which, Russia never really
ENERGY,OIL&GAS
energy-oil-gas.com
5
reduced its exports. In early 2020, as gathering economic headwinds slowed demand growth, Saudi Arabia sough to extend the production cuts, but Russia walked away. Saudi Arabia responded by increasing its exports and the price crashed. All of this on the eve of the pandemic. The rest is history, an unprecedented shutdown in economic activity resulted in a 30 per cent fall in oil demand in April and forced OPEC+, plus a few others back to the table in early April to agree even deeper cuts. The situation is now in the balance, the price has recovered, but there is a growing recognition there will be no quick ‘bounce’ back, and there is speculation that oil demand has now passed its peak. Even before the pandemic, there was recognition that natural gas faced a somewhat different trajectory through the low carbon transition. The industry has sold itself as the ‘greenest fossil fuel,’ somewhat of an oxymoron; but its green credentials have been tarnished by the environmental impacts of hydraulic fracturing and the acknowledgement that fugitive emissions along the supply chain undermine the lower carbon intensity when combusted. Furthermore, the energy of intensity of liquified natural gas (LNG)
6
ENERGY,OIL&GAS
energy-oil-gas.com
production has also called its benefits as a solution to decarbonisation into question. The global gas market suffered from oversupply as new LNG production, in Australia and the United States, outstripped demand growth. This would have happened earlier had China not embarked on a dash for gas. Initially, gas markets were less exposed to the impact of the lockdown, but summer in the northern hemisphere and already filling storage capacity have resulted in very low prices. So much so that it is no longer economic for US LNG terminals to liquefy gas for export to Europe and cargoes are being cancelled. Having weathered the lockdown, the question is ‘what happens next’? No one really knows; the pandemic is running riot across the global south and threatening to re-emerge in Europe. The IMF has lowered it expectations for economic output in 2020. It is clear that while social distancing and quarantine remain a requirement, economic activity will be depressed. Already, some oil and gas companies slashed their dividends, some have cut their workforces and the majority are cutting back investment. But there is a very real prospect that what happens next
MARKET OUTLOOK
will accelerate the arrival of the new energy age. First, because the current enforced changes in work patterns, behaviour and consumption may result in permanent changes that reduce demand for fossil fuels. Second, because the pandemic is requiring a massive amount of state intervention and assistance and recovery packages may come with green conditions attached that do not favour fossil fuels. Neither of these is certain and there is a good deal of pessimism abroad. Whatever the outcome, the global economy has been dealt a massive blow that will leave an indelible mark on the energy demand curve, resulting in low prices. Talk of tight markets in the future, with a short-lived period of higher prices, will only accelerate demand destruction. Thus, the supermajors, the national oil companies and the petrostates may only have one business cycle left before the new energy age sets in, bringing with it the beginning of the end for the fossil fuel industry. Undoubtedly, this will be a long goodbye, but in an industry where investments are in the multiple billions and payoffs span 20-30 years, decisions made now face a very different future.
WARWICK BUSINESS SCHOOL Michael Bradshaw is Professor of Global Energy at Warwick Business School, the largest department at the University of Warwick. Warwick Business School is consistently placed among the world’s leading business schools by global rankings. Its world-class research is building a reputation for WBS in sustainability, behavioural science, finance, entrepreneurship & innovation, strategy, leadership, healthcare and the future of work. For further information please visit: www.wbs.ac.uk
ENERGY,OIL&GAS
energy-oil-gas.com
7
Wind
'gold mines' GRAHAM STEWART, ANNI PIIRAINEN, KATE JOHANNESEN AND ADRIAN DE ANDRES TAKE A LOOK AT HOW TO FIND THE PERFECT SWEET SPOT FOR LOCATING OFFSHORE WIND SITES
8
ENERGY,OIL&GAS
energy-oil-gas.com
WIND POWER
B
y 2050, the Carbon Trust estimates that the UK alone could host up to 35GW of floating offshore wind (FOW).1 Floating wind still has a long way to go before it is commercially competitive against conventional fixed structures. Developers are therefore faced with a dilemma: costs will reduce as development increases but waiting around until costs come down could mean forfeiting the most promising locations to competitors. With the launch of a new offshore wind leasing round in Scotland (Scotwind), which has a significant proportion of sites suitable for floating wind, alongside the UK government’s consultation on the next contract for difference (CfD) allocation round, where will this expanding capacity be installed? The characteristics that are expected to define an ideal floating site can be grouped as: • Resource - the site should have high wind speed to achieve high energy yield • Transmission - annual offshore Transmission Network Use of System (TNUoS) costs should be as low as possible • Installation - proximity to the coast and a grid connection point is important to reduce cable lengths • Operations & maintenance - onshore substation for grid connection should also have enough available capacity for connection without triggering extensive reinforcements of the network
understand the competition between sites or projects within a leasing or CfD round. To understand where the most commercially lucrative areas for FOW development are located, the model was filtered to exclude fixed foundations, and by LCoE to include only the lowest values. The results shown in Figure 1 are based on a semi-submersible floating platform type, as this is the most progressed concept suited to a reasonably wide range of water depths. There will be some variation in the results if the model is applied to other floating platform types or specific designs
To compute and visualise the financial feasibility of fixed and floating offshore wind in UK waters, Xodus Group has developed a tool that incorporates geographical information systems (GIS) with sophisticated levelised cost of energy (LCoE) modelling. This provides a high-level and holistic understanding of where the ideal ‘gold mine’ offshore floating wind locations are, and where a rush for investment and development is expected.
Location, location, location The LCoE tool has many different applications. It can be used for early site identification, micro-siting, and to better
Figure 1: The predicted ‘gold mines’ of floating offshore wind
ENERGY,OIL&GAS
energy-oil-gas.com
9
The areas highlighted in light and dark pink have the lowest LCoE for FOW due to a more optimum balance being achieved across the range of parameters. Developed through the analysis of more than 40 different calculated layers, the model’s CAPEX and OPEX estimations have been made through carefully overlaying these tiers. The pros and cons for each area have been summarised in Table 1.
and environmental considerations would need further analysis in tandem to ultimately select which sites would be most suitable for development, and to check compatability with the UK seabed leasing and consenting processes.
Table 1: Site specific pros and cons
(DPOs) currently under consideration for the upcoming ScotWind leasing round. As The Crown Estate has excluded water depths greater than 60m in Round 4, there is no overlap of the ‘gold mines’ with these zones in the map. However, the map highlights the potential suitability of additional areas outside of these zones for floating wind projects, which could be considered for inclusion in future leasing rounds. The tool is therefore well equipped to assist
The tool offers a purely techno-economic view of the potential for offshore wind development around the UK coastline. It is therefore a starting point in terms of the optimal development areas from an engineering perspective, prior to removal of any unsuitable areas due to the various constraints that may encountered. Evidently, the engineering
10
ENERGY,OIL&GAS
energy-oil-gas.com
A floating future for wind power? A notable takeaway from Figure 1 is the number of areas that are consistent with the locations of draft plan options
WIND POWER
Figure 2: A buoyant market for offshore wind is on the horizon
potential developers on determining the optimal areas within these DPOs/bidding areas to maximise revenue and minimise LCoE. Careful consideration would therefore need to be given to the fundamental assumptions that make up each usecase. It is therefore recommended that the model and its filtering tool is re-run with tailored inputs to each specific project concept of interest to enhance the insights that can be gained. As such, development of the LCoE GIS tool is not static and future versions will augment the model fidelity to include a greater range of built-in input options such as turbine size, project capacity, timeline and project technology considerations among others. This will facilitate direct comparison of a range of project options. Likewise, regional versions will also become available for the US and Japanese offshore wind markets, for instance. An add-in module is currently under development to calculate the levelised cost of hydrogen for various project configurations as an alternative, or combined, route to market. Within the Scotwind leasing round, significant emphasis will be placed on FOW due to the number of sites that would be uneconomic for fixed structures. A high level of developer interest is anticipated in a number of these areas and the expectation is that an increased push will be made to lower the LCoE of FOW in the upcoming years. The
potential of a separate strike price for floating offshore wind in upcoming CfD rounds is therefore likely to accelerate this development, as well as any co-development and investment initiatives for floating wind coupled with the fledgling offshore hydrogen production industry. Only the results of the leasing rounds will tell whether developers will take decisive action on this ‘gold fever’ for a more environmental and sustainable energy mix in the 21st century. 1 Carbon Trust, ‘Floating Offshore Wind: Market and Technology review’, June 2015
XODUS GROUP Graham Stewart, Anni Piirainen, Kate Johannesen and Adrian de Andres all work at Xodus Group, a global energy consultancy, offering expert advice and solving complex problems. Multiskilled specialists work across the energy spectrum providing advisory, engineering and consultancy services alongside intelligent data solutions. From concept and development, through consenting, asset management and optimisation to late-life and decommissioning, Xodus helps clients to maximise value, proactively seeking clever ways to do things better. For further information please visit: www.xodusgroup.com
ENERGY,OIL&GAS
energy-oil-gas.com
11
NEWS
Nuclear maintenance Charah Solutions, Inc. a leading provider of environmental and maintenance services to the power generation industry, has announced that its Allied Power division has signed a multi-year contract extension for nuclear maintenance and technical services with Exelon Generation Company, LLC, the largest owner and operator of nuclear
Extended collaboration
plants in the United States and the largest producer of emissions-free energy. Allied Power will provide maintenance and modification services for 12 Exelon nuclear plants and 21 units in four states as well as fleet wide staff augmentation services through mid-August 2025, with an option for a five-year renewal. Allied Power’s services are designed to support Exelon’s objectives for safe, event-free outage and operational performance at Exelon’s sites in Illinois, Maryland, New York and Pennsylvania.
