EP2004-5167 Feasibility Study Volume2

Restricted to Shell Personnel Only EP 2004-5167
OGUD.2003.000012.01
Marsical Sucre Liquefied Natural Gas Project Upstream
Plan For The Phase 1 Polygon,
Part 1 - Field Development Feasibility Study
Volume 2 (Surface Engineering)
by
Compiled by A. P. Lanson, Jr. (SIEP-EPT-AGH),
MSLNG Upstream Team
Sponsor: Shell International Gas

Reviewed by: J. Langer, G. Lambirth, D. Mander,
J. Kikkert, T. Klaver
Approved by: K. Pascoe
Date of issue: May 2004
Period of work: November 2002 - June 2003
Account code: A-001087-100
ECCN number: EAR 99
This document is classified as Restricted to Shell Personnel Only. 'Shell Personnel' includes all staff with a personal contract with
a Shell Group Company, designated Associate Companies and Contractors working on Shell projects who have signed a
confidentiality agreement with a Shell Group Company. Issuance of this document is restricted to staff employed by a Shell
Group Company. Neither the whole nor any part of this document may be disclosed to Non-Shell Personnel without the prior
written consent of the copyright owners.
Copyright 2004 SIEP B.V.
SHELL INTERNATIONAL EXPLORATION AND PRODUCTION B.V., RIJSWIJK

Further electronic copies can be obtained from the Global EP Library, Rijswijk
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1. EXECUTIVE SUMMARY AND CONCLUSIONS

This report summarizes the surface engineering feasibility study carried out by Shell Global
Solutions International BV at the request of Shell Venezuela SA.
The work was carried out as part of an integrated upstream subsurface/surface
project team commissioned by Shell International Gas (SIG) on behalf of its partners PDVSA
and Mitsubishi. It represents part of the upstream scope of the Mariscal Sucre Liquefied Natural
Gas (MSLNG) Preliminary Development Agreement (PDA). The feasibility study was carried
out during the period December 2002 to June 2003.
This report should be reviewed as an integral part of the “MSLNG project Upstream Plan for the
Phase 1 Polygon, Part 1 - Field Development Feasibility Study, Volume 1 and 2.i.
The overall objective of this feasibility phase was to identify and assess a wide range of credible
and realistic scenarios for the development of the Rio Caribe, Mejillones, Patao, and Dragon non-
associated gas fields located offshore North East Venezuela.
The integrated development scenarios were constrained by a range of LNG plant inlet and
Domestic Gas demand profiles. The resulting demand profiles varied between 682 and 1185
MMscf/d over the 30-year production period considered. An additional constraint was the
location of the LNG plant, previously selected to be in Guiria.
Surface concepts were defined to assess the impact on capital requirement and schedule of the
following aspects:
• Demand profiles,
• Different geological subsurface realizations including variations in contaminant and liquid
loading,
• Integrated area development phasings (e.g., Sequential, parallel)
• Integrated facility and processing concepts (Hardware Sensitivities). This included subsea
and platform wells, single and multi-phase pipelines, onshore and offshore condensate
export, in-field, or central compression facilities, etc.
A reference case was defined to allow an independent comparison of the alternative concepts.
All surface concepts were modeled taking into account reservoir and well engineering constraints
and reflecting the PDA’s ambitions in the field of HSE and SD performance.
The feasibility study allows the following conclusions:
• The UTC/UDC for;
o The demand profiles studied range from 2.25 to 2.65 USD/boe or 0.52 to 0.65
US$/MMBtu for UTC and 1.27 to 1.58 USD/boe or 0.30 to 0.40 US$/MMBtu for UDC
i See Reference 15
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However, the well count for the various scenarios were being revised upwards at the time
of report finalisation adding some 0.06 US$/BOE per additional well.
o Phased area developments were calculated as having an effect of 0.32 US$/BOE or 0.8
US$/MMBtu on both UTC and UDC.
o The effect of various integrated hardware sensitivities results in a range of 0.62
US$/BOE or 0.09 US$/MMBtu for UTC. Similarly the UDC range is 0.43 US$/BOE or
0.06 US$/MMBtu.
• The total CAPEX (including wells) for the different demand profiles ranges from 1.12BnUS$
to 1.57 BnUS$ (in Real Terms 2003) or in NPV7 terms 0.66 BnUS$ and 0.88 BnUS$. See
note on well count above.
• No surface engineering show stoppers have been identified.
• The demand profiles do not indicate a clear or changing preference for one or more of the
surface concepts.
• Concept selection, in addition to capital cost, will be strongly influenced by life cycle issues
and non-monetary factors such as HSE, SD, Local Content, Development Flexibility,
Availability, Operations, Security, Downstream Integration, Expansion Potential, etc.
• Impact of the reservoir sensitivities between the reference case and the high case are not yet
completed.
• The uncertainty in PVT data affects condensate revenue projection from Rio Caribe to some
0.28 US$/BOE or 0.04 US$/MMBtu.
• The Liquid loading impact from PVT uncertainty in Mejillones, Patao, and Dragon do not
affect concept selection for their field development concepts.
Ultimately, the concept selected may be some combination of those studied in this report.
The uncertainties and risks that will require continued attention in the next phases include:
• Impact of Reservoir Fluid Contaminant on Upstream and Downstream Facility design.
Uncertainty in contaminant levels can be addressed through appraisal drilling and/or
development scheduling, the latter with a focus on data acquisition.
• Pipeline design activities will need to address seismic and soil stability risks and define the
exposure of the offshore route to the alleged explosives dumping ground in the Boca de
Dragon.
• SDEA sensitivity will continue to be addressed in the pipeline route-selection process.
• Alignment of project and government decision processes leading up to VAR3
• Schedule impact of project financing and local content requirements.
• Well and reservoir performance and impact on flexibility requirements for surface facility
design concept.
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The troubles in Venezuela earlier in the year have impacted the Upstream team far less than
the other PDA teams. However, whilst good progress has been made, the understanding of the
CAPEX and schedule consequences of the following issues are not yet fully understood:
• Minimum condensate production volumes into the LNG Plant and impact of condensate
production variation over time.
• Impact of various levels of contaminants on the process design, and it’s associated cost and
the measures available to manage this uncertainty beyond completion of the LNG plant BoD.
• Landing pressure at the LNG plant as an integrated study
• Pre-commissioning gas requirement in quality and volumes as function of time.
• Export of condensate, including through the LNG plant or directly from offshore to an
alternative location.
Integrated Project Economics will have to be run to demonstrate robustness of the project
against the above parameters to demonstrate the impact on the LNG plant investment and/or
upstream development options to manage contaminant uncertainty.
Volume 2 MSLNG Upstream Surface Team as compiled by Hein Hilhorst:

• Hein Hilhorst TL OGUS-OGUD, SGSi
• Bin Finch FE OGUS-OGUD, SGSi
• Ed Hernandez Pl OGUS-OGUD, SGSi
• Stewart Hayward Economics OGUS-OGUD, SGSi
• Martin Geven Operations OGUS-OGUD, SGSi
KEYWORDS
South America, Venezuela, Norte Paria, Mariscal Sucre, FDP, LNG, VLNG, Field
Development Feasibility Study, Concept Selection, Field Development Plan, gas
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TABLE OF CONTENTS
1. EXECUTIVE SUMMARY AND CONCLUSIONS I
2. INTRODUCTION AND BACKGROUND 2-1
3. CONTENT AND CONSTRAINTS 3-1
3.1. Business Context 3-1
3.2. Venture Description/Background 3-1
3.3. Boundary Conditions and External Factors 3-4
3.3.1. Geographical Description of the Paria Peninsula 3-4
3.3.2. National Park 3-5
3.3.3. Climatic and Oceanographic Conditions 3-7
3.3.4. Primary Socio-Economic Features 3-9
3.3.5. Infrastructure 3-9
3.3.6. LNG Plant Location 3-10
4. SCOPE OF WORK 4-1
4.1. Deliverables of the Feasibility Phase 4-1
4.2. Defining Parameters 4-2
5. CONCEPT AND COST SUMMARY 5-1
5.1. Summary of Hardware Sensitivities 5-5
5.2. Summary of Field Phasing Sensitivities 5-8
5.3. Summary of Demand Curve Sensitivities 5-9
5.4. Summary of Geological Case Sensitivities 5-11
5.5. Corrosion Case Sensitivities 5-13
5.6. Unit Technical Costs 5-15
5.7. Benchmarking of Estimates 5-22
5.8. Cost Estimates Review 5-23
6. PIPELINE SUMMARY AND SCOPE OF REVIEW 6-1
6.1. Summary 6-1
7. GENERAL DESCRIPTION OF WORK PROCESS 7-1
7.1. Review and Summary Earlier Work Completed 7-1
7.2. Integration with Subsurface Team 7-3
7.3. Integration with LNG Plant Team 7-4
7.3.1. General Discussion 7-4
7.3.2. LNG Plant Simple Process Description 7-5
7.3.3. Inlet Pressure Optimization 7-7
7.3.4. Impact of Contaminants 7-7
7.3.5. Condensate Recovery 7-9
7.4. Integration Among Surface Team Members 7-12
7.5. Peer Assists and Quality Control 7-12
8. COST ESTIMATING METHODOLOGY AND ASSUMPTIONS 8-1
8.1. Basic Estimating Methodology 8-1
8.1.1. Tools, Documents, and Assumptions 8-1
8.1.2. Estimating Categories 8-2
8.1.3. Excluded Items 8-2
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9. COMPOSITION 9-1
9.1. Basis for Process Simulation Work 9-1
9.2. Pseudo Component Properties 9-2
9.3. Uncertainty 9-2
9.4. Contaminant Matrix 9-3
10. FIELD PHASING SCENARIOS 10-1
10.1. Concept 3 10-3
10.1.1. Reservoir Engineering Input 10-3
10.2. Concept 4 10-21
10.3. Concept 5 10-29
10.4. Concept 6 10-37
10.5. Concept 7 10-45
11. DEMAND CURVE SENSITIVITIES 11-1
11.1. Capacities and Start-up Phasing Comparisons 11-2
11.2. Gathering System 11-3
11.3. Compression 11-4
11.4. Pipeline Information 11-4
11.5. Cost Estimate 11-5
11.6. CAPEX / DRILLEX 11-5
11.7. OPEX 11-5
12. GEOLOGICAL REALIZATION SENSITIVITIES 12-1
12.1. Modified Reference Case – Updated Geological Interpretation 12-2
12.1.1. Production Forecast 12-2
12.1.2. Capacities and Phasing 12-3
12.1.3. Compression 12-3
12.1.4. Cost Estimate 12-4
12.2. High Geological Realization 12-5
12.2.1. Production Forecast 12-5
12.2.4. Stabilized Condensate Production 12-7
12.3. Downside Case: High Well Count – 200 BCF / Well 12-9
12.4. High Water Production 12-10
12.5. High CGR at Rio Caribe 12-11
12.5.2. Stabilized Condensate Production 12-12
13. HARDWARE SENSITIVITIES 13-1
13.1. CPF Location Sensitivity 13-4
13.1.1. Concept 1 - Rio Caribe Central Platform 13-4
13.2. Concept 2 - Mejillones CPF 13-16
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13.2.1. Overall Layout 13-16

13.2.2. Gathering System 13-17
13.2.3. Central Production Facility – Compression Platform 13-17
13.2.4. Civil/Structural 13-19
13.2.5. Pipeline Information 13-20
13.2.6. Electrical Power Supply and Distribution 13-20
13.2.8. CAPEX / DRILLEX 13-20
13.2.9. OPEX 13-21
13.2.10. Comparison and Conclusions 13-21
13.2.11. CPF Location Comparison 13-21
13.3. Subsea versus Conventional Sensitivity 13-23
13.3.1. Concept 1 – All Subsea except Rio Caribe CPF Platform(s) 13-23
13.3.3. Subsea Hardware 13-24
13.4. Fixed versus Floating Sensitivity 13-25
13.5. Concept 2 – Floating Production Unit (FPU) 13-25
13.6. Compression and Power Generation Sensitivity 13-28
13.6.1. Concept 2 - Field Compression and Power 13-28
13.6.3. Integrated Process Description 13-28
13.6.4. Field Wellhead Platform Facilities 13-29
13.6.6. Central Production Facility 13-30
13.6.7. Separation 13-31
13.7. Concept 2 – Onshore Compression and Power Generation 13-33
13.7.4. Pipeline Information 13-35
13.8. Compression Comparison 13-36
13.9. Pipeline Single-Phase versus Two-Phase Sensitivity 13-39
13.9.1. Concept 2 – Single-Phase Pipelines 13-39
13.10. Condensate Handling and Export Sensitivity 13-46
13.10.1. Concept 1 – GBS Offshore Condensate Handling and Offloading 13-46
13.11. Concept 1 – FPSO Offshore Condensate Handling and Offloading 13-51
13.11.3. Concept 2 – Condensate Handling and Pipeline to Puerto La Cruz 13-52
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13.11.7. Comparison Condensate Handling and Export Sensitivity 13-53
13.12. High Volume Sensitivity 13-55
13.12.1. Concept 2 – High Volume 13-55
13.13. Concept 2 – Subsea with FPSO, Single Phase Pipelines, Condensate to
Puerto La Cruz 13-56
13.13.3. Subsea Hardware 13-58
13.13.6. Separation 13-58
13.13.7. Hydrocarbon Dewpointing 13-59
13.13.9. Dehydration 13-60
13.13.10. Water Treatment 13-60
13.13.11. Condensate Stabilization 13-60
13.13.12. Pipeline information 13-61
13.13.14. Comparison 13-61
13.14. Corrosion and Materials Sensitivity 13-62
13.14.1. Impact on Concept 3 for High CO2 and H2S 13-62
13.15. Field Infrastructure Study 13-64
14. PIPELINES 14-1
14.1. Summary and Conclusions 14-1
14.2. Route Selection 14-3
14.2.1. Route Descriptions 14-3
14.2.2. Route Selection Criteria 14-24
14.3. Hydraulics 14-27
14.3.1. Preliminary Sizing Calculations 14-28
14.3.2. Concept Sizing Calculations 14-41
14.3.3. Description of Concepts 14-41
14.3.4. Conclusions and Cost Summary 14-49
15. COST ENGINEERING 15-1
15.1. Estimating of Options 15-1
15.1.1. Initial Stage – Hardware Sensitivities 15-1
15.1.2. Pipeline Routing Reviews 15-2
15.1.3. Other Elements 15-4
15.1.4. Conclusions 15-5
15.2. Field Phasing Sensitivities 15-5
15.2.1. Comparison to the Earlier Stage 15-5
15.2.2. Phasing and Flows 15-6
15.3. Demand Curve Sensitivities 15-7
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15.3.1. Further Concepts 15-7

15.4. Updated Geology Concepts 15-7
15.5. Other Sensitivities 15-8
15.5.1. Contaminants 15-8
15.6. OPEX 15-8
15.7. Determination of UDC and UTC 15-9
15.8. Estimate Benchmarking and Checks 15-10
15.9. Cables and Umbilicals 15-11
15.10. Decommissioning 15-11
15.11. Infill Wells 15-11
15.12. FPSO Costs 15-12
15.13. Domestic Gas Plant 15-12
15.14. Operations Base 15-13
15.15. Subsea Isolation Valves (SSIV) 15-13
15.16. Landfalls and Seismic Crossings 15-13
15.16.1. Landfalls 15-13
15.16.2. Seismic Crossings 15-13
15.17. Phasing and Scheduling of the Project 15-14
15.18. Power Generation and Compression Philosophy 15-15
15.19. Interface with Downstream Cost Engineers 15-15
16. FLOW ASSURANCE 16-1
16.1. Hydrates 16-1
16.1.1. Summary 16-1
16.1.2. Reservoir Conditions 16-2
16.1.3. Hydrate Stability Analysis 16-2
16.1.4. Hydrate Inhibition Options 16-4
16.2. Wax 16-7
16.3. Asphaltenes 16-9
17. CORROSION AND MATERIALS 17-1
17.1. Scope of Assessment 17-1
17.2. Threats Considered 17-1
17.3. Types of Facilities That Were Assessed 17-2
17.4. Hydrocor Modeling 17-4
17.5. Flowlines 17-11
17.6. Effects of H2S Concentration 17-15
17.7. Hydrogen-induced Cracking (HIC) 17-16
17.8. Chlorides and Service Temperature 17-16
17.9. Material Selection Recommendations 17-17
18. TECHNOLOGY 18-1
18.1. Instrumentation Control and Automation 18-1
18.2. Well Head Platforms and / or Subsea Templates 18-2
18.3. Flowlines Connecting Well Heads / Subsea Templates to the CPF; Export
Pipelines 18-2
18.4. Central Production Facility 18-2
18.5. Compression Platform 18-3
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18.6. Conclusion 18-3

19. OPERATIONS AND MAINTENANCE 19-1
19.1. Operating Philosophy 19-1
19.1.1. Introduction 19-1
19.1.2. Manning 19-3
19.1.3. Standards and Criteria for Design 19-4
19.1.4. Standardization and Sparing Philosophy 19-4
19.1.5. Isolation Philosophy 19-4
19.1.6. Control and Monitoring Philosophy 19-5
19.1.7. Maintenance Philosophy 19-5
19.1.8. Inspection Philosophy 19-5
19.2. Operations and Maintenance Facilities 19-5
19.3. Integrity Management 19-6
19.3.1. Safeguarding Systems 19-7
19.3.2. Fire and Gas Detection and Protection 19-8
19.4. IT and Telecoms 19-9
19.5. Availability 19-10
20. PROJECT EXECUTION 20-1
21. INTERFACES 21-1
REFERENCES 21-3
APPENDIX A. SUMMARY TABLES OF WIND AND WAVE CRITERIA A-1
APPENDIX B. RISK MATRIX B-1
APPENDIX C. PRELIMINARY SIZING RESULTS C-1
APPENDIX D. COST SUMMARY SHEETS D-1
APPENDIX E. GLOSSARY E-1
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LIST OF FIGURES
Figure 2.1: Phase 1 polygon. 2-1
Figure 3.1: Location of Rio Caribe and North of Paria Gas fields. 3-2
Figure 3.2: MSLNG wider polygon. 3-3
Figure 3.3: Geographical Features. 3-4
Figure 3.4: Paria National Park. 3-6
Figure 3.5: Study area for metocean conditions. 3-7
Figure 3.6: Alternative sites. 3-11
Figure 4.1: Value identification / realization process. 4-1
Figure 5.1: Demand Curve Profiles 5-4
Figure 5.2: Concept summary: CAPEX USDk, RT 2002. 5-7
Figure 5.3: Concept summary: CAPEX USDk NPV7%. 5-7
Figure 5.4: Concept summary – CAPEX – USDk, RT 2003. 5-9
Figure 5.5: Concept summary – CAPEX – USDk, PV 7%. 5-9
Figure 5.6: Concept summary – CAPEX – USDk, RT 2003. 5-11
Figure 5.7: Concept summary – CAPEX – USDk, PV 7%. 5-11
Figure 5.8: Concept 3 and updates – CAPEX – RT 2003, Concept 3=100%. 5-12
Figure 5.9: Concept 3 and updates – CAPEX – PV 7%, Concept 3=100%. 5-13
Figure 5.10: Concept summary – CAPEX, USDk, RT 2003. 5-14
Figure 5.11: Concept summary – CAPEX, USDk, PV 7%. 5-15
Figure 5.12: UDC and UTC for Concepts 1 and 2 – USD/BOE. 5-19
Figure 5.13: UDC and UTC for Concepts 3 to 7 – USD/BOE. 5-19
Figure 5.14: UDC and UTC for Concepts 3.1 to 3.5 – USD/BOE. 5-20
Figure 5.15: UDC and UTC for Concepts 2 and 3 and updated
geology – USD/BOE. 5-21
Figure 5.16: Effect of extra wells and facilities on UTC. 5-22
Figure 6.1: Proposed Pipeline Concepts. 6-2
Figure 7.1: Integrated reservoir / facilities engineering activities. 7-3
Figure 7.2: LNG plant overview. 7-6
Figure 7.3: Offshore versus onshore stabilized condensate from Concept 3. 7-10
Figure 7.4: LNG plant feed HHV – offshore versus onshore
Condensate stabilization. 7-11
Figure 10.1: Total production profile. 10-3
Figure 10.2: Concept 3 – wells and platforms. 10-4
Figure 10.3: Concept 3. 10-4
Figure 10.4: Reference Case Wellhead Platform. 10-6
Figure 10.5: Gathering System DP’s. 10-7
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Figure 10.6: CPF Platform – Mejillones. 10-8

Figure 10.7: Rio Caribe Phase Diagram. 10-9
Figure 10.8: Compression Platform (Bridged to CPF). 10-10
Figure 10.9: Rio Caribe horsepower demand. 10-11
Figure 10.10: Slugcatcher Condensate Recovery. 10-12
Figure 10.11: Condensate Handling / Storage Unit. 10-13
Figure 10.12: Condensate stabilization energy requirements:
Onshore versus Offshore. 10-14
Figure 10.13: Stabilized condensate (BPD) Offshore versus Onshore. 10-15
Figure 10.14: LNG plant feed HHV –
Offshore versus Onshore condensate stabilization. 10-16
Figure 10.15: Concept 3: Annual OPEX. 10-21
Figure 10.16: Total Production Profile. 10-22
Figure 10.17: Concept 4 – Wells and Facilities. 10-22
Figure 10.20: Rio Caribe compression demand – Concept 3 versus Concept 4. 10-24
Figure 10.21: Concept 4: accelerated condensate shrinkage. 10-25
Figure 10.22: Stabilized condensate production: Concept 3 versus Concept 4. 10-25
Figure 10.23: Concept 4: Annual OPEX. 10-29
Figure 10.28: Rio Caribe compression. 10-32
Figure 10.29: Compression demand and discharge pressure –
Concept 5 versus Concept 3. 10-33
Figure 10.30: Concept 5 condensate shrinkage. 10-33
Figure 10.31: Stabilized condensate production. 10-34
Figure 10.32: Concept 5 annual OPEX. 10-37
Figure 10.37: Horsepower Contribution by Field. 10-41
Figure 10.38: Condensate Processing Volume Shrinkage. 10-41
Figure 10.39: Stabilized condensate production – Concept 6 versus Concept 3. 10-42
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Figure 10.40: LNG plant feed HHV versus production year. 10-42
Figure 10.41: Concept 6 – Annual OPEX. 10-45
Figure 10.43: Concept 7 – Subsea Architecture. 10-47
Figure 10.44: Slugcatcher pressures. 10-48
Figure 10.45: Horsepower Contribution by Pipeline Inlet. 10-49
Figure 10.46: Total horsepower comparison – Concept 7 versus Concept 3. 10-49
Figure 10.47: Compression suction pressure and ratio –
Figure 10.48: Total horsepower comparison – Concept 7 versus Concept 3. 10-51
Figure 10.49: Compression suction pressure and ratio –
Figure 10.50: Comparison of Stabilized Condensate. 10-52
Figure 10.51: Rio Caribe feed to LNG plant – HHV versus production year. 10-53
Figure 10.52: OPEX Concept 7. 10-57
Figure 11.1: Demand Curve Profiles. 11-1
Figure 11.2: Peak platform throughput. 11-2
Figure 11.3: Dragon gathering line DP. 11-3
Figure 11.4: Compression HP Comparison. 11-4
Figure 11.5: OPEX comparison. 11-6
Figure 12.1: Total production profile. 12-2
Figure 12.2: Horsepower contribution by field. 12-3
Figure 12.3: Horsepower comparison – different geological realizations. 12-4
Figure 12.5: Horsepower Contribution by Field. 12-6
Figure 12.6: Horsepower comparison Updated Geology versus High Geology. 12-7
Figure 12.7: Stabilized condensate production – Updated versus High Geology. 12-7
Figure 12.8: HHV comparison – Updated versus High Geology. 12-8
Figure 12.9: Condensate Processing Volume Shrinkage. 12-12
Figure 12.10: Stabilized condensate comparison –
Updated Reference versus High CGR. 12-13
Figure 12.11: Heating value comparison – outlet from slugcatcher. 12-13
Figure 13.1: Concept 2 production profile. 13-3
Figure 13.2: Concept summary – CAPEX USDk, NPV 7% - Concept 1 = 100%. 13-4
Figure 13.4: Reference Case Wellhead Platform. 13-7
Figure 13.5: Gathering system DP. 13-8
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Figure 13.6: Central Processing Facility (CPF) platform. 13-9

Figure 13.7: Compression platform. 13-11
Figure 13.9: Concept 1 OPEX. 13-15
Figure 13.11: Gathering System Pressure Drop. 13-17
Figure 13.12: Horsepower compared to discharge base case. 13-18
Figure 13.14: Concept 2 OPEX. 13-21
Figure 13.15: Compression horsepower required – Concept 1 versus Concept 3. 13-22
Figure 13.16: Concept 1 Subsea. 13-24
Figure 13.17: Concept 2 – FPU. 13-26
Figure 13.18: Concept 2 Infrastructure. 13-28
Figure 13.19: Field HUB platform. 13-29
Figure 13.21: Mejillones CPF Platform. 13-31
Figure 13.22: HUB compression platform. 13-32
Figure 13.24: Mejillones CPF Platform. 13-34
Figure 13.25: Horsepower Requirements. 13-35
Figure 13.26: Pressure drop Dragon to Mejillones CPF –
Onshore versus Offshore. 13-36
Figure 13.27: Total compression demand –
Reference versus Onshore versus Field. 13-37
Figure 13.28: JT Impact on Rio Caribe Compression HP. 13-41
Figure 13.29: JT Impact on Mejillones Compression HP. 13-42
Figure 13.32: Compression Horsepower demand versus
Single Phase PL concept. 13-45
Figure 13.33: Concept 1 – offshore condensate via GBS. 13-46
Figure 13.34: CPF platform. 13-47
Figure 13.35: Rio Caribe Phase Diagram. 13-48
Figure 13.37: Offshore versus Onshore condensate stabilization. 13-50
Figure 13.38: Energy comparison: Offshore versus Onshore. 13-50
Figure 13.39: Concept 1 – Offshore Condensate via FPSO. 13-51
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Figure 13.40: CPF Platform. 13-52

Figure 13.41: CPF Platform. 13-53
Figure 13.42: Concept 2 “High Case” Production Profile. 13-55
Figure 13.44: Concept 2 – High Case FPSO Subsea Single Phase PL’s. 13-57
Figure 13.45: Gathering System DP. 13-58
Figure 13.46: JT Impact and Field Influence on Total Compression. 13-59
Figure 13.47: Condensate Handling / Storage FPSO. 13-60
Figure 13.48: Compression Horsepower Demand – Reference versus High Volume
concept. 13-61
Figure 13.49: Drilling cost estimate graph. 13-65
Figure 13.50: Rio Caribe field layout summary. 13-66
Figure 13.51: Mejillones field layout summary. 13-66
Figure 13.52: Patao Field Layout Summary. 13-67
Figure 13.53: Dragon field layout summary. 13-68
Figure 14.1: Geographic points of interest. 14-3
Figure 14.2: Marine points of interest. 14-4
Figure 14.3: Proposed pipeline routes. 14-5
Figure 14.4: North Coast landfall, vicinity of San Juan de Unare. 14-6
Figure 14.5: San Jan de Unare to El Llano, forested area in mountains. 14-7
Figure 14.6: El Llano to Guiria, west to east corridor. 14-8
Figure 14.7: North Coast Landfall, Punta Cacao. 14-10
Figure 14.8: North Coast landfall, Bay West of Punta Cacao. 14-11
Figure 14.9: Punta Cacao to Guiria, aerial view of National Park. 14-13
Figure 14.10: Punta Cacao to Guiria, area north of Guiria. 14-14
Figure 14.11: North Coast landfall, Ensenada de Mejillones. 14-16
Figure 14.12: North Coast Landfall, aerial view of Ensenada de Mejillones. 14-16
Figure 14.13: Mejillones to Mapire, vicinity of National Park. 14-17
Figure 14.14: Mejillones to Mapire, road parallel to Rio Mapire. 14-19
Figure 14.15: Isthmus Option, aerial view of Isthmus. 14-22
Figure 14.16: Isthmus option, overhead view of Isthmus. 14-23
Figure 14.17: Isthmus option, view from South Coast. 14-23
Figure 14.18: Elevation profile – west route. 14-30
Figure 14.19: Elevation profile – reference case route. 14-31
Figure 14.20: Elevation profile – reference case route, tunnel option. 14-31
Figure 14.21: Elevation profile – CIGMA route. 14-32
Figure 14.22: Elevation profile – sea route. 14-32
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Figure 14.23: Updated CAPEX estimates. 14-46

Figure 15.1: Concept summary – CAPEX USDk, RT 2002, Concept 1=100%. 15-1
Figure 15.2: Concept summary – CAPEX – USDk, NPV 7% Concept 1=100%. 15-2
Figure 15.3: MSLNG Pipeline Options – CAPEX. 15-4
Figure 15.4: UTC in USD/boe. 15-9
Figure 15.5: PV CAPEX. 15-10
Figure 16.1: Hydrate phase boundaries for MSLNG reservoir fluids. 16-2
Figure 17.1: Input-output screen for Line 9 of Table 17.1. 17-11
Figure 18.1: Summary project schedule. 18-1
Figure 19.1: Operations Philosophy. 19-2
Figure 19.2: Operations Methodology. 19-2
Figure 19.3: Operations Base Requirements. 19-6
Figure 19.4: Effective Capacity (on a monthly basis) of the combined system
(production+LNG), artificial data. 19-11
Figure 19.5: Associated nr. of stream days of typical LNG plant. 19-12
Figure 20.1: Local capability. 20-3
Figure 21.1: Essential interfaces. 21-1
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EP 2004-5167 - XVI - Restricted to Shell Personnel Only
LIST OF TABLES
Table 5.1: Hardware Sensitivities 5-2
Table 5.2: Field Phasing Sensitivities 5-3
Table 5.3: Geology Phasing Scenarios 5-4
Table 5.4: Sensitivity Forecast from Reservoir Engineering 5-5
Table 5.5: General Summary – USDk RT 2002 5-6
Table 5.6: General Summary – USDk – NPV 7% 5-6
Table 5.7: General Summary- USDk RT 2003 5-8
Table 5.8: General Summary – USDk PV 7% 5-8
Table 5.9: General Summary – USDk – RT 2003 5-10
Table 5.10: General Summary – USDk – PV 7% 5-10
Table 5.11: Summary – USDk, RT 2003 5-12
Table 5.12: Summary – USDk, PV 7% 5-12
Table 5.13: General Summary – USDk, RT 2003 5-13
Table 5.14: General Summary – USDk - PV 7% 5-14
Table 5.15: Concepts 1 and 2 with Variations 5-16
Table 5.16: Concepts 3 to 7 5-17
Table 5.17: Concepts 3 to 3.5 5-18
Table 5.18: UDC and UTC for Updated Work and Concepts 2 and 3 5-21
Table 7-1: Offshore Stabilization Tradeoffs 7-12
Table 9.1: Norte de Paria Gas Stream Components 9-1
Table 9.2: Rio Caribe Gas and Liquid Stream Components 9-1
Table 9.3: Pseudo Component Properties 9-2
Table 9.4: Contaminant Matrix 9-3
Table 10.1: Phasing Scenarios 10-1
Table 10.2: Compression Capacities All Platforms 10-5
Table 10.3: Stabilizer Peak Process Parameters 10-13
Table 10.4: Jacket Load Cost Estimate Basis 10-17
Table 10.5: Power Load All Platforms 10-19
Table 10.6: CAPEX Summary 10-20
Table 10.7: Concept 4 Platform Peak Capacities and Phasing 10-23
Table 10.8: Heating value Differential: Concept 3 versus Concept 4 10-26
Table 10.12: Start-up Phasing 10-31
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Table 10.20: Well Startup Phasing 10-48
Table 10.21: Subsea Architecture 10-54
Table 10.22: Subsea Architecture - Infrastructure 10-54
Table 11.2: Well Count 11-3
Table 11.3: Pipeline Diameters 11-4
Table 12.1: Geology Phasing Scenarios 12-1
Table 12.2: Sensitivity Forecast from Reservoir Engineering 12-1
Table 12.3: Geology Update - Capacities and Phasing 12-3
Table 12.5: Optimistic Geological Update –
Capacities and Phasing for Concept 3 12-6
Table 12.7: Downside Case – High Well Count 12-9
Table 12.10: High CGR Capacities and Phasing 12-12
Table 13.1: Hardware Sensitivities 13-2
Table 13.2: Capacities for All Platforms 13-6
Table 13.3: Jacket Load Cost Estimates 13-13
Table 13.4: Power Loads All Platforms 13-14
Table 13.5: CAPEX Summary – Concept 1 13-15
Table 13.6: Capacities for All Platforms 13-17
Table 13.7: Horsepower Compared to Discharge Base Case 13-18
Table 13.10: Peak Capacities 13-21
Table 13.11: Topside Total Operating Weight 13-22
Table 13.12: CAPEX and OPEX in M USD 13-23
Table 13.14: CPF - Topside Operating Weight 13-26
Table 13.15: Electrical Load 13-27
Table 13.16: CAPEX and OPEX Costs 13-27
Table 13.17: Topside Operating Weights 13-37
Table 13.18: Electrical Loads 13-38
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Table 13.20: Platform Capacities 13-39
Table 13.21: Inlet JT System Performance 13-41
Table 13.22: Process Parameters for TEG Dehydration 13-43
Table 13.25: Topside Operating Weights 13-45
Table 13.28: Topsides Operating Weights 13-53
Table 13.30: Condensate Handling and Export Sensitivity Costs 13-54
Table 13.31: Concept 2 Capacities 13-56
Table 13.33: Operating Weights – Reference versus High Volume 13-61
Table 13.36: CAPEX for 2.5% CO2 13-63
Table 14.1: Key Conclusions and Recommendations 14-2
Table 14.2: GPS Coordinates-Geographic Points of Interest 14-4
Table 14.3: GPS Coordinates-Marine Points of Interest 14-5
Table 14.4: Key Issues 14-9
Table 14.8: Main Criteria Weighting 14-25
Table 14.9: Technical Sub-Criteria Weighting as a Percentage
of the Main Criteria 14-26
Table 14.10: SDEA Sub-Criteria Weighting as a Percentage of the Main Criteria 14-27
Table 14.11: Local Content Sub-Criteria Weighting as a Percentage
of the Main Criteria 14-27
Table 14.12: Costs Sub-Criteria Weighting as a Percentage of the Main Criteria 14-27
Table 14.13: Gas and Liquid Compositions 14-29
Table 14.14: Pseudo Component Properties 14-29
Table 14.15: Two-Phase Sizing Summary 14-35
Table 14.16: Single-Phase Sizing Summary 14-36
Table 14.17: Line Pack Results 14-37
Table 14.18: Summary of Recommended Pipeline Facilities 14-39
Table 14.19: Summary of Costs, Pipeline Facilities 14-40
Table 14.20: Pipeline Options - CAPEX 14-41
Table 14.21: Concept 1 and 2 Variations 14-43
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Table 14.22: Summary of Concepts 1 and 2 14-45

Table 14.23: Demand Curve Sensitivities 14-47
Table 14.24: Concept 5 Summary 14-48
Table 14.25: Concept 7 Summary 14-48
Table 14.26: Summary of Concepts 3-7 14-49
Table 15.1: MSLNG Pipeline Sizing Cost Comparison 15-3
Table 15.2: Cost Comparison – Jack-up Drilling versus Platform Drilling 15-5
Table 15.3: Concept 3 (Latest) Comparison with Concept 2 15-6
Table 15.4: Gas Processing Cost Estimate 15-12
Table 16.1: Reservoir Conditions 16-2
Table 16.2: Hydrate Phase Behavior Predictions 16-3
Table 16.3: Subcooling in each Reservoir Fluid 16-5
Table 16.4: Methanol and MEG Dosage Rate Requirements 16-6
Table 16.5: Condensate Parameters 16-8
Table 16.6: Predicted Cloud Point Temperature 16-8
Table 16.7: Asphaltene Content of Condensates 16-9
Table 17.1: Results of Hydrocor Modeling of Conditions Assessed for the Rio Caribe
Flowline 17-7
Table 17.2: Results of Hydrocor Modeling of Conditions Assessed for an Export
Pipeline Transporting Saturated Gas 17-9
Table 17.3: Results of Hydrocor Modeling of Conditions Assessed for an Export
Pipeline Transporting Saturated Gas and Condensate 17-10
Table 17.4: H2S Concentrations that Can Result in 0.05 psia (3.5 m bar) Partial
Pressure of H2S at the MAOP for Common Flange Classes 17-15
Table 17.5: Maximum Service Temperatures for Three Stainless Steel Alloys Exposed
to Marine Environments 17-17
Table 17.6: Summary of Material Selection Recommendations
for Three Situations 17-18
OGUD.2003.000012.01
EP 2004-5167 - 2-1 - Restricted to Shell Personnel Only
2. INTRODUCTION AND BACKGROUND

Between 1978 and 1982, Lagoven discovered substantial quantities of natural gas in offshore
fields north of the Paria peninsula, Venezuela. The resources are contained in 4 fields: Rio
Caribe, Mejillones, Patao, and Dragon, which collectively trace a linear footprint sequence east to
west over a distance of some 95 km. They sit in 90 m (shallowest part) to 150 m (deepest part) of
water some 40km offshore. Rio Caribe is a retrograde gas / condensate field, and the remaining
3 are essentially dry gas fields – all with multiple reservoirs spanning a depth range of some 2,100
m to 2,800 m.
Leads
Fields
Rio Caribe Area
N. Paria Area
Polygon
e1
Phas
Figure 2.1: Phase 1 polygon.

