right on track...
...to back Qatar’s leading role in LNG

Qatar Petroleum and Shell are shareholders in Qatargas 4 and Qatar Petroleum, ConocoPhillips and Mitsui are shareholders in Qatargas 3, both of which are Liquefied Natural Gas (LNG) projects currently under construction in Qatar’s Ras Laffan Industrial City, offshore Qatar, and in other locations around the world. To leverage the benefits and economies of scale by working together and to share technological know-how and expertise, the development of the two projects has been brought together under the management of a single Joint Asset Development Team (JADT).

‘Shell in the Middle East’ goes to Doha to meet key members of the JADT to see what progress is being made with the construction of the offshore facilities and in the drilling campaign to provide the two LNG trains with the 1.4 billion standard cubic feet per day of natural gas that each of the trains will require to produce the 7.8 million tonnes of LNG per year for which they are designed. We also visit the J. Ray McDermott yard in the Jebel Ali Free Zone in the UAE to see how the construction of the topsides of the production platforms is proceeding...

Qatargas 3 is a joint venture between Qatar Petroleum, with a 68.5 per cent shareholding, ConocoPhillips, with 30 per cent, and Mitsui, with one and a half per cent. Qatargas 4 is a joint venture between Qatar Petroleum, with a 70 per cent shareholding, and Shell, with 30 per cent. When the Heads of Agreement was signed for Qatargas 4, it was deemed beneficial to establish a Joint Asset Development Team [JADT] with staff from Qatargas, ConocoPhillips and Shell to develop the project.

“Qatargas 3 and Qatargas 4 are both integrated LNG [Liquefied Natural Gas] projects that each include a 7.8 million tonnes per annum [mtpa] LNG [Liquefied Natural Gas] train. Whilst under separate ownership, these projects will be developed as a single integrated project under the management of the JADT,” says Kerr Johnston, Chief Operating Officer of Qatargas 3 and of the Qatargas 3&4 JADT.

“What this means is that both projects will have shared offshore facilities in terms of wells, production platforms and pipelines to bring the natural gas to Ras Laffan Industrial City [RLIC], where the gas is then delivered to each of the two LNG production trains.

“After processing the natural gas to LNG it is delivered to common storage facilities, as are the by-products of the process, such as condensate, LPG [Liquefied Petroleum Gas] and sulphur,” he says.

Qatargas is a massive venture, of which Qatargas 3 and Qatargas 4 are just two trains. Qatargas began with Qatargas 1, which consists of three LNG trains which currently have a combined production capacity of around 10 mtpa. Qatargas 2 is a two-train project, each train with a capacity of 7.8 mtpa.

Once all seven LNG trains are up and running, Qatargas will have a total production of 41 mtpa, making it the largest LNG company in the world.

Kerr then goes on to say, “One of the key factors that has made the Qatargas 3&4 integrated project a success to date is the high level of safety which has been achieved. This has been made possible by the use of the Incident and Injury-Free [IIF] performance system, a safety programme developed by international consultancy JMJ. The IIF approach to safety management was first introduced on Qatargas 1 and has been used throughout the company since that time.

“The success of this sort of safety programme depends, of course, on the commitment and sincerity of management and supervision, which must ensure that the safety system is embedded throughout all of the operation.

“In all our orientation sessions here at Qatargas 3&4 we share that commitment and explain what our workers can expect from us, and also what we expect from them. “One example of this is the issuing to all staff of a red ‘stop card’. Any worker can use this card at any time to stop the work that is going on if he or she feels it is unsafe to continue.

“IIF is more than talk. We want to make sure that everybody goes home safe and we have been doing a good job of that so far. Since start-up we have had nine minor LTIs [Lost Time Incidents], our Total Recordable Incident Rate [TRIR] is currently running at 0.31 per 200,000 man hours worked and our LTI rate is 0.03 per 200,000 man hours worked. It’s a good performance but still with room for improvement on our site.

“Recently we have achieved 15 million man hours since our last LTI on the project, and that is with a workforce in which people speak seven different languages and 42 different dialects on site.”

Moving on to talk about his responsibility as Chief Operating Officer of the JADT, Kerr says, “As head of the Joint Asset Development Team it is my job is to harness the skills and talents of a highly qualified group of people from different companies and align them in order to deliver Qatargas 3&4 as a successful project.

“Because of the different make-up of the members of the team it is important to take all points of view into account. Furthermore, due to the diversity and different views of members of the JADT we are able to achieve the benefit of the combined experience and technical capabilities of all the shareholders.

“One example of this is that we needed to develop a special chemical ‘cocktail’ to ensure the protection of the inside of the wet gas pipeline bringing the gas from the field to the shore. To resolve this issue shareholder experts have worked together for a year to develop a testing programme, which has resulted in the production of a suitable chemical combination to protect the pipeline during its operational phase.”

Kerr concludes, “We have made good progress on the development of the offshore programme, with three jackets installed and three rigs drilling development wells. Onshore development is also progressing well, with the target date for first LNG from Qatargas 3 in 2009 and by the end of the decade for Qatargas 4.

“Without doubt, the Qatargas 3&4 integrated project is one of the most challenging in the world. We have pulled together a talented and dedicated team which is committed to delivering a successful project and whilst challenges lie both behind and ahead of us we are confident that we will deliver these trains so they will reliably supply energy to customers for many years to come.”

