PA-B platform location PILTUN -ASTOKHSKOYE B PLATFORM LOCATION BRIEFING PAPER Introduction In order, to develop the hydrocarbons in the Piltun-Astokhskoye Field as part of the Phase 2 development of Sakhalin II, Sakhalin Energy plans to locate the PA-B platform approximately 13 km from the north eastern shore of Sakhalin Island, and therefore some 7 km from the edge of the area where whales are known to feed. The location of the PA-B platform balances technical, economic and environmental considerations. The Company is committed to ensuring that the mitigation measures developed for the installation and operation of the platform will result in no material adverse impact on the western gray whales. This briefing paper provides an analysis of the reasons behind the choice of the selected location, platform details, installation activities and mitigation measures for potential impact on the western gray whales. Summary Early planning suggested that up to five platforms would be required to develop the PA field economically. However, careful study of the two main features of the field coupled with the use of the latest drilling techniques enabled the original field development concept to be modified considerably. This led to a revised plan featuring only two platforms, the existing Molikpaq platform and the PA-B platform, currently under construction. Initial studies of the field, its geographical location offshore and the geological conditions in the reservoir led to the selected PA-B platform location. It is based on a balance of technical, economic and environmental factors and optimises the safe and efficient recovery of hydrocarbons from the field. Technical considerations mean the platform can only be located within a limited area due to a number of factors. Shallow gas hazards east and northeast from the planned platform location are a serious safety hazard and increase the risk of blowouts during drilling operations. Clay channels composed of soft sediments south and southeast create an unstable foundation and the platform cannot be installed on such sediments. The existence of the whale feeding ground to the west restricts the number of suitable locations to the west. A major relocation of the platform site would be needed to have a material environmental benefit. This would entail a number of unacceptable technical risks. It would seriously affect the capability to efficiently develop the field and increase the complexity and risks in drilling the wells – including making some of the well targets impossible to reach. The drilling duration for those wells that could be reached would be increased and this, coupled with such things as increased vessel traffic for equipment, further erodes the net environmental benefit of any platform relocation. Relocation would reduce total economic hydrocarbon recovery from the field and would result in substantially increased costs – running into hundreds of millions of dollars – and significant delays in bringing the field on-stream. When assessing any possible impact of the new PA-B platform on western gray whales, it should be noted that experience with the existing Molikpaq platform to date indicates that there has been no discernable impact on the whales since it began operations in 1999. The PA field The PA hydrocarbon field is located off the northeast coast of Sakhalin Island and is primarily an oil field with associated gas. It consists of two main producing areas – the Piltun and the Astokh hydrocarbon features. The Astokh accumulation is already being produced via the Molikpaq offshore platform and its location will not therefore be covered further in this briefing paper. The main Piltun feature measures about 13 km long by about 6.5 km wide, with the nearest point of the feature located about 10 km from the coast and the outermost point of the feature about 17 km from the PA-B platform location coast. Estimated recoverable reserves of the Piltun feature are some 57.5 million tonnes oil, and 6.9 billion cubic metres of associated natural gas. Field development The number and location of platforms required to safely and efficiently produce oil and gas from an offshore field depend on a number of key parameters including: • • • • • The size of the field. The depth of field beneath the surface of the seabed. The distribution of hydrocarbons within the reservoir and the presence of any anomalies, such as layers of hydrocarbons above the main reservoir and seismic faults. Geological features within the field, such as faults, which may segment the field and isolate areas of hydrocarbons. The complexity of the well trajectories required for recovery of oil and gas. Initial studies suggested that up to five platforms would be required to develop the PA field economically. However, detailed study of the two main features of the field coupled with the use of up to date drilling techniques enabled the original field development concept to be modified considerably and led to a revised plan featuring two platforms - the existing Molikpaq platform on the Astokh accumulation and a new platform on the Piltun accumulation. The reduction in the number of platforms brings major benefits to the field development viz.: • The reduction in the number of platforms means a major reduction in the environmental footprint of the development including: o Less disturbance to the marine environment from construction and installation activities. o Less disturbance from long term operations. o Fewer offshore pipelines. o Significantly reduced