The Tengiz oil fields are about to enter a new phase of manufacturing with the construction of the ‘Second Generation Project’ (SGP) and the introduction of Bitter Fuel 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 funding of $three billion (SGP $2.2 billion and SGI $800 million) by the scheduled completion date of early 2007.
The Tengiz subject, first found in 1979, has recoverable reserves estimated at between 6 and 9 billion barrels. The field was jointly developed in 1993 as a forty-yr enterprise between Chevron Texaco (50%), Kaz Munai Gaz (20%), US Exxon Mobil (25%) and LUKArco (5%). The joint enterprise firm is known as TengizChevrOil (TCO).
Previous to the expansion project the Tengiz oil discipline has 53 wells, tapping a column of crude oil round 1.6km thick. The oil strain when the sector was first tapped was 12,000psi but in 2004 the stress is all the way down to 10,000psi in most areas and 8,500in others. The SGI project hopes to make use of gasoline injection technology to spice up the strain and increase oil restoration, while the SGP will improve the number of producers (wells) and enhance and increase the crude export infrastructure.
The production of crude in 2004 is 13 million tonnes per year but with the SGI and SGP manufacturing is estimated to increase to over 25 million t/y. The 2 tasks will create over 7,000 jobs in Kazakhstan and aid the development of the economy. A total funding of $20 billion is envisaged for the duration of the 40 years of the Tengiz oil subject venture. TengizChevrOil intends to export extra of the Tengiz area’s further capability through the Caspian Pipeline Consortium pipeline working 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 tasks have been virtually shelved altogether during a breakdown in relations between TengizChevrOil and the Kazakhstani authorities in 2002. The phrases of the growth had been initially a part of the 1993 contract signed by all of the concerned events.
The Kazakhstan authorities warned that the mission might be cancelled in November 2002 over a disagreement about the way to fund the challenge. The private partners wanted to make use of the earnings from the oil subject to fund the SGI and SGP. This would have meant lower earnings and therefore decrease taxes due on the earnings. Nonetheless the Kazakhstan authorities had been towards this and needed to maximise the income in order to claim more money for the State.
Following this main disagreement most of the drilling subcontractors similar to Parker Drilling Firm of Houston, Texas, have been ready to conclude their contracts and the sector may have closed. The issues were resolved during 2003 negotiations, when an agreement about funding of the new venture was reached (i.e., 90% international funding) and the tax situation clarified (Kazakhstan government receives a $200 million a 12 months payment plus income and tax percentages).
ENVIRONMENTAL POLLUTION FINES
TengizChevrOil are also fighting a $71 million high quality for environmental transgressions imposed by the Tengiz regional authorities (Atyrau Oblast) late in 2002. This occurred due to modifications in the way the central government collects taxes. In earlier years some of the taxes were paid directly to the regional authorities where Tengiz is predicated.
The central government decided in 2002/2003 that every one taxes ought to first be paid to the capital, Astana. Following this the Atyrau Oblast realised it confronted a shortfall. They then had the concept of suing TengizChevrOil for damaging the surroundings. The fantastic was imposed for sulphur pollution.
The sulphur concerned is already in the elemental type saved in blocks across the Tengiz area and doesn’t cause pollution. The sulphur blocks are now to be converted into pellets and bought on the world market as a priceless commodity. A new plant is already being constructed to transform probably polluting bitter gas (H2S) into sulphur pellets. As well as, the SGI system will use up a significant proportion of the bitter gas produced (actually bitter gasoline disposal is without doubt one of the SGI’s secondary advantages).
CONTRACTORS AND Development Tasks
The lead contractor for the engineering, procurement, construction, administration (EPCM) of the SGP and SGI are PFD UK, a joint venture between Parsons Vitality & Chemicals and Fluor Daniel Corporation. The phrases of the agreed contract beneath authorities guidelines require that the lead contractors use a minimum of 80% Kazakhstani labour in the course of the venture.
Able Devices and Controls will present the circulate and level measurement instrumentation systems for the project. Heavy construction tools can be supplied by Arctic Development Worldwide (ACI), who can even present educated personnel to function and maintain the gear over the duration of the contract. Versatec Engineering will present engineering consultancy and security consultancy all through the duration of the challenge.
All the contractors are conscious of the situations in Tengiz, the place the temperatures can differ from 36°C to -40°C.
PARSONS FLUOR DANIEL JOINT Venture
PFD UK holds the majority of subcontracts and buy orders for the undertaking and can be liable for the development of main new infrastructure on the oil discipline including: a 6,500-mattress development camp, a new rail line spur, a new street between the construction camp and the SGP development site. The foremost new facilities will include a brand new subject manufacturing gathering system and SGP process plant, oil refinery expansion, an SGI compressor plant, and new product export infrastructure (gasoline export pipe-line, extra crude storage, LPG storage) and a sulphur forming plant (to transform bitter fuel reserves to usable sulphur products for export similar to elemental sulphur pellets or sulphuric acid).
The main a part of the mission might be eight injectors for the SGI undertaking and 39 new drilling wells as the second era challenge. Trial injections for the SGI system are due to begin within the third quarter of 2004 and will continue for as much as 18 months before the total scale injection system is carried out (the compressor plant shall be completed by then).
Ready Devices AND CONTROLS
This supplier will provide and set up gas and liquid clamp-on ultrasonic circulate meters (maintenance free), nuclear level instrumentation, and radar and guided wave radar (GWR) degree transmitters. In a position expects that a total of 135 radar and GWR instruments can be required, however there’s an choice for RF admittance level transmitters for functions that aren’t suitable for radar or GWR.
The radar installations will likely be installed underneath a two-wire, loop powered, intrinsically protected foundation and will probably be utilized in oil, gas and sulphur restoration areas and in addition in underground amenities (liquefied fuel storage). Vast beam ultrasound transmission is to be used and it will enable operation underneath wet circumstances and the required accuracy over a variety of circulation charges. Varied nucleonic level gauging for the venture requires interface control on separator vessels and foam detection on flash drums. In a position are to provide their state-of-the-art gauging know-how together with a staff of flow meter and instrumentation engineers to make the system run smoothly.