DNV ENERGY MAIN OFFICES:

Aberdeen Cromarty House 67-72 Regent Quay Aberdeen AB11 5AR United Kingdom Tel: +44 1224 335000 Abu Dhabi Plot No. 252/Area W47 23rd Street Al Mushrif Area Abu Dhabi United Arab Emirates Tel: +971 2 447 5915 Antwerp Duboisstraat 39 b1 2060 Antwerp Belgium Tel: +32 3 206 65 40 Beijing Room B2107 Hanwei Plaza No.7 Guanghua Road Chaoyang District Beijing 100004 China Tel: +86 10 6561 7076 Bergen Johan Berentsensvei 109-111 P.O.Box 7400 NO-5020 Bergen Norway Tel: +47 55 94 36 00 Buenos Aires Carlos Pellegrini 1023, 4th oor C1009ABU Cdad. Aut. de Buenos Aires Buenos Aires Argentina Tel: +54 11 4021 4200 Calgary Suite 123 2340 Pegasus Way NE Calgary, AB Canada T2E 8M5 Tel: +403 250 9041 Columbus 5777 Frantz Road Dublin, Ohio 43017-1386 USA Tel: +1 614 761 1214 Copenhagen Tuborg Parkvej 8, 2nd Floor DK-2900 Hellerup Denmark Tel: +45 39 45 48 00 Essen Schnieringshof 14 45329 Essen Germany Tel: +49 201 7296 414 Houston 1400 Ravello Drive Katy, Texas 77449 USA Tel: +1 281 396 1000 Ho Chi Minh City Unit 2, 5th Floor Lawrence S Ting Building 801, Nguyen Van Linh Parkway Tan Phu Ward, District 7 Ho Chi Minh City Vietnam Tel: +84 8 54135 128 Jakarta Granadi Building 11th Floor (North Wing) Jl. H.R. Rasuna Said kav. X-1 no. 8-9 Jakarta 12950 Indonesia Tel: +62 21 252 6233 Kuala Lumpur 24th Floor, Menara Weld 76, Jalan Raja Chulan 50200 Kuala Lumpur Malaysia Tel: +603 2050 2888 London Palace House 3 Cathedral Street London SE1 9DE United Kingdom Tel: +44 207 357 6080 Luanda Edicio Monumental Rua Major Kanhangulo n 290, 2 Andar Luanda Angola Tel: +244 222 390335 Maca Rua Acapulco, 24 Cavaleiros CEP 29720-150 Maca Brazil Tel: +55 22 2757 1480 Manchester Highbank House Exchange Street Stockport SK3 0ET United Kingdom Tel: +44 161 477 3818 Oslo Veritasveien 1 NO-1322 Hvik Norway Tel: +47 67 57 99 00 Paris Tour AREVA, Centre BFI 92084 Paris-La Defense Cedex France Tel: +33 1 47 96 46 36 Port of Spain 7th Floor Albion Plaza Energy Centre 22-24 Victoria Avenue Port of Spain Trinidad & Tobago W.I. Tel: +1 868 623 0023 Moscow Business Centre Tagansky 3 Marksistskaya st.bld.2 Ofce 2.3.4 109147 Moscow Russian Federation Tel: +7 495 739 4833 Mumbai Emgeen Chambers 10, C.S.T. Road Vidyanagari, Kalina Santacruz East Mumbai 400098 India Tel: +91 22 26650909 Rio de Janeiro Rua Sete de Setembro, 111 12 andar - Centro CEP 20050-006 Rio de Janeiro Brazil Tel.: +55 21 3722 7232 Salvador Rua Dr.Jose Peroba 149 sala 1101 Ed.Centro Empressarial Eldorado-Stiep 41770790 Salvador Brazil Tel: +55 71 3273 3700 So Paulo Av. Alfredo Egydio de Souza Aranha, 100 3 andar, Bloco D, Vila Cruzeiro CEP 04726-908, So Paulo Condomnio Centro Administrativo Santo Amaro, CASA Tel: +55 11 3305 3305 Seattle 1809 7th Avenue, Suite 900 Seattle, WA 98101 USA Tel: +1 206 387 4200 Shanghai House No. 9 1591 Hong Qiao Road Shanghai 200336 China Tel: +86 21 3208 4518 Singapore DNV Technology Centre 10 Science Park Drive Singapore 118224 Tel: +65 6508 3750 Stavanger Bjergstedveien 1 NO-4007 Stavanger Norway Tel: +47 51 50 60 00

| THIS IS DNV |
DNV is a global provider of services for managing risk. Established in 1864, DNV is an independent foundation with the purpose of safeguarding life, property and the environment. DNV comprises 300 ofces in 100 countries, with 9,000 employees. DNV has four business areas, DNV Energy, DNV Maritime, DNV Industry and DNV IT Global Services. Our vision is global impact for a safe and sustainable future.

DNV Veritasveien 1 NO-1322 Hvik, Norway Tel: +47 67 57 99 00 Fax: +47 67 57 99 11 www.dnv.com/energy

Offshore pipelines

Go strong.

