Asian Oil And Gas-september-october 2014

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aogdigital.com      ▼ September - October 2014 ASIAN OIL & GAS AOG  Australian LNG   page 12 Content is copyright protected and provided for personal use only - not for reproduction or retransmission. For reprints please contact the Publisher. E &P  Consu lta ncy & So ftw are Beicip-Franlab Headquarters 232, avenue Napoléon Bonaparte 92500 Rueil-Malmaison - France Tel.: +33 1 47 08 80 00 Email: [email protected]     w     w     w   .      b     e      i     c      i     p   .     c     o     m GEOSCIENCE AT ITS BEST Software Consulting solution Leading Petroleum Consultancy and Sofware editor, Beicip-Franlab and Beicip Technology Solutions are offering a perfect combination of industry know-how & state of the art technology: • Proven track records all over the world in Exploration and Field development thanks to a unique combination of Innovation and Experience . • OpenFlow Suite from Exploration to Reservoir Management: next generation geoscience software to unlock conventional and unconventional « oil and gas reserves » . Beicip Technology Solutions Suite 14-02, G-Tower • 199 Jalan Tun Razak 50400 Kuala Lumpur, Malaysia Tel : +603 2165 1700 Email: [email protected] www.beiciptecsol.com Content is copyright protected and provided for personal use only - not for reproduction or retransmission. For reprints please contact the Publisher. aogdigital.com REGIONAL UPDATES  4 Briefs New discoveries, leases, and development plans. SHIPYARDS  6 Tiger Drillships Ready for Action China’s new 170m-long, 32m-wide drillships will be able to work in water up to 5000ft and drill to 32,900ft. After almost 3 years in development, they are on the verge of delivery. GEOLOGY & GEOPHYSICS  8 2D Revolution   2 D seismic survey technology and subsurface imaging  techniques are changing the way we search for hydrocarbons. COVER STORY   10  Australian LNG Fueling Asia All around the world, countries are investing in LNG technology. Mary Ching describes the market in Australia. FEATURES  14 The path is laid for decommissioning in  South East Asia There are nearly 2000 structures installed offshore in the Asia Pacific region, all of which will eventually need to be decommissioned. New ASCOPE guidelines should pave the way, explains Nina Rach.  16 Myanmar-China Oil and Gas Pipelines: Rebirth of an Ancient Trade Passage The Myanmar-China crude oil and natural gas pipelines are significant in a way that they epitomize a reincarnation of the ancient southwestern silk trading route. Mary Ching explains. COMPANY NEWS  20    Activity  Chinese industrial conglomerate Fosun International Ltd. will acquire Australia’s Roc Oil Co. Ltd. in an all-cash US$441 million transaction. CONTRACTS  21 McDermott Wins Indonesion Fab Work  Petronas subsidiary PC Ketapang II Ltd. awarded McDermott International a fast-track fabrication contract in August. PRODUCTS & TECHNOLOGY   22   Solutions AOG staff highlight new tools and techniques designed to improve operational performance. PEOPLE  23   Spotlight US-based project management company Crowley Maritime chose William Hill as manager for its new Singapore office. FACTS & FIGURES  24   Numerology  A capsule view of interesting industry statistics. COVER IMAGE The loading jetty at the Pluto infrastructure has a single processing train with production capacity of 4.3 million tonnes/year. Photo from Woodside Energy Ltd. Contents 3 September ·  October 2014 |   AOG 6 10 Content is copyright protected and provided for personal use only - not for reproduction or retransmission. For reprints please contact the Publisher. AOG   |  September ·  October 2014 4 aogdigital.com www.aogdigital.com Atlantic Communications LLC 1635 W Alabama Houston, Texas 77006-4101, USA Tel: +1 713 529 1616 [email protected] Editorial Director Nina Rach Tel: (+1) 713 831 1780 [email protected] Managing Editor Audrey Leon [email protected] Associate Editor Sarah Parker Musarra [email protected] Editorial Interns Gregg App Jerry Lee Web Editor Melissa Sustaita [email protected] Design & Layout Bonnie James ADVERTISING REPRESENTATIVES Singapore, Malaysia, Indonesia, Thailand & Korea Anthony Chan Tel: (+65) 63457368 [email protected] China, Hong Kong & Taiwan Henry Xiao Tel: (+86) 21 3921 8471 [email protected] Italy Fabio Potesta Tel: (+39) 10 570 4948 [email protected] Netherlands/Austria/Germany Arthur Schavemaker Tel: (+31) 547 275005 [email protected] Norway/Denmark/Sweden/Finland Brenda Homewood Tel: +44 (0) 1732 459683 [email protected] United Kingdom Mike Cramp Tel: +44 (0) 1732 459683 [email protected] France/Spain Paul Thornhill Tel: +44 (0) 1732 459683 [email protected] North America Amy Vallance Tel: (+1)281 758 5733 [email protected] John Lauletta Tel: (+1) 713 874 2220 [email protected] Publisher Brion Palmer Tel: (+1) 713 874 2216 [email protected] Associate Publisher Neil Levett Tel: +44 (0) 1732 459683 [email protected] Regional Briefs ASIAN OIL & GAS AOG September · October 2014  Australia • ORIGIN ACQUIRES BROWSE INTEREST Australia’s Origin Energy acquired Karoon Gas’ interest in Western Australia’s Browse basin permits WA- 315-P and WA-398-P for an estimated US$800 million. According to Karoon, the Browse  basin gas condensate basin has discov- ered resource in excess of 30Tcf. It is set to become a significant source of global LNG supply with Inpex’s Ichthys project and Shell’s Prelude projects (currently under construction) and Woodside’s Browse LNG project (in FEED). Origin will be responsible for all costs associated with the current Pharos-1 exploration well, located in permit WA- 398-P, which encountered hydrocarbon pay in the Browse basin this July. China • CNOOC DUO BEGINS PRODUCTION Operator CNOOC Ltd. began production at its Wenchang 13-6 oilfield and Panyu 10-2/5/8 project, both of which are locat- ed in the South China Sea. Wenchang’s main production facilities include one wellhead platform and 12 producing wells. There are currently five wells pro- ducing approximately 1300bbl/d.  The Panyu 10-2/5/8 project is designed to share some facilities of Panyu 4-2 oilfield. The new facilities include one wellhead platform and nine producing wells. CNOOC says there are four wells connected, which are producing approxi- mately 9000b/d. CNOOC expects to reach peak production of 13,000b/d is expected  by 2015. Indonesia • PGN FSRU LAMPUNG    BEGINS OPERATIONS The PGN FSRU Lampung project off Indonesia had its vessel and associ- ated mooring and pipeline to shore deemed mechanically complete and started commercial operation for client Perusahaan Gas Negara (PGN). The PGN FSRU Lampung   received its first cargo of LNG through a ship-to-ship transfer, and has now entered its final commis- sioning phase. It will be working offshore Labuhan Maringgai, South Sumatra, Indonesia on the PGN LNG project. The contract with PGN is for 20 years. India • GE INVESTS IN WIND PROJECTS GE Energy Financial Services invested equity in three Atria Power wind proj- ects under construction in India. The wind farms will have a combined capacity of 126Mw. The first project, 25.6Mw, located in Ananthapur district of Andhra Pradesh, is expected to reach commercial operations in September. Two other projects, each 50Mw, are located in Betul district of Madhya Pradesh, and are expected to reach commercial operations in December and  June 2015 respectively. The projects will use GE 1.6-87.5 wind turbines, serviced by GE under an operations and maintenance agreement, to generate 76Mw of the total capacity. Additional turbines will be supplied and serviced by another manufacturer to generate 50Mw. Atria Power is man- aging construction and operations. Content is copyright protected and provided for personal use only - not for reproduction or retransmission. For reprints please contact the Publisher. September ·  October 2014 |   AOG  5 aogdigital.com Myanmar • ENI ENTERS MYANMAR The Italian major, Eni, signed two production sharing contracts (PSC) with Myanmar Production and Exploration Co. Ltd. (MPRL E&P) for the RSF-5 in the Salin basin and PSC-K onshore blocks in the Pegu Yoma-Sittaung basin. Block RSF-5 covers an area of 1292sq km in the prolific Salin basin, approxi- mately 500km north of Yangon. Block PSC-K covers an area of 6558sq km in the unexplored Pegu Yoma-Sittaung  basin, in the central part of Myanmar. This agreement marks Eni’s first entry into Myanmar. The exploration period will last six years and subdivided in to three phases.  