Asian Pipeline Landscape Challenges and Opportunities

Pipeline Perspective on India

McDermott Asia Pacific Pte Ltd

25 October, 2010

Background
With average GDP growth rate of 5.8% for pass two decades, India is one of the fastest growing economies in the world Estimated population of 1.2 billion and a coast line of 7,517km The energy needs are growing rapidly in India and particularly consumption of gas is expected to grow 500 MMSCMD in 5 years Hydrocarbon Vision 2025 aims to create more pipeline projects both national & international Considering size and growing population, Pipeline infrastructure needs to grow several folds

Content
I. II. Onshore Pipeline Overview International Pipeline Opportunities

III. Offshore Pipeline Overview IV. Deepwater Pipeline Overview V. Technical Aspects, Challenges and Opportunities VI. Pipeline Resources and Information

VII. Indian Regulatory Challenges

I. Onshore Pipeline Overview

Drivers of Transportation of Oil by Pipeline
Environment friendly
10% 32% 26% Pipelines Road Tankers

Least energy requirement Lowest maintenance costs Minimal impact on land use Negligible loss of product in transit High reliability Multi-product transportation

Rail Tankers
Water Carriers 32%

I. Onshore Pipeline Overview

Onshore Pipeline Services Crude oil pipelines Petroleum product pipelines Natural gas pipelines LPG Water & effluents Slurries Classification of Pipelines
45%
1700 km

Onshore Pipelines Approx 25,000+ Km

2000 km

8% 7%
10000 Km

Gas 40% Oil & Petroleum Product LPG

11450 Km

Brach/Spur

Cross country trunk pipelines Spur and branch pipelines Marine offloading terminals and outfalls

I. Onshore Pipeline Overview

Indias Major Gas Trunklines Pipeline Company Length Size Product

1
2 3 4

HBJ
DVPL EWPL Country Pipeline Network

GAIL
GAIL RGTIL GAIL

1700 -->3397km
770km 1385km 7850km 1900km

36
42 48 -

Gas
LNG Gas Gas LPG

Existing Gas Pipelines Network By Companies (%)

8% 11% 6% 15% 60% GAIL - Gas (7850km)

GAIL - LPG (1900km)

GAIL - LNG (770km) RGTIL - Gas (1385km) GSPCL - Gas (1070km)

I. Onshore Pipeline Overview

Indias Future Gas Pipelines Network (km)
9000 8000 7000 6000 7890

Future Gas Pipelines By Major Companies(%)

5000
4000 3000 2000 1000 0
Kakinada - Vijayawada Chennai - Chennai - Gujarat GAIL Gas Howrah - Chennai Tuticorin Bangalore - pipeline Grid (400km) (445km) (670km) Mangalore (2600km) (7890km) (660km)

22% GAIL - Gas (7890km) 2600 12% 400 445 670 660 66% RGTIL- Gas (1515km) GSPC - Gas (2600km)

I. Onshore Pipeline Overview

Indias Major Cross Country Crude Oil & Petroleum Pipelines
Pipeline 1 2 3 4 5 Product Pipelines including Kandla to Bhatinda 1443 kmTrunkline Crude Pipelines North East India Crude oil Pipelines to refineries Onshore Spur and branch Pipelines 24 inch Oil MDP (insulated & heated longest Pipeline) Multi-Product Pipelines Company IOCL OIL ONGC/GSPCL Cairn BPCL HPCL
Existing Oil/Product Pipeline By Companies(%)
7% 9%

Length 6000km 3000km 1432km 1000+ km 670km 1650km 2100km

20%

IOCL Crude (3000km) IOCL Product (6000km)

11%

BPCL Product (2100km) HPCL Product (1650km)

14% 39%

OIL (1432km) ONGC Spur/Brach (1000km +)

I. Onshore Pipeline Overview

Future Petroleum Product Pipelines (km)
3000 2540 2500

2000 1580 1500

1000 660 540 500 375

1000

200
0
RIL Jamnagar Patiala RIL Jamnagar Kanpur RIL Goa- Heydrabad RIL Chennai Bangalore RIL Kakinanda Vijaywada RIL Haldia - Ranchi RIL & IOCL Central India Pipeline

I. Onshore Pipeline Overview

Crude Oil & LPG Pipeline In India GAIL Gas Pipeline Grid

II. International Pipeline Opportunities

Notable Proposals: Iran-Pakistan-India (IPI) Gas Pipeline Turkmenistan-Afghanistan-PakistanIndia (TAPI) Gas Pipeline Bangladesh India Onshore Gas Pipeline Import gas from Myanmar Oman India Gas Pipeline

