intro to facilities eng

CGE665

Facilities Engineering

Lecturer: Lecturer: NikNik KhairulKhairul IrfanIrfan Bin Bin NikNik AbAb LahLah

UNIVERSITI TEKNOLOGI MARAUNIVERSITI TEKNOLOGI MARA

Nik Khairul Irfan profile

Office- Lecturer Room level 11

Office No- 0355436347

Email- [email protected]

Education Background

BSc in Mechanical Eng. (UTP)

UNIVERSITY TEKNOLOGI MARA

BSc in Mechanical Eng. (UTP)

Msc in Petroleum Eng. (UTP)

Working experience

UTP (Graduate Assistant)

Shin Nippon Machinery Sdn Bhd (Sales Engineer)

UiTM (Lecturer)

Course Information

Subject Name Facilities Engineering

Code CGE665

Credit hour /contact hour 3 (3 hour Lecture & 1 hour

Tutorial per week)

Level BachelorLevel Bachelor

Prerequisite (if any) Nil

Assessment

Test/ Assignment/ Project 40%

Final Exam 60%

Semester Taught 6


Learning OutcomeUpon completion of this course, student should be

able to:

To describe and identify suitable equipment and processing techniques for petroleum production

and export facilities.

To integrate the first stage design and optimization technique in the selection of major process

equipment on oil & gas facilities.

To identify and describe the equipment used in subsea developments.


Rules & Regulation


OVERVIEW OF CGE665OVERVIEW OF CGE665

This course is designed to introduce the

students with the surface equipment

related to Exploration and Production

(E&P) processes and the conception of the


(E&P) processes and the conception of the

overall facilities setup as well as designing

of some of the critical equipments.

Outline - Chapter1

Overview of the oil & gas industry

E & P business

1.1) Phases of E&P Activities

1.2) Details of Project Dev. Phase

11


1.2) Details of Project Dev. Phase

PSC Production Sharing Contract (Malaysia)33

44 Project Life Cycle Concept

E & P Project Costs 22

1.1a. E&P Business- Acquisition of Rights

Phases of Activities in Petroleum Industry

Acquisition of Rights To obtain permission from government

or relevant agency before drilling of

Exploration wells.

These can be done through

A) Concessions Agreement : E&P activities are determinedA) Concessions Agreement : E&P activities are determined

by the Contractors. The host

country only interested in the

profits (profit sharing and taxes)

B) Production Sharing

Contracts Agreement: E&P activities are performed by the

(PSC) Contractors and approved by the host

country / agency. Costs are recoverable

through some mechanisms and profits

are shared. Taxes imposed.


1.1a. E&P BusinessAcquisition of Rights


Acquisition of Rights To obtain permission from government


Exploration wells.

These can be done through (contd).

C) Joint Venture Agreement : E&P activities are jointly performedC) Joint Venture Agreement : E&P activities are jointly performed

by the Contractors and the host country.

Costs and profits are shared based on

the agreed equities. Taxes are imposed.

D) Service Contract Agreement : E&P activities are performed by the

host country representative but some

agreed scope of work are contracted

out to a Contractor. Costs are borne by

the host country. Contractor only

benefits from the scope of work they

have provided. Taxes may be imposed.


1.1b. E&P Business - Exploration


Acquisition of Rights

EXPLORATION

To obtain permission from government


Exploration wells.

To search for oil and gas fields

This is a high risk activities may constitute :This is a high risk activities may constitute :

a) Gravity and Magnetic Surveys :

Mapping of gravity and/or magnetic anomalies due to the

variations of the earths geological structures and magnetic

properties of rocks.

b) Seismic Survey : Seismic lines producing Coarse 2-dimensional

seismic grid reflecting the geophysical nature of the rocks etc.

c) Wildcat Exploration well drilling,


Facilities Engineering - Introduction

1.1c. E&P Business Appraisal Phase



EXPLORATION



Exploration wells.


To determine the commercial significance of

3/10/2015 APDrRazaliHamzah 12

APPRAISALTo determine the commercial significance of

the discovery and to shape the initial development

plan for the field.


