How to create maximum value for the Mozambique LNG operations

By Hendrik Jan van Eldik

How to create maximum valuefor the Mozambique LNG operations

Tomorrow’s Oil & Gas solutions, delivered today

Agenda

Introduction, who we are and what we do

Challenges running an LNG export operation

How to create maximum value

Our credentials

1

2

3

4

Who are we:

Our practices are based on Norwegian best traditions in the Oil and Gas Industry for over more than 25 years

Delivering hydrocarbon accounting and LNG solutions to all well-known operators globally

We are a Nordic company with offices world-wide in the main Oil and Gas hubs helping our clients to be most successful

Operating in more than 90 countries, 24.000 employees, stock exchange in Oslo, Helsinki, Stockholm

Key facts Tieto Oil & Gas

~50% of the world’s LNG processing controlled by Tieto systems

Daily accounting for

~40% of all oil

production in the world

40m+ bookings, for

50k users, managed

till date

4 national pipeline operators using

Tieto; including an operator delivering

of gas in EU~30%

Supporting daily optimizationof LNG cargo plans and blend production for massive oil & gas operations

We deliver Commercial Gas ManagementBest practices

Commercial Gas Management - Typical Function modules

Important questions by running an LNG Export operation

• Many companies in the oil

and gas industry use a

combination of

spreadsheets and manual

procedures to support

commercial operations

• Optimization of operations

and revenues are often

based on experience of

seniors. How to be sure

best decisions have been

taken

• How to avoid the risk of

data inconsistency, not

being in compliance with

govermental regulations

• Automate business

process supply chain, by

using a central database

and an integrated rules

engine to provide an

enterprise strength

application.

• Having tools available

being able to choose

what to optimize /

maximize against target

taking into account the

whole chain

• One statement of records,

one entry of master data,

one source of official

production data, planning

data and commercial

information

• Visibility across the

hydrocarbon supply chain

– from well to revenue

recognition – to streamline

operations, execute

agreements, comply with

regulations and non

operating partners, being

sustainable.

Practice Recommended Create

(Integrated) supply chain from reservoir to customer, with Energy Components, how to create maximum value

Raw gas Production

LNGShipment

LNGLiquefication

LNGStorage

LNGStorage

GasDistribution

Field operator Plant operator Terminal operator Fleet/vessel operator Terminal operator (import) Gas transport operator

LNG Producers LNG Import terminal

Grid operator

LNG/GasTransactions

Hydrocarbons

Infrastructure

Other Transactions

Buy feed gas

SellLNG FOB

SellLNG DES

Buy LNGshipment capacity (charter)

DomGas export

Sell title to gas at stock

Sell gas at entry

Sell title to gas in

pipeline

Sell gas at Exit

Sell LNG storage/re-gasification

capacity

Sell gas pipeline capacity

Small scale + Truck

Loading

Energy Components for LNG operationsSupply chain from reservoir to customer

Raw gas Production

LNGShipment

LNGLiquefication

LNGStorage

LNGStorage

GasDistribution



Grid operator

LNG/GasTransactions

Hydrocarbons

Infrastructure

Other Transactions

Buy feed gas

SellLNG FOB

SellLNG DES


DomGas export


Sell gas at entry


pipeline

Sell gas at Exit


capacity


Small scale + Truck

Loading

EC Production

• Supports for different

types of forecasts

Budget, Short term,

Long term, Rolling etc.

• Unlimited number of

scenarios

• Capabilities of

calculating

forecasted values

• Sub daily, Daily and

Monthly

• Support for volumes,

mass and component.

• Allocation to both well

and reservoir level

• Ownership allocation

• Vizualization of the

allocation network in

Stream Node Diagram

• Calculation Library

• Decline curves

• Performance curves

• Multi well testing

• Graphical interface to

select stable periods.

• Group and well

deferments

• Planned/Unplanne

d events

• Down and

constrained events

• Calculation of

deferred volumes

Forecasting

/Planning

Well Testing Deferment

management

Allocation01 02 03 04

05Supporting functions

• Individual dashboards

• Reporting emissions and discharge

• Reporting to internal and corporate

• Inventory management

• Reporting to JV partners

• Reporting to regulatory bodies

• Daily production and operation reports

Storage and ShipmentSupply chain from reservoir to customer

Raw gas Production

LNGShipment

LNGLiquefication

LNGStorage

LNGStorage

GasDistribution



Grid operator

LNG/GasTransactions

Hydrocarbons

Infrastructure

Other Transactions

Buy feed gas

SellLNG FOB

SellLNG DES


DomGas export


Sell gas at entry


pipeline

Sell gas at Exit


capacity


Small scale + Truck

Loading

EC Transport

• Production planning

• Scenarios

• Revision W-M-Y

ADP/PADP/SLS

Physical:

• Destinations

• Vessel

• Storage

• Berth

Contractual hierarchies:

• MSPA/SPA/ Conf. notice

• Penalties

• Opportunities

Harbour operations

• FOB/DES cargos

• Documents

• Purging/

cooling/boil-off

• BTU calc.