DNV provides world-class expertise in technology, operations, management and risk. We combine our know-how into a professional service concept designed to safely improve the performance of your business. So you can go strong on all dimensions.

DNV serving the energy industry

| CONTENTS |
SERVICES OVERVIEW The importance of a complete picture ENTERPRISE RISK MANAGEMENT ERM Is pipeline the optimal transport solution? SHE RISK MANAGEMENT Making pipeline the safe option FLOW ASSURANCE, DESIGN, FOUNDATIONS AND MATERIALS Pushing the design envelope safely VERIFICATION The assurance of full independence PIPELINES IN OPERATION Safely extending the lifespan WORLD-CLASS CODES AND STANDARDS Taking the industry forward 6 8 9

Concept and design: CREUNA Images: Front cover DNV, p2 Nina Rangy, p6 DNV, p7 courtesy of StatoilHydro, DNV, Global Industries Ltd., p8 Corbis, p9 courtesy of StatoilHydro, Nina Rangy, p10 DNV, p11 DNV, p12 DNV, p13 DNV, p14 DNV, p15 Snamprogetti, p16 DNV, p17 Saipem. Production: Ressurs

10 12 14 16

| OFFSHORE PIPELINES |

DNV SERVICES TO THE ENERGY INDUSTRY

Enterprise Risk Management SHE Risk Management Technology Qualication Verication Offshore Classication Asset Risk Management Training IT Risk Management Certication

As conduits for oil and gas, pipelines form the backbone of most national and international energy infrastructures. Pipeline systems represent signicant nancial investment and constitute a key element of the industrial and public value chain. Therefore, operators must withstand scrutiny from a number of constituencies, while securing an acceptable return on investment. Ensuring that each pipeline is designed, fabricated and operated in a safe, reliable and cost-effective manner involves a multitude of professional disciplines.

| OFFSHORE PIPELINES |

Addressing pipelines end to end

Tomorrows oil and gas reserves will be located in ever deeper waters, in harsh environments, far from existing infrastructure. Since the early seventies, DNV has supplied the industry with a full range of services and capabilities related to the development, operation and maintenance of pipeline systems. Pushing into the new energy frontier poses greater challenges for pipeline systems and DNV is committed to support the industry continuously as a pipeline technology leader.

TARGET SEGMENTS
Through these services our teams of highly qualied professionals deliver cutting-edge solutions to customers across the industry: Deep and ultra-deepwater eld development Floating offshore installations Fixed offshore installations Offshore and onshore pipelines Natural Gas/LNG Rening and petrochemicals Wind energy Power generation and transmission Carbon capture and storage Arctic operations and technology

PAGE 4 | DNV ENERGY | Services Overview | ERM | SHE Risk Management | Flow Assurance, Design, Foundations and Materials | Verication | Pipelines in Operation | World-Class Codes and Standards

| OFFSHORE PIPELINES |

THE BUSINESS LIFE CYCLE

DNV assisting companies in the energy industry along the entire life cycle to safeguard and improve business performance
PROJECT PHASES:

STRATEGY

FEASIBILITY & CONCEPT SELECTION

DESIGN

CONSTRUCTION

INSTALLATION & COMMISSIONING

OPERATION & LIFE EXTENSION

DECOMMISSIONING

DNV ENERGY DELIVERIES:

BUSINESS CASE ASSESSMENT INTEGRATED FIELD DEVELOPMENT SUPPORT PROJECT DUE DILIGENCE PROJECT RISK MANAGEMENT SHE RISK MANAGEMENT RELIABILITY ASSESSMENT TECHNOLOGY QUALIFICATION DESIGN SUPPORT VERIFICATION QUALITY SURVEILLANCE AND INSPECTION MATERIAL AND CORROSION TESTING OFFSHORE CLASSIFICATION OPERATIONS EXCELLENCE TROUBLESHOOTING MAINTENANCE MANAGEMENT

PAGE 6 | DNV ENERGY | Services Overview | ERM | SHE Risk Management | Flow Assurance, Design, Foundations and Materials | Verication | Pipelines in Operation | World-Class Codes and Standards

| OFFSHORE PIPELINES |

SERVICES OVERVIEW

The importance of a complete picture

Designing, constructing, installing and operating pipeline systems are complex challenges. DNV offers the whole gamut of pipeline-related services. We can help you safeguard and improve your operations through a deeper and more complete understanding of risks and opportunities in pipeline projects.
DNV services comprise the full life cycle of pipeline systems.

Industry and governments make signicant investments in pipeline systems. They rely on a broad range of expertise to ensure that each pipeline operates in a safe, reliable and costeffective way. Since the early 1970s, DNV has played a leading role in the development of pipeline technology. We were deeply involved in the SUPERB Joint Industry Project, that introduced limit state-based design and modern design principles, revolutionising pipeline design. Today DNV offers unique multidisciplinary competences to customers all over the world from the very early phases through to operations and life extension.