Geopolitical Issues: Gas pricing dispute Security/ border risk Route selection

Figure: Iran-Pakistan-India (IPI) Gas Pipeline

III. Offshore Pipeline Overview

Major offshore fields in India 1. 2. 3. 4. Bombay (Mumbai) Offshore Basin, West coast of India, Arabian sea Gulf of Cambay, North West coast of India Krishna-Godavari Basin, East Coast of India, Bay of Bengal Cauvery Basin, East Coast of India, Bay of Bengal

Figure: Offshore Fields in India

III. Offshore Pipeline Overview

Offshore Pipeline Services Crude oil Gas (sour & non-sour) Multiphase production Gas lift Water Injection
Existing Offshore Pipelines approx 4500 kms
2% 200 km 2% 180 km

Trunk Lines 19% 1800 km Infield Lines

Classification of Offshore Pipelines Trunk line In-field pipelines Flow lines including flexible Offshore loading/unloading line Marine Terminal and Jetty Head Pipelines

77% 2300 km

Loading/Unloading Lines
Marine Terminal/Jetty Head

III. Offshore Pipeline Overview

Bombay (Mumbai) Offshore Basin

Discovered in 1974, the field has been operated by ONGC Bombay High Oil field consist of 2 blocks, namely Mumbai High North (MHN) and Mumbai High South (MHS) Decline in existing oil and gas production led to the need of a redevelopment plan in 2000 ONGC owns and operates the largest network of subsea pipelines including in-field lines and trunk lines. Other major field operators includes Reliance, British Gas, Cairn, and GSPCL.

III. Offshore Pipeline Overview

Mumbai High Field (North)

III. Offshore Pipeline Overview

Mumbai High Field (South)

III. Offshore Pipeline Overview

III. Offshore Pipeline Overview

ONGCs Major Offshore Trunkline
Bombay High Uran Trunk Line, BUT (1979) 30 crude/26 gas; 200km x2 Mumbai High Uran Trunk Line, MUT (2005) 30 crude/ 28 gas 205km x 2; pre-trench/backfill for 20km; post trenched until 130 km offshore section South Basin Hazira Trunk Line (1986) 36 Gas 220km Heera Uran, HUT (1991)26 crude/24 Gas 85km x 2 ICP Heera Trunk Line (1995) 30/22 Crude 143km Second Basin Hazira Trunk Line, SBHT (1995) 42 Gas 245km;Post trenched to 4m cover at shore;
Figure: MUT
Mumbai High Field

Hazira

III. Offshore Pipeline Overview

Offshore loading/Unloading Pipelines CALM/SPM
Owner RIL - RJMT Essar Vadinar IOCL - Vadinar BPCL - Kochi BORL - West HPCL - Visag CPCL- Chennai Pipe Size 48 30 48 42 48 48 Length (km) 3 X 20 3 X 18 20 20 20 15 4.2 8 Tanker Size DWT 350,000 150,000 350,000 300,000 300,000 300,000

Major Marine Terminal/ Jetty Head Pipelines

Liquid chemical handling jetty at Dahej, Gulf of Cambay, Gujarat chemical port terminal company limited (GCPTCL), which comprises 38 pipelines (20 to 2) includes 15 cryogenic lines. Reliance Jamnagar Marine Terminal (RJMT) is located in the Gulf of Kutch, Indias largest petroleum terminal. The terminal provides 4 berths and 5 single point moorings (SPM).

IV. Deepwater Pipeline Overview

Outlook of Deepwater and Shallow Water Pipeline Offshore Pipelines in India
10% 500 km

Oil available onshore and shallow water environment is diminishing, hence there will be a need for deepwater drilling.