1.1c. E&P Business Appraisal Phase

EXPLORATION

EXPLORATION DRILLING

APPRAISAL

RESULTSDry

DISCOVERY


QUIT

APPRAISAL

Appraisal drilling to define the extent of discovery

Data gathering to aid in the development studies

Development feasibility studies

DEVELOPMENT

RESULTSInconclusive


1.2d. E&P Business Development Phase



EXPLORATION



Exploration wells.


To determine the commercial significance ofAPPRAISAL

DEVELOPMENT



plan for the field.

To formulate the Field Development Plan, install

platforms / facilities, drill and complete the

development wells.


1.1d. E&P Business Development Phase

This is the DEVELOPMENT of Production Concept and IMPLEMENTATION activities.

The objectives:

To meet the maximum recovery with minimum cost.

Consideration in the Development plan are:Consideration in the Development plan are:

i) Drilling requirements. (Number of wells, well spacing and drainage pattern, drilling program, completion strategy, etc. )

ii) Production techniques and policy anticipated. (Artificial lift needs, pressure maintenance, etc.)

iii) Facilities required Drilling and Production)

iv) Development time and cost expected.


1.1e. E&P Business Production Phase



EXPLORATION



Exploration wells.


To determine the commercial significance ofAPPRAISAL

DEVELOPMENT

PRODUCTION



plan for the field.



development wells.

To bring oil/gas from sub-surface to surface and

to separate gas/oil/water before oil is stored and

gas is processed.


1.1e. E&P Business Production PhaseDRILLING OF PRODUCTION WELLS

i.i. Production wells are drilled by a Drilling Contractor for Production wells are drilled by a Drilling Contractor for

the whole drilling campaign to completely produced the whole drilling campaign to completely produced

the prospects.the prospects.

ii.ii. The specified drill rig is mobilized and the drilling will The specified drill rig is mobilized and the drilling will

start.start.start.start.

iii.iii. The First Oil/Gas is the first Production starting at the The First Oil/Gas is the first Production starting at the

platform when the first well is completed and producedplatform when the first well is completed and produced

iv.iv. The drilling campaign will drill all the planned The drilling campaign will drill all the planned

production wells on the platform before the drill rig is production wells on the platform before the drill rig is

demobilized.demobilized.


1 E&P Business - Summary



EXPLORATION

APPRAISAL



Exploration wells.



the discovery and to shape the initial developmentAPPRAISAL

DEVELOPMENT

PRODUCTION

Processing / Export


plan for the field.



development wells.

To bring oil/gas from sub-surface to surface and

to separate gas/oil/water before oil is stored and

gas is processed.

To condition the gas / oil and sell to customers.


1.1g. E&P Business Facilities, Transportation, Storage and

Export


EXPLORATION

APPRAISAL


APPRAISAL

DEVELOPMENT

PRODUCTION

Processing / Export

Facilities Engineering, Transportation

Storage and Metering (for Export)

falls under these phases of the E&P

business


1.2 E&P Business Development Phase

Field Development Evaluation.

Geologist

OOIP

Fluid Contacts

Rock Quality

Facilities Eng.

Types of Platforms

Pipelines and

Support Fac.

Drilling Eng.

Max. Reach

Min. Time

Reservoir. Eng.

EUR

No. of Plat.

No. Of Wells

Production Plan

FIELD

LEVEL

Facilities Eng

Facilities Selection

Investment Cost

Operating Cost

Reservoir Eng.

EUR

Production

Plan

Production

Forecast

Drilling Eng

Drilling Cost.

Geologist

OOIP

Economic Evaluation

Platform

LEVEL


1.2a1. E&P Business Details of Project

Development & Implementation Activities

Oil and Gas Development Activities:

a. FEASIBILITIES STUDIES

b. CONCEPTUAL DESIGNb. CONCEPTUAL DESIGN

c. FABRICATION / CONSTRUCTION

d. INSTALLATION

e. HOOK-UP AND COMMISSIONING

f. DEVELOPMENT DRILLING


1.2a2. E&P BusinessProjects Development & Implementation

Oil & Gas Projects Milestones.

