Managing the Construction of LNG Projects

Presented by

HABIBIE RAZAK, P. ENG., AER Project Manager, Oil & Gas Black & Veatch International

Presented for CAFEO 30 Phnom Penh, 19 December 2012

SOLVING THE WORLD’S COMPLEX CHALLENGES

• Founded in 1915

• Global workforce over 9,500

• More than 100 offices worldwide

• Projects in more than 100 countries on 6 continents

• $2.6 billion in annual revenues in 2011

• Employee-owned corporation

BLACK & VEATCH CORPORATION IS A LEADING GLOBAL ENGINEERING, CONSULTING AND CONSTRUCTION COMPANY

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Black & Veatch Corporate Profile

• One of Leading EPC Contractors, US Based Company. • Our Mission sets the bar high – Building a World of Difference ®.. • We specialize in these major markets:

Energy Water Telecommunications Federal Management Consulting

• Forbes Magazine "500 Largest Private Companies in the United States." • Ranked by Engineering News-Record as the industry’s No. 1 design firm

in both Power and Telecommunications and are consistently in the Top 10 in Water.

• Leaders in more than 20 categories among design firms, contractors and environmental companies worldwide.

• Further information please click www.bv.com

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Black & Veatch; Energy Division

• Black & Veatch service offerings include: 1. Conceptual and preliminary engineering 2. Procurement 3. Engineering design 4. Management consulting 5. Construction 6. Asset management 7. Environmental consulting 8. Security design and consulting

• Servicing from power generation, power delivery, and oil and gas facilities, we cover the entire range of energy needs.

• We work closely with clients to deliver solutions to their most complex projects through our commitment to execution excellence, quality and integrity of service.

• Black & Veatch Oil & Gas Services Ammonia/Fertilizers Gas Processing Gasification LNG Sulfur Recovery

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Liquefied Natural Gas (LNG) Overview • LNG is liquefied natural gas which is cooled until -162 degree Celsius • LNG is 1/600 times of volume from natural gas. Gas is changed to LNG for

easy transportation.

In this today’s global energy need, LNG/LNG Plants are used and built for several applications

• Substitution of diesel. In China and Japan, trucks and buses are currently using LNG

• Natural gas used for power station gas fuel supply • Gas/LNG can be used for domestic need such as cooking, heating, etc • Becoming alternative fuel cleaner (green energy) and in some countries

LNG is becoming cheaper than diesel (fossil fuel) • Especially for medium to small-scale LNG Plants are advantageous because

their compact size enables the production of LNG close to the location where it will be used. This proximity decreases transportation and LNG product cost for consumers

• The medium to small-scale LNG Plant also allows localized peak-shaving to occur – balancing the availability of natural gas during the high and low period of demand.

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How LNG Plant Works

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How LNG Plant Works

Inlet Feed Gas Pipeline

Pretreatment Process (CO2 Removal,

Dehydration & Mercury Removal)

Liquefaction Process

Mixed Refrigerant Make-up

LNG Storage

LNG Loading and Transportation

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Black & Veatch PRICO® LNG Liquefaction Technology

• Black & Veatch provides mix refrigerant technology called as PRICO® – Poly Refrigerant Integrated Cycle Operation process.

• A single mixed refrigerant loop to accomplish the gas liquefaction with a refrigerant that is a mixture of nitrogen and hydrocarbons ranging from methane to iso-pentane.

• By using a SMR all equipment items associated with heat exchange refrigeration loops (cascade process) or two loops as in the propane pre-cooled or double refrigerant processes are eliminated.