In 1988, Lagoven invited Shell to participate in formulating development plans for these fields
that resulted in the joint delivery, one year later, of a feasibility report contemplating an integrated
LNG project – Proyecto Crystobal Colon (PCC). A development trial then followed until June
1999 when Shell submitted to MEM/PDVSA its proposals for a revised project, Venezuela LNG
(VLNG). By this time, Lagoven had been taken into PDVSA.
In January 2000, MEM terminated the PCC project and subsequently put VLNG in its place
(May 2000). The new project targeted export of 4 mtpa LNG to USA markets, commencing in
year 2006. The Partners (PDVSA, Shell, ExxonMobil and Mitsubishi) intended to incorporate a
OGUD.2003.000012.01
new joint venture company by end Feb. 2002 with a view to executing both the upstream and
downstream elements as an integrated, seamless project. However, on 9th October 2001, the
Venezuelan Government formally terminated the VLNG project and simultaneously invited the
former Partners to submit competitive proposals for participating in a successor project: Mariscal
Sucre LNG (MSLNG). Respective holdings in the successor project were announced in April
2002: State (60%); Shell (30%); Mitsubishi (8%) with 2% reserved for Venezuelan entities.
Besides targeting 4.7 mtpa LNG for USA markets via a new-build LNG plant located to the
south of the peninsula near Guiria, entry to this new project included supply of up to 300
MMscf/d gas to internal Venezuelan markets. A Framing Agreement (FA) that set out the
principles for progressing the project was signed on 18th June 2002 and a new Preliminary
Development Agreement (PDA) was signed amongst the Partners on 30th November 2002. The
PDA envisioned entering into a Joint Licensing Agreement (JVA) and License by the end of 2003
with first gas production commencing at the beginning of 2008.
Signing of the JVA and License requires the confirmation of an acceptable area development
plan. The purpose of this feasibility report is twofold; (1) to define and describe the widest
possible range of integrated surface development concepts that will meet the commercial offtake
profiles and (2) to give the range of remaining subsurface uncertainties. The options considered
are all in line with the project’s high level drivers and core business values on Health, Safety and
Environment, Capital Efficiency, and business controls.
In this feasibility phase, UTC and UDC are used as the primary economic criteria for the
comparison of the various concepts. Production profiles and associated capital costs are
produced as input to project economics.
This document focuses on factors that significantly impact life cycle costs and highlights the key
risks and uncertainties associated with each of the scenarios to be considered in the concept
selection phase of the project. This report will be the primary input for the selection phase.
OGUD.2003.000012.01
3. CONTENT AND CONSTRAINTS
3.1. Business Context

The Preliminary Development Agreement between PDVSA Gas, Shell Venezuela S. A. and
Mitsubishi Corporation was signed on 30th November 2002. This agreement authorized the start
of technical, economic, environmental, and social feasibility studies for the Mariscal Sucre LNG
Project. Once confirmation of the project’s feasibility has been obtained, it is expected that the
partner companies will sign a Joint Venture Agreement (JVA) (currently expected end 2003/early
2004).
The main objective of the integrated subsurface and surface Upstream team is to optimize the
economic recovery of hydrocarbons from the offshore gas fields in combination with the
downstream LNG and Domestic gas facilities. The reference offtake profile of the new-build
LNG plant will produce approximately 4.7 mtpa to overseas markets. The project is also
required to supply up to 300 MMscf/d to the CIGMA complex. This reference case will be
tested against both upward and downward adjustment of LNG plant and CIGMA demand. The
project will lead to an integrated Upstream and Downstream development entity. No sales
agreement will be required between upstream and downstream elements. Sales and Purchase
Agreements will, however, be needed for the sale of LNG, which is currently expected to be on a
Free On Board (F.O.B.) basis.
The fields will supply gas to the LNG plant for as long as economically supportable. This is
presently estimated to be approximately 30 to 35 years.
The project will be developed against high standards of environmental protection and operational
safety. The joint venture (JV) development will use personnel sourced from all participating
companies, either directly through the JV or via Technical Services Agreements (TSA’s) with
Affiliate Service Providers. Additionally, some services may be contracted out to third parties.
3.2. Venture Description/Background

Between 1978 and 1982 Lagoven discovered substantial quantities of natural gas in offshore
fields north of the Paria Peninsula, Venezuela. The resources are contained in 4 fields: Rio
Caribe, Mejillones, Patao and Dragon, which collectively trace a linear footprint sequence west to
east over a distance of some 95 km. The fields are located north of the peninsula in
approximately 100 m of water some 30 km offshore. Rio Caribe is a gas and condensate field
while the remaining 3 are essentially dry gas fields – all with multiple reservoirs spanning a depth
range of some 2,100 to 2,800 meters.
OGUD.2003.000012.01
Figure 3.1: Location of Rio Caribe and North of Paria Gas fields.
Feasibility and concept selection studies have been initiated for the Phase 1 Polygon (which
contains the 4 fields and spans an area of some 2,000 km2) with an integrated upstream team
comprising representatives from Shell, PDVSA, and Mitsubishi. The team is officed in Shell’s
Bellaire and Westhollow Technology Centers, Houston. Potential for expansion exists (subject to
MEM approval) through a subsequent phase polygon (approximately 6,000 km2), which sits
immediately adjacent to the Phase 1 Polygon (see Figure 3.2).
Shell is represented in the subsurface by SEPTAR and in the surface facilities by SGSUS OGUD,
OGUP, and OGPS. The team is working from a dataset comprising early 1990’s vintage 3D
seismic (processed) over the area of the four fields, and information retrieved from 12 wells
originally drilled by Lagoven. Data quality is variable and further data acquisition may be
required during the next project phase if sufficient data is not available with PDVSA.
OGUD.2003.000012.01
Figure 3.2: MSLNG wider polygon.

A significant issue for the Upstream is that while the gas fields sit to the north of the Paria
ii
Peninsula, the LNG plant will be located to the south. The LNG plant location was selected in
a previous phase and is acceptable to all parties involved. The gas export pipeline route will
therefore need to navigate the peninsula, which is mountainous, highly active seismically, and
contains a national park noted in a number of international NGO priority sites, including ‘WWF’,
‘Conservation International’, ‘World Conservation Union’ and ‘Birdlife’. Significant early
attention is being given to pipeline routing in the project feasibility studies.
The focus of the Upstream team is to define the necessary concepts and scenarios that
satisfactorily frame the ranges of project realization scenarios and provide a sound basis to start
the ultimate concept selection process. This will be done either on the basis of existing data or
with the help of additional appraisal activities. The latter will be supported by an integrated
Value of Information (VOI) exercise.
ii See Reference 4 on page 21-3
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3.3. Boundary Conditions and External Factors
3.3.1. Geographical Description of the Paria Peninsula

The MSLNG gas fields are situated some 30 km north of the Paria Peninsula in water depths
ranging from 90m to 150m (300 to 500 ft).
Figure 3.3: Geographical Features.

Two active seismic faults run from east to west. One fault is located north of the peninsula
between the peninsula and the gas fields while the other is located south of the peninsula. The
area has a history of seismic activity, which will be taken into account in the design of the surface
facilities. Tsunamis and hurricanes have been recorded on the north coast of the Paria Peninsula
in the past, though not in the Gulf of Paria.
The north coast of the Paria Peninsula is characterized by steep, rocky cliffs and heavily to
moderately forested slopes. There are few beach areas and no populated areas from San Juan de
iii
Unare to the eastern tip of the peninsula. Based on observations of the May 15-17 Site Visit
there are few areas suitable for a pipeline landfall on the north coast. Visible surface rock and
rock outcroppings are common along the coastal areas.
The southern coast from Guiria to the town of Mapire is characterized by steep terrain and
undulating hills. The coastal areas are sparsely populated and there are several flat river deltas
iii See Reference 3 on page 21-3
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(specifically, the rivers Salado, La Ceiba, and Mapire), which attract inhabitants. A west to east
highway is under construction along the coast and has reached as far as Mapire. The presence of
the highway has attracted new settlers to the area.
The mountain range running west to east across the peninsula (“mountain range”) rises steeply
from the northern coastline and reaches elevations as high as 400m at distances of less than 1 km
from the coastline. The mountain range is widest (north/south distance of approximately 14 km)
and has the highest elevations (>800m) in the vicinity of longitude W 62° 42.79’. From this area
to the eastern tip of the peninsula, the mountain range narrows and elevations decrease. Steep
slopes are common throughout the mountain range, regardless of the elevation. This
characteristic, along with the potential for heavy seasonal rainfall and seismic activity makes the
mountainous areas susceptible to landslides or debris flows. In general, there is no evident road
infrastructure across the mountain range with the exception of several roads currently under
construction in the mountains south of Ensenada de Mejillones.
3.3.2. National Park

The Paria National Park was formed in 1979 to preserve an area of outstanding natural beauty
and bio-diversity. It has been noted in a number of international NGO priority sites, including
‘WWF’, ‘Conservation International’, ‘World Conservation Union’, and ‘Birdlife’. The park
covers an area along the mountainous north coast of the peninsula from a point east of San Juan
de Unare to the eastern tip of the peninsula. Within the park are areas of dry forest, humid
montane (cloud) forest, cocoa and coffee plantations and to the east end of the peninsula it
iv
encompasses part of the coastline . Figure 3.4 below illustrates the coverage of the national
park.
There has been a history of human intervention within the park with a number of cocoa and
coffee plantations located within its boundaries. As the cocoa industry in the region has declined,
there is growing evidence that the pressure on the land is increasing with previously untouched
areas being cleared for farming and logging. In general, access to the land is also being improved,
especially around Los Mangos, north of Guiria. With the opening of the road to Macuro, access
to the eastern end of the park will lead to increasing pressure on this relatively untouched
iv
region . During the Site Visit, slash and burn activities were observed in a number of areas
within the park.
iv See Reference 4
OGUD.2003.000012.01
Figure 3.4: Paria National Park.

The park supports a variety of vegetation types as it rises up from a relatively dry plain, which
receives approximately 1,000 mm/yr rainfall up into the mountains where there is greater than
2,000 mm/yr rainfall. In the higher mountain areas there are regions of humid montane (cloud)
forest that maintain unique ecosystems. The cloud forest in this region starts at a lower altitude
than anywhere else in the country. The flora is dependent on the moisture captured and retained
by the forest cover and this includes a number of epiphytic plants. The cloud forest areas are
v
sensitive to pollution in the air, especially acid rain .
The vegetation in the mountains also plays an important role in maintaining the hydrological
cycle for the peninsula. The potable water for Guiria comes from the Rio Guarama, which is
maintained by its water catchment in the national park. The vegetation helps retain the soil cover
v
and increase the water infiltration to aquifers .
v See Reference 4
OGUD.2003.000012.01
3.3.3. Climatic and Oceanographic Conditions

The Climate can be described as Tropical. Ambient temperatures can range from 21°C to 35°C.
Average temperatures are around 32°C and the humidity varies from 68% to 98%. Annual
rainfall in the area is in the order of 1,000 mm/year at the relative dry plains to 2,000 mm/year
up into the mountains.
Preliminary wind and wave criteria and metocean conditions for the Gulf of Paria and Caribbean
Sea are reported in Reference 5 - Preliminary Metocean Design and Operational Conditions for the Mariscal
Sucre LNG Project, Venezuela. Design conditions were derived for three locations: in the Gulf of
Paria (grid point 10810/860), in the Bocas del Dragon, or Dragon’s Mouth (grid point
11041/961) and in the Caribbean Sea in the general vicinity of the Mejillones field (grid point
11326/1064). Figure 3.5: Study Area for Metocean Conditions below illustrates the area of
interest and depicts the locations of the grid points. Summary tables of the main wind and wave
criteria are included in Appendix A – Summary Tables of Wind and Wave Criteria (Section 22).
Figure 3.5: Study area for metocean conditions.

The Gulf of Paria (GoP) is relatively shallow with a mean depth of 15 m and a maximum depth
of 45 m. The more shallow areas are located at the western end of the GoP because of the
estuarine sedimentation processes. Greater depths are found at the mouths of the estuary and
are related to the scouring effects of tidal currents near the bed. These scouring processes are
OGUD.2003.000012.01
also responsible for the existing great depths of the Dragon’s Mouth (more than 300 m) and of
vi
the Serpent’s Mouth (maximum of 50 m) .
The overall current direction in the Caribbean Sea is westward. The westward flow is a result of
the combined effect of persisting northeasterly trade winds over the area and the large-scale
circulation pattern in the Atlantic Ocean. The northeasterly winds in the Caribbean area are
caused by the gradient in atmospheric pressure with high pressures in the north and lower
pressures in the south. The rotation of the earth causes an initial wind drift current
approximately 45o to the right of the wind direction (on the northern hemisphere). Thus, the
wind-induced currents are west-northwest directed. Next to this effect, the overall circulation of
surface water in the Atlantic Ocean brings the westward flowing Northern Equatorial Flow and
Southern Equatorial Flow together, leading to an enhanced westward flow along major parts of
the northern coast of South America. This current as referred to as the density (“geostrophic” or
vi
“slope”) current .
Next to the density current, the local wind generates a current that again has an angle of about 45
degrees to the right of the wind direction in deep water. In shallower water, such as that found in
the GoP, this angle will be less. Various sources report the existence of a clockwise rotating gyre
in the GoP. This circulation is a result of the fresh water discharge from many river systems and
the mixing of fresh and saline water. The anti-cyclonic gyre may not be predominant if wind-
induced mixing is present in the Gulf. At present, the Metocean team is not aware of any field
data that can provide information on the current speeds within the gyre. Outside sources have
vi
reported current speeds of up to 0.5 m/s .
Tidal currents in the Caribbean Sea are mostly small although no accurate information is known
about the offshore tidal currents. Inside the GoP, tidal currents are more significant and
dominate the current speed. The tidal wave comes in through Serpent’s Mouth and Dragon’s
Mouth, respectively. Sources report that the tidal inflow and outflow through Dragon’s Mouth is
5 times as large as the inflow through Serpent’s Mouth. The high tidal inflow also explains most
of the seasonal variations in salinity inside the GoP as it brings in less saline water from the
Caribbean Sea during high discharge periods of the Orinoco and Amazon. Tides in the GoP are
mainly semi-diurnal. The tidal range gradually increases from 1 m near Dragon’s Mouth and 1.5
m in Serpent’s Mouth up to 2.5 m at the western end of the GoP. The tidal wave shows a clear
“shallow water wave” behavior: it takes 75 minutes for the incoming tide to reach the western
end of the GoP from the Dragon’s Mouth whereas the same distance takes about 130 minutes
for the outgoing tidal wave.
Mean spring tidal currents range from 0.6 m/s in the western part of the GoP to 0.3 m/s near
the coast of Trinidad. Locally, for instance near the southern coast of the Paria Peninsula and in
the Guiria trough, tidal current speeds are surprisingly high and can range from 1 to 1.5 m/s
during spring tide. All these data indicate that the GoP has a clearly marked estuarine circulation.
vi See Reference 5
OGUD.2003.000012.01
In fact, the existence of the estuarine circulation in the GoP was remarkably well described by
vii
Christopher Columbus during his third voyage to the new world in 1498 .
Waves inside the GoP are in general significantly lower than in the Caribbean Sea. In the
Caribbean Sea, wind waves are typically greater than 1 m for 85% - 90% of the observations.
Waves higher than 2.5 m are only reported in a few percent of the observations. Calm seas rarely
occur except for the more sheltered areas and at the lee side of the islands. Swell waves are also
generated by the trade winds. Though their effect is somewhat reduced within the Caribbean Sea
vii
by the Antilles chain of islands that provide some protection .
3.3.4. Primary Socio-Economic Features

The local economy is based on agriculture and fishing. There is no significant industry in the
area. Malaria and Cholera are common diseases in the area and poisonous moths, which can
cause significant skin irritation, are known to frequent the Gulf of Paria.
The town nearest the future LNG plant, Guiria, has a population of some 20,000-25,000 people.
In Guiria some 80% of the population have access to a sewage system, however sewage
treatment before discharge into the Gulf of Paria is non-existent. Solid waste is disposed of in an
uncontrolled garbage dump.
There is a high level of poverty in the area with a high migration rate to other areas. The
unemployment rate in the area is around 20%.
Drug trafficking is believed to be active in the area. Early attention to security issues will
therefore need to be given.
During construction and operation of the project a large influx of people can be expected. The
Socio-Economic impact of this development on the local population needs to be carefully
assessed prior to the start of the project in order manage the expectations of the population.
The necessary stakeholder mapping, consultation and ESHIA activity are being planned and
executed under responsibility of the SDEA team and with a clear focus on LNG plant site
viii
development and upstream pipeline routing .
As part of this feasibility study, a joint SDEA/Upstream Hazard Identification exercise was
executed which identified the high-level Health, Safety, Environmental, and Societal impacts of
ix
the project on the work force, communities, and the environment .
3.3.5. Infrastructure
The existing infrastructure is very basic. To support the Upstream and LNG plant operation it
will be necessary to upgrade and construct new infrastructure. In addition to the potential
vii See Reference 5

viii See Reference 8
ix See Reference 11
OGUD.2003.000012.01
relocation of a domestic airport, these include but are not limited to extensions, upgrades, or new
construction of:
• A harbor and shipping channel supporting the LNG and Upstream operations.
• A telecommunication system
• A heliport
• Housing, recreational facilities, schools, health clinic, etc. for the JV’s staff
• An office complex
• Power generation, water treatment and sewage disposal facilities
• A warehouse and workshop complex
• A contractor’s camp and associated facilities.
The above infrastructure needs are part of the core project requirements and do not include any
additional functionality that may be added as part of any SDEA initiatives undertaken with the
local communities.
Although the project will create employment and will provide an economic stimulus to the area
the initial pressures on the local infrastructure by the temporary construction camps and
increased population will have adverse effects on the transport and road infrastructure, water and
electricity supply, waste management and demand for medical services. These issues have been
x
highlighted and captured in the HAZID report carried out as part of the feasibility phase and
will be considered in execution planning and SD activities.
3.3.6. LNG Plant Location

The location of the LNG plant has been selected in a previous phase of the project to be in
Guiria. The alternative sites reviewed are shown in Figure 3.6. This selection process is
xi
documented in the LNG Plant Location Study . As a result, for the purpose of this feasibility
report, the LNG plant site is considered a given.
x See Reference 11
xi See Reference 4
OGUD.2003.000012.01
Figure 3.6: Alternative sites.
OGUD.2003.000012.01
4. SCOPE OF WORK
This surface feasibility report is the deliverable of the scope of work agreed between SVSA and
SGSi on behalf of the MSLNG PDA partners. SGSi has committed jointly with SIEP/SEPTAR
and partner representatives to carry out the feasibility study of the proposed Venezuela Mariscal
Sucre LNG Project for Shell Venezuela SA.
The primary objective is to perform technical studies, in conjunction with SIG Ltd., PDVSA,
Mitsubishi, SIEP Subsurface Group, and the SGSi OGG LNG study team, to support the Phase
1 (Assess) and Phase 2 (Select) activities leading up to the Value Assurance Review 2 (VAR2) and
VAR3 milestone decisions.
VALUE IDENTIFICATION VALUE REALISATION
IDENTIFY &
SELECT DEFINE EXECUTE OPERATE
ASSESS
VAR 1 VAR 2 VAR 3 VAR 4 VAR 5
STRATEGIC DECISIONS OPERATIONAL DECISIONS
Figure 4.1: Value identification / realization process.

This scope is fully integrated with and should be reviewed as an integral part of the SEPTAR
xii
report Subsurface feasibility Evaluation MSLNG .
4.1. Deliverables of the Feasibility Phase

• Surface facilities concepts in support of integrated field development solutions from reservoir
to the LNG plant inlet, including production rates, CAPEX, OPEX, HSE, and project
schedule. The result will be used as input in economic screening and project decision
processes in the form of a Feasibility Report. The concepts identified in this report will be
defined to a level of detail necessary to achieve a +30%/-30% accuracy range in projected
capital and operating cost expenditure forecasts.
• Identification of the main risks, uncertainties, assumptions, and value drivers linked to each
of the identified scenarios.
• Necessary support and documentation on executed activities to successfully pass the VAR2
milestone decision.
xii See Reference 9
OGUD.2003.000012.01
Preliminary work will include a review of work previously completed with follow-up discussions
with PDVSA, SIEP, and SGS OGG LNG to understand, and where validated, to build on
technical work that has previously been conducted.
A site visit will be carried out to obtain an understanding of the terrain and the challenges
associated with the possible plant site location.
4.2. Defining Parameters

As a minimum, the following parameters will be reviewed in the concept identification phase and
their impact on the overall development plan will be assessed:
Drilling and Completion
• Drilling method (Semi, jack-up, tender-assist, platform supported)
• Platform wells, (number per cluster, total number)
• Subsea wells (satellite wells, clustered and manifold)
• Configuration
Production Center
• All Platforms (maximum offshore facilities including condensate export)
• Offshore Production Center with Subsea (SS) tie backs (offshore processing and offshore
export)
• Offshore Production Centre with SS tie backs (minimal offshore facilities)
• Onshore Production Centre with SS tie backs and multiphase transport system
Market Demand (peak rates and duration of rate plateau):
• Expected LNG throughput
• Higher LNG throughput (high rates wells or high density well count)
• Local Gas distribution
• Allowances for possible future expansion
Timing
• Concurrent Development
• Staged Development
• Impact of projected new Technology Developments
Processing, including Compression
• Compositional variations
• Contaminants
OGUD.2003.000012.01
• Impact from platform outages

• Staged Compression
Export from Field
• Multiphase pipelines
• Multiple single phase pipelines
• Multiphase boosting
• Offshore condensate stabilization and offloading
• System operating pressure levels
• Capacity planning for upside potential
Operating Philosophy/Execution
• HSE Issues and QRA
• Availability analysis
• Manning philosophy
• Local content/local capacity
• Availability and buffer capacities
OGUD.2003.000012.01
5. CONCEPT AND COST SUMMARY

The concept derivations can be divided into four categories, as illustrated in the diagram below:
Hardware Sensitivities Field Phasing

#1 CPF @ RC #2 CPF @ Mejillones #3 CPF @ Mejillones + new geology
a. + Subsea a. High Volume #4 CPF @ RC + accelerated Condensate
b. + FPSO condensate b. FPU
c. +GBS condensate c. Field Compression
#5 RC + Drag work to center w/ sep P/L
d. Onshore Compress #6 Parallel dev. w/ SS at P&D
e. Single Phase P/L
f. GBS+P/L Puerta La
#7 SS to Beach, daisy chain RC, M, P, D
Corrosion &
Cruz w/ separate P/L
Materials g. High FPSO, SS
Sensitivity
Demand Profiles ( CPF @ Mej.)
Geological Realizations 1400
3-4: 4.2 mtpa
Gas Production MMSCFD
1200
• Updated Geology 1000 3-2: 4.7 mtpa
800
3: 4.7 mtpa + 200
• High Geological Realization 600
400 3-3: 4.7 mtpa + 300
• High Well Count = 200 BCF/well 200
3-5: 4.7 mtpa + 300
0
• High Water 10 3-1: 5.2 mtpa + 300
13
16
19
22
25
28
1
4
7
Production Year
• High CGR
Each of these are summarized as follows:

Hardware Sensitivities:
Cases in this category were based on 2000 VLNG work. Forecasts were received from the
Reservoir Engineers based on the geological models completed during the 2000 VLNG exercise.
The strategy was to allow surface engineers to progress toward the VAR-2 deadline in parallel
with the subsurface work. Variables chosen for these cases were largely independent of the
reservoir. A summary of the comparisons made during this study is set out below:
• CPF Location Sensitivity
• Subsea versus Conventional Sensitivity
• Fixed versus Floating CPF Sensitivity
• Compression and Power Generation Location Sensitivity
• Pipeline Single Phase versus Two-Phase Sensitivity
• Condensate Handling and Export Sensitivity
• High-Volume Sensitivity
• Corrosion and Materials Sensitivity
• Field Infrastructure Study
OGUD.2003.000012.01
A summary of specific cases run in this category is illustrated in the following table:
Table 5.1: Hardware Sensitivities
HC Offshore
Export PL Export PL Structure Dewpoint Cond Compression Power
Concept Name Production Profile Phase Route Type Location Control Dehydration Stabilizer Location Generation
VLNG - 4.7 mtpa + Direct
Concept 1 Domgas Scenario 2 Two Phase Overland Jacket Rio Caribe No No No Bridged to CPF CPF
Concept 2 Domgas Scenario 2 Two Phase Overland Jacket Mejillones No No No Bridged to CPF CPF
Concept 1 - Subsea Domgas Scenario 2 Two Phase Overland Jacket Rio Caribe No No No Bridged to CPF CPF
CPF
Jacket +
Concept 1 - FPSO for
Offshore Cond.
Condensate VLNG - 4.7 mtpa + Direct Stabilizer
Handling via FPSO Domgas Scenario 2 Two Phase Overland & Storage Rio Caribe No No Yes Bridged to CPF CPF
Concept 2 - High VLNG - 5.2 mtpa + Direct

Volume Domgas Scenario 4 Two Phase Overland Jacket Mejillones No No No Bridged to CPF CPF
Concept 2 - Field
Compression & 4.7 mtpa + Domgas Direct Bridged to CPF
Power Scenario 2 Two Phase Overland Jacket Mejillones No No No and Field HUBs Field HUBs
Concept 2 - Single 4.7 mtpa + Domgas Single Direct Bridged to

Phase Pipelines Scenario 2 Phase PL's Overland Jacket Mejillones Yes Yes Yes CPF's CPF
Concept 1 -
Offshore
Condensate CPF GBS
Handling via GBS, VLNG - 4.7 mtpa + Direct with
and offloading Domgas Scenario 2 Two Phase Overland Storage Rio Caribe No No Yes Bridged to CPF CPF
Concept 2 - FPSO Domgas Scenario 2 Two Phase Overland FPSO Mejillones No No No Bridged to CPF CPF
Concept 2 -
Compression &
Power Gen VLNG - 4.7 mtpa + Direct
Onshore Domgas Scenario 2 Two Phase Overland Jacket Mejillones No No No Onshore Onshore
Overland
Concept 2 - Subsea + Cond
FPSO, Single Phase Line to
- Cond PL to Puerta VLNG - 5.2 mtpa + Single Puerta La
La Cruz Domgas Scenario 4 Phase PL's Cruz FPSO Mejillones Yes Yes Yes On FPSO On FPSO
Direct
Overland
Concept 2 - + Cond
Condensate Line to CPF GBS
Handling - Cond PL VLNG - 4.7 mtpa + Puerta La with
to Puerta La Cruz Domgas Scenario 2 Two Phase Cruz Storage Mejillones No No Yes Bridged to CPF CPF
Field Phasing Sensitivities:

An integrated effort was undertaken with Reservoir Engineering, Well Engineering, and
Production Technology to create various development scenarios related to the phasing of the
four fields. 2000 VLNG geological models were updated from subsurface work completed up to
that time and passed onto Reservoir Engineering to incorporate into new forecasts and well
counts. Generally, this resulted in more wells and more drilling locations. Well bore stability was
the driving issue for increasing the drill center numbers, with a goal to keep drilling offsets less
than 2,134 meters (7,000 feet). The following is a summary list of the Phasing Scenarios that
were studied:
OGUD.2003.000012.01
Table 5.2: Field Phasing Sensitivities

Phasing Scenario Simple Name Uptake Profile Geology
Phasing Scenario 1: Update Concept 2 model Concept 3 770 MMSCFD + Modified
(Mejillones CPF) 200 Domgas Base Case
buildup
Phasing Scenario 2: Accelerated Concept 4 770 MMSCFD + Modified
(Unconstrained) Condensate Production at 200 Domgas Base Case
Rio Caribe (Rio Caribe CPF) buildup
Phasing Scenario 4: Dual Initial Development Concept 5 770 MMSCFD + Modified
- separate CPF's and export lines from Dragon 200 Domgas Base Case
and Rio Caribe initially, followed by Patao and buildup
Dragon
Phasing Scenario 5: Mej CPF plus Concept 6 770 MMSCFD + Modified
compression and subsea ”data” tiebacks early 200 Domgas Base Case
to Dragon and Patao buildup
Subsea to Beach Concept using Phasing Concept 7 770MMSCFD + Modified
Scenario 2 Forecast 200 Domgas Base Case
buildup
Demand Curve Sensitivities:
This was completed with a fixed phasing scenario and hardware concept to test CAPEX/OPEX
sensitivities to various demand curves from the LNG Plant and Domestic Gas forecast.
Following is a description of the 5 demand curve sensitivities that were based on Concept 3:
• 4.2 mtpa (682 MMSCFD)
• 4.7 mtpa (770 MMSCFD)
• 4.7 mtpa + gradual build up to 200 MMSCFD Domestic Gas
• 4.7 mtpa + gradual build up to 300 MMSCFD Domestic Gas
• 4.7 mtpa + 300 MMSCFD Domestic Gas from Year 1
• 5.2 mtpa (852 MMSCFD) + 300 MMSCFD Domestic Gas from Year 1
OGUD.2003.000012.01
Demand Curve Profiles
1400
1200 4.2 mtpa

1000 4.7 mtpa
800 4.7 mtpa + 200
600 4.7 mtpa + 300
400 4.7 mtpa + 300
200 5.2 mtpa + 300
0
1
10
13
16
19
22
25
28
Production Year
Figure 5.1: Demand Curve Profiles

Geological Realization Sensitivities:
The following table represents the cases that were considered for the geological realization
sensitivity analysis:
Table 5.3: Geology Phasing Scenarios
Geology Update # 2: Concept 3 updated Concept 3 770 MMSCFD + Modified Reference
to allow comparison to High and Low Updated Geology 200 Domgas buildup Case
Geological Sensitivity
High Geological Sensitivity: Parameter Concept 3 Update 770 MMSCFD + Modified Reference
with highest impact for each reservoir High Geology 200 Domgas buildup Case
optimistic case was changed from
Concept 3 Update
Low Geological Sensitivity: Parameter Concept 3 Update 770 MMSCFD + Modified Reference
with highest impact for each reservoir Low Geology 200 Domgas buildup Case
pessimistic case was changed from
Concept 3 Update
High Well Count Sensitivity - 200 BCF Concept 3 770 MMSCFD + Modified Reference
per Well resulting in 69 Total wells 200 BCF/well 200 Domgas buildup Case
High Water Production Case: Concept 3 770 MMSCFD + Modified Reference
From Subsurface Sensitivity Study – Updated Geology 200 Domgas buildup Case
Highest water production case High Water
High CGR Case: From Subsurface Concept 3 770 MMSCFD + Modified Reference
Sensitivity Study – Highest CGR case Updated Geology 200 Domgas buildup Case
(Rio Caribe only) High CGR
OGUD.2003.000012.01
The subsurface team was not able to complete a P85 or P15 case in time for the VAR-2.
Nevertheless, sensitivities based on geological realizations were completed and the relative
impacts were assessed. As an initial effort to characterize the impact of these sensitivities on cost
and economics, the Reservoir Engineers provided forecasts that were based on the following
findings from the sensitivity exercise.
Table 5.4: Sensitivity Forecast from Reservoir Engineering
High Case Low Case
Rio Caribe Max Gas Water Contacts Min Permeability
Mejillones Max Rock Properties Min Gas Water Contacts
Patao Max Gas Water Contacts Min geology realization
Dragon Max Gas Water Contacts Min geology realization
Each of the above represents, for each field: 1) the one parameter that had the highest impact on
the reservoir for the most optimistic reservoir case, and 2) one parameter that represented the
highest impact on the most pessimistic reservoir case. While this is not quite ideal from the
standpoint of having a statistically based set of parameters that vary, it does provide a preliminary
indication of the impact on cost and performance.
In the course of analyzing the sensitivities, the subsurface team completed benchmarking
activities which indicated that the proposed number of MSLNG wells in the reference case
models resulted in individual wells being required to produce reserves in excess of current best
performances in comparable fields. As a result, a new well count was produced that included
“statistical” wells that were used to assess a new realization case. Since the impact of this
increased number of wells had far more downside impact than the low geological realization
forecast that was previously made, surface engineering only provided estimates for the higher
well count case to show a downside scenario. This new higher well count case should not be
considered as being the low case.
Cases were also developed to investigate the impact of increased expected water production and
highest condensate to gas ratio (CGR).
5.1. Summary of Hardware Sensitivities

Within the following sections are the high-level cost summaries for the initial cases reviewed
using the early subsurface realizations (also referred to as the VLNG data).
Other sections in this report document contain details of the scope descriptions and their related
cost calculations, whilst an Appendix at the end of the document holds all the breakdown values
for each Concept.
The table set out below shows the summary of CAPEX values for each of the Concepts
examined under the initial stage of evaluation. The costs are in Real Terms 2002 and show 50/50
figures in thousands of US dollars.
OGUD.2003.000012.01
Table 5.5: General Summary – USDk RT 2002

General summary USDk - RT 2002
CONCEPT
1 2 1 Subsea 1 FPSO Cond 2 High Vol 2 FPU
CPF 83,331 87,815 83,331 259,406 88,230 275,627

Compression platform 181,108 181,850 181,108 180,961 237,291 0
Wellheads 134,192 130,958 132,305 134,192 130,958 165,756
Flowlines + umbilicals 283,765 202,451 366,198 283,765 196,364 202,451
Wells 308,628 308,628 445,245 308,628 306,123 358,792
Export system 79,730 84,985 79,730 79,730 91,322 84,985
Onshore facilities 56,138 56,138 56,138 56,138 56,138 56,138
TOTAL 1,126,893 1,052,827 1,344,055 1,302,820 1,106,426 1,143,749
CONCEPT
2 Field comp 2 Single ph 1 GBS 2 GBS+Cond 2 Hi,FPSO,Sub 2 Onshore
CPF 81,861 239,260 194,196 202,339 538,243 62,862