ADDRESSING THE ENTIRE LIFE CYCLE DNV can assist you in selecting the right transport solution, evaluating aspects ranging from availability and tariffs associated with existing infrastructure, to cost, revenue and risks related to a new solution. Materials need to be stretched to their limit in order to safely install and operate pipelines in extreme water depths and other challenging conditions. We work on the latest design methodologies. We assure quality and integrity during installation so that you can break barriers condently. Once in operation, there is a ne balancing act between withstanding scrutiny and maximising safety, while securing an acceptable return on investment. DNV recommends that you start planning the operational phase early in the project. Dont wait until it is too late.

A COMPLETE SUITE OF SERVICES From well to shore, from concept to operation, from internal ow to external threat DNV offers the full range of pipeline-related services: Transport solution Concept & feasibility studies Environmental studies and impact assessment Safety and risk analysis Structural design assistance Material selection Geotechnical engineering Flow assurance Verication and certication Fabrication and installation surveillance Marine warranty In-service inspection Condition and integrity risk assessments Lifetime extension and re-qualication of existing pipelines Database management Laboratory facilities for both small scale and full scale testing Failure investigations and analyses

STATE-OF-THE-ART SOFTWARE TOOLS AND SOLUTIONS DNV applies state-of-the-art software solutions as an integrated part of our services. Some of the key tools are listed below: EasyRisk is used to assess business risk related to different eld development scenarios. OLGA is a programme developed for analysis of multiphase ow issues in pipe systems. FATFREE is a programme for failure analyses of free spans exposed to ocean current and wave loading in compliance with the DNV RP-F105 Free Spanning Pipelines.

STABLELINE is a programme used to calculate stability of offshore pipelines according to DNV-RP-F109 On-Bottom Stability Design of Submarine Pipelines. ABAQUS is used for non-linear structural design analysis including pipe-soil interaction as well as advanced materials engineering. Pipeline Engineering Tool (PET) addresses all key design formulas in DNV OS -F101 Submarine Pipeline Systems. ORBIT Pipeline Management System is a web-based tool covering both Onshore and Offshore pipeline integrity management.

THE FUTURE The international pipeline industry is not static. There is need for continuous developments and enhancements in order to guide and support the industry in relatively uncharted territories such as the arctic, ultra-deep waters, and projects with challenging uid composition and long tie-back solutions. Our vision is to make a global impact for a safe and sustainable future. By developing new methodologies, understanding the new risk agenda and working hard to manage risk and improve safety and environmental performance we take steps in the right direction.

CASE:

| CRITICAL ISSUE: Challenging riser and pipeline design. SOLUTION: Deep multidisciplinary competences. Systematic assessment of suppliers and contractors. DELIVERABLES: Design verication. Quality system assessment. QA of pipe mills and coating plant, qualication welder and AUT. Survey of pipe lay and commissioning. VALUE TO CUSTOMER: Successful installation on schedule.

ALPINE DEEPWATER PIPELINE WITH 40 YEARS DESIGN LIFE

The Williams Companies of the U.S. decided plant, welder and AUT system qualication, to embark on the challenging Alpine project and survey of offshore pipe lay and comin the Gulf of Mexico. The scope includes missioning. construction of a deepwater pipeline startThe Alpine project was successful, in part, ing at a new spar platform in Garden Banks due to DNVs technical expertise, effectiveblock 668 at a water depth of 3,150 ft (960 ness working in a team environment with metres) and ending at an existing platform multiple contractors, and recognition of in Galveston Block A244. our particular needs, says Charles Nichols, DNV was engaged to support Williams from Williams project manager. Nichols concluded the design phase to installation and commisthat DNV was professional and responsive sioning. The detailed scope included verication to their needs as a deepwater pipeline opeof detailed steel catenary riser and pipeline rator in the Gulf of Mexico. design, assessment of prime contractors quality system, QA of pipe mills and coating

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| OFFSHORE PIPELINES |

ENTERPRISE RISK MANAGEMENT ERM

SHE RISK MANAGEMENT

Is pipeline the optimal transport solution?

The selection of a transport solution depends on a host of factors. DNV helps you nd the optimal alternative, based on the particular needs of your project.
DNV can assist in identifying the best transport solution.

Making pipeline the safe option

We work with our clients to develop, implement, maintain and continuously improve best practices in SHE Risk Management of offshore pipelines.
DNV applies a riskbased approach to SHE Risk Management.

Early phase eld development involves business case assessments of possible development concepts. A major part of a development concept is the transport solution, where alternatives range from sea transportation using shuttle tankers to novel subsea-to-land solutions. The selection of a transport solution depends on several factors, from availability and tariffs associated with existing infrastructure, to cost, revenue and risks related to a new solution. To nd the best solution, you need to challenge and assess both technical and economical aspects of the full eld development solution. OUR APPROACH DNV applies an integrated approach to ensure that both technical and economical issues are properly accounted for when assessing the attractiveness of the various development and export alternatives. The eld development is described as a value where the oil and gas from sub-surface to nal export is modelled, so that both physical ows (oil, gas, condensate, NGL, etc.) and resulting cash ows are calculated.