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Why Clients Chose PRICO® Mixed Refrigerant Liquefaction LNG Technology

PRICO® offers many advantages to clients which are a direct result of our global leadership in design and constructing LNG facilities: • Unsurpassed proven performance in small, mid and large scale facilities • Guaranteed performance in support of client LNG business model • Optimized LNG production • Optimized utility consumption • Simplified operations • Maximum flexibility to handle changes in feed gas • High reliability • Low cost – no proprietary equipment • Fewer pieces of equipment compared to competing technologies • Rapid start-up to full production • Unsurpassed training • Full complement of lump sum EPC services with proven track record • Single point lump sum responsibility and accountability • Strong balance sheet supported by over 10,000 dedicated global professionals

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LNG Plant Process Flow Diagram

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October 2012 7th Annual Asia LNG

BLACK & VEATCH – 50 YEARS OF LNG LEADERSHIP

• B&V’s patent PRICO® Single Mixed Refrigerant technology

• 23 global plants in operation

• 15 plants in construction

• Simplified operations = compact plant

• Applied across broad range of sizes

• Short startup time to production

• Cost competitive solution

• Black & Veatch’s Global EPC experience delivering sustainable solutions

Proven PRICO® Technology – Global EPC delivery

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EXMAR EXPORT Floating LNG Project

• Black & Veatch has been a pioneer in the LNG industry since the 1960s and will provide engineering and procurement for topside liquefaction equipment and packages (FLSRU) using its patented PRICO® LNG technology. Black & Veatch will also provide on-site commissioning and start-up services.

• Once the EXPORT™ has been built, it will be towed from China to Colombia where it will be owned and operated by EXMAR for Pacific Rubiales Energy Corporation. The EXPORT™ will be located off the coast of Colombia. It will begin production at the end of 2014 giving the country greater access to global LNG import and export markets.

• Wison Offshore & Marine Ltd (Wison) will deliver the overall EPCI and commissioning to EXMAR. Headquartered in Shanghai, Wison will construct the facility through its wholly-owned fabrication facility in Nantong, China.

• A global Black & Veatch team working from offices in several countries will be supporting Wison on this project.

12 FIRST FLRSU

October 2012 7th Annual Asia LNG

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EXMAR EXPORT Floating LNG Project

There are several advantages building offshore LNG liquefaction as follows: • To provide viable solutions that enable the entire LNG processing value

chain to be based offshore closer to production wellheads. This is a smarter, faster way to gain market access over similar, previously proposed projects and it can be redeployed rapidly to other field locations when required.

• Limited need for land acquisition, no need of land and building permit which are sometimes complicated, free from community disturbance during project execution because all pretreatment and liquefaction components are fabricated in vendor’s workshop and brought to sea for complete installation.

• Reduce the need for onshore LNG storage with LNG tanks located in the hull with additional capacity of support a host of LNG storage vessels to ship large cargoes

• Reduced jetty construction and impact to the local shore lines

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Sep 2012 Black & Veatch

CHINA LNG PLANTS

CHINA

Hongxing

Xinjiang

Syngas

Xilan

Erdos

CNOOC Dazhou

Lanzhou

Bazhou

Guang’yuan

Wuhai #1

Wuhai #2

Yuanheng

Xingyuan

Qianyuan

Tianjin

Guang’an

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LNG Plants in China

Figure 5 Cold Box (Refrigerant Exchanger)

Figure 6 LNG Storage Tank

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LNG Plants in China

Guangyuan LNG Plant

Office and Electrical Building

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Project Execution Strategy

Black and Veatch can provide total Engineering, Procurement and Construction (EPC) for all projects. We work with local contractors to execute the construction led by B&V construction management team including to provide all pre-commissioning, commissioning an start-up services to hand over a complete operating facility Engineering Stage B & V provides the engineering work start with Front End Engineering Design (FEED) to Detailed Engineering Design (DED) for whole packages consist of: • Process Engineering • Rotating and piping engineering • Electrical engineering • Instrument & control engineering • Civil & Structural Engineering

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Project Execution Strategy

Procurement Stage Typical LNG plant major equipment and materials are procured from and contracted to several vendors/contractor managed by Project Manager of Black & Veatch consists of: • The Brazed Aluminum Heat Exchanger (Cold-box) supplied by

multiple qualified vendors; • The Refrigerant Compressor complete with gearbox and driver

supplied as a package from qualified vendors having experience in handling mixed refrigerant components including technical field assistance during installation and commissioning;

• BOG Compressor, Regeneration Gas Compressor and/or Recycle Gas Compressor globally sourced from qualified suppliers.