Compression platform 102,705 239,029 180,961 181,628 0 0
Wellheads 533,540 130,610 134,192 131,828 159,326 130,958
Wells 308,628 308,628 308,628 308,628 489,038 308,628
Export system 84,981 101,948 79,730 188,861 189,499 157,824
TOTAL 1,295,111 1,278,064 1,237,610 1,271,873 1,705,559 1,229,652
The table following shows the effects of project phasing on the CAPEX values, using a
discounting factor of 7%.
Table 5.6: General Summary – USDk – NPV 7%
General summary USDk - PV 7%
CONCEPT
1 2 1 Subsea 1 FPSO Cond 2 High Vol 2 FPU
CPF 67,433 71,062 67,433 209,537 71,398 222,792
Compression platform 111,807 112,265 111,807 111,717 192,021 0
Wellheads 69,580 66,990 72,499 69,580 91,756 94,977
Wells 196,199 196,199 279,903 196,199 223,854 240,016
Export system 63,988 68,211 63,988 63,988 73,278 68,211
TOTAL 707,294 671,590 837,665 849,306 832,990 782,858
CONCEPT
2 Field comp 2 Single ph 1 GBS 2 GBS+Cond 2 Hi,FPSO,Sub 2 Onshore
CPF 66,244 193,614 157,148 163,737 434,020 51,229

Compression platform 63,405 132,143 111,717 112,128 0 0
Wellheads 216,031 66,831 69,580 67,687 116,332 66,990
Wells 196,199 196,199 196,199 196,199 360,172 196,199
Export system 68,208 81,935 63,988 150,561 151,164 126,751
TOTAL 719,687 822,820 796,916 847,172 1,296,356 810,778
OGUD.2003.000012.01
For more ease of comparison, two charts are shown below laying out the comparative CAPEX
values, again in both Real Terms 2002 and in PV7% figures.
C on c e pt sum m a ry - C ap ex - U SD k , R T 2 00 2 Co n c ep t 1 = 1 0 0%
160%
140%
120%
100%
80%
60%
40%
20%
0%
ub
P S nd
ol
ph
re
BS BS
SO ea
U
1
on
m
V
Fi FP
ho
bs
,S
le
G
co
C
+C
h
O
Su
ns
ng
ig
O
el
H
Si
1
FP
i,F
2
G
2
H
2
2
1
2
C PF Comp ress ion platfo rm W ellhea ds Flowlines + um b
W ells Ex port s ys tem On sho re fac ilities
Figure 5.2: Concept summary: CAPEX USDk, RT 2002.
Concept summary - Capex - USDk, NPV 7% - Concept 1 = 100%
200%
180%
160%
140%
Onshore
facilities 120%
Export
system 100%
Wells
80%
Flowlines +
umb 60%
Wellheads
40%
Compression
platform
20%
CPF
0%
ea
ph
re
d
ub
S
1
d
Vo
on
on
B
FP
ho
bs
,S
G
le
co
C
ns
Su
ng
ig
S+
1
SO
PS
d
O
H
Si
el
1
B
FP
i,F
2
2
Fi
G
2
H
2
2
1
Figure 5.3: Concept summary: CAPEX USDk NPV7%.
OGUD.2003.000012.01
5.2. Summary of Field Phasing Sensitivities

The Demand Curve Sensitivities analysis was performed to investigate the impact on project cost
of evacuating the gas from the four fields in varying time frames. Using Concept 3 as the “base
case,” four further options were derived; these are referred to as Concepts 4, 5, 6, and 7.
Concepts 3, 4, 5, and 6 are all basically configured using conventional technology. However,
Concept 7 uses a variety of the latest subsea and material technologies.
The cost estimates for these scenarios are shown in the following tables. Real Terms and PV
figures are depicted separately and are compared in a chart as in the Hardware Sensitivities
section above.
One important fact to note is that in taking the step from the use of the “VLNG” subsurface
realizations that were employed in determining the initial Hardware Sensitivities cost estimates,
we have now moved on in terms of both reservoir analysis and CAPEX/OPEX values.
Concept 3 was the first scenario to be evolved using the updated reservoir information. 1 July
2003 was chosen as the base date for Real Time cost estimates to more easily align with the
economics calculations and to be more up to date. Using Concept 3 as the starting point, all
further cost estimates have been evaluated with the 1 July 2003 base date.
Tables of data results for the Field Phasing Scenarios are set out below.
Table 5.7: General Summary- USDk RT 2003
CONCEPT
3 4 5 6 7
CPF 104,620 107,516 181,966 107,043 0
Compression platform 127,463 161,934 69,820 192,672 0
Wellheads 217,119 209,249 191,981 145,316 206,396
Flowlines + umbilicals 280,781 354,127 231,424 186,876 549,438
Wells 362,778 406,988 401,011 347,071 425,126
Export system 134,938 142,499 202,513 134,942 240,663
Onshore facilities 75,502 75,502 75,502 75,502 137,668
TOTAL 1,303,204 1,457,819 1,354,222 1,189,428 1,559,298
Table 5.8: General Summary – USDk PV 7%

CONCEPT
3 4 5 6 7
CPF 84,661 87,004 147,251 86,622 0
Compression platform 70,456 131,041 32,366 74,122 0
Wellheads 108,609 99,082 79,562 80,541 105,353
Flowlines + umbilicals 126,372 136,250 82,530 108,412 270,719
Wells 173,717 178,551 188,484 186,417 194,485
Export system 108,362 114,409 162,683 108,365 193,229
Onshore facilities 52,240 52,240 52,240 53,311 93,097
TOTAL 724,417 798,577 745,115 697,790 856,883
OGUD.2003.000012.01
Concept 3 to 7 summary - Capex - USDk, RT 2003 - Concept 3 = 100%
140%
120%
100%
80%
60%
40%
20%
0%
3 4 5 6 7
CPF Compression platform Wellheads

Flowlines + umbilicals Wells Export system
Onshore facilities
Figure 5.4: Concept summary – CAPEX – USDk, RT 2003.
Concept 3 to 7 summary - Capex - USDk, PV 7% - Concept 3 = 100%
140%
120%
100%
80%
60%
40%
20%
0%
3 4 5 6 7

Onshore facilities
Figure 5.5: Concept summary – CAPEX – USDk, PV 7%.
5.3. Summary of Demand Curve Sensitivities

Taking Concept 3 as the base, a set of five production rate options was evaluated. These options
represent combinations of different LNG plant feed rates and local demand rates. It is currently
viewed that the LNG plant will require 770mmscfd of gas to produce approximately 4.7 million
tons of LNG per annum (mta). Supply to the local domestic gas service is also envisioned, either
OGUD.2003.000012.01
at the commencement of the MSLNG project or at some time in the forthcoming years. The
quantity required for this domestic gas supply is not finalized at this time but could be up to
300mmscfd.
The actual production output from the LNG plant has also not been precisely fixed at present,
with the range being evaluated between 4.2 mta and 5.2 mta. Gas volumes to produce these
LNG quantities have been calculated and used in determining the surface facilities.
Consequently, the Upstream team has put together the following scenarios in order to attempt to
capture the full range of presently projected gas volume requirements.
The list below sets out the scenarios evaluated.
• Concept 3.1 – 852mmscfd (to provide 5.2mta of LNG) + 300mmscfd from day 1
• Concept 3.2 – 770mmscfd only
• Concept 3.3 – 770mmscfd + gradual increase to 300mmscfd
• Concept 3.4 – 682mmscfd only (to provide 4.2mta of LNG)
• Concept 3.5 – 770mmscfd + 300mmscfd from day 1
Cost summary tables showing the results of the cost estimating work for these five Concepts,
along with their relative position relating to Concept 3, are set out below.
Table 5.9: General Summary – USDk – RT 2003
CONCEPT
3 3.1 3.2 3.3 3.4 3.5
CPF 104,620 108,592 104,620 104,620 103,704 104,620
Compression platform 127,463 334,587 127,463 127,463 127,463 310,933
Wellheads 217,119 219,207 215,158 217,543 185,422 217,543
Wells 362,778 421,072 336,676 398,174 307,640 417,509
Export system 134,938 139,050 130,920 130,920 130,920 134,946
TOTAL 1,303,201 1,566,493 1,238,395 1,326,050 1,115,936 1,540,499
Table 5.10: General Summary – USDk – PV 7%

CONCEPT
3 3.1 3.2 3.3 3.4 3.5
CPF 84,661 87,875 84,661 84,661 83,920 84,661
Wellheads 108,609 135,358 105,223 111,477 93,193 127,508
Wells 173,717 229,066 173,427 191,333 160,742 214,233
Export system 108,362 111,666 105,132 105,132 105,132 108,368
TOTAL 724,417 883,362 693,948 741,990 658,869 843,340
OGUD.2003.000012.01
Concept summary - Capex - USDk, RT 2003 - Concept 3 = 100%
Onshore facilities
Export system
140%
Wells
120%
Flowlines + umbilicals
100%
Wellheads
80%
Compression platform
60%
CPF
40%
20%
0%
3 3.1 3.2 3.3 3.4 3.5
Figure 5.6: Concept summary – CAPEX – USDk, RT 2003.
Concept summary - Capex - USDk, PV 7% - Concept 3 = 100%
Onshore facilities
140%
Export system
120%
Wells
100%
Flowlines + 80%
umbilicals
Wellheads 60%
40%
Compression
platform 20%
CPF
0%
3 3.1 3.2 3.3 3.4 3.5
Figure 5.7: Concept summary – CAPEX – USDk, PV 7%.
5.4. Summary of Geological Case Sensitivities

As with the other Sensitivity reviews, Concept 3 has been taken as the reference case. Following
on from the reviews of geology, condensate, water, and well count re-evaluations carried out by
the subsurface team, new options have been compiled and cost estimates produced accordingly.
UDC and UTC calculations were also prepared for each option and the tables, contained later in
this section, show how they compare with the reference case Concept 3.
OGUD.2003.000012.01
Table 5.11: Summary – USDk, RT 2003

CONCEPT
3 Updated 200 Bcf + 19 High CGR High Water High Geo
CPF 104,620 104,620 104,620 109,938 104,620 104,620
Wellheads 217,119 214,908 214,908 214,908 214,908 214,908
Wells 362,778 383,218 1,167,429 383,218 383,218 383,218
Export system 134,938 142,138 142,138 142,138 142,138 142,138
TOTAL 1,303,201 1,572,935 2,357,146 1,578,253 1,577,813 1,548,815
Table 5.12: Summary – USDk, PV 7%

CONCEPT
CPF 84,661 84,661 84,661 88,964 84,661 84,661
Wellheads 108,609 116,861 116,861 116,861 116,861 109,603
Wells 173,717 193,960 538,555 193,960 193,960 182,326
Export system 108,362 114,148 114,148 114,148 114,148 114,148
TOTAL 724,417 823,948 1,168,544 828,252 826,763 763,695
Concept 3 and Updates - Capex - RT 2003 - Concept 3 = 100%
200%
150%
100%
50%
0%
3 Upda t e d 2 0 0 B c f + 19 Hi g h C GR Hi g h Wa t e r Hi g h Ge o
CPF Compression platform Wellheads Flowlines + umbilicals

Wells Export system Onshore facilities
Figure 5.8: Concept 3 and updates – CAPEX – RT 2003, Concept 3=100%.
OGUD.2003.000012.01
Concept 3 and Updates - Capex - PV 7% - Concept 3 = 100%
180%
160%
140%
120%
100%
80%
60%
40%
20%
0%

Onshore facilities
Figure 5.9: Concept 3 and updates – CAPEX – PV 7%, Concept 3=100%.
5.5. Corrosion Case Sensitivities

Also referred to as the “Contaminants Cases” these options have been evaluated in order to
ascertain the additional CAPEX and OPEX which would required if the gas transported from the
reservoirs was found to contain quantities of H2S and/or CO2.
The degree of contamination is not anticipated to be very great; however the assumption is that
the surface facilities would only transport this gas and not treat it. Further explanations of the
options are contained elsewhere in the document, but the tables indicating costs are shown
below.
Table 5.13: General Summary – USDk, RT 2003
CONCEPT
3 3CT1 3CT2
CPF 104,620 104,909 107,017
Compression platform 127,463 128,111 133,860
Wellheads 217,119 217,398 221,918
Flowlines + umbilicals 280,781 286,271 440,980
Wells 362,778 362,778 362,778
Export system 134,938 137,860 227,565
Onshore facilities 75,502 93,058 93,058
TOTAL 1,303,204 1,330,385 1,587,176
OGUD.2003.000012.01
Table 5.14: General Summary – USDk - PV 7%
CONCEPT
3 3CT1 3CT2
CPF 84,661 84,895 86,601
Compression platform 70,456 70,819 74,050
Wellheads 108,609 108,754 111,125
Flowlines + umbilicals 126,372 128,702 191,440
Wells 173,531 173,717 173,717
Export system 108,362 110,710 182,805
Onshore facilities 52,240 58,943 58,943
TOTAL 724,234 736,541 878,681
140%
Onshore facilities 120%
Export system 100%
Wells
80%
Flowlines +
umbilicals 60%
Wellheads
40%
Compression
platform 20%
CPF
0%
3 3CT1 3CT2
Figure 5.10: Concept summary – CAPEX, USDk, RT 2003.
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140%
Onshore facilities 120%
Export system 100%
Wells
80%
Flowlines +
umbilicals 60%
Wellheads
40%
Compression
platform 20%
CPF
0%
3 3CT1 3CT2
Figure 5.11: Concept summary – CAPEX, USDk, PV 7%.
5.6. Unit Technical Costs

The tables below set out the calculated values for Unit Technical Cost and Unit Development
Cost for the Concepts examined in both the Field Phasing Sensitivities and Demand Curve
Sensitivities.
More detailed definitions of these terms are set out in a separate section of this report but in
principal UTC describes the cost (in terms of CAPEX and OPEX) per barrel of oil equivalent for
a project’s production over it’s field life, this cost being discounted to a present value.
The tables also include values for UDC and UTC in terms of USD per MMBtu, these values
including the contributions from both gas and condensate.
OGUD.2003.000012.01
Table 5.15: Concepts 1 and 2 with Variations

MSLNG Concepts 1, 2 and Variations
Concept summary showing UDC and UTC values
Note - All values calculated using 7% discount factor

347 Gas stream days allowed
Costs are in USD
Values include gas + condensate contribution
Concept Variation UDC UTC UDC UTC

USD/MMBtu
1 1.47 2.55 0.27 0.47

2 1.40 2.47 0.26 0.46
1 Subsea 1.75 2.98 0.32 0.55
1 FPSO Condensate 1.77 2.99 0.33 0.55
2 High volume 1.33 2.38 0.32 0.57
2 FPU 1.63 2.86 0.30 0.53
2 Field compression 1.50 2.66 0.28 0.49
2 Single phase lines 1.71 2.99 0.32 0.55
1 GBS 1.66 2.84 0.31 0.52
2 GBS + condensate 1.76 2.96 0.33 0.55
2 High vol, FPSO+subsea 2.07 3.56 0.50 0.86
2 Onshore gen + compression 1.69 2.79 0.31 0.51
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Table 5.16: Concepts 3 to 7
MSLNG Concepts 3 to 7

Costs are in USD
Concept UDC UTC UDC UTC

USD/boe USD/MMBtu
3 1.47 2.50 0.27 0.46
4 1.62 2.69 0.30 0.50
5 1.50 2.53 0.28 0.47
6 1.41 2.43 0.26 0.45
7 1.74 2.75 0.32 0.51
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Table 5.17: Concepts 3 to 3.5

MSLNG Concepts 3 to 3.5

Costs are in USD

USD/MMBtu
3 1.47 2.50 0.27 0.46
3.1 1.27 2.25 0.23 0.42
3.2 1.48 2.52 0.27 0.47
3.3 1.41 2.43 0.26 0.45
3.4 1.58 2.65 0.29 0.49
3.5 1.30 2.28 0.24 0.42
Set out below are the corresponding sets of information in chart format for each of the 3
Sensitivities.
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UDC and UTC for Concepts 1 + 2 - USD/boe
4.00
3.50
3.00
2.50
2.00
1.50
1.00
2 High volume
2 Onshore gen
2 High vol,
2 Single phase
2 GBS +
1 Subsea
2 FPU
1 GBS
2 Field
1
2
1 FPSO
Figure 5.12: UDC and UTC for Concepts 1 and 2 – USD/BOE.
UDC and UTC for Concepts 3 to 7 - USD/boe
3
2.8
2.6
2.4
2.2
UDC 2
UTC 1.8
1.6
1.4
1.2
1
3 4 5 6 7
Figure 5.13: UDC and UTC for Concepts 3 to 7 – USD/BOE.
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UDC and UTC for Concepts 3.1 to 3.5 - USD/boe
2.80
2.60
2.40
2.20
2.00
UDC
1.80
UTC
1.60
1.40
1.20
1.00
3 3.1 3.2 3.3 3.4 3.5
Figure 5.14: UDC and UTC for Concepts 3.1 to 3.5 – USD/BOE.
For information, and in order to assist with comparison work between the early cases (Concepts
1 and 2 and their variations), Concept 3 and the latest geological analyses (as dealt with in
Concept 3 Updated Geology, etc), set out below is a table showing the relevant values for UDC
and UTC for all of these new cases together with Concepts 2 and 3 for reference.
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Table 5.18: UDC and UTC for Updated Work and Concepts 2 and 3
MSLNG Concepts - Geology Updates

Costs are in USD

USD/MMBtu
2 1.40 2.47 0.26 0.46
3 1.50 2.54 0.28 0.47
3 - Updated Geology 1.70 2.81 0.32 0.52
3 - 200Bcf wells 2.41 3.76 0.45 0.70
3 - High CGR 1.71 2.82 0.32 0.52
3 - High Water 1.71 2.82 0.32 0.52
3 - High Geology 1.57 2.63 0.29 0.49
U D C and U TC for U pdated Geology - U S D /boe
5.00
4.50
4.00
3.50
3.00
2.50
2.00
1.50
1.00
0.50
0.00
2 3 Upda te d 200Bcf High High High
W e lls CGR W a te r Ge o
Figure 5.15: UDC and UTC for Concepts 2 and 3 and updated geology – USD/BOE.
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The question of new well counts has been discussed previously in this document; a final chart in
this section indicates how the extra number of wells affects the projected UTC. This diagram
attempts to portray the likely increases in UTC as well count increases – one line shows how this
will vary if associated facilities (wellhead platforms, flowlines, umbilicals, etc) are accounted for
and the other, dotted, line indicates this increase assuming that only well costs are included. This
latter version presumes that the extra wells are accommodated on existing platforms and that no
additional pipelines are needed.
Effect of extra wells (and facilities) on UTC
5.00
4.00
UTC in USD/boe
3.00
2.00
1.00
0.00
0 20 40 60 80 100 120
Number of Wells
Figure 5.16: Effect of extra wells and facilities on UTC.

Platform data
Along with the basic process of estimating the costs of the wellhead, compression, and central
processing facility platforms – CES determines values for sizes, weights and electrical power
requirements for each. The data generated by the tool has been extracted and the results shown
in tables located elsewhere in this overall report.
5.7. Benchmarking of Estimates

As part of the cost engineering work performed on this project, additional work has been carried
out on several fronts to benchmark and, more importantly, to improve the estimates produced.
Areas of the project estimate that have been dealt with include wells, export and gathering
pipelines, the supply and installation of electrical power transmission cables and umbilicals, line
pipe procurement rates and subsea facility CAPEX.
In addition to the more formal and specific determination of the cost of particular elements of
the project, higher-level reviews of the Concept CAPEX have been done. These are purely
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indicators in terms of, for example, fabricated cost per ton of steel jackets, pipeline rule-of-thumb
values, Lang factors, etc.
More details of the results of these exercises are laid out in another section of this report.
5.8. Cost Estimates Review

In accordance with standard procedures, the cost estimates produced for, and forming the basis
of option selection and economic analysis, have been reviewed by a leading expert in the Shell
cost engineering section who is not allied to this particular project. Full details of scope
definition have been provided for this check procedure to be carried out and the results of the
review have been incorporated into the results shown in this report.
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6. PIPELINE SUMMARY AND SCOPE OF REVIEW
6.1. Summary
Shell Global Solutions Pipelines Business Group (OGUP) is responsible for the provision of
pipeline expertise to the MSLNG Upstream development team. Work related to the pipeline
concept selection commenced in Q4 2002 and has progressed such that pipeline concept options
have been developed and key uncertainties associated with each concept option have been
identified. Section 14 - Pipelines provides the necessary detail regarding:
1. The scope of the pipeline concept evaluation work
2. Key uncertainties, risks and opportunities associated with each of the pipeline routes under
consideration
3. The proposed methodology and criteria for pipeline route selection
4. The methodology utilized to perform the pipeline hydraulic modeling and slugcatcher sizing
5. Preliminary results and conclusions of the hydraulic modeling
Scope
For the purpose of this feasibility study, the pipeline facilities commence at the outlet flange of
the proposed offshore Central Processing Facility (CPF), or equivalent subsea central hub, and
terminate at the outlet flange of the onshore slugcatcher. At present, pipeline facilities also
include the slugcatcher. Pipeline options include offshore and onshore segments.
The scope of the pipeline concept evaluation includes the following:
• Desktop routing utilizing 1:100,000 and 1:25,000 scale maps
• Preliminary assessment of construction feasibility via desktop survey and site visit
• Development of preliminary concept selection criteria
• Preliminary hydraulic modeling for single phase and two-phase concepts
• Preliminary slugcatcher sizing for two phase concepts
• Concept-specific hydraulic modeling, including slugcatcher sizing for two-phase concepts
• Identification of key risks, uncertainties, and opportunities because of the above activities
Overview
In general, the proposed pipeline facilities commence offshore at a point approximately 32 km
north of the Paria Peninsula. Water depths in this area are approximately 90 m. As various CPF
locations are under consideration, the aforementioned details are approximate and may vary
depending on the selected location of the CPF. The pipeline facilities will terminate at the
proposed LNG liquefaction plant southwest of the town of Guiria. Overland sections of the
pipeline facilities may cross the Paria National Park, which stretches along the mountains of the
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north coast of the peninsula from a point due east of San Juan de Unare to the eastern most tip
of the peninsula.
Proposed Pipeline Concepts
Four pipeline concept options are currently under consideration (Figure 6.1) and are briefly
described below.
Figure 6.1: Proposed Pipeline Concepts.

West Route: The offshore section of this pipeline route would land at a point west of San Juan
de Unare, thereby avoiding the national park. Construction options include laying the pipeline
through the mountains or tunneling under the mountainous section. Once through the
mountains, the route traverses mildly undulating terrain to Guiria.
Reference Case Route: Considered the most direct route, the offshore pipeline would land in the
bay west of Punta Cacao and cross the national park. As with the West Route, construction
options through the mountains include overland construction or tunneling. Once across the
mountainous terrain of the national park, the route passes through undulating foothills and
sparsely populated areas before reaching Guiria.
CIGMA Route: The offshore section of this route would land at Ensenada de Mejillones and
cross the peninsula at its narrowest point. It is thought that the national park has a width of less
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than 1 km in this area. Once across the peninsula, the route enters the shallow waters of the Gulf
of Paria before reaching Guiria.
Offshore Route: Also referred to herein as the “Sea Route,” this option would avoid the national
park altogether by passing around the eastern most point of the Paria Peninsula. The Sea Route
would run from the CPF to the eastern tip of the peninsula where it would pass through the
Boca Grande Channel, or Dragon’s Mouth and across the Gulf of Paria before making landfall at
Guiria. A second option for rounding the tip of the peninsula is the “Isthmus Option” whereby
the pipeline would be routed overland across a small strip of land at the eastern tip of the
peninsula.
Technical descriptions of the routes as well as key uncertainties, risks and opportunities
associated with each pipeline route are discussed in more detail in Section 14.2 – Route Selection
beginning on page 14-3.
Selection Criteria and Methodology
It is proposed to utilize an objective, systematic approach to the route selection in which the
Upstream, Downstream, SDEA and Local Content teams will identify, compile and analyze
critical selection criteria and sub-criteria related to the following broad categories:
• Technical
• SDEA
• Local Content
• Costs
Selection criteria will be weighted based on their relative importance. Each route is then assigned
a relative ranking in order to determine the preferred route. For the purpose of accounting for
specific, critical issues whose impact cannot be adequately measured by the proposed ranking
system, the concept of a blocker will be introduced, which has the potential to disqualify a route.
The proposed selection criteria and methodology is only presented in the present document. The
criteria will be refined and utilized for the final concept selection, which will take place in the next
phase of the project. Additional detail regarding the proposed methodology and preliminary
selection criteria can be found in Section 14.2.2 – Route Selection Criteria.
Hydraulic Calculations
For each route option described above the following cases were analyzed:
• Single phase gas
• Single phase liquid
• Two-phase (gas/liquid), including slug catcher sizing
Additionally, line pack calculations were performed for specific cases. Sizing parameters,
methodology and a summary of results and recommendations are described in detail in Section
14.3.1 Preliminary Sizing Calculations beginning on page 14-28.
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In addition to the above, hydraulic calculations were performed given seven specific concept
options (i.e., a fixed CPF location and specific pipeline route). A description of each concept
option and the rationale for its selection are described in detail in Sections 10, 11, and 13.
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7. GENERAL DESCRIPTION OF WORK PROCESS

This section describes the work process and work integration issues between the Upstream
groups and the downstream LNG plant team. Further detailed description of interfaces between
subsurface, upstream surface, and LNG plant teams is described in the Interface Document (re
Mariscal Sucre LNG Subsurface/Surface/Downstream Execution Interface and Key Project
Information).
7.1. Review and Summary Earlier Work Completed

The project team started with a review of existing data. There is an ongoing effort underway to
review data from PDVSA as it becomes available. The work completed by Exxon for the surface
xiii
engineering aspects from PCC (July 1996) was reviewed and summarized as outlined below .
• Well Reach used was max 5 km, although 7 km possible
• Hybrid development favored (RC + Mej + Pat initial) for < 50 wells
• Sequential development (RC + Mej initial) favored for 69 and 92 wells
• 100-150 MMSCFD rates/well possible in all fields
• Hydrates can form in Rio Caribe at subsea temps
• CO2 corrosion high downhole and RC wellheads
• CO2 corrosion low at separators and pipelines
• Only RC requires gas dehydration to prevent hydrates
• RC developed higher initially, but constrained RC to supply Condensate to LNG Plant
• Mejillones chosen as hub site (Plant at NE Guiria)
• Rich Rio Caribe streams delivered separately to plant for flexibility
• Well reach sensitivity studied - additional satellite costs more than offset drilling savings
• There are satellite platforms at Mejillones and Patao
• Tender Assisted Drilling (TAD) versus. self-contained drilling were equivalent costs (CAPEX
and day-rates). Chose self-contained for reliability.
• Water treated to 100 ppm HC discharged from caissons
• Well testing occurs at satellites through the use of test separation
• Wellhead and manifolds ANSI 1500, Facilities ANSI 600 operating 1200-1300 psig
• RC and Mej manned 24/7, satellites daylight only. 70 people
xiii See Reference 10
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• PL route shallow buried across the Park.

• Field gathering lines combined and minimized.
• RC had separate gas and condensate pipelines influenced by high $132MM slugcatcher cost
for 2 phase PL.
• Interfield pipelines sized for 5psi/km delta P.
• Offshore compression gave lower costs than onshore compression (discounted).
• 990 MMSCFD Reference Case. RC 200 MMSCFD Year 1-7
• Each field central platform. Patao 1 satellite, Mejillones 2 satellites
• Compression added year 6 at Mej for Norte fields, RC year 21.
• Inclined flares at all satellite platforms
• Two slug catchers installed onshore.
• Range of offshore options considered varies only $0.08/MMBtu: has little overall economic
impact.
• CAPEX range was approx. 1.4 to 1.6 Billion USD.
The largest differences between that early work and the work carried out for this MSLNG report
are as follows:
• Significantly lower well count in MSLNG
• Subsea was not considered in PCC.
• Well bore stability issues are better understood, leading to a maximum offset less than 7,000
feet (2,134 meters) in MSLNG. This results in increased drilling centers for MSLNG.
• Jack-up rigs used for MSLNG platform concepts rather than Self contained drilling
platforms.
• No test separators for MSLNG. Low well count allows individual well multiphase meters.
• Two-phase pipeline used for Rio Caribe production in MSLNG, versus single phase pipelines
for PCC.
A review was carried out from a surface perspective at that time, equivalent to the identify/assess
and select phase. However, not much detail has been provided in the documentation from that
review. The integrated project review was the equivalent of a VAR 1 review. In VLNG 2000,
the focus was on the subsurface and an updated cost estimate for the Exxon development
concept was made with limited input from surface engineers. The resulting cost estimates and
economics were carried forward through the equivalent of a “VAR 1 ½.” The project was then
postponed due to lack of market opportunities.
The surface concept in the VLNG 2000 work was not well documented and therefore it is
impossible to reconcile with our current concepts. For that reason, it is not summarized in this
report.
OGUD.2003.000012.01
The VAR review for VLNG 2000 (Ref VLNG VAR review) had two recommendations
regarding the EP surface engineering components as listed below:
• Optimize concept and cost prior to JVA and FID
• Utilize C2V team to carry out opportunity framing exercise
With regard to these recommendations, a C2V consultant was also present during the V2V
xiv
Workshop and coached the Surface Engineering team and LNG Plant team on key interfaces .
It is the intent to optimize the concept as the team moves forward in to the Concept Selection
phase post VAR-2.
It is the intention of this report to address these issues as well as to demonstrate that
development concept feasibilities studied were of sufficient breadth and appropriate depth to
span the wide variety of development options available.
7.2. Integration with Subsurface Team

A Volume to Value (V2V) workshop was held with the entire project team to better understand
project requirements, deliverables, and key interface issues. An obvious key interface from the
Surface Engineering viewpoint was with the Subsurface engineering team members.
Integrated activities with the Subsurface team can be best illustrated with the following diagram:
Figure 7.1: Integrated reservoir / facilities engineering activities.
xiv See Reference 13
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The challenge was to allow enough time in the schedule to examine the appropriate breadth and
depth of surface development concepts, while providing subsurface geologists and geophysicists
(G&G) opportunity to reinterpret data from VLNG 2000. A concern was that by the time the
updated interpretations were passed on, there would be insufficient time for reservoir and
facilities simulations.
Consequently, a decision was made that the reservoir engineers would use the VLNG 2000 data
with some early modifications to develop a forecast that could be used by surface engineers for
initial assessments. The two disciplines then worked on parallel paths; the reservoir engineers
developed field specific updates as geological models were completed and the surface engineers
worked on development concepts that could be completed with a single forecast independent of
subsurface requirements. This resulted in a number of “hardware” sensitivities that were run and
are described later in the report.
At an agreed date, the G&G team members “froze” their models to allow enough time for the
reservoir engineers and surface engineers to complete their respective work based on the output
of the updated geological models. This occurred when geological interpretations for Rio Caribe
and Mejillones were largely complete with limited updates on Patao and Dragon. Further
interpretation and subsequent impact on the project will continue up to VAR-3, and possibly
beyond.
Process engineers began the work process by assembling a gathering system network that was
passed onto the Production Technologist (PT). The PT then developed lift curves using
xv
PROSPER, including pseudo lift curves for nested manifolds . The reservoir engineers (RE)
xv
then included these lift curves in the MULTISIM reservoir modeling tool . The lift curves allow
for a realistic backpressure on the reservoir that yield a more realistic production rate and
pressure versus time forecast. The Well Engineer then assisted the Reservoir Engineers with the
selection of well locations. The forecast then was given to the process engineer to use as input to
a HYSYS gathering and compression system model (including Shell two-phase flow correlations).
This was accomplished by linking the production forecast in an Excel spreadsheet to HYSIS via
an Excel BROWSER add-in. This allowed for compression costs, timing, and other processing
alternatives to be quickly and accurately modeled.
7.3. Integration with LNG Plant Team

Similarly, interface issues were better defined and acted on after the V2V between the surface
engineers and the downstream LNG engineers. The following sections describe key learnings
from these discussion sin more detail.
7.3.1. General Discussion

Follow-up discussions took place between the two groups as work progressed toward VAR-2.
Key points realized from these discussions were:
xv See Reference 22
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• The interface boundary between the upstream and downstream components occurs at the
slugcatcher outlet.
• Dehydration of the gas prior to delivery into the export pipeline is unnecessary since the gas
is re-saturated with water at the LNG plant inlet as part of processed used to remove acid
gases upstream of the liquefaction process. Thus the LNG plant must dry the entire stream
anyway before it enters the liquefaction train.
• Optimization of inlet pressure at the LNG plant must be an integrated effort between the
Upstream and Downstream teams. An optimum balance between pipeline size, slugcatcher
size, offshore ANSI pressure rating, and landing pressure impact on LNG recovery must be
achieved. This effort will be completed before concept selection.
• There is a key value-chain optimization that must occur with condensate separation and
stabilization in order to balance incremental condensate recovery (or acceleration) against
LNG plant requirements. These requirements may include (1) a need to increase LNG
production through dewpoint elevation resulting from a richer inlet gas, and (2) a need to
enhance extraction of refrigerant components for make-up refrigerant to avoid import. Too
much rich gas will result in high RVP condensate, out of spec LNG, or a requirement for
LPG export facilities.
• The LNG plant will incur additional capital costs due to the large uncertainty surrounding the
presence of contaminants.
• The Operations Philosophies need to be integrated, and draft reviews with the LNG team
have already taken place. MSLNG is one single production train without a structured
upstream and downstream component, and the upstream Operations Philosophy (see Section
19.1 on page 19-1) is drafted from that basis. An integrated control room at the plant is
envisioned.
• Availability studies need to be integrated moving toward VAR-3.
• Similar manufacturers of equipment should be maximized where possible to achieve
synergies in maintenance and repair.
• A coordinated effort is required to crystallize the investment needed to improve the civil
infrastructure around Guiria.
• Commissioning requirements need to be synchronized between the upstream and
downstream in an integrated fashion.
An MSLNG Interface document was created to capture interface issues and can be referred to
for further information.
7.3.2. LNG Plant Simple Process Description

A simple diagram of the LNG process is illustrated below.
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Figure 7.2: LNG plant overview.