From this model, technical and economical performance of the eld development alternative can be assessed; in particular the various export alternatives. The integrated model includes the various risks and uncertainties that impact the eld development, such as: Uncertainties in in-place volumes and recovery factors Availability and risks related to technical performance Frequency of component failures, duration of repairs, and waiting time and cost of repair resources Uncertainty in CAPEX, OPEX, tariffs, etc. Uncertainty in product prices Uncertainty in timing of rst oil/rst gas Through the integrated model, the dependencies between the technical, economical and the risks are managed. To support the selection of export alternative, full probability distributions for economic indicators such as

Net Present Value (NPV), Break-even oil price, etc. can be found. KEY BENEFITS The DNV approach does not replace detailed analyses, but provides a means of aggregating data from different disciplines into a more complete basis for decision making. Since the integrated model allows all relevant uncertainties and their dependencies to be included, the total risk can be described more completely. Furthermore, the major risk drivers and their underlying causes and knock-on effects can be analysed.

A new risk agenda is emerging, bringing with it new demands on your business and how it is managed. Stakeholders expect clear management of safety, health and the environment. Mere compliance with legal requirements for SHE performance is no longer sufcient for forward-thinking organisations. We can help you safely and responsibly improve your business performance. DNV applies risk-based methods and advanced software tools to ensure that hazards are identied and understood throughout the life cycle of projects and operations. We adopt our approach to the relevant project challenges, applying the full range of DNV capabilities and experience.

INCREASE SAFETY Our services will ensure that you make the appropriate strategic and operational decisions related to health and safety issues: Risk Assessments Consequence assessments External impact assessments Design Accidental Load and protection studies Management Systems and performance standards Emergency planning, response and investigation ENVIRONMENTAL CHALLENGES We provide many inter-related services in the area of environmental risk management including:

Environmental impact and risk assessment Dispersion and fate modelling Impact and risk management planning Spill preparedness and response analysis and planning Biodiversity management Environmental monitoring Visual mapping of sensitive areas Environmental ROV surveys Corporate Social Responsibility EXPERTISE AND COMMITMENT We combine technical expertise and advanced risk methodologies with management consulting skills to offer a new and different type of consulting service. By understanding the new risk agenda and working hard to improve safety and environmental performance, we are committed to our vision of making a global impact for a safe and sustainable future.

CASE:

| A length of 1,200 kilometres makes Langeled the worlds longest submarine gas pipeline. The pipeline starts at the Nyhamna export terminal in western Norway, goes via the Sleipner riser platform in the North Sea, and lands in Easington on the English east coast. Langeled has a capacity of 20 billion cubic metres of gas to be transported annually from the Norwegian continental shelf. This will cover 20 per cent of the gas consumption in the UK.

| DNV has supported StatoilHydro with different SHE studies for the concept phase and planning of the Langeled pipeline. Examples of studies include: Concept risk assessment analysing 3rd party societal risk, personnel risk and pipeline damage caused by external impact Risk comparison of alternative locations of future tie-ins Risk assessment of marine operations

| CRITICAL ISSUE: Long pipeline with large areas of free spans, trawling activity and steep landfall. SOLUTION: Applying sophisticated risk assessment techniques. KEY DELIVERIES: Documentation of pipeline risk, including third party risk and pipeline damage. VALUE FOR CLIENT: Decision support on risk reducing measures and pipeline routing optimisation.

LANGELED A MILLION TONS OF STEEL SAFELY SUPPLYING THE UK WITH NORWEGIAN GAS

PAGE 10 | DNV ENERGY | Services Overview | ERM | SHE Risk Management | Flow Assurance, Design, Foundations and Materials | Verication | Pipelines in Operation | World-Class Codes and Standards

| OFFSHORE PIPELINES |

FLOW ASSURANCE, DESIGN, FOUNDATIONS AND MATERIALS

Pushing the design envelope safely

Extreme free spans, global buckling of HPHT pipelines, ice scour induced loads and enhanced utilisation of materials in corrosive environments DNV can help you break these and other barriers with condence.
Experienced and well-trained personnel ensure cutting edge solutions. Our design support is based on advanced testing and technical analysis.

With a highly experienced and well trained global network of personnel, DNV is well placed to meet the requirements of a global pipeline market. We offer tailored solutions throughout the life cycle of pipeline systems with focus on adding value and safeguarding life, property and the environment. FLOW ASSURANCE DNV provides in-depth understanding of multi-phase ow characteristics in pipeline systems at both normal and incidental operating conditions. This knowledge represents a valuable input to the optimisation of the design and operation of pipelines. And contributes to cost-effective solutions, and robust and effective pipeline performance. We address the following key areas either as part of an integrated approach or as standalone services:

Thermo-hydraulic analysis (pressure and temperature drop) Capacity/line sizing Slug/terrain slugging Hydrate and wax prediction Chemical injection Insulation optimisation/design Start-up and shut downs Cool down Blow down Water hammer/pressure surge analysis Leak analysis Understanding and analysing multiphase ows is a complicated task. DNV utilises the state-of-the-art transient multiphase programme OLGA to analyse issues related to production and transportation of multiphase ows from the reservoir to the separator. We participate in all phases of a project, from feasibility studies to the operational phase. OLGA is developed for analysis of multiphase ow issues in pipe systems, and may be used

for both steady state and transient analysis. The programme solves the governing equation for mass, momentum and energy for the various phases, based on ashing and condensation of the gas and liquid phases. STRUCTURAL DESIGN A key element of DNVs services is that independent detailed engineering analysis forms part of third party verication activities. We use a range of state-of-the-art software packages to perform relevant technical analysis: Global and local buckling Pipe reeling Pipe snaking Upheaval buckling Expansion curve Tie-in spool piece J-tube pull-in Fatigue analyses for free spans and VIV On bottom stability Pipeline installation, dynamic and static Structural Design

