Engineering Company Role on Energy Projects The Grand Hotel, Taipei, 2007 Sept 13, 2007
Contents 1. Chiyoda as Eng g Company 2. Energy Supply and Demand 3. Trend & Nature of Production Facilities 4. Economy of Scale 5. Smart EPC Requisite 6. Summary : Challenges for Sustainability 1
1. Chiyoda as Eng g Company (1/2) : Area of Services Gas Value Chain Gas Processing/LNG/LPG Petrochemicals, Chemicals & Fertilizer Petroleum Refining Metal & Mining CHIYODA General Industries Established Jan., 1948 Pharmaceutical Environmental Preservation Employees 6,000 Global Basis 2
1. Chiyoda as Eng g Company (2/2) : Field of Services Basic Concept Market Research etc. Project Concept Basic, Operation, Logistics Concept Market Research Future Program Feasibility Study etc. Master Planning Approval Master Planning Site, Capacity Determination Basic Data Master Schedule Manning Schedule Budget Estimation Other Client s Requirement etc. Basic Design OPTION (if Required by Client) Budget Approval Basic Design Review of Equip. Review of Material, Heat & Other Balance Construction Cost Estimation Budget Allocation etc. FINANCE ARRANGEMENT Investor Research Official Development Assistance Export Credit Agency Other Funds Specification Approval Drawing, Calculation Approval Detail Design Basic Design Schedule Specification for subcontracting Quotation Evaluation of Sub-Contractor Detail Design etc. Procurement Procurement Detail Schedule Vendor Selection Purchase Order Research & Development for Applied Mechanics, Pollution Control Technology, etc. Attending Progress Meeting Inspection Machine/Equip. Fabrication Inspection etc. Construction Detail Schedule Temporary Work Notification to Authorities Selection of Subcontractor Subcontracting Construction under Quality, Safety, Cost, Schedule Control Inspection Preparation for Commissioning etc. Attending Progress Meeting Inspection Construction Commissioning Power -In Machine & Equip. Start-Up Pipe Flushing etc. BY CLIENT Procedure Approval Training Training of Owner s Operator Operator Assignment BY CHIYODA Start Operation Operation Maintenance 3
2. Energy Supply and Demand (1/5) : Primary Energy Supply Energy Demands(Mtoe) 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 778 3,193 1,344 672 2,763 4,130 Total 5,536 2,310 3,451 795 2,703 29 2,068 1,407 892 3,575 4,308 5,074 5,766 2,413 1971 2000 2010 2020 2030 source: IEA World Energy Outlook 2004 Total 16,487 Total 14,385 2,226 Total 12,193 1,891 764 Total 9,969 1,641 776 3,601 year Water Renewable energy Nuclear power Coal Natural gas Petroleum 4
2. Energy Supply and Demand (2/5) : Fossil Resources Fossil Reserves, Production & R/P Ratio Resources Data at end of 2005 Chiyoda s Outlook Oil Proved Reserves Production R/ P Ratio : 1,201 billion bbl : 29.6 billion bbl per year : 40.6 years Oil: Dominant still in 2030, but Shift to transport fuels and chemicals Gas Proved Reserves Production R/ P Ratio : 179.83 Tri. Sm3 : 2,763.0 Bil. Sm3 : 65.1 years Natural Gas: Accelerated Shift Coal Proved Reserves Production R/ P Ratio : 909,064 million tons : 5,853 million tons : 155 years Coal: One of major fuels to generate electric power Source: BP Statistical Review of World Energy 2006 5
2. Energy Supply and Demand (3/5) : CO 2 Burduns Fuels Consumption ton Heating Value (LHV) 10 6 kcal CO 2 ton Natural gas 0.081 1.00 0.24 Crude/Heavy Oil 0.100 1.00 0.32 Coal 0.150 1.00 0.41 Hydrogen 0.035 1.00 0.00 6