Testing in Brazil
Ampelmann, the Dutch offshore access provider, has signed a new, three-year contract with Brunei Shell Petroleum (BSP) for work in Asia Pacific. The company will provide two of its latest version L-type systems to enable daily crew change operations in the region. “We are excited to continue our collaboration with BSP and are thankful for their continued trust in our services,” said Joeri Poelmann, Ampelmann’s Area Manager for Asia Pacific. “This contract is proof of the local industry’s push to make offshore access ever safer and more efficient.” Ampelmann’s first version of the L-type system was initially developed in collaboration with BSP for their crew change operations and made its first transfers in Brunei back in 2013. After many iterations, the latest system is a compact and electrically powered plug-and-play system enabling continuous access from vessel to offshore platform, and vice versa, capable of transferring 50 people in less than five minutes. The L-type can be deployed in sea states beyond 2m significant wave height, making it possible to use year-round, including during the monsoon season. The latest version of the system, the version 4, has been in use since 2018. With a proven track record and unsurpassed workability in many regions throughout the globe, it remains the most suitable solution for crew change operations. Over the past decade, Ampelmann’s systems have helped make offshore access in the Asia Pacific region safe and more efficient.
Benthic has signed a contract with Petrobras to provide geotechnical site investigation services at the Mero
Framework agreement announced
field off the coast of Brazil. The work includes in-situ testing, sampling and seismic cone testing at 26 locations in water depths to 2200 meters. The deepwater offshore operations will take place this year, despite the Covid-19 pandemic and current global economic conditions. Following the offshore operations, Benthic will complete advanced onshore laboratory testing at its new, state-of-the-art technology center in Rio de Janeiro. The company will use its PROD3 seabed drilling and geotechnical testing system, a proprietary portable remotely operated drill that can switch between piston sampling and rotary coring to maximize productivity. The PROD3 is up to five times more productive than a drillship in water depths of more than 500 meters.
12
ENERGY,OIL&GAS
Nova People - together with its subcontractors Fulkrum Technical Resources (UK) and P.U.I. EKO-INWEST S.A. (Poland) – has secured a major contract for a significant role in the ongoing Baltic Pipe Project operated by Gaz-System S.A. Norway-based Nova People, together with Aberdeen-based Fulkrum and Poland-based EKOINWEST, will provide specialized personnel to support survey, construction and inspection activities across both offshore pipelay and landfall operations. The industry specialists were chosen to secure the highest level of professional quality in their provision of personnel, specifically relating to survey, construction and inspection activities both onshore and offshore. The Baltic Pipe Project is a strategic infrastructure project developed in collaboration between GazSystem S.A. and Energinet.dk (Denmark) and is co-financed by the European Union to create a new inter-European gas corridor that will supply gas directly from Norway via Europipe to the markets in Poland, Denmark and adjacent countries. Owen Gibbons, Commercial Director, Fulkrum Technical Resources said: “We have an extensive track-record working on both subsea and pipeline workscopes globally, and we are delighted to combine with Nova People’s recruitment expertise, to work with Gaz-Systems and support the Baltic Pipe Project.”
energy-oil-gas.com
Partners for digitalization Neptune Energy has announced an exciting new partnership with 3D technology specialist, Eserv, as part of the ongoing digitalization of Neptune’s assets including its operated Cygnus gas platform in the UK southern North Sea. Using 3D and Artificial Intelligence (AI) technologies, a digital map of all three bridge-linked jackets was captured, enabling Neptune Energy to detect asset integrity issues early and plan fabric
Exciting project completed
maintenance work on Cygnus. Specialist engineers and integrity experts now have the opportunity
Fluor Corporation’s joint venture with Daewoo Engineering & Construction and Hyundai Heavy Industries has successfully achieved final provisional turnover of the facilities for Kuwait National Petroleum Company’s (KNPC) Mina Abdullah Package 2 (MAB2) Clean Fuels Project in southern Kuwait. “This significant milestone marks the completion and successful handover of MAB2 facilities to KNPC,” said Mark Fields, president of Fluor’s global Energy & Chemicals business. “It has been an honor to complete this megaproject alongside KNPC, training hundreds of their personnel and leveraging multiple local suppliers and contractors.” The Clean Fuels Program is being executed on the three KNPC-owned and operated refineries in Kuwait. As part of the program, KNPC plans to retire existing processing facilities at the Shuaiba Refinery and perform a major upgrade and expansion of the MAB and Mina Al-Ahmadi refineries to integrate the refining system into one complex with full conversion operations. The MAB2 package facility is comprised of a world-scale hydrogen plant (steam reformers), sulfur block (sour water stripper, amine regeneration unit and sulfur recovery unit) and utilities, off-sites and non-process buildings. It also covers extensive modifications to the existing Mina Abdullah refinery units.
to carry out a significant amount of their traditional work from onshore, reducing the cost and environmental impacts associated with travelling offshore. The digital mapping of the Cygnus gas production platform, which is capable of producing approximately
REAL COPY
six per cent of UK domestic gas demand, is one element of the
partnership with Aberdeen-based Eserv. As part of an ongoing digital transition, onshore teams can take a virtual walkthrough of the entire platform, plan work and monitor changes in the physical structure, identifying potential issues early and
Gold mine expansion
accurately. The AI element of the technology is being ‘trained’ to
Newmont has commissioned leading global technology company ABB to design, supply, install and provide long-term service for the entire mine hoist mechanical and electrical systems for the mine production shaft at Tanami. The gold mine is located in the Tanami Desert, 563km north west of Alice Springs and 949km southwest of Darwin in Northern Territory, Australia. The $24 million AUD ($17 million USD) contract marks part of Newmont’s Tanami Expansion 2 (TE2) project which is expected to increase the annual capacity of the processing site to 3.5 million tonnes per annum from 2.6 million tonnes and extend the life of the mine beyond 2040. Over a 90-week period, ABB will deliver two complete mine hoist systems; a double drum personnel-riding hoist and a friction hoist. “The Tanami expansion project (TE2) includes construction of a 5.4-meter shaft that can reach 1460 meters below surface depth to enable recovery of ore. This provides a viable solution to extend the mine and with an additional investment in processing is expected to increase production to 3.5 million tonnes per year,” said Neil Steyn, Regional Project Director at Newmont. “ABB’s in-house mechanical hoist design capability will help deliver a tailor-made solution in a cost-effective way.” As part of the TE2 project, ABB’s solutions package also includes digital applications covering functional safety, a programmable logic controllers (PLC) control system, remote operations, shaft communication and the latest drive systems technology.
identify thousands of individual components, valves and other plant equipment, and is ‘learning’ how to spot potential integrity issues including corrosion.
ENERGY,OIL&GAS
energy-oil-gas.com
13
Licence to
drill
AN INDUSTRY EXPERT’S GUIDE TO HIRING A DRILLING RIG
T
he drilling industry is one of the widest and most varied out there. The breadth and depth of drilling types requires a correspondingly wide-ranging collection of drilling rigs. What rig you hire hinges entirely on the kind of work it is that you need doing. With modern drilling machinery becoming increasingly expensive, rig rentals are becoming a more attractive proposition. We spoke to John Rodgman, director of the Borehole Solutions drilling group, to get his thoughts on what rig you need, as well as any other considerations you ought to make before going ahead and hiring your drilling rig.
What’s the scale of your job? It seems an obvious question, but you first have to consider what kind of geotechnical work it is that you need doing?
14
ENERGY,OIL&GAS
energy-oil-gas.com
There’s a big difference, after all, between carrying out some basic sample testing to determine soil characteristics, and using a rotary drilling setup to drill deep down and look for coal seams. To the layperson, they could both be constituted as ‘drilling’, and yet, in reality, their scale could hardly be more different.
Larger Rigs Most drilling companies will offer rotary and cable percussion drilling services, with a good portion of them now also offering sonic drilling options as well. Rotary drilling is best used for quarrying or mining purposes. Percussion drilling is effective in both consolidated and unconsolidated formations and sonic drilling, with its clean efficiency and quick speed, displays its efficacy most in overburdened formations.
DRILLING
Smaller Rigs Sample testing, as previously touched upon, is on the smaller scale of the drilling spectrum. A handheld window rig is easy-to-use (and can be used by one operator), low-cost and delivers quick and accurate results. If you’re looking for preliminary geotechnical work like a trial pit, then you will most likely only need a small JCB-type digger.
Does your project have additional limitations? Not every drilling scenario is simple, in fact, very few are. Gone are the days in which geotechnical companies worked purely in rural settings; green, open fields with easy access and lots of room with which to work. Nowadays, in fact, there are very few environments which can’t be drilled in some way or other. So, do some initial groundwork and consider whether you’re going to need a more specialised setup. You may need a restricted access rig, for instance, or a rig which houses the ability to work within limited space. First look at the drilling space, itself, and whether there’s room for a ‘normal’ rig. If not, then you’re going to need to use a rig which uses an external generator or power unit. Alternatively, you could look at hiring a rig with telescopic masts, that can drill with only a couple of metres’ worth of headroom. If, on the other hand, the issue is getting your rig to the site, itself – perhaps through a narrow alleyway, for example – then hire a rig which has width-adjustable capabilities so that you can get through tighter spaces.
Do you need any additional extras? One of the most common questions we’re asked is about the price of a rig hire, but in all honesty, there’s no one-size-fits all pricing structure. It’s very much dependent on the rig you’re looking to hire, how long you want it for, the rig’s condition, any additional extras such as casing alternatives, or track mates for especially muddy projects. If you’re
working in the middle of winter in a waterlogged field, then your rig is going to need a little bit of extra support from a traction point of view. Otherwise, there’s a very real risk of the rig getting bogged down in the mud, which doesn’t help anybody. Also, it’s worth making sure you do your research on the drilling company from which you’re hiring. Again, it may seem like stating the obvious, but many people are so preoccupied with the idea of actually getting their rig hire sorted, that they don’t do their due diligence beforehand. Have a browse online and ask around to find out whether the company has the sort of hiring experience you’re looking for. A good quality firm will take correspondingly good care of their rigs. Less experienced companies, on the other hand, or perhaps those companies who cut a few more corners, are more likely to let the condition of their rigs slide. That spells bad news for you as a customer, and it’s not unheard of for rigs to be hired and then conk out whilst mid-job. That’s added hassle and stress that you don’t need, as a customer, nor that you should expect – when you pay for a service, after all, you expect it to be a good one.