Gas from the slugcatcher at approximately 75 bara (1103 psia) enters an acid gas-treating (amine)
unit where CO2 (and H2S if present) is removed. It is then dehydrated with mole sieve beds and
fed through a mercury guard bed where any residual mercury is removed. The feed then enters a
pre-cool stage prior to entering a column that separates the C5+ components. The C5+ stream
enters a fractionation train where refrigerant makeup components (primarily C2 and C3) are
extracted and stored, and the remaining LPG’s are spiked back into the LNG, but only to a limit
that does not result in the LNG Higher Heating Value (HHV) exceeding 1070 Btu/SCF. The
C5+ fraction is combined with the stabilized condensate from the slugcatcher, but only up to a
limit to which the combined mix cannot exceed the Reid Vapor Pressure (RVP) specification for
the condensate.
The gas enters the main liquefaction process followed by a flash at near atmospheric pressure.
The liquid run down is the LNG product to storage. The flash gas is composed of mainly
methane and nitrogen and is used for fuel gas. Any excess fuel required is taken from the inlet
stream prior to acid gas treatment.
LNG constraint and/or specifications are as follows:
• LNG product higher heating value must be less than approximately 1070 Btu/SCF
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• LNG product cannot exceed 0.09 mole percent C5+ from scrub column or freezing will
occur in the main cryogenic heat exchanger.
• LNG product cannot exceed 5 mg/Mm3 H2S.
• LNG product cannot exceed 1 mol percent nitrogen.
7.3.3. Inlet Pressure Optimization

The landing pressure at the LNG plant has several impacts to the offshore design, as listed
below:
• ANSI rating at the Central Production Facility (CPF)
• Compression horsepower installed at CPF (CAPEX)
• OPEX (fuel) required to operate the offshore compression
• Pipeline size
• Slugcatcher size
The desired inlet pressure to the LNG plant, or slugcatcher landing pressure, is 75 bara (1103
psia). This high inlet pressure, from a plant perspective, is the optimum pressure, as it will
maximize LNG production. For lower inlet pressures, the LNG production will drop some 0.7%
per bar at full power utilization. Hence, for an inlet pressure of say 65 bara, LNG production
will decrease by approximately 0.3 mtpa. If the refrigeration power can be increased, depending
on the design, LNG production levels can be restored with additional CAPEX invested.
The process simulations of the various upstream concepts considered indicate that an ANSI 600
(1480 psig) design for the CPF compression facilities is possible, but with little margin left to
meet inlet pressure requirements at the LNG plant. A larger pipeline size would provide
additional margin, but two-phase flow dynamics then dictate a larger slugcatcher at the CPF.
For this reason, an integrated study is necessary in the Concept Selection phase to optimize all
the above factors into a robust landing pressure determination that minimizes CAPEX and
provides operational flexibility for the entire system.
7.3.4. Impact of Contaminants

The impact of contaminants in the feed stream to the LNG plant was discussed. A list of the
potential contaminants and their corresponding values are contained in the Composition section
of this report. There is insufficient information from the well tests to provide a comfortable level
of certainty to the LNG design team for an optimal plant design.
The following discussion relates to the qualitative impact various contaminants have on the LNG
plant. Where possible, quantitative information is also included.
7.3.4.1. Nitrogen
The amount of N2 has an impact on LNG production as well as the plant design of the tail.
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Typical LNG sales and purchase agreements limit the concentration of N2 to 1 mol percent. If
there is more than 1% mol in LNG plant feed gas, a so-called ‘end flash system’ is needed
downstream of the main liquefaction section, as shown in the above diagram. In its simplest
form this involves an atmospheric flash vessel, LNG rundown pumps to pump the LNG to the
storage tanks, an end-flash compressor with driver (to route the overhead vapours to the fuel gas
system) and a heat exchanger for cold recovery. This “simple” flash system can be used for N2
contents in feed gas of up to some 3 % mol.
For more than 3 mole percent, the quantity of the quantity of methane (C1) that would flash off
with the N2 could exceed the fuel gas demand, and a stripper column needs to be installed for
sharper N2 / C1 separation. An end-flash system normally costs US$ 15-20 million (depending
on simple vessel or stripper column).
In addition to the above, it should be noted that a concentration of 1% N2 in the plant feed gas
lowers the LNG boiling point by some 4°C. This will result in a power penalty, or LNG
production loss. It is entirely possible that an end flash system is needed anyway to boost the
production capacity to 4.7 mtpa. From a plant design perspective (and in view of the above end
flash considerations), it is important to know the N2 content of the plant feed gas with
reasonable accuracy.
7.3.4.2. Carbon Dioxide, H2S, and Sulphur Containing Compounds

An acid gas removal unit (AGRU) is typically installed in the front-end of an LNG plant to
remove acid gas components for operational reasons and LNG specification requirements. This
is most commonly for removal of CO2 only since H2S is less often present, or is present only in
relatively small quantities. CO2 removal as such is not difficult (and can be done at very high
incoming CO2 levels), but its quantity needs to be known with reasonable accuracy in order to:
• Select the most appropriate solvent
• Define the heat requirements for CO2 stripping. This heat needs to be supplied from a waste
heat recovery scheme and any uncertainties in feed gas definition will directly affect the
design of these utilities schemes.
• Define of turndown capability.
H2S, if present in significant quantities, would affect the design of the AGRU and possibly the
choice of solvent. Deep removal of H2S from a gas containing up to 0.5 mol % H2S is possible,
and the H2S specification of less than 5 mg/Mm3 can be achieved. The only issue is the
treatment of the regenerator off-gas. Normally, this is combusted in an incinerator before it is
sent to atmosphere. At relatively high levels of H2S, this may no longer be allowed if SO2 levels
in the combustion gas exceed local regulations. In this case, a small sulfur recovery unit may be
required; however, this is an unlikely scenario for MSLNG.
Removal of other sulphur components (COS, RSH) is an issue since these can only be removed
with physical solvents, and possibly only in combination with additional removal in mol sieve
OGUD.2003.000012.01
beds. Even then, COS removal remains problematic. The maximum allowable total sulfur
3
components in LNG are 30 mg/Nm . It is therefore important to have good definition of sulfur
components in plant feed gas composition.
7.3.4.3. Mercury
Hg, when present in plant feed gas, needs to be removed to levels to less than 10
nanogram/Nm3 in order to prevent corrosion in the main cryogenic heat exchanger (MCHE).
Removal of Hg takes place in a mercury guard bed which is normally installed downstream of the
drier beds but upstream of the MCHE. Though it is not difficult to remove Hg, significant
corrosion problems with associated plant downtime and revenue losses can occur if not managed
properly. With a properly designed guard bed, Hg levels of 20-30 microgram/Nm3 in plant feed
gas can be accommodated. In cases where no indications of Hg exist in the feed gas, plot space
and some simple provisions can be made for later guard bed installation, if necessary. This would
defer the expenditure of some US$4-5 million.
7.3.4.4. Benzene, Toluene, Ethylbenzene, Xylene (BTEX)

Removal of BTEX should be accomplished in the AGRU (a physical solvent like Sulfinol is then
required) and in the scrubber column. It is important to know the maximum BTEX content in
the feed gas since BTEX needs to be removed to sufficiently low levels (less than 3 ppm mol) in
order to avoid freeze-out in the main cryogenic heat exchanger. BTEX levels in the order of
1000 ppm (mol) in plant feed gas can be accommodated in the LNG train.
7.3.4.5. Production Chemicals

The presence of methanol is known to cause operational problems in the LNG plant mol sieve
beds. This issue will be addressed following completion of hydrate inhibition studies that will be
completed in the next phase. An initial assessment is provided later in this report.
7.3.5. Condensate Recovery

There is a balance that must be achieved for the amount of condensate that is recovered and the
value of that condensate to the Joint Venture partners in NPV terms.
The LNG plant requires a certain amount of ethane, propane, and a small amount of butane as
refrigerant make-up for the closed loop refrigeration process (see diagram above). As the plant
operates, a certain amount of losses in the closed-loop system occur, particularly during re-starts.
Recovery of these lighter end components in the scrubber column is assisted by the presence of
heavier ends (C5+). Additionally, the presence of these components in the feed raises the
dewpoint of the LNG in the main cooling section of the plant. This results in less refrigeration
horsepower needed to liquefy the LNG product.
Too many C3 to C5+ components in the feed can result in exceeding product specifications for
both the condensate and the LNG products. Excess C3 and C4 that are not used as refrigeration
makeup is spiked back into the LNG product. The amount that can be reinjected into the main
OGUD.2003.000012.01
stream is limited by the LNG higher heating value specification as well as by the component
specifications listed previously. Excessive C3 and C4 production will require LPG export
facilities for the LNG plant.
The C5+ that is generated from the bottom of the debutanizer in the LNG fractionation train
still contains a significant amount of volatile C3 and C4 components. There is a limited amount
of this that can be spiked into the stabilized condensate without exceeding the Reid Vapor
Pressure (RVP) specification for the condensate. To address this issue, the optimum volume of
gas must be produced from Rio Caribe, or the condensate handling needs to be controlled to
limit the C5+ components that exit the slugcatcher in the gas phase. As it is desired to produce
as much condensate as early as possible from a condensate revenue perspective, the rest of the
discussion focuses on the second option.
It was demonstrated by process simulations that condensate production from the slugcatcher is
maximized by separating the liquid offshore prior to mixing with the leaner gases from
Mejillones, Patao, and Dragon offshore. The lighter components in the lean gas absorb part of
the condensate and are not recovered by separation onshore at the slugcatcher. Simulations were
done for both onshore and offshore stabilization to the same condensate specification (13 psia
RVP). The results for one case (Concept 3) are as follows (given the effect on the LNG plant, is
the net effect of recovering more condensate in the slugcatcher positive or negative to the
economics.
Offshore versus Onshore Stabilized Condensate
16,000 50,000
14,000
Condensate (MBBl)
12,000 40,000
Condensate
Stabilized
Cumulative
Stabilized
10,000 30,000
(BPD)
8,000
6,000 20,000
Delta = 10.6 MM Bbl
4,000 10,000
2,000
- -
1
4
7
10
13
16
19
22
25
28
Production Year
Stabilization Onshore (BPD) Stabilization Offshore (BPD)
Cumulative MBBl Onshore Stbilization Cumulative MBBl Offshore Stabilization
Figure 7.3: Offshore versus onshore stabilized condensate from Concept 3.
The volumes shown above do not include C5+ components recovered from the LNG
fractionation train, as it is unknown whether it is possible to re-inject those components without
exceeding the RVP specification. The components that would have been recovered offshore and
OGUD.2003.000012.01
are left in the gas stream are ultimately recovered in the LNG plant. If all those components can
be spiked back in without exceeding the condensate Reid Vapor Pressure (RVP) specification,
then the recovered volumes offshore versus onshore become equal.
An example (Concept 3) of the change in higher heating value (HHV) going into the LNG plant
for both onshore and offshore stabilization is shown below:
LNG Plant Feed HHV - Offshore versus Onshore

Condensate Stabilization
1,070
1,060
1,050
LNG Feed HHV (Btu/SCF)
1,040
1,030
1,020
1,010
1,000
990
980
970
1
11
13
15
17
19
21
23
25
27
29
Production Year
LNG Plant Feed HHV - Stabilization Onshore (BPD)

LNG Plant Feed HHV - Stabilization Offshore (BPD)
Figure 7.4: LNG plant feed HHV – offshore versus onshore Condensate stabilization.
A detailed discussion of the above graphs is contained in Section 10.1 (page 10-3) describing
Concept 3.
The tradeoffs that need to be optimized for an offshore condensate recovery scheme are outlined
in the following table:
OGUD.2003.000012.01
Table 7.1: Offshore Stabilization Tradeoffs

Advantages Disadvantages
Increased condensate recovery achieved Lower dewpoint (due to leaner feed) of LNG
independent from LNG plant. Accelerated in the plant requires more refrigeration
recovery possible horsepower and/or loss of LNG production
Less investment required in LNG Loss of refrigerant make-up components,
fractionation equipment and condensate particularly in the earlier years. Make-up
export facilities must be imported and facilities for that
included as CAPEX
There is no issue with exceeding the Condensate processing and offloading
condensate RVP specification due to complicates the operation offshore (CAPEX
reinjection from LNG process and OPEX)
May be an advantage if ultimate disposition
of condensate favors the offshore location
The issues above need to be properly costed and optimized in an integrated effort between the
Upstream and Downstream engineering teams during the Concept selection phase.
7.4. Integration Among Surface Team Members

The Operations Philosophy was one of the first work packages drafted, and served as guidance
from the operations engineer to the process / concept engineer. Work completed by the process
and pipeline engineers were discussed and analyzed with the cost engineer for modeling in CES.
CES provided additional information for the facilities concept (e.g., platform bulk weights) from
the database it is based on. A corrosion engineer was used to develop a materials and corrosion
basis for the path forward. This also required interaction with the process and pipeline engineers.
The pipeline engineers were solicited to conduct a peer assist on the gathering system modeled by
the process engineer. The selection of scenarios that were run was the result of informal
brainstorming exercises that occurred between team members.
As with any project, the real interface values were derived from numerous formal and informal
discussions among team members based on camaraderie and the professional desire to produce a
quality concept feasibility study.
7.5. Peer Assists and Quality Control

A number of formal peer assists, internal reviews, and partner meetings took place to ensure
technical consistency and appropriate content. These are briefly listed below:
• Volumes to Value Workshop: This was an integrated workshop of a one week duration
between the upstream and downstream project staff that set forth opportunity framing
exercises and addressed key interface issues.
• Partner Meetings: There were several meetings and engagement sessions with PDVSA and
Mitsubishi where progress presentations were made and feedback was solicited and
incorporated.
OGUD.2003.000012.01
• Subsea Workshop: A workshop was held between the surface engineering team and Shell
Subsea experts to solicit specific feedback regarding subsea development options.
SEPTAR Review: An upstream peer assist was conducted with Shell staff members from both
SEPTAR and SGS (Subsurface and Surface). This was a comprehensive project review where
discipline specific presentations were given and feedback was received at the end of the day.
OGUD.2003.000012.01
8. COST ESTIMATING METHODOLOGY AND ASSUMPTIONS
8.1. Basic Estimating Methodology
8.1.1. Tools, Documents, and Assumptions

The cost estimates in this report have been compiled using the tools, documents, and
assumptions listed below:
• The Shell Cost Engineering System (CES) Version 14, with a base reference date of 1 July
2002 was used in the preparation of the initial Hardware Sensitivity estimates. In later
estimates, Field Phasing Sensitivities, Demand Curve Sensitivities and Corrosion Cases, costs
have a base date of 1 July 2003. The related charts and tables are marked accordingly.
• All costs are listed in US Dollars (millions or thousands depending on the listing – values are
stated) in Real Terms.
• Estimates are taken as being at the feasibility stage, having a band of accuracy of ± 30%.
• A project contingency of 15% has been used in all estimates.
• All estimates, unless otherwise noted, include for the costs of engineering and design,
insurance and certification and construction project management.
• A list of specific exclusions from the cost estimates may be found later in this report but in
principle no allowances are made for Venture Set-up or JV formation costs.
• Well costs have been discussed and agreed with the project team’s well engineer through
continuous engagement.
Principle assumptions used in the formulation of the cost estimates are as follows –
• The construction of the facilities is assumed to take place in Venezuela wherever possible,
taking into account schedule, capability, and cost implications. Essentially the assumption
has been made that line pipe and general steel for jackets, etc., will all be manufactured in
Venezuela.
• It is understood that a pipeline coating plant exists in Venezuela and this has been the costing
assumption.
• Major specialist material, complex topsides facilities, and subsea wellheads would be shipped
to site from a US Gulf Coast location.
• Engineering and design teams could be located at any suitable location, having regard to the
elements of the project on which they are working and the most cost effective source of such
expertise.
• With the prime exception of the Operations Base facility, the Upstream element of this
project is self-sufficient. It provides it’s own power generation equipment, supply base,
OGUD.2003.000012.01
logistics support, project supplies, spares and consumables and includes for the delivery of
the gas up to the inlet flange of the LNG plant at the battery limit fence.
• As for the Operations Base itself, costs in these estimates presume that an integrated facility
with the LNG plant will be constructed. This philosophy has not yet been finalized but from
an operational point of view there is a clear preference for integration with the LNG plant
facilities.
• No definitive project schedule has yet been agreed upon, and consequently it has been
necessary for us to assume a suitable period for the pre-first gas work. The start date has
been assumed early in 2005, commencing in time to allow first gas to be delivered to the
LNG plant Q2 2007.
• In several Concepts gas volumes in excess of the requirements of the LNG plant are to be
delivered to an onshore domestic gas facility that will export gas of suitable specification to
the local grid. Costs for this facility are included in the estimates where necessary, values
varying according to throughput and composition.
8.1.2. Estimating Categories

The estimates have been split into the following categories: - central processing facilities, field
facilities (including wells), export system, and onshore facilities. These categories represent the
essential functional building blocks that are required for each of the concepts studied. They also
provide the basis for high-level comparison between the options.
Operational costs (OPEX) are also included in these estimates for the anticipated field life, which
is taken in all cases as being 30 years.
The costs for decommissioning (abandonment) have not been shown in the CAPEX section of
the estimates. It is however part of the economic evaluation of the cases and such costs are dealt
with appropriately.
8.1.3. Excluded Items

In addition to any items mentioned elsewhere in this report, there is no provision in the cost
estimates for the items listed below.
• Land costs
• Pre start-up expenditure
• Local and national taxes
• Import duties
• Escalation – all estimates are at Real Term prices.
• Social payments, local project funding, etc.
• Legal fees, permits, right-of-way costs, etc.
New seismic investigation and reporting
OGUD.2003.000012.01
9. COMPOSITION
9.1. Basis for Process Simulation Work

The following composition was received from Reservoir Engineering based on well test data and
subsequent PVT analysis. It forms the basis for all process modeling completed in this study:
Table 9.1: Norte de Paria Gas Stream Components
Dragon Patao Mejillones
Gas Stream Gas Stream Gas Stream
Component Mole % Component Mole % Component Mole %
Dragon Patao Mejillones
Gas Stream Gas Stream Gas Stream
Component Mole % Component Mole % Component Mole %
NITROGEN 0.31 NITROGEN 0.95 NITROGEN 2.86594
CARBON DIOXIDE 0.09 CARBON DIOXIDE 0.32 CARBON DIOXIDE 0.15765
METHANE 99.46 METHANE 98.54 METHANE 95.55027
ETHANE 0.085 ETHANE 0.09 ETHANE 0.45227
PROPANE 0.05 PROPANE 0.05 PROPANE 0.34729
I-BUTANE 1.00E-11 I-BUTANE 0.02 I-BUTANE 0.08632
N-BUTANE 0 N-BUTANE 0.01 N-BUTANE 0.12432
I-PENTANE 0 I-PENTANE 0.01 I-PENTANE 0.05033
N-PENTANE 0 N-PENTANE 0.01 N-PENTANE 0.04999
N-HEXANE 0 N-HEXANE 0 N-HEXANE 0.07132
C7+ 1.00E-11 C7+ 1.00E-11 C7+ 0.2443
Table 9.2: Rio Caribe Gas and Liquid Stream Components

Rio Caribe 700 psia 110 Deg F
Gas Stream Liquid Stream
Component Mole % Component Mole %
NITROGEN 0.24 NITROGEN 0.02
CARBON DIOXIDE 0.62 CARBON DIOXIDE 0.28
METHANE 83.51 METHANE 18.72
ETHANE 8.07 ETHANE 7.32
PROPANE 4.62 PROPANE 11.09
I-BUTANE 0.64 I-BUTANE 3.04
N-BUTANE 1.25 N-BUTANE 8.13
I-PENTANE 0.29 I-PENTANE 3.84
N-PENTANE 0.25 N-PENTANE 4.01
C6 0.43 C6 4.67
C7+ 0.09 C7 8.987
C8 6.91
C9 5.312
C10 4.085
C11 3.14
C12 2.415
C13 1.856
C14 1.427
C15 1.097
C16_17 1.493
C18_20 1.177
C21_54 0.981
OGUD.2003.000012.01
The above compositions were derived from average well test data for Dragon, Mejillones, and
Patao and handed to Surface Engineering Group by Reservoir Engineering. The Rio Caribe
composition was derived from exploration well RC2. Detailed PVT data can be located in the
xvi
Subsurface Engineering Report .
9.2. Pseudo Component Properties

Pseudo components shown in the previous tables were modeled by Shell PVT experts (see detail
in Subsurface report) with the following properties:
Table 9.3: Pseudo Component Properties
NBP [F] MW Liq Density [API]
RE C6* 128.99 84.00 79.99
RE C7* 175.46 96.00 66.08
RE C8* 216.72 107.00 59.72
RE C9* 261.99 121.00 54.16
RE C10* 299.47 134.00 50.39
RE C11* 335.75 147.00 47.30
RE C12* 373.36 161.00 44.52
RE C13* 409.62 175.00 42.17
RE C14* 447.15 190.00 39.99
RE C15'* 485.81 206.00 37.93
RE C16_17* 538.09 228.52 35.36
RE C18_20* 609.47 260.92 32.09
RE C21_54* 761.79 336.67 28.00
RE C7+* 316.39 140.00 48.89
Pseudo components as listed above were used for all reservoirs in this study.
9.3. Uncertainty
There is a considerable uncertainty in the PVT data for this project. Well test information was
incomplete and many of the contaminants were not analyzed. In the case of Patao and Dragon,
analyses received from the test wells did not indicate whether there was an associated liquid
stream or not. The most comprehensive data came from Rio Caribe, which results in better
confidence from this field. However, the composition shown above is at one set of conditions
which changes with time as the pressure depletes and the condensate to gas ratio (CGR) declines.
It is worth noting that similar comments regarding PVT uncertainty were contained in the PCC
xvii
report .
Hydrogen sulfide was only mentioned for two of the wells at Patao with values of 200-700 ppm,
but at none of the other Patao. Rio Caribe results showed zero values for H2S, indicating it was
measured. There was no such indication for Mejillones or Dragon.
xvi See Reference 5

xvii See Reference 20
OGUD.2003.000012.01
Currently there is a belief that complete well files exist in Venezuela, and PDVSA is actively
searching for them. The strategy in the meantime is to quantify the uncertainty into a
CAPEX/OPEX cost from the Surface facilities perspective, in an attempt to put boundaries
around the uncertainty impact.
9.4. Contaminant Matrix

In order to create boundaries around the uncertainty, an attempt was made to use analogues to
set upper limits on contaminants. Where analogues did not provide adequate clarity, the surface
engineering team has chosen a “Project High” to be used for sensitivities and Value of
Information (VOI) analyses to be completed post VAR-2. Since flow assurance is closely related,
a high level analyses on wax, asphaltenes, and hydrates (discussed in the next section) are
included in the following contaminant matrix.
Table 9.4: Contaminant Matrix
Geochemical Interpretations
Issue Base Low High FacilitiesProject Summary
High
Wax None None None 0 Lower pressures - none expected.
With empirical fit, 3 Norte Paria
fields 9 deg F cloud point, Rio
Caribe 26F)
Asphaltene None None None 0 Lower pressures - none expected
Scale CaCO3 None CaCO3 and CaCO3 and CaCO3 will be present, Possibly
Scale BaSO4 BaSO4 BaSO4. Barium not shown on
water analysis. Scale Inhibition
Required
Hydrates Will Form Rio Caribe Will Form - Will Form - Hydrate subcooling relatively low
- LDHI only Continuous Continuous (9-18F). Rio Caribe most
Regenerative Regenerative susceptible. Relatively low
injection rates required
H2S 0 ppm 0 ppm 1% 500 ppm Predictions based on theoretical
considerations for biogenic gas
origin, and the tectonic setting.
No good analogs.
CO2 0.25% 0% 10% 2.5% Predictions based on theoretical
No good analogs.
N2 0.5% 0% 2% 2% Predictions based on theoretical
No good analogs.
OGUD.2003.000012.01
Geochemical Interpretations
Issue Base Low High FacilitiesProject Summary
High
Helium 0% 0% 0.5% 0.5% Predictions based on theoretical
No good analogs.
Chlorides 14,000 ppm 0 14,000 ppm 14,000 ppm Petrophysics Resistivity logs
(water)
RSH 0 0 0 ? No Analogues. No indication of
liquids origin
COS 0 0 0 ? No Analogues. No indication of
liquids origin
Mercury 0.01 ug/m3 0 ug/m3 < 10 ug/m3 < 10 ug/m3 Predictions based on theoretical
No good analogs.
Other 0 0 0 ? No Analogues. No indication of
Heavy liquids origin
Metals
NORM 0 0 0 ? No Analogues. No indication of
liquids source. Radon unlikely.
Correlates to BaSO4 and heavy
metals
BTEX 0 0 0 ? No Analogues. No indication of
liquids origin. Based on API
gravity (high), it should be low.
CGR RC- 100 RC- 60 Mej RC- 140 RC- 140 Mej - 12 Statistical representation of all that
Mej - 3 Pat - 0 Pat - 0 Mej - 12 Pat - 4 Drag - 4 could have gone wrong in well test
- 0 Drag - Drag - 0 Pat - 4
0 Drag - 4
The above parameters form the basis for sensitivity and VOI studies. This also is a reference
document for the interface with the LNG plant as most of the contaminants above impact the
LNG plant design to a greater extent than the upstream surface facilities design (see Section 7.3 –
Integration with LNG Plant Team
The primary impact to the surface facilities design is around CO2 and H2S levels. In the above
table, those are the only two contaminants where the Project High differed from the analogue
study high value. These values were chosen very qualitatively. The 500 ppm H2S and 2.5% CO2
values represent step changes for materials required on pipelines and topsides. This is discussed
in detail in the Corrosion and Materials section of this report. The cost consequence of these
CO2 and H2S concentrations on the Upstream surface facilities design is examined later in the
report.
OGUD.2003.000012.01
A detailed discussion of the analogue studied conducted to develop the above table is contained
xviii
in the Subsurface Report .
xviii See Reference 9
OGUD.2003.000012.01
10. FIELD PHASING SCENARIOS

An integrated effort was undertaken with Reservoir Engineering, Well Engineering, and
Production Technology to create various development scenarios related to the phasing of the
four fields. 2000 VLNG geological models were updated from subsurface work completed up to
that time and passed onto Reservoir Engineering to incorporate into new forecasts and well
counts. Generally, this resulted in more wells and more drilling locations. Well bore stability was
the driving issue for increasing the drill center numbers, with a goal to keep drilling offsets less
than 2,134 meters (7,000 feet). Well counts were increased due to an improved understanding of
wellbore stability, and the need to include infill replacement wells due to projected sand failures.
The following is a summary list of the Phasing Scenarios that were studied:
Table 10.1: Phasing Scenarios
Phasing Scenario 1: Update Concept 3 770 MMSCFD + 200 Modified Reference
geology from Concept 2 model Domgas buildup Case
(Mejillones CPF)
Phasing Scenario 2: Accelerated Concept 4 770 MMSCFD + 200 Modified Reference
(Unconstrained) Condensate Domgas buildup Case
Production at Rio Caribe (Rio
Caribe CPF)
Phasing Scenario 4: Dual Initial Concept 5 770 MMSCFD + 200 Modified Reference
Development - separate CPF's Domgas buildup Case
and export lines from Dragon
and Rio Caribe initially,
followed by Patao and Dragon
Phasing Scenario 5: Mej CPF Concept 6 770 MMSCFD + 200 Modified Reference
plus compression and subsea Domgas buildup Case
"data" tiebacks early from
Dragon and Patao
Subsea to Beach Concept using Concept 7 770 MMSCFD + 200 Modified Reference
Phasing Scenario 2 Forecast Domgas buildup Case
The purpose for this phase of the study was to examine the technical and cost impacts of phasing
the fields differently.
Significant learning had occurred from both the Surface and Subsurface Engineering from the
previous work, completed (Hardware Sensitivities contained later in the report), and the models
from both disciplines had improved. It was jointly decided between the two groups that a
priority had to be established in the Reservoir Engineering MULTISIM model that would set
forth the development strategy for each concept. The following guiding criteria were established
for MULTISIM in priority order:
1. The order in which each field would be developed is defined for each Phasing Scenario
concept, and the model would turn fields on in that order.
OGUD.2003.000012.01
2. Wells in field Hub’s (central gathering centers) would be turned on before wells from satellite
wellhead platforms.
3. Compression would not be turned on at any field until the wells were all developed, except
for Rio Caribe. Compression would be turned on at Rio Caribe to evacuate all the
condensate. Rio Caribe was constrained at 150 MMSCFD (except Concept 4) to ensure
adequate richness of feed for the LNG plant.
Any exceptions to the above priorities will be noted in descriptions contained in the following
sections.
Also worth noting is that Process Engineering adjusted the modeling to account for changes in
composition at Rio Caribe over time. Previous work had used a constant composition for
simplicity. While this was fine for the leaner gas and for the purpose of the previous modeling
effort, it was not adequate for this study, which will feed project economics. The simplification
overstated cumulative condensate barrels produced, and the change in heating value of the LNG
plant feed over time. Rio Caribe was constrained in all cases except Concept 4 to 150 MMSCFD
in an initial attempt to provide the LNG plant with necessary refrigerant make-up components
over the life of the field.
Well Engineering provided a model that calculated the number of replacement wells that would
be required in each field due to sand failures. This failure percentage was derived from Gulf of
xix
Mexico experience for similar geology .
Well design includes access to several sand layers in each individual well. Commingling
production from several zones may be a regulatory issue in Venezuela. While there are options
to deal with this uncertainty, it is possible that extra wells will be required for compliance. This
extreme solution was not considered for any of the concepts investigated in this report.
The iterative process for integrating gathering system backpressures into a realistic production
model was used as described previously. There was no effort to optimize each concept solution,
as the intent is to establish the Concept and optimize the selected Concept during VAR-3
preparation. For example, there are improvements to be made for mobilization and
demobilization activities as they relate to phasing for developing small pockets of reserves.
The first case, Concept 3, will serve as the reference case against which the others will be
described and compared. Concepts will be discussed by exception to Concept 3 only. The
following sections describe each of the resulting Concepts in detail.
xix See Reference 22
OGUD.2003.000012.01
10.1. Concept 3
Concept 3 is an update of Concept 2 (see Section 13 –Hardware Sensitivities later in the report)
that is based on the new geological interpretations from the Subsurface Team. The real
difference was in well count and number of drilling locations. The changes to the geology from
Concept 2 resulted in an improved understanding of the reservoirs in each field, and an improved
understanding of well stability by Well Engineering. Concept 3 is the reference case against
which all other Field Phasing Scenarios are compared.
10.1.1. Reservoir Engineering Input

Reservoir Engineering received the following production forecast:
Total Production Profile
1100
1000
900
800
Drag Input MMSCFD
700
MMSCFD
600 Pat Input MMSCFD

500 Mej Input MMSCFD
400
RC Input MMSCFD
300
200
100
0
1
4
7
10
13
16
19
22
25
28
Year
Figure 10.1: Total production profile.
OGUD.2003.000012.01
Following is an illustration of the field layout:

p
Figure 10.2: Concept 3 – wells and platforms.
10.1.1.1. Infrastructure
The resulting infrastructure is represented in the following schematic:
L=9,010 m
Mej
Concept 3
D=20” (18”ID)
L=6,736 m CPF L=7,539 m L=7,008 m L=5,870 m
D=16”(14.3”ID) D=20” (18”ID) D=24” (21.6”ID) D=16” (14.3”ID)
RC RC Mej Mej P P P
Drag
West HUB West East HUB West East
L= 21,604 m L=16,963 m
D=18” D=30”
(16.1 ID) (28”ID)
L=42,294 m
D=30” (28”ID)
RC1 RC2 RC3 RC4
M2 M3 M4 M6 M7 P4 P3
M1
RC5 RC6
M5 P5 P6 P1 P2
D2 D4
Legend P7 D3 D5 D7
= Central
Processing = Well = Manifold
Facility
Figure 10.3: Concept 3.

The wells listed above do not show the replacement infill wells which result in an additional 7
wells over the life of the field.
OGUD.2003.000012.01
10.1.1.2. Integrated Process Description

The intent was to keep the process offshore as simple as possible to minimize CAPEX, and to
keep the Operations simple and reliable. To achieve this, the wellhead platforms were set up to
consist of x-mas trees and a manifold, with an export transfer line to a single Central Processing
Facility (CPF) located at Mejillones. Umbilicals from the CPF would supply the following:
• Power
• Corrosion Inhibitor
• Hydrate Inhibitor
• Fibre Optic cable
• Spares
Similarly, the Central Processing Facility served as the wellhead location for the Mejillones wells
drilled from that location, and consisted of a manifold to gather production from all four fields
and export via a two-phase pipeline. The CPF would include all chemical injection equipment,
power generation equipment, and accommodations suitable for 24/7 coverage. Additionally, the
CPF would include a flare for process relief and future compression process requirements.
When compression is needed, separation and compression equipment would be installed on a
bridged compression platform.
The following table illustrates capacities for all platforms, and start-up phasing:
Table 10.2: Compression Capacities All Platforms
Phasing From Wells Exiting
Platform
Start-up Number Gas Rate Gas Rate Cond Rate Water Prod
Platforms Year of Wells MMSCFD MMSCFD BPD BPD
RC West 1 4 150 150 11,140
RC HUB 1 2 79 178 13,923
Mej East 6 1 217 217 18
Mej CPF 1 3 620 969 14,020 146
Mej West 3 2 282 282 34
Patao East 21 2 325 325 0
Patao West 15 2 445 591 0
Patao HUB 9 3 621 910 0
Dragon 26 3 463 463 0
The number of wells shown above (22) represents the number of wells that actually had to
produce in the MULTISIM simulation to meet the input demand curve. It differs from the
number of wells that were illustrated in the infrastructure layout. Only the number of wells that
had to produce from MULTISIM, plus the seven infill wells were included in the cost estimate
for a total of 29 wells.
OGUD.2003.000012.01
10.1.1.3. Field Wellhead Platform Facilities

As previously discussed, the philosophy was to keep the facilities as simple as possible. Wellhead
platforms consisted of x-mas trees and manifolds. Power, chemical injection services, and a fiber
optic cable were provided by umbilical. Valves on the platform would be actuated by an electric-
drive hydraulic pumping system. The x-mas trees were 5000 psi rated, and manifold rating is
ANSI 1500 to handle the Shut-in Tubing Pressure (SITP) of 3500 psi. Since no relief valves
would be required, a flare was not included. Venting would be accomplished to blow-down small
sections of pipe should maintenance on the platform be required. Due to the small well count at
each platform, individual non-fiscal metering was included for each well to ensure sound
reservoir management, and to avoid installation of well testing equipment. Pigging facilities were
included for the corrosion inhibition program, and to allow periodic pipeline integrity
assessments using intelligent pigging technology. The following schematic illustrates the basic
design function for a typical wellhead platform:
Base Case Wellhead Platform

ASNI 1500 (3705 psig)
Wellbay: # of Wells + 2 spare slots
Meter
Meter
Flowline
Meter
Meter
Multiphase meters - Rio Caribe and Mejillones
Gas Meters - Dragon & Patao
Umbilical
1. Electrical
Supporting Infrastructure 2. Corrosion Inhibitor
1. Heliport 3. Hydrate Inhibitor
"Typical" 2. Boat Docking 4. Fibre Optic Cable
3. Small Crane 5. Spare
Wellheads = 5000 psi design 4. Hydraulic Pumps 6. Spare
5. Lights
6. Shelter (Unmanned)
7. Pigging Facilities
Figure 10.4: Reference Case Wellhead Platform.
10.1.1.4. Gathering System

The gathering network was rigorously modeled using HYSYS with Shell Two-phase flow
correlations included. This was done for every production year to size the system not only for
initial conditions, but also for future conditions when pressures decline even while producing
OGUD.2003.000012.01
volumes were maintained. This provides a challenge, particularly with the Rio Caribe two-phase
system, as it may become unstable at some point in time. While some work was done in this area
to confirm feasibility over the life of the field, this represents an opportunity for further analysis
and optimization when work commences on Concept Selection.
The pressure rating (wall thickness) for the flowlines will also be optimized during Concept
Selection. Flowlines rated to ANSI 900 must include some overpressure protection on the
wellhead platform, such as relief valves (undesired) or HIPS (high O&M). This must be
compared against the life cycle costs for flowlines rated for SITP (ANSI 1500). The
infrastructure schematic illustrates the gathering system sizes and lengths. The pressure drop as a
function of time is shown in the graph below.
Gathering System DP's
250
RC to Mej
Pressure Drop (psi)
200
RC West
150 Mej West
Mej East
100 Pat East
Pat HUB
50
Pat West
0 Drag East
Drag to RC
1
10
13
16
19
22
25
28
Production Year
Figure 10.5: Gathering System DP’s.
10.1.1.5. Central Production Facility

The Central Production Facility located at Mejillones consists of a gathering manifold, Mejillones
x-mas trees, and export line to the LNG plant location. Support facilities for the entire offshore
development are also included. The following diagram illustrates the functionality of the CPF
platform:
OGUD.2003.000012.01
Central Processing Facility (CPF) Platform
Transfer Line from other Field
To Compression
Platform (Future)
From Wellhead Platforms
Meter Two-phase PL
Meter
Meter
From Compression Platform
Meter
(Future)
Meter
ANSI 900 (2220 psig)
Wells drilled from CPF Platform Turbine
Generator
Umbilical Corrosion
Distribution Inhibitor
to Wellhead
Platforms
2 spares Hydrate
Inhibitor
Fibre Optic CAO / DCS

Note: Turbine/generator package oversized for future Compression Platform
Supporting Infrastructure
1. Heliport
2. Boat Docking
3. Small Crane
4. Hydraulic Pumps
5. Lights
6. Living Quarters (incl capacity for future Comp.Platform)
7. Firewater System (incl capacity for future Comp.Platform)
8. Instrument Air (incl capacity for future Comp.Platform)
9. Emergency (Diesel) Generator
10.Flare system
Figure 10.6: CPF Platform – Mejillones.
OGUD.2003.000012.01
10.1.1.6. Separation
The functionality of separation for this Concept is to keep liquids from entering the compressor.
As there is no compression needed during the first several years and the export line is two-phase,
there is no need to install separation until the bridged compression platform is added later (see
Compression section). The only separation that will occur is for the Rio Caribe production
stream.
Phase envelope considerations need to be considered when discussing separation. Following is a
basic phase diagram built for the Rio Caribe production mix at Year 1:
Rio Caribe Phase Diagram
4000 Bubble Point

3500 Dew Point
3000 .13 Quality
Pressure (psia)
Gas .15 Quality

2500
2000 .18 Quality
.20 Quality
1500
.22 Quality
1000
Liquid .25 Quality
500
.28 Quality
0 .30 Quality
-300 -200 -100 0 100 200 300 400 500 .32 Quality
Temperature (Deg. F) .35 Quality
Figure 10.7: Rio Caribe Phase Diagram.