Year 1Year 1 Year 2 Year 2 Year 3Year 3 Year 4Year 4

Feasibility Study

Conceptual Design

Detail Design


Project DevelopmentProject Development Project ImplementationProject Implementation

Procurement / Long Lead Items

Contracting

Fabrication

Hook-up & Commissioning

Installation

Drilling & Production

First Oil/Gas

Production


Facilities Engineering - Introduction

1.2b. E&P BusinessProject Development


FEASIBILITY STUDY

i.i. General Concept DefinitionGeneral Concept Definition

ii.ii. Preliminary Cost EstimatesPreliminary Cost Estimates

Economic EvaluationEconomic Evaluationiii.iii. Economic EvaluationEconomic Evaluation

iv.iv. Feasibility Screening StudiesFeasibility Screening Studies

v.v. Field Development PlanField Development Plan

vi.vi. Work Program and BudgetWork Program and Budget

NB. Done by an InNB. Done by an In--house Project Teamhouse Project Team


1.2c. E&P BusinessProject Development


CONCEPTUAL DESIGN (Front End Engineering)

i.i. More Detail Concept DefinitionMore Detail Concept Definition

ii.ii. Facilities OptimizationFacilities Optimization

iii.iii. Environmental / Site SurveysEnvironmental / Site Surveysiii.iii. Environmental / Site SurveysEnvironmental / Site Surveys

iv.iv. Design SpecificationsDesign Specifications

v.v. Contracting Strategies / DocumentsContracting Strategies / Documents

vi.vi. Design Basis Memorandum or ConceptualDesign Basis Memorandum or Conceptual

vii.vii. DBM Report.DBM Report.

NB. Usually done inNB. Usually done in--house/contractorhouse/contractor


1.2d. E&P BusinessProject Implementation


DETAIL DESIGN

i.i. Develop specifications for each equipment.Develop specifications for each equipment.

ii.ii. Approved for Bid (AFB) DrawingsApproved for Bid (AFB) Drawings

iii.iii. Approved for Construction (AFC) DrawingsApproved for Construction (AFC) Drawingsiii.iii. Approved for Construction (AFC) DrawingsApproved for Construction (AFC) Drawings

iv.iv. Detail Design ReportDetail Design Report

v.v. Materials Procurement for long lead items.Materials Procurement for long lead items.

NB. Specifications, AFB/AFC are either done inNB. Specifications, AFB/AFC are either done in--house or house or

by Design Consultants.by Design Consultants.

Procurement are done by Purchasing unit.Procurement are done by Purchasing unit.


1.2e. E&P BusinessProject Implementation


PROCUREMENT & FABRICATION

i.i. Fabrication works are done at Fabrication Fabrication works are done at Fabrication

Yards Yards chosen through competitive bidding.chosen through competitive bidding.

ii.ii. Procurement of Materials e.g. tubular, sheet Procurement of Materials e.g. tubular, sheet

metals, valves, welding equipment, metals, valves, welding equipment, metals, valves, welding equipment, metals, valves, welding equipment,

construction equipment such as cranes are construction equipment such as cranes are

responsibilities of the fabrication contractors..responsibilities of the fabrication contractors..

iii.iii. PrePre--commissioning of individual systems e.g. commissioning of individual systems e.g.

pumping unit, heat exchanger and fire deluge.pumping unit, heat exchanger and fire deluge.

iv.iv. LoadLoad--out and transportationout and transportation


1.2f. E&P BusinessProject Implementation


INSTALLATION

i.i. Installation is performed by Installation Contractors Installation is performed by Installation Contractors

obtained through competitive bidding.obtained through competitive bidding.

ii.ii. Used Installation Spread consisting of Installation / Used Installation Spread consisting of Installation /

Crane Barge , Tug Boats, Supply Vessels, Divers @ Crane Barge , Tug Boats, Supply Vessels, Divers @ Crane Barge , Tug Boats, Supply Vessels, Divers @ Crane Barge , Tug Boats, Supply Vessels, Divers @

Diving Equipment, Construction Crew, Steam Diving Equipment, Construction Crew, Steam

Hammers, Welders and Riggers and onboard Hammers, Welders and Riggers and onboard

accommodation and catering.accommodation and catering.

iii.iii. HookHook--up and Commissioning can be part of the up and Commissioning can be part of the

installation scope of works.installation scope of works.

iv.iv. System Testing and StartSystem Testing and Start--up.up.