• Dehydration, Amine Treating Package supplied by packagers delivering pre-assembled skids including technical field assistance during installation and commissioning;

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Project Execution Strategy Procurement Stage (Continued) • Carbon steel & stainless steel pressure vessels for exchangers,

condensers and any associated drums supplied and fabricated by respective vendors. Preferred to go with local fabricators subject to vendor surveillance conducted by B&V procurement and construction team.

• Piping bulk material including carbon & stainless steel pipe and fittings supplied by certified manufacturers as per the international standards and codes such as ASME, ANSI, etc.

• Valves and other special cryogenic special materials by trusted certified manufacturers as per the international standards & codes.

• All utility systems such as demineralization package, nitrogen package, flares, emergency power, consumable storage, instrument air, office, DCS system supplied by different vendors/manufacturers.

• Qualified local or national construction contractors & subcontractors to provide services for civil, concrete, structures, buildings, mechanical, electrical, instrumentation and control, fire protection system for whole LNG plant facilities.

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Project Execution Strategy

EPC Project Responsibilities Black & Veatch manages the entire scope as the EPC contractor to coordinate the design, procurement and construction performed by Black & Veatch and its partners, including all suppliers and contractors who are working for project. A typical project would include the following: • Review the design package from each vendor and identify the

interface and the interconnections among them. Project manager to ensure there are no missed item.

• Manage and coordinate with Black & Veatch construction management team during project construction, commissioning and start-up stage.

• Management of subcontractors and suppliers to ensure that all work is completed to the specification as required by Black & Veatch and meets all HSE requirements.

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Project Execution Strategy

EPC Project Responsibilities (Continued) Black & Veatch manages the entire scope as the EPC contractor to coordinate the design, procurement and construction performed by Black & Veatch and its partners, including all suppliers and contractors who are working for project. A typical project would include the following: • Management of projects to meet planned schedules and within the

agreed financial budgets. • Ensure financial controls are in place and provide reporting via the

project controls officer that reflects the status of each cost center under project manager’s control.

• Complete reviews of projects to ensure engineering, risk management, QA/QC are all being attained and kept at the highest standard.

• Procure major equipments to ensure all those equipments are complying with standards and specifications.

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Project Execution Strategy

Project Manager

Engineering

Procurement

•Process Engineers

Civil/Structural Engineers

Piping Engineers

Mechanical Engineers

Electrical Engineers

Instruments and Controls

Construction

•Procurement services

•Purchase orders

•Vendor Qualification

•Expediting

•Traffic and logistics

Site Management,

QA/QC

National/Local Contractor

Local Procurement

Commissioning and Startup

Project Owner/Client

Project Organization Chart

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Project Execution Strategy

WORK BREAKDOWN STRUCTURE (WBS) WBS is a deliverable oriented hierarchical decomposition of the work to be executed by project team to accomplish the project objectives and create the required deliverables. The WBS organizes and defines the total scope of the project. The WBS subdivides the project work into smaller, manageable pieces of work, with each descending level of the WBS representing an increasingly detailed definition of the project work. Project manager needs to provide the WBS due to some reasons:

o Provides a framework for organizing and managing the approved project scope o Helps to ensure that we have defined all the work that makes up the project o Provides a framework for planning and controlling cost and schedule information o It’s better to be deliberate about planning than rely on luck

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Project Execution Strategy WORK BREAKDOWN STRUCTURE (WBS)

No WORK BREAKDOWN STRUCTURE 1 INLET GAS COMPRESSION

1.1. Construct inlet gas compressor foundation 1.2. Assembly and install inlet gas compressor, complete with motor, gear-box, and related components 1.3. Install inlet gas filter/coalescer 1.4. Install inlet gas compressor discharge cooler 1.5. Install pipelines, valves, fitting and other related accessories within the system