BOREHOLE SOLUTIONS LTD Borehole Solutions Ltd is a leading provider of geotechnical drilling solutions across the United Kingdom, and has been for over two decades. It offers an extensive and comprehensive range of drilling solutions, catering to any and every situation. The Borehole team has racked up over a century of drilling experience between them, and the firm is a proud member of various prestigious bodies within the industry – the British Drilling Association, CHAS, RISQS and Construction Line, to name but a few. For further information please visit: www.boreholesolutions.co.uk
ENERGY,OIL&GAS
energy-oil-gas.com
15
A strong
position
ECUADOR’S MINING INDUSTRY – PAST, PRESENT AND FUTURE. BY FREDY SALAZAR
T
wo large mines started in Ecuador last year, opening the country’s account as a mineral producer with an industrial-scale mining sector. Both projects were based on iconic discoveries that in their time changed the scientific and commercial view of Ecuador as a destination for mining investment. The Mirador copper porphyry discovery in 1995 was the first time that these kinds of giant deposits were recognised in Ecuador. Similarly, significant high-grade gold mineralisation found at Fruta del Norte in 2007 opened up the prospectivity for world-class, Tier 1 gold assets in the country. Ecuador is now recognized as one of the most underexplored, untapped, mineral-rich regions in the world. And the new Mirador copper mine and the new Fruta del Norte
16
ENERGY,OIL&GAS
energy-oil-gas.com
gold mine have really shown the world that the country is open for business. To understand the potential economic benefits mining could bring to the nation and for those that invest in it, look south along the Andes to Peru and Chile. These two nations currently produce 40 per cent of the world’s copper exports1 with mining contributing about ten per cent of GDP to each of their economies every year. The mineral-rich Andean geology clearly does not stop at the border, so Ecuador also has the potential to develop a responsible and sustainable mining sector to underpin its economy. In a country perhaps more associated with eco-tourism than mining the question has to be asked, is the country now poised for an imminent mineral resources rush? My personal
MINING
experience in the sector has tracked the evolving approach to the industry. When I began my career as an exploration geologist in 1986, small artisanal mines had already been operating in the country for more than 50 years. I became employed by an international exploration company in 1987, and from what I saw during my time working at these artisanal mines, it was clear that Ecuador was a land of significant mineral wealth. In fact, while many of my peers took the more oil-centric career path that was typical in our country, these compelling observations during these years became the driving force for what has now been a 30-year career in Ecuadorian exploration. From studying these artisanal mines and our own
exploration activity, we knew that Ecuador had the right rocks. However, the country lacked the right regulation and organizations to take mining from small artisanal sites to large-scale industrial projects. In fact, for long periods the mining industry has been actively discouraged in Ecuador. A moratorium on mining was imposed in 2008, a subsequent 70 per cent Windfall Tax for times of high metal prices was introduced, and a Sovereign Adjustment ensuring majority government ownership killed off the viability of an international resources sector. It should also be remembered, though, that Ecuador has been a dollarized economy since 2000 which means that printing currency is not an option. This just leaves borrowing, inward investment or foreign export earning
ENERGY,OIL&GAS
energy-oil-gas.com
17
as potential sources of US dollars. Historically Ecuador’s economy relied heavily on oil and tourism, and as the nation suffered heavily from global oil prices plummeting in 2013, Ecuador’s relationship with mining began to change. Economic diversification was needed, and in 2015 the Mining Ministry was created. Consultancy agency McKinsey reviewed the mining code, eventually leading to alignment with global best practice. And the windfall tax was finally abolished in August 2018. The response in the mining sector has been dramatic. Foreign direct investment (FDI) was more than $250 million in 2017, and since 2018, 28 internationally renowned mining companies have established entities in Ecuador to pursue investment opportunities. In 2019 two billion dollars in total were invested in at Mirador and Fruta del Norte. The country now has two well-regulated, carefully monitored mines, employing thousands of local people, and generating vital foreign exchange earnings Looking ahead, I expect a bright future for mining in Ecuador, although challenges and risks remain. As someone who was born and raised in the country and leads an Ecuadorian mining company, I know, for example, just how important it is to have proper community engagement. Ecuador is a country made up of many cultures, nations and diversities. It is essential that these are respected during every stage of the mining process in order to preserve the country’s rich history and unique civilizations. Responsible
18
ENERGY,OIL&GAS
energy-oil-gas.com
MINING
mining needs to build trust and show that the activity will be a win-win for workers, the local communities and the Government. Of course, a new industry in a country brings many unknowns. There will be some who want jobs and there will be others who do not want change. Some fear the rapid introduction of a new industry and potential downsides; others welcome the foreign direct investment and potential benefits. As we know from looking at Peru or Chile, a responsible mining sector can underpin an economy. Directly, mining creates jobs for Ecuadorians, stimulates investment and ultimately produces commodities sold in US dollars. Indirectly, it drives the development of infrastructure and brings international experts to the country with invaluable skills and knowledge to impart. Importantly, while many Ecuadorians fear the unknowns that mining brings, the government has reached an ineluctable truth that that the country needs a modern mining industry to pay for its social and infrastructure agenda. Simply put, key pillars of the economy such as the oil sector, agriculture (bananas, coffee, cocoa, flowers) and tourism are all ex-growth. With a growing population and falling oil prices a new mainstay of the economy is needed. I also believe that as familiarity with the mining sector grows, support for it will grow. As we look forward, I can see that the resources sector in
Ecuador is in the strongest position it has ever been in its history. With metal prices rising, capital available to invest in exploration and development, those companies willing to take the communities on the journey with them have a wonderful opportunity to create something special. The Government is now truly on side to support responsible industrial mining, and there is no reason for us not to meet or even surpass the competition of our neighbors as well as the global community. 1 https://pubs.usgs.gov/periodicals/mcs2020/mcs2020-copper.pdf
SALAZAR RESOURCES Fredy Salazar is the CEO and President of Salazar Resources, an exploration company that was founded by Ecuadorians with a focus on creating value and positive change through discovery. The experienced Ecuadorian team has a proven track record of discovery and an unrivalled understanding of the geology in-country, having played an integral role in the discovery of most of the major projects in Ecuador, including the two newest operating gold and copper mines. Salazar Resources is genuinely committed to ensuring that its projects have a positive impact on Ecuadorian communities and the economy. It is trusted by the government to set new standards working with the indigenous communities of Ecuador in the natural resources exploration sector. For further information please visit: www.salazarresources.com
ENERGY,OIL&GAS
energy-oil-gas.com
19
Increased
efficiency
DUNCAN BROWN OUTLINES BEST PRACTICE FOR OPERATORS ADDRESSING COST AND SAFETY EFFICIENCIES IN HAZARDOUS AREAS FOLLOWING THE CORONAVIRUS CRISIS
T
he coronavirus crisis is adding to the uncertainties the global oil industry faces in terms of new investments. One of the key challenges for operators going forward however will be to leverage new technologies for costefficient development and operation, whilst maintaining and improving safety. In recent years, the offshore industry has been consumed with declining production efficiency, lost revenues and questions over the long-term sustainability of operations as costs have climbed. As a leading independent provider of bolted joint integrity and flange management solutions, Asset55 are an example of a company that is supporting operators
20
ENERGY,OIL&GAS
energy-oil-gas.com
to construct, maintain and operate assets, more safely, but also efficiently and cost-effectively. Offshore industry challenges are nothing new to Asset55 and it’s what the company was founded on. As an independent SaaS company, we don’t provide tools or technicians out in the field, instead our staff can support clients through a combination of industryleading software called iQ and a support team of expert engineering consultants. We work with oil and gas operators, but also with people up and down the flange management service value chain - so primary contractors, service providers, tool providers and others. The technological advances we have seen within the
FLANGE MANAGEMENT
oil and gas industry weren’t really being taken up within the area of flange management. This meant we were seeing increased risk across all key areas, hydrocarbon leakage, asset downtime, damage to flange components and rework. The result of this meant there was also increased risk to safety and cost. Many bolt load calculations in industry today have been handed down, shared, revised and diluted and they now lack any traceability back to the original engineering source. It’s rare that they are in line with the latest best practice guidelines (ASME PCC-1) within the flange management area of oil and gas. ASME PCC-1 has been around since 2013 and was updated in 2019, and is widely recognised as the
most effective guideline of how to carry out flange management correctly from a bolt load calculation and technical point of view. Very few of the operators we deal with carry out bolt loads to that best practice, they use much more outdated methods. The Asset55 IQ system provides a source of sophisticated calculations in line with PCC-1. It’s continuously updated and improved so that as developments are made within the industry, our software moves with it, so we ensure that everyone using it is kept in line with the latest best practice. Flange Management is an area where the sophistication of the engineering approach has moved rapidly within the last three years. We ensure that the
ENERGY,OIL&GAS
energy-oil-gas.com
21
people we deal with don’t need to keep abreast of all these developments, as we keep them updated directly through our software. All of our calculations are independently verified. We have some really smart internal engineers and part of what we do is to make sure our calculations are transparent so we get everything independently validated by the University of Strathclyde. We aim to offer our clients a ‘single source of truth’ for bolt load calculations, across many thousands of different combinations of flange, gasket and bolt materials of various standards and we have made iQ the single go-to place for that information. As a result, we are continuously improving it, so as new gasket materials come into the market, we aim to update iQ accordingly. Even today, the most common method for selecting a bolt-load is by referring to a printed Torque table. However in the field, these hard copies are often duplicated and revised as required as they are passed around and therefore lose any traceability back to the original source. Slide rules are another variation on the theme, but in many cases the values they provide are now out of date. Whatever the format, all of these types of tools tend to be very limited and they can only cover a very small number of components. We worked with an operator with 16 different tables for the flange, gasket and bolt materials on their assets and their Torque tables still only covered 80 per cent of components. We understand that it’s difficult to get all of the
22
ENERGY,OIL&GAS
energy-oil-gas.com
information into a precise format if you are using static tables or spreadsheets. Version control is also a nightmare. We find with clients that they print off a table and it gets passed down on to a platform and then it gets scribbled over, changed and they’ve lost control. Out in the field because people can’t find exactly what they need, quite often they’ll have to make an approximation. i.e. ‘this flange sort of looks like one of them, and it’s all I’ve got on my table’. That can lead to some approximations that could potentially prove unsafe and we have seen that on a number of occasions where people just didn’t have the information to hand to be able to make those sophisticated engineering decisions. That’s an issue with the limited type of tools that are available out there. In contrast to that, Asset’s iQ system has the industry’s largest inventory of flange, gasket, bolts, lubricants and tools. There are thousands of combinations, which we define as a universal list. We commit to clients that if they find a standard or material that isn’t in the system, we will endeavour to get it built into it. That’s one of the huge benefits of having such a wide user group because if we get a new gasket material from a specific asset in Asia, we update the whole system then we could have another user in North America who would benefit from that as well. We are constantly improving the system and building up huge inventories of all the different types of components.