Vietnam • OFFSHORE VIETNAM DISCOVERY  A consortium of three Japanese ex- ploration companies, led by operator Idemitsu Kosan, discovered natural gas and condensate at the fourth well in Blocks 05-1b and 05-1c offshore south- ern Vietnam, about 300km (188mi) southeast of Ho Chi Minh City. Spudded in February, natural gas and condensate were indicated following drill stem tests carried out in May and August. Discovery of gas and condensate at this exploration well follows discovery of oil and gas accumulations at other wells drilled in blocks 05-1b and 05-1c. A detailed reservoir evaluation will be carried out in conjunction with further evaluation of other potential prospects in these blocks. • DUA OIL PROJECT PRODUCTION BEGINS Oil production has begun at the Dua oil project, operated by Premier Oil offshore Vietnam, 40 years after the field was discovered. The tie-in from Dua to the Chim Sáo field in Block 12W was approved by the government of Vietnam in December 2011 and sanctioned in August 2012. Subsea installations were completed in 2013 and tied back to the Chim Sáo FPSO via flowlines and umbilicals. Premier Oil drilled three production wells at Dua, beginning in February, using the newbuild West Telesto ILC jackup, operated by Seadrill.The gross production rate from the Dua wells is estimated to average 8000 bo/d for the first 12 months of production. Sufficient oil and gas handling capacity is available on the Chim Sao FPSO to accommodate both  Chim Sao and  Dua  at full production. Thailand • SUKSAN SALAMANDER    RECEIVED FIRST OIL First oil has been received in the tanks of the newly converted Suksan Salamander floating storage and offload- ing vessel (FSO) at the Bualuang field in the Gulf of Thailand, says London- headquartered Salamander Energy. The upgrade to the field’s facilities targets a reduction in operating costs of up to US$25 million/yr. The new FSO will operate at half the day rate of the existing Rubicon Vantage floating production, stor- age, and offloading (FPSO) ves- sel. Additionally, the upgrades double the water-handling capacity, poten- tially increase production rates, and extend the productive life of the field. The Rubicon Vantage  FPSO will leave the field in the coming weeks. • MANCHAREE-1 DISAPPOINTS Singapore-based KrisEnergy completed drilling on the Mancharee-1 well off the Gulf of Thailand with no significant pay zones identified. KrisEnergy says gas shows were encountered at several levels but no sig- nificant pay zones were identified. The West Cressida jackup rig, owned  by Seadrill Far East, drilled to 3720m total depth in 51.8m of water. The well is located in license G10/48 in the devel- oping Wassana oil field, which covers 4696sq km over the southern section of the Pattani b asin and is located in up to 60m water depth. In June, KrisEnergy contracted Shelf Drilling’s Key Gibraltar jackup for development, appraisal and exploration drilling in the G10/48 and G6/48 blocks. The contract will begin in January 2015 for a firm six-month term with an option to extend an additional two months.   Philippines • CONTRACTING ROUND LAUNCHED The Philippines Department of Energy launched the fifth Philippine Energy Contracting Round (PECR5) in May, and scheduled international roadshows in Texas, Singapore, and Turkey (14-17 September 2014) to encourage oil ex- ploration players to join the contracting round. The PECR5 offers 11 areas for petroleum exploration, most located in Luzon, and 15 areas for coal exploration, largely concentrated in Mindanao. For petroleum, applications will be accepted until 27 February 2015 (11:00 AM, PST). Applications will be opened only after the submission period. For coal, applicants will have until 19 September 2014 (11:00 AM, PST) to file applications. Endorsement of winning applicants for coal and petroleum are planned for 21 November 2014 and 4 May 2015, respectively. Kazakhstan • DISCOVERY AT BNG Oil and gas have been detected at a depth of 4332m in well A5 of BNG contract area being drilled onshore Kazakhstan, Roxi Petroleum an- nounced. After the completion of clean- up work to deal with the oil and gas shows encountered, core samples will  be taken to determine the oil bearing horizon. Well A5, the first deep well on the BNG contract area, with a planned total depth of 4700m is targeting principally the middle carboniferous formation at 4390m of the South Emba sub-basin. The BNG contract area is located in the west of Kazakhstan 40km southeast of Tengiz on the edge of the Mangistau Oblast, covering an area of 1561sq km of which 1376sq km has 3D seismic cover- age acquired in 2009 and 2010. Russia • KARA SEA PROSPECT SPUDDED ExxonMobil began exploratory drill- ing operations in the Kara Sea’s Universitetskaya structure in the East Prinovozemelskiy area in August, defy- ing Western sanctions against Russian state-owned Rosneft.   Operations will last two months. Rosneft said that the Universitetskaya structure contains a 55m-high hydrocarbon trap, with resources of 1.3 billion toe. About 30 structures have been found in three East Prinovozemelskiy areas of the Kara Sea, with a resource base totaling 87 billion  boe, Rosneft said. Drilling will take place at 81m water depth. The Kara Sea has water depths ranging 40-350m. While previous sanctions forbid the US and EU from business transactions with sanctioned individuals, July’s sanc- tions specifically intend to deny Rosneft, and other sectors of the Russian econo- my, from thriving off Western-based oil and gas equipment and technology. AOG Content is copyright protected and provided for personal use only - not for reproduction or retransmission. For reprints please contact the Publisher.  Shipyards 3Q 2014; [ Tiger II  ] will be ready 1Q 2015. The drillships will be cyber-based and have offline drill pipe and casing stand building.” Each ship will have four 7500psi, 2400rpm electric quintaplex mud pumps, and 15ksi Cameron BOP with MUX control system. US-based offshore drilling and pro- duction equipment provider Drilling Technological Innovations LLC (DTI) provided drilling motion compensation packages for both drillships. The pack- ages for the Tiger series include DTI’s slim-design, single-wireline tensioners with true 200,000-pound capacity at mid-stroke, advanced riser-recoil sys- tem, full tensioner system controls and crown-mounted compensator. ABB provided the core electrical sys- tem solutions for the two ships, including the electric propulsion system, electric power generation and distribution system, and drill drives with control systems. The electric propulsion system is comprised of drives, transformers, and drive motors. The new drillships are “ideal for operations in remote locations where reduced usage of supply boats make the Tiger Class a very cost-effective alterna- tive,” said Burnett. In April, Opus exercised options to  build two additional CSSC Offshore Tiger class drillships at the Shanghai Shipyard.   MAERSK DRILLING GETS XLE-2 JACKUP Maersk Drilling took delivery of its second ultra-harsh environment jack-up, XLE-2, from the Keppel FELS shipyard in Singapore in August. It mobilized to the Norwegian North Sea, where it will commence a five-year contract with Det Norske Oljeselskap ASA. The rig, which will be named at a ceremony in Norway in October, is the second in a series of four newbuild ultra harsh environment jack-up rigs to enter Maersk Drilling’s rig fleet in 2014-16. The four jack-up rigs represent a total investment of US$2.6billion. The first three jack-up rigs, includ- ing XLE-2, will be delivered from the Keppel FELS shipyard in 2014-2015, and the fourth will be delivered from the Daewoo Shipbuilding and Marine Engineering (DSME) shipyard in South Korea in 2016. The total estimated contract value is about US$700 million. Det norske has op- tions to extend the contract up to a total of seven years. The rig will be working on the Ivar Aasen field, which contains approximately 150 MMboe. AOG McDermott will fast-track BTJT-A jacket in Indonesia McDermott International, Inc. was awarded a contract by PC Ketapang II Ltd., a subsid- iary of Petronas, for fast-track fabrication of the BTJT-A jacket for the Bukit Tua develop- ment project in the Ketapang block, off east Java, Indonesia. McDermott will fabricate the four-leg, 1100t wellhead jacket from the Batam Island fabri- cation facility in Indonesia. The project is expected to be complete by mid-November 2014. “The timing of delivery for this fast-track project is critical,” says Hugh Cuthbertson, vice president and general manager, Asia Pacific. “We have already commenced fabrica- tion activities as the jacket must be completed for installation before the start of the monsoon season.” Aerial view of McDermott’s Batam Island yard.   OPUS OFFSHORE READIES TO RECEIVE TIGER DRILLSHIPS Tiger I   and Tiger II  , the first drill- ships to be built in China, for Opus Offshore Pte Ltd, are on the verge of delivery. The drillships were ordered in Sep- tember 2011, and construction began on 1 June 2012. The 170m-long, 32m-wide drillships are being built under a turnkey con- tract by China State Shipbuilding Corp (CSSC)-affiliated Shanghai Shipyard Co. Ltd. The ships will be able to work in water to 5000ft and drill to 32,900ft and are classed by ABS. They will be managed by the Songa-Opus JV, formed earlier this year. Peter Burnett, Operations Manager at Opus Offshore, said: “ Tiger 1  will be ready for operations New Opus drillship: Tiger I  Maersk Drilling’s XLE-2 jack up drilling rig. AOG   |  September ·  October 2014 6 aogdigital.com Content is copyright protected and provided for personal use only - not for reproduction or retransmission. For reprints please contact the Publisher. aogdigital.com      ▼ May - June 2014 Receive Your Complimentary Subscription of Asian Oil & Gas magazine. Subscribe Today! Content is copyright protected and provided for personal use only - not for reproduction or retransmission. For reprints please contact the Publisher. Geology & Geophysics COSL takes delivery of 12-streamer seismic vessel China Oilfield Services Ltd. (COSL) announced on 11 August that its newly  built 12-streamer seismic vessel Hai Yang Shi You 721 was successfully de- livered in Shanghai. The vessel will be put into operation after completing tests with its geophysical equipment. Hai Yang Shi You 721, the second major seismic vessel purchased by COSL, is capable of towing 12 streamers for seis- mic data acquisition, each 8000m long. It can conduct high-density seismic data collection at a maximum intensity of up to 3000psi. Equipped with a new generation seismic data collection system, an integrated navigation system, a lateral streamer control system, a complete geophysical mechanical remote control system and an advanced diesel-electric propulsion system, Hai Yang Shi You 721 is able to deliver high efficiency and premium seismic data collection quality at lower fuel consumption, and perform steadier and quieter operation, accord- ing to COSL. COSL’s first seismic acquisition vessel, Hai Yang Shi You 720, is a sister ship of the same model and has achieved good results and hit a number of new records for COSL’s data collection operations since its delivery in May 2011 from Shanghai Shipyard. COSL is a majority owned subsidiary of Chinese state-owned company CNOOC Group. SeaBird’s  Aquila Explorer    to start 2D surveys On 31 July 2014, Norway’s SeaBird Ex-  ploration  Plc reported that the R/V Aq- uila Explorer   received a letter of award for