SOLID FOUNDATIONS Geotechnical design is associated with a variety of challenges where a broad understanding of both structural responses and soil characteristics is required. In DNV, soilpipe interaction issues are identied and solved by integrating the geotechnical services in the design or verication process. Our services involve application of DNV standards, other recognised standards, national requirements and client specications. The services are offered for a broad scale of both onshore and offshore pipelines, including: Geophysical surveys to identify potential hazards Seismic hazard studies Soil investigations Slope stability analyses Flow analyses of failed soil (debris ow, turbidity ow) Optimum pipeline route selection Soil properties and soil resistance

Heat isolation for cover Anchor or ice ridge hazards and impact loading THE RIGHT MATERIALS Ensuring that the right material is selected, specied, delivered and installed is a key aspect of every successful pipeline project. DNV owns and operates material laboratories in Norway, Singapore and the USA. We draw on a wealth of experience from failure investigations, corrosion studies, testing and R&D projects to help the customer select the optimal material. We also help ensure that the materials are properly joined through our deep understanding of welding and non-destructive testing. DNV has published a number of codes and standards to ensure that the international pipeline industry has easy access to best practices.

Assessment of ultimate pipe capacity Fracture mechanics and fatigue assessment Verication of material specications and manufacturing documentation Mechanical testing Metallurgical investigations Corrosion testing Qualication of new materials Quality surveillance Troubleshooting Remaining life assessment Failure investigation

CASE:

| High Pressure and High Temperature (HP/ HT) pipelines will expand due to thermal and internal pressure. The integrity of such a pipeline can be assured either by restraining it and keeping it in place, or by releasing the compressive force by allowing it to buckle in a controlled manner. The choice is inuenced by a number of complex parameters and depends on the operators and the designers experience and preference. Buried pipelines are normally designed not to buckle and, hence, to sustain the loads in the original conguration.

| The new recommended practice DNV-RPF110 Buckling of Pipelines is the result of the HOTPIPE Joint Industry Project (JIP) performed by Snamprogetti, Statoil and DNV and sponsored by Statoil, Agip, Shell, BP and Hydro. The new recommended practice complements DNV-OS-F101 and gives specic requirements for global buckling scenarios of HP/HT pipelines.

| CRITICAL ISSUE: Develop reservoirs with high pressure and high temperature characteristics. SOLUTION: The new DNV RP-F110 with state-of-the-art methods. KEY DELIVERABLES: The DNV RP-F110 includes design methods for: Exposed pipelines on even/uneven seabed Buried/covered pipelines with potential global buckling in the vertical plane VALUE TO THE INDUSTRY: Optimum pipeline design.

INTERNATIONAL R&D HIGH PRESSURE AND HIGH TEMPERATURE PIPELINES

PAGE 12 | DNV ENERGY | Services Overview | ERM | SHE Risk Management | Flow Assurance, Design, Foundations and Materials | Verication | Pipelines in Operation | World-Class Codes and Standards

| OFFSHORE PIPELINES |

VERIFICATION

The assurance of full independence

DNVs transparent and fully independent approach to verication, certication, quality surveillance and marine operations will help reduce and manage risk, thereby ensuring a successful project.
To ensure condence, DNV applies a risk-based approach to vercation.

INCREASE

AB I

LIT Y

TO IN

EARLY PHASE INVOLVEMENT

F LU
ENC
E

CH COST OF

A NGE

CONCEPTUAL PHASE

TIME COMMISSIONING

Early involvement= Higher chance to implement changes with lower nancial impact

DNV is close at hand and prepared to help all over the world.

Authorities now tend to move from prescriptive regimes to functional requirements in a goal-setting regime, where safety shall be demonstrated based on risk approaches. Hence, there will probably be a stronger future demand for measurable objectives to be presented by the owners regarding safety to life, property and the environment. Verication and certication have historically been carried out with varying scope and depth of involvement. The depth of involvement, or level of verication, has not always been very transparent. In order to ensure a transparent approach, DNV was the rst organisation that introduced a riskbased approach.

A RISK-BASED APPROACH DNV aims through Risk-Based Verication, to instil condence in our customers and other stakeholders. Through independent and competent scrutiny, the intent is to conrm that the asset is designed, constructed and/or operated so that: It is t for its intended purpose Its level of integrity is as high as reasonably practicable The associated risk to health, life, property and environment is as low as reasonably practicable (ALARP) The DNV OSS -301 Certication and Verication of Submarine Pipeline Systems, which describes DNVs certication and verication services for pipeline systems, was published in October 2000. It is the rst, and still only, publicly available detailed description of third-party involvement for pipeline systems. The document gives detailed scope of work for certication and verications for

three different levels, low, medium and high. This will allow the owner to select the degree of certication or verication in compliance with the overall risk objective for the project. IMPORTANCE OF EARLY INVOLVEMENT Risk-Based Verication services should seek to reduce any uncertainty in the eld or pipeline development as early as possible. If any weaknesses are revealed, the services should allow for effective management of necessary changes. DNVs verication experience reinforces the important message of early involvement and the need for in-depth knowledge of the activities required to obtain optimal resource allocation for the verication process. A proactive approach is required, placing particular emphasis on roles and responsibilities.