1.2g.E&P BusinessProject Implementation


PIPELINE INSTALLATION

i.i. Pipeline installation is performed separately by a Pipeline installation is performed separately by a

Pipeline Installation Contractors obtained through Pipeline Installation Contractors obtained through

competitive bidding.competitive bidding.

ii.ii. Used Installation Spread consisting of Pipe Laying Used Installation Spread consisting of Pipe Laying ii.ii. Used Installation Spread consisting of Pipe Laying Used Installation Spread consisting of Pipe Laying

Barge , Anchor Handling Boats, Supply Vessels, ROV/ Barge , Anchor Handling Boats, Supply Vessels, ROV/

Equipment, Construction Crew, Welders and Riggers Equipment, Construction Crew, Welders and Riggers

and onboard accommodation and catering.and onboard accommodation and catering.

iii.iii. Pressure Testing and Commissioning are part of the Pressure Testing and Commissioning are part of the

installation scope of works.installation scope of works.

iv.iv. System Testing and StartSystem Testing and Start--up.up.


1.2h. E&P BusinessProject Implementation


DRILLING and PRODUCTION

i.i. Production wells are drilled by a Drilling Contractor for Production wells are drilled by a Drilling Contractor for

the whole drilling campaign to completely produced the whole drilling campaign to completely produced

the prospects.the prospects.

ii.ii. The specified drill rig is mobilized and the drilling will The specified drill rig is mobilized and the drilling will

start.start.start.start.

iii.iii. The First Oil/Gas is the first Production starting at the The First Oil/Gas is the first Production starting at the

platform when the first well is completed and producedplatform when the first well is completed and produced

iv.iv. The drilling campaign will drill all the planned The drilling campaign will drill all the planned

production wells on the platform before the drill rig is production wells on the platform before the drill rig is

demobilized.demobilized.


2. E&P Project Costs.

a. CAPEX Costs.

Exploration Seismic Survey

- Exploration wells

Appraisal wells

Platforms / Jackets

Development Wells

Production Facilities

Pipelines inter-platforms & to shore

Terminals & Export facilitiesTerminals & Export facilities

b. Operating & Maintenance Costs.

c. Abandonment Costs.

Facilities Mothballing & Removal,

Wells plugging & Facilities Removal


2a. E&P Project Costs.Development Wells

Depend on - Total Reserves

- Reserves per well

- Off-take rate

Include - Drilling

- Casing/Cementing

- Completion equipment

- Well Heads

Type - Production Wells

- Injection Wells- Injection Wells

Statistics - USD 2 million / well (shallow wells:

4,000 ft.)

- USD 4 million / well (deep wells :

8,000 ft.)

Reserves - 1.5 to 4 million bbls/well

(average 2.5 million bbls/well).

Capacity - 1000 2000 bopd/well


2b. E&P Project Costs.Platforms / Jacket

Depend on - Field Size (Area Extend )

- Water Depth

- Number of Slots for Drilling of wells

Include - Structure

- Piles (depends on depth of penetration) /

Foundation.

- Conductors (for wells)- Conductors (for wells)

Type - Central Production & Processing (CPP)

- Satellite Production (SP)

- Manned / Unmanned

Statistics - CPP = USD 65 million

- SP = USD 25 million

Reserves - CPP = 60 Million Bbls.

- SP = 30 Million Bbls.

Water depth up to

70 meters


2c. E&P Project Costs.Production Facilities

Depend on - Throughput Volume

- Requirement for Gas and/or

Water Injection

- Requirement for Gas Lift Requirement

Include - Processing Facilities Include - Processing Facilities

- Injection Facilities.

- Pumping Facilities

- Power Generation

Statistics - 70% of Wells Costs (Approximation).