a 2D seismic survey in Australasia. Under the US$11 million contract, the 2D survey will cover at least 10,000 km (6213 mi.). Seabird said the project is expected to start in 4Q 2014 and will require 90 days  based on the minimum survey size. Norwegian geophysical contractor TGS also reported that it would use the Aquila Explorer   for a 17,000km, 2D multi-client survey off northwest New Zealand. The Aquila Explorer   is a 2D long offset/source survey vessel built in 1981, and refurbished in Singapore in 2007. The vessel is 71m long and 17.5m abeam, with a mean draft of 5.45m. Earlier this year, the Aquila Explorer    received a $5.5 million contract for a 2D seismic survey in the same region. Searcher begins Pinatubo 2D broadband seismic survey  Australia’s Searcher Seismic Pty Ltd. has started shooting the Pinatubo multi-client 2D seismic survey west of Luzon Island, the largest island of the Philippines. The 3843km 2D survey is laid out in a 10km x 20km grid over the West Luzon  basin. The survey includes coverage over the upcoming PECR-5 bid round  blocks 8, 9, 10, and 11. This area is in the Luzon Sea (Philip- pine territorial waters), adjacent to the South China Sea. Searcher says the Pinatubo 2D survey is the first modern seismic 2D coverage over the West Luzon basin. The survey covers an unexplored area and will provide data sufficient to define major structural trends and plan detailed follow-up surveys. The Pinatubo multi-client 2D survey includes long offset, broadband data, with the following acquisition param- eters: Sample rate of 2ms; Record length of 12sec; Streamer length of 10km. The deliverables will include: • Final, full-angle volume (AGC) (in time and depth) • Final, full-angle volume (Raw) (in time and depth) • Filtered and scaled relative amplitude angle volumes (near, mid, far, ultra far) (in time and depth) West Perth-based Searcher says acqui- sition of the Pinatubo survey will be completed in late August. Fast-track data will be available to ensure ample time for evaluation of the  blocks for PECR5 bidding round. AOG Rosneft has reported that on 24 July 2014, the research vessel Geolog Dmitry Nalivkin  * sailed from Kirkenes, Norway to the Kara Sea. In the next three months, the ship will acquire 2D seismic data over three Vostochno-Prinovozemelsky license areas. The field work will be conducted over almost 7000sq km surface area, and the results will help identify and delineate drillable oil and gas prospects, says Rosneft. A pre-project meeting was held aboard the vessel just before it sailed. Representatives of Karmorneftegaz (ExxonMobil and Rosneft joint-venture that organizes the exploration program in the Rosneft licenses in Kara Sea) met with specialists from the Marine Arctic Geological Expedition (MAGE). The Vostochno-Prinovozemelsky licenses cover 126,000sq km (31million acres), with water depths varying from 40-50m (120-1000 ft). The ice cover period lasts from 270-300 days/yr. Rosneft holds 66.7% participating interest in the joint-venture companies aiming to develop the Kara Sea and Black Sea, and ExxonMobil holds 33.3%. • *The ship is named for Dimitri Vasilievich Nalivkin (1889–1982), a Soviet geologist (stratigrapher) who mapped much of the geology of the USSR (The Oxford Companion to The Earth, 2000). Rosneft starts Kara Sea seismic acquisition AOG   |  September ·  October 2014 8 aogdigital.com East Prinovozemelsky blocks 1, 2 and 3 in the Kara Sea. Content is copyright protected and provided for personal use only - not for reproduction or retransmission. For reprints please contact the Publisher. Actionable Intelligence, on and for the Global Offshore Industry Field Development Reports Global coverage with Regional updates on key exploration areas Case Studies on New Technology FAX   this form to +1 866. 658. 6156 (USA) or visit us at www.oedigital.com 3. 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Serving the industry since 1975  no thank you R  e  q  u  i  r  e  d    r  e  a d  i  n g    f  o  r    t  h e    G  l  o  b  a l    O  i  l    &    G  a s    I  n d  u  s  t  r  y    s  i  n c  e    1 9  7  5  o  e  d  i  g   i  t  a l  . c  o  m      ▼                     O                      f                      f                s                       h               o                r               e                        E                n               g                            i                n               e               e                r              •                       J                     A                      N                      U                     A                      R                      Y                       2                     0                     1                     3   D  i  g  i  t  a l    –    O  E  D  I  G  I  T  A L . C  O  M    L a u  n c  h e  s    1 2   /  1 P  r  i  n t  –    J  a n u  a r  y   I  s  s  u  e    C  l  o  s  e    D  a t  e  s  S  p  a c  e  :    1 2  -  1 0   ,   M  a t  e  r  i  a l  s  :  1 2  -  1 2  E  v  e  n t  s    –    C  h a l  le  n g  e  s    i  n   G  e  o  s  c  i  e  n c  e    3   /  5    –    3   /  7  Content is copyright protected and provided for personal use only - not for reproduction or retransmission. For reprints please contact the Publisher. AOG   |  September ·  October 2014 10 aogdigital.com D espite aging oil basins, the coun- try is not keen on taking a back seat in the oil and gas scene. Natural gas production and greater LNG capac- ity are fueling a multi-billion invest- ments Down Under. Almost $200 billion worth of LNG projects under construc- tion, abundance of gas resources, and strategic location could potentially be the catalysts for Australia to clinch the world’s top LNG exporter position by 2020. Australia is a country with economic reserves of 1 billion bbl of crude oil, 2.1  billion bbl of condensates, and 1 billion  bbl liquid petroleum gas (LPG) accord- ing to the Australian government agency, Geoscience Australia. In 2012, oil produc- tion summed up to 484,000 b/d, compris- ing about 50% crude oil, 28% lease con- densates, 13% LPG, with refining gains and biofuels making up the remaining percentage. Statistics have illustrated that condensates and liquids associated with natural gas production are progressively substituting crude oil production. Oil-producing basins Australian oil reserves are concentrated mostly off the coasts of Western Australia, Victoria, and the Northern Territory. Onshore basins are found in Queensland and South Australia, known as the Cooper basin, though it only accounts for 5% of the country’s oil resources. Western Australia’s abundant crude oil reserves makes up 64% of the country’s proven reserves, 75% of its condensate and 58% of its LPG reserves. The Carnarvon basin in the northwest accounts for 72% of total liquids production. While the Gippsland basin in southeastern Australia accounts for 24% of total liquids production. These are the largest oil producing basins in the country. The production from Carnarvon  basin is predominantly exported, while the Gippsland basin oil production is mostly used in domestic refining. Currently, Australia is not producing oil shale on a commercial basis due to technical and environmental challenges. However, according to a recent U.S. Energy Information Administration (EIA) study on world shale oil resources, the country has techni- cally recoverable reserves of over 17 MMbbl in the state of Queensland.  All around the world, countries are investing in LNG technology. Mary Ching explains the market in Australia.  Australian LNG Woodside’s onshore Pluto LNG terminal located at Burrup Peninsular. Photos from Woodside Energy Ltd. Fueling  Asia The loading jetty at the Pluto infrastructure which has a single  processing train with production capacity of 4.3 million tonnes a year. Content is copyright protected and provided for personal use only - not for reproduction or retransmission. For reprints please contact the Publisher. September ·  October 2014 |   AOG  11 aogdigital.com Oil import surpasses export In 2012, Australia exported 280,000 b/d of crude oil and con- densates to Singapore, South Korea, China, Japan, Thailand, and Malaysia. Countries such as Japan utilize these imports for direct crude burning in electric power plants. Australian crude oil is light, and is low in sulfur and wax, with higher value than heavier crudes. However, oil production in Australia has been decreasing since 2000 because of maturing basins. Productions from new fields will not been able to offset declines from aging basins unless more fields are discovered. To meet rising domestic oil consumption, the country has to increasingly import oil. Australia imported 234,000 b/d net crude oil, and 294,000 b/d net oil products in 2012. Singapore provides about 60% of the overall oil products imported into North Australia and Northwest Australia. This is due to the lack of adequate regional refining capacity in North and Northwestern Australia, whereas eastern Australia imports crude oil for its refineries and domestic markets. Although much of Australia’s oil production is located off its northwest coast, the crude oil and condensates produced there are ex- ported to Asian refineries. For instance, in 2012, countries like Malaysia, Nigeria, United Arab Emirates, and Indonesia supplied more than half of the total crude oil imports (55%) into Australia. The second tier of crude oil supplies (about 22%) is contributed by African countries such as West Africa, Nigeria, Congo, and Gabon. Gas resources Australia is endowed with an abundance of natural gas for its domestic consumption as well as for export pur- pose. The country has more than 800 trillion cubic feet (tcf) of gas resources and this number is growing with new explorations unlocking more gas. New gas discoveries in Australia have caused a recent influx of investments into the country. Increased demand for gas in the Asia Pacific region has also boosted investors’ confidence in Australian gas. Approximately 