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Wasco Energy Group of Companies

Credit picture: Axel ScmidtNord Stream 2 Pipeline Project

Wasco Subsea and Pipeline Support Unplanned Repair (SPURTM) InitiativeAOG 2019 14th March 2019

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Agenda

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Challenges Faced During Unplanned Repair Scenarios

Subsea & Pipeline Unplanned Repair Initiative (SPURTM)

The Operational Model

Benefits of SPURTM

Typical Pipeline Failure Response

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INSPECTION PLAN

REPAIR EXECUTION

PLAN

MATERIALS / EQUIPMENT PROCUREMENT

OFFSHORE EXECUTION

PIPELINE FAILURE /

SHUTDOWN

INITIAL OFFSHORE

INSPECTION

REPAIR EXECUTION

PIPELINE RE-START

Risk of pipeline failures increasing annually due to:

• Ageing assets;

• Changes to operational conditions;

• Reduced Integrity Management Programs resulting from recent market conditions.

PIPELINE SHUTDOWN PERIOD / LOST PRODUCTION

Existing Risks Factors

PREPARATION

EXECUTION

RESPONSE

IMPACT

• Unknown availability, location, suitability and readiness of in-house spares• Unknown availability, location, suitability and readiness of regional spares• Limited in-house resources to coordinate and manage preparation activities

• Limited availability of in-house engineering resources to coordinate execution• Lengthy procurement process to source, negotiate and obtain necessary equipment

and materials• Schedule constraints often requiring QA and procedural short-cuts/deviations

• Reduced readiness• Prolonged reaction time• Prolonged execution duration

• Increased production downtime• Increased CAPEX / Repair costs• Increased QA / HSE / Environmental Risk

ISOLATED APPROACH

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Wasco SPUR™ Outline Principals

Dedicated Regional Storage Facility

Cross-utilization of Assets Between

Regional Operators

Cost Optimization/Sharing

Between Regional Operators

Dedicated Services/Materials for Fast-Track Execution

Dedicated SPURTM

Response Team

• Region wide collaboration between Pipeline Operators and Service Providers targeted towards:

- Improved preparation and reaction time;

- Improved quality and efficiency of repairs;

- Reduced CAPEX risk;

- Reduced production risk;

- Reduced Quality, HSE and Environmental risk.

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SPUR™ Initiative – Operational Model

DEDICATED REGIONAL SPARES FACILITY

SPARES GAP ANALYSIS

GAPS REVIEWED AGAINST AVAILABLE REGIONAL SPARES

SUPPLIER FRAME AGREEMENTS

SPARES MAINTAINED AT 100% MOBILISATION READY

STATE OF THE ART INVENTORY MANAGEMENT SYSTEM

EQUIPMENT MATERIALS

PREPARATION

SPARES GAP IDENTIFIED?

SPARES GAP REMAINS?

MATERIALS EQUIPMENTSPECIALIST

ENGINEERING

EXECUTION

RESPONSE COORDINATOR WITHIN 24HRS

MATERIALS MOBILISATION

EQUIPMENT MOBILISATION

RESOURCES MOBILISATION

STANDARDIZED PROCEDURES

SUPPORTS DEVELOPMENT OF INITIAL REPAIR STRATEGY

CLOSE-OUT

CLOSE-OUT COORDINATOR DURING CLOSE-OUT

SUPPORTS PROJECT CLOSE-OUT

EQUIPMENT DEMOBILISATION

SPARES REPLENISHMENT

EQUIPMENT REFURBISHMENT

INDIVIDUALLY OR ON COST SHARING BASIS

CRITICAL REGIONAL PIPELINES

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SPURTM

Inventory Management System

• Fast-Response Inventory Management system developed purposely for SPUR™;

• Fast, user friendly navigation via online computer system and/or tablet/smartphone;

• Search by Pipeline or Equipment/Material Type instantly;

• Dedicated 24hr SPUR™ Inventory Management Support Center; 7

Benefits of SPURTM

PREPARATION

EXECUTION

RESPONSE

IMPACT

• Fast and easy access to wider range of critical spares• Spares managed and maintained at 100% readiness for fast execution• Frame agreements in place for expansion of inventory on individual or cost-sharing basis

• Response Coordinator in place for immediate support• Frame agreements in place for fast-track mobilisation of specialist resources• Frame agreements in place for fast-track mobilisation of critical repair equipment• Suite of standardized procedures in place for fast-track execution

• Improved readiness• Improved reaction time• Reduced execution duration

• Reduced Production downtime• Reduced CAPEX• Reduced Environmental Impact

WASCOINTEGRATED APPROACH

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Summary

1. If done correctly, industry collaboration can be a very powerful tool;

2. Current market conditions driving towards industry collaboration;

3. SPURTM model low complexity to implement and execute;

4. SPURTM model easily adaptable to regional requirements;

5. Provides benefit to all parties;

1. Reduced CAPEX risk;

2. Reduced Production Risk;

3. Reduced Quality, HSE and Environmental Risk.

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