• Demurrage

• Timesheet

• Analysis mgmt.

Forecasting Planning &

Scheduling

Terminal

operations01 02 03

04Capacity management

• Maintenance

• Yield factors

• Operational events

• Shared/own infrastructure

05Terminal operations

Gas dispatching

• Nomination mgmt.

• Messaging

Contractual hierarchies

Commercial – Sales and RevenuesSupply chain from reservoir to customer

Raw gas Production

LNGShipment

LNGLiquefication

LNGStorage

LNGStorage

GasDistribution



Grid operator

LNG/GasTransactions

Hydrocarbons

Infrastructure

Other Transactions

Buy feed gas

SellLNG FOB

SellLNG DES


DomGas export


Sell gas at entry


pipeline

Sell gas at Exit


capacity


Small scale + Truck

Loading

EC Sales & Revenue

• Pricing

• Complex price calculations

• Manage price structures vs. Contracts

• Sales contracts

• Purchasing contracts

• Tariff contracts

• Intercompany transaction

contracts

• ACQ/AACQ

• Take or Pay Make Up

• Make Good

• Cancellations

• Force Majeure

• Penalty calc.

• KPIs

• Planned

• Actuals

Contractual reconciliation Planning & Scheduling01 02

• Automatic invoice processing using

data directly from EC Production / EC

Transport / EC Sales

• Invoice

• Provisional

• Final

• Reconciled

• Multiple currencies & Due date

calculations

• Payment terms

• Late payment mgmt.

• Interest calc.

• Four eyes approval

• Inventory Valuation

• Valuation of Storage Tank positions,

Goods-In-Transfer, etc.

• Automated ERP/SAP booking interface

Mass Balancing

Mass Balancing can appear in many forms. The most common examples are:

o Balancing a full production network

o Balancing a plant or refinery on a per-component

level

o Calculating total and per-component inventory for

one or more NGL, LPG and/or LNG Tanks

o Forecasting plant production and storage levels

based on a range of operational, production and

weather parameters

All these processes are used at Energy Components implementations around the globe.

Optimization benefit realization

Increase profitabilityCreate better plans

EC HCM will help the planners make better plans which will minimize the

need for 3rd-party cargoes, vessel chartering and unsatisfied customers.

This will help you maximize the profitability of the LNG Midstream business

Reduce costHolistic planning

EC HCM will enable you to manage LNG Midstream activities on a

portfolio level. This will allow for less silo thinking and help improve fleet

utilization, reduce need for chartering and maximize customer service

level.

Quicker decision makingAll actionable data in one system

With all data needed to make good decisions in one system

providing all users with the same, actionable data available at any

given time. This means that the planners spend less time searching

for information and more time on making better decisions.

Our credentials, active on all continents globally

More than

100 customers

Installed in more

than 55 countries

World-wide de-facto

standard

Corporate standard, best practices

600 EC licences sold globally

• Offshore, onshore production operations

• Gas transport/pipeline operations

• LNG import terminals

• LNG export terminals

• Gas sales

• Revenue accounting

• Management of partner-operated assets

• Governmental hydrocarbon accountingEC

DaWinci

Seg

men

ts

Our credentials

LNG Export reference casesAdministration of the Gas Supply Agreements for the supply of gas to the LNG plant, including nominations to the gas suppliers and Sales Purchase Agreements (SPAs) for the sale of LNG cargoes. Administration of other sales for LNG, LPG and Condensate . Management of LNG, LPG and Condensate cargo liftings from the plant, including production of the Cargo documentation. Invoicing of LNG, LPG and Condensate sales and provision of data to the accounting system.

Production Transport Sales Revenue

Energy Components has been successfully implemented for Woodside Energy Ltd and their main operation North West Shelf (NWS). The allocation system involves a full gas plant allocation, where the ownership of both components and products are allocated for each of the 6 Joint Venture partners from the export points at the plant, through the trunk lines and back to the offshore fields


Energy Components was implemented as the Ichtys LNG Management System to support ADP/90 Day scheduling, Short term planning / Lifting operation, Shipment documents, Allocation and Hydrocarbon accounting as well as Contractual accounting for all product deliveries.