oil spill risks. o Less disturbance from supply ship and helicopter activities. o Safer operations through having fewer people and less equipment based offshore. • From an economic point of view, the ability to develop the field with just two platforms results in a reduction in costs, which improves the economic efficiency of the development and maximises the benefit of these hydrocarbon resources for the Russian nation and the company’s shareholders. PA-B platform details The PA-B platform is an integrated oil and gas production platform designed to drill, process and export oil and associated gas via subsea pipeline to shore. The platform comprises a concrete gravity base structure (CGBS) that is nearing completion in Vostochny in the Far East of mainland Russia and an integrated topsides deck, which is under construction in Korea. The CGBS comprises a concrete caisson structure with four legs used to support the topsides. Wells are drilled through one of the legs and the other three legs are used for storage, utilities and for the export pipelines. The CGBS is 54 m high and weighs about 100,000 tonnes. It is installed on a flat firm area of the seabed and is held in place by its own weight coupled with the weight of the topsides. The topsides contain all the facilities needed to drill wells, process the produced hydrocarbons and export them to shore. They also contain the living quarters for the operating crew and all the support services. The topsides weigh about 28,000 tonnes. Further details regarding the installation and operation of the platform substructure and topsides can be found in the construction and installation section below. PA-B platform location PA-B platform location The location of the platform has been selected to optimise the safe and efficient recovery of hydrocarbons from the field. The Russian authorities have approved the selected location as part of the overall TEOC for the project and the State Environmental Expertisa has given the project a positive conclusion. The location is based on 3D seismic surveys and other geological and reservoir engineering surveys of the reservoir, which enable a detailed picture of the reservoir to be made. These surveys allow the depth and extent of the field to be mapped and show where the oil and any associated gas are trapped within the reservoir. The location of wells required to maximise recovery of hydrocarbons from the reservoir is complex. Although many advances have been made which increase the distance wells can be drilled away from a platform, the distance is also limited by the location, size and geological conditions of the field. With respect to the Piltun accumulation, the above limitations mean that moving the platform by even a relatively small distance can have a major impact on the ability to space the wells in the reservoir in locations that allow efficient drainage of the oil and gas. 1. Piltun feature of the PA Field PA-B location – Piltun feature of the PA Field North Main Piltun feature of the PiltunAstokhskoye Field where development drilling is planned PA-B platform location Approx 7 km west - estimated outer edge of the Piltun area where whales have been observed to feed 0 1 KILOMETER S 2 3 4 5 Graphic representation of the main Piltun feature of the PA field - scale is approximate only Seismic surveys indicate other sub-surface anomalies, such as layers of oil or gas that lie closer to the surface, seismic faults or unstable seabed conditions. Knowledge of these details is important because the presence of such conditions can present technical and safety hazards. PA-B platform location 2. Shallow gas hazards PA-B location – shallow gas hazards North Main Piltun feature of the PiltunAstokhskoye Field where development drilling is planned Potential area of possible shallow gas risk PA-B platform location Approx 7 km west - estimated outer edge of the Piltun area where whales have been observed to feed 0 1 KILOMETER S 2 3 4 5 Graphic representation of the main Piltun feature of the PA field - scale is approximate only Shallow gas presents a serious safety hazard due to the risk of causing blowouts - an uncontrolled escape of gas – that could possibly occur during drilling activities. In the case of the Piltun accumulation of the PA field, potential shallow gas hazards have been located stretching several kilometres to the east and northeast. PA-B platform location 3. Unstable seabed conditions PA-B location – unstable seabed hazards North Main Piltun feature of the PiltunAstokhskoye Field where development drilling is planned PA-B platform location Approx 7 km west - estimated outer edge of the Piltun area where whales have been observed to feed Potential area of possible shallow gas risk Area of ‘unstable’ seabed: unsuitable for platform placement 0 1 KILOMETER S 2 3 4 5 Graphic representation of the main Piltun feature of the PA field - scale is approximate only Immediately to the southeast and stretching south are areas of clay channels, which lead to unstable seabed conditions and create a further safety hazard. The platform requires a stable and firm seabed to support its weight. Seabed areas containing clay channels, and similar unstable soft sediments, are not capable of safely supporting the weight of such a structure. All of the above factors are critical in selecting a safe and effective location for the platform. The selected location allows all the required well targets to be reached to ensure maximum recovery of hydrocarbons, avoids shallow gas hazards and has