Deepwater Shallow Water 90% 4500km

India has some breakthroughs in deepwater pipeline system at certain fields. KG-D6 D1, D3 Gas Field MA-D6

IV. Deepwater Pipeline Overview

Indias first deepwater oil and gas field KG D6

Located 60km off east coast of India in the Bay of Bengal Operated by Reliance Industries (RIL) At 1200m water depth with proven plus probable reserves of 11.3 Tcf Tie-Back of 60kms Capacity of 550,000 Barrels of Oil Equivalent Per Day (BOEPD) 500kms of pipelines, flow lines and umbilicals installed Start of production in 6.5 years from discovery in comparison to the world average of 9 10 years for similar deepwater production

Figure: KG D6 Block

IV. Deepwater Pipeline Overview

D1, D3 Subsea System and Pipelines
2 major gas discoveries, D1 and D3, began producing in 2Q 2009 At peak production, the gas fields are expected to produce 80 MMSCM Water depth:600 -1200m

Comprises 18 production wells, 18 Xmas trees Subsea facility comprises 350km of pipeline, 150km of steel tube umbilicals, 11 subsea structures (PLEM, 6 MF, 3 SDA, UDH) 45 PLETs, 29 anchor blocks, 56 jumpers and 212 subsea tie-in

14 x 8/10 Flow lines 6 x 16/18 Infield pipelines 3 x 6 MEG lines 3 x 24 Gas Export

Figure: D1 & D3 Gas Field

IV. Deepwater Pipeline Overview

MA-D6 (D26) Field Reliance implemented an Early Production System to produce oil from the MA-D6 (D26) field using an FPSO Production commenced on 4Q 2008 in a record time of about 2.5 years from discovery Oil production from 6 wells now exceeds 22,000 barrels per day Water depth range 1200m to 1400m Risers and umbilicals are connected to the FPSO through a turret and swivel mooring system to position itself at the desired location for disconnect in extreme weather
Figure: MA-D6 Field

4 x 8 Gas export flexible risers 4 x 8 Production flexible risers 1 x 6 Gas injection flexible riser 6 x 6 Production jumpers 24 Export rigid pipeline to CRP 1 Dynamic Umb riser & 8 infield Umb 1 each Prod MF & Gas export MF

V. Technical Aspects, Challenges & Opportunities

Primary Pipeline Design Codes and Standards
Codes/Standards ASME B31.8 ASME B31.4 OISD-141 OISD-214 OISD-226 API 5L / ISO 3183 API RP1102 API 1104 Description Gas Transportation and Distribution Piping Systems Pipeline Transportation Systems for Liquid Hydrocarbons and other Liquids Design and Construction Requirements for Cross-Country Hydrocarbon Pipelines Cross-Country LPG Pipelines Natural Gas Transmission Pipelines and City Gas Distribution Networks Specification for Line Pipe Recommended practice for Rail and Highway crossings Standard for Welding Pipeline and Related Facilities

API 6D / ISO 14313

ASME B16.2 ASME B16.5 ASME B16.9 DNV OS-F101 DNV81 DNV RP B401/F103 DNV RP E305/F109 DNV RP F105 Other References

Pipeline Valves
Metallic Gaskets for Pipe Flanges Ring Joint, Spiral Wound and Jacketed Pipe Flanges and Flange Fittings Factory Made Wrought Steel Butt welding Fittings Submarine Pipeline Systems Rules for Submarine Pipeline System Cathodic Protection Design On-bottom Stability Design for Submarine Pipelines Free Spanning Pipelines Applicable Standards / Specs of ASME, API, NACE, MSS, BS, DIN and IP-6

Table : Pipeline Codes, Standards

V. Technical Aspects, Challenges & Opportunities

Local Regulations

Type of Pipeline Crossing ROU & Land Acquisition National Highway Crossings MDR/ ODR Crossings Railway Track Crossings Crossing through Forest Land River/Canal Crossings

Approval Authority Central/State Govt. as applicable (As per PMP Act 1962) NHAI PWD Indian Railways Forest Authority Irrigation/Canal Authority

Table : Indian Approval Authorities Regulations

V. Technical Aspects, Challenges & Opportunities

Pipeline Design and Technological Advancement

Shore Approach Design

Combination of site selection and design activity Pipeline stability analyses, trenching/ burial requirements and construction method Dredging (hydraulic and conventional), HDD, mechanical trenching, jetting and plowing techniques are considered in conjunction with seabed soils data to determine method suitability. Shore approach installation methods and equipment, including pipe pull, pipelay, directional drilling and/or a combination of the above methods, to be evaluated. Surface and bottom currents are very severe at shore crossings (East Coast & Hazira landfalls) Shore approaches and port limits typically with pre-trench and burial; then continue with post trench until the pipeline stability and concrete coating not an issue.