FLANGE MANAGEMENT
As our SaaS is our primary commercial model, we attempt to make iQ as good a fit as it can possibly be. However, there are some elements that you just can’t put into the software and that’s why we have our expert engineering team on hand to offer support for scenarios outside of iQ. Our expert integrity engineers will do things manually for our client base as required, picking up the stuff that could never be adequately covered by software alone. With this joint approach, the software and the consultancy service, we try and make sure all of our operator clients have everything they need. Another area we identified as a weakness in the industry was the storage of critical joint data. It was largely deficient so even in situations where a client had moved on from a paper-based system, very often the solutions were tied to an individual PC or an individual user. People were effectively building large spreadsheets of an infantry of all the joints, all the mechanical connections that you would find on any given oil and gas asset. However, keeping data in that format, there is an inherent risk of data security, overwriting or losing spreadsheets or that particular laptop gets lost. It’s also very difficult to quickly share that information or share updates when it’s on a file somewhere. Only 10 years ago, all of this might have been stored in an operator’s cardboard box! Quite often we have seen a lack of a single-consistent data set for connections on an asset. You get various service providers coming on to an asset, one company might be doing the turnaround, or a maintenance
contract and every time joints are touched, broken out or retightened, it was via a different system and that data was being recorded in a different place. This meant workers on an asset were struggling to build up an inventory of what they had, because often the contractor would take the data with them upon completion of the scope. We have a highly secure cloud-based solution so anyone who has the authorisation can access it 24/7 and because we are independent, it also means contractors can access it too. As an online solution, it also gives us the flexibility to turn people on and off very quickly. If someone comes to work on an asset for two weeks, we’ll give them access for that period of time only which means the operator gets the benefit of everyone using a single, consistent system. While initially operators were slow on the take-up of the system, we’re seeing traction now and I think some of that is due to a younger generation of technicians and engineers coming into the industry who have grown up with technology rather than pen and paper and therefore it’s second nature to them. It’s certainly helping in the drive to digitisation because iQ only takes a minute to use and it’s really user-friendly. Flange management is quite a niche area and is very specialised and even for well-developed engineering teams within an operator, it will only make up a very small part of their very busy day. That’s how we very quickly gained a global reputation for what we do. We deal with issues that engineers might only see once in their career, but we see them on a daily basis from operators working globally. With production efficiency in decline in many areas, planned and unplanned maintenance makes up the bulk of the costs. Asset55’s technology can help offshore operators improve maintenance in what has become a very challenging year. Efficient operators will then be far more likely to save time and cost and reduce risk to people and operations.
ASSET55 Duncan Brown is a director at Asset55, an innovative SaaS technology company that was founded in 2012 by David Frame and Mike Rudd. Based in Sunderland in the North East of England, the business has been a key player in the oil and gas technology and services market for eight years and is a leading provider of flange management and completions enablement solutions.
For further information please visit: https://assetfiftyfive.com/
ENERGY,OIL&GAS
energy-oil-gas.com
23
Floating new solutions
26
ENERGY,OIL&GAS
energy-oil-gas.com
PROFILE
YINSON HOLDINGS BERHAD
FPSO John Agyekum Kufuor (JAK)
Jahn Atle Høgberg
We ensure to draw a lot from the experienced people we have in the company which differentiates us from a new business. Even though the Offshore Production Division is not that old, we have probably as many experienced people as any of our competitors. They are the foundation of our success and we care about their skills, happiness, and engagement
ENERGY,OIL&GAS
energy-oil-gas.com
27
PROFILE
YINSON HOLDINGS BERHAD
With a presence in eleven countries, Yinson Holdings is a world-leading energy solutions provider shaping the global landscape through the provision of modern, purpose-built assets for the energy industry. Established in 1983 by current Chairman Lim Han Weng, Yinson began life as a humble logistics company, but before long, the firm had launched itself into a trajectory of rapid growth. By 2010, Yinson had become one of Malaysia’s biggest transport firms, supplying customers with over 550 trucks and operating its own fleet of around 365. Soon after, the business expanded into marine transport and, after partnering with PTSC Vietnam, secured its first offshore contract with FSO Bien Dong. A few years later, Yinson had, among various other successes, acquired Fred. Olsen Production, won contracts in Malaysia and Nigeria, as well as locking down a major 15-year deal with ENI in Ghana for an FPSO handling 58,000 barrels of oil and exporting 210 million standard cubic feet a day. Jahn Atle Høgberg, Yinson’s Senior Vice President of Business Development,
28
ENERGY,OIL&GAS
energy-oil-gas.com
discusses the company’s current position following 37 years of irrepressible progress. “Today, we have three business divisions at Yinson,” he explains. “The first is Offshore Production, which at the moment is the biggest area. We specialize in the provision of integrated services for Floating, Production, Storage, Offloading, (FPSO) and Floating, Storage, and Offloading (FSO) units for the oil and gas industry. In this area, we control the full value chain - we sign the contract, build the FPSO, own it, lease it to the client and operate it for the long-term. The second division is Renewables, where the business model is also to build and operate our own assets, focusing mainly on wind and solar power. Finally, we have the Offshore Marine division which was our first focus and covers the ownership, operation, and chartering of offshore support vessels to service the energy industry. As you can see, it is pretty much the same business model in each division.” In terms of the Offshore Production Divison’s latest activity, Yinson was recently awarded its
Mooring solutions to rely on
FLOATING WIND
OIL & GAS
FISH FARMING
SERVICE & SPARES
seasystems.no
PROFILE
YINSON HOLDINGS BERHAD
first contract in Brazil. Widely regarded as an important step forwards for the business, the company is currently constructing a new FPSO for the Brazilian venture, which is due to begin operations in 2023.
Upgrade capabilities “We’ve been following Brazil for many years and waiting for these projects to come to the market, so this kind of development was a target for a long time. When it finally came to market, we managed to secure one of the FPSOs inquired by Petrobras,” Jahn reports. “Once constructed, FPSO Anna Nery is slated for continuous production for 25 years in the Marlim oil field in the Campos Basin, Brazil. The FPSO is a rather large unit, with a storage capacity of 1.6 million barrels, production capacity of 250,000 barrels of liquid per day whereof 70,000 barrels a day of oil and gas compression volume of 142 million standard cubic feet. The unit marks our entrance into Brazil which is without a doubt the biggest market in the world for FPSOs and will continue to be so in the years to come.”
30
ENERGY,OIL&GAS
energy-oil-gas.com
When completed, FPSO Anna Nery will be the newest addition to Yinson’s growing fleet of modern FPSOs and FSOs at work around the globe. Alongside FPSOs in operation in Ghana, Nigeria, and Malaysia, the firm has joint venture ownership in one FSO and one FPSO in Vietnam. Earlier this year, the company’s FPSO Abigail-Joseph (ex Allan) was subject to refurbishment and redeployment work that will allow the FPSO to operate in Nigeria for another 15 years as part of the first greenfield project by an indigenous Nigerian company, FIRST E&P. “We hooked up this FPSO in August and we will be going forward with commissioning and start-up over the next months. The upgrade in the shipyard took about nine months, which is rather quick for an FPSO project. It underlines our Offshore Production Division’s capabilities,” Jahn says. “We’re not really a technologybased company when it comes to equipment and so forth, but we focus on continuous improvement, meaning that we capture lessons learned throughout the whole FPSO lifecycle, from design to decommissioning, and then we
THE AUTHORITY ON
OFFSHORE ENERGY PRODUCTION UNITS
LEARN MORE TODAY http://www.eagle.org/BrazilFPSOs
SAFETY LEADERSHIP IN A CHANGING WORLD
PROFILE
YINSON HOLDINGS BERHAD
deal with all these lessons in a systematic way that ensures we never make the same mistake twice and instead, repeat everything that has been successful. “We ensure to draw a lot from the experienced people we have in the company which differentiates us from a new business. Even though the Offshore Production Division is not that old, we have probably as many experienced people as any of our competitors. They are the foundation of our success and we care about their skills, happiness, and engagement. As examples, we have launched several programs this year in support of personal development and performance recognition.”
Business strategy Throughout a challenging year for the industry, Yinson has bucked global trends and continued to hire new team members to bolster the company’s workforce in support of its many ongoing projects. Despite the difficulties of working in various locations worldwide, the company reacted swiftly to the Covid19 outbreak and has been able to operate efficiently and with a minimum of interruption across the board. The company’s progress in 2020 under such difficult circumstances has endowed Yinson with a solid foundation on which it can continue working towards its
mission of ‘passionately delivering powerful solutions’ across the energy sector, as a reliable, open, adaptable, decisive, and sustainable partner. “I think our business strategy has helped us succeed,” Jahn emphasizes, when asked about what he believes are Yinson’s key differentiators in the market. “Along with value chain management and a quest for continuous improvement, we are also very good in the area of cost control and solutions. Adding on to that, we have successfully built several strong partnerships with international corporations, which allows us to tap into their expertise and network as well. We further try to be innovative when it comes to solutions and we’ve got an excellent track record in operations, including a five-year fleet uptime record of 99.8 per cent. Perhaps more than anything, what really makes us stand out is our project execution strategy. We subcontract topside modules and detail engineering, whilst all the project, engineering and construction management as well as conceptual engineering and the interface management is performed by Yinson. We focus on quality rather than quantity in our workforce. We hardly ever have to lay anybody off due to market fluctuations because of the long-term lease contracts we pursue and our smaller, more capable organization.” Within the next three to five years, Yinson
Bhadla Solar Park
ARAGON
Aragon AS is an independent engineering contractor delivering overall process solutions and services to the offshore Oil, Gas and LNG Industry. Our strategy is to be a worldwide provider of environmentally sound solutions. We cover entire topside design, but with core competence within recovering, conditioning, treating and liquefying natural gas. Our scope of services includes turnkey EPC contracts, engineering services, equipment supply, FEED, technical studies and operation services. Aragon’s mission is to improve the value of our Clients’ portfolio by providing quality, cost-efficient engineering solutions through high performance project execution with trusted partners and constant, predictable results. We strongly believe that we can provide qualified solutions that meet performance and all project requirements at globally competitive prices.