QUALITY SURVEILLANCE AND INSPECTION The level of verication activity is differentiated according to the inherent risk (i.e. consequence) to the pipeline system. During the fabrication and installation phase we support our customers by providing: Quality surveillance during pipe manufacturing and coating Inspection services and construction supervision through pipeline installation and commissioning Depending on risk level low, medium or high, DNVs attendance varies from an audit based approach to full 24/7 site team attendance.

MARINE OPERATIONS The nancial and technical consequences which may be incurred as a result of an accident or occurrence during offshore marine operations can be devastating. This fact alone emphasises the importance of a well-dened marine verication scope, a recognised technical reference, competence and experience, and quality within the marine verication service. DNV stands up to these requirements through our integrity and independence, our close relation to in-house specialist disciplines, and through more than thirty years experience as warranty surveyor and marine verier. We base our work on DNV Rules for Planning and Execution of Marine Operation.

GLOBAL REACH The opportunities of the global energy market belong to those who approach them with a comprehensive understanding of risk. Equally important is the ability to implement solutions and uniform standards across geographies. Thats why DNVs global presence is so highly valued by our customers in the energy sector. No matter where you conduct your business, DNV is close at hand and prepared to help. Our international organisation comprises a network of more than 300 ofces spanning Europe, Africa, the Middle East, Asia and the Americas.

CASE:

| Block KG-DWN-98/3 in the Krishna Godavari Basin, Bay of Bengal off the east coast of India is the rst deepwater development in India. The gas eld covers an area of 7,500 km2, located 40 kilometres and 60 kilometres south east of Kakinada with water depths of between 400 and 2,700 metres. Phase 1 of the project comprises subsea production systems, owlines, pipelines, a shallow water control and riser platform and an onshore process plant. It is developed by Reliance Industries Ltd., Indias largest private sector enterprise, with businesses in the energy and materials value chain.

| DNV has supported Reliance Industries Ltd. from the Front End Engineering Design (FEED) through to detailed design verication, manufacture control and independent construction and installation inspection. The work is based on DNV-OSS-300 Risk Based Verication and utilises resources from DNVs worldwide ofce network. In addition to verication work, DNV is also supporting Reliance Industries Ltd. by analysing reliability, availability and maintainability of the overall system.

| CRITICAL ISSUE: Managing risk in an international deepwater project with vendors and engineering consultants spread around the globe. SOLUTION: Multidisciplinary competencies and state-of-the-art methods and tools. DNVs world-wide network. KEY DELIVERABLES: FEED verication. Design verication. RAManalysis manufacture control. Independent construction and installation inspection. VALUE DELIVERED: Focus on critical design, fabrication and installation aspects.

KG D-6 INDIAS FIRST DEEPWATER PROJECT

PAGE 14 | DNV ENERGY | Services Overview | ERM | SHE Risk Management | Flow Assurance, Design, Foundations and Materials | Verication | Pipelines in Operation | World-Class Codes and Standards

| OFFSHORE PIPELINES |

PIPELINES IN OPERATION

Safely extending the lifespan

As pipelines are put into operation and approach maturity in their design life, a different set of considerations and capabilities are required. At this stage, the value of planning the operational phase early in the project also becomes evident.
Our goal is to combine a high safety level with low operating costs.

DESIGN

ANALYSES AND RE-DESIGN

AUTHORITIES

MANAGEMENT

CUSTOMERS

PUBLIC

PIPELINE INTEGRITY MANAGEMENT

PIPELINE INTEGRITY MANAGEMENT (PIM)

OPERATIONS AND MONITORING

MAINTENANCE

INSPECTIONS

REPAIRS

EMERGENCY RESPONSE

DNVs integrity management services and systems connect key operational activities with assessment and stakeholder requirements.

DNV provides a variety of services addressing issues related to pipelines in operation. These services focus on reducing pipeline operating costs, while still maintaining an acceptable reliability and safety level. DNV experts team up with the pipeline operators to establish the most cost-ef cient solutions for each pipeline system. Most of our services for pipelines in operation are requested during the pipeline operational phase. However, DNV also provides operations-related services at an early design phase, ensuring that sound pipeline operational integrity has been built into the pipeline system during initial planning, design and construction. We build our services in the operational phase on the competence gained when participating in a number of joint industry development projects and developing DNVs unique pipeline codes and standards. Services for Pipelines in Operation cover:

Integrity Management involving all activities required for control and documentation of pipeline system integrity during its operational life. DNV also offers assistance for roll-out and/or implementation of the integrity management programme within an operators organisation. Condition Assessment for pipeline systems and components. This includes assessment of metal loss defects, dents and cracks (i.e. defect assessment) as well as assessment of freespan and global buckling (i.e. structural integrity of HP/HT pipelines). Inspection and Maintenance Planning uses the results from the condition assessment to prioritise inspection and maintenance activities based on risk of failure balanced against cost of prevention work.