2. Energy Supply and Demand (4/5) : Trend of Primary Energy Supply Mtoe 6,000 5,000 4,000 3,000 2,000 1,000 0 Trend of Primary Energy Supply in the World Mtoe: Million tonnes of oil equivalent Actual Supply Oil 1.3%/yr Coal 1.8%/yr Gas 2.0%/yr Projection 1970 1980 1990 2000 2010 2020 2030 Year Source: IEA World Energy Outlook 2006 Chiyoda s Outlook <Oil> Large investment in Refinery Upgrading Projects with sophisticated complexes for; Oil residue upgrading Chemical refinery integration <Gas> Global LNG boom Large gas and chemical projects New clean energy: Growing supply of Gas-To-Liquid products <Coal> Growing demand and stricter environmental regulations will request; Coal gasification (IGCC) BTG with flue gas desulfurization 7
Energy Demand by Fuel 2004 2. Energy Supply and Demand (5/5) Energy Demand Industry Coal Oil Natural Gas Power 2,493 Mtoe Residential Transport Industry 3,317 Mtoe Residential Industry Power 2,025 Mtoe 1.65times 1.42times 1.69times 2030 Industry 4,120 Mtoe Residential 4,698 Mtoe Industry Residential Power 3,422 Mtoe Power Transport Industry Mtoe: : Million tonnes of oil equivalent Source: IEA World Energy Outlook 2006 8
3. Trend & Nature of Production Facilities (1/2) : General Market Trends Upstream Upstream Gas Gas Processing Processing Projects Projects Residue Residue upgrading upgrading projects projects Chemical Chemical refinery refinery integration integration projects projects LNG LNG and and GTL GTL projects projects Gas-based Gas-based petrochemical petrochemical projects projects Plant Plant Nature Sophisticated Sophisticated process process complex complex Mega-sized Mega-sized projects projects with with very very large large equipment equipment and and piping piping 9
3. Trend & Nature of Production Facilities (2/2) : Key Technology Trend - Safe and Reliable Operation - Economy of Scale - Lower Energy Consumption - Environmentally Clean 10
4. Economy of Scale (1/4) : Project Trend Mega-sized Project Building a process unit 1.5 and 2.5 times larger than existing largest after Yr2000 (Ethylene, Methanol, LNG plants. Plant Capacity (Million Ton/Year) 10.0 9.0 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 LNG Plant Capacity Trend (1 Train) Production Capacity Demand 0.0 0 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 Start Up Year 250 200 150 100 50 LNG Demand/Produt.Cap. (Million Ton/Year) Plant Capacity(Million ton/year) 2.0 1.8 1.6 1.4 1.2 1.0 0.8 0.6 0.4 0.2 Ethylene Plant Capacity Trend (1Train) Production Capacity Demand 200 180 160 140 120 100 80 60 40 20 Ethylene Demand/Product. (Million Ton/Year) PlantCapacity(MTA) 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 Methanol Plant Capacity Trend (1Train) Production Capacity Demand 40 35 30 25 20 15 10 5 Methanol Demand/Product. (MTA) - 0 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 Start Up Year - 0 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 Start Up Year 11
4. Economy of Scale (2/4) : LNG Capacity and Driver Selection Chiyoda s s LNG Experience RasGas II Train 3 RasGas II Ras Laffan, Qatar 4.7mtpa 2003 Qatargas 2 Train 4 & 5 Qatargas 2 Ras Laffan, Qatar 7.8mtpa x 2 2007, 2008 ADGAS Train 1 & 2 ADGAS Das Island, U.A.E. 1.1mtpa x 2 1976 Qatargas Train 1 & 2 Qatargas Ras Laffan, Qatar 2.0mtpa x 2 1997 Qatargas Train 3 Qatargas Ras Laffan, Qatar 2.0mtpa 1998 RasGas II Train 4 RasGasII Ras Laffan, Qatar 4.7mtpa 2005 RasGas II Train 5 RasGas II Ras Laffan, Qatar 4.7mtpa 2006 RasGas(3) Train 6 & 7 RasGas(3) Ras Laffan, Qatar 7.8mtpa x 2 2008, 2009 Arun Train 4 & 5 Pertamina Arun, Indonesia.76mtpa x 2 1984 ADGAS Train 3 ADGAS Das Island, U.A.E. 2.5mtpa 1994 Qatargas Debottlenecking Project Qatargas Ras Laffan, Qatar +1.0mtpa x 3 2003, 2004, 2005 Sakhalin LNG Train 1 & 2 Sakhalin Energy Sakhalin Island, Russia 4.8mtpa x 2 2008 Bontang Train E, F, G Pertamina Bontang, Indonesia 2.3mtpa 1989, 1993, 1997 Oman LNG Train 1 & 2 Oman LNG Qalhat, Oman 3.3mtpa x 2 2000 Qalhat LNG Project Qalhat LNG Qalhat, Oman 3.3mtpa 2005 Qatargas 3&4 Train 6 & 7 Qatargas 3&4 Ras Laffan, Qatar 7.8mtpa x 2 2008, 2009 12