32
ENERGY,OIL&GAS
energy-oil-gas.com
expects its Offshore Production Division to lead the company to become one of the top three FPSO firms in the world. As for Yinson’s Renewables Division, Jahn hopes the firm will be able to both acquire further operating assets and develop and construct its own greenfield assets, transforming the renewables arm of the business into a major revenue stream for the business. “We currently have one solar plant in India with a generation capacity of 140 MW (AC) and depending on the weather, the estimated annual electricity production is 298,000 MWh. For this site, we have a 25-year power purchase agreement in place that runs into 2042, but we are looking at a lot of new prospects too,” Jahn declares. “We plan to eventually build our own
FPSO Helang
34
ENERGY,OIL&GAS
energy-oil-gas.com
plants and operate a selection of renewable generating assets. Our primary focus is onshore wind and solar, but we might also look into offshore wind and hydro opportunities. Of course, we’ll still do oil and gas production - predictions suggest that, in 30 years’ time, oil will be produced in similar amounts to today - but renewable energy will surely be more important in the global energy mix going forward and will help us expand our company and grow our legacy.” In early August, Yinson was, for the second year running, recognised as a ‘Most Honoured Company’ in the 2020 All-Asia Executive Team Ranking organized by leading international financial publication Institutional Investor. Additionally, Group Chief Executive Officer
PROFILE
YINSON HOLDINGS BERHAD
FPSO Helang crew
Lim Chern Yuan ranked third in the Best CEO category for the Oil & Gas sector by buyside analysts. The awards act as confirmation that Yinson is a company moving in the right
direction, and with big plans for the future, as well as some exciting projects just around the corner, the firm is sure to play a vital role in the industry for decades to come.
Yinson Holdings Berhad www.yinson.com ............................................ Services: Energy solutions provider
FRAMES
International oil and gas equipment supplier Frames has been awarded significant contracts by Yinson for the Anna Nery FPSO that will be located on the Marlim Field, offshore Brazil. The supply includes chemical injection systems, an electrostatic coalescer, HIPPS and a subsea hydraulic power unit. Frames has more than 35 years of experience in supplying such systems to the global FPSO market and its packages have been operating offshore Brazil since 1997. The close co-operation and early involvement with Yinson made design optimisation possible to meet the challenging space limitation on Anna Nery FPSO. The combination of a compact design and meeting the performance and project requirements shows Frames’ engineering at its best. Frames Brazil Office will support Yinson during operation with maintenance and local support during the lifetime of the FPSO. Frames is proud to be part of Yinson’s ambitious journey into Brazil. www.frames-group.com
...with exciting plans for new developments, upgrades and refinery expansions on the agenda, the business can be viewed as a leading light for not just Pakistan but for the wider energy industry
ENERGY,OIL&GAS
energy-oil-gas.com
35
Towering above the vast West Texas scrublands, amongst the rugged canyons filled with rattlesnakes, tarantulas, and scorpions, Phillips 66’s Borger Refinery is a facility like no other. It was Phillips first refinery and is located around 50 miles northeast of Amarillo, and half a day’s drive
36
ENERGY,OIL&GAS
energy-oil-gas.com
from the majestic Rocky Mountains. The refinery’s rich heritage can be traced back to the mid 1920s when Frank Phillips and his brother came to the West Texas panhandle in search of oil. Having already struck black gold near Bartlesville, Oklahoma, Frank and his brother travelled West to try their luck
PROFILE
PHILLIPS 66 – BORGER REFINERY
Lone star
spirit
in Hutchinson County, where they soon began drilling – with extraordinary results. The purchase of a small skimming refinery followed and the booming oil town of Borger sprang up almost overnight. “The people that came into this area and developed the oil were very tough minded,
resilient people because Borger is not an easy place to live,” explains Refinery Manager and industry veteran Darrel Hail. “It is dry and rugged, with only 22 inches of rain per year and about 3000 feet in elevation, yet in 1935, Borger was part of the largest oil field in the world. From there, it’s just continued to grow. ENERGY,OIL&GAS
energy-oil-gas.com
37
Building on our rich history and the strong Phillips 66 brand, over the next three to five years we plan to consolidate some of our operations, refurbish our offices, improve the efficiency of our plant, and attack cost as much as we can. Much of that will be focused on work to reduce our energy and water consumption, looking at all kinds of things from reduced steam venting to the recycling of water
Darrel Hail
38
ENERGY,OIL&GAS
Along with the skimming refinery, Phillips began buying, installing, and constructing natural gas liquid plants as well. From about 1500 barrels a day in 1926, it grew to about 15,000 barrels a day by 1930.”
Focus on research Construction began in 1930 on a pipeline from Borger to East St. Louis, Illinois, to move much needed liquid products to Midwestern customers. Later the pipeline was extended into Chicago. This was the first such pipeline in the world. People in Chicago could purchase gasoline produced from Texas crude, located more than 1000 miles away. Known today as one of the nation’s most technologically advanced facilities, Borger Refinery’s focus on innovation began early. The company’s first commercial HF alkylation unit went into operation at the Borger Refinery in 1942. Phillips developed the technology a year earlier for producing 100 octane aviation gasoline thus playing a key part in World War Two, for the Allied war effort. In 1961, the first resid cracker was installed to transform residual crude oil and turn it into valuable products. These are just two examples of key technological advancements carried out at Borger. “Phillips 66 has always had a very entrepreneurial spirit,” Darrel says. “We have a research center in Bartlesville and we’ve always been open to technology and pioneering new products versus standard commodity fuel. We employ a lot of research scientists in Bartlesville today, so that is part of our heritage and it’s still a part of our continuing operation. Phillips has always seen
energy-oil-gas.com
Borger Refinery as a place for experimentation and the development of cutting-edge products. “The First HF alkylation unit I mentioned is a pretty impressive bit of technology, as is the 2200-pound FCC feed hydrotreater. The unit started as a resid hydrotreater in 1982, but when the US changed its Sulfur in fuel regulations, we converted the unit in 2007 allowing it to take the Sulphur out of our fuel. We also added a 28,000 barrels a day delayed coker. The benefit has been that we get a larger volume of quality feed to our FCC units and in 2019, we added a vacuum tower to that process, so we’re getting all the diesel that is converted as well. The coker, hydrotreater treating the FCC feed, along with the vacuum tower, provides us with a big competitive advantage to run heavy crudes. Essentially, we are 2200-pound hydrotreating half our feed stock to this plant, which is going to provide a lot of extra liquid barrels, and liquid barrels is where you make money.”
Range of products Now, in 2020, Borger Refinery is a 150,000 barrel a day facility predominantly processing West Texas sour crude oil, as well as heavy Canadian crude. In general, the site produces motor fuels, gasoline, and jet fuels for commercial grade aircraft, alongside diesel for trucks, tractors, and farming operations. The refinery makes a Sulphur stream that goes into making fertilizers and coke which is burned as fuel. “We are a little bit different to a lot of refineries because we manufacture some low volume, high value specialty products, including aviation gasoline for small planes,” Darrel states. “We make solvents used for products like post-it notes and tire manufacturing, and we also send some product across the street to the Chevron Phillips Chemical plant where they make odorants, dry-cleaning fluids, gasoline engine testing materials, and precursors to chicken feed of all things. “Although, we have a wider product slate than most refineries, the bread and butter of the economics of the plant is mostly in fuels production. If you think about the size of the refinery, running 150,000 barrels a day, some of these specialty product streams might only be 500 barrels a day, so they are very small. They are difficult to make and often energy intensive, so we get to command a higher price.”
PROFILE
Historically, Borger Refinery has run sour crude from Midland and Odessa, Texas. However, the recent explosion of lighter, sweeter crudes produced in the Permian region – a lot of which are now being exported – has led the facility to reassess its priorities. “We are evaluating installing a continuous catalytic regenerator reforming unit so we can tap into those light barrels and turn them into high octane gasoline and other products,” Darrel reports. “That is a 2023 venture that we are currently in the middle of and just about to begin detailed engineering. It’s a really big project for us that will provide a lot of construction jobs and keep the refinery robust in its operation for the next 20 to 25 years. We are mainly doing it because the
PHILLIPS 66 – BORGER REFINERY
crude landscape has changed and the lighter, sweeter crude is more available than the heavier stuff, so we are now aiming to do both.”
People power As Borger Refinery continues to thrive, Phillips 66 is eager to highlight the contribution of its first facility’s most important asset – its people. Having worked in the industry for more than six decades between them, Darrel and Refinery & Community Relations Director Kenny Morrison are united in their belief that more than any refinery aspect, it is its workforce that makes a real difference. “Whether it be people out there searching for that last bit of reliability and
AGGREKO
Aggreko salute WRB’s Borger refinery operations. We are both honored and privileged to be part of the refinery’s ongoing success by providing expertise and support to the site’s critical infrastructure. Aggreko will continue seeking improvement opportunities as well as supporting turnarounds and day-to-day needs to assist the refinery in achieving their performance goals. Aggreko are a world-leading provider of mobile modular power, temperature control and energy services. We are working at the forefront of a rapidly changing energy market and are focused on solving our customers’ challenges to provide cost-effective, flexible and greener solutions across the globe.