1.6. Install all electrical and instrumentation consist of earthing cables and accessories, electrical cables, field instrument, complete

2 AMINE TREATING PACKAGE 2.1. Install HP natural gas/coalescer 2.2. Install slop Tank 2.3. Install contactor feed/effluent exchanger 2.4. Install amine storage tank 2.5. Install amine contactor 2.6. Install amine flash tank 2.7. Install lean amine charcoal filter 2.8. Install lean amine filter 2.9. Install amine circulation pumps 2.10. Install amine cooler 2.11. Install amine make-up pump 2.12. Install amine sump 2.13. Install amine cooler 2.14. Install amine sump pump 2.15. Install amine stripper 2.16. Install rich/lean exchanger 2.17. Install amine KO drum 2.18. Install stripper reflux condenser 2.19. Install amine booster pumps 2.20. Install stripper reflux pumps 2.21. Install stripper reflux drum 2.22. Install lean amine surge tank 2.23. Install amine reboiler 2.24. Install steam boiler 2.25. Install all piping, valves, fitting, entire amine treating package, complete

2.26. Install all electrical and instrumentation consist of earthing cables and accessories, electrical cables, field instrument,

complete

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Project Execution Strategy WORK BREAKDOWN STRUCTURE (WBS)

3 DEHYDRATION SYSTEM 3.1. Install mol sieve filter/separator 3.2. Install dehydrators 3.2. Install dust filters 3.3. Install regeneration gas cooler 3.4. Install regeneration gas separator 3.5. Install mercury removal vessel 3.6. Install carbon dust filters 3.7. Install dehydration water carbon filter 3.8. Install regeneration gas heater 3.9. Install all piping, valves, fitting entire dehydration package, complete

3.10. Install all electrical and instrumentation consist of earthing cables and accessories, electrical cables, field instrument, complete

4 LIQUEFACTION SYSTEM 4.1. Install refrigerant suction drum 4.2. Install refrigerant compressor complete with gear-box, and gas turbine/motor 4.3. Install refrigerant compressor inter-stage cooler 4.4. Install inter-stage KO drum 4.5. Install inter-stage refrigerant pump 4.6. Install refrigerant condenser 4.7. Install refrigerant discharge separator 4.8. Install refrigerant pumps 4.9. Install refrigerant exchanger

4.10. Install LP heavies exchanger 4.11. Install HP heavies exchanger 4.12. Install start-up exchanger 4.13. Install heavies separator 4.14. Install hydrogen flash drum 4.15. Install hydrogen flash heater 4.16. Install nitrogen flash drum 4.17. Install nitrogen flash heater 4.18. Construct LNG impoundment basin 4.19. Install all piping, valves, fitting entire liquefaction system, complete

4.20. Install all electrical and instrumentation, consist of earthing cables and accessories, electrical cables, field instrument,

complete

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Project Execution Strategy WORK BREAKDOWN STRUCTURE (WBS)

5 REFRIGERANT MAKE-UP 5.1. Install refrigerant storage tank 5.2. Install ethylene storage tank 5.3. Install propane unloading pump 5.4. Install propane storage tank 5.5. Install propane drying bed 5.6. Install iso-pentane unloading pump 5.7. Install iso-pentane storage tank 5.8. Install iso-pentane drying bed 5.9. Install all piping, valves, fitting and instrumentation devices entire refrigeration make-up system, complete 5.10. Install all electrical and instrumentation, consist of earthing cables and accessories, electrical cables, field instrument,

complete 6 BOIL-OFF GAS COMPRESSION

6.1. Install BOG reheat exchanger 6.2. Install BOG exchanger 6.3. Install BOG compressor oil coalescer 6.4. Install BOG compressor oil filter 6.5. Install BOG compressor 6.6. Install BOG compressor discharge cooler 6.7. Install BOG compressor oil separator 6.8 Install BOG compressor oil pump 6.9 Install BOG compressor discharge oil filter

