Santos GLNG a lean supply chain

Transcription

1 Section Heading Section text goes here Santos GLNG a lean supply chain 1

2 Scope Overview of Santos Gladstone Liquefied Natural Gas (GLNG) Project Overview of the GLNG Supply Chain first principles Centres of Gravity GLNG Supply Chain optimised Benefits 2

3 GLNG Overview Partners: Santos (operator, 30% shareholder), PETRONAS (27.5%), Total (27.5%), KOGAS (15%). US$18.5 billion gross capex estimate from FID to end Project revenue underpinned by binding long-term LNG sales contracts with PETRONAS and KOGAS covering more than 90% of LNG plant capacity. Existing and sanctioned upstream gas processing capacity of 725 TJ/d. 420-kilometre gas transmission pipeline. LNG plant capacity of 7.8 mtpa. When fully operational, GLNG will average two LNG cargoes per week, or just over 100 per annum. 3

4 4

5 5 24/7 drilling operations

6 6 Major gas processing facilities

7 420km pipeline 4.3km undersea tunnel 7

8 8 Two-train, 7.8 mtpa LNG facility

9 9 Utilising world-class technology

10 Overview of GLNG Supply Chain 1 st Principles GLADSTONE Well Sites CIS Compression Hub ROMA / FAIRVIEW 550km / 1 day 650km / 1 day BRISBANE

11 Overview of GLNG Supply Chain Requirements In-scale ~ $100M / 35k line items of inventory to support operations. Execute: ~ 250 goods & services contracts Dependencies include: Drilling operations Gas treatment and compression facilities Gas transmission pipeline LNG production facilities Demand profile is variable or uncertain 11

12 Basics of Inventory Management Effect of Actual Demand Expected or Average Inventory Working Stock Safety Stock Time 12 SANTOS 2014

13 Demand deductions Demand profile is variable or uncertain and largely can t be used for initial planning Cost of stock out in lost production and revenue far exceeds cost of supply Long term plan is 80:20 PM to CM. Initial commissioning and operations is the opposite. Overstock and then optimise Establish call off contracts and then procure when work packages become firm. Operator to carry the risk 13

14 Centres of Gravity One must keep the dominant characteristics of both belligerents in mind. Out of these characteristics a certain centre of gravity develops, the hub of all power and movement, on which everything depends. That is the point against which all our energies should be directed. On War, Carl von Clausewitz, 1832 Any important sources of strength Warfighting, Marine Corps Doctrinal Publication 1,

15 Centres of Gravity GLNG Supply Centres of Gravity Gas treatment & compression Drilling & completions LNG Production Stakeholder RAM of compression modules Rig availability and operations RAM of key production modules Supply Chain Simple and integrated supply chain for key material Simple and integrated supply chain for key material Reliability & availability of critical spares Deductions Simple supply chain for stakeholder with access to tech material. Potentially overstock until usage confirmed. Simple supply chain for stakeholder with ready access to material. Min N+1 Redundancy Technical inventory with technical QA/QC requirement. Locate with tech capability and minimise moves. Potentially overstock until usage confirmed. 15

16 Overview of GLNG Supply Chain Optimised GLADSTONE Well Sites Storage CIS Compression Hub 550km / 1 day ROMA Roma Logistics Hub 500km / 1 day BRISBANE

17 Supply Chain Optimisation Drilling Operations Leap frog containerised support Containerised high usage material located at Rig site. Container replenished and delivered to ne location every 3-4 days MTA with main contractors with short term engagement Inventory Optimisation 35k items catalogued Lead time and price confirmed on use Supplier performance management Automated min/max review on top 30% usage Maximise use of rebuildables Only manage items that need to be managed 17 31/05/2016

18 Supplier dashboard 18

19 Benefits Contracts MTAs with releases against firm scopes keep balance of risk with the Operator Contracting approach suits current market conditions Material Technical inventory located in suitable storage mediums adjacent to technical support. Minimise technical labour Common use and critical items located adjacent to Rig operations. Minimise Rig downtime Reduce transport requirements / cost & safety exposure Non-critical items can be provided with minimal control 19

20 Key observations Design your supply chain to suit your industry, your dependency and the market conditions Waste and a lean supply chain are relative concepts Measure waste across total line of operation or value chain, not just supply chain inputs. Value Stream Mapping is a valuable (essential) tool. Link cost and waste to EBITDA for lasting improvement. 20