92% of traditional gas resources are located in the North West Shelf (NWS) offshore. The majority of Content is copyright protected and provided for personal use only - not for reproduction or retransmission. For reprints please contact the Publisher. AOG   |  September ·  October 2014 12  aogdigital.com traditional gas resources are supplied by 10 massive fields in the Carnarvon, Browse, and Bonaparte basins. The production from these giant fields surpass the production from almost 500 other gas fields in Australia. In terms of technically recoverable shale gas reserves, ac- cording to the U.S. EIA study Technically Recoverable Shale Oil and Shale Gas Resources, Australia had an estimated 437tcf in 2012. From the inland Cooper basin and the eastern Maryborough basin to the offshore southwestern Perth basin and the northwestern Canning basin, these recoverable shale gas reserves are scattered throughout Australia. LNG export Accompanying Australia’s oil production decline, natural gas production has increased in the past decade. Buoyed by new developments, Australia has become the third-largest liquefied natural gas (LNG) exporter in the world, after Qatar and Malaysia. Australia is delivering reliable and cleaner energy to Asia Pacific. From 2012 to 2013, Australia ranked in $13.7 billion in LNG export revenue. Experts calculated that Australian LNG exports will quadruple over the next five years. With LNG export of about 990 billion cubic feet (bcf) in 2012, Australia’s vast gas resources and strategic location in close proximity to Asian markets provided the platform for the up- surge in LNG export. New exploration activities and liquefac- tion capacity also substantiated the steady growth in export. The main market for Australia’s LNG export is Japan, fol- lowed by other Asian consumers namely China, South Korea, and Taiwan. Exports to Japan started to intensify in 2011 with the dawn of Japan’s natural gas-fired generation, which replaced the nuclear power plant as a result of the Fukushima Daiichi nuclear disaster. Another significant market is China with whom a number of Australian liquefaction projects and gas purchase contracts have  been inked to provide supply for the escalating Chinese demand. LNG terminals, increased capacity  Buttressed by three LNG export facilities, Australia has a total export capacity of about 1.2 billion cubic feet per year. Featuring five offshore LNG trains with a total capacity of 780 billion cubic feet per year, the North West Shelf is the largest LNG facility in Australia. It exports most of its produc- tion to Japan in order to fulfil long-term supply agreements. Whereas Darwin LNG is Australia’s second LNG facility consist- ing a production train with the capacity of 170 billion cubic feet per year. Situated at Australia’s northern coast, it also serves export contracts to Japan, utilizing natu- ral gas from the Bayu-Undan field in the Timor Sea. Trade with the Japanese is evidently paramount to Australia’s success in securing its position as one of the global leaders in LNG exporter. The latest addi- tion to Australia’s LNG facility is the Pluto terminal at the Northwest region. Since its inception in 2012, the Pluto facility has one train with a capacity of over 200 billion cubic feet per year which supplies to Japan and Malaysia markets. Expansion plans are in progress from Woodside, which holds a 90 percent equity share in Pluto. However, challenges are present in obtaining more gas reserves from fields in the vicinity as well as high project costs. To maintain its position in LNG export and to ensure expo- nential growth in the future, new liquefaction facilities are currently under construction as well as expansion of current terminals. A total of seven projects in Queensland, coastal and offshore Northwest Australia are under construction and are expected to provide an estimated operation of 3 tcf/ year by 2017. This additional supply of LNG will be exported to meet growing demand in Japan, Korea, China, Taiwan, and Malaysia as well as tackling potential markets such as India, Singapore, Mexico and Chile. A considerable number of projects are also in the planning stages, some are pending on legal issues and final investment decisions. With almost $200  billion worth of LNG projects under construction, this could potentially propel Australia to overtake Qatar at the forefront of LNG trade by the turn of the decade. Opportunities for development are also paired with con- straints. Current projects under construction such as Ichthys, Gorgon, Wheatstone, Gladstone, and Queensland Curtis are burdened by high costs. For instance, Gorgon LNG proj- ect reported that such costs had amplified by more than 40 percent from US$37 billion to US$52 billion. Cost challenges were manifested by issues such as the lack of workers which subsequently affected the high cost of wages. Access to certain remote areas and environmental issues can incur very high project costs too. The appreciation of the Australian dollar to the U.S. dollar since 2009 also contributed to cost challenges. Overall capital expenses for newer projects have also sky rock- eted and posed potential threats for new projects to be post- poned or abandoned. With rising project costs, businesses could see changing trends. Perhaps some will emphasize on expanding existing fa- cilities to increase production instead of developing new fields and new projects. Nevertheless, even in a flourishing industry, competition cannot be excluded in the future as Australia may have to compete with exporting countries such as Russia and the United States. AOG - Source: U.S. Energy Information Administration. Woodside, one of the world’s leading LNG producers, holds a majority share in the Pluto project. Photo: Woodside Energy Ltd. Content is copyright protected and provided for personal use only - not for reproduction or retransmission. For reprints please contact the Publisher. Petroleum Exhibition & Conference of Mexico For 21 years, PECOM has been helping companies connect and succeed in Mexico’s oil and gas industry. Now, with Mexico’s recently signed energy reforms, the opportunity for your company has never been bigger! Tish Barroso Sales: A-M Direct: 713.285.5070 [email protected] For conference information contact: Jennifer Granda OE Events Manager Direct: 713.874.2202 | Cell: 832.544.5891  [email protected] Contact: Gisset Capriles Sales: N-Z Direct: 713.874.2200 | Cell: 713.899.2073 [email protected] Parque Tabasco, Villahermosa, Tabasco, Mexico 2015 April 14-16 Content is copyright protected and provided for personal use only - not for reproduction or retransmission. For reprints please contact the Publisher. AOG   |  September ·  October 2014 14 aogdigital.com T here are more than 600 offshore installations over 25 years old in Asia Pacific, company portfolios of older structures are growing, and decommissioning in the region is only just beginning. Options for retiring structures include complete removal, removal to the seabed, removal to the footings, leave in place, topple to the seabed in situ, as an artificial reef, remove to sea-  bed and transport to a different artificial reef site, or remove to elevation, which means to remove all steel to a depth of 55m  below the lowest astronomical tide. Decommissioning offshore structures presents numerous challenges, and many projects require bespoke plans. In ad- dition to ubiquitous health and safety concerns in managing heavy lifts of objects of unknown integrity, subsea activities, and hazardous materials, the potential environmental impacts must be well thought out and mitigation procedures estab- lished. Lifting capacity is a limiting factor. Subsea cutting equipment is available for steel members up to 3m in diam- eter, assuming there is physical access. A majority of the dis- mantling, cutting, and sectioning must take place offshore, as few docks can support the offloading of large pieces of steel. Decommissioning was actually mentioned in the Geneva Convention of 1958, at a time when offshore structures were much smaller and simpler, and expectations were that they would be totally removed when they were retired. The agreement was superseded in 1982 by the United Nations Convention on the Law of the Sea (UNCLOS) which referred to permitting requirements for leaving man-made structures in the marine environment. In 1989, the International Maritime Organization (IMO) published guidelines and standards for the removal of offshore installations and structures. North Sea Now, the OSPAR Convention governs the decommissioning of offshore structures in the North Sea area. As of February 1999, it requires all redundant man-made structures to be removed for disposal on land, except for concrete, gravity-based struc- tures and the footings of steel-piled jackets (SPJ) installed  before 1999, where the installed jacket exceeds 10,000 tonnes. Self-floating steel piled jackets weigh more than 12000 tonnes and were only installed in the 1970s and 1980s; none have been decommissioned yet. Barge-launched jackets gener- ally weigh between 5000 and 25000 tonnes. Lift installed structures weigh less than 10,000 tonnes. Shallow-water jackets usually weigh less than 2000 tonnes and are installed in water less than 55m deep. The OSPAR Commission reviews requirements every five years and considers amendments based on proposals by OSPAR contracting parties and the availability of new tech- nology. Following amendments in 2008, it was noted that no technology yet exists to safely cut large sections of SPJ foot- ings and grout-filled pile clusters. It’s unclear whether the recent completion of Allseas’ new, gigantic, twin-hull Pieter Schelte  heavy-lift vessel will change OSPAR regulations.  