Quality lines (liquid volume fraction) are shown for the operating region of interest to the
project. In general terms, the amount of liquids that fall out of the separators are heavily
influenced by the pressure and temperature at the CPF. Dropping the pressure to an optimum
value at the CPF will result in more liquid barrels recovered from the separator. Pressure is
allowed to drop to the value needed to transport the production onshore without compression in
sensitivity cases where condensate is stabilized on the platform (see below).
Uncertainty in the PVT data has an impact on any analysis used to optimize condensate recovery.
10.1.1.7. Compression
A bridged compression platform was installed in Year 6. The platform jacket must be sized to
accommodate an initial compression demand of 5,000 hp, and an incremental 7,000 being
required in Year 9. For purposes of creating a comprehensive cost estimate, sparing was
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assumed to be 3, 50% units for availability reasons. An availability study will be conducted
during the Concept Selection phase.
Process modeling was completed to determine horsepower demand as a function of time. The
HYSYS simulation model was integrated with the gathering system. Therefore, a year-by-year
analysis of available suction pressure (end-of-pipe) was integral to the horsepower calculations. A
discharge pressure of 1480 psig (ANSI 600) was used in all cases. This matches well with the
pipeline and slugcatcher sizing analysis completed by OGUP for the 30 in. pipeline case to
deliver to the LNG plant at 1100 psia (75 bara). It should be noted, however, that the 30 in.
pipeline case requires dynamic simulation to ensure that the operation is stable over the entire
range of conditions. The initially recommended size of 24 in. was not used since this required all
discharge components to be rated to ANSI 900 (2220 psig) resulting in increased CAPEX,
increased horsepower, and a corresponding increase in the minimum suction pressure required to
keep the compression as a single stage machines. This requires further study between process
and pipeline engineers during the Concept Selection phase. The minimum suction pressure
constraint feeding abandonment pressures in the reservoir engineering field models was set at
380 psig, to allow for single stage compression. This also requires further investigation and
optimization during Concept Selection. The following diagram illustrates the Compression
platform components:
Compression Platform
(Bridged to CPF)

Rio Caribe Compressor
(Turbine Driver)
To CPF Export PL
Air Cooled
3 x 50% units
Booster Pump
3 x 50% units
1. Crane Firewater
2. Lights Instrument Air
3. Interconnect w/ CPF Flare From CPF
Fibre Optic
Electric Power
Figure 10.8: Compression Platform (Bridged to CPF).
OGUD.2003.000012.01
The modeling was done in a way that would allow easy comparison of compression horsepower
requirements between each field. Hence, individual field values were summed up to determine a
total compression horsepower requirement. This is a simplification as some common
manifolding would be necessary since there are three compressors and four fields, resulting in a
potential for underestimation of horsepower. All fields do not arrive at the compression facility
at the same pressure. Also, phasing optimization may result in less horsepower required. These
issues were viewed as an optimization that will be completed during the Concept Selection phase.
The compression demand curve determined from the modeling effort is illustrated below:
Rio Caribe Horsepower Demand
14,000 50.000
12,000
40.000
10,000
Horsepower
Aftercooler
(MMBtu/hr)
8,000 30.000
6,000 20.000
4,000
10.000
2,000
- 0.000
1
3
5
7
9
11
13
15
17
19
21
23
25
27
Production Year 29
RC Compression HP RC Cooler Duty
Figure 10.9: Rio Caribe horsepower demand.
10.1.1.8. Condensate Production versus Horsepower Sensitivity

As stated in the introduction to this section of the report, the guiding philosophy is that new
wells would be turned on prior to putting the old wells on compression, except at Rio Caribe.
The reason for this exception was the desire to extract all the condensate barrels from Rio Caribe
early in the project life to maximize the present value of the condensate. The impact of the
assumption was analyzed and quantified to allow for an economic analysis that examines if the
extra horsepower investment pays for the incremental barrels of condensate recovered from the
reservoir.
OGUD.2003.000012.01
The graph below shows the impact compression has on condensate barrels recovered:
Slugcatcher (Unstabilized) Condensate

Recovery with and without Compression
16,000 40,000
14,000 35,000
Raw Condensate
Cumulative Raw
12,000 30,000
Condensate
10,000 25,000
(M Bbl)
(BPD)
8,000 20,000
Delta = 6.9 MM Bbl
6,000 15,000
4,000 10,000
2,000 5,000
- -
1
3
5
7
9
11
13
15
17
19
21
23
25
27
29
Production Year
From Slugcatcher - NO Compression From Slugcatcher WITH Compression

Cumulative MBBl without Compression Cumulative MBBl with Compression
Figure 10.10: Slugcatcher Condensate Recovery.

Pumping
The only significant pumping required is a 175 HP pump to inject condensate and water back
into the export pipeline after separation.
Onshore Processing
In an attempt to keep the facilities as simple as possible, dehydration, hydrocarbon dewpoint
control, and condensate stabilization were not included for this case. However, a sensitivity was
run for stabilization of the condensate offshore instead of onshore and is described in the next
section.
With regard to dehydration, there are only two reasons to dehydrate offshore. The first is to
eliminate the need for corrosion inhibition in the export pipeline. The second is to ensure single-
phase flow (in conjunction with dewpointing), for the two single-phase pipelines option. These
were discussed in previous sections.
In the treating section of the LNG plant, all gas becomes saturated with water due to the aqueous
amine solution the gas comes in contact with, so full dehydration of the inlet stream in the LNG
plant is required regardless of whether or not dehydration is done offshore.
OGUD.2003.000012.01
Offshore Versus Onshore Condensate Stabilization Sensitivity

Condensate stabilization can be done either onshore or offshore. A discussion of the factors that
require an integrated study with the LNG plant team during the next phase (VAR-3) of the
project was discussed previously in the report (see Integration with LNG Plant Team). The
substance of an offshore condensate stabilization process is discussed below:
Condensate Handling/Storage Unit
(On CPF Topsides)
Ovhd Gas
Compressor
To CPF Metering
Air Cooled Supporting Infrastructure

ANSI 300 1. Heliport
(740 psig) 2. Small Crane
Operating Pressure 3. Lights
100 psia 4. Firewater System (incl capacity for future Comp.Platform)
ANSI 150 5. Instrument Air (incl capacity for future Comp.Platform)
(285 psig) 6. Emergency (Diesel) Generator
7.Flare system
Condensate Ship Loading

Stabilizer
Column
Figure 10.11: Condensate Handling / Storage Unit.

The raw condensate is flashed to 300 psia and is then fed to a stabilizer operating at 100 psia.
The condensate is stabilized to 13 psia RVP and the overhead gas is compressed back into the
produced gas stream. The following table lists the peak process parameters for the offshore
stabilizer:
Table 10.3: Stabilizer Peak Process Parameters
Column Feed Stabilized Cond Bottoms Temp Ovhd Gas
(BPD) (BPD) (Deg F) Comp (HP)
19,318 14,024 133 2,626
There is a significant energy difference between the offshore and onshore stabilization cases as
shown below:
OGUD.2003.000012.01
Energy Requirements: Offshore vs Onshore

30.000 3,000
25.000 2,500
Reboiler Duty
(MMBtu/hr)
20.000 2,000
15.000 1,500
10.000 1,000
5.000 500
0.000 -
1
3
5
7
9
11
13
15
17
19
21
23
25
27
29
Production Year
Offshore Reboiler Duty Onshore Reboiler Duty

Offshore Ovhd Compression HP Onshore Ovhd Compression HP
Figure 10.12: Condensate stabilization energy requirements: Onshore versus Offshore.

More energy is required offshore due to the phase equilibrium established prior to mixing with
Patao and Dragon production. There are more light ends held in the condensate, hence a higher
reboiler and overhead gas compression energy requirement.
It was demonstrated by process simulation that condensate production is maximized by
separating the liquid prior to mixing with the very lean gas from Patao and Dragon offshore.
The lighter components in the lean gas absorb part of the condensate and are not recovered by
separation onshore at the slugcatcher. Simulations were done for both onshore and offshore
stabilization to the same condensate specification (13 psia RVP). The results are as follows:
OGUD.2003.000012.01
Offshore versus Onshore Stabilized Condensate
16,000 50,000
14,000
Condensate (MBBl)
12,000 40,000
Condensate
Stabilized
Cumulative
Stabilized
10,000 30,000
(BPD)
8,000
6,000 20,000
Delta = 10.6 MM Bbl
4,000 10,000
2,000
- -
1
4
7
10
13
16
19
22
25
28
Production Year
Stabilization Onshore (BPD) Stabilization Offshore (BPD)
Cumulative MBBl Onshore Stbilization Cumulative MBBl Offshore Stabilization
Figure 10.13: Stabilized condensate (BPD) Offshore versus Onshore.

The above does not account for the amount of C5+ components recovered from the LNG
fractionator that can be recovered and added to the stabilized condensate without exceeding the
condensate RVP specification. A detailed discussion on this issue is contained in a previous
section (Integration with LNG Plant Team).
The change in heating value (Btu/SCF HHV) going into the LNG plant for both onshore and
offshore stabilization is shown below:
OGUD.2003.000012.01
LNG Plant Feed HHV - Offshore versus Onshore

1,070
1,060
1,050
LNG Feed HHV (Btu/SCF)
1,040
1,030
1,020
1,010
1,000
990
980
970
1
11
13
15
17
19
21
23
25
27
29
Production Year
LNG Plant Feed HHV - Stabilization Onshore (BPD)

LNG Plant Feed HHV - Stabilization Offshore (BPD)
Figure 10.14: LNG plant feed HHV – Offshore versus Onshore condensate stabilization.
Because of this analysis, it is clear from a qualitative standpoint that 150 MMSCFD of Rio Caribe
production will not supply the LNG plant with refrigerant make-up components for a 30-year
project life. The requirement for make-up must be quantified by the LNG plant team as an
integrated study to determine the optimum constraint that should be placed on production from
Rio Caribe. This activity is planned as an optimization exercise during the Concept Selection
phase of the project.
10.1.1.9. Domestic Gas Plant

For the gradual built up to 200 MMSCFD of domestic gas, an onshore dehydration plant
downstream of the slugcatcher was added in the estimate for dehydrating the gas for the
domestic market. The higher heating value (HHV) of the gas when it begins to be delivered to
the domestic market is low enough (1046 Btu/SCF) as to not require dewpointing, and for the
reference case compositional assumptions, no H2S or CO2 removal is required.
OGUD.2003.000012.01
10.1.1.10. Contaminant Control

The reference case contaminant compositions shown in the contaminant matrix were assumed
for this Concept. No special treating was required, however; corrosion inhibitor is needed as a
minimum for all pipelines and flowlines, unless Corrosion Resistant Alloy is used. This is
discussed in detail in the Corrosion and Materials section of this report. Options for material
selection downhole can be referenced in the Subsurface Engineering Report. For purposes of
the comprehensive cost estimate, there was little difference between downhole corrosion
inhibition and the use of 13-chrome tubulars.
10.1.1.11. Control and Automation
The Concept is setup for distributive control from the CPF to all the wellhead platforms via fiber
optic cable in the umbilical. Additionally, in accordance with the Operating Philosophy (Section
19.1), a jointly-operated upstream and downstream control room will be provided onshore. The
total control of the facility can be accomplished onshore, but initially the control room will have
control at night to reduce manpower offshore. Further studies will be launched during the
Concept Selection Phase.
10.1.1.12. Metering
The assumption was that individual wells will be metered via non-fiscal gas meters or multiphase
meters where required. A metering study will be initiated post VAR-2 that will look at more
detail and consider the Venezuelan Gas Law as a guiding principle. Metering (non-fiscal) will also
be included on the export Pipeline from the CPF. An option for SMART well type metering will
be considered as part of this study. More information regarding SMART well technology can be
found in the Subsurface Engineering report.
10.1.1.13. Civil/Structural
Using various inputs from the process design, the Shell CES program outputs approximate
platform dimensions and loads needed to be supported by the jacket structure. The following
table represents the basis by which the costs were estimated:
Table 10.4: Jacket Load Cost Estimate Basis
Concept 3 All weights in tons
Description CPF at Mejillones
Jacket wt Piles wt Topsides
Dry wt Op wt Plan size
Platform at CPF 1,156 443 2,300 2,600 22 x 21
Comp platform 1,473 459 3,500 3,800 33 x 29
Wellhead Mej W 766 275 270 300 18 x 18
Wellhead Mej E 766 275 260 300 18 x 18
Wellhead RC Hub 722 279 340 400 18 x 18
Wellhead RC W 722 275 300 360 18 x 18
Wellhead Pat Hub 1,098 242 360 400 18 x 18
Wellhead Pat W 1,054 121 250 300 18 x 18
Wellhead Pat E 1,125 123 270 300 18 x 18
Wellhead Drag 1,364 139 280 300 18 x 18
OGUD.2003.000012.01
Further study is required post VAR-2, and appropriate membership will be added to the team at
that time to consider the applicability of the CES estimated loads. Refinement to the
civil/structural design will be conducted on the Selected Concept.
10.1.1.14. Pipeline Information

The pipeline route chosen for purposes of providing a comprehensive cost estimate was the
CIGMA route. A 30 in. two phase pipeline 55.9 kilometer long was estimated with a 2,800-barrel
slugcatcher. As discussed previously, there is a trade-off between compressor horsepower
required and slug catcher size. The larger the pipeline diameter, the larger the slugcatcher and
increased flow instability in the pipeline. Conversely, the larger pipeline results in an ANSI 600
design limit on the compressor discharge side of the process (lower CAPEX than ANSI 900) as
well as less horsepower consumed and slightly more linepack. Further studies are needed post-
VAR -2 on the dynamics of the 30 in. two phase export pipeline (optimization of the above
parameters) and total life cycle cost.
10.1.1.15. Well Engineering Support Facilities

For developing cost estimates, all wells were assumed to be drilled by jack-up rig. This is quite
feasible for Rio Caribe, Mejillones, and Patao (80 meter to 115 meter water depth), but a new
generation jack-up would be required to drill at the specified location at Dragon (120-130
meters). At this time, only two rigs exist that may be able to drill at these water depths, but given
that Dragon will not be developed until much later, it was assumed that additional units will
become available in the future. Please refer to the Well Engineering section of the Subsurface
xx
Feasibility Report for more details .
10.1.1.16. Electrical Power Supply and Distribution

The electrical demand for this Concept was partially determined through Process calculations,
and partially by correlations that exist in the Shell Cost Estimating System (CES). Power is
generated at the CPF by three, 50% turbine drive generators (5.8 MW installed). Umbilicals
supply the power to all the field locations. The following table shows the loads on all the
platforms.
xx See Reference 22 on page 21-3
OGUD.2003.000012.01
Table 10.5: Power Load All Platforms

Power reqd
MW
Platform at CPF 0.79
Comp platform 0.9
Wellhead Mej W 0.2
Wellhead Mej E 0.2
Wellhead RC Hub 0.2
Wellhead RC W 0.2
Wellhead Pat Hub 0.2
Wellhead Pat W 0.2
Wellhead Pat E 0.2
Wellhead Drag 0.2
Total 3.29
Adjusted Total 3.87
This provides the basis for a more detailed electrical engineering overview of the project that will
begin during the Concept Selection phase.
10.1.1.17. Cost Estimate

The cost analyses summarized in this section were used to compare phasing scenarios relative to
each other.
10.1.1.18. CAPEX / DRILLEX

The table below summarizes the CAPEX for this case. DRILLEX represents $392,790 M USD,
or 30% of the total expenditure.
OGUD.2003.000012.01
Table 10.6: CAPEX Summary

Concept 3 CAPEX M $USD
Central Facilities CPF at Mejillones 104,620
Compression platform linked to CPF 127,463
Field Facilities Wellhead platform - Mej West 26,576
Wellhead platform - Mej East 26,547
Wellhead platform - Rio Caribe HUB 28,156
Wellhead platform - Rio Caribe West 27,134
Wellhead platform - Patao HUB 27,766
Wellhead platform - Patao West 25,474
Wellhead platform - Patao East 26,024
Wellhead platform - Dragon 29,442
Wells - mob/demob 39,011
Wells at Rio Caribe 79,805
Wells at Mejillones 80,864
Wells at Patao 119,753
Wells at Dragon 43,345
Flowlines + umb - Rio Caribe to CPF 71,520
Flowline + umb - Mej E+W to Mej CPF 33,412
Flowlines + umb - Patao to CPF 94,497
Flowlines + umb - Dragon to CPF 81,352
Export System Export pipeline - CIGMA route 124,272
Slugcatcher at shore 10,666
Onshore Facilities Operations base at LNG plant 20,815
Onshore domestic gas treatment plant 19,364
Marine base 35,323
CAPEX Total 1,303,201

PV CAPEX (7%) 724,417
10.1.1.19. OPEX
OPEX for Concept 3 was estimated using percentages of Capital for fixed cost, and variable
costs as a function of production as per standard CES algorithms. PV OPEX for this case was
$541 MM USD.
OGUD.2003.000012.01
Concept 3: Annual OPEX

Annual OPEX (M $USD)
80,000
60,000
40,000 Annual OPEX
20,000
0
1
4
7
10
13
16
19
22
25
28
Production year
Figure 10.15: Concept 3: Annual OPEX.
10.1.1.20. Comparison and Conclusions

This case represented an update to Concept 2 resulting from an improved understanding of
subsurface parameters. Concept 2 was based on VLNG 2000 geological interpretation and can
be found in Section 13 – Hardware Sensitivities later in this report. A table outlining the cost
differential between Concept 2 and Concept 3 can be found in Section 15 – Cost Engineering of
this report. The differences can be explained by the following:
• There were 2 more wells in Concept 3, but they were cheaper to drill due to a reduction in
Total Depth Along Hole (tdah).
• Infill replacement wells due to sand damage were not considered in Concept 2.
• Significantly less compression required for Concept 3.
• There were more wellhead platforms in Concept 3 due to an improved understanding of
wellbore stability and a decrease in acceptable offset. This impacted gathering system and
umbilical distances as well.
• Concept 3 was a longer, larger diameter pipeline (30 in. compared to 24 in. in estimate).
• The cost of treating domestic gas was not included in Concept 2.
10.2. Concept 4
This Concept examines the impact of accelerated condensate delivery from Rio Caribe with Rio
Caribe also being the CPF location. Also, Dragon was developed subsea with two subsea
template centers.
OGUD.2003.000012.01

1100
1000
900
800 Drag MMSCFD
MMSCFD
700
600 Pat MMSCFD
500 Mej MMSCFD
400
300 RC MMSCFD
200
100
0
1
10
13
16
19
22
25
28
Year
Figure 10.16: Total Production Profile.

The following map illustrates the layout for the field development concept:
Figure 10.17: Concept 4 – Wells and Facilities.
OGUD.2003.000012.01
L=6,736 m CPF
RC
L=9,010 m
Concept 4 L=5,870 m
D=16” (14.3”ID)
D=16”(14.3”ID) L=7,539m L=7,008 m
D=20” (18”ID) D=20” (18”ID) D=24” (21.6”ID)
RC Mej. Mej. Mej. P P P
West South HUB North HUB West East
L=37,105 m
L= 21,604 m D=34” (32”ID)
D=32” (30” ID)
L=61,682 m
D=30”(28”ID) L=2,811 m
D=18” (16.1”ID)
Drag
HUB Drag
East
RC1 RC2 RC3 RC4 M5 M3
M1 M2 M4
RC5 RC6 M7 M6 D1 D2 D5
P5 P6 P1 P2
Legend P7
P4 P3 D3 D4
= Central
Facility
Table 10.7: Concept 4 Platform Peak Capacities and Phasing

Start-up From Wells To Export PL
Phasing Gas Rate Number Gas Rate Cond Rate Water Prod
Platforms Year MMSCFD of Wells MMSCFD BPD BPD
RC West 1 133 2 133 6,900
RC CPF 1 360 4 970 29,000 100
Mej East 9 291 2 291 33
Mej HUB 1 525 3 970 133
Mej West 6 263 2 263 38
Patao East 23 342 2 342 0
Patao West 17 432 2 603 0
Patao HUB 11 682 3 910 0
Dragon HUB 27 390 2 390 0
OGUD.2003.000012.01
Missing from the above is the Dragon East template, which was not needed to fulfill the demand
requirement. Consequently, it is not included in the estimate.
number of wells that were considered in the infrastructure layout. Only the number of wells that
had to produce from MULTISIM plus seven infill replacement wells were included in the cost
estimate for a total of 29 wells.

The pressure drop for the gathering system is illustrated in the following diagram:
120
Mej to RC
100
Pressure Drop (psi)
RC West
80 Mej West
Mej East
60
Pat East
40 Pat HUB
Pat West
20
Drag to RC
0
1
10
13
16
19
22
25
28
Production Year

The change to the horsepower demand compared to Concept 3 is illustrated below:
Rio Caribe Compression Demand

Concept 3 vs. Concept 4
45,000
40,000
Compression HP
35,000
30,000
25,000 Concept 4 HP
20,000 Concept 3 HP
15,000
10,000
5,000
-
1
3
5
7
9
11
13
15
17
19
21
Production Year
Figure 10.20: Rio Caribe compression demand – Concept 3 versus Concept 4.
OGUD.2003.000012.01
The compression requirement is 42,000 HP required in Year 1 with an after-cooler duty of 150
MMBtu/hr.
The condensate production parameters are shown in the figure below:
Concept 4: Accelerated Condensate Shrinkage
40,000 45,000
35,000 40,000
Condensate (MBBl)
30,000 35,000
Condensate
30,000
Cumulative
Stabilized
25,000
(BPD)
25,000
20,000
20,000
15,000 15,000
10,000 10,000
5,000 5,000
- -
1 2 3 4 5 6 7 8 9 10 11 12 1314 15 1617 18
Production Year
Raw Condensate Offs hore Slugcatcher Condensate Onshore
Stabilized Condensate Cumulative Stabilized Condensate
Cumulative Raw Offshore Cumulative Slugcatcher
Figure 10.21: Concept 4: accelerated condensate shrinkage.

The accelerated production at Rio Caribe changes the phasing of stabilized condensate onshore.
A relative comparison of stabilized condensate production between Concept 3 and Concept 4 is
shown below:
Stabilized Condensate Production: Concept 3 vs Concept 4
30,000 35,000
Concept 4 Stabilized
Cumulative Stabilized
30,000
Condensate (MBbl)
25,000
Condensate (BPD)
Condensate
25,000
20,000 Concept 3 Stabilized
Stabilized
20,000 Condensate
15,000
15,000 Concept 4 Cumulative
10,000 Stabilized Condensate
10,000
5,000
Stabilized Condensate
- -
1
3
5
7
9
11
13
15
17
Production Year
Figure 10.22: Stabilized condensate production: Concept 3 versus Concept 4.

As shown on the above diagram, the condensate is recovered much sooner in Concept 4 than in
Concept 3, but accelerating the condensate resulted in an additional 30,000 hp of compression
OGUD.2003.000012.01
approximately 5 years sooner. The economics will determine whether the investment is justified.
The cost of onshore stabilization is not included in the economics, as an onshore facility
downstream of the slugcatcher would be integral with LNG plant (see Section 7.3 – Integration
with LNG Plant Team earlier in report). The following table illustrates the relative difference in
higher heating value being fed to the LNG plant resulting from condensate acceleration:
Table 10.8: Heating value Differential: Concept 3 versus Concept 4
Year Concept 3 Concept 4
1 1057 1149
5 1052 1078
10 1057 1032
16 1033 1008
18 1016 1005
25 999 1004
30 1003 1007
10.2.1.5. Subsea
For this concept, the Well Engineer updated the drilling requirement in Dragon to split the 5
wells into two separate drill centers. These were done with subsea templates as preliminary
results from a Field Infrastructure Study (Section 13.15) indicated two subsea templates may be
less CAPEX than two platforms. The templates are fitted with manifolds and umbilical receiving
facilities. Corrosion inhibitor and hydrate inhibitor are delivered to each well by umbilical
service.

For the gradual build up to 200 MMSCFD of domestic gas, an onshore dehydration plant was
added in the estimate for dehydrating the gas for the domestic market. The higher heating value
(HHV) of the gas shown in the table above is high in the early years for this case, but by the time
the domestic gas starts up, the HHV will be low enough (approximately 1040 Btu/SCF) as to not
require dewpointing, and for the reference case compositional assumptions, no H2S or CO2
removal is required.
OGUD.2003.000012.01
The following table represents the basis by which the costs were estimated:
Description CPF at RC, Accelerated RC Production
Platform at CPF 1,154 553 2,400 2,800 25 x 23

Comp platform 1,378 1,027 5,100 5,500 33 x 29
Wellhead Mej S 766 277 260 300 18 x 18
Wellhead Mej N 766 275 260 300 18 x 18
Wellhead Mej Hub 855 305 400 450 18 x 18
Wellhead RC W 722 275 300 360 18 x 18
Wellhead Pat W 1,054 121 260 300 18 x 18
Wellhead Pat E 1,125 123 270 300 18 x 18
Refinement to the civil/structural design will be conducted on the Selected Concept.

The electrical demand for Concept 3 was partially determined through Process calculations, and
partially by correlations that exist in the Shell Cost Estimating System (CES). Power is generated
at the CPF by three, 50% turbine drive generators (7.2 MW installed). Umbilicals supply the
power to all the field locations. The following table shows the loads on all the platforms.
Power reqd
MW

Comp platform 1.9
Wellhead Mej S 0.2
Wellhead Mej N 0.2
Wellhead Mej Hub 0.2
Wellhead RC W 0.2
Wellhead Pat W 0.2
Wellhead Pat E 0.2
Total 4.09
Adjusted Total 4.81
OGUD.2003.000012.01

The pipeline route is the CIGMA route from Rio Caribe that is a 61 kilometer, 30 in. pipeline
with a 4,000-barrel slugcatcher.

The cost analyses summarized in this section were used to compare phasing scenario options
relative to each other.

CAPEX M $USD
Central Facilities CPF at Rio Caribe 107,516
Field Facilities Wellhead platform - Mej South 26,576
Wellhead platform - Mej North 26,576
Wellhead platform - Mej HUB 30,197
Subsea wellhead - Dragon 19,502
Flowlines + umb - Mej to RC CPF 65,487
Flowline + umb - Mej N+S to Mej Hub 53,776
Marine base 35,323

PV CAPEX (7%) 798,577
OGUD.2003.000012.01
10.2.1.12. OPEX
costs as a function of production per standard CES algorithms. PV OPEX is $563 MM USD.

80,000
70,000
60,000
50,000
40,000 Annual OPEX
30,000
20,000
10,000
0
1
4
7
10
13
16
19
22
25
28
Production Year
Figure 10.23: Concept 4: Annual OPEX.

The relative merit of this Concept should be weighed against the downside elements for the
LNG plant, as previously discussed. One advantage of this Concept is accelerating the value in
NPV terms for the condensate recovered. Locating the CPF at Rio Caribe partially negates the
technical challenge of having two-phase flow dynamics occur through a pipeline to another CPF.
With falling pressure and the dynamics involved with such a pressure drop, it is difficult to size a
line that will be stable during the entire life cycle of production. This becomes a problem when
the stream must be separated for compression in later years. This is not an issue if the CPF and
wellheads are located at Rio Caribe HUB, but still is an issue with the Rio Caribe West
production, which accounts for the majority of the liquids produced. The concept does require
significantly more compression horsepower than Concept 3 due to the accelerated production of
the condensate. Economic analysis that accounts for increased CAPEX and accelerated
condensate revenue in conjunction with the cost impact to the LNG plant will be done for VAR-
3.
10.3. Concept 5
Concept 5 was developed to allow for dual initial development of Dragon and Rio Caribe. Initial
production at Rio Caribe is desirable to capture the value of the condensate at the front end of
the project. Initial development at Dragon may be desirable to prevent potential value erosion
due to possible connectivity across the border with Trinidad on Hibiscus (Atlantic LNG).
OGUD.2003.000012.01
The concept also allows for one stand-alone two-phase pipeline to bring Rio Caribe production
to shore. The lean gas export pipeline from Dragon to the LNG plant (offshore route) will carry
production from Patao and Mejillones later in the field life.

1100
1000
900
800 Drag MMSCFD
MMSCFD
700
600 Pat MMSCFD
500 Mej MMSCFD
400
300 RC MMSCFD
200
100
0
1
10
13
16
19
22
25
Year 28

OGUD.2003.000012.01
L=6,736 m CPF
RC
L=9,010 m
Concept 5 L=5,870 m
L=2,811 m
D=18” (16.1”ID)
D=16”(14.3”ID) D=20” (18”ID) L=8,987m L=7,008 m D=24” (21.6”ID)
D=20” (18”ID) D=16” (14.3”ID)
RC Mej. Mej. Mej. P P P Drag
West South HUB North West East HUB East
L=12,493 m
D=30”(28”ID)
L=35,252 m
D=30” (28”ID)
RC1 RC2 RC3 RC4 M4 M3 M2 M1 P5 P6

P4 P3
D3 D4
M5 P7
RC5 RC6
M7 M6 P2 P1 D1 D2 D5
Legend
= Central
Facility

The platform capacities and start-up phasing is shown in the following table:
Table 10.12: Start-up Phasing
RC West 1 150 4 150 9,000
RC CPF 1 95 2 150 16,680 100
Mej HUB 25 620 2 970 29
Mej West 28 417 2 417 62
Patao East 12 378 2 616 0
Patao West 20 356 3 356 0
Patao HUB 6 507 2 902 0
Dragon East 4 356 2 356 0
Dragon CPF 1 620 3 620 0
OGUD.2003.000012.01
Mejillones West was never needed to fulfill the demand curve in the 30-year window, so it was
not included in the estimate.
had to produce from MULTISIM plus the seven infill replacement wells were included in the
cost estimate for a total of 29 wells.

The pressure drop in the gathering system is shown in the following graph:
160
140 Mej to RC
Pressure Drop (psi)
120 RC West
Mej West
100
Mej East
80
Pat East
60
Pat HUB
40
Pat West
20 Drag East
0
1
3
5
7
9
11
13
15
17
19
21
23
25
27
29
Production Year

Both CPF’s at Dragon and Rio Caribe are identical to the design laid out for Concept 3, except
there will not be a bridged compression platform at Dragon. The compression requirement at
Rio Caribe is 5000 HP in Year 8, with 12,000 HP being added in Year 11 as illustrated below:
Rio Caribe Compression
18,000 70.000
16,000 60.000
14,000
50.000
After Cooler
Horsepower
(MMBtu/hr)
12,000
10,000 40.000
8,000 30.000
6,000
20.000
4,000
2,000 10.000
- 0.000
1
3
5
7
9
11
13
15
17
19
21
23
25
27
29
Production Year
Rio Caribe HP Rio Caribe After Cooler MMBtu/hr
Figure 10.28: Rio Caribe compression.
OGUD.2003.000012.01
After cooler duties are 15 MMBtu/hr in Year 8 with an additional 45 Mmbtu/hr being added in
Year 11.
The compression is noticeably higher for Concept 5 than for Concept 3 as shown in the
following figure:
Compression Demand and Discharge Pressure

Concept 5 vs Concept 3
20,000 1,700
1,600
Compression HP
Comp Discharge
15,000 1,500 Concept 5 HP
(psia)
1,400 Concept 3 HP
10,000
1,300 Concept 5 Comp Disch
5,000 1,200 Concept 3 Comp Disch
1,100
- 1,000
1 4 7 10 13 16 19 22 25 28
Production Year
Figure 10.29: Compression demand and discharge pressure – Concept 5 versus

Concept 3.
An 18-inch pipeline from Rio Caribe to the LNG plant was recommended. This resulted in
higher discharge pressures offshore, up to over 1600 psia compared to the 1480 requirement for
Concept 3.
Stabilized condensate production from Rio Caribe is illustrated in the figure below:
Concept 5 Condensate Shirinkage
18,000 70,000 Raw Offshore BPD

16,000 60,000
Condensate (BPD)
14,000 From Slugcatcher BPD

50,000
12,000
10,000 40,000 Stabilized Condensate
8,000 30,000 BPD
6,000 Cum Raw Offshore
20,000
4,000 (MBbl)
2,000 10,000
Cum Slugcatcher (MBbl)
- -
1
4
7
10
13
16
19
22
25
28
Cum Stabilized (MBbl)

Production year
Figure 10.30: Concept 5 condensate shrinkage.
OGUD.2003.000012.01
Stabilized Condensate production is compared to Concept 3 in the following figure:
Stabilized Condensate Production
12,000 40,000
10,000 35,000
8,000 25,000 Condensate BPD
(BPD)
6,000 20,000 Concept 3 Stabilized

6.9 MM Bbl Condensate
4,000 15,000
2,000 5,000 Stabilized (MBbl)
- - Concept 3 Cumulative
1 3 5 7 9 11 13 15 17 19 21 23 25 Condensate (MM Bbl)
Production Year
Figure 10.31: Stabilized condensate production.

The above table compares the difference in stabilized condensate recovery from the slugcatcher
between Concept 5 and Concept 3. For Concept 3, the lighter components in the Patao, Dragon
and Mejillones gas absorb some of the condensate from Rio Caribe, which are not recovered by
separation at the slugcatcher due to the mixed phase equilibria established. The rich feed from a
stand-alone Rio Caribe pipeline prevents this from happening. In this case, there is no concern
about producing too much C5+ in the LNG plant and exceeding the condensate RVP limit as
recovery is maximized from the slugcatcher separation. There also is no longer any advantage to
offshore separation and stabilization unless a compelling logistical reason makes it so.
The resulting heating value of the combined gas from both pipelines out of the slugcatcher is
1044 Btu/SCF in Year 1 compared to 1057 Btu/SCF for Concept 3. This is due to the initial
mixing with Dragon for Concept 5, the leanest gas of all four fields, compared to initial mixing
with Mejillones for Concept 3.
Costs for Concept 5 do not include the condensate stabilization process onshore. The interface
between the Upstream and Downstream teams occurs at the outlet of the slugcatcher. The
analysis in this section was provided to indicate the dynamics involved with condensate recovery
being onshore or offshore.
10.3.1.5. Offshore Processing

Similar to Concept 3, there was no processing included at either Rio Caribe or Dragon.