ENERGY,OIL&GAS
energy-oil-gas.com
39
improvement, reducing the company’s environmental footprint, or taking care of their brothers and sisters so no one gets hurt, people are 100 per cent the name of the game in this business,” Darrel asserts. “In terms of our workplace here in Borger, people take real pride living in this region of the country and working for the refinery. People really help each other and there is a spirit of teamwork. We’re just a small plant in a relatively small county and I think that pulls people together. We’ve got about 1000 employees and contractors that we employ daily. Then we provide feed stock for the chemical plant across the street that hires around 500 more. That is a lot of good, high paying jobs in this
40
ENERGY,OIL&GAS
energy-oil-gas.com
part of the country that wouldn’t be here otherwise.”
Community support In 2019, Borger Refinery rolled out Phillips 66’s Energy in Action program, a set of expectations that encourage employees to promote and celebrate working for the greater good, creating an environment of trust, seeking different perspectives, and achieving excellence. No stranger to public recognition, the facility also earned the 2019 AFPM Distinguished Safety Award, the US oil industry’s most coveted honor. “People have asked me,” Darrel adds, “why I work for Phillips, and I answer, that
PROFILE
after all these years, I’ve never been asked to do anything unsafe, unethical, or bad for the environment. We have always been a principle-oriented company and every year we fill out an ethics survey to make sure that everybody understands that you must do things right to work for Phillips. I think that permeates the business.” Widely recognized by Borger residents as ‘the lifeblood of the local community’, Borger Refinery not only employs local people and encourages business for local hotels and restaurants, but the facility works closely with local schools, colleges, and organizations to devise volunteering activities and fundraising opportunities. “Any time there is an opportunity for goodwill, we like to get involved,” Darrel reveals, “from mentoring on math, to a program called Junior Achievement, which covers life skills for 8th graders. We also work on Habitat for Humanity projects and many employees are involved with the Boy Scouts of America for whom we run an annual sporting clay shooting event that raises approximately $50,000 every year. “We have stable, high paying jobs at this refinery, and we want more people to understand what we do here so we can attract the best talent. We collaborate with Frank Phillips College in town to provide high school graduates with access and capabilities to get these roles. We offer internships and programs that promote and teach them about working with their hands. “The Borger Refinery believe it is a privilege to operate in this community. What’s nice for us is that the community appreciates us too. This is according to high ratings on periodic company reputation studies where we ask community leaders how we are doing. Philanthropy is so important for a smaller community like Borger. We work with the local fire department to tackle wildfires and have a strong working relationship with the Borger police department. We train with and regularly donate extra equipment to smaller departments in the area. The facility is also involved with the United Way and other charities.”
Green efforts Following a year in which Borger Refinery has continued to perform well despite the negative impact of Covid-19 on the oil industry, the facility is now looking to expand its interests further north and west of West
PHILLIPS 66 – BORGER REFINERY
Texas. Denver, Colorado remains a key market for the refinery and work is currently ongoing to reverse a natural gas pipeline between Denver and Borger to allow the facility to transport more products north. The announced closure of refineries in Wyoming and New Mexico looks set to offer new opportunities for product placement in those areas of the country too. “All in all, we are trying to make the most of investment in the Permian Basin and build upon other pipeline investments on crude and other products,” Darrel comments. “This is still a commodity business, to the extent that if we can produce motor fuels cheaper than somebody else then we stay in business, and we are firm believers in that strategy. “Building on our rich history and the strong Phillips 66 brand, over the next three to five years we plan to consolidate some of our operations, refurbish our offices, improve the efficiency of our plant, and attack cost as much as we can. Much of that will be focused on work to reduce our energy and water consumption, looking at all kinds of things from reduced steam venting to the recycling of water. In the last ten years, we have reduced our Sulphur dioxide emissions by over 98 per cent and in 2019 we commissioned a $25 million wastewater project to improve water recovery. The company has invested a lot of money and Borger Refinery is currently enjoying its best environmental performance ever, but we are always looking at new greener energy sources to help reduce our energy bills and environmental footprint.”
Phillips 66 – Borger Refinery www.phillips66.com/refining/ borger-refinery ......................................... Products and services: Crude oil refinery
ENERGY,OIL&GAS
energy-oil-gas.com
41
Clearing the air
Owned and operated as an enterprise utility by the City of Clearwater, Clearwater Gas System (CGS) is the fourth largest municipal gas system in Florida. In business since 1923, Clearwater Gas serves over 28,000 customers across 20 municipalities and ranks 34th out of nearly 1000 public gas systems in the Unites States. Primarily a natural
42
ENERGY,OIL&GAS
energy-oil-gas.com
and propane gas service provider, Clearwater Gas also offers maintenance, installation, repair services, and appliance sales, as well as operating as a Compressed Natural Gas (CNG) fueling station. Speaking to Energy, Oil and Gas, Executive Director Chuck Warrington summarized the energy provider’s guiding philosophy.
PROFILE
CLEARWATER GAS SYSTEM
According to the US Department of Transportation, pipelines are the safest form of energy transportation, but still, as a gas utility, Clearwater Gas System is regularly safety inspected by the Florida Public Service Commission and the Department of Transportation
“Our mission statement incorporates the ongoing effort of Clearwater Gas to be a ‘provider of choice’, which addresses allowing consumers the opportunity to ‘choose’ either natural gas or propane gas energy,” he explained. “Given today’s energy and utility climate, most corporations have outsourced several customer service functions, but
Clearwater Gas System has continued to offer - for over 95 years - in-house functions such as service and repair, installation, appliance sales, and a ‘live’ voice during customer calls.” Clearwater Gas has enjoyed impressive growth throughout the last decade and has current annual revenues of nearly $50 million. In 2019, robust marketing efforts resulted ENERGY,OIL&GAS
energy-oil-gas.com
43
PROFILE
VWS WESTGARTH CLEARWATER GAS SYSTEM
in the addition of 1,879 new gas customers and a growth rate of 7.5 per cent. Such significant progress led a report compiled by the Municipal Natural Gas Association to name Clearwater Gas System as the fastest growing gas utility within the state. Building on this success, CGS recently moved into a brand-new utility complex. Funded through the provider’s retained earnings, the 57,000 square foot site has been designed with durability, efficiency, and sustainability in mind. “The new Clearwater Gas campus features enhanced building elements, mechanical and electrical systems, and space planning to create a flexible and effective location with a minimum 50-year service life,” Chuck revealed. “Sustainable design features include a main
building oriented on the site to maximize daylight on the North and South facades; membrane roofing with a light-color, low albedo surface to reflect heat and reduce the cooling load; interior lighting controlled by occupancy sensors that reduce energy use when rooms are vacant; and finally, gas-fired equipment providing chilled water for highefficiency air conditioning and humidity control.” The new campus was designed to meet CGS’ infrastructure needs and the day-to-day functional needs of 100 employees. Chuck made it clear that the functional business needs of its employees are critically important to motivate and retain good people to support the success of any gas utility. “The ultimate goal is to attract and hire
RINNAI AMERICA CORPORATION Rinnai America Corporation, the brand leader of tankless water heaters, in partnership with Clearwater Gas, is bringing value to consumers by providing increased energy efficiency, cost savings, and premium hot water and home heating solutions. Our long-standing partnership helps grow Clearwater’s profitability by bringing new customers to distribution lines, creating conversion programs to drive gas adoption, adding additional gas burner tips to homes, and developing long-term customer retention. Through Rinnai’s builder relationships, within residential new construction (RNC), new natural gas communities are being developed with a new emphasis on innovative solutions for multi-family developments. Commercial businesses are facing difficult financial times, requiring a demand for energy cost reduction, reduced maintenance, costs, redundancy, and reliability; Rinnai commercial water heating products meet these needs. Commercial businesses can make confident decisions, with complex solutions, utilizing Rinnai’s free Application Engineering service, providing complete design and sizing of projects with a 100 per cent guarantee.