ASCOPE guideline development The ASEAN Council on Petroleum (ASCOPE) is the associa- tion of national oil companies in the Association of South East Asian Nations (ASEAN) region. It was established on 15 October 1975 in Jakarta, Indonesia as an “instrument for regional cooperation among member countries. ASCOPE coordinates with the Coordinating Committee for Geoscience Programs in East and Southeast Asia (CCOP), an intergovernmental organization whose mission is to facilitate and coordinate the implementation of applied geoscience programs, with 12 regional members. At the 15 th ASCOPE Exploration and Production Business Development Committee (E&P BDC) meeting in September 2006, it was noted that 54% of the installed platforms/offshore There are nearly 2000 structures installed offshore in the Asia Pacific region, all of which will eventually need to be decommissioned. New ASCOPE guidelines should pave the way, explains Nina Rach. The path is laid for decommissioning in South East Asia Content is copyright protected and provided for personal use only - not for reproduction or retransmission. For reprints please contact the Publisher. September ·  October 2014 |   AOG  15 aogdigital.com structures in the area are more than 20 years old, and ASCOPE members could benefit from a collaborative approach toward developing “unconventional” decommissioning solutions. During the 16th E&P BDC meeting in May 2007, it was decid- ed that ASCOPE Member Countries would cooperate to come up with a regional convention decommissioning reference document, with technical assistance from Petrad. Also, each ASCOPE member country would formulate its own decommis- sioning guidelines. At the 17th E&P BDC meeting in September 2007, Malaysia proposed a regional effort to share resources and Thailand proposed to have common decommissioning guidelines. At the 18th E&P BDC meeting, Norway’s Petrad conducted a one-day workshop prior to establishing a regional decommis- sioning guideline. At the 19th E&P BDC meeting in August 2008, ASCOPE formed the Decommissioning Guidelines (ADG) Task Force, set up terms of reference, and put together a two-year roadmap. The road map was revised in 2009, with the decision to share historical data and leverage with Petrad and CCOP as consulting bodies to benchmark with other regions. It was also decided that the ADG task force would meet quarterly to draft the Guideline, and that country chapters of ASCOPE should attend decommissioning conferences in key decommissioning areas, such as the North Sea and the Gulf of Mexico. The task force would also investigate technologies for heavy lifting, un- derwater cutting, environmental monitoring and remediation, and look into salvage, reuse, and refurbish options. Over the next two years, the ADG task force issued a draft version of the Decommissioning Guideline for comment, and selected a technical editor. In December 2011, ASCOPE engaged Reverse Engineering Services Ltd. (RESL), based in Manchester, England, to edit the ADG Guidelines, with input from member countries. Brian Twomey, RESL Managing Director, said the company reviewed the onshore and offshore decommissioning guide- lines of other countries such as the United Kingdom (UK), Norway, United States (US Idle Iron), and Australia, among others.  ADG The guidelines were completed in 2013 and launched at the 38th ASCOPE Council Meeting (ACM), held in Yangon, Myanmar. ASCOPE Decommissioning Guidelines (ADG) provide a common technical reference for ASEAN countries for decom- missioning. The guideline aims to establish a balance between environmental protection, cost, safety and technical consid- erations in accordance with applicable global and regional conventions and guidelines. The Guidelines include: Introduction; International Decom- missioning Law and Regulations; Technical Decommissioning & Disposal Options; Impact Assessment; Residual Liability in Decommissioning; and References. In 2013, Twomey said the new ASCOPE Decommissioning Gu idelines will hopefully lay the foundation for a regulatory regime in Asia that is more flexible than those found in Europe and the United States, as operators need “clarity, simplicity and flexibility” to manage their growing decommissioning burden. Costs In March 2010, Twomey published a review of decommission- ing costs in the Asia-Pacific region. At that time, the region had more than 1700 offshore installations, and companies have installed an average of 86/year, during the preceding decade. About 95% of the structures are fixed jackets, 3% FPSOs, and 2% TLPs, with a smattering of other types. Twomey’s data showed that about 48% of the offshore installations were more than 20 years old in 2010, and nearly 12% were more than 30 years old. A few (16) were even greater than 40 years old. In 2010, Indonesia had about 500 offshore structures, with more than 300 of them characterized as small platforms, tripods, or single wellhead platforms in the Java Sea north of  Jakarta. Others are in East Kalimantan, in Java off Surabaya, Gresi, and Pasurian, and off Sumatra in the Straits of Malacca. More than 50% of Indonesia’s offshore facilities are greater than 20 years old. At the same time, Malaysia had about 250 offshore struc- tures off Peninsular Malaysia, Sarawak, Sabah, and the Malaysia-Thailand Joint Authority. (The MJTA was formed to manage exploration in disputed and territorial waters in the Gulf of Thailand.) Nearly 50% of Malaysia’s offshore installa- tions had exceeded their 25-yr design life, including 28% off Sarawak, 12% off Sabah, and 8% of Peninsular Malaysia. Most (85%) of Asia-Pacific’s offshore installations are in shallow water, less than 75m, but more than 200 are in water deeper than 75m. There are only a handful of gravity-based structures, led by the mammoth, 102,500-tonne Malampaya platform off the Philippines. About 54% of structures actually weigh less than 2000 tonnes and are in shallow water. To determine the future cost burden of the existing offshore installations, Twomey considered available cost data, and the average cost to remove per tonne and per facility. He excluded well P&A and subsea installation costs, assumed pipelines would be left in place, and assumed that the offshore struc- tures would be totally removed. Costs could only be estimated for 819 offshore facilities (roughly half of the 1732 facilities then counted), and at the time, would cost US$15.2 billion to remove. Twomely consid- ered that the total cost for all “could be as high as $32 billion.” Four years later, with new ASCOPE guidelines, we may yet see a push to safely retire some of the older iron. AOG The Iwaki platform, partially dismantled. Photo by Nathan Paculba. Content is copyright protected and provided for personal use only - not for reproduction or retransmission. For reprints please contact the Publisher. AOG   |  September ·  October 2014 16  aogdigital.com M ore than two thousand years ago, the southwestern Silk Road was the great link between China and other South Asian regions including India, depicting a flourishing route for trade and cultural exchanges from one civilization to another. Likened to a modern day adaptation of the ancient south western Silk Road, the Myanmar-China crude oil and natural gas pipelines are not just modes of transporting re- sources for export and import, they are the catalysts that bring waves of political, economic and social transformations in the newly emerging Myanmar and rising capitalist China. The pipelines stretch from the Kyaukphyu port in the Bay of Ben- gal, Myanmar to Kunming in the Yunnan Province of China. According to China National Petroleum Corp. (CNPC) and Xinhua News Agency, the Myanmar-China Pipelines proj- ect has contributed many positive elements to the lives of Myanmar population. They have provided employment for more than a thousand Myanmar employees, which accounts for more than half of their project staff. The project companies have also donated millions of dollars to Myanmar communi- ties to develop educational programs and medical treatment facilities. CNPC has also agreed to reimburse the Myanmar government US$13.6 million/yr in the form of rent for the crude oil pipeline, along with US$1 for every ton that flows through it, assuming the oil pipeline operates at full capacity. In the beginning Early discussions on the pipelines started between the two nations in 2004. Subsequently, China’s interest in purchas- ing natural gas was cemented in long-term contracts span- ning three decades, which PetroChina and the government of Myanmar signed in 2005. This was the basis for the agree- ment signed by CNPC (the parent company of PetroChina) and the Daewoo International consortium in 2008, to purchase the natural gas produced from the offshore Shwe gas field in the Andaman Sea. The Daewoo International consortium is comprised Myan- ma Oil and Gas Enterprise, India’s Oil and Natural Gas Corp. (ONGC), GAIL, and Korea Gas Corp., with Daewoo leading the gas field operation. The Shwe natural gas field has a total proven reserve of ap- proximately 9.1 trillion cubic feet (tcf). It was discovered in The Myanmar-China crude oil and natural gas pipelines are significant in a way that they epitomize a reincarnation of the ancient southwestern silk trading route. Mary Ching explains. Myanmar-China Oil and Gas Pipelines: Rebirth of an Ancient 2004 by Daewoo and has an estimated production rate of 700 million cubic feet/day (mcf/d). Dual construction In 2009, Myanmar and China brought their plans further by signing an agreement to construct a crude oil pipeline and a gas pipeline that run parallel, starting at Kyaukphyu and passing through Mandalay, Lashio and Muse in Myanmar, and con- tinues through the Chinese border city of Ruili the in Yunnan Province. The pipelines then continue to Kunming, in south- western Yunnan, where the oil pipeline then terminates. The gas pipeline extends further—an additional 2035km— reaching Guizhou Province and the Guangxi region of China. Overall, the oil pipeline measures 771km in length, while the gas pipeline is 2806km long. Construction costs for the oil pipeline and the gas pipeline were reported to be US$1.5 bil- lion and US$1.04 billion, respectively. In 2013, construction of the gas