Pipeline Operability Review allows the pipeline operator to identify and assess all important areas of potential operational improvement (with regard to both management and technical solutions) against a set of Best Practices based on DNVs experience from major projects and international operators. Re-qualification as required for lifetime extension, change of use of the pipelines systems, or modications and repairs due to damage. Data management support by collecting and organising data needed for long term integrity management and daily operation, covering pipeline data, surveys and inspection results, assessments etc.

Support for Regulatory Compliance including interpretation of regulations, consultancy during planning and implementation, information management and meetings with regulators. Risk assessment supporting the operators in managing SHE and business risk. Methods such as HAZID and QRA can be applied at different levels of detail, and the output risk ranking can be used as basis for decision making approaches like RCM and RBI. Availability and reliability evaluations of pipeline networks provide condence and maximise system uptime. Technical support for operators in connection with repair, troubleshooting, onsite support and technical advice, intervention, decommissioning, training etc.

WEB-BASED INTEGRITY MANAGEMENT ORBIT Pipeline is a Pipeline Integrity Management support software tool developed by DNV in close cooperation with leading oil and gas companies. The tool supports the activities and working process within pipeline integrity control and documentation, and contains modules for: Data management Condition assessment Defect evaluations Pipeline and component risk assessment Inspection planning Pro-forma reporting The new fully web-based ORBIT Pipeline Management System covers both onshore and offshore pipeline integrity management functions and is delivered with an Integrity Management Portal as standard. This portal provides ready access to historical reports, condition of all assets embraced by the system, overall risk proles, system alerts and

status of integrity management projects and tasks in a trafc light fashion. Tailored integration to customer applications, e.g. GIS, SAP and other systems is important to reduce the overall impact on a company when introducing a new pipeline integrity solution. Rather than replacing in-house applications, the pipeline integrity solution represents a strengthening of the companys overall asset management as it is integrated with already well functioning in-house systems. The oil and gas industry dedicates large resources to the development of tomorrows operations making use of new technology for more efcient work processes. The ORBIT Pipeline will help you make faster and more qualied decisions, thereby safely extending the lifespan of your pipelines.

CASE:

| A four-tonne anchor hooked and damaged the DONG-operated oil pipeline, which runs from the Gorm Field to Fils on the Danish west coast. The pipeline transports all oil from the Danish offshore sector to shore. The potential development of future fatigue failure initiated a repair of the pipeline. The damaged section was in water depths of 52 metres, and the pipeline was buried 1.5 metres below the seabed. The cost of closing the pipeline for the repair would have been signicant, so the company wanted the pipeline to be repaired whilst in operation.

| DNV provided support to DONG for the overall repair approach and solutions, the damage assessment, the inspection requirements, the design of the repair clamp, the installation and the pipeline-excavation procedures. The urgent request was quickly solved by integrating all relevant disciplines such as soil, materials, clamp design, marine operations, inspection techniques and the damage assessment. DNV also performed third party verication of the repair work from its ofces in Esbjerg, Denmark, and Aberdeen, Scotland.

| CRITICAL ISSUE: A four tonne anchor hooked onto an oil pipeline. SOLUTION: A multidisciplinary approach to assess the condition and repair method for the pipeline. KEY DELIVERABLES: Damage assessment. Repair method. Installation support. Inspection. Veri cation. VALUE TO THE CUSTOMER: Pipeline successfully repaired without shutdown, saving several hundred million NOK.

GORM TO FILS PIPELINE AN IMPOSSIBLE PIPELINE REPAIR

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| OFFSHORE PIPELINES |

WORLD-CLASS CODES AND STANDARDS

Taking the industry forward

DNVs rst pipeline code was issued in 1976. Since then we have created a series of internationally recognised standards and recommended practices together with the pipeline industry.

DNV works closely with the industry to advance standards.

SERVICE SPECIFICATIONS OFFSHORE STANDARDS RECOMMENDED PRACTICES OPERATION CONSTRUCTION DESIGN INTERNATIONALLY RECOGNISED CODES

STRUCTURE OF DNV OFFSHORE CODES

A clearly set structure accommodates the different DNV Codes.

Following increased consumption of oil and natural gas, offshore pipeline construction activity is about to reach historic levels. Recent estimates forecast that close to 70,000 kilometres of offshore pipelines will be constructed in the period from 2007 to 2011 with Europe as the front runner followed by the South Pacic, Far East and the Gulf of Mexico. Pipelines are effective and a highly reliable means for hydrocarbon transportation over short and medium range distances. They represent large investment costs for a eld development or gas export transport system. These investment costs are highly inuenced by the applicable codes for design and construction of the pipeline.