(HHV) of the gas when it begins to be delivered to the domestic market is low enough that
OGUD.2003.000012.01
dewpointing is not required, especially if one assumes that the gas from the Dragon export
pipeline would be the stream where the domestic gas is taken off. For the reference case
compositional assumptions, no H2S or CO2 removal is required.
The following table represents the basis by which the costs were estimated.
Description CPF at RC and Dragon, 2 export routes
Platform at Rio 875 230 1,500 1,700 18 x 18

Comp platform 668 202 1,300 1,500 18 x 18
Platform at Dragon 2,490 485 1,800 2,100 25 x 23
Wellhead Mej S 807 207 300 350 18 x 18
Wellhead Mej Hub 855 305 360 420 18 x 18
Wellhead RC W 722 275 300 360 18 x 18
Wellhead Pat W 1,158 144 280 320 18 x 18
Wellhead Pat E 1,054 121 270 300 18 x 18
Wellhead Drag E 1,347 129 270 300 18 x 18
Electrical Power Supply and Distribution
Power reqd
MW
Platform at RC CPF 0.6

Comp platform 1
Platform at Dr CPF 0.7
Wellhead Mej S 0.2
Wellhead Mej Hub 0.2
Wellhead RC W 0.2
Wellhead Pat W 0.2
Wellhead Pat E 0.2
Wellhead Drag E 0.2
Total 3.7
Adjusted Total 4.35
OGUD.2003.000012.01

The 18-inch, 61-kilometer Rio Caribe pipeline followed the CIGMA route with a 2,000-barrel
slugcatcher. The 32-inch, 98-kilometer Dragon pipeline follows the offshore route with no
slugcatcher needed on the receiving end.
The stability of the Rio Caribe pipeline requires dynamic simulation in the next phase of the
project.


CAPEX M $USD
CPF at Dragon 103,808
Field Facilities Wellhead platform - Mej South 27,380
Wellhead platform - Mej HUB 29,721
Wellhead platform - Dragon East 27,748
Flowlines + umb - Mej to Dragon CPF 71,110
Flowline + umb - Mej S to Mej Hub 27,669
Flowlines + umb - Patao to Dragon CPF 87,507
Flowlines + umb - RC W to RC CPF 24,139
Flowlines + umb - Dragon CPF to D W 20,999
Export pipeline - Dragon to Guiria 95,433
Marine base 35,323

PV CAPEX (7%) 745,115
OGUD.2003.000012.01
10.3.1.11. OPEX
OPEX for Concept 5 was estimated using percentages of capital for fixed cost, and variable costs
as a function of production per standard CES algorithms. PV OPEX is $548 MM USD.
80,000
70,000
60,000
50,000
40,000 Annual OPEX
30,000
20,000
10,000
0
1
4
7
10
13
16
19
22
25
28
Production Year
Figure 10.32: Concept 5 annual OPEX.
10.3.1.12. Comparison and Conclusions:

The cost for this option is nearly identical to Concept 3 (see Section 15 – Cost Engineering), but
provides additional flexibility in the system. There is an advantage of a separate pipeline for Rio
Caribe being routed all the way to shore as a smaller stream, which will allow it to be handled to
the LNG fractionator separately for making refrigerant make-up. Also, this keeps the two-phase
flow problem limited to a smaller pipeline, which keeps the dynamics of two-phase flow
instability out of the entire gas stream. Finally, the presence of two pipelines may provide more
flexibility for potential future expansion into the larger polygon resulting from successful
exploration in the area. The downside is there are two pipeline routes to contend with, and two
separate CPF operations centers, which complicate the offshore operations somewhat.
10.4. Concept 6
Concept 6 was an attempt to address the increasing reservoir uncertainty inherent with moving
east along the polygon. Patao and Dragon geological interpretations were still underway during
this study, and there was not an abundance of data for the subsurface engineers to work with.
Also, preliminary results from an integrated Field Infrastructure Study (contained further in the
report) indicated that subsea development, particularly with daisy chain tiebacks or clustered well
developments, may have some CAPEX advantage over platform or subsea template
development. Concept 6 is similar to Concept 3 in that the CPF is located at Mejillones. The
difference is the early development of two isolated subsea tiebacks from Patao and Dragon.
OGUD.2003.000012.01
These two “data gathering” subsea wells were chosen from both Patao and Dragon to provide
early indication of Patao and Dragon reservoir performance that will aid in future development
of these fields. Two wells were chosen per field so that an understanding of pressure
communication between wells could be established in the reservoir. These wells would also
contribute to fulfilling the demand curve throughout the development of the Area.
Reservoir Engineering Input
1100 Dragon Subsea Data Wells

1000 MMSCFD
900
800 Drag Input MMSCFD
MMSCFD
700
600 Patao Subsea Data Wells
500 MMSCFD
400
200
100
0 Mej Input MMSCFD
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29
RC Input MMSCFD
Year

OGUD.2003.000012.01
The resulting infrastructure is represented below:
L=9,010 m
D=20” (18”ID)
Mej
CPF
Concept 6
L=6,736 m L=7,539 m
D=16”(14.3”ID) D=20” (18”ID)
RC RC Mej Mej 12” (11.3” ID)

West HUB West East 2,357 meters
18” (16.13” ID)

15,859 meters
L= 21,604 m 20” (17.9” ID)

D=18” L=5,902 m 3,012 meters
(16.1 ID) D=30” (28”ID)
L=16,963 m
D=30” (28”ID)
L=42,294 m
D=30”(28”ID)
P P
HUB East
Drag
RC1 RC2 RC3 RC4 P5 P6
M3 M4 P2 P1
M1 M2 P7
RC5 RC6
M5 P3
M6 M7 P4
D2 D5 D4
Legend
= Central D1 D3
Facility

The capacities and start-up phasing for the platforms are shown in the table below:
RC West 1 150 4 150 11,251
RC HUB 1 72 2 214 13,912
Mej East 15 213 1 213 23
Mej CPF 1 367 3 979 13,946 133
Patao East 26 329 2 329 0
Patao HUB 18 341 3 873 0
Subsea Wells 1 400 4 400 0
OGUD.2003.000012.01
Missing from the above are Dragon and Mejillones West, which were not needed to fulfill the
demand requirement. Consequently, neither is included in the estimate.
had to produce from MULTISIM plus the 5 infill replacement wells were included in the cost
estimate for a total of 24 wells.

The following graph illustrates the pressure drop in the gathering system as a function of time:
300
RC to Mej
250
Pressure Drop (psi)
RC West
200
150 Mej East
100 Pat East

50
Pat HUB
0
Subsea Daisy Chain to
1
10
13
16
19
22
25
28
Pat HUB
Production Year

The CPF is identical to Concept 3, and the horsepower required for Rio Caribe production is the
same.
OGUD.2003.000012.01
Horsepower Contribution by Field
50,000
45,000
40,000
Compression HP
35,000
30,000
Mejillones
25,000
Rio Caribe
20,000
15,000
10,000
5,000
-
1
3
5
7
9
11
13
15
17
19
21
23
25
27
29
Production Year
Figure 10.37: Horsepower Contribution by Field.

The difference is that compression was allowed to come on before developing the next field,
which was a change in the established priority for the MULTI SIM model. This resulted in
compression phasing as follows (sparing included):
• Year 8: Two 5,000 HP compressors with 36 MMBtu/hr after-cooling
• Year 10: Add 5,000 HP and 10 MMBtu/hr after-cooling
• Year 19: Add 37,000 HP and 111 MMBtu/hr after-cooling
Condensate shrinkage for Concept 6 is shown in the following figure:
Condensate Processing Volume Shrinkage

Raw Offshore BPD
25,000 70000
60000 From Slugcatcher BPD
Cumulative MBBl's
20,000
Barrels per Day
50000
Stabilizer Feed BPD
15,000 40000
30000 Stabilized Onshore BPD
10,000
20000
5,000 Raw Offshore MBBl
10000
- 0 From Slugcatcher MBBl
1
5
9
13
17
21
25
29
Production Year Stabilized Onshore

MBBl
Figure 10.38: Condensate Processing Volume Shrinkage.

Stabilized condensate production compared to Concept 3 is illustrated below:
OGUD.2003.000012.01

12,000 30,000
11,000
9,000 Onshore BPD
Stabilized BPD

7,000 Onshore BPD
6,000 15,000
5,000 3.5 MMBbl Concept 3 Cumulative
4,000 10,000
2,000 5,000
1,000
- -
1
4
7
10
13
16
19
22
25
28
Production Year
Figure 10.39: Stabilized condensate production – Concept 6 versus Concept 3.

The leaner gas from Patao and Dragon that are mixed early, result in more retrograde
vaporization of the condensate from Rio Caribe as discussed in length in Concept 3. Ultimately,
the barrels are recovered in the LNG plant, but may or may not be able to be spiked back into
the condensate based on the Reid Vapor Pressure specification. These are issues for further
study during the next phase.
The resulting heating value of the gas from the slugcatcher as a function of time is illustrated
below:
LNG Plant Feed HHV vs Production Year
1080.0
66
63
62
61
10
58
57
10
10
56
10
53
53
10
52
10
1060.0
10
49
48
48
10
10
46
10
10
10
10
10
40
HHV (Btu/SCF)
35
10
1040.0
30
10
10
19
10
10
1020.0 HHV
10
05
10
10
03
03
03
03
02
02
01
01
01
10
10
10
10
10
10
10
10
10
10
1000.0
980.0
960.0
1
11
13
15
17
19
21
23
25
27
29
Production Year
Figure 10.40: LNG plant feed HHV versus production year.
OGUD.2003.000012.01
analysis in this section was provided to indicate the dynamics involved with condensate recovery
being onshore or offshore.
10.4.1.5. Subsea
The development of the four subsea wells in Patao and Dragon is treated independently from the
other production. The four wells are daisy chained together starting from the Eastern most well
in Dragon to the western most well in Patao. The term “daisy chain” refers to the sequential
connection of one well to the next flowing toward a common gathering location. There is a
manifold included at the expected future location of the Patao HUB for future tie-in to new
subsea clustered well manifold development. In this manner, the 30 in. pipeline to Patao can be
utilized for future Patao development. Dragon will most likely require a separate line to the
Mejillones CPF as in the other cases, however; in this Concept, Dragon development (other than
the subsea wells) is not required to meet the demand curve inside the 30-year production
window.

(HHV) of the gas when it begins to be delivered to the domestic market is low enough (1049
Btu/SCF) as to not require dewpointing, and for the reference case compositional assumptions,
no H2S or CO2 removal is required.
The following table represents the basis by which the costs were estimated.
Description CPF at Mej, Subsea data tiebacks
Platform at Mej CPF 1,178 507 2,300 2,700 22 x 21

Comp platform 1,603 1,107 5,000 5,900 33 x 29
Wellhead Mej E 766 275 260 300 18 x 18
Wellhead RC Hub 722 279 340 400 18 x 18
Wellhead RC W 722 275 300 350 18 x 18

power to all the field locations. The following table shows the loads on all the platforms:
OGUD.2003.000012.01

Power reqd
MW
Platform at Mej CPF 0.79

Comp platform 1.8
Wellhead Mej E 0.2
Wellhead RC Hub 0.2
Wellhead RC W 0.2
Total 3.19
Adjusted Total 3.75

The pipeline route is the same as Concept 3.

The cost analyses summarized in this section were used to compare hardware options relative to
each other.

CAPEX M $USD
Field Facilities Wellhead platform - Mej East 26,576
Wellhead platform - Rio Caribe HUB 28,156
Subsea wellhead - Patao HUB 22,966
Subsea satellites Patao A + B 12,404
Subsea wellhead Patao East 15,666
Subsea satellites Dragon A + B 12,414
Flowlines + umb - satellites to Mej CPF 70,597
Flowline + umb - Mej E to Mej CPF 26,107
Flowlines + umb - Pat Hub + East to Mej 44,759
Flowlines + umb - RC W to RC Hub 13,176
Flowlines + umb - RC Hub to Mej CPF 32,237
OGUD.2003.000012.01
Table 10.19 (cont): CAPEX Summary

CAPEX M $USD
Marine base 35,323

PV CAPEX (7%) 697,790
10.4.1.12. OPEX
costs as a function of production per common CES algorithms. PV OPEX is $544 MM USD.
80,000
70,000
60,000
50,000
40,000 Annual OPEX
30,000
20,000
10,000
0
1
4
7
10
13
16
19
22
25
28
Production year
Figure 10.41: Concept 6 – Annual OPEX.

Concept 6 shows significant cost improvement over the previous Concepts 3 to 6. Avoidance of
development at Dragon and Mejillones West, and the elimination of a subsea (or platform) drill
center in Patao are the major factors. This Concept provides flexibility to handle the unknowns
at Patao and Dragon due to subsurface uncertainty. Data provided in advance of full-scale
development will ensure that there is not a commitment to a specific (and potentially erroneous)
infrastructure prior to adequate subsurface understanding.
10.5. Concept 7
Concept 7 is the result of many learnings that have occurred during the scope of this study. A
Field Infrastructure study completed earlier in the process indicated that there was no real cost
OGUD.2003.000012.01
advantage to a subsea development. As the result of an internal peer assist with Shell Subsea
Development experts, some learnings occurred that resulted in revision to the initial study, which
is contained later in this report.
The initial study was based on a template-based subsea architecture, which appears not to be
optimal for this development. As a result of the well design and well count, a daisy-chained well
development or manifold cluster type architecture provides some cost advantages for all four
fields, although the difference is more pronounced in the easterly direction from Rio Caribe to
Dragon.
Another key finding that was made during the Hardware Sensitivity study was that onshore
compression did not prove advantageous from a CAPEX and OPEX perspective. This was
mainly due to the large horsepower requirements necessary onshore. The basis for that study
was 2000 VLNG geology. For Concepts 3 to 6, an update to that geology was provided which
resulted in much better pressure performance than before. Compression was not required
(except deliberately at Rio Caribe to maximize condensate extraction) at all for Concept 3 to meet
the reference-case demand scenario.
A subsea development with onshore compression and utilities with umbilical service back to the
field results in a Subsea To Beach concept discussed below.

The forecast used for this concept was an individual well-by-well production forecast received
from the reservoir engineers that formed the basis for Concept 3. The individual well production
build-up resulted in a forecast identical to Concept 3 as shown below:
1100
1000
900
800
MMSCFD

400
RC Input MMSCFD
300
200
100
0
1
4
7
10
13
16
19
22
25
28
Year

While there is some error in wellhead backpressures resulting from using the Concept 3 forecast
based on Concept 3 surface infrastructure in the MULTISIM model, proper line sizing reduces
this error adequately for purposes of this study.
OGUD.2003.000012.01
The following maps illustrates the subsea architecture for Concept 7:
Concept 7: Subsea to Beach

Rio Caribe
1230000
Dragon
Mejillones
5 3
1
Patao 6
Patao 2
Mejillones 2 1 4 3 4
5 7
1220000 Dragon 3 5
4
North (m)
7
6
1
Rio Caribe
3 2
4
1210000 1
2
6 5
Export Pipelines
1200000
540000 560000 580000 600000 620000 640000
East (m)
Figure 10.43: Concept 7 – Subsea Architecture.

Wells MPD6, DPD4, and DPD5 were never required to meet the demand curve, leaving 22 wells
that were producing, plus seven infill replacement wells. The total number of wells included in
the cost estimate was 29 wells.

Start-up phasing for well development is illustrated in the table below:
OGUD.2003.000012.01
Table 10.20: Well Startup Phasing

Y ear
1 3 4 6 7 9 11 13 15 18 21 24 26 28 30
W ell R C -1
R C -2
R C -3
R C -4
R C -5
R C -6
M -1
M -2
M -3
M -4
M -5
M -6
M -7
P-1
P-2
P-3
P-4
P-5
P-6
P-7
D -1
D -2
D -3
D -4
D -5

The following graph illustrates the landing pressure arriving onshore as a function of time:
Slugcatcher Pressures
2500
Landing Press (psia)
2000
1500
RC Slugcatcher
1000 Mej Slugcatcher
500
0
1
10
13
16
19
22
25
28
Production Year
Figure 10.44: Slugcatcher pressures.

Stainless steel (316 SS) lined pipe will be used on the gathering system to ensure the integrity of
the system. This eliminates the need for corrosion inhibitor injection, and occasional pigging of
the line.
OGUD.2003.000012.01
10.5.1.4. Onshore Production Facility

Total horsepower requirements onshore are illustrated below for production from both pipeline
systems.
Horsepower Contribution by Pipeline Inlet
8,000
7,000
Compression HP
6,000
5,000
SUM RC HP
4,000
SUM Lean Gas HP
3,000
2,000
1,000
-
1
3
5
7
9
11
13
15
17
19
21
23
25
27
29
Production Year
Figure 10.45: Horsepower Contribution by Pipeline Inlet.

The horsepower required for Concept 7 is 7,000 horsepower compared to Concept 3, as
illustrated below:
Total Horsepower Comparison

14,000
12,000
Compression HP
10,000
8,000 Concept 3 Total HP
4,000
2,000
-
1 4 7 10 13 16 19 22 25 28
Production Year
Figure 10.46: Total horsepower comparison – Concept 7 versus Concept 3.

These results were somewhat unexpected, as the horsepower requirement for Rio Caribe
compression onshore exceeds the requirement from Concept 3 offshore. The following graph
provides the explanation for this occurrence:
OGUD.2003.000012.01
Compression Suction Pressure & Ratio

2,000 4
Concept 3 Suction
3.5
Suction Pressure
Pressure
Compression
1,500 3
Concept 7 Suction
2.5
Ratio
(psia)
Pressure
1,000 2
Concept 3
1.5
Compression Ratio
500 1
Concept 7
0.5
Compression Ratio
- 0
1 4 7 10 13 16 19 22
Production Year
Figure 10.47: Compression suction pressure and ratio – Concept 3 versus Concept 7.
As shown above, the suction pressure for the two scenarios shows little difference. In Concept
3, it was necessary to use a 16 in. line from Rio Caribe West (6.7 km) to the Rio Caribe HUB, and
an 18 in. line from the HUB to the Mejillones CPF (21.6 km). This was due to the flow stability
coming on to the Mejillones platform separators and an attempt to keep the velocity high to
minimize slugging. For Concept 7, a larger 22 inch line was used, while much longer at 63
kilometers, the pressure drop amounted to about the same.
The result was that the compression ratio for Concept 3 compressing to a 1480 psia discharge
pressure was much higher than for Concept 7 compressing to the plant inlet pressure of 1103
psia. Given the volumes of gas are roughly the same, this translates into less Rio Caribe
horsepower (lower compression ratio) required for Concept 7.
OGUD.2003.000012.01
Total Horsepower Comparison

14,000
12,000
Compression HP
10,000
4,000
2,000
-
1 4 7 10 13 16 19 22 25 28
Production Year
Figure 10.48: Total horsepower comparison – Concept 7 versus Concept 3.

These results were somewhat unexpected, as the horsepower requirement for Rio Caribe
compression onshore exceeds the requirement from Concept 3 offshore. The following graph
provides the explanation for this occurrence:
Compression Suction Pressure & Ratio

2,000 4
Concept 3 Suction
3.5
Suction Pressure
Pressure
Compression
1,500 3
Concept 7 Suction
2.5
Ratio
(psia)
Pressure
1,000 2
Concept 3
1.5
Compression Ratio
500 1
Concept 7
0.5
Compression Ratio
- 0
1 4 7 10 13 16 19 22
Production Year
Figure 10.49: Compression suction pressure and ratio – Concept 3 versus Concept 7.
As shown above, the suction pressure for the two scenarios shows little difference. In Concept
3, it was necessary to use a 16 in. line from Rio Caribe West (6.7 km) to the Rio Caribe HUB, and
an 18 in. line from the HUB to the Mejillones CPF (21.6 km). This was due to the flow stability
coming on to the Mejillones platform separators and an attempt to keep the velocity high to
OGUD.2003.000012.01
minimize slugging. For Concept 7, a larger 22 inch line was used, while much longer at 63
kilometers, the pressure drop amounted to about the same.
Considering that, the compression ratio for Concept 3 compressing to a 1480 psia discharge
pressure was much higher than for Concept 7 compressing to the plant inlet pressure of 1103
psia. Given the volumes of gas are roughly the same, this translates into less Rio Caribe
horsepower required for Concept 7.
Stabilized condensate production is compared to Concept 3 and is illustrated below:
Comparison of Stabilized Condensate
12,000 40,000
10,000 35,000
8,000 25,000 Condensate
(BPD)

8.7 MM Bbl
15,000 Condensate
4,000
2,000 5,000 Condensate (MM Bbl)
- - Concept 7 Cumulative
1 4 7 10 13 16 19 22 25 28 Condensate (MM Bbl)
Production Year
Figure 10.50: Comparison of Stabilized Condensate.

The above graph compares the difference in stabilized condensate recovery from the slugcatcher
between Concept 7 and Concept 3. For Concept 3, the lighter components in the Patao, Dragon
and Mejillones gas absorb some of the condensate from Rio Caribe, which are not recovered by
separation at the slugcatcher due to the mixed phase equilibria established. The rich feed from a
stand-alone Rio Caribe pipeline prevents this from happening. In this case, there is no concern
about producing too much C5+ in the LNG plant and exceeding the condensate RVP limit as
recovery is maximized from the slugcatcher separation. There also is no longer any advantage to
offshore separation and stabilization unless a compelling logistical reason makes it so.
The resulting heating value of the gas from the Rio Caribe slugcatcher illustrated below:
OGUD.2003.000012.01
Rio Caribe Feed to LNG Plant

HHV vs Production Year
1400.0
32
20
23
25
18
08
06
06
06
00
99
99
00
00
01
01
97
96
95
97
12
12
12
12
12
12
12
12
12
12
11
11
12
12
12
12
11
11
11
11
1200.0
HHV (Btu/SCF)
1000.0
800.0
HHV
600.0
400.0
200.0
0
0
0
0
0
0
0
0
0
0
0.0
1
11
13
15
17
19
21
23
25
27
29
Production Year
Figure 10.51: Rio Caribe feed to LNG plant – HHV versus production year.
The separate rich feed to the LNG plant is an asset for downstream operation. The LNG plant
can better control and monitor the refrigerant make-up needed for the plant by having a smaller,
separate rich feed available.
analysis in this section was provided to compare the effect of offshore versus. onshore
condensate recovery.
10.5.1.5. Subsea
The architecture subsea involves the use of subsea manifolds and pipeline end manifolds
(PLEMs). All the wells are drilled nearly vertical individually from a semi-submersible. With
little offset involved, this may result in cheaper wells than when drilling from a central subsea
template. It also provides more flexibility as knowledge is gained from producing the reservoir
on where to drill the next well. The PLEM is there to allow the next well to easily be connected
in a daisy chain fashion wherever needed.
The following tables represent the infrastructure for the subsea architecture:
OGUD.2003.000012.01
Table 10.21: Subsea Architecture

Well Inches Length
Mejillones Segment Diameter (in) (meters)
6 to 7 20 2,699
7 to 5 24 4,416
5 to 3 26 2,601
3 to 4 26 1,092
4 to HUB 30 3,653
2 to 1 20 3,106
1 to PLEM 24 3,653
Rio Caribe 4 to HUB 10 745
1 to HUB 8 335
3 to HUB 8 312
2 to HUB 10 998
HUB to PL 24 5,532
5 to 6 12 2,134
6 to PLEM 12 100
Patao 2 to 1 12 3,005
1 to 4 16 3,460
4 to 3 18 3,048
3 to HUB 18 300
HUB to HUB 30 13,739
6 to 7 10 1,407
7 to 5 12 1,252
5 to HUB 12 100
HUB to Mej 30 13,958
Dragon 2 to PLEM 8 200
5 to HUB 10 1,207
1 to HUB 8 233
3 to HUB 10 1,894
4 to HUB 10 2,840
HUB to Mej 30 35,435
Table 10.22: Subsea Architecture - Infrastructure

Infrastructure
PLEMs Manifolds
Rio Caribe 6 2
Mejillones 7 1
Patao 7 2
Dragon 5 2
The biggest challenge resides with the umbilical service. The power required offshore is greatly
diminished compared to Concept 3 since all the utilities and consequently most of the demand
exists onshore. The challenge is getting the hydraulics and hydrate inhibition offshore. This is
very common offshore in the Gulf of Mexico, but the MSLNG development has a large number
of wells to service.
OGUD.2003.000012.01
To minimize the required amount of chemical utility lines in the umbilical, and to reduce the risk
of corrosion failure later in the life of the development, all the gathering lines are 316 stainless
steel lined. This eliminates the need for corrosion inhibitor, which is more challenging subsea in
any case (see Corrosion section), and ensures the integrity of the system.

A dehydration plant was added in the estimate to handle the gradual buildup of up to 200
MMSCFD of gas for the domestic market. The higher heating value (HHV) of the gas to be
delivered to the domestic market is sufficiently low that dewpointing will not be required,
especially if the side stream is taken from the Lean Gas pipeline prior to mixing with Rio Caribe.
For the reference case compositional assumptions, no H2S or CO2 removal is required.

Special attention is needed to ensure that the number of electrical distribution points offshore is
feasible for this concept. The estimate includes spare power cables from onshore to the
Mejillones and Rio Caribe offshore central manifolds for availability and capacity contingencies.

The pipeline routes from both Rio Caribe and Mejillones are the CIGMA routes. The distances
are different than before, as the location of the manifold HUB was changed from Concept 3.
Rio Caribe will flow in a 22 in. line for 63 kilometers with a 3,400-barrel slugcatcher. The 30-inch
lean gas production will flow for 71 kilometers with a 2,800-barrel slugcatcher. Both pipelines
are injected with corrosion inhibitor though umbilical service lines from the plant site. While this
was a stretch for the gathering system, it is much more feasible for the export pipelines.
Both pipelines will require a dynamic study in the next phase of the work to ensure proper sizing
over the entire range of expected production and pressures.


OGUD.2003.000012.01

CAPEX M $USD
Central Facilities
Field Facilities Subsea wellhead - RC template - 1-4 29,024
Subsea wellheads - RC satellites - 5+6 27,743
Subsea wellheads - Mej satellites 50,135
Subsea wellheads - Patao satellites 72,018
Subsea wellheads - Dragon satellites 27,476
Flowlines + umb - Rio Caribe area 97,357
Flowline + umb - Mejillones area 133,579
Flowlines + umb - Patao area 162,645
Export System RC Export pipeline - CIGMA route 82,151
Mej Export pipeline + umb - CIGMA route 135,296
RC Slugcatcher at shore 12,546
Mej Slugcatcher at shore 10,670
Onshore compression plant 36,195
Onshore power generation 25,971
Marine base 35,323

PV CAPEX (7%) 856,883
10.5.1.11. OPEX
OPEX for Concept 7 was estimated using percentages of capital for fixed cost, and variable costs
as a function of production per standard CES algorithms. PV OPEX is $500 MM USD.
OGUD.2003.000012.01
C o n c e p t 7 : T o ta l O P E X
80,000
70,000
60,000
50,000
40,000
30,000
20,000
10,000
0
1
11
13
15
17
19
21
23
25
27
29
P ro d u c ti o n Ye a r
Figure 10.52: OPEX Concept 7.

Concept 7 shows significant cost increase over the previous Concepts 3 to 6. Avoidance of
development at Dragon, and the elimination of a platform (or subsea) drill center in Patao were
more than offset by an increase in gathering system and umbilical costs. There is the potential
for significant cost reduction if the technical challenge of inhibiting the gathering system for
corrosion through the umbilical service can be solved. The cost of stainless steel lines more than
doubled the cost of the gathering system infrastructure. There are technological alternatives for
this (e.g., chemical injection buoys), but they need to be studied in much more detail during the
next phase. Also, the availability of power supply needs to be studied as eliminating the dual
power cables to each central manifold also has a major cost impact.
It is also possible that a single export pipeline may have some additional cost advantage; however,
common manifolding of all four fields will increase compression costs onshore.
A well-by-well subsea development such as this provides for maximum flexibility. If revisions in
the development plan are suggested by initial production tests, subsequent well sites can be
relocated without being limited by existing infrastructure. Each well being daisy chained allows
for a connection on the end of the PLEM to go wherever needed.
OGUD.2003.000012.01
11. DEMAND CURVE SENSITIVITIES

This was completed with a fixed phasing scenario and hardware concept to test CAPEX/OPEX
sensitivities to various demand curves from the LNG Plant and Domestic Gas forecast.
Following is a description of the six demand curve sensitivities that were based on Concept 3:
• Concept 3-4: 4.2 mtpa (682 MMSCFD)
• Concept 3-2: 4.7 mtpa (770 MMSCFD)
• Concept 3: 4.7 mtpa + gradual build up to 200 MMSCFD Domestic Gas
• Concept 3-3: 4.7 mtpa + gradual build up to 300 MMSCFD Domestic Gas
• Concept 3-5: 4.7 mtpa + 300 MMSCFD Domestic Gas from Year 1
• Concept 3-1: 5.2 mtpa (852 MMSCFD) + 300 MMSCFD Domestic Gas from Year 1
Demand Curve Profiles
1400
1200 4.2 mtpa

1000 4.7 mtpa
800 4.7 mtpa + 200
600 4.7 mtpa + 300
400 4.7 mtpa + 300
200 5.2 mtpa + 300
0
1
10
13
16
19
22
25
28
Production Year
Figure 11.1: Demand Curve Profiles.

The facilities design philosophy and content are the same for all the above demand curve
scenarios and are based on Concept 3 as previously discussed. For that reason, this section of
the report will only point directly to the differences that occur because of the changing demand
curve requirements.
OGUD.2003.000012.01
11.1. Capacities and Start-up Phasing Comparisons

Start-up phasing for the various fields is represented by the following table:
Start-up Phasing (Year)
Platforms Conc 3 Conc 3-1 Conc 3-2 Conc 3-3 Conc 3-4 Conc 3-5
RC West 1 1 1 1 1 1
RC HUB 1 1 1 1 1 1
Mej East 6 2 7 7 8 3
Mej CPF 1 1 1 1 1 1
Mej West 3 1 3 3 5 10
Patao East 21 13 24 19 28 15
Patao West 15 7 16 15 19 10
Patao HUB 9 4 9 8 11 5
Dragon 26 17 29 23 0 19
Maximum throughput capacity for each of the demand curves scenarios is illustrated in the
following graph:
Peak Platform Throughput
1400
1200 Conc 3
1000 Conc 3-1
MMSCFD
800 Conc 3-2

600 Conc 3-3
400 Conc 3-4
200 Conc 3-5
0
st
st
on
t
t
t
PF
B
B
es
es
es
HU
HU
Ea
Ea
g
W
W
W
ra
ej
o
ej
o
RC
ej
D
RC
ta
ta
M
ta
M
Pa
Pa
Pa
Platform
Figure 11.2: Peak platform throughput.
OGUD.2003.000012.01
Well count is illustrated in the following table:

Table 11.2: Well Count
Well Count
Platforms Conc 3 Conc 3-1 Conc 3-2 Conc 3-3 Conc 3-4 Conc 3-5
RC West 4 4 4 4 3 4
RC HUB 2 2 2 2 2 2
Mej East 1 1 1 1 1 1
Mej CPF 3 3 3 3 3 3
Mej West 2 2 2 2 2 2
Patao East 2 2 2 2 1 2
Patao West 2 2 2 2 2 2
Patao HUB 3 3 3 3 3 3
Dragon 3 5 1 5 0 5
Infill Replacements 7 9 7 7 6 7
Total 29 33 27 31 23 31
11.2. Gathering System

To illustrate the impact on the gathering system, pressure drop in the main 30-inch transfer line
was compared for each demand scenario as shown in the following figure:
Dragon Gathering Line DP
450
400
350 Conc 3
300 Conc 3-1
DP (psi)
250 Conc 3-2

200 Conc 3-3
150 Conc 3-4
100 Conc 3-5
50
0
15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
Production Year
Figure 11.3: Dragon gathering line DP.

The gathering system network was identical in each case for both the MULTISIM and HYSYS
models. As can be seen above, the pressure drop for the high flow cases is quite excessive, and
represents about 70% of the peak horsepower demand. Optimization of line size will reduce the
pressure drop and corresponding horsepower required, and this optimization should be
undertaken during the VAR-3 studies.
OGUD.2003.000012.01
11.3. Compression
The following figure illustrates the impact higher flow rates have on the compression horsepower
required.
Compression HP Comparison
120,000
110,000
100,000 Conc 3
Compression HP
90,000
80,000 Conc 3-1
70,000 Conc 3-2
60,000
50,000 Conc 3-3
40,000 Conc 3-4
30,000
20,000 Conc 3-5
10,000
-
1 3 5 7 9 11 13 15 17 19 21 23 25
Production Year
Figure 11.4: Compression HP Comparison.

