Indonesia and Thailand State Owned Oil&Gas Company Take Greater Control Of Mature Oil & Gas Fields

National Oil Companies (NOCs) in Thailand and Indonesia are using the expiry of existing production-sharing contracts as an opportunity to take greater control of mature oil and gas fields domestically, says GlobalData, a leading data and analytics company.

The company’s latest research reveals that PTT Exploration and Production Public Company Limited (PTTEP) in Thailand and PT Pertamina in Indonesia will operate the majority of production in their respective countries by 2023. PTTEP won the 2018 international auctions for the Bongkot and Erawan concessions and the new concessions start from 2022 with PTTEP as the operator. Two particularly large blocks taken over by Pertamina are the Mahakam block operated by Total SA before 2018, and the Rokan block operated by Chevron Corporation until 2021.

Nicole Zhou, Upstream Analyst at GlobalData, commented, “Countries across Southeast Asia are starting to see their NOCs as the key agents to improving national energy security. However, increasing responsibility for key producing assets may well come at a cost. Pertamina has not operated an asset on the scale of Mahakam and Rokan previously and the longest it has operated one of its top 10 largest projects by gross production is eight years.

“PTTEP currently has a small equity share in some of the fields that will be in the Erawan concession, but it will become the main participant and operator in the new concession. At Bongkot, it is already the operator, but will significantly increase its share in the field by becoming the sole participant.”

Zhou continued, “In Indonesia, regulations introduced over the past three years have made it easier for the state-run NOC, Pertamina, to take over blocks with expiring production-sharing contracts. In Thailand, PTTEP’s bid won based on its gas price – US$3.55/MMbtu – and profit share terms, which are thought to be more competitive than Chevron’s proposed terms.”

As Thailand and Indonesia try to improve the security of their energy supplies and increase their control of reserves, the NOCs may be taking on more than they can handle. Gas production in April 2019 from Mahakam block that Pertamina took over was only 666.6 mmcfd, as the company struggled with rig mobilization and poor weather. The previous year, challenges with rig procurement and mobilization prevented Pertamina from meeting its production target for the block, which was already 75% of 2017. Stabilizing production in these major projects such as Mahakam and Rokan in Indonesia and the Erawan concession in Thailand will be a big stretch for Pertamina and PTTEP.

Zhou added, “The mature fields will require advanced technologies, extensive management experience and consistent production maintenance/enhancement expenditures to compensate for the high natural decline rates. It remains to be seen whether these national oil companies will be able to learn quickly enough to convert their new assets into increased production.”

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8:34:00 PM | 0 comments

In a Week, Plains' Cactus II Oil Pipeline Begin to Line Fill , According to Source

NEW YORK (Reuters) - Plains All American Pipeline LP’s 670,000 bpd Cactus II oil pipeline system from the Permian Basin to the Corpus Christi, Texas area will commence line fill within a week, a source with direct knowledge of the matter said. Cactus II construction pipeyard. (photo: Plains All American) The pipeline operator said this month the Cactus II project is progressing on schedule for initial service by the end of the third quarter of 2019.

We have over 90% of the pipe in the ground and we’re working diligently toward completion,” a company executive said during its investor day about two weeks ago. Once line fill is complete, commodities merchant Trafigura, one of the largest shippers on the line, will be shipping full contractual volumes, the source said. Trafigura signed a long-term agreement with Plains last year to transport a total of 300,000 bpd of crude and condensate on the Cactus II pipeline from the Permian Basin to the port of Corpus Christi. The trading house is one of the biggest exporters of U.S. crude and the deal with Plains will allow it deliver crude to U.S. Gulf Coast refiners, ship the oil to its condensate splitters and export terminal in Corpus Christi, which it co-owns with Buckeye Partners L.P (BPL.N).

Pipeline takeaway constraints had slowed production growth and weighed on oil prices in the Permian basin but midstream companies have announced several new projects, such as Cactus II, to help clear the transportation bottleneck. Exports of U.S. crude have surged to a record at nearly 4 million bpd after Washington lifted a ban in late 2015. Other shippers on the Cactus II line include Concho Resources Inc and Anadarko Petroleum Corp, according to the companies. Two other pipelines are also on track to begin service this year to transport Permian crude to the Gulf Coast.

“With the impending start-ups of Cactus II, EPIC, and Gray Oak, there will be about 2 million bpd of crude capacity delivering into Corpus Christi from the Permian, with the majority, if not all, of the incremental supply destined for international markets via the docks,” Barclays analysts said in a note. Plains did not immediately respond to requests for comment.

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5:58:00 PM | 0 comments

Intelligent Pigging

Intelligent ("smart") Pigging is an inspection technique whereby an inspection probe, often referred to as a "smart" pig, is propelled through a pipeline while gathering important data, such as the presence and location of corrosion or other irregularities on the inner walls of the pipe.