V. Technical Aspects, Challenges & Opportunities

Pipeline Design and Technological Advancement

Deepwater pipeline design

500m to 2200m water depth Encompass most of the fundamentals of conventional pipeline design Warrants a thorough and rigorous level of engineering

Key Aspects: Flow Assurance Operability Pipeline routing Material selection Installation methods Construction logistics

V. Technical Aspects, Challenges & Opportunities

Pipeline Design and Technological Advancement Subsea Pipeline Technology Drivers Typical Deep Water subsea Tie-back
Large diameter line pipe at manufacturing limit Large diameter pipeline installation limits

High external over-pressure & thermal loads

Corrosion resistant materials Large bore valves & diverless connections

V. Technical Aspects, Challenges & Opportunities

Pipeline Design and Technological Advancement Subsea Pipeline Technology Drivers

Line pipe manufacturing technical limits(CRA clad, wall thickness, ovality)

Hydrate prevention challenges during precommissioning

Commissioning High pressure wells: Class 5000 Large Bore equipment

V. Technical Aspects, Challenges & Opportunities

Pipeline Design and Technological Advancement Subsea Pipeline Technology Drivers Interaction with thermal loads Buckling Long Free Span Lengths over 100m+ in length May exceed static structural limits for combined loading May be subject to VIV Steep seabed slopes May aggravate liquid slugging

Need to develop robust geological & geotechnical models Seabed evolution & historical events Current seabed characteristics Potential sources of instability (seismicity, shallow gas)

V. Technical Aspects, Challenges & Opportunities

Pipeline Design and Technological Advancement Subsea Pipeline Technology Drivers High Pressure/High Temperature Reservoirs make pipeline design impractical large diameter line pipe can only be cost effectively manufactured by UOE CRA clad line pipe difficult to manufacture in high wall thicknesses Induced Lateral Buckling

V. Technical Aspects, Challenges & Opportunities

Pipeline Design and Technological Advancement Subsea Pipeline Technology Drivers

Lateral Buckling: (Typical Mitigation Methods)

V. Technical Aspects, Challenges & Opportunities

Construction Challenges

Challenges of Onshore Pipelines in India

Land acquisition for the 'right of way' and the public hearing along the pipeline route Working in desert areas poses a number of challenges Equipments should be tailored to withstand very hot climates Very steep hilly terrain, with slopes up to 70. Mobilize transportation of pipe, equipment etc will be a logistical challenge. Many high pressure pipelines that are constructed require anchor block

V. Technical Aspects, Challenges & Opportunities

Construction Challenges

Challenges of Onshore Pipelines in India

The Right of Way is restricted to protect sensitive ecosystem i.e. dense forest land, biological diversity hotspots etc. For the laying of pipeline in the above areas, permission has to be obtained from the relevant authorities. Trenching in marshy and slushy coastal land with a limited working window Trenching in hard rock that require three to four rounds of controlled blasting to remove rock River crossing by HDD, river crossing by float and sink technique. Water for hydrotesting can be difficult to source and require transportation Excavation on the steep slope carryout by special excavators and a powerful all-wheel drive.

V. Technical Aspects, Challenges & Opportunities

Construction Challenges

Challenges of Offshore Pipelines in India

Almost everywhere around east coast the ocean conditions are hostile. The inclement weather on Indias east coast reduced a fair weather window for offshore installation to 4 months i.e. from mid December to mid April. Demobilization is deemed necessary in case of rapid evacuation to avoid damages due to cyclones that are endemic to the Bay of Bengal. Seasonal Loop or Eddy currents in Bay of Bengal causes extensive weather down time In addition, the KG deepwater fields have the following notable challenges during installation: muddy seabed; ROV operable affects due to zero visibility; high currents. Mumbai offshore field weather window for installation is 7 months i.e. from October to April. Lay barge to equip with better motion characteristic, improved barge-mooring or positioning systems and faster weather disruption procedures Vessel entry permit approval required from Indian Navy

V. Technical Aspects, Challenges & Opportunities

Moving Forward with ECA of Pipeline Girth Weld

ECA is based on fracture mechanics principles

ECA is alternate acceptance criteria for pipeline girth weld inspection Due to wide usage of Automatic welding/AUT system during pipe laying, ECA has been carried out prior to laying to define flaw acceptance criteria to benefit the following: Fewer repairs Faster installation Reduced laying cost Predict large acceptable flaw size than the workmanship

V. Technical Aspects, Challenges & Opportunities

Pipelines with HDD Technology

Benefits of HDD over laying the pipe in an open trench are various: No shore excavation No cofferdam requirement No interruption to surface traffic No disturbance to shoreline flora and fauna Secure depth of cover Minimal footprint Minimal site preparation & reinstatement Vary depth of cover to avoid underground utilities, pipelines or structure Relatively short construction duration