Energy Components was implemented as the LNG Management System for Queensland Curtis LNG (QCLNG) to support Planning and Scheduling, Lifting operation, Shipment documents, Gas supply, Allocation and Hydrocarbon accounting as well as Contractual accounting.


Energy Components is employed as the PNG LNG supply chain management system including the proper handling of all LNG sales agreements, scheduling and lifting operations, invoicing and revenue accounting


By implementing EC as the SDS solution ADNOC LNG has the tool to manage specific vessel delivery scheduling which can incorporate all aspects of planning and execution from berthing for loading until the vessel returns after discharge.

Production Transport Sales Revenue Midstream

LNG Export reference casesEnergy Components is implemented to cover Qatargas business critical requirements for the Hydrocarbon Accounting System, including all EC modules; EC Production, EC Transport, EC Sales and EC Revenue. EC covers the following business critical operations for Qatargas: Management of LNG, LPG, Condensate and Sulphur cargo liftings from the plant, including production of the cargo documentation, Administration of the Sales Purchase Agreements (SPAs) for the sale of LNG cargoes, Administration of other Sales for LNG, LPG, Condensate and Sulphur, Invoicing of LNG, LPG, Condensate, and Sulphur sales and provision of data to the accounting system for financial accounting. EC is the central, consolidated database for all hydrocarbon accounting figures within Qatargas, providing the official Hydrocarbon accounting data required for company reporting.


RasGas (now merged with Qatargas) implemented EC for Cargo Administration, Allocation, Gas Sales and Revenue Accounting. Several expansion projects have been conducted, and the RasGasEC solution today covers former RasGas LNG trains 1, 2, 3, 4, 5, Helium extraction units and AKG Sales Gas processing unit.


EC implementation scope is managing the production stock capacity (LNG, condensate), handling cargos, production scheduling and mass balancing. Also supporting Marketing and Shipping department with planning the ADP, 90day and short-term scheduling business processes with unique and complex scenarios optimization scenarios.


EC implementation scope is managing the production stock capacity (LNG, condensate), handling cargos, production scheduling and mass balancing. Also supporting Marketing and Shipping department with planning the ADP, 90day and short-term scheduling business processes with unique and complex scenarios optimization scenarios.


Chevron has equity in 3 export terminals (Gorgon, Wheatstone and NWS) shipping to 10 delivery locations, a total of 250 voyages per year. They were previously managing their deliveries per export terminal. To improve efficiency and ensure meeting their delivery obligations they now manage the deliveries on a portfolio level by using EC HCM Midstream.


Looking forward to meet and discuss with you in more detail, Thank you

Backup slides

Mass Balancing in EC

Energy Components Mass Balancing has been implemented at various Gas

Processing, LNG and crude plants around the world. Examples include

terminals in Qatar, Singapore and The Netherlands, as well as Australia.

Implementation is done in the EC Calculation Engine, giving full flexibility to

include the whole Mass Balancing process, and update process rules in an

easy-to-comprehend way when needed.

There is an option to include the original Mass Balancing spreadsheet as a part

of the calculation, making the process easy to update for users that are familiar

with Excel, and at the same time version controlled and Sox-compliant.

LNG Export operation - Typical practices

Field/Well ownership

Ownership allocation

Joint Venture Accounting

Complex allocation network set up

Well production allocation, Well testing

Production forecasting

Hydrocarbon

products

Hydrocarbon Accounting

Feed Gas

Xxx MTPA of LNG

Xxxx bpd Condensate

Xxx MMSCFD Domestic Gas

Facility: FPSO, Pipeline, Trains,

Storage and Loading

Integrated plant availability, Maintenance, Constraints

Mass Balancing

Annual Production Profile, ADP- 90 day schedules, ad hoc planning

Inventory Management, BOG

Berth Scheduling

Cargo Management

LNG Export operation - Typical practices

Contract

Agreements

Operating Agreements

Terminal Usage Agreements

Supply and Purchase Agreement

Other Sales Agreements (Condensate)

Contract Management (ACQ)

Sell of

products

Delivery

Price calculations

Invoicing; billing items, billing rules,

calculations, invoice line items, TAX

handling, GL input to finance

Title transfer,

Custody Transfer

FOB (DES)

Contract Management

Allocation and reconciliation

Hydrocarbon

products

Sales planning

Optimization