4. Economy of Scale (3/4) : Effect on Design Plant area vs. Capacity : LNG Plant Case - Plant Capacity (10 6 Ton/Y) 2.5 3.0 4.5 8.0 - Plant Area (Ratio/BASE) BASE 1.7 2.4 3.6 Effect of Larger Plant on Design - Design exceeds standard size - Unbalance between the plant components - Design by Analysis and new Design by Rule 13
4. Economy of Scale (4/4) : Challenges - Updating of Design Standard for Mega-Size Plant Design - Adoption of Innovative Material / Design for Equip & Mat l - Strengthen Manufacturing Infra for Large Equip & Mat l Technology exchanges and collaboration between various industries are more important than before 14
5. Smart EPC requisite (1/5) : Quality Requisite Sophisticated & Mega-sized project Supply Security Global Environment Measure Security of Planned Plant Quality Creditability of Plant Completion Security of Payout A huge amount of investment. A number of potential projects. Security of Planned Product Quality Reliability of Operation Proven Technology & Advanced Solution Driver Reliable and Proven Smart EPC Minimization of CAPEX & OPEX 15
5. Smart EPC requisite (2/5) : Reliability Maximum Reliability of EPC High Quality On-Schedule Completion HSE Management Risk Management Reliable Plant for Operation & Maintenance Cost Effectiveness with High Efficiency EPC : Engineering, Procurement & Construction 16
5. Smart EPC requisite (3/5) : Work Volume EPC Contractor needs to manage: Many varieties of plant processes and site environment. Each project is unique, and the business is hard to standardize or formulate. Huge amount of information of complex material compositions. (0.5 million sheets of documents, 3 million equipment data). Complicated dynamically inter-related thousands of activities of E-P-C. Global work share. 17
5. Smart EPC requisite (4/5) : Countermeasures Enhancement for continuous improvement in quality management system. Utilization of the lessons learnt in the past projects to a full extent through the well organized and user friendly LL system. Global operation on a common engineering platform. Well organized coaching, advice, monitoring and education system to new recruits. Intelligent and integrated IT system, which allows us to execute all EPC activities in a single consistent virtual plant. Discipline Space Time 18
Intelligent & Integrated 5. Smart EPC requisite (5/5) : Design IT System i-plant21 TM TM Intelligent & Integrated Project Engineering Systems i-front Front End Engineering ENGINEERING i-eng Engineering Database i-3d Integrated 3D Plant Design i-dms Project Document Management PROCUREMENT CONSTRUCTION i-pms Project Management i-mat Material Management i-field Construction Management 19
6. Summary Market demands sophisticated complex and mega-sized projects. To realize them, required are; Proven less energy, environmentally clean technologies Advanced solution Design by Rule => Design by Analysis => New Design by Rule Smart EPC for maximum reliability in project execution. Intelligent and integrated IT system. Technology exchanges and collaboration between various industries are more important than before. Shortage of experienced persons has significant impact on the industry s long-term health. Finding and training new recruits to replace an ageing workforce is a priority for every part of energy business chain. 20
Thank You 21