2d.E&P Project Costs.Pipelines

Depend on - Throughput Volume

(Diameter & Wall-thickness)

- Distance/Length

- Materials Specifications

Include - Facilities (Pumps & Compressors) Include - Facilities (Pumps & Compressors)

- Storage Capacities

- Loading or Pumping Rates

Type - Oil Pipelines

- Gas Pipelines

Statistics - 15 to 20 for oil CS X 52

(USD/in./m) - 20 to 30 for gas CS X 65


2e.E&P Project Costs.Terminal / Tanker

Depend on - Throughput Volume (Storage Capacity)

- Infra - Structure

Include - Facilities

- Storage Capacities

- Loading or Pumping Rates- Loading or Pumping Rates

Type - Terminal (Oil)

- Tanker (FPSO/FSO)

Statistics - USD 400k/1000 bbls. capacity

- USD 100k-200k/1000 bbls. capacity.


2f.E&P Project Costs.Operating & Production

Depend on - Type of Operations

(Onshore/Offshore)

- Gas Injection

- Water Injection

Include - Facilities Operating/Maintenance

- Overhead and management

- Wells workovers- Wells workovers

Statistics - Based On Cumulative CAPEX

- 9% for Compressors

- 1% for Structures / Jackets

- 1% for Pipelines

- 10 % for wells tangibles

- 10% for on-shore Terminals

- USD 0.5 million USD 2 millions / well


2g.E&P Project Costs.Abandonment

Depend on - Type of Facilities Size & Complexity

- Location (Offshore/Onshore)

- Scope of Work ( Total/ Partial).

Include - Platform/Jacket Removal

- Super-Structure

- Production Facilities

- Pipelines- Pipelines

- Wells plugging

Experience - Based on the Crane Barge Rates &

Transportation Barge Rates

(Study shows that the cost of Platform removal

may be similar to that of installation costs)

- Drilling Rigs Rates and Number of wells


3. PSC-Malaysian Model.

COMPARISON of the 1976, 1985 AND DEEPWATER PSC TERMS

MAIN FEATURES 1976 TERMS 1985 TERMS DEEPWATER TERMS

1. ROYALTY

2. Cost Recovery

a. Oil

b. Gas

3. Profit Split

(in favor of PETRONAS)

a. Oil

10%

20%

25%

70:30

10%

50%

60%

First 10,000 bopd 50:50

Next 10,000 bopd 60:40

10%

75%

75%

(In favor of Contractors)

First 50,000 bopd 14:86

Next 50,000 bopd 18:82a. Oil

b. Gas

4. Contract Period (Yr.)

5. a. Signature Bonus

b. Discovery Bonus

c. Production Bonus

6. Research Cess

7. Carigalis Participation

70:30

3+2 Expl.

4 Dev.

15 (oil) Prod.

Nil

RM2.5 million

RM5.0 million

0.5%

Nil

Next 10,000 bopd 60:40

Above 20,000bopd 70:30

(for first 50 millions bbls)

First 2 trillion scf 50:50

Excess 2 trillion scf 70:30

5-Exploration

4-Development

15-Oil Production

20-Gas Production

Waived

Waived

Waived

0.5%

Minimum 15%

Next 50,000 bopd 18:82

Above 100,000 bopd 37:63

After cumulative production

Of 300 mmbbls 50:50

To be negotiated

7-Exploration

6-Development

25-Oil Production

Waived

Waived

Waived

0.5%

Minimum 15%


4. Projects Lifecycle

PrePre--DevDev BuildBuild--UpUp PlateauPlateau DeclineDecline AbandonAbandon

PRODUCTION

ENVELOP

TimePOTENTIAL PROJECTS : Funding Requirements

NEW PROJECTS : High Capital Spending

YOUNG PROJECTS : Cash Generating

AGEING PROJECTS : Self Financing

ABANDONMENT:

Cash SinkMAINTENANCEOPERATIONS &ACQUISITION


intro to facilities eng

Documents

production ep processes

rightsphases of activities

petroleum production

phases of ep activities1

ep business acquisition

details of project

througha concessions

oil gas facilities