What makes intelligent pigging different is that smart pigs are capable of performing advanced inspection activities as they travel along the pipe, in addition to just cleaning it. Smart pigs use nondestructive examination techniques such as ultrasonic testing and magnetic flux leakage testing to inspect for erosion corrosion, metal loss, pitting, weld anomalies, and hydrogen induced cracking, among others. They are also able to gather data on the pipeline's diameter, curvature, bends, and temperature.

Smart pigging provides a number of advantages over traditional forms of pipeline inspection. It allows pipelines to be cleaned and inspected without having to stop the flow of product. It also allows the a pipeline to be completely inspected without having to send inspectors down its entire length. Finally, it provides cleaning and inspection services at the same time, saving companies both time and money.

This is how inteligent piging is working.

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11:06:00 AM | 0 comments

Deadly Oil Pipeline Explossion in Africa

https://www.youtube.com/channel/UC4vzXJj1ND7KMDOLfpi46Rw/?sub_confirmation

(AFP)Scores are feared dead following an oil pipeline explosion in southeastern Nigeria, officials said Monday, with some putting the toll at more than 70. At least eight people died on Saturday in Kom Kom Town in the oil-producing Rivers State, according to an assessment Sunday by the police and a local official.
But locals were “putting the figures at over 70” people killed, the regional coordinator of the National Emergency Management Agency (NEMA), Walson Brandon told AFP on Monday. It was difficult to confirm the casualties because “the area is inaccessible after heavy rains this morning,” he added. Ogechi Nnamdi, a local resident at the scene said: “I saw about 20 dead bodies. Eleven had been carried away and more are in the swamp yet to be recovered.” Promise Chibuzo Nwankwo, a local politician, said the exact numbers of dead were unclear “but I can confirm to you that scores of persons were recorded dead as a result of the explosion.”
The explosion occurred on Saturday afternoon while maintenance work was taking place on a pipeline operated by the Pipeline Product Marketing Company, a subsidiary of the state oil company, the Nigerian National Petroleum Corporation. Leaks had been spotted on the pipeline in the week before the explosion, said Kennedy Azodeh, an official in charge of maintenance operations. “Locals including vandals stormed the area in boats and canoes to scoop the product”, he said.
The company eventually cut off the supply and began maintenance work “accompanied by police officers and members of the Nigeria Security Civil Defense Corps (NSCDC).” “People were asked to leave, but they refused”, Azodeh said. Several oil pipeline accidents have occurred in recent years in Nigeria, Africa’s biggest oil producer. In October 2018, 30 people died in the explosion of an oil pipeline attacked by looters in southeast Nigeria.

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6:11:00 PM | 0 comments

California Natgas Pipeline return delayed

(Reuters) - Southern California Gas Co (SoCalGas) has delayed the estimated return of a natural gas pipeline until July 29 from July 5 after finding a couple of pipeline leaks in remote areas of the desert that the company said were "non-hazardous." SoCalGas, a unit of California energy company Sempra Energy, said this week it found the pipe leaks on June 7 and June 18 while working on Line 235-2, which ruptured on Oct. 1, 2017. After that rupture, SoCalGas took the adjacent Line 4000 out of service for inspection and maintenance. The utility has since returned Line 4000 to service but kept it and another pipe, Line 3000, at reduced pressure until Line 235-2 returns. Once 235-2 returns, SoCalGas said it will upgrade Lines 3000 and 4000.


Gas supplies have been tight in Southern California for years due to the pipeline limitations and reduced availability of the utility's biggest storage field at Aliso Canyon in Los Angeles, following a massive leak between October 2015 and February 2016. SoCalGas said the reductions or outages on Lines 235-2, 3000 and 4000 reduced pipeline system capacity by about 0.7 bcfd. Once SoCalGas starts returning the pipelines this summer, the utility has said its overall pipeline capacity should rise to 2.705 bcfd from around 2.355 bcfd now. SoCalGas has projected the increase in pipeline capacity plus storage withdrawals of around 0.68 bcfd would enable it to meet expected peak demand of 3.368 bcfd this summer without pulling gas out of Aliso. After the Aliso leak, the state mandated the storage cavern be used only to maintain system reliability after all other storage facilities and pipelines have been exhausted.


SoCalGas has said Lines 235-2 and 3000 are largely 1957 vintage pipelines, while Line 4000 is largely a 1960 vintage pipe. Line 3000 extends about 125 miles west from South Needles on the California-Nevada border to the Newberry Springs compressor station about 20 miles east of Barstow in the south central part of the state. Line 235 extends about 46 miles west from the Newberry compressor to Victorville, which is about 80 miles northeast of Los Angeles. Once all of the pipes are back, SoCalGas has said its pipeline capacity would rise to around 3.085 bcfd.

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10:49:00 AM | 0 comments