The Tengiz oil fields are about to enter a new part of production with the development of the ‘Second Generation Venture’ (SGP) and the introduction of Bitter Gas Injection (SGI). This improvement, which has been in the planning and approval stage since 2002, will start in 2004 and is predicted to require a complete investment of $3 billion (SGP $2.2 billion and SGI $800 million) by the scheduled completion date of early 2007.
The Tengiz discipline, first discovered in 1979, has recoverable reserves estimated at between 6 and 9 billion barrels. The field was jointly developed in 1993 as a forty-yr venture between Chevron Texaco (50%), Kaz Munai Gaz (20%), US Exxon Mobil (25%) and LUKArco (5%). The joint enterprise firm is named TengizChevrOil (TCO).
Prior to the enlargement project the Tengiz oil field has fifty three wells, tapping a column of crude oil around 1.6km thick. The oil stress when the sector was first tapped was 12,000psi however in 2004 the strain is down to 10,000psi in most areas and 8,500in others. The SGI mission hopes to make use of gas injection expertise to boost the stress and improve oil recovery, whereas the SGP will improve the variety of producers (wells) and enhance and develop the crude export infrastructure.
The manufacturing of crude in 2004 is 13 million tonnes per yr but with the SGI and SGP manufacturing is estimated to extend to over 25 million t/y. The 2 initiatives will create over 7,000 jobs in Kazakhstan and help the event of the economic system. A total funding of $20 billion is envisaged for the duration of the forty years of the Tengiz oil discipline enterprise. TengizChevrOil intends to export extra of the Tengiz subject’s extra capability via the Caspian Pipeline Consortium pipeline running the 1,500km from Tengiz to the Russian Black Sea port of Novorossiysk (thus fixing the export downside from the remote Tengiz field).
POLITICS AND CONTROVERSY
The Tengiz growth projects have been nearly shelved altogether throughout a breakdown in relations between TengizChevrOil and the Kazakhstani authorities in 2002. The terms of the expansion had been initially a part of the 1993 contract signed by all of the involved events.
The Kazakhstan government warned that the challenge may very well be cancelled in November 2002 over a disagreement about easy methods to fund the undertaking. The personal companions needed to use the profits from the oil subject to fund the SGI and SGP. This is able to have meant lower income and hence decrease taxes due on the profits. Nevertheless the Kazakhstan government had been against this and needed to maximise the income so as to claim more money for the State.
Following this main disagreement lots of the drilling subcontractors reminiscent of Parker Drilling Company of Houston, Texas, were able to conclude their contracts and the field might have closed. The problems have been resolved throughout 2003 negotiations, when an agreement about funding of the new venture was reached (i.e., 90% international investment) and the tax scenario clarified (Kazakhstan authorities receives a $200 million a 12 months cost plus income and tax percentages).
ENVIRONMENTAL POLLUTION FINES
TengizChevrOil are additionally preventing a $71 million wonderful for environmental transgressions imposed by the Tengiz regional government (Atyrau Oblast) late in 2002. This occurred due to adjustments in the way the central authorities collects taxes. In previous years among the taxes had been paid on to the regional authorities the place Tengiz is predicated.
The central authorities determined in 2002/2003 that each one taxes should first be paid to the capital, Astana. Following this the Atyrau Oblast realised it confronted a shortfall. They then had the idea of suing TengizChevrOil for damaging the setting. The advantageous was imposed for sulphur pollution.
The sulphur concerned is already within the elemental type saved in blocks around the Tengiz subject and doesn’t trigger pollution. The sulphur blocks are actually to be transformed into pellets and offered on the world market as a beneficial commodity. A brand new plant is already being constructed to convert potentially polluting sour gasoline (H2S) into sulphur pellets. As well as, the SGI system will use up a major proportion of the bitter gasoline produced (in truth bitter fuel disposal is without doubt one of the SGI’s secondary benefits).
CONTRACTORS AND Building Tasks
The lead contractor for the engineering, procurement, building, administration (EPCM) of the SGP and SGI are PFD UK, a joint enterprise between Parsons Vitality & Chemicals and Fluor Daniel Corporation. The terms of the agreed contract underneath authorities guidelines require that the lead contractors use no less than eighty% Kazakhstani labour in the course of the project.
In a position Devices and Controls will present the flow and stage measurement instrumentation methods for the challenge. Heavy building equipment shall be provided by Arctic Construction Worldwide (ACI), who may also present educated personnel to function and maintain the equipment over the duration of the contract. Versatec Engineering will provide engineering consultancy and security consultancy all through the duration of the mission.
All the contractors are conscious of the situations in Tengiz, where the temperatures can range from 36°C to -40°C.
PARSONS FLUOR DANIEL JOINT Enterprise
PFD UK holds the majority of subcontracts and purchase orders for the project and shall be liable for the construction of main new infrastructure at the oil field together with: a 6,500-mattress construction camp, a new rail line spur, a new highway between the construction camp and the SGP development site. The most important new facilities will include a new subject production gathering system and SGP course of plant, oil refinery growth, an SGI compressor plant, and new product export infrastructure (fuel export pipe-line, extra crude storage, LPG storage) and a sulphur forming plant (to transform sour gas reserves to usable sulphur merchandise for export corresponding to elemental sulphur pellets or sulphuric acid).
The main a part of the mission will likely be eight injectors for the SGI challenge and 39 new drilling wells because the second generation mission. Trial injections for the SGI system are due to begin in the third quarter of 2004 and will proceed for up to 18 months before the full scale injection system is implemented (the compressor plant shall be completed by then).
In a position Instruments AND CONTROLS
This supplier will present and install gasoline and liquid clamp-on ultrasonic flow meters (maintenance free), nuclear level instrumentation, and radar and guided wave radar (GWR) stage transmitters. Able expects that a total of 135 radar and GWR devices will be required, however there is an choice for RF admittance level transmitters for functions that aren’t appropriate for radar or GWR.
The radar installations will be installed below a two-wire, loop powered, intrinsically protected basis and shall be used in oil, fuel and sulphur restoration areas and likewise in underground amenities (liquefied gas storage). Broad beam ultrasound transmission is for use and this may enable operation below wet situations and the required accuracy over a variety of stream rates. Varied nucleonic degree gauging for the project requires interface management on separator vessels and foam detection on flash drums. In a position are to produce their state-of-the-art gauging expertise along with a team of move meter and instrumentation engineers to make the system run smoothly.