44
ENERGY,OIL&GAS
energy-oil-gas.com
individuals that desire a long and healthy career in the gas industry,” he remarked. “After many years of obstacles with hiring, specifically salary-based issues, the City of Clearwater’s Human Resources department decided to conduct a much-needed classification and compensation review. The results of the review showed that about half of the City of Clearwater positions (in comparison to similar jobs) were behind market. We desire to recruit and retain quality staff and we are unable to do so if half our positions are being paid behind
46
ENERGY,OIL&GAS
energy-oil-gas.com
the going market rate. To fix the issue, the city council agreed to spend more than $3 million last year to boost the salary ranges for positions that fell below market to where they should be and to address the proper placement of employees in pay ranges based upon years of service in the current position. As a result, this study truly helped the gas system with an ongoing challenge of hiring and retaining qualified individuals.” The importance of a skilled and settled workforce has never been more evident than in 2020 when, like firms across the globe, Clearwater Gas has been forced to contend with the negative impact of the Covid-19 pandemic. Limitations on face-to-face customer visits mean that the provider’s employees have been forced to conduct regular customer interactions over the phone, through email, and on social media. Delays in natural gas infrastructure installation and permit procurement have also been common challenges since the outbreak of the virus. “This period has required consistent messaging, as well as a huge dose of patience from our customers and employees,” Chuck said. “We had been told by customers in the past that hearing a human voice on the other end of a phone call is so refreshing versus hearing automated dialogue. Once you provide a detailed explanation, customers are a bit more
PROFILE
understanding and that’s where our team have stepped in. “Alongside this, Clearwater Gas System has been doing everything it can throughout 2020 to enhance the safety and wellbeing of its customers and employees. We are committed to providing a safe and reliable service and we do not anticipate any service disruptions at this time. Our internal teams are taking a number of precautionary measures, including wearing PPE to mitigate exposure to the virus, and we are regularly communicating with our employees, as well as posting Covid-19 updates on the gas website for all gas customers.” The focus on safety should come as no surprise to those well-acquainted with the way Clearwater Gas operates. Safety has always been the provider’s top priority, and among other initiatives, CGS operates an emergency gas dispatch center open 24 hours a day, seven days a week, which allows customers to report gas leaks and other gas-related concerns. “Clearwater Gas System is committed to taking every precaution necessary to protect gas lines and ensure a safe environment for our workforce and the general public,” Chuck asserted. “According to the US Department of Transportation, pipelines are the safest form of energy transportation, but still, as a gas utility, Clearwater Gas System is regularly safety inspected by the Florida Public Service Commission and the Department of Transportation. As such, our safety measures include training for all gas sections, including Service and Repair, Installation, Cathodic Protection and Construction.” Having made it through the first half of a challenging year, Clearwater Gas is eager to develop the customer connections it has established over the past few years, while continuing to evolve and expand in the future. Chuck highlighted that the provider’s current partnership with Habitat for Humanity of West Pasco County highlights the firm’s ongoing dedication to maintaining strong customer relationships. Habitat for Humanity offers a unique and sensible formula that makes it possible for limited-income individuals and families to own a home they can afford. Clearwater Gas has, to date, provided natural gas service to 144 Habitat Homes in North Pinellas and Pasco counties. For Chuck and his team, it’s a sign of good things to come. “We feel confident that we will continue to grow at about eight per cent annually, which will possibly add another 10,000 customers in the next five years,” the Executive Director
CLEARWATER GAS SYSTEM
stated. “We also believe that our customers will show increasing interest in higher tech gas equipment like gas air conditioning, CHP energy systems, and desiccant systems.” No matter what else the future may hold, Clearwater Gas is determined to become a greener, more sustainable organization by the end of the decade. As well as employing practical initiatives such as paperless billing, CGS regularly shares several approved residential and commercial Gas Energy Conservation programs as tools to promote environmental sustainability practices. It all goes to bolster the provider’s efforts to provide energy savings to its customers while helping to create a cleaner planet. “Our overall message is that natural gas has been a game changer in American energy utilization,” Chuck declared. “When we explain our environmental strategies, we talk in terms of annual energy ‘savings’ when operating typical gas appliances such as water heaters and dryers. At current residential rates, natural gas is 65 per cent cheaper to operate versus electric energy and recent studies show that natural gas produces much lower emissions than those of other fossil fuels like coal or oil. Also, due to its higher efficiency, natural gas emits 52 to 56 per cent less GHG than coal for the same amount of electricity. At present, 130 City of Clearwater vehicles fuel at the CNG station on Hercules Avenue in Clearwater, as well as about 20 customer CNG vehicles. We believe that the consistent use of natural gas is a significant contributor to reducing pollution and improving the climate concerns of our world.”
Clearwater Gas System www.clearwatergas.com ......................................... Products: Natural and propane gas provider
ENERGY,OIL&GAS
energy-oil-gas.com
47
Technical wizardry
Renowned for its highly technical approach to every project - no matter how big or small - ZAP Engineering and Construction Services is a full-service
48
ENERGY,OIL&GAS
energy-oil-gas.com
engineering and construction management firm, with a major emphasis on the oil and gas industry. Founded in 2001 by Steve Tzap, ZAP was established after its founder saw
PROFILE
ZAP ENGINEERING AND CONSTRUCTION SERVICES
Fostering relationships with our clients has been the growth engine for our business and I think that will continue to be the case,” Shane reports. “Our focus is not on getting more business from new clients, our focus is really on grasping an opportunity to execute a project, showing what we can do on a small scale, and then from there, we usually take on more and more responsibility for that company
a need in the market for a process-centric engineering firm to support the industry. “Steve really wanted to approach things from a heavy process perspective to provide
engineering solutions for operators,” explains ZAP’s Vice President of Business Development, Shane Wilson. “He grew the business from one person to the 150 people ENERGY,OIL&GAS
energy-oil-gas.com
49
we have today, spanning all major engineering disciplines. Following Steve’s lead, we still have a process-centric focus today.” With an emphasis on engineering, ZAP brings its technical expertise to a variety of EPC projects. Thanks to its full EPC capabilities, the company is able to perform all design and engineering in-house, before project managing contractors and vendors in the execution phase. “We are unique, I believe, in the larger EPC space,” Shane says. “When we are bidding on EPC projects, we tend to be competing with construction companies that have an engineering group to support their construction efforts. On the other hand, we are primarily an engineering company that leverages our engineering experience, as well as our ability to manage and schedule EPC projects. We do not have a construction arm; we contract all of that out, so it forces
50
ENERGY,OIL&GAS
energy-oil-gas.com
us to do complete and accurate engineering, while scheduling and planning very detailed scopes of work for our contract partners. When we execute an EPC project, we track the development daily, with a tremendous amount of KPIs and metrics, to ensure that we react quickly to any issues. It’s been a very successful philosophy and approach for us.”
Rapid expansion Serving both midstream and upstream markets in the oil and gas industry, ZAP’s processing engineering department continues to be the largest group within the organization, so it is no surprise that the firm shines most brightly on heavy process, highly technical projects preferred by the company’s founder. Capable of servicing a wide range of requests, from small process related studies to large turnkey ventures, ZAP’s first two EPC contracts arrived in 2010, transforming the firm from a pure engineering business into a full-service provider. “In 2010, Frank Lousberg – now company President – encountered a client that felt the cost to design and build their compressor stations was not competing with some of their rival companies,” Shane relates, “so they came to ZAP and asked us to do some front-end engineering and design with a total install cost estimate for the two stations. “Frank found that ZAP could build these compressor stations and still meet the company’s specifications, for significantly less than it had been costing them in the past. At that time, the most senior person in that organization turned to Steve Tzap and asked him if he would perform EPC work for that cost and Steve agreed. A commitment was made and we executed both of those projects on time and on budget. That was really our primary entry into the EPC space and we have continued to foster that capability as we have grown over the last ten years.” ZAP’s growth over the last decade has been substantial and even included a two-year period where the firm tripled in size. Shane believes the rapid expansion is the result of numerous factors. “As the US oil and gas market has expanded over the years, we have ridden that wave in some regards, so that has definitely helped our business,” he states. “We’ve also applied our skillset to other industries, so that has allowed us to grow as well. Part of our business strategy right now is to diversify. We believe that we’ve honed skills in the oil
PROFILE
ZAP ENGINEERING AND CONSTRUCTION SERVICES
and gas industry that is directly applicable to other sectors too, particularly those that are highly technical and process-centric. I think it all comes from the foundation of our core values as a company and bringing in real talent. I am currently working around some of the smartest, most driven people that I have encountered in my career.�
Adaptable and agile Strong client relationships have been vital to the company too. As ZAP has strengthened connections with some of its core customers, the firm has been offered opportunities on increasingly large projects and broadened its capabilities as a result. Many of the company’s current clients have been ZAP customers since the business started in 2001. MMR GROUP, INC.
MMR appreciates its decade-long relationship with ZAP Engineering & Construction Services. This partnership has led the company to Texas, New Mexico, and Colorado to successfully perform electrical and instrumentation services on over 30 projects. MMR, the largest open-shop electrical and instrumentation contractor in the nation, serves clients in the chemical and petrochemical, oil and gas, industrial manufacturing, power generation and power development markets. MMR provides services to clients in the industrial sector, including instrument installation and technical services, electrical construction, power distribution, enhanced panel and modular control building services, telecommunications and security systems, commissioning and start-up assistance, power development and maintenance.
ENERGY,OIL&GAS
energy-oil-gas.com
51
“Fostering relationships with our clients has been the growth engine for our business and I think that will continue to be the case,” Shane reports. “Our focus is not on getting more business from new clients, our focus is really on grasping an opportunity to execute a project, showing what we can do on a small scale, and then from there, we usually take on more and more responsibility for that company.” “Due to the size of our business, and with the leadership we have in place, one of our coolest advantages is we are a highly adaptable and an agile option for our clients,” adds Mechanical Engineer and Business Development Manager, Evan Anundsen. “Every project is a little bit different and, on the whole, we are very good at being able to turn on a dime or make a quick change to handle whatever the client needs.”
Serious about safety Among ZAP’s current projects is the construction of a cryogenic gas plant in North Dakota. Contractual obligations held by the client mean that ZAP has been forced to act quickly throughout the development, but the company is well on track with the
52
ENERGY,OIL&GAS
energy-oil-gas.com
plant’s aggressive schedule. A hallmark of the way ZAP runs its EPC projects, proactivity has played a key role in the North Dakota scheme’s success. “We want to do as much front-end engineering as possible on our EPC projects,” Shane reveals. “We were shortlisted by this particular client and when they called us in for a final interview, we let them know that there were four mechanical designers in our office working on their project as we spoke and the client was really surprised. Our reply to them was, ‘in order to hit your schedule, we cannot lose a single day’. I think that really speaks to our customer focus. We will always do everything in our power to ensure their success, which, in turn, ensures our success. We are willing to take calculated risks in order to achieve our goals.” One area in which the company is not willing to take risks is Health and Safety. Earlier this year, ZAP, along with its partners at Schwob Energy Services and MMR, celebrated 50,000 safe man-hours for a series of compressor stations in Southeast New Mexico. The achievement is evidence of ZAP’s treatment of safety as not only a priority, but a core value.