a stable seabed, and yet remains a significant distance – about 7 km east of the near-shore whale feeding ground in Piltun Bay. Whale feeding areas Currently two main feeding areas of the western gray whale are known along the northeast coast of Sakhalin Island, the Piltun feeding area (80 km long by an average of 6 km wide - total 480 sq km) and the Chaivo offshore feeding area (60 km long by an average of 18 km wide – total 1080 sq km). The planned offshore activities of Sakhalin Energy are located close to the Piltun feeding area and vessel traffic will run close to the offshore feeding area. Sakhalin Energy is committed to minimise any potential impact that platform installation and operation activities might have on the western gray whale while on their feeding grounds. PA-B platform location Minimising impact on the whales The PA-B platform is located in a water depth of about 30 m at 13 km from shore and about 7 km from the eastern border of the Piltun feeding area. To date no gray whales have been observed around the platform location mainly because their prey organisms do not occur there. However, it is known that underwater noise can travel over long distances and thus short term installation and long-term operational activities from the PA-B location could have the potential to impact the feeding whales. Sakhalin Energy has conducted various noise studies to assess the potential impact and has used the results to develop mitigation measures. Additionally, Sakhalin Energy is studying the recommendations made in the recently released report from the independent scientific review panel, which the company commissioned the IUCN to convene. Where the report made practical recommendations to further mitigate potential impacts to the whales – such as the change of pipeline route and model sensitivity analysis – many of these are being implemented. The range of mitigation measures that apply to all activities that are required for the installation and operational phase of the PA-B platform are detailed in the Sakhalin Energy Marine Mammal Protection Plan. These are summarised below: Collision risk • • • • • • • • • • • Vessels operating in the Piltun area will not traverse the Piltun feeding area or waters less than 20 m depth unless essential for safety or specifically required and authorised. All vessels on transiting voyages are required to keep within defined navigational corridors, unless essential for safety or specifically required and authorised. For all vessels involved in the PA-B installation, an area with a radius of 2 km around the PA-B location has been established as a construction corridor - i.e. about 5 km from the Piltun feeding area. Vessels are required to operate within these corridors unless essential for safety or specifically required and authorised. As the anchors are set at a maximum distance of 1 km from the platform location, the vessels involved will operate well within these boundaries. Specific speed requirements for vessels have been established under different visibility conditions and depending on their route or location. In the construction corridors, maximum speed limits of 10 knots in good visibility and 7 knots in low visibility have been set. Sudden changes in speed and course are to be avoided, unless required for safety reasons. Transiting vessels will attempt to maintain a minimum of 1,000 m separation from observed western gray whales and any other endangered whale species. Non-transiting vessels moving with a speed of less than 5 knots will be required to maintain course and speed unless there is an imminent risk of collision. Any attempt to pursue, intercept, encircle, or cause groups of whales to separate will not be permitted. Vessels will not cross directly in front of or in the immediate vicinity of moving or stationary whales. When moving parallel to whales, vessels will maintain a constant speed and course. At least two trained marine mammal observers (MMO) will be present on all key vessels involved in offshore construction activities along the east Sakhalin coast and shall maintain a continuous watch for western gray whales and other marine mammals. All crew members shall maintain a watch for marine mammals, regardless of whether or not the MMO is on watch. Noise: • • The mitigation measures defined below apply to all offshore activities that have the potential to impact gray whales while in the Piltun feeding area. Contractors are requested to use equipment and procedures that minimise noise, such as use of special enclosures, mufflers, sound-isolation mounts, tuned propellers and drive shafts, shrouds on propellers, along with minimal use of thrusters. Some noise reducing methods in the installation and or operation methods have already been implemented, such as: o Workers required to complete the installation, hook-up and start-up of the platform will be housed in a flotel moored next to the platform, reducing the number of crew change vessels. PA-B platform location • • • • • • This flotel will be held in position by anchors rather than dynamic positioning using engines to remain on station, which will limit noise emissions. o The positioning of CGBS will be undertaken via deck-mounted winches on the five tugs. A series of “deadman” anchors are placed on the seabed and cables attached to them are routed through the winches on the tugs to the CGBS and the winches are used to control the cables and maintain the position of the CGBS. This means the tugs’ propulsion system will not be used, which will