SELECTING THE BEST CODE Many national and international pipeline codes in use today worldwide are subject to various safety regimes and operator preferences. What is the criteria for selecting the best design code? Is it the code giving the minimum wall thickness or something else? DNV believes the selection criteria are simple and threefold: The code shall ensure at least a minimum safety level that is acceptable to society Given the above, the best code is the one that gives the minimum life cycle cost The code should comply with the overall ISO standards For an off the shelf pipeline design, any of the internationally recognised codes fulll the rst criterion based on historical record. Most of these codes are experience-based using an allowable stress format where all failure modes are covered implicitly in a few simple design formats. They are often simple

to apply and work well when applied within the scope of application, i.e. where there has been extensive past experience used as the basis for the code. For other pipeline designs where there is limited eld experience, such as HT/HP, deepwater, uneven seabed, arctic pipelines in ice-infested areas, only a limit-state-based design code with links to fabrication, installation and operation phases can ensure a minimum acceptable safety level. A FAMILY OF BEST PRACTICES Based on our project experience, research, and joint industry development work, DNV issues a number of pipeline codes. These comprise service specications, standards and recommended practices, and are highly regarded within the international pipeline community. The DNV-OSS-301 Service Specication for Certication and Verication of Pipelines presents DNVs approach for certication

and verication of offshore pipelines. The specication presents a comprehensive and detailed risk based method for this service. The DNV OS -F101 Offshore Standard for Submarine Pipeline Systems provides acceptance criteria and design procedures for pipelines. The standard applies modern limit-state-design principles with safety classes linked to consequences of failure. The DNV standard is complemented by several recommended practices (RPs) which give detailed advice on how to analyse specic technical aspects according to stated criteria: DNV RP- C205 Environmental Conditions and Environmental Loads DNV RP- F101 Corroded Pipelines DNV RP- F102 Pipeline Field Joint Coating and Field Repair of Linepipe Coating DNV RP- F103 Cathodic Protection of Submarine Pipelines by Galvanic Anodes

DNV RP- F105 Free Spanning Pipelines DNV RP- F106 Factory Applied external Pipeline Coatings for Corrosion Control DNV RP- F107 Risk Assessment of Pipeline Protection DNV RP- F108 Fracture Control for Pipeline Installation Methods Introducing Cyclic Plastic Strain DNV RP- F109 On-bottom Stability DNV RP- F110 Global buckling of pipelines DNV RP- F111 Interference Between Trawl Gear and Pipelines DNV-RP-F112 Design of Duplex Stainless Steel Subsea Equipment Exposed to Cathodic Protection DNV RP- F113 Pipeline Subsea Repair DNV RP-O501 Erosive wear in Piping systems Some of the above RPs were originally developed for offshore pipelines, but are also relevant for onshore pipelines. See www.dnv.com for an overview of all available codes.

THE FUTURE Codes and standards should reect current good practice and be open for application to innovation and state-of-the-art technology. Therefore best codes do not exist statically or indenitely. There will always be a need for developments and enhancements in order to guide and support the industry in relatively uncharted territories such as the arctic, ultra-deep waters, and projects with challenging uid composition and long tie-back solutions. We are currently working with the industry to develop better criteria for deepwater installations, better understanding of pipe/ soil interaction, arctic pipelines and smarter pipeline integrity management.

CASE:

| Russian energy giant Gazprom together with ENI of Italy embarked on a very ambitious project when they decided to install two subsea gas pipelines across the Black Sea the Blue Stream Project. The pipelines were built to meet the growing demand for more environmentally friendly energy in Turkey and have a capacity of 16 billion cubic metres per year. The project faced challenges such as extreme water depths approaching 2,150 metres, a difcult seabed topography both on the Russian and Turkish side, and high external H2S content. Furthermore, the installation took place in areas with high seismic activity.

| DNV supported the project from the conceptual phase in 1995 to the installation completion of the two 24 diameter pipelines in 2002. The DNV-OS-F101 Submarine Pipeline Systems was chosen as the governing code and has now been adapted as the corporate standard for all of Gazproms offshore pipelines.

| CRITICAL ISSUE: Installation of export pipelines at extreme water depths and demanding seabed conditions. SOLUTION: Use of DNV-OS-F101 involving multidisciplinary competencies and state-of-the-art methods and tools. KEY DELIVERABLES: Total System Certication via design verication, manufacture control and independent construction inspection. VALUE DELIVERED: Completion on time in accordance with strict international standards.

BLUE STREAM THE WORLDS DEEPEST TRUNKLINE

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DNV locations
DNV serves the energy industry from more than 40 primary locations worldwide. In addition, we draw on DNVs entire worldwide network of 300 ofces in 100 countries.

Trondheim Bergen Stavanger Oslo Sandefjord Aberdeen Esbjerg Copenhagen Manchester Moscow Antwerp London Essen Paris

Calgary Astana Seattle Tanggu St. Johns Halifax Boston Columbus Houston

Tripoli Kuwait Doha Abu Dhabi Muscat Mumbai Ho Chi Minh City Lagos Kuala Lumpur Singapore

Shanghai

Vung Tau

Trinidad

Jakarta Luanda Salvador

Rio de Janeiro

Maca

So Paulo Porto Alegre Buenos Aires