pipeline concluded and the line became fully operational. However, construction of the oil pipeline has evidently due to various obstacles and challenges. Although the oil pipeline Content is copyright protected and provided for personal use only - not for reproduction or retransmission. For reprints please contact the Publisher. September ·  October 2014 |   AOG  17 aogdigital.com was scheduled to commence operations early this year, inter- nal conflicts, protests from both Chinese and Myanmar locals, China’s overcapacity and economic slow-down have caused the oil pipeline project to be postponed. Oil pipeline as a channel to avoid sea traffic The onshore crude oil pipeline was primarily designed as a plan for alternative trading route for oil imports from the Middle East and Africa, which transits through the Strait of Malacca. This 800km waterway stretches between Indone- sia, Malaysia and Singapore. It connects the Andaman Sea (Indian Ocean) with the South China Sea (Pacific Ocean). This important shipping lane offers the shortest distance by sea for Persian Gulf exporters to reach China, Japan, South Korea and the Pacific countries. Almost 80% of China’s crude oil imports navigate through the Strait of Malacca, which is teeming with more than 60,000 vessels every year. The Strait of Malacca had about 15.2 million b/d of crude oil flow in 2011.These factors indicate the bustling waterway is a potential choke point with possibilities of collisions, ground- ing/stranding and oil spills. Apart from that, ships traversing through the Strait of Malacca are at risk of attempted theft and hijackings from pirates. China solidifies its goal as gas pipeline operates The Myanmar-China gas pipeline has a capacity of 424 bcf/ yr. Since 4Q 2013, Myanmar has been exporting gas to China through the pipeline. It began to export its first production at 182 bcf/yr, which exceeded China’s expectation of receiving 146 bcf/yr. Now, Myanmar has secured a new business portfo- lio in exporting gas to the world’s greatest trading nation. As for China, the gas pipeline is an additional avenue for the country to source for more gas and diversify its gas supply to ensure sustainability in the future. It is also anticipated Trade Passage Large image: China eyes to revive the ‘Southwestern Silk Route’ for its economic and trade sustainability. Photo by Rob Parciasepe. Left: One of the construction sites of the Myanmar-China oil and gas pipelines. According to the Shwe Gas Movement, local work- ers were treated unfairly with low wages and poor working conditions.   Above: Local students traverse to and from school along trails which have been destroyed during the pipelines construction. Photos from Shwe Gas Movement. Content is copyright protected and provided for personal use only - not for reproduction or retransmission. For reprints please contact the Publisher. AOG   |  September ·  October 2014 18  aogdigital.com that the pipeline will deliver up to its maximum capacity when more gas fields in Myanmar are developed. Hence, Chi- na’s gas imports through pipelines are soaring as Myanmar and other countries including Central Asia increase produc- tion to appease the growing demand for gas in China. Controversy-laden projects Despite rendering economic benefits to both China and Myanmar while forging political ties, the reputation of the Myanmar-China oil and gas pipelines project has often been slated as a controversial operation. Charges of exploitation, unfair treatment, environmental hazards, politics, and safety issues have caused numerous protests and resistance amongst these two nations. Resistance from the Chinese public regarding the construc- tion of the Anning refinery in Kunming is one of the hurdles faced by the the oil pipeline planners. With a maximum capacity of 440,000 b/d, the crude oil pipeline is designed to supply oil to the proposed Anning refinery which requires 200,000 b/d to produce gasoline and diesel efficiently while feeding a nearby petrochemicals plant. Thousands of Kun- ming residents protested CNPC’s construction of the refinery on the grounds of environmental pollution with emission of carcinogenic chemicals. Moreover, the Chinese economy is experiencing decline and overcapacity resulting in a hold back in energy develop- ment. The construction delay at the Anning refinery follows a number of other massive refineries and petrochemical projects  being postponed. Equally controversial is the resistance from the Myanmar public on the oil pipeline construction which also has been delaying the project completion. The people of Myanmar and human rights activists have staged protests against the oil and gas pipelines by voicing complaints over unfair compen- sations for land confiscation. The local Myanmar residents complained that they had to abandon their homes and lands without proper compensations in order to give way to the project. Complaints on environmental and safety issues were also aggressively raised. Some protestors have stated that it is not justifiable for Myanmar to export gas while a majority of its population is stranded in poor living conditions without electricity. Furthermore, there is a growing resentment against China amongst the Myanmar nationalities, many who believe that the Chinese are exploiting their land and natural resources while infringing upon their local interests. It is a common percep- tion among Myanmar locals and critics that profits reaped by t he Chinese from oil and gas projects outweigh the benefits obtained by the people of Myanmar. These sentiments, stemmed from past political, economic and social issues with China, con- tinue to permeate through Myanmar communities. Under all these circumstances, it has been reported that the oil pipeline is presently being scheduled for completion in 2016. Repeating history  In light of the southwestern Silk Road, China has been foster- ing ties with Myanmar to access the ports at the Bay of Bengal, a strategic trade starting point for immeasurable amount of Chi- nese goods to be shipped to Europe and a gateway for oil import from the Middle East to reach China. China will achieve a milestone in resurrecting a south- western ancient passage that once prospered with trade and cultural diffusions. Once again, China is attempting to conduct more trading activities with India, the Middle East and Europe across this history-filled route. The Myanmar-China oil and gas pipelines project is an illustration of these visions. So, will history repeat itself? Many are of the opinion that China always seems to have the prerogative in trading business. AOG Above: The loading jetty at the Pluto infrastructure which has a single processing train with production capacity of 4.3 million tonne/yr.   Photo from Woodside Energy Ltd. Left: Women from the Arakan State, where the gas that supplies the pipeline originates, still need to collect firewood as a source of cooking fuel.   Photo from Shwe Gas Movement. Content is copyright protected and provided for personal use only - not for reproduction or retransmission. For reprints please contact the Publisher. START READING TODAY! For the latest oil and gas news serving the Pan-Asian market, visit aogdigital.com  and subscribe to the bi-monthly edition of Asian Oil & Gas. Subs cribe @ aog digital.com aogdigital.com Content is copyright protected and provided for personal use only - not for reproduction or retransmission. For reprints please contact the Publisher. Activity KrisEnergy adds Chevron’s Cambodian assets Singapore-based KrisEnergy will acquire Chevron Overseas Petroleum (Cambodia) Ltd. for US$65 million. Chevron’s Cambodia unit holds a 30% participating interest in and operator- ship of offshore asset, Cambodia block A. Chevron Cambodia’s 30% participat- ing interest in Cambodia Block A will reduce to 28.5% once the Cambodian National Petroleum Authority (CNPA) completes its acquisition of a 5% par- ticipating interest in the block. Pre- transaction, KrisEnergy held an indirect 25% participating interest in Cambodia Block A, which will reduce to 23.75% post transfer to CNPA. Once the acquisition is final, KrisEnergy will indirectly hold 52.25% participating interest in the devel- opment block. Its partners include: MOECO Cambodia Co. Ltd. (28.5% WI), GS Energy (14.25%) and CNPA (5%) once formal transfer is approved. Block A is approximately 6278sq km over the Khmer Trough, offshore Cambodia. The contract area covers 4709sq km over the Khmer basin in the Gulf of Thailand where water depths range from 50- 80m. The agreement includes renam- ing Chevron Cambodia to KrisEnergy (Apsara). Vung Tau Rig Services established   Semco Maritime and PetroVietnam Marine Shipyard (PVMS) establish Vung Tau Rig Services in Vietnam to repair, refurbish and up- grade rigs. The prospects for upgrades in the Southeast Asian offshore rig market are positive. Some 25 rigs are currently op- erating in Vietnamese waters and the ac- cess to upgrades in Vietnam will appeal to rig owners now having an alternative to moving their rigs to Singapore to have them upgraded, says Semco Maritime. Vung Tau Rig Services is looking for facilities to allow for upgrades of even larger rigs. Exova Group expands into India Exova Group will expand its reach into India with the recent acquisition of Mumbai-based Metallurgical Services Private Ltd. Exova says the move will support the expansion of its offerings to customers in emerging Asian markets. “Demand for specialist testing in the Indian subcontinent is expected to grow as a result of significant industrial and infrastructure investment, expansion of global manufacturing operations and increased regulatory requirements,” the company says.This is Exova’s sixth ac- quisition within the past year, CEO Ian El-Mokadem said, extending the com- pany’s reach to 23 countries worldwide. Sumatec Resources Bhd to buy Borneo Energy Oil and Gas Ltd. Malaysia’s Sumatec Resources Bhd plans to buy Kazakhstan’s Borneo Energy Oil and Gas Ltd. for US$250million (RM800million) in cash and shares. Sumatec announced on 11 July 2014 that it had signed a framework agree- ment with Abu Talib Abdul Rahman and Dr. Murat Safin to buy Borneo Energy, which owns 100% of Buzachi Neft LLP. Buzachi is an independent upstream oil and gas player incorporated in Kazakhstan and its activities include exploration, production, and trading of oil and natural gas. Buzachi has two, 25-year subsoil use contracts, running until November 2026, to explore and produce oil and gas in Karaturun Vostochnyi and Karaturun Morskoi fields, which are also known as the Buzachi fields, in northern Kazakhstan. The fields started production in 2007 are producing between 400 and 600  bo/d. Sumatec CEO Chris Dalton said Sumatec could easily ramp up produc- tion as soon as it completes the pro- posed acquisition. AOG Fosun Chairman Guo Guangchang speaks at the China Europe International Business School. Photo from CEIBS. AOG   |  September ·  October 2014 20  aogdigital.com Fosun to buy Roc Oil Chinese industrial conglomerate Fosun International Ltd. will acquire Australia’s Roc Oil Co. Ltd. in an all- cash US$441 million transaction. Sydney-based Roc Oil maintains as- sets from Australia to Malaysia, China, and the UK North Sea, which produced 2.7MMboe in 2013, and earned a net profit of US$45.2 million. “The reason for the company enter- ing into the Bid Implementation Agree- ment, and the Proposed Transaction, is to enable the group to enter the up- stream oil & gas industry and acquire oil & gas assets,” Fosun said in a statement to the Hong Kong stock exchange. Roc Oil had been in previous merger discussions with Horizon Oil, but ac- cepted Fosun’s all-cash buyout offer of A$0.69/share on 4 August 2014. Roc Oil has stakes in projects backed by Petro- China and CNOOC. Fosun will get assets in China’s Bohai Bay and Beibu Gulf, “provid- ing stable upstream income and a learning ground for further exploration in the region as China moves more into offshore pro- duction,” said Wu Fei, a Hong Kong-based energy analyst at Bocom International Securities. Content is copyright protected and provided for personal use only - not for reproduction or retransmission. For reprints please contact the Publisher. Contracts •  MACGREGOR WINS SUBSEA CRANE SUPPLY  Chinese shipbuilder Fujian Mawei Shipbuilding Ltd. awarded MacGregor a contract for two 100-tonne active heave-compensated subsea cranes. The cranes will be fitted to two 86m multipur- pose platform supply vessels under construction in Fuzhou, China. Delivery is scheduled for the end of September and October 2015. This order  builds on a 2013 contract for eight cranes for installation on a new series of four compact semisubmersible offshore accommodation vessels for Marine Assets Corp. •  PETRONAS, QINTERRA  SIGN SERVICE PACT Petronas Carigali Snd Bhd and Qinterra Technologies signed a contract worth approximately US$20miliion to support Petronas’ Malaysia operations. Under the three-year agree- ment, Qinterra Technologies will provide tractor services for all of Petronas offshore as- sets. The scope for work covers more than 50 wells, which will see the introduction of next generation tractor applications, including debris collector and rotational equipment. Qinterra has had a presence in Malaysia since 2008 and is one of the brands formed from the restructure of Aker Solutions and EQT VI in January 2014. •  PERTAMINA IN MATINDOK DEVELOPMENT DEAL Indonesia’s PT Pertamina EP awarded a lump sum contract for the Matindok Gas Development project to a consortium composed of Technip and PT Wijaya Karya (Persero) Tbk (WIKA). The contract covers the engineering, procurement, construction and instal- lation of gas well pads, as well as flowlines, pipelines; a central processing plant (672 million cu m/yr of gas) with gas treatment facilities such as acid gas removal and sulphur removal, and related infrastructure. Sweet gas from Matindok central processing plant will  be sent to the Donggi Senoro liquefied natural gas (LNG) plant. Technip’s operating center in Jakarta will carry out the detailed engineering, pro- curement of critical process equipment, while WIKA will carry out the construc- tion activities along with the procurement of major items. The project is scheduled for completion by 1H 2016. The Matindok develop- ment is an onshore project in Central Sulawesi, compris- ing the Donggi, Matindok, Maleoraja and Minahaki fields. It produces about 1Bcm/y of natural gas and is solely owned by Pertamina. •  BUMI TO SUPPLY FPSO OFF INDONESIA  Husky-CNOOC Madura Ltd. granted Malaysia-based Bumi Armada Offshore Holdings Ltd. and its joint venture company PT Armada Gema Nusantara a contract to pro- vide the floating production, storage and offloading (FPSO) vessel for the Madura BD Field, located approximately 65km east of Surabaya and about 16km south of Madura Island, offshore Indonesia. The contract is worth an es- timated US$1.18 billion for a fixed period of 10 years with options of five extensions worth an aggregate value of $147 million.  The contract will be finalized  by late September 2014. •  HONGHUA OFFSHORE  WINS SEMISUB ORDER Orion Engineering and Management Ltd. signed a letter of agreement with Hong Kong’s Honghua Offshore Oil & Gas Equipment to build a semisubmersible drilling rig for about US$320 million. According to the LOA, the agreement is expected to be executed within 60 days. At the same time, Orion has the option to purchase three addi- tional rig units with the same specification from Honghua Offshore under the same conditions, at intervals of six months. The rig and option units under the LOA will be equipped with the company’s in-house designed and manu- factured drilling package. Meanwhile, Orion will contract a subsidiary of Opus Offshore Ltd. to supervise the construction of the rig. •  INDONESIA ORDERS FIRST CNG CARRIER Pelayaran Bahtera Adhiguna, a subsidiary of Indonesia’s state-owned power company Perusahaan Listrik Negara (PT PLN) chose Qingdao Wuchuan Heavy Industry’s shipyard in northern China to build the world’s first compressed natu- ral gas (CNG) carrier. The carrier will transport natural gas from Indonesian fields in East Java to the island of Lombok.  The CNG carrier has been designed by China’s CIMC Ocean Engineering Design & Research Institute, and will  be classed by ABS and by the Indonesian class society Biro Klasifikasi Indonesia. AOG   CUSTOM REPRINTS For additional information, please contact Foster Printing Service, the official reprint provider for OE. Call 866.879.9144 or [email protected] Give yourself a competitive advantage with reprints. Call us today! Take Advantage of your Editorial Exposure November ·  December 2014 |   AOG  21 aogdigital.com Content is copyright protected and provided for personal use only - not for reproduction or retransmission. For reprints please contact the Publisher.  Solutions displayed on the bridge of the vessel. www.amarcon.com Mitsubishi launches wind Lidar system Tokyo- headquar- tered Mitsubishi Electric launched its compact wind lidar technology. Lidar, combining light and radar, is a remote sensing apparatus that projects a laser beam and then evaluates the reflected light to measure wind speed. Mitsubishi’s compact wind lidar can measure wind remotely at multiple alti- tudes for accurate assessment and predic- tion of wind-turbine power generation, and features improved environmental tolerance for diverse operation. It has an increased tolerance to extreme environmental conditions, including water resistance to IP67 and temperatures down to -20°C, has a reduced power consumption and a small profile for easy operation, and has motion compensation for offshore use supports floating wind turbines. The Energy Research Centre of the Netherlands conducted tests to validate and subsequently approved Mitsubishi Electric’s compact wind lidar as comply- ing with European wind measurement standards. www.mitsubishielectric.com GE introduces iQ VideoProbe The GE Mentor Visual iQ Video Probe.  Photo from GE. GE’s Measure- ment and Control  business introduced a new video  borescope – the GE Mentor Visual iQ VideoProbe. With the devic e, techni- cians employ non-destructive testing (NDT) techniques, such as visual inspections, to alert technicians to any material or component indications that can adversely affect the integrity or safety of the equipment. Designed for use across several industries, GE Mentor Visual iQ VideoProbe is equipped with an touchscreen interface, on-screen keyboard and ergonomic buttons. Menu directed inspection (MDI) guides users through the inspection process and organizes results for simplified reporting. Equipped with Bluetooth and Wi-Fi connectivity, and similar to GE’s newly launched Mentor EM, the GE Mentor Visual iQ VideoProbe is built for real-time collaboration. Harnessing the power of the Industrial Internet, inspec- tion technicians will be able to connect directly with experts from the field to get advice, share screens and images of the inspection site, make notes, and more accurately assess the area, helping to expedite the inspection process. The quick change probes with multiple lengths and diameters and tip optics speed the inspection process by allow- ing technicians to identify more indica- tions and collect more data with a single system. The 3D Phase Measurement capabilities help determine accurate indi- cation depth and size for pitting, cracking and corrosion. www.ge.com AOG Pan Ocean orders Octopus-Onboard Korean-based global shipping company Pan Ocean ordered OCTOPUS-Onboard system from ABB subsidiary Amarcon for two semisubmersible heavy lift ves- sels, the Sun Rise  and the Sun Shine . The state-of-the-art ship monitoring and advisory system will support the vessels’ route planning, optimization of speed, heading, and fuel consumption. Amarcon will deliver an OCTOPUS- Onboard installation including motion monitoring and forecasting. The system will increase workability and safety dur- ing heavy lift