PROFILE
ZAP ENGINEERING AND CONSTRUCTION SERVICES
ZAP Engineering and Construction Services “We relate quality with safety,” Shane declares. “Safety is one of the top things we vet when we are evaluating potential contract partnerships with a construction company or a vendor. It’s something we take very seriously. All our engineers go through safety training and I think that we set that expectation from the first day they walk into our office. It goes all the way up to our President and CEO, where they are seeing everything from reported near misses to first aid data, so we are tracking leading indicators when it comes to the safety of all of our construction projects. Again, it goes back to our client focus. They are operating, managing, and running gas plants, compressor stations, and wellhead facilities; safety is paramount to them, so it inherently becomes paramount to us.”
the minerals processing sector, so that seems a logical fit for our expansion. We’ve been increasing those capabilities, as well as looking into other areas of the energy sector.”
www.zapecs.com ......................................... Products and services: Detailed engineering, design and construction management
Expansion plans Driven by its long-standing client relationships, process heavy approach, and core values of accountability, mutual respect, quality, and execution, Shane expects ZAP’s growth trajectory to endure well into the future. Though the company will continue applying its skillset to the oil and gas industry, Shane believes that other sectors could also benefit from ZAP’s expertise and that, as a result, diversification is inevitable. “There has been some growth in the mining and minerals processing industry, so we are working on more and more projects in that area,” he remarks. “A number of the leaders in our company have a background in ENERGY,OIL&GAS
energy-oil-gas.com
53
Clean
energy revival
54
ENERGY,OIL&GAS
energy-oil-gas.com
PROFILE
CADENT GAS LTD
ENERGY,OIL&GAS
energy-oil-gas.com
55
PROFILE
CADENT GAS LTD
Officially formed in 2017, when National Grid sold off its gas distribution business, Cadent is the company responsible for transporting gas to over 11 million customers in the UK. Managing a network of over 82,000 miles of pipes, Cadent operates and maintains the country’s largest gas distribution network, and today represents four of the UK’s eight gas distribution networks, offering coverage to North London, the West Midlands, North West, and the East of England. With more than 4000 employees to its name, Cadent looks after the main gas pipe that supplies local areas in the abovementioned regions, as well as the smaller pipes branching off it, which bring gas directly into homes and businesses. The company also maintains, repairs and replaces gas pipes to ensure a safe and reliable flow, and manages the National Gas Emergency Service for all gas customers in the UK. That means, if something was to go wrong, Cadent is the first point of call to ensure that all issues are dealt with calmly, quickly and safely. The services that Cadent provides directly to homes can be separated into three categories; connections, disconnections and alterations. Cadent provides its new domestic gas connection service to customers, taking pride in the fact that it understands the importance of making this as straightforward as possible. Fortunately, Cadent’s friendly,
56
ENERGY,OIL&GAS
energy-oil-gas.com
helpful and knowledgeable team is passionate about helping customers through this process. It is for this reason that, every year, some 10,000 new homeowners choose Cadent to connect them to its gas network.
Customer satisfaction Cadent is also proud to offer a comprehensive gas disconnection service. The company recognizes that there are various reasons that a customer may need their gas to be disconnected. This could range from simply no longer requiring gas, through to a property being demolished. Whatever the need for disconnection, Cadent’s dedicated team ensures that its customers’ needs remain at the heart of its services. Lastly, when it comes to gas alterations, Cadent’s customers most commonly use this service when there is a need to move a relocate a gas meter, or if pipes need moving to a more suitable location. This can be as a result of renovation works or an extension to a property, or simply because said meter would not otherwise be easily accessible. As well as home customers, Cadent also provides its services to businesses within London, the East of England, the North West, and the West Midlands. Again, whether it be a connection, disconnection or an alteration service that a business requires, Cadent understands the importance of delivering complete customer satisfaction. As
soon as a business quote has been accepted and paid for, its delivery team begin to plan the work, and works will typically be completed in approximately six-to-eight weeks, with Cadent promising to always offer the earliest date available. While local authority restrictions can sometimes apply in certain areas, or it may require road traffic management permissions which can sometimes impact delivery timescales, its team makes it a priority to ensure that the customer is always kept up to date and well informed. For Cadent, innovation sits at the heart of its activities. To the company, this means doing things differently to benefit its customers and the environment. By
embracing innovation, it can successfully identify the most up-to-date tools and techniques to help keep gas flowing safely, reliably and with minimal disruption to end users. Cadent takes tools and ideas from initial concept through feasibility testing, and all the way to trials, in order to ensure that they are fit for purpose and – most importantly – can deliver real value to its customers.
Innovative approaches Cadent works collaboratively with the other gas distribution networks on individual projects and shares learning from all of its projects. Working together has been shown to help its customers benefit from the sharing
ENERGY,OIL&GAS
energy-oil-gas.com
57
PROFILE
CADENT GAS LTD
of effective new ways of working and future technology. For example, the company works in partnership with EIC to bring forward new innovations and technologies, from small to medium enterprises, from around the world that could potentially be applied to the gas network. Meanwhile, the Gas Network Innovation Strategy has been developed by all of the gas distribution networks and National Grid, bringing together all of the most important challenges and opportunities facing the UK’s gas transmission and distribution networks, and setting the foundations for how Cadent and its peers innovate. Working with its partners across the industry, the company innovates to tackle several important challenges. One is consumer vulnerability, whereby it explores how best to support the needs of consumers in vulnerable circumstances today and in the future, ensuring that everyone can experience the benefits of the energy transition, and that any adverse effects of change are minimized. Others include, facilitating and accelerating the UK’s move to net zero greenhouse gas emissions before 2050, developing and implementing industry leading techniques for optimizing assets and practices for energy networks, and developing and
58
ENERGY,OIL&GAS
energy-oil-gas.com
testing solutions to increase the flexibility, transparency and efficiency of the energy system. Keeping its communities safe and warm is – unquestionably – the primary goal of Cadent, however, it has also created for itself an impressive track record over the years of operating as a responsible business, from its regulatory commitments and practices, to its social actions. Since March 2017, Cadent has raised over £200,000 for its various charity partners, its employees have given over 1369 hours of their time to community projects since August 2017, and it is estimated that the company has made a positive impact on over 128,000 people as a result of its volunteering program.
Critical industry Through its community investment, and the actions it takes, Cadent strives to enhance the lives of people in the communities in which it lives, works and impacts through its networks. Its responsible activities help Cadent to create closer connections locally with its customers, and it recognizes the fact that it plays an essential part in today’s society. To this end, it cares deeply about how its operations affect its stakeholders, employees and customers.
One of its goals is to be a leader in raising awareness of carbon monoxide safety, helping to prevent any instances of carbon monoxide poisoning in its networks. Through various carbon monoxide initiatives, it is able to extend its reach far and wide to spread this vital message. Strengthening its reputation through such actions means Cadent’s presence in communities is reliable, valued and trusted. By focusing on why and how it operates responsibly, the company can translate the values at the heart of its organization, and live by them for the mutual benefit of its employees, its stakeholders and the 11 million customers it serves. Turning to both current and future affairs, energy networks like Cadent have been recognized as critical industries throughout the Covid-19 outbreak. During the lockdown, the company stepped down its planned customer facing gas mains renewal work, only focusing on critical projects and emergencies. To keep the gas flowing safely – both now
and in the years to come – the company has carefully begun to restart its construction program to replace ageing metal gas mains with tough new plastic ones under an initial three-month program of works. This will be subject to permission from councils for Cadent to work in the streets, and to the evaluation of feedback from its customers.
Comprehensive business plan The safety of Cadent’s customers and its teams has always been absolutely non-negotiable. Every year, it replaces around one per cent of the 80,000 miles of underground mains it looks after, as they reach the natural end of their safe working lives. Some of these are old pipes, and showing signs of age, thus they must be replaced so as to remove the risk of gas leaks, and ensure a safe and reliable gas supply. As would be expected from a responsible business, Cadent has changed the way that it undertakes such tasks, so as to take account of all guidelines associated with Covid-19.
ENERGY,OIL&GAS
energy-oil-gas.com
59
PROFILE
CADENT GAS LTD
If colleagues need to enter people’s homes, they will be wearing all the appropriate protective clothing to keep those living there safe. This will include disposable gloves, masks and safety glasses. They will ask residents to stay in a separate room. They will work as efficiently as possible and wipe down
60
ENERGY,OIL&GAS
energy-oil-gas.com
any surfaces they have touched before leaving the property. Colleagues will observe social distancing from the public and from each other. However, where work tasks require colleagues to work more closely together, contact between colleagues will be kept to a minimum, they will wear the appropriate PPE
for the task, and follow good hygiene rules. Moving forward, Cadent has formulated a comprehensive Business Plan to cover the years of 2021 through to 2026. The plan sets out how the company intends to keep energy flowing to 11 million homes and businesses through targeted investment and operational management, while also delivering enhanced customer experiences and facilitating the urgent actions needed to tackle the UK’s net zero climate change ambition by creating a pathway to clean gas. Further to this, Cadent intends to deliver a consumer value proposition with an estimated net social value of £537 million, deliver a real bill reduction of over ten per cent for the average customer, and improve services for less than 33p per day, per customer.
Practical pathways Cadent is excited about the opportunity that the next decade offers to significantly transform and refocus the long history of custom and practice, to deliver more for its customers, communities, colleagues and stakeholders. At the same time, it recognizes the critical need to address the urgent challenges of climate change action to deliver net zero emissions for the benefit of both current and future customers. It should not be forgotten, however, that the scale of investment and change needed to deliver this in an affordable, secure and sustainable way will not be inconsiderable, and that government, regulators and businesses need to strike the right balance between delivering the critical long-term needs of future consumers with affordability for existing ones. For its part, Cadent plans to continue its leading role in driving and shaping practical ways to deliver clean gas to address the UK’s net zero emissions goal. To date, it has been at the forefront of developing practical pathways for clean gases such as biomethane, BioSNG and hydrogen through landmark innovation projects, working closely with its industry colleagues. The company wants to continue to invest in making this a reality as soon as possible, given the urgency for action and the wider societal benefits that it will bring. Cadent has set out how it will continue to facilitate and support clean gas resources to connect its networks, while also setting out how it plans to support Ofgem, and national and local government in moving to net zero emissions. This ambition includes finding
a solution to progressing with pioneering new projects such as HyNet – where the company is part of a consortium of different commercial, academic and entrepreneurial organizations working together. This will create a clean gas pathway using hydrogen, in order to decarbonize the North West of the UK by the end of the next decade. It is estimated that this will also help to create 5000 local jobs and stimulate industry, whilst delivering significant carbon savings of around one million tons at a low cost, compared to alternatives. The company wants to be one that is known for its forward thinking and leadership – especially in rising to meet the challenges of a net zero emissions country – and that delivers for all of its customers, particularly those in vulnerable situations. Cadent’s plan for 2021-2026 is an important step on this journey, and will help it to begin to transform experiences and set long-term ambitions for the outputs that it will deliver for its customers over this period of time.
Cadent Gas Ltd www.cadentgas.com ............................................ Services: Gas distribution network operator
ENERGY,OIL&GAS
energy-oil-gas.com
61