“Construction of the offshore facilities by the Joint Asset Development Team [JADT] for both Qatargas 3 and Qatargas 4 is progressing, broadly on track, to ensure that gas is available for Qatargas 3 in 2009 and Qatargas 4 around the end of the decade,” says Rob Dakers, Chief Operating Officer of Qatargas 4.

“The onshore development is also progressing well, with some of the plant in advanced stages of construction.

“The Joint Asset Development Team [JADT] should be congratulated for its tremendous focus on safety, particularly in the upstream, where the team has helped to achieve 1,000 days without an LTI [Lost Time Incident] in drilling operations.

“It is very good to see that the JADT has really come together with Qatargas, Shell and ConocoPhillips secondees working together as one team to deliver the facilities for the two ventures. Like any project there are challenges but I am confident that these will be squarely faced and the facilities will be delivered as per expectations.

“The expansion of Elba Island regasification terminal, which will receive the majority of the LNG from Qatargas 4, is now well under way. I was pleased to attend the ground- breaking ceremony for the terminal recently and to see Qatar’s strong commitment to supply the North American markets,” he concludes.

“The project began operations in November 2004 by spudding an appraisal well for Qatargas 3,” says Ken Marnoch, Upstream Manager and Deputy Chief Operating Officer of the Qatargas 3&4 Joint Asset Development Team.

“In June 2005 Qatargas 3 and Qatargas 4 came together as an integrated project and in August that year we had people from Qatargas, Shell and ConocoPhillips working together as a single team.

“Each of the two LNG trains will produce 7.8 mtpa and will need to be supplied with 1.45 billion standard cubic feet per day [scfd] of gas each. To do this we have, under construction, three production platforms, each with a capacity for 15 wells.

“So far we have in place three jackets, which in layman’s terms means the support legs or structures on which the production platforms will be installed when they are ready. The production platforms are currently being built in Dubai and will be ready for installation and hooked up to the pipelines and wells by the end of the year. “At the moment we have three drilling rigs, one for each jacket, drilling development wells. These wells are expected to deliver around 85,000 scfd of gas on average with the wells being designed to produce a maximum of 150,000 scfd of gas, if required.

“So,” he explains, “the 33 wells will provide the necessary volumes of gas, but should one of the platforms go down production can be increased from the other two platforms to keep gas production flowing sufficiently to maintain production of LNG from both trains at maximum capacity.

“The three jackets are in water depths of 50 to 60 metres and the wells are being drilled to depths of 3,500 metres vertically.”

Ken then goes on to say, “We thought that the drilling would be relatively easy as many wells have been drilled in the North Field without problems.

“Our 33 wells are in a newly allocated block and we have a few challenges. However, our experiences over the last six months have served to make Qatargas 3&4 offshore drilling team one of the most experienced teams in the North Field.

“So far we have drilled and completed six of the 33 wells and are using a batch drilling process, where we drill the same hole size on several wells rather than drilling and completing one well at a time.

“Batch drilling reduces the amount of equipment handling and allows the drilling team to immediately apply lessons from one well to the next, improving overall efficiency.

“The laying of the pipelines will begin in May and they have been designed in such a way that gas will come from well head seven into one pipeline and from well head eight into the second pipeline. Well head nine is positioned between the two pipelines and will be able to direct its production into either pipeline.

“At the other end of the pipelines, onshore, the gas will enter a single onshore slug-catcher, which is a form of separation unit to catch any slugs of liquids brought ashore in the delivery of the upstream gas.

“So,” concludes Ken, “we continue to make good progress offshore but the really great news is that everyone is going home safe. Since we started operations in November 2004 we have not had a single LTI [Lost Time Incident] in 3.5 million man hours of drilling and it is two years since our last recordable incident.

“This project has a strong safety culture, with everyone in the Upstream Team playing their part. Whilst we continue to demonstrate that it is possible to be incident and injury-free, we know that our past performance is no guarantee for the future. Our focus for 2008 is to engage with more people to build, strengthen and deepen our relationships as our safety bottom line is about people. Everyone goes home safe, no kidding!”

Peter Flanagan is Head of Construction for the Qatargas 3&4 offshore facilities, which are being built at the J. Ray McDermott yard in the Jebel Ali Free Zone in the UAE.

“As part of the offshore facilities programme we are building three well heads, or production, platforms, the jackets for which were successfully installed offshore Qatar in the North Field in 2006, with temporary decks to permit drilling operations to begin immediately,” he says.

“Currently the topsides are under construction and progressing well, with sail away and installation scheduled for the end of 2008.

“The award of this important contract to an experienced and proven contractor such as J. Ray McDermott has led to on-time delivery of the jackets and we are optimistic for a similar performance with the topsides,” Peter concludes.

Richard Withers, Project Manager for the Qatargas 3&4 facilities at J. Ray McDermott, says, “This is one of many contracts which J. Ray McDermott has to supply offshore installations for Qatar’s booming gas industry.

“Having Qatargas 3&4 as a client for J. Ray McDermott is further endorsement of this company’s international status. Operations here in the Jebel Ali Free Zone are run to the best of global standards, with great emphasis being placed on HSE issues, especially the safe execution of all our contracts.

“The three platforms, which we are building for Qatargas 3&4, with their jackets and topsides will weigh in at a total of 9,000 metric tonnes of steel and other materials,” Richard concludes.