virtually eliminate acoustic emissions from the tugs during installation. A system of 5 anchors will be used during the installation – two to the south west, and one each to north west, north east and south east which will be located at a distance of one kilometre from the CGBS location. Only two of these anchors – those running south west – will be in the direction of the whale feeding area and will be up to six kilometres away from the outer edge of the feeding ground. o The drilling of wells takes place inside the concrete legs of the substructure. This shields noise emissions. The noise footprint of activities related to PA-B CGBS installation has been predicted with acoustic models using source level measurements of a vessel working at full power as analogue for the tugs to be used for tow in. Source level measurements of the actual tugs under various power regimes are being planned start of May for refinement of noise footprint prediction and verification of effectiveness of power level reduction as mitigation. The predicted noise footprint will be field tested during the earlier installation of the Lunskoye platform as an extra validation. Noise measurements of operational noise (including drilling activities and the presence of a standby vessel) have been carried out on the Molikpaq and used in acoustic modelling exercises to predict expected noise emissions from PA-B. These noise measurements from the Molikpaq indicate that noise levels are below the level that may cause avoidance of whales at a distance of less than 5 km. Based on these results, the noise footprint of operational activities of the PA-B platform is not expected to cause a biological impact to the whale population. As the Molikpaq platform and the new PA-B platform are different structures, noise emissions of currently operating similar CGBS platform structures are also being investigated to provide additional verification of the predicted noise footprint and to develop mitigation measures if necessary. The actual noise output during offshore construction will be monitored in the field through real time acoustic monitoring. Pre-defined “action criteria” and decision protocols will be developed in case the observed impact of the whales is higher than predicted. Before starting any offshore operations, vessel captains will receive a briefing on the importance of the mitigation measures and the communication and decision chains. All types of aircraft will maintain a minimum altitude of not less than 450 m over the western gray whale feeding area, subject to pilot safety requirements. Aircraft involved in construction and operational activities will be prohibited from flying over or circling wildlife, including whales, for the purposes of casual viewing. Waste: • • • • • The first well to be drilled from the platform will be a dedicated cuttings re-injection (CRI) well, which will be drilled with water-based drilling fluid (mud). The method of cuttings and waste mud disposal from this first well is currently under investigation, but the cuttings and waste mud will not be discharged to the sea. The disposal methods being investigated include: Collecting and shipping the waste mud and cuttings to the existing Molikpaq platform or Lunskoye platform - which will have commenced operations - and re-injecting them into their CRI wells. Collecting and shipping the waste mud and cuttings ashore for temporary storage or disposal. Temporary storage on a barge alongside the platform until the CRI system is operational. The factors affecting the final selection of drilling waste disposal for this first well include economic, technical feasibility, safety and environmental benefit. Shipping waste mud and cuttings with a supply boat to one of the other platforms or to shore clearly has an environmental impact due to the extra shipping activities involved. PA-B platform location • All drilling cuttings and waste mud from all subsequent wells will be injected into the CRI well. There will be no discharge of cutting or drilling fluids to the sea – even in the case of low toxicity water-based mud, which is commonly discharged in many parts of the world in similar offshore operations. With implementation of the above mitigation measures, no biological impacts on the western gray whales are expected from PA-B installation and operations activities. Oil spill risks Oil spill trajectory modelling indicates that the predominant north to south current in the area will generally cause any oil spill to move away from the Piltun feeding area. Only in the event of a strong easterly wind is oil spill likely to impact waters overlying the Piltun area. Containment and recovery of oil spilled on the sea is difficult. Sakhalin Energy therefore gives priority to the prevention of oil spills, which is achieved through design and engineering solutions for the facilities. Below are just a few of the measures that have been taken to prevent spills from the offshore facilities at Piltun: o Hydrocarbon producing wells are all equipped with blow-out preventers that automatically shut wells down in the event of an uncontrolled release of oil or gas. o All areas of the platform subject to possible contamination with oil – such as the drilling floor on the platform – are equipped with an enclosed drainage and collection system that prevents overboard discharges of oil. o Emergency shutdown valves will be installed on the platform and on the beach to shut down oil and gas flow to the offshore pipelines in the unlikely event of a suspected