Chevron Progress in Associated Gas Utilization Focus on Kazakhstan and Angola Flare Reduction Programs

Transcription

1 Global Gas Chevron Progress in Associated Gas Utilization Focus on Kazakhstan and Angola Flare Reduction Programs GGFR Steering Committee 30Nov2011 Babak Fayyaz Jim Wisner

2 Chevron Successes Part of Long-Term Integrated Flare Reduction Plan Chevron has fully incorporated GGFR Associated Gas Recovery Planning processes. Six years of repeated annual planning, execution and review. Strong integration with commercial major capital project activities of business units. Strong cooperation with government programs and development of regional infrastructure % overall global reductions achieved over past 6 years. Major lessons learned from successes and challenges.

3 Example Success Stories Kazakhstan 90% flaring reduction while increasing production by 150% Integrated planning and execution with Kazakhstan government and Tengiz Chevroil (TCO) partners and Major Capital Project programs - Intentional operator-government planning to reduce flaring while enhancing production - Achieved with high local content Part of $2.2 Billion environmental improvement project program of TCO Additional detail on GGFR Success Story website.

4 Global Gas Angola LNG: Key Insights from a Successful Associated Gas LNG Project Prepared by: Jim Wisner, Commercial General Manager, Southern Africa, Chevron ; Chevron Lead, GGFR Steering Committee Presented by: Babak Fayyaz, Coordinator Chevron AGRP Process Washington D.C. November 29,

5 Keys to A Successful Associated Gas LNG Project Early Development Phase 1. Opportunity Identification (resource, land and marine access) 2. Clear Project Vision 3. Government Support and Stakeholder Alignment 4. Aligned Upstream and Midstream Objectives 5. Market solution Later Development Phases 6. Effective Project Planning and Execution 7. Environmental Mitigations 8. Host Community Acceptance 5

6 Angola LNG: A Case Study in Value Chain Integration Project Scope Anchored by Associated Gas supply Future Non-Associated Gas Gathering from multiple gas sources Single train 5.2 mmtpa LNG plant LNG and LPG loading facilities 7 dedicated LNG ships Employee housing and infrastructure Construction team of ~7,000 ~50% Angolan Multiple Community Projects Key Milestones December 10, 2007: Final Investment Decision LNG Ship Delivery In Progress LNG Plant Commissioning in Progress Q1 2012: 1 st LNG cargo 22.8% 36.4% 13.6% 13.6% 13.6%

7 Key #1: Identify Gas Resource, Land and Marine Access Importance: LNG is only feasible with reliable gas supplies, land and port access Early Angola studies found: Sufficient gas resource for reliable supply: both associated and nonassociated gas Long term solution for associated gas required to enable continued oil development Potential plant locations provided acceptable marine access Sufficient LNG market demand Project could be economically viable 7

8 Key #2: Clear Project Vision Importance: A clear project vision is necessary to create stakeholder alignment and government support Angola LNG Vision: Gather associated gas from multiple upstream suppliers, with some participating in the LNG project Block 0 & 14 Block AG 0 & 14 NAG AG (CVX) Enguia NAG CABINDA CABINDA SOYO SOYO One 5.2 MMTPA LNG Train LNG on Plant Kwanda Island next to Kwanda Base CONGO RIVER Develop a regional integrated gas solution to enable oil development Block 15 AG Block 15 AG (EM) Quiluma NAG Atum & Polvo NAG Contribute to the social and economic development of Angola. Block 17 AG Block 17 AG (TOTAL) LOMBO EAST LOMBO EAST Develop an economically viable project for all stakeholders Block 18 AG (BP) 8

9 Key #3: Stakeholder Alignment and Government Support Importance: stakeholder alignment and government support were needed to ensure smooth project development and implementation. ALNG aligned with Angolan government objectives and strategies Strong support and resources from Sonangol Solution for associated gas to enable oil development and align interests Foundation for regional gas gathering network Foundation for domestic gas supply by Sonangol Significant local content Enabling legislation and fiscal regime timed to support major project commitments 9

10 Key #4: Aligned Integrated Upstream & Midstream Importance: Close planning between upstream and midstream is necessary to ensure reliable flow of associated gas to the LNG plant Integrated value chain aligns interests from field to LNG Multiple sub-projects require coordinated planning Upstream stakeholders and aligned value chain helps to ensure gas supply is reliable Back-up non-associated gas supply Robust value chain governance Multiple Companies bringing resources to a large LNG project LNG expertise Human and financial capital ALNG shareholders in LNG offtake chain 22.8% 36.4% 13.6% 13.6% 13.6% Block 0 & 14 Gas Aligned Interests enhance reliability Block 15 Gas Block 18 Gas Angola LNG Shipping International Markets Block 17 Gas Other Gas 10

11 Key #5: Aligned Marketing Solution Importance: reliable market access for LNG is essential for gas flow assurance through the entire value chain. Product offtake assurance was critical to avoid impact on oil operations Supply competition increasing, LNG market evolving Different marketing models were considered Early alignment of Angola LNG shareholders on the preferred marketing model supported the final investment decision. For Angola LNG, 3 LNG Ships will be owned by Sonangol-E.P. Shipping Holding Ltd. Sonangol/Chevron ship operations joint venture 11

12 Key #8: Host Community Acceptance Importance: Acceptance by a project s host community is critical for long term success ~US$ 1.7 billion Angolan content during project construction ~3,800 Angolans employed during the construction phase Includes skill training Soyo area road and bridge new construction and road refurbishment Construction of 22 MW power plant for Soyo community Regional hospital major expansion and refurbishment School major expansion and refurbishment Major community housing project ALNG staff residential housing integrated with Soyo community Soyo airport upgrades Support for regional health initiatives Multiple other community projects. Extensive use of Soyo community services and businesses. 12

13 The Angola LNG Journey July 2008 December 2009 November

14 The Early Keys enabled Angola LNG s Success and Can serve as a Model for any Large Scale Associated Gas Development. November