Problem Statement
The incessant attacks and uncontrollable bunkering activities on the existing condensate evacuation line has become a serious burden to the government and its JV partners. This is most common in swampy terrains and therefore needs immediate replacement of the existing line.
However, the greatest challenge is what type of evacuation technique most suitable to avert bunkering and devastation of the environment. A timeline of 18 months has been given as expected completion period.
Root Cause Analysis
Fatalities as a result of illegal bunkering fires.
Pollution of environment and frequent forest fires.
Evacuation line integrity check indicates line can no longer be in use.
Line is over 25 years old.
Low gas from gas fields to gas plant
Short supply of feed gas from gas plant to LNG plant
Line has over identified 650 bunkering points
Spiking not accepted option by government regulators.
Alternatives:
Alternative A: Burial of evacuation line using trenchless technique.
Alternative B: Burial of evacuation line with concrete mat and concrete tunnel technique.
Alternative C: Burial of evacuation line using normal shallow trenches.
Alternative D: Transport condensate via barging.
Analysis of Alternatives
Alternative A: Trenchless technique - This requires the laying of 8’’ x 10km Carbon steel pipeline using horizontal directional drilling technique.
Courtesy of http://www.northeasttrenchless.com/hdd.html
CAPEX Costs
Right of way acquisition – Not required
Environmental Impact Assessment – $0.15M
Engineering and Design
Route Survey – $0.11M
Geotechnical investigation - $1.5M
FEED and Detailed Design - $0.76M
Procurement
Cost of Linepipes, PE coating and Concrete coating - $3.8M
Construction
Pipeline installation using HDD burial - $8M
Pipeline testing and commissioning - $0.3M
Project Management Contractor – $0.22M
Owners Cost - $0.52M
Contingencies - $1.6M
Total Project Cost - $17M
Schedule
Duration – 8Months
Annual OPEX Costs
$0.7M
MERITS
No surface river crossings
Short duration of execution.
Lesser impact to the environment.
Few persons involved in construction
Little equipment required on site
No surveillance on line
Deep burial which reduces exposure to bunkering activities.
Low security cost during construction
Surface distortion is eliminated
Low cost of environmental restoration as against trenching.
Low safety risk exposure
Low cost of Project management
DEMERITS
No tie-ins allowed
High cost of execution.
HDD equipment not available in-country.
Execution of HDD by imported expertise.
Lack of technology transfer to locals through engineering, procurement and construction.
Expensive cost of repair when pipeline is damaged.
Repair of damaged portion takes a long time; requires deployment of HDD equipment to salvage and repair.
Approval process by regulatory authorities takes longer; due to its rare usage.
Alternative B: This requires the laying of a 10’’ x8km Carbon steel pipeline in a deep excavation with concrete mat footing and concrete tunnel on top in pipeline.
CAPEX Costs
Right of way acquisition – Not required
Environmental Impact Assessment – $1.42M
Engineering and Design
Route Survey – $0.11M
Geotechnical investigation - $0.65M
FEED and Detailed Design - $0.34M
Procurement
Cost of Linepipes, PE coating and Concrete coating - $3.8M
Cost of Pre-cast concrete mats/tunnels - $2M
Construction
Concrete mat/tunnel installation - $2.9M
Pipeline installation - $1.76M
Pipeline testing and commissioning – $0.30M
Project Management Contractor – $1.44M
Owners Cost - $0.73M
Contingencies - $1.4M
Total Project Cost - $15.41M
Schedule
Duration – 24Months
Annual OPEX Costs
$0.9M
MERITS
Unhindered approval by regulatory authority
In country capacity involved in Engineering, Procurement and Construction
90% Local capacity in installation
Low surveillance on line
Deep burial which reduces exposure to bunkering activities.
DEMERITS
High cost of execution.
Expensive cost of repair when pipeline is damaged.
Repair of damaged portion takes a longer time; requires destruction of concrete protection to access line
High environmental impact during construction
Long execution period
Involves a lot of workforce both onsite and offsite
Plenty of equipment required
High cost of project management
High safety risk exposure level during construction
Very high cost of surface restoration.
High cost of security
Alternative C: This requires the laying of a 10’’ x 8km Carbon steel pipeline in shallow trenches.
CAPEX Costs
Right of way acquisition – Not required
Environmental Impact Assessment – $0.42M
Engineering and Design
Route Survey – $0.11M
Geotechnical investigation - $0.26M
FEED and Detailed Design - $0.17M
Procurement
Cost of Linepipes, PE coating and Concrete coating - $3.8M
Construction
Pipeline installation - $2.67M
Pipeline testing and commissioning - $0.3M
Project Management Contractor – $0.6M
Owners Cost - $0.54M
Contingencies - $1M
Total Project Cost - $9M
Schedule
Duration – 18Months
Annual OPEX Costs
$1.8M
MERITS
Low cost of execution
Short execution duration
Low cost of repairs (via existing call-out contract)
Unhindered approval by regulatory authority
In country capacity involved in Engineering, Procurement and Construction
100% Local capacity in installation
DEMERITS
Susceptible to bunkering
High environmental impact during construction
Involves a lot of workforce both onsite and offsite
Plenty of equipment required
High cost of project management
High safety risk exposure level during construction
High cost of surface restoration.
High Surveillance of line.
High cost of security during construction.
Alternative D: This requires the evacuation of condensate using barging means.