Figure: Horizontal drill installed under a water crossing

V. Technical Aspects, Challenges & Opportunities

Pipeline Decommissioning Opportunities

Pipelines have surpassed its design life, either they have to be decommissioned or replaced with the new pipeline
In Mumbai High Fields, there are 200 offshore platforms & 4500 km offshore pipelines installed; some were built in late 70s and early 80s that faces decommissioning or replacement due to ageing design life. Pipeline decommissioning involves: Pigging Flushing Filling and Plugging of lines Followed by removal or abandonment in situ. Regulations relating to pipelines are currently controlled by operators preference and national regulations rather than international code requirements.

V. Technical Aspects, Challenges & Opportunities

Emergency Pipeline Repair System

The EPRES provides a mechanism that mitigates risk and addresses the timely repair of pipelines. The industry is to work on a co-operative basis with a common interest of timely repair and minimal disruption to oil and gas operations.

The possible emergency pipeline repair equipment to be shared includes: Pressure containment clamps (Eg: hot tap clamps) Mechanical connectors Line pipe, bends and pipe fittings ROV tools

VI. Pipeline Resources and Information

Pipeline Operating Companies
ONGC GAIL Bharat Petroleum (BPCL) Hindustan Petroleum (HPCL) Indian Oil Corp Ltd. (IOCL) OIL India GSPC Gujarat State Petroleum Corporation Reliance Industries Limited (RIL) Cairn India HOEC BG Exploration Essar Oil NIKO Resources, ENI, Hardy oil Leading National Oil and Gas Exploration Company of India Gas Authority of India, a Leading public sector company; Largest gas transmission network Refining, Storing, Marketing and Distributing petroleum products Major integrate oil refining and marketing companies in India Major diversified, transnational, integrated energy company Oil exploration, refining and distribution Vertically integrated energy company across India and overseas Activities span exploration and production of oil and gas, petroleum refining and marketing, petrochemicals Largest producing oil field in the Indian private sector Oil field operator in the Indian private sector Tapti gas field operator Operates a fully integrated oil company of international size and scale in India Operators/JV - Shareholders in Offshore Fields

VI. Pipeline Resources and Information

Pipeline Engineering Consultants
EIL L&T - Valdel Engineers Wood Group (JPK) Bechtel Corporation Leading Design Consultant providing offshore and onshore field development Offshore/ Onshore Engineering Pipeline Engineering Engineering, Construction and Project Management

Pipeline EPCI Companies

RGTIL (Reliance) L&T Punj Lloyd Ltd KasStroy Service PSL McDermott HHI Saipem Leighton Global Industries NPCC Allseas Technip Aker Solutions Leading Gas Transmission Infrastructure onshore pipeline Leading EPCI both onshore and offshore pipeline One of the largest engineering construction companies in India Pipeline EPC Pipe Coating, Anode, Bends EPCI Offshore Pipelines EPCI Offshore Pipelines EPCI Offshore Pipelines EPCI Offshore Pipelines EPCI Offshore Pipelines EPCI Offshore Pipelines EPCI Deepwater Pipelines EPCI Deepwater Pipelines EPCI Subsea System

VII. Indian Regulatory Challenges

Central Regulatory Bodies like PNGRB ensure access to gas pipelines on nondiscriminatory common carrier principle for all users; Tariff for the pipelines to be approved by Regulator. For details refer to http://www.pngrb.gov.in/
Perform other functions entrusted by central government Lay down technical standards/ specifications

Ensure adequate availability and equitable distribution

Enforce retail & marketing service obligation

Protect consumer interest by fostering fair trade & competition

Functions of the Board

Register & Authorise entitiies

Declare pipeline as common/contract carrier

Maintain databank information

Monitor prices & prevent restrictive trade practices

Regulate access & transportation rather on common/ contract carrier/ CGD network

Conclusions
The challenges faced by any company, is more or less conventional as faced by any pipeline construction.
Land acquisition for the right of way will be the biggest challenge Limited offshore weather windows Lag far behind in pipeline infrastructure Produced 2/3rd of gas consumed by power and fertilizer sectors; GOI given special thrust to these sectors to provide gas in priority Expected expenditure in the next 5 years will be approx $5 to 6 billion in pipeline RIL, ONGC,GSPCL have made several major discoveries including ultra deepwater in its KG basin blocks

Major investment expected in rural water pipeline infrastructure.