leak or abnormal condition. o Offshore pipelines are designed to the highest technical standards using seamless linepipe materials and welding standards, as well as mechanical and corrosion protection provisions o Extensive ice scour research has led to deep burial of pipelines up to 30m water depth, virtually eliminating the probability of damage being caused by ice scour o Sakhalin Energy already has an excellent record with regard to oil spills. The Molikpaq platform – which currently uses an offshore oil loading system until offshore pipelines are installed to bring production ashore – has spilled less than two litres of oil over the past three years. This spill performance is world class in the offshore oil and gas industry. However, Sakhalin Energy is not complacent and the following measures will be implemented as part of the Phase 2 development: • Oil will be exported from the platform by subsea pipeline, which has lower associated spill risks compared with existing offshore tanker loading and tanker movements down the east coast of the island. • A vessel with oil spill response capability will be on standby in the vicinity of the platform 24 hours a day. This vessel will be equipped with oil spill containment and recovery equipment and will have onboard storage for recovered oil. The vessel will also have a “daughter” vessel on deck to assist in deployment should this be necessary. • Sakhalin Energy ha s a fully equipped oil spill response base at Nogliki. This facility contains shoreline cleanup and bay protection equipment, including vessels. This equipment can be airlifted to sites by helicopter. For Phase 2, SEIC will establish a number of emergency response depots locating rapid response packs of equipment at key locations. • Sakhalin Energy is also participating in the development of a regional oil spill response capability for Sakhalin Island. Although planning of this is in its early stages, it will integrate industry and government resources. Further background information Construction and installation Installation of the PA-B platform will take place in two stages – placing the CGBS on the seabed, and then installing the topsides on the CGBS legs. All these activities will be subject to the mitigation measures outlined above. PA-B platform location Concrete gravity base substructure: • This will be floated and towed by three tugs escorted by an offshore support vessel and a guard vessel from the construction site at Vostochny to the platform location on the Piltun feature of the PA field. • The tow route will take the substructure up the coast of mainland Russia, through La Perouse straight (which separates the southern tip of Sakhalin from the northern tip of Hokkaido, Japan), and up the coast of Sakhalin to the selected site. Statistics are as follows: o Towing distance o Towing time o Installation time 1020 nautical miles approx 18 days approx 35 days (2 days seabed re-profiling, 3 days CGBS preparation and ballasting to sea floor, 30 days rock placement) • Some sand will be redistributed to create a horizontal and smooth seabed. Removed material will be redistributed on the seabed around the base of the substructure. The area to be prepared will cover a square of approximately 110m by 110m and the levelled area will be down to elevation LAT –30.0m. This will yield a net volume for re-profiling the seabed of approximately 7,500 cubic metres. • Once at the site, it will be held in position by five tugs using the pre-installed anchors and a winch-based station-keeping system (see above), and carefully ballasted with seawater to sink it gently to the seafloor. • The tow and actual installation will take place over a period of about three weeks. The installation of the scour protection - required to protect the base of the substructure from wave and current action - is a somewhat longer process and will last about 30 days. o The scour protection material will be placed around the base of the CGBS by using a fall pipe and side stone placement methods. In areas around the CGBS requiring high accuracy, rock material will be placed through the fall pipe. In areas somewhat further away, the rock can be placed by using the alternative side-stone placement method. An estimated volume of 25,000 cubic metres of rock has to be placed to protect the CGBS foundation against scour due to wave and current action. • No piling activities are required to attach it to the seabed – it will remain in place by virtue of its own weight. Topsides: • Much of the commissioning work of equipment on the topsides will be performed in the construction yard, which will cut down on offshore commissioning activities and associated noise emissions. • The topsides will be installed on a barge and towed to the site by tugs from the construction site in Korea. • Once at the site, the barge will be positioned between the substructure legs and the barge ballasted to lower the topsides gently onto the top of the legs. • For the remaining commissioning and hook-up work required offshore, a flotel (floating accommodation vessel) will be moored using anchors near the platform during the 120 days required for the work. • The topsides will be towed from the construction site in Geoje, South Korea, and will cross the Sea of Japan before following a similar route to the substructure tow. Statistics are as follows: o Towing distance o Towing time o Installation time 1530 nautical miles approx 16 days 26 days (25 days preparation of top of CGBS legs, 1 day mating topsides to CGBS legs