CAPEX Costs
Right of way acquisition – Not required
Environmental Impact Assessment – N0.35M
Engineering and Design
FEED and Detailed Design - $0.09M (discharging and receiving facilities MOD works).
Procurement
Procurement of Floating Storage and offloading (FSO) barge - $28M
Construction
Capital dredging for barging route and floating storage offloading vessels - $6M
Flowstations modification works for discharge/receiving facilities – $1m
Project Management Contractor – $0.26M
Owners Cost - $0.52M
Contingencies - $3.5M
Total Project Cost - $40M
Schedule
Duration – 12Months
Annual OPEX Costs
Mtce dredging, security, Loading, barging and discharging (1yr duration x $11m pa)
MERITS
Short execution duration
In country capacity involved in Engineering, Procurement and Construction of facilities modification
100% Local capacity in modification works
Low cost of project management
DEMERITS
Mobilisation of FSO barge from outside country
Stringent approval because of the transportation of hydrocarbon in-country
Susceptible to pirates attack
Very high security alert level and cost
High environmental impact if accidented or attacked
High river traffic along river route
Plenty of equipment required
High cost of project management
High safety risk exposure level during transportation
SELECTION CRITERIA
Value Drivers – Deter Bunkering activities, Opex <$2M, Low environmental impact (during and after construction), speedy approval by regulatory authority, duration not exceeding 18months, utilization of local content through EPC, Capex < $30M, low security exposure and low repairs cost
Using Grid Analysis
| Using Grid Analysis | |||||||||||||||||||
| GRID ANALYSIS (UNWEIGHTED) | |||||||||||||||||||
| Alternatives | Drivers | ||||||||||||||||||
| OPEX < $2M | CAPEX < $30M | LOCAL CONTENT | ENVIRONMENT IMPACT | APPR BY REGULATOR | PRJ DURATION > 18MTH | REPAIR COST | DETER BUNKERING ACTIVITIES | SECURITY THREAT | |||||||||||
| A | 5 | 5 | 1 | 5 | 1 | 5 | 1 | 5 | 5 | ||||||||||
| B | 5 | 5 | 3 | 1 | 3 | 1 | 1 | 3 | 3 | ||||||||||
| C | 5 | 5 | 5 | 3 | 5 | 3 | 5 | 1 | 1 | ||||||||||
| D | 1 | 1 | 1 | 3 | 1 | 5 | 3 | 5 | 3 | ||||||||||
| LEGEND | |||||||||||||||||||
| High impact | 1 | ||||||||||||||||||
| medium impact | 3 | ||||||||||||||||||
| Low impact | 5 | ||||||||||||||||||
| GRID ANALYSIS (WEIGHTED) | |||||||||||||||||||
| Alternatives | OPEX < $2M | CAPEX < $30M | LOCAL CONTENT | ENVIRONMENT IMPACT | APPR BY REGULATOR | PRJ DURATION > 18MTH | REPAIR COST | DETER BUNKERING ACTIVITIES | SECURITY THREAT | TOTAL | |||||||||
| Weighting | 3 | 3 | 3 | 4 | 3 | 3 | 3 | 4 | 3 | ||||||||||
| A | 15 | 15 | 3 | 20 | 3 | 15 | 3 | 20 | 15 | 109 | |||||||||
| B | 15 | 15 | 9 | 4 | 9 | 3 | 3 | 12 | 9 | 79 | |||||||||
| C | 15 | 15 | 15 | 12 | 15 | 9 | 15 | 4 | 3 | 103 | |||||||||
| D | 3 | 3 | 3 | 12 | 3 | 15 | 9 | 20 | 9 | 77 | |||||||||
| LEGEND Order of importance | |||||||||||||||||||
| Very high | 4 | ||||||||||||||||||
| High | 3 | ||||||||||||||||||
| Medium | 2 | ||||||||||||||||||
| Low | 1 | ||||||||||||||||||
Selection of Preferred Alternative.
Based on the value drivers listed and grid analysis above. Alternative A ranked highest in score therefore is the preferred alternative.
Performance montoring and post-evaluation
Approval by regulatory body can be fast-tracked by conducting in-depth study and obtaining results of similar installation globally.
Installation of a computerized LDS (leak detection system) along line for easy detection via GPRS.
Installation of pig traps and periodic pigging of line.
The promotion of trenchless technology by the Local content monitoring board for condensate line burial, as seen all over for road crossings.
References:
The memory jogger 2 ‘Tool for continuous improvement and effective planning by Michael Brassard and Diane Ritter – Second Edition 2010.
Foundation design and Construction by MJ Tomlinson, Seventh edition 2001
http://www.mindtools.com/pages/article/newTED_03.htm
http://www.mindtools.com/pages/article/newTMC_80.htm
http://www.northeasttrenchless.com/hdd.html
WOW!!!! AWESOME!!! Idubamo, you understand exactly what we are looking to have you learn. The only "weak" part is if you had access to your Engineering Economy, you could have produced an even more sophisticated analysis using the tools and techniques of multi-attribute decision making (Chapter 14) but otherwise, there is nothing at all wrong with your approach.
ReplyDeleteKeep up the good work and if you can, it would be great if you would assist your colleagues in writing up their blog postings? For each person you help catch up, I am willing to give you credit for that week in return for you taking the time to mentor your colleagues.
BR,
Dr. PDG, Jakarta