As previously discussed, optimization of line size is needed for the two high flow cases.
11.4. Pipeline Information

The pipeline routes were identical for Concept 3-1 to 3-5. There was a difference in pipeline
diameters required as follows:
Table 11.3: Pipeline Diameters
Recommended
Pipeline Diameter Recommended Slug
Concept Gas Uptake Profile (NPS) Catcher Volume (BBL)
770 MMscf/d+200
3 MMscf/d domestic gas 30 2800
build up.
852 MMscf/d+300
3-1 MMscf/d domestic gas 32 2800
from Year 1
3-2 770 MMscf/d 28 2800
770 MMscf/d+300
build up.
3-4 682 MMscf/d 28 2800
770 MMscf/d+300
from Year 1
OGUD.2003.000012.01
11.5. Cost Estimate

The cost analyses summarized in this section were used to compare demand curve sensitivities
11.6. CAPEX / DRILLEX

The table below summarizes the CAPEX for these cases.
Conc 3 Conc 3-1 Conc 3-2 Conc 3-3 Conc 3-4 Conc 3-5
CAPEX (M $USD)
CPF at Mejillones 104,620 108,592 104,620 104,620 103,704 104,620
Compression platform linked to CPF 127,463 334,587 127,463 127,463 127,463 310,933
Wellhead platform - Mej West 26,576 26,576 26,576 26,576 26,576 26,576
Wellhead platform - Mej East 26,547 26,547 26,547 26,547 26,547 26,547
Wellhead platform - Rio Caribe HUB 28,156 28,156 28,156 28,156 28,156 28,156
Wellhead platform - Rio Caribe West 27,134 27,134 27,134 27,134 25,704 27,134
Wellhead platform - Patao HUB 27,766 28,748 28,190 28,190 27,754 28,190
Wellhead platform - Patao West 25,474 25,474 25,474 25,474 25,474 25,474
Wellhead platform - Patao East 26,024 26,024 26,024 26,024 25,211 26,024
Wellhead platform - Dragon 29,442 30,548 27,057 29,442 0 29,442
Wells - mob/demob 39,011 33,438 44,584 39,011 44,584 39,011
Wells at Rio Caribe 79,805 79,805 79,805 79,805 70,126 79,805
Wells at Mejillones 80,864 92,436 82,679 82,679 82,679 82,679
Wells at Patao 119,753 122,095 120,597 120,597 110,251 120,597
Wells at Dragon 43,345 93,298 9,011 76,082 0 95,417
Flowlines + umb - Rio Caribe to CPF 71,520 56,376 56,376 56,376 56,376 73,082
Flowline + umb - Mej E+W to Mej CPF 33,412 31,850 42,813 53,776 53,776 26,107
Flowlines + umb - Patao to CPF 94,497 94,497 94,497 83,534 94,497 94,497
Flowlines + umb - Dragon to CPF 81,352 81,352 73,734 73,734 0 81,352
Export pipeline - CIGMA route 124,272 128,384 120,254 120,254 120,254 124,280
Slugcatcher at shore 10,666 10,666 10,666 10,666 10,666 10,666
Operations base at LNG plant 20,815 20,815 20,815 20,815 20,815 20,815
Onshore domestic gas treatment plant 19,364 23,772 0 23,772 0 23,772
Marine base 35,323 35,323 35,323 35,323 35,323 35,323
0 0 0 0 0 0
CAPEX Total 1,303,201 1,566,493 1,238,395 1,326,050 1,115,936 1,540,499
PV CAPEX (7%) 724,417 883,362 693,948 741,990 658,869 843,340
11.7. OPEX
OPEX for these cases were estimated using percentages of capital for fixed cost, and variable
costs as a function of production per standard CES algorithms.
OGUD.2003.000012.01
OPEX Comparison
100,000
Annual Total OPEX (M
Conc 3
80,000
Conc 3-1
60,000
$USD)
Conc 3-2
40,000 Conc 3-3
Conc 3-4
20,000
Conc 3-5
0
1 5 10 15 20 25 30
Production year
Figure 11.5: OPEX comparison.
OGUD.2003.000012.01
12. GEOLOGICAL REALIZATION SENSITIVITIES

The following table represents the cases that were considered for the geological realization
sensitivity analysis:
Table 12.1: Geology Phasing Scenarios
Geology Update # 2: Concept 3 updated to allow Concept 3 770 MMSCFD + 200 Modified
comparison to High and Low Geological Updated Geology Domgas buildup Reference Case
Sensitivity
High Geological Sensitivity: Parameter with Concept 3 Update 770 MMSCFD + 200 Modified
highest impact for each reservoir optimistic case High Geology Domgas buildup Reference Case
was changed from Concept 3 Update
Low Geological Sensitivity: Parameter with Concept 3 Update 770 MMSCFD + 200 Modified
highest impact for each reservoir pessimistic case Low Geology Domgas buildup Reference Case
was changed from Concept 3 Update
High Well Count Sensitivity - 200 BCF per Well Concept 3 770 MMSCFD + 200 Modified
resulting in 69 Total wells 200 BCF/well Domgas buildup Reference Case
High Water Production Case: Concept 3 770 MMSCFD + 200 Modified
From Subsurface Sensitivity Study – Highest water Updated Geology Domgas buildup Reference Case
production case High Water
High CGR Case: From Subsurface Sensitivity Concept 3 770 MMSCFD + 200 Modified
Study – Highest CGR case (Rio Caribe only) Updated Geology Domgas buildup Reference Case
High CGR
The subsurface team was not able to complete a P85 or P15 case for the VAR-2. Nevertheless,
sensitivities based on geological realizations were completed and the relative impacts were
assessed. As an initial effort to characterize the impact of these sensitivities on cost and
economics, the Reservoir Engineers provided forecasts that were based on the following findings
from the sensitivity exercise.
Table 12.2: Sensitivity Forecast from Reservoir Engineering
High Case Low Case

Rio Caribe Max Gas Water Contacts Min Permeability
Mejillones Max Rock Properties Min Gas Water Contacts
Patao Max Gas Water Contacts Min geology realization
Dragon Max Gas Water Contacts Min geology realization
Each of the above represents, for each field: 1) the one parameter that had the highest impact on
the reservoir for the most optimistic reservoir case, and 2) one parameter that represented the
highest impact on the most pessimistic reservoir case. While this is not quite ideal from the
standpoint of having a statistically based set of parameters that vary, it does provide a preliminary
indication of the impact to cost and performance.
OGUD.2003.000012.01
In the course of analyzing the sensitivities, the subsurface team completed benchmarking
activities, which indicated that MSLNG wells in the reference case models were accessing
reserves in excess of comparable fields in the benchmarking effort. As a result, a new well count
was produced that included “statistical” wells, which were used to assess a low realization case.
Since the impact of higher wells had far more downside impact than the low geological
realization forecast that was made, surface engineering only provided estimates for the high well
count case to show a downside scenario.
Cases were also developed to investigate the impact of highest expected water production and
highest condensate to gas ratio (CGR).
Each of those cases will be discussed and compared in the following sections:
12.1. Modified Reference Case – Updated Geological Interpretation
12.1.1. Production Forecast

The forecast provided by the reservoir engineers is as follows:
1000
900
800
MMSCFD
600
Pat Input MMSCFD
500
Mej Input MMSCFD
400
300 RC Input MMSCFD
200
100
0
10
13
16
19
22
25
28
1
4
7
Year
Figure 12.1: Total production profile.

As can be seen above, the forecast update illustrated that the Concept 3 well count and surface
infrastructure could not meet the reference case demand scenario of a 4.7 mtpa LNG plant and a
gradual build up of 200 MMSCFD domestic gas for a 30 year production life.
OGUD.2003.000012.01
12.1.2. Capacities and Phasing

The following table represents the capacities and phasing resulting from a geological update to
Concept 3:
Table 12.3: Geology Update - Capacities and Phasing
RC West 1 150 3 150 10,420
RC HUB 1 63 2 171 14,003
Mej East 6 142 2 142 11
Mej CPF 1 620 3 949 14,077 5,349
Mej West 4 139 1 139 14
Patao East 14 274 2 274 0 5,200
Patao West 11 471 2 594 0 5,200
Patao HUB 7 371 3 668 0 5,200
Dragon 17 633 5 633 0
The total wells represent the 23 shown above plus another seven infill replacement wells included
to account for sand failures for a total of 30 wells compared to 29 for Concept 3.
12.1.3. Compression
The following figure illustrates the compression demand for each field resulting from the
geological update:
90,000
80,000
70,000
Compression HP
60,000 Drg
50,000 Pat
40,000 Rio Caribe
30,000 Mejillones
20,000
10,000
-
1
3
5
7
9
11
13
15
17
19
21
23
25
27
29
Production Year
Figure 12.2: Horsepower contribution by field.
OGUD.2003.000012.01
As the geology progressed from similar phasing concepts (Mejillones CPF), the compression
requirement changed significantly. The following figure illustrates the differences between
Concept 2, Concept 3, and Concept 3 – Updated Geology:
Horsepower Comparison
Different Geological Realizations
90,000
80,000
Compression HP
70,000
60,000
Concept 2
50,000
Concept 3
40,000
Concept 3 - Updated
30,000
20,000
10,000
-
13
17
21
25
29
1
Production Year
Figure 12.3: Horsepower comparison – different geological realizations.

When comparing Concept 3 to the updated version, there is a particularly large difference in
compression horsepower required. Additional wells for the updated case would most likely
reduce this difference.
12.1.4. Cost Estimate

The table below summarizes the CAPEX for this case compared to Concept 3:
Concept 3 Update Concept 3
CAPEX M $USD M $USD
Central Facilities CPF at Mejillones 104,620 104,620
Compression platform linked to CPF 371,768 127,463
Field Facilities Wellhead platform - Mej West 26,576 26,576
Wellhead platform - Mej East 26,547 26,547
Wellhead platform - Rio Caribe HUB 28,156 28,156
Wellhead platform - Rio Caribe West 24,923 27,134
Wellhead platform - Patao HUB 27,766 27,766
Wellhead platform - Patao West 25,474 25,474
Wellhead platform - Patao East 26,024 26,024
Wellhead platform - Dragon 29,442 29,442
Wells - mob/demob 33,438 39,011
Wells at Rio Caribe 70,126 79,805
Wells at Mejillones 80,864 80,864
OGUD.2003.000012.01

Concept 3 Update Concept 3
CAPEX M $USD M $USD
Wells at Patao 119,753 119,753
Field Facilities Wells at Dragon 79,037 43,345
Flowlines + umb - Rio Caribe to CPF 71,520 71,520
Flowline + umb - Mej E+W to Mej CPF 33,412 33,412
Flowlines + umb - Patao to CPF 94,497 94,497
Flowlines + umb - Dragon to CPF 81,352 81,352
Export System Export pipeline - CIGMA route 131,472 124,272
Slugcatcher at shore 10,666 10,666
Onshore Facilities Operations base at LNG plant 20,815 20,815
Onshore domestic gas treatment plant 19,364 19,364
Marine base 35,323 35,323
CAPEX Total 1,572,935 1,303,201

PV CAPEX (7%) 823,948 724,417
The cost difference above is mainly attributed to the higher compression impact for the updated
case. There is a small discrepancy between the export pipeline estimates. This was due to a
correction to the Mejillones CPF location that was discovered and incorporated for future cases.
Also, two additional Dragon wells were needed in the MULTISIM model for the Updated
Geology case.
12.2. High Geological Realization
12.2.1. Production Forecast

The forecast provided by the reservoir engineers is as follows:
1100
1000
900
800
Drag Input MMSCFD
700
MMSCFD

400
RC Input MMSCFD
300
200
100
0
10
13
16
19
22
25
28
1
4
Year

In this case, the new geological interpretation with the optimistic geological parameters enabled
the production forecast to meet the 4.7 mtpa plus 200 MMSCFD demand scenario.
OGUD.2003.000012.01

The following table represents the capacities and phasing resulting from the optimistic geological
update to Concept 3:
Table 12.5: Optimistic Geological Update – Capacities and Phasing for Concept 3
RC West 1 125 4 125 9,142
RC HUB 1 66 2 150 15,297
Mej East 7 138 2 138 11
Mej CPF 1 620 3 970 15,370 1,500
Mej West 5 129 1 129 14
Patao East 17 289 2 289 0 1,200
Patao West 12 470 2 585 0 1,200
Patao HUB 8 407 3 710 0 1,200
Dragon 21 646 5 646 0
The total wells represent the 24 shown above plus another seven infill replacement wells included
to account for sand failures for a total of 31 wells compared to 30 for Concept 3 - Updated
Geology.
12.2.3. Compression
The following figure illustrates the compression demand for each field resulting from the
geological update:
80,000
70,000
Compression HP
60,000
Drg
50,000
Pat
40,000
Rio Caribe
30,000
Mejillones
20,000
10,000
-
1
3
5
7
9
11
13
15
17
19
21
23
25
27
29
Production Year
Figure 12.5: Horsepower Contribution by Field.
OGUD.2003.000012.01
While the High Geological Realization is able to meet the demand scenario, it is at the expense of
significant compression horsepower near the end of the 30-year production window. The
following compares the above against the results from Concept 3 – Updated Geology:
Horsepower Comparison Updated Geology vs High

Geology
90,000
80,000
70,000
Compression HP
60,000 Concept 3 - High

50,000 Geology
40,000 Concept 3 - Updated
30,000 Geology
20,000
10,000
-
13
17
21
25
29
1
Production Year
Figure 12.6: Horsepower comparison Updated Geology versus High Geology.

The figure above illustrates that the High Geological parameters delay compression by several
years compared to the Updated Geology case.
12.2.4. Stabilized Condensate Production
The following graph illustrates that the High Geological parameters result in additional recovery
of condensate from the reservoirs.

Updated vs High Geological Realization
13,000 45,000
12,000
40,000
11,000
10,000 35,000
9,000
Stabilized BPD
30,000
8,000
7,000 25,000
10.8 MM Bbl
6,000 20,000
5,000
4,000 15,000
3,000 10,000
2,000
5,000
1,000
- -
1
3
5
7
9
11
13
15
17
19
21
23
25
27
29
Production Year
Concept 3 - Updated Concept 3 - High Geology

Cumulative - Updated MBbl Cumulative - High MBbl
Figure 12.7: Stabilized condensate production – Updated versus High Geology.
OGUD.2003.000012.01
A consequence of the above is that the gas HHV from the slugcatcher to the LNG plant stays
higher for a longer period as illustrated below:
HHV Comparison Updated Geology vs High

Geology
1080
1060
HHV (Btu/SCF)
1040 Concept 3 - Updated

Geology
1020
Concept 3 - High
1000 Geology
980
960
10
13
16
19
22
25
28
1
4
7
Production year
Figure 12.8: HHV comparison – Updated versus High Geology.

The CAPEX comparison between the High Geological Realization and the Updated Geology
case is shown below:
Concept 3 Updated Concept 3 High
Geology Geology
CAPEX M $USD M $USD

Wells at Dragon 79,037 79,037
OGUD.2003.000012.01

Concept 3 Updated Concept 3
Geology High Geology
CAPEX M $USD M $USD

Field Facilities Flowlines + umb - Rio Caribe to CPF 71,520 71,520
CAPEX Total 1,572,935 1,548,815
PV CAPEX (7%) 823,948 763,695
The small difference is attributed to slightly lower compression requirements.
12.3. Downside Case: High Well Count – 200 BCF / Well

As stated previously, a new well count was produced that included “statistical” wells that were
used to assess a low realization case. Since the impact of higher wells had far more downside
impact than the low geological realization forecast that was made, surface engineering only
provided estimates for the high well count case to show a downside scenario. The following
table indicates the number of wells considered:
Table 12.7: Downside Case – High Well Count
Total Wells Development Wells Infill Wells Redrill Wells
Rio Caribe 8 4 1 2
Mejillones 23 13 4 6
Patao 21 12 3 6
Dragon 17 10 3 5
Total 69 39 11 19
The extra wells did not have a location associated with them, so supporting infrastructure was
assumed to be the average of the total from the reference case. The extra wells were also phased
similarly. The following table illustrates the resulting impact to CAPEX:
OGUD.2003.000012.01

Concept 3 Concept 3 High Well
Updated Count
Geology
CAPEX M $USD M $USD

Statistical wells (incremental 39 wells) 0 784,211
CAPEX Total 1,572,935 2,357,146
PV CAPEX (7%) 823,948 1,168,544
12.4. High Water Production

The Updated Geology Reference Case already included 5,000 barrels per day of peak water
production compared to only condensed water from saturated gas in Concept 3. The reservoir
engineers produced a series of curves from their water production sensitivity analysis (Ref
Subsurface Team Report) that resulted in a total expected peak water production from each field
as follows:
• Rio Caribe – 1,600 BWPD
• Mejillones – 2,300 BWPD
• Patao – 5,700 BWPD
OGUD.2003.000012.01
• Dragon – 2,500 BWPD

The impact of additional water on offshore CAPEX is small as shown below, due to the fact that
water is reinjected into the two-phase pipeline offshore and is not treated or disposed of.
However, there is a cost impact to the LNG plant as slugcatcher liquids will contain the produced
water, which will have to be treated and properly disposed. The CAPEX for this is not included
in the table below.
Concept 3 Concept 3 High Water
Updated
Geology
CAPEX M $USD M $USD

CAPEX Total 1,572,935 1,577,813
PV CAPEX (7%) 823,948 826,763
12.5. High CGR at Rio Caribe

The High Geological Realization completed by the reservoir engineers did not include the impact
of PVT uncertainty. Earlier in this report, an upside CGR was given for the four fields. The
reservoir engineers provided a CGR forecast (declining with time) at Rio Caribe such that Surface
Engineering could analyze the impact on CAPEX. The CGR’s are so much lower at the other
OGUD.2003.000012.01
three fields that they were not included in the analysis. The differences when compared to
Concept 3 – Updated Geology reference case are discussed in the sections below.

The following table illustrates the capacities and phasing for the High CGR case:
Table 12.10: High CGR Capacities and Phasing
RC West 1 150 3 150 14,390
RC HUB 1 63 2 150 22,177
Mej East 6 142 2 142 11
Mej CPF 1 620 3 949 22,251 5,349
Mej West 4 139 1 139 14
Patao East 14 277 2 277 0 5,200
Patao West 11 471 2 594 0 5,200
Patao HUB 7 371 3 698 0 5,200
Dragon 17 633 5 633 0
12.5.2. Stabilized Condensate Production

The following figure illustrates the impact of stabilized condensate production resulting from a
higher Rio Caribe CGR:
Condensate Processing Volume Shrinkage

Raw Offshore BPD
35,000 120000
30,000 From Slugcatcher BPD
100000
Cumulative MBBl's
Barrels per Day
25,000
80000 Stabilizer Feed BPD
20,000
60000
15,000 Stabilized Onshore BPD
40000
10,000
Raw Offshore MBBl
5,000 20000
- 0 From Slugcatcher MBBl

13
17
21
25
29
1
5
9
Production Year Stabilized Onshore

MBBl
Figure 12.9: Condensate Processing Volume Shrinkage.
OGUD.2003.000012.01
Compared to the Updated Geology reference case, production and ultimate recovery is
significantly higher as shown below:
Stabilized C o nd en sate C o m p ariso n

U pdated R eference vs H igh C G R
18,000 50,000
16,000 45,000
14,000 40,000
Condensate (BPD)
Cumulative MBbl
12,000 35,000
Stabilized
30,000
10,000
16.8 MM Bbl 25,000
8,000
20,000
6,000 15,000
4,000 10,000
2,000 5,000
- -
1
3
5
7
9
11
13
15
17
19
21
23
25
27
29
Produ ction Year
H igh C G R Stabilized BPD R eference Stabilized BPD

H igh C G R C umulative M BBl R eference C umulative M BBl
Figure 12.10: Stabilized condensate comparison – Updated Reference versus High CGR.
The result is a slightly higher heating value from the slugcatcher to the LNG plant as illustrated
below:
Heating Value Comparison

Outlet from Slugcatcher
1070
1060
Higher Heating Value
1050
1040
(Btu/SCF)
1030
High CGR HHV
1020
Reference HHV
1010
1000
990
980
970
1
10
13
16
19
22
25
28
Production Year
Figure 12.11: Heating value comparison – outlet from slugcatcher.
OGUD.2003.000012.01

The impact on CAPEX for the Upstream facilities is negligible as shown in the following table.
However, the cost for the stabilization facility in the LNG plant will be impacted.
Concept 3 Updated Concept 3
Geology High CGR
CAPEX M $USD
CAPEX Total 1,572,935 1,578,253
PV CAPEX (7%) 823,948 828,252
OGUD.2003.000012.01
13. HARDWARE SENSITIVITIES

The purpose of this section is to test various hardware sensitivities against a reference case in
order to understand incremental cost implications. It should be emphasized that the absolute
values for the cost estimates are not relevant, only the differences for the purpose of each
comparison are valid.
Cases in this category were based on 2000 VLNG reservoir models. Forecasts were received
from the Reservoir Engineers based on the geological models completed during the 2000 VLNG
exercise. The strategy was to allow surface engineers to progress toward the VAR-2 deadline
independent of subsurface work progress. In the sequence of time related events, the majority of
this was the first study completed by the surface engineering team. Variables chosen for these
cases were largely independent of the reservoir. A summary of the comparisons made during this
study is contained below:
• CPF Location Sensitivity
• Subsea versus Conventional Sensitivity
• Fixed versus Floating CPF Sensitivity
• Compression and Power Generation Location Sensitivity
• Pipeline Single Phase versus Two Phase Sensitivity
• Condensate Handling and Export Sensitivity
• High Volume Sensitivity
• Corrosion and Materials Sensitivity
• Field Infrastructure Study
A summary of cases presented for the above comparisons is described in the following table:
OGUD.2003.000012.01
Table 13.1: Hardware Sensitivities

HC Offshore
CPF
Jacket +
Offshore Cond.

Concept 2 - Field

Concept 1 -
Offshore
Condensate CPF GBS
Concept 2 -
Compression &
Overland
Direct
Overland
Concept 2 - + Cond
In addition, there was a case completed to test sensitivities to the upstream infrastructure for the
presence of elevated H2S and CO2 levels. This Corrosion and Materials Sensitivity is contained at
the end of this section and is based on Concept 3.
Also included at the end of this section is a description of a model that compares Field
Development options in general, that are independent of CPF location or expert pipeline routing.
Drilling options and methods are compared against the wellhead infrastructures (subsea versus.
platform options).
Details for each case are discussed in this section. For simplicity and clarity, the first case
(Concept 1) will serve as the reference case against which the others will be discussed by
exception only. The production forecast for most of these cases is illustrated below:
OGUD.2003.000012.01
Concept 2 Production Profile
1100
1000
900
800
700 Pat MMSCFD
MMSCFD
600 Drag MMSCFD

500 Mej MMSCFD
400 RC MMSCFD
300
200
100
0
1
3
5
7
9
11
13
15
17
19
21
23
25
27
29
Year
Figure 13.1: Concept 2 production profile.

Slightly different forecasts were generated for Rio Caribe based centers and Mejillones based
centers, however; for practical purposes they were identical and are characterized by the above
graph.
In all cases, Rio Caribe production was constrained to 150 MMSCFD with the intent to provide
the LNG plant components necessary for refrigerant make-up. Constraining Rio Caribe also
reduces the NPV value of the condensate in the reservoir. This optimization issue must be
quantified during the next project phase to determine what is best for the overall project
economics.
For purposes of completing the Hardware Sensitivities, the composition at Rio Caribe was
assumed constant with time. In reality, the composition of Rio Caribe becomes leaner with time
as the condensate is produced. This assumption results in an overstatement of the amount of
condensate produced in later years, but for purposes of this study, the simplification is adequate
for comparing the relative merit of one case against another.
Costs quoted in each section were determined from 2000 VLNG well counts, locations, and
design. The absolute value of CAPEX and DRILLEX numbers is not as relevant as their relative
value to each other. Again, the purpose of this part of the study is to assess the relative impact
that different hardware combinations can have on the development. The chart below provides a
relative comparison for PV CAPEX values at 7%.
OGUD.2003.000012.01

200%
180%
160%
140%
120%
100%
80%
60%
40%
20%
0%
CPF Compression platform Wellheads Flowlines + umb Wells Export system Onshore facilities
Figure 13.2: Concept summary – CAPEX USDk, NPV 7% - Concept 1 = 100%.
13.1. CPF Location Sensitivity

The 2000 VLNG models were based on a sequential development moving from the west to the
east. Rio Caribe and Mejillones were developed first, followed by Patao and Dragon. This study
first looks at a Rio Caribe CPF (Concept 1), then describes a Mejillones CPF (Concept 2), and
finally a comparison between the two is made. Concepts 1 and 2 serve as reference cases for all
the other comparisons made in this study.
13.1.1. Concept 1 - Rio Caribe Central Platform

Rio Caribe was chosen as the first central facility to study. Platform-based facilities were
determined and used as the basis to compare the other hardware options. Well locations,
production profiles, and flowing tubing-head pressures were provided from Reservoir
Engineering as a function of time. Drill centers were chosen such that drilling offsets would not
exceed approximately 5 kilometers (16,400 feet).
13.1.1.1. Overall Layout

OGUD.2003.000012.01
Concept 1
Water Water Water Water Water
Water
Depth: 90m Depth: 100m Depth: 115m Depth: 120m Depth: 130m
RC Depth: 80m P D D
P
CPF M East West East
West
L= 26,667 m L=45,415 m
L=7735 m
D= 30” D=30”
D=20”
L=8108 m
L=62,130 m D=30”
D=30”
RC1 RC2 RC3 RC4

M1 M2 M3 M4
P2 P3
M5 M6 P1 P5
D1 D6
P4
D2 D4
Legend P6
= Central D3 D5 D7
Facility

The intention was to keep the process offshore as simple as possible to minimize CAPEX, and to
render the Operations to be simple and reliable. To achieve this, the wellhead platforms were set
up to consist of Christmas trees and a manifold, with an export transfer line to a single Central
Processing Facility (CPF) located at Rio Caribe. Umbilicals from the CPF would supply the
following:
• Power
• Corrosion Inhibitor
• Hydrate Inhibitor
• Fibre Optic cable
• Spare chemical lines
Similarly, the Central Processing Facility served as the wellhead location for the Rio Caribe wells,
and consisted of a manifold to gather production from all four fields and export via a two-phase
OGUD.2003.000012.01
pipeline. The CPF would include all chemical injection equipment, power generation equipment,
and accommodation suitable for 24/7 coverage. Additionally, the CPF would include a flare for
process relief and future compression process requirements. When compression is needed,
separation and compression equipment would be installed on a bridged compression platform.
The following table illustrates capacities for all platforms, and start-up phasing:
Table 13.2: Capacities for All Platforms
Start -Up From Wells To Export PL Condensate Water
Phasing Gas Rate Number Gas Rate Rate Rate
Rio Caribe 1 150 4 970 17,000 0
Mejillones 1 620 6 620 74 0
Patao East 7 200 3 200 0 0
Patao West 7 200 3 400 0 0
Dragon East 12 460 5 460 0 0
Dragon West 12 180 2 640 0 0
13.1.1.3. Field Wellhead Platform Facilities

As previously discussed, the philosophy was to keep the facilities as simple as possible. Wellhead
platforms consisted of x-mas trees and manifolds. Power, chemical injection services, and a fiber
optic cable were provided by umbilical. Valves on the platform would be actuated by an electric-
drive hydraulic pumping system. The Christmas trees were 5000 psi rated, and manifold rating is
ANSI 1500 to handle the Shut-in Tubing Pressure (SITP) of 3500 psi. Since no relief valves
would be required, a flare was not included. Venting would be accomplished to blow-down small
sections of pipe should maintenance on the platform be required. Due to the small well count at
each platform, individual non-fiscal metering was included for each well to ensure sound
reservoir management, and to avoid installation of test separation equipment. Pigging facilities
were included for the corrosion inhibition program, and to allow periodic pipeline integrity
assessments using intelligent pigging technology. The following schematic illustrates the basic
design function for a typical wellhead platform:
OGUD.2003.000012.01
Base Case Wellhead Platform

ASNI 1500 (3705 psig)
Meter
Meter
Flowline
Meter
Meter
Multiphase meters - Rio Caribe and Mejillones
Umbilical
1. Electrical
"Typical" 2. Boat Docking 4. Fibre Optic Cable
Wellheads = 5000 psi design 4. Hydraulic Pumps 6. Spare
5. Lights
Figure 13.4: Reference Case Wellhead Platform.

The gathering network was rigorously modeled using HYSYS with Shell Two-phase flow
correlations included. This was done for every production year to size the system not only for
initial conditions, but also for future conditions when pressures decline even while producing
volumes were maintained. This provides a challenge, particularly with two-phase systems that
may become unstable at some point in time. While some work was done in this area to confirm
the overall concept over the life of the field, this represents an opportunity for further analysis
when work commences on Concept Selection.
The pressure rating (wall thickness) for the flowlines will also be optimized during Concept
Selection. Flowlines rated to ANSI 900 must include some overpressure protection on the
wellhead platform, such as relief valves (undesired) or High Integrity Pressure Protection System
(HIPPS) (high O&M). This must be compared against the life cycle costs for flowlines rated for
Shut-in Tubing Pressure (SITP) (ANSI 1500). The layout diagram above shows the line lengths
and diameters for the gathering system. The following graph illustrates the gathering-system
pressure drop as a function of time.
OGUD.2003.000012.01
Gathering System DP
450
400
350
Mejillones
Delta P (psi)
300
250 East Patao
West Patao
200
East Dragon
150
West Dragon
100
50
0
0 5 10 15 20 25 30 35
Year
Figure 13.5: Gathering system DP.

The Central Production Facility located in Rio Caribe consists of a gathering manifold, Rio
Caribe x-mas trees, and export line to the LNG plant location. Support facilities for the entire
offshore development are also included. The following diagram illustrates the functionality of
the CPF platform:
OGUD.2003.000012.01
C entral P rocessing Facility (C P F) P latform
T ransfer Line from other F ield
T ransfer Line from other Field
T o C om pression
T ransfer Line from other Field
P latform (F uture)
F rom W ellhead P latform s
M eter T w o-phase P L
M eter
M eter
F rom C om pression P latform
M eter
(Future)
M eter
A N S I 900 (2220 psig)
W ells drilled from C P F P latform T urbine
G enerator
U m bilical C orrosion
D istribution Inhibitor
to W ellhead
P latform s
2 spares H ydrate
Inhibitor
F ibre O ptic CAO / DCS

N ote: T urbine/generator package oversized for future C om pression P latform
S upporting Infrastructure
1. H eliport
2. B oat D ocking
3. S m all C rane
4. H ydraulic P um ps
5. Lights
6. Living Q uarters (incl capacity for future C om p.P latform )
7. F irew ater S ystem (incl capacity for future C om p.P latform )
8. Instrum ent A ir (incl capacity for future C om p.P latform )
9. E m ergency (D iesel) G enerator
10.F lare system
11. P igging Facilities
Figure 13.6: Central Processing Facility (CPF) platform.
As there is no compression needed during the first several years and the export line is two-phase,
OGUD.2003.000012.01
there is no need to install separation until the bridged compression platform is added later (see
next section).
A bridged compression platform was installed in Year 5. The platform jacket was sized to
accommodate an initial compression demand of 45,000 hp, with 32,000 hp being added Year 27.
Separation will occur separately for each field. The purpose of cost estimating, three fifty-percent
units were assumed. After cooler requirements in Year 5 and 27, respectively, are 140
MMBtu/hr and 100 MMBtu/hr.
The strategy for centralizing compression was to allow the same installed horsepower to be
utilized for different fields as they are phased in and out of production. This serves to minimize
CAPEX and OPEX when compared to field compression (discussed later).
compression horsepower requirements for each field were determined separately, and the
discharge pressure of 1480 psig (ANSI 600) was used in all cases. This matches the pipeline and
slugcatcher sizing analysis completed by OGUP for the 30 in. pipeline case to deliver to the LNG
plant at 1100 psia (75 bara). It should be noted, however, that the 30 in. pipeline case requires
dynamic simulation to ensure that the operation is stable over the entire range of conditions. A
24 in. pipeline is a more conservative line size from a two-phase flow stability viewpoint.
However, this requires all discharge components to be rated to ANSI 900 (2220 psig) resulting in
increased CAPEX, increased horsepower and a corresponding increase in the minimum suction
pressure required to keep the compression as a single stage machine. This requires further study
between process and pipeline engineers during the Concept Selection phase. The following
diagram illustrated the Compression platform components:
OGUD.2003.000012.01
Compression Platform
(Bridged to CPF)

Rio Caribe Compressor
(Turbine Driver)
To CPF Export PL
Mejillones Air Cooled

3 x 50% units
Firewater
Patao
Instrument Air
From CPF
Fibre Optic
Electric Power
Dragon
1. Crane
Booster Pump 2. Lights
3. Interconnect w/ CPF Flare
3 x 50% units
Figure 13.7: Compression platform.

The modeling was done in such a way that it would allow easy comparison of compression
horsepower requirements between each field. Hence, the individual field values were summed up
to determine a total compression horsepower requirement. Individual field compression
requirements were analyzed to determine the demand origin, but with 4 fields and only 3 50%
machines, available there would necessarily be some common (manifold) suction pressure
requirements. This may lead to an underestimate of total HP required. However, three
compressors still allow some separation of medium and low suction pressure to minimize
horsepower consumed. Phasing of the field and wells coming on also could result in less total
horsepower required. These issues were viewed as an optimization that needs to be completed
during Concept Selection.
The compression demand curve determined from the modeling effort is illustrated in the Figure
below:
OGUD.2003.000012.01
90,000
80,000
70,000
Horsepower
60,000 Drg
50,000 Pat
40,000 Mej
30,000 RC
20,000
10,000
-
1
10
13
16
19
22
25
28
Production Year
13.1.1.8. Pumping
The only significant pumping required is to pump the separated condensate and water back into
the export pipeline after separation. The pump power requirement was approximately 500
horsepower.
13.1.1.9. Offshore Processing

In an attempt to keep the facilities as simple as possible, dehydration, hydrocarbon dewpoint
control, and condensate stabilization were not included in the bases case. Each of those elements
is considered later in the report.
There are only two reasons to dehydrate offshore. The first is to eliminate the need for corrosion
inhibition in the export pipeline. The second is to ensure single-phase flow (in conjunction with
dewpointing), for the two single-phase pipelines option. These are considered later in the report.
In the treating section of the LNG plant, all gas becomes saturated with water due to the aqueous
amine solution the gas comes in contact with, so full dehydration of the inlet stream in the LNG
plant is required regardless of whether or not dehydration is done offshore.
13.1.1.10. Contaminant Control

The reference case contaminant compositions shown in the contaminant matrix were assumed
for this Concept. No special treating was required. However, corrosion inhibitor is needed as a
OGUD.2003.000012.01
minimum for all pipelines and flowlines unless Corrosion Resistant Alloy (CRA) materials are
used.
13.1.1.11. Control and Automation

The Concept is setup for distributive control from the CPF to all the wellhead platforms via fiber
optic cable in the umbilical. Additionally, there will be a jointly operated upstream and
downstream control room onshore. The total control of the facility can be accomplished
onshore, but initially the control room will have control at night to reduce manpower offshore.
Further studies will be launched during the Concept Selection Phase.
13.1.1.12. Metering
Individual wells will be metered via non-fiscal gas meters or multiphase meters where required.
A metering study will be initiated post VAR-2 that will look at more detail and consider the
Venezuelan Gas Law as a guiding principle. Metering (non-fiscal) will also be included on the
export Pipeline from the CPF.
table represents the basis by which the costs were estimated:
Table 13.3: Jacket Load Cost Estimates
Concept 1 All weights in tonnes
Platform at CPF 883 315 1,924 2,200 25 x 23

Comp platform 1,431 1,353 5,800 6,200 33 x 29
Wellhead Mej 723 87 382 550 18 x 18
Wellhead Pat W 823 259 289 400 18 x 18
Wellhead Pat E 925 274 289 400 18 x 18
Wellhead Drag W 1,236 95 256 350 18 x 18
Wellhead Drag E 1,418 117 350 500 18 x 18
civil/structural design will be conducted on the selected concept.

The pipeline route chosen was the reference case central route as a 44 km, 30 in. two-phase
pipeline. As discussed previously, there is a trade-off between compressor horsepower required
and slugcatcher size. The larger the pipeline diameter, the larger the slugcatcher and increased
flow instability in the pipeline. However, the larger pipeline results in an ANSI 600 design limit
on the compressor discharge side of the process (lower CAPEX than ANSI 900) as well as less
OGUD.2003.000012.01
horsepower consumed and slightly more linepack. Further studies are needed post-VAR -2 on
the dynamics of the 30 in. two phase export pipeline (optimization of the above parameters).
13.1.1.15. Well Engineering Support Facilities

All wells were costed out as drilled by jack-up rig. This is quite feasible for Rio Caribe,
Mejillones, and Patao (80 meter to 115 meter water depth), but a new generation jack-up would
be required to drill at the specified location at Dragon (120-130 meters). At this time, only two
rigs exist for these water depths, but given that Dragon will not be developed until Year 12, it
was assumed that additional rigs will become available in the future. Please refer to the Well
Engineering section of the Subsurface Feasibility Reportxxi for more details.