6.10. Install BOG compressor oil coalescer 6.11. Install all piping, valves, fitting and instrumentation devices entire boil off gas compression, complete

6.12. Install all electrical and instrumentation, consist of earthing cables and accessories, electrical cables, field instrument,

complete 7 REGEN GAS COMPRESSOR

7.1. Install recycle gas separator 7.2. Install regeneration gas compressor suction scrubber 7.3. Install heavies tank 7.4. Install regeneration gas compressor cooler 7.5. Install regeneration gas compressor inter-stage coolers 7.6. Install regeneration gas compressor inter-stage separators 7.7 Install all piping, valves, fitting and instrumentation devices entire regeneration gas compressor, complete

7.8 Install all electrical and instrumentation, consist of earthing cables and accessories, electrical cables, field

instrument, complete

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Project Execution Strategy WORK BREAKDOWN STRUCTURE (WBS)

8. FLARE SYSTEM

8.1. Construct LNG storage tank, complete with foundations, bunding, structural steelwork, etc

8.2. Install LNG send-out pumps 3.3. Install flare knock-out drum 8.4. Install warm flare knock-out drum 8.5. Install flare KO drum heater 8.6. Install flare tip 8.7. Install warm flare tip 8.8. Install flare stack

8.9. Install all piping, valves, fitting and instrumentation devices entire flare system, complete

8.10. Install all electrical and instrumentation, consist of earthing cables and accessories, electrical cables, field instrument, complete

9. UTILITY SYSTEM 9.1. Install make-up water pump 9.2. Install make-up water treating 9.3. Construct and install cooling tower, complete 9.4. Install instrument air package 9.5. Install nitrogen package 9.6. Install liquid nitrogen package

9.7. Install fire protection system such as pumps (diesel, electric and jockey), hydrants, fire water pipe-line, deluge system, alarm

system, etc.

9.8. Install electrical distribution system such as switch-gear, transformers, circuit breakers, switchyard, etc

9.9. Install analyzer system 9.10. Install DCS and run all instrument and control cables entire the LNG plant

9.11 Install all electrical and instrumentation, consist of earthing cables and accessories, electrical cables, field instrument for whole

utility system, complete

10. BUILDINGS 10.1. Construct compressors building complete with overhead crane installation, etc. 10.2. Construct DCS/Centralized control room building 10.3. Construct electrical switch room building 10.4. Construct analyzer building 10.5. Construct office facilities, complete

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Project Execution Strategy WORK BREAKDOWN STRUCTURE (WBS)

11. TRANSFER SYSTEM

11.1. Construct jetty structures

11.2. Construct LNG loading point system

11.3. Construct access road entire LNG plant, LNG tank and LNG jetty area

11.4 Install all piping, valves, fitting and instrumentation devices entire transfer system, complete

11.5 Install all electrical and instrumentation, consist of earthing cables and accessories, electrical cables, field instrument for

whole transfer system, complete

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Conclusion • LNG is becoming competitively to displace oil to decouple cost of

benchmark crude pricing indices. LNG is preferred cleaner fuel in the hydrocarbon mix since it is environmentally friendly (green energy campaign).

• By using one refrigeration loop, start-up, operation, and shutdown of sequential system is eliminated. The PRICO® process offers the lowest equipment content (lowest cost) of all technologies and the simplicity of a single operating refrigeration system (technical and economical perspectives).

• The construction duration of the LNG plant using PRICO® technology can be done in fast way and shorten the duration of the construction since Black & Veatch has the proper standard layout for each types of LNG Plants starting from base-load to peak-shaving types.

• Black & Veatch with PRICO® technology can be easily managing the project in a proper manner specifically in the development of work breakdown structure (WBS) for each project because all equipment used in the projects are typical as project manager can easily refer to previous projects.

• Black & Veatch is experienced and capable to undertake lump sum EPC services with proven track record.

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Thanks for attention

Regards, Habibie Razak

Email Address: RazakH@BV.COM Mobile: +628114207316