transportation projects. A motion monitor system (TMS-3) based on three accelerometers, will also be installed on the two heavy freight cargo vessels. With this, multiple critical loca- tions of the ves- sel, for instance the cargo, can be measured and ROVs clean hulls CleanHull Singapore Pte Ltd. successfully performed the first environmental-friendly hull clean- ing test trial at a Singapore port terminal using ROVs. Through close collaboration with maritime com- panies, and as part of the memo- randum of understanding signed in April 2012 between the Maritime and Port Authority of Singapore (MPA), the Singapore Maritime Institute, and BW Ventures Pte Ltd, hull cleaning technology was de- ployed by a local team from Clean- Hull. On-site testing confirmed the feasibility of performing hull cleanings of container ships and other vessels during their loading and unloading activities at the port terminals in Singapore. By using an ROV or even multiple ROVs simultaneously for hull cleanings, instead of deploying divers, provides a safe and reliable choice that is independent of water visibility, currents, time of the day, and ongoing activities on the vessel (such as loading/unloading/bunkering). In addition, the collection and filtering systems assure that residues and potential contaminants can be disposed of through environmentally-friendly procedures and without harm to marine life and water quality at the port. www.cleanhull.no AOG   |  September ·  October 2014 22 aogdigital.com Cleanhull ROV deployed in Singapore. Photo from BW Maritime. Content is copyright protected and provided for personal use only - not for reproduction or retransmission. For reprints please contact the Publisher. Spotlight engineering and structural mechanics at the University of California at Berkeley in 1978 as a Fulbright Scholar. He later joined the AIT staff, serving as a professor since 1987. In administration, he has served as the dean of the former School of Civil Engineering 1998-2004, as founding dean of School of Engineer- ing and Technology 2004-2009, as Vice President for Resource Development 2009-2013, and as Interim president since 13 February 2013. The UK-based Energy Industries Council (EIC) named  Azman Nasir  the EIC’s new head of Asia Pacific. Nasir, who has 24 years’ experience in the transport, railway, oil and gas, and marine industry sectors, will be based out of the EIC’s new Kuala Lumpur office, which has been recently relocated from Singapore. Nasir will be respon- sible for supporting the EIC’s member- ship base and growing the EIC’s activities across Asia Pacific, Austral- asia, China, the Indian Sub-Continent, Afghanistan and Pakistan. Nasir was previously general manager of a project management company responsible for developing Malaysia’s railway infra- structure and was CEO of Malaysia’s Labuan Shipyard & Engineering for three years.  “We are delighted to be welcoming Azman to the EIC at a time of grow- ing UK company activity within both Malaysia and Asia as a whole,” said the EIC’s Chief Executive Officer Claire Miller. “Azman’s industry experience and local knowledge will be invaluable to the EIC’s membership as they look to capitalize on opportunities in these growing Asian markets.”  Of his appointment, Azman Nasir said: “It’s clear that many UK companies today are looking east to do business as the onshore and offshore oil & gas, power and renewable sectors all con- tinue to grow. The EIC will remain at the forefront of these developments, un- locking opportunities for our members and helping them to win business across this vast and highly profitable region.” Newly established exploration and production com- pany, Singapore-  based AziPac Ltd., named Frank Inouye its new managing director. Inouye has over 34 years’ experience in the oil and gas industry. He has worked extensively in Australia, Asia, North Africa, Canada and South America. Dur- ing his career, Inouye held several senior management positions including; executive chairman, CEO/COO of Coastal Energy, a company he founded in 2004 and led until 2008. It was sold to Cepsa for US$2.2 billion in 2013; CEO of Samudra Energy; head of corporate development for Premier Oil and general manager of Premier’s southeast Asian operations. AOG US-based project management company Crowley Maritime chose    William Hill  to serve as manager for its new Singapore office. Hill previously served as director, business develop- ment, for Crowley’s Anchorage, Alaska, office for the last six years where he worked numerous sealift and marine projects for major oil, gas, and engineer- ing, construction and procurement management customers. “We’ve seen an increase in customers requiring service in the (Asia Pacific) region and as part of our commitment to consistently evaluate and expand service offerings to meet such needs, we decided that a physical location with local personnel in Singapore was necessary,” Hill said. “It will allow us to not only have in-person management of our assets in the area,  but will also provide better, more timely communication with our current and potential customer base.”  Worsak Kanok- Nukulchai has been named the seventh president of the Asian Institute of Technology (AIT) in Pathumthani, Thailand. He is the first AIT alumnus, the first Asian, and the first Thai national to be selected as president of AIT in its 54-year history. He earned his Ph.D. in structural Wild Well Control, Inc., appointed  Wayne Stennes   and Christian Haustead   managing director and area manager, respectively, at the company’s regional office in Kuala Lumpur, Malaysia. Stennes and Haustead will enhance emer- gency well control operations and assist market development for non-emer- gency well control engineering services. “The addition of Wayne Stennes and Christian Haustead will greatly enhance Wild Well’s response and engineering capabilities for our clients throughout the Asia Pacific region,” said Freddy Gebhardt, president of Wild Well Control. “Wayne and Christian both bring a wealth of knowledge regarding the emergency response processes required when dealing with emergency well control incidents. Their experience in this field will provide our clients with the most comprehensive and heightened level of response to a well control emergency, onshore and offshore.”  Wayne StennesChristian Haustead September ·  October 2014 |   AOG 23 aogdigital.com Content is copyright protected and provided for personal use only - not for reproduction or retransmission. For reprints please contact the Publisher. AOG   |  September ·  October 2014 24 aogdigital.com US$ 13.6 million s e comne capacy o ree GE-backed Atria Power wind projects, ocae n na. ee page . 300,000 A conventional semisubmersible rig is held together by 300,000 bolted joints. See page 22. The amount of money CNPC has agreed to reimburse the Myanmar government as rent for its crude oil pipeline. See page 16. 990 bcf  Australia exported about 990Bcf of LNG in 2012. See page 10 . Opus Offshore’s new Tiger and Tiger II drillships will be able to drill to 32,9000ft. See page 6 . 32,900 ft  is the size of the Wassana oil field, located in Thailand’s Pattani basin. See page 5. 4696 sq km Asian Oil & Gas Subscription www.aogdigital.com ............................... 7 AOGDIGITAL www.aogdigital.com ......................................................... 19 Beicip-Franlab  www.beicip.com ........................................................... IFC Foster Printing  www.fosterprinting.com ................................................ 21 Freedom Well Services  www.freedomwellservices.com .................... 24 Global FPSO Forum 2014  www.globalfpso.com .............................. OBC Offshore Engineer Subscription www.oedigital.com .......................... 9 OilOnline  www.oilonline.com ................................................................ IBC PECOM 2015  www.pecomexpo.com ...................................................... 13 126 Mw September/October 2014 Display Advertisers www.FreedomWellServices.com (832) 379-2300 [email protected] Freedom Well Services’ experse in de - commissioning and well abandonment is unsurpassed. Give us a call today and let us show you what we mean when we say: “Safety is the Priority, Quality is the Standard”  Our Decommissioning and P&A teams  provide a full array of equipment and experienced personnel for any project: whether it be for inland waters, Gulf of Mexico, or anywhere around the world. WELL SERVICES   Numerology Content is copyright protected and provided for personal use only - not for reproduction or retransmission. For reprints please contact the Publisher.     W      O     R     K      S Contribute to the success of the Young Professionals of LAGCOE (YPL). Create your profile to OilOnline and we donate a $1 to (YPL). Young Professionals of LAGCOE is an ambassador of the oil and gas industry that supports industry growth with educational programs, recruitment missions, training and mentorship. Be Valuable to the Industry  from the Very  First Click. Go to   OilOnline.com to set up your profile Content is copyright protected and provided for personal use only - not for reproduction or retransmission. For reprints please contact the Publisher. President, National Ocean Industries Association (NOIA) Randall Luthi PRESENTED BY: forum Global Keynote Speaker SPONSORS Jennifer Granda OE Events Manager Direct: 713.874.2202 | Cell: 832.544.5891  [email protected] Plan to attend the two day conference and participate in the Mooring Special Session Workshop held on September 23 rd from 1:00 – 5:00 p.m. September 23 – 25, 2014 4 th  Annual Galveston Island Convention Center at globalfpso.com  today! REGISTER Interested in sponsorship and exhibiting? Contact: Gisset Capriles Business Development Manager Direct: 713.874.2200 | Cell: 713.899.2073 [email protected] Content is copyright protected and provided for personal use only - not for reproduction or retransmission. For reprints please contact the Publisher.