Table 13.4: Power Loads All Platforms
Power reqd
MW

Comp platform 1.86
Wellhead Mej 0.2
Wellhead Pat W 0.2
Wellhead Pat E 0.2
Wellhead Drag W 0.2
Wellhead Drag E 0.2
Total 3.65
Adjusted Total 4.30

each other.

xxi See Reference 9 on page 21-3
OGUD.2003.000012.01
Table 13.5: CAPEX Summary – Concept 1

CAPEX M $USD
Field Facilities Wellhead platform Mejillones 25,122
Wellhead platform Patao West 25,585
Wellhead platform Patao East 26,406
Wellhead platform Dragon West 26,100
Wellhead platform Dragon East 30,979
Flowline + umb - Mejillones to CPF 54,872
Export System Export pipeline - CPF to LNG plant 68,629
Marine base 35,323

PV CAPEX (7%) 707,293
13.1.1.19. OPEX
costs as a function of production as per standard CES algorithms.
Concept 1: OPEX
70,000
60,000
Annual OPEX (M$ USD)
50,000
40,000
Total OPEX
30,000
20,000
10,000
0
1
10
13
16
19
22
25
28
31
Production Year
Figure 13.9: Concept 1 OPEX.
OGUD.2003.000012.01
13.2. Concept 2 - Mejillones CPF

The second concept was to place the CPF at a more centrally located location. The drawback is
to have a two-phase flowline with high liquid loading being transported to Mejillones. The
geographical center of all the wells lies between Mejillones and Patao. Mejillones was chosen
over Patao since it was desired to produce the condensate from Rio Caribe early on, and
Mejillones is closer. The concept was the same as for Concept 1, except for the CPF is located at
Mejillones. Consequently, the gathering system changed and horsepower requirements were
somewhat different. The following sections discuss these differences.
13.2.1. Overall Layout

The infrastructure for Concept 2 is represented in the following schematic:
Concept 2
Water Water Water Water Water Water
Depth: 80m Depth: 90m Depth: 100m Depth: 115m Depth: 120m Depth: 130m
Mej P P D D
RC CPF West East West East
L= 26,667 m
D= 30” L=19,708 m L=7735 m
D=30” D=20”
L=62,130 m L=8108 m
D=30” D=30”
RC1 RC2 RC3 RC4
M1 M2 M3 M4
P2 P3
M5 M6 P1 P5
D1 D6
P4
D2 D4
Legend P6
= Central D3 D5 D7
Facility

The following table illustrates capacities for all platforms, and installation phasing:
OGUD.2003.000012.01
Table 13.6: Capacities for All Platforms

Rio Caribe 1 150 4 150 17,000 0
Mejillones 1 620 6 970 17,000 0
Patao East 7 200 3 200 0 0
Patao West 7 200 3 400 0 0
Dragon East 12 520 5 520 0 0
Dragon West 12 205 2 725 0 0
13.2.2. Gathering System

The following graph illustrates the gathering-system pressure drop as a function of time:
Gathering System DP
300
250
Mejillones
Delta P (psi)
200
East Patao
150 West Patao
East Dragon
100
West Dragon
50
0
0 5 10 15 20 25 30 35
Year
Figure 13.11: Gathering System Pressure Drop.
13.2.3. Central Production Facility – Compression Platform

A bridged compression platform will be installed in Year 5. The platform jacket must be sized to
accommodate an initial compression demand of 45,000 hp, with 20,000 hp being added Year 27.
As for Rio Caribe (Concept 1), a discharge pressure of 1480 psig (ANSI 600) was used in all
cases. This matches the pipeline and slugcatcher sizing analysis completed by OGUP for the 30
in. pipeline case to deliver to the LNG plant at 1100 psia (75 bara). It should be noted, however,
that the 30 in. pipeline case requires dynamic simulation to ensure that the operation is stable
OGUD.2003.000012.01
over the entire range of conditions. A 24 in. is a more conservative approach to the two-phase
dynamics problem, but it was not desired since this required all discharge components to be rated
to ANSI 900 (2220 psig) resulting in increased CAPEX, increased horsepower, and a
corresponding increase in the minimum suction pressure required to keep the compression as a
single stage machines. An initial analysis was performed that seems to indicate that spending
more on a larger slugcatcher than on spending CAPEX on increased horsepower installation is
essentially cost neutral (see Table 13.7); however, higher OPEX for more horsepower was not
considered. This requires further study between process and pipeline engineers during the
Concept Selection phase. The following graph and table illustrates the initial assessment:
Horsepower Req compared to 1480 psi Discharge

Base Case
100,000
90,000
80,000 Total HP 1480 psi
Horsepower
70,000 discharge
60,000
Total HP 1900 psi
50,000
discharge
40,000
30,000 Total HP 1700 psi
20,000 discharge
10,000
-
1
4
7
10
13
16
19
22
25
28
Production Year
Figure 13.12: Horsepower compared to discharge base case.
Table 13.7: Horsepower Compared to Discharge Base Case

Discharge Year 12 Installed Slugcatcher Slugcatcher Pipeline Total
Line Size Pressure Peak HP HP Cost Size (BBl) Cost Cost Cost
Optimization
24 in. Line 1,900 57,000 $106,305,000 1,900 $11,101,000 $69,000,000 $186,406,000
26 in. Line 1,700 51,000 $ 95,115,000 2,500 $12,000,000 $71,000,000 $178,115,000
30 in. Line 1,480 45,000 $ 83,925,000 4,600 $20,000,000 $74,000,000 $177,925,000
The compression demand curve determined from the modeling effort is illustrated in Figure
13.13.
OGUD.2003.000012.01
80,000
70,000
60,000
Horsepower
Drg
50,000
Pat
40,000
Rio Caribe
30,000
Mejillones
20,000
10,000
-
1
10
13
16
19
22
25
28
Production Year
13.2.4. Civil/Structural
table represents the basis by which the costs were estimated.
Concept 2 All weights in tonnes
Platform at CPF 982 333 1,986 2,300 25 x 23

Comp platform 1,526 1,279 5,814 6,200 33 x 29
Wellhead RC 610 74 320 450 18 x 18
Wellhead Pat W 823 259 289 400 18 x 18
Wellhead Pat E 925 274 289 400 18 x 18
Wellhead Drag W 1,236 95 256 350 18 x 18
Wellhead Drag E 1,418 117 350 500 18 x 18
civil/structural design will be conducted on the Selected Concept.
OGUD.2003.000012.01
13.2.5. Pipeline Information

The pipeline route chosen was the base case central route from Mejillones as a 53 km 30 in. two
phase pipeline. As discussed previously, there is a trade-off between compressor horsepower
required and slugcatcher size. The larger the pipeline diameter, the larger the slugcatcher and
increased flow instability in the pipeline. However, the larger pipeline results in an ANSI 600
design limit on the compressor discharge side of the process (lower CAPEX) as well as less
horsepower consumed and slightly more linepack. Further studies are needed post-VAR -2 on
the dynamics of the 30 in. two phase export pipeline (optimization of the above parameters).
13.2.6. Electrical Power Supply and Distribution

power to all the field locations. Actual load was the same as for Concept 1.

each other.
13.2.8. CAPEX / DRILLEX

CAPEX M $USD
Field Facilities Wellhead platform Rio Caribe 21,888
Wellhead platform Patao West 25,585
Wellhead platform Patao East 26,406
Wellhead platform Dragon West 26,100
Wellhead platform Dragon East 30,979
Flowline + umb - Rio Caribe to CPF 50,430
Export System Export pipeline - CPF to LNG plant 73,884
Marine base 35,323

PV CAPEX (7%) 671,588
OGUD.2003.000012.01
13.2.9. OPEX
costs as a function of production. More information can be found in the Cost Engineering
section of the report.
Concept 2 OPEX
70,000
60,000
50,000
40,000
Total OPEX
30,000
20,000
10,000
0
1
4
7
10
13
16
19
22
25
28
31
Production Year
Figure 13.14: Concept 2 OPEX.
13.2.10. Comparison and Conclusions

Mejillones as the CPF is lower cost than the Rio Caribe CPF (Concept 1), but has the
disadvantage of having a two-phase transfer line from Rio Caribe. This is not an issue early on,
but becomes technically challenging as the pressure from Rio Caribe falls off and compression is
needed. At that time, Rio Caribe must go through a separator on Mejillones to be compressed,
and slugging becomes a concern.
13.2.11. CPF Location Comparison

Given the phasing default of a west to east development, the location of the CPF could either be
at Rio Caribe or Mejillones.
The difference in peak capacities at the platforms is shown in the following table:
Table 13.10: Peak Capacities
Platforms Concept 1 Concept 2
Rio Caribe 970 150
Mejillones 620 970
Patao East 200 200
Patao West 400 400
Dragon East 460 520
Dragon West 640 725
OGUD.2003.000012.01
Compression Horspower Required

100,000
80,000
Horsepower
60,000 Concept 1
40,000 Concept 2
20,000
-
1
10
13
16
19
22
25
28
Production Year
Figure 13.15: Compression horsepower required – Concept 1 versus Concept 3.
Table 13.11: Topside Total Operating Weight

Topsides Total Operating Weight (tonnes)
Platforms Concept 1 Concept 2
Platform at CPF 2,200 2,300
Comp platform 6,200 6,200
Wellhead Mej/RC 550 450
Wellhead Pat W 400 400
Wellhead Pat E 400 400
Wellhead Drag W 350 350
Wellhead Drag E 500 500
Electric load is the same.
OGUD.2003.000012.01
Table 13.12: CAPEX and OPEX in M USD

CAPEX and OPEX in M $USD
CAPEX Concept 1 Concept 2
Central Processing Facility 83,331 87,815
Wellhead platform Mejillones/Rio Caribe 25,122 21,888
Wellhead platform Patao West 25,585 25,585
Wellhead platform Patao East 26,406 26,406
Wellhead platform Dragon West 26,100 26,100
Wellhead platform Dragon East 30,979 30,979
Flowline + umb - Mejillones to CPF 54,872 50,430
Export pipeline - CPF to LNG plant 68,629 73,884
Operations base at LNG plant 20,815 20,815
0 0
CAPEX Total 1,126,892 1,052,825
PV CAPEX (7%) 707,293 671,588
PV OPEX (7%) 550,874 548,195
As can be seen above, the difference is mainly in the longer transfer lines and umbilicals from
Dragon and Patao to Rio Caribe than for Mejillones.
Mejillones as the CPF is lower cost ($74 MM) than the Rio Caribe CPF (Concept 1), but has the
disadvantage of having a two-phase transfer line from Rio Caribe. This is not an issue early on,
but becomes technically challenging as flow dynamics from Rio Caribe change with time. At that
time, Rio Caribe must go through a separator on Mejillones to be compressed, and slugging
becomes a concern.
13.3. Subsea versus Conventional Sensitivity
13.3.1. Concept 1 – All Subsea except Rio Caribe CPF Platform(s)

The next variation was to examine a subsea development, for each field except the CPF location
at Rio Caribe. Subsea templates were used where platforms stood before as drilling centers. The
platform at Rio Caribe was drilled with a jack-up rig as before. Drilling of subsea wells was by a
semisubmersible rig. A platform-based compression topside was added later at Rio Caribe. All
bulk transfer line sizes were changed to CRA to avoid the need for corrosion inhibition and
pigging. The production forecast was the same as Concept 1. The only changes were the use of
subsea hardware and the use of CRA for bulk transfer lines.
OGUD.2003.000012.01

The infrastructure is represented in the following schematic:
Concept 1 - Subsea
RC
CPF
Water Water
Depth: Water
Depth: Water Water
80m Depth: 100m
90m Depth: 115m Depth: 120m Water
L= 26,667 m
Depth: 130m
D= 30” L=19,708 m
D=30”
Mej L=7735 m
P D=20” L=36,256 m
West P D=30” L=8108 m
East D D=30”
West D
East
RC1 RC2 RC3 RC4

M1 M2 M3 M4
P2 P3
M5 M6
P1 P5
D1
P4
Legend P6
D6
D2 D4
= Central D3 D5 D7
Facility
Figure 13.16: Concept 1 Subsea.
13.3.3. Subsea Hardware

Template based drilling was assumed to analyze this case since it required no change in well paths
that were established from VLNG 2000. A detailed look at Pipeline End Manifolds (PLEMs)
and other connecting hardware was not done at this level of study. Since the subsea templates
were to be fed with the same umbilical services as the wellhead platforms, the same design (and
cost) was used for that as well. This was an oversimplification due to changing termination
requirements, but was considered adequate for a VAR-2 analysis to show an upper boundary for
a subsea development.

Initial indication is that there is no real advantage in CAPEX or OPEX to a subsea development
using subsea templates in place of platforms. This is looked at in more detail using other subsea
infrastructure in the Phasing Scenarios section of this report.
OGUD.2003.000012.01
This section will examine and compare a platform development against subsea hardware
everywhere except the central production facility.
CAPEX Concept 1 Conc 1 Subsea

Wellhead structure Mejillones/Rio Caribe 25,122 35,183
Wellhead structure Patao West 25,585 24,053
Wellhead structure Patao East 26,406 24,073
Wellhead structure Dragon West 26,100 16,107
Wellhead structure Dragon East 30,979 32,889
0 0
CAPEX Total 1,126,892 1,344,055
PV CAPEX (7%) 707,293 837,665
PV OPEX (7%) 550,874 634,627
13.4. Fixed versus Floating Sensitivity
13.5. Concept 2 – Floating Production Unit (FPU)

This hardware variation was used to assess the impact of a floating central facility versus a fixed
facility. The only variation from Concept 2 is that a Floating Production Unit (FPU) replaces the
fixed structure at the Mejillones CPF. This also implies a subsea well development for
Mejillones.

The infrastructure is represented in the following schematic:
OGUD.2003.000012.01
Concept 2 – FPU
Depth: 80m Depth: 100m Depth: 115m Depth: 120m Depth: 130m
P P D D
RC
Mejillones West East West East
FPSO
Water
Depth:
90m
L= 26,667 m L=19,708 m L=7735 m
D= 24” D=30” D=20”
Mej
L=62,130 m L=8108 m
D=30” D=30”
RC1 RC2 RC3 RC4
M1 M2 M3 M4
P2 P3
M5 M6 P1 P5
D1 D6
P4
D2 D4
Legend P6
D3
= Central D5 D7
Facility
Figure 13.17: Concept 2 – FPU.

There is no apparent advantage in replacing the Mejillones CPF with a Floating Production Unit.
Both CAPEX and OPEX are higher. The only possible advantage might be in a phased
development where there is an advantage in moving the CPF to a new location, or if leasing an
FPU instead of building one has positive NPV impact on economics.
The following table compares topside operating weight (tons) for a platform based CPF and a
Floating Production Unit:
Table 13.14: CPF - Topside Operating Weight
Platforms Concept 2 Conc 2 FPU
CPF Platform or FPUF 2,300 8,200
Comp platform 6,200 -
OGUD.2003.000012.01
The electrical load (MW) is compared in the following table:

Table 13.15: Electrical Load
Platforms Concept 2 Conc 2 FPU
CPF Platform or FPU 0.79 2.74
Comp platform 1.86 0
Wellhead Mej/RC 0.20 0.2
Wellhead Pat W 0.20 0.2
Wellhead Pat E 0.20 0.2
Wellhead Drag W 0.20 0.2
Wellhead Drag E 0.20 0.2
Total 3.65 3.74
Adjusted Total 4.30 4.40
CAPEX and OPEX costs are compared below.
Table 13.16: CAPEX and OPEX Costs
CAPEX Concept 2 Conc 2 FPU
Platform CPF or FPU 87,815 275,627

Mejillones subsea wellheads 35,146
Wellhead platform Rio Caribe 21,888 21,888
0 0
CAPEX Total 1,052,825 1,143,749
PV CAPEX (7%) 671,588 782,858
PV OPEX (7%) 548,195 633,620
OGUD.2003.000012.01
13.6. Compression and Power Generation Sensitivity
13.6.1. Concept 2 - Field Compression and Power

This hardware option looks at the impact of placing compression and power generation in each
individual field instead of at the CPF.

The resulting infrastructure can be represented by the following schematic:
Figure 13.18: Concept 2 Infrastructure.

In this case, each field “HUB” will have its own compression and power generation facility. The
umbilical tiebacks are then limited only within a given field, greatly reducing the installed
kilometers that were required for Concept 2.
13.6.3. Integrated Process Description

Compression in this case is installed in each individual field when it is required, along with
necessary separation equipment. While eliminating the ability to use the same compression
horsepower for more than one field, the compressor is closer to the source, thereby allowing
installation of somewhat smaller bulk transfer lines for Rio Caribe and Patao than it did under a
centralized compression scenario. Capacities for each field are identical to Concept 2.
OGUD.2003.000012.01
13.6.4. Field Wellhead Platform Facilities

The wellhead platforms at Patao East and Dragon East are exactly the same as they were for
Concept 2; however Patao West and Patao East are now “HUB” platforms with generation
capacity and bridged compression platforms to service their respective fields as illustrated below.
Field HUB Platform
Rio Caribe, West Patao & West Dragon
Transfer Line from Wellhead Platform

To Compression
ASNI 1500 (3705 psig) Platform (Future)
Meter
Meter Flowline
Meter
Meter From Compression Platform

Multiphase meters - Rio Caribe and Mejillones (Future)
Supporting Infrastructure Turbine

1. Heliport
Generator
2. Boat Docking
3. Small Crane To Field Wellhead
4. Hydraulic Pumps Platform Corrosion
"Typical" 5. Lights Umbilical
Inhibitor
Wellheads = 5000 psi design 7. Firewater System
8. Instrument Air 2 spares Hydrate
9. Emergency (Diesel) Generator Inhibitor
10.Flare system
Figure 13.19: Field HUB platform.

The change to the gathering system involved line size changes at Rio Caribe and Patao, which
resulted in a very limited cost impact. The Rio Caribe transfer line for this case is a 20 in. and
from Patao is a 24 in. Following is a chart illustrating pressure drops in the system:
OGUD.2003.000012.01
Gathering System DP
160
140
120
Rio Caribe
Delta P (psi)
100 East Patao

80 West Patao
60 East Dragon
40 West Dragon
20
0
0 5 10 15 20 25 30 35
Year

The impact of compressing production in the field results in less pressure drop in the gathering
system when compared to Concept 2.
13.6.6. Central Production Facility

The Central Production Facility located in Mejillones consists of a gathering manifold, Mejillones
Christmas trees, and export line to the LNG plant location. In contrast to Concept 2, support
facilities for only Mejillones are included. The following diagram illustrates the functionality of
the CPF platform:
OGUD.2003.000012.01
Mejillones Central Processing Facility (CPF) Platform

From Field HUB Platforms
To Compression
Platform (Future)
Meter Two-phase PL
Meter
Meter
From Compression Platform
Meter
(Future)
Meter
1. Heliport
2. Boat Docking ANSI 900 (2220 psig)
3. Small Crane Turbine
4. Hydraulic Pumps
5. Lights Wells drilled from Mej Platform Generator
7. Firewater System (incl capacity for future Comp.Platform) Note: Turbine/generator package oversized for future Compression Platform
9. Emergency (Diesel) Generator Corrosion
10.Flare system Inhibitor
Hydrate
Inhibitor
Figure 13.21: Mejillones CPF Platform.
13.6.7. Separation
As there is no compression needed during the first several years and the export lines from each
field are two-phase, there is no need to install separation until the bridged compression platform
is added later (see next section).
13.6.8. Compression
Bridged compression platforms will be installed in all the fields as follows:
• Rio Caribe: 3,250 hp Year 12 and 3,250 hp Year 19
• Mejillones: 41,000 hp Year 5
• Patao: 31,000 hp Year 11
• Dragon: 38,000 hp Year 26
Separation will occur separately for each field. The following diagram represents the
compression facilities at the HUB platforms:
OGUD.2003.000012.01
HUB Compression Platform

(Bridged to each Field "Hub")
Compressor
ANSI 900 (2220 psig) (Turbine Driver)
To HUB Transport PL
From Field HUB Air Cooled

2 x 50% units
Supplied from HUB
1. Electrical
2. Fibre Optic Cable
3. Flare
4. Firewater System
Booster Pump 5. Instrument Air
1. Crane
2. Lights
2 x 50% units
Figure 13.22: HUB compression platform.

In contrast with Concept 2, the assumption was to install two, fifty percent units for availability.
compression horsepower requirements for each field were determined separately, and the
discharge pressure of 1480 psig (ANSI 600) was used in all cases. The following graph illustrates
the compression requirements for each field as a function of time:
45,000
40,000
35,000
Horsepower
30,000 Mejillones
25,000 Rio Caribe
20,000 Pat
15,000 Drg
10,000
5,000
-
1
10
13
16
19
22
25
28
Production Year
OGUD.2003.000012.01
Compression Phasing was determined as follows:

• Year 5: 41,000 HP and 150 MMBtu/hr After-cooling at Mejillones
• Year 11: 31,000 HP and 100 MMBtu/hr After-cooling at Patao
• Year 12: 3,250 HP and 15 MMBtu/hr After-cooling at Rio Caribe
• Year 19: 3,250 HP and 15 MMBtu/hr After-cooling at Rio Caribe
• Year 26: 38,000 HP and 130 MMBtu/hr After-cooling

This case results in both higher CAPEX and higher OPEX than Concept 2. There are two
potential benefits to compression in the field: (1) If more reserves are accessible through field
compression (this was not considered in this study) and (2) Better flexibility for compression
investment. Jacket and topsides on compression platform do not have to be pre-built for future
expected weight and compression loads.
A result of this concept is increased personnel in the field, which leads to increased safety
exposure and the need to include accommodation facilities should personnel be required to stay.
13.7. Concept 2 – Onshore Compression and Power Generation

This concept was chosen to see if it is feasible to compress onshore. The advantage is a much
simpler operation offshore.

All the production from the fields will flow to the central gathering HUB at Mejillones then
combine in a manifold to flow onshore. The idea is that all the platforms would be simple
wellhead platforms and manifolds with service umbilicals from the onshore location. The change
offshore compared to Concept 2 is the CPF becomes a manifold and there is no bridged
compression platform added in later years. Power is generated onshore as well with a power
cable / umbilical traversing the mountains with the pipelines.

The production from Rio Caribe, Patao, and Dragon is gathered to the CPF at Mejillones. The
CPF then becomes a manifold, and looks much like the other wellhead platforms as shown
below:
OGUD.2003.000012.01
Mejillones Central Processing Facility (CPF) Platform

From Field Platforms
Meter Two-phase PL
Meter
Meter Umbilical from Onshore
Meter 1. Electrical
Meter
2. Boat Docking ANSI 900 (2220 psig) 4. Fibre Optic Cable
4. Hydraulic Pumps 6. Spare
5. Lights Wells drilled from Mej Platform
6. Limitied Accomodations
9. Emergency (Diesel) Generator
11. Flare
Figure 13.24: Mejillones CPF Platform.
13.7.3. Compression
The most obvious changes for this concept are compression requirements and the offshore
export pipeline that feeds the compressors. The compression suction pressure and discharge
pressures have changed compared to Concept 2, but the ratio still allowed for a single stage of
compression to be installed. The suction pressure is somewhat lower than that for Concept 2 as
the production has the export pipeline to get through before arriving at the compressor. The
compressor discharge-pressure requirement is also lower than Concept 2 since the compression
is directly in front of the LNG plant, and pipeline pressure drop does not have to be accounted
for. The minimum suction pressure encountered in process simulations was 279 psia and the
discharge pressure was held constant at 1102 psia. Following is a graph showing the horsepower
requirement as a function of time:
OGUD.2003.000012.01
Horsepower Demand
100,000
90,000
80,000
70,000
Horsepower
60,000
50,000 Comp HP
40,000
30,000
20,000
10,000
-
1
10
13
16
19
22
25
28
Production Year
Figure 13.25: Horsepower Requirements.

Compression Phasing was determined as follows:
• Year 6: 50,000 HP and 150 MMBtu/hr After-cooling
• Year 12 Additional: 20,000 HP and 50 MMBtu/hr After-cooling
• Year 27 Additional: 20,000 HP and 60 MMBtu/hr After-cooling
The power requirements offshore are much less than in Concept 2 because the offshore facilities
are much simpler. The umbilical would be laid along with the pipeline (particularly onshore and
shore crossings) to minimize installation costs. Two power cables were included in the cost
(shown below) for reliability and maintenance reasons. The above provides the basis for a more
detailed electrical engineering overview of the project that will begin during the Concept
Selection phase.
13.7.4. Pipeline Information

For this case, the two-phase export pipeline-inlet pressure varies from 2235 psia for 770
MMSCFD to 460 psia for 970 MMSCFD due to pressure decline in reservoir and increased
demand from domestic gas in later years. Since it is two-phase flow early on, velocities must be
sufficient to keep the line swept and ensure a stable pipeline operation. The route analyzed and
included in the cost is the direct overland route as before. The method chosen to incorporate
this broad range of operating condition was to install two parallel 30 in. pipelines with a 6,000-
barrel slugcatcher. The pressure drop in one line prevents this concept from being feasible in
OGUD.2003.000012.01
later years. Only one would be in service initially to manage the large condensate volumes in the
pipeline. This needs to be further studied by dynamic simulation in the next phase of the project.
As the condensate production declines and the pressure declines from all the fields, the second
line would be put into service to allow the production to feed the compressors with adequate
pressure. Both lines would be installed up front to minimize installation costs and better manage
the impact to the land onshore. While this is a higher cost option, it has an added advantage as
there are now two 30 in. pipelines going to the Norte de Paria area that allow for future
expansion from the wider polygon in the future.

This Concept has a higher PV CAPEX than the field compression case. The OPEX is flatter
over time. The relative difference in OPEX should be studied in more to see if there is a
significant difference in total life cycle cost. The operation offshore is significantly less
complicated.
One definite advantage is the presence of two 30 in. pipelines offshore for future growth
potential in the expanded polygon.
13.8. Compression Comparison

This section will examine the sensitivity to a centralized compression location offshore, a central
location in each field (4 compression locations), or an onshore compression location.
The following figure represents the pressure drop on the bulk transfer line from Dragon to
Mejillones CPF.
Pressure Drop from Dragon to Mejillones CPF

Onshore vs Offshore Compression
300
Conc 2 Onshore
250 Compression No Flow
Delta P (psi)
200 No Flow No Flow No

Flow No Flow No Flow
150
No Flow
100
Conc 2 Field
50 Compression No Flow
No Flow No Flow No
0
Flow No Flow No Flow
1
10
13
16
19
22
No Flow
Production Year
Figure 13.26: Pressure drop Dragon to Mejillones CPF – Onshore versus Offshore.
OGUD.2003.000012.01
The figure illustrates that significant pressure drop reduction is realized by installing compression
at Dragon. The inlet pressure to the transfer line is constant, allowing for a steady, predictable
pressure drop in the pipeline.
The graph illustrates a much larger horsepower demand for the onshore case.
Total Compression Demand

Reference vs Onshore vs Field
100,000
90,000
80,000
70,000
60,000
50,000
40,000
30,000
20,000
10,000
-
1
11
13
15
17
19
21
23
25
27
29
Production Year
Conc 2 Onshore Compression Conc 2 Field Compression Concept 2
Figure 13.27: Total compression demand – Reference versus Onshore versus Field.
The following table lists the differences in topside operating weights between the cases:
Table 13.17: Topside Operating Weights
Platforms Concept 2 Conc 2 Onshore Conc 2 Field Compression
Compression
Platform at CPF 2,300 1,700 2,300
Comp platform 6,200 - 2,900
Wellhead Mej/RC 450 450 1,600
Wellhead Pat W 400 400 1,700
Wellhead Pat E 400 400 400
Wellhead Drag W 350 350 1,700
Wellhead Drag E 500 500 500
Electrical Loads are compared as follows:
OGUD.2003.000012.01
Table 13.18: Electrical Loads

Platforms Concept 2 Conc 2 Onshore Conc 2 Field
Compression Compression
Platform at CPF 0.79 0.20 0.79

Comp platform 1.86 1.67
Wellhead Mej/RC 0.20 0.20 0.2
Wellhead Pat W 0.20 0.20 0.2
Wellhead Pat E 0.20 0.20 0.2
Wellhead Drag W 0.20 0.20 0.2
Wellhead Drag E 0.20 0.20 0.2
Total 3.65 1.20 6.64
Adjusted Total 4.30 1.41 7.82

CAPEX Concept 2 Conc 2 Onshore Conc 2 Field
Compression Compression
Central Processing Facility 87,815 62,862 81,861
Compression platform linked to CPF 181,850 0 102,705
Wellhead platform Mejillones/Rio Caribe 21,888 21,888 62,448
Wellhead platform Patao West 25,585 25,585 67,874
Wellhead platform Patao East 26,406 26,406 26,319
Wellhead platform Dragon West 26,100 26,100 66,355
Wellhead platform Dragon East 30,979 30,979 30,892
Wells at Rio Caribe 79,409 79,409 79,409
Wells at Mejillones 93,370 93,370 93,370
Wells at Patao 57,395 57,395 57,395
Wells at Dragon 78,454 78,454 78,454
Flowline + umb - Mejillones to CPF 50,430 50,430 24,320
Flowlines + umb - Patao to CPF 61,850 61,850 42,392
Flowlines + umb - Dragon to CPF 90,171 90,280 60,546
Export pipeline - CPF to LNG plant 73,884 146,723 73,880
Slugcatcher at shore 11,101 11,101 11,101
Operations base at LNG plant 20,815 20,815 20,815
Marine base 35,323 35,323 35,323
Onshore power gen plus compression 0 220,511 0
Power cable - onshore plant to CPF 0 90,171 0
Field Compression for Rio Caribe 0 0 69,963
Field Compression for Patao 0 0 97,922
Field Compression for Dragon 0 0 111,767
CAPEX Total 1,052,825 1,229,652 1,295,111
PV CAPEX (7%) 671,588 810,778 719,687
PV OPEX (7%) 548,195 564,337 594,931
As shown above, there is little difference in cost between the field and the onshore compression
cases. The reference case with a single central compression facility offshore appears to be the
optimum for this field configuration.
OGUD.2003.000012.01
13.9. Pipeline Single-Phase versus Two-Phase Sensitivity

This concept variation examines the impact of installing two single-phase pipelines as opposed to
one two-phase pipeline for Concept 2.
13.9.1. Concept 2 – Single-Phase Pipelines
This section describes an analysis for evaluating a single-phase pipeline option.
By necessity, the requirement for two single-phase pipelines from the Mejillones CPF requires
more processing offshore that with one two-phase pipeline. Five processes must be installed to
ensure single-phase flow:
• Separation: Condensate must be separated from the Production Stream
• Dehydration: Water condensation in the pipeline may result in two-phase flow.
• Hydrocarbon Dewpoint Control: This must be done to prevent hydrocarbon condensation
in the pipeline.
• Condensate Stabilization: This may need to be done to prevent flashing in the pipeline.
• Water Treating and Disposal: Water must be disposed of offshore
While it is feasible that the installation of only separation may result in a more stable flow
situation than a combined flow, it is not free from two-phase flow dynamics without installation
of the other processes. It is entirely possible that with separation only, the facility operators
would be struggling with two two-phase pipelines instead of one without separation.
Compared to Concept 2, the only change to the facilities occurs at the Mejillones CPF and
bridged compression platform. Following is a table showing the capacities at each platform:
Table 13.20: Platform Capacities
From Wells To Export PL
Gas Rate Number Gas Rate Cond Rate Water Prod
Platforms MMSCFD of Wells MMSCFD BPD BPD
Rio Caribe 150 4 150 17,000 0
Mejillones 620 6 970 29,000 350
Patao East 200 3 200 0 0
Patao West 200 3 400 0 0
Dragon East 520 5 520 0 0
Dragon West 205 2 725 0 0
Gas Rate Cond Rate

Pipelines MMSCFD BPD
Gas 970 0
Condensate 0 15,000* * Stabilized to 13 psia RVP

The following sections describe the infrastructure on the CPF.
OGUD.2003.000012.01
In contrast to Concept 2 where separation was not required until compression began, separation
is required immediately for this case. All 4 fields will have inlet separators on the platform to
separate condensate and/or free water from the production stream.
13.9.1.4. Hydrocarbon Dewpointing

Dewpointing is required to ensure that there are no liquids dropping out in the export gas
pipeline. The process chosen for the study was a simple JT operation with heat exchange, and in
certain cases, an inlet cooler as well (discussed below).
JT Simulation
It was not desirable to apply JT to the mixed stream, as neither Dragon nor Patao need to be
dewpointed, and putting the mixed stream through a JT valve would result in a large amount of
unnecessary recompression horsepower. It was also not desirable to install JT valves on Rio
Caribe and Mejillones with a temperature specification on the outlet side of the valve. To do so
would also use excess horsepower as the lean gas streams from Patao and Dragon absorb some
of the heavier components resulting in a combined mix with a much lower hydrocarbon dew
point temperature. Therefore, JT valves were installed on both the Rio Caribe and Mejillones
production streams with a specified pressure drop that resulted in no liquids in the slugcatcher in
the HSYYS model. This was done to avoid excessive use of recompression and take full
advantage of the mixed phase envelope resulting from dilution with Patao and Dragon
production. It was assumed hydrate inhibitor is injected upstream at valve!
Inlet Cooler on Mejillones
The Mejillones wells on the CPF platform do not have pipelines in contact with the seawater to
cool them down. The ability of the JT valve to adequately cool the inlet gas to drop out liquids is
not only a function of pressure drop across the valve, but also of the inlet temperature to the
valve. The wellhead temperatures at Mejillones are approximately 120° F. It was noted that
between Years 7 and 12, a dry gas stream onshore could not be met without an inlet cooler on
the Mejillones Production Stream, even when allowing the pressure to drop to the 380-psia
minimum. The inlet cooler sits in front of the JT heat exchanger and has a duty of 21
MMBtu/hr. It is worth noting that the installation of the cooler in Year 12 also saved
horsepower in years when it was required.
Dewpointing Data
The following table illustrates the performance of the inlet JT system, which only operates to
Year 11:
OGUD.2003.000012.01
Table 13.21: Inlet JT System Performance

Rio Caribe Mejillones
JT Outlet JT Outlet JT Outlet JT Outlet
JT DP Press Temp JT DP Press Temp
Year psi psia Deg F psi psia Deg F
1 1138.2 1480.0 29.3 1279.3 1400.0 -3.4
2 1012.0 1480.0 32.1 1025.7 1300.0 7.6
3 1165.0 1200.0 20.4 772.3 1200.0 26.3
4 1236.1 1000.0 11.9 607.7 1000.0 37.2
5 1306.0 800.0 2.4 397.1 800.0 63.1
6 1073.9 900.0 13.7 286.8 380.0 73.8
7 451.3 1400.0 48.4 134.7 380.0 62.3
8 342.7 1400.0 53.1 134.7 380.0 58.0
9 166.3 1480.0 61.9 134.7 380.0 53.0
10 73.6 1480.0 66.6 114.7 400.0 54.1
11 0.0 1462.0 70.6 94.7 420.0 56.4
12 0.0 1344.4 69.6 0.0 514.7 90.0
The compression requirements for this case were heavily influenced by the pressure drop
through the JT valve. As with Concept 2, the minimum pressure allowed at the compressor was
380 psia to allow for single stage compression. The following graph shows the influence that the
JT valve has on the compression horsepower for Rio Caribe and Mejillones production,
respectively:
JT Impact on Rio Caribe Compression HP
6,000
5,000
Compression HP
4,000 JT Incremental Rio

Caribe
3,000
Rio Caribe Base
2,000 Compression
1,000
-
10
13
16
19
22
25
28
1
4
7
Production Year
Figure 13.28: JT Impact on Rio Caribe Compression HP.
OGUD.2003.000012.01
JT Impact on Mejillones Compression HP
70,000
60,000
Compression HP
50,000
JT Incremental
40,000 Mejillones
30,000 Mejillones Base
20,000 Compression
10,000
-
1
10
13
16
19
22
Production Year
Figure 13.29: JT Impact on Mejillones Compression HP.

The total horsepower requirement for the Development is illustrated in the following graph:
80,000
70,000
60,000
Horsepower
Drg
50,000
Pat
40,000
Mejillones
30,000
Rio Caribe
20,000
10,000
-
1
10
13
16
19
22
25
28
Production Year
OGUD.2003.000012.01
13.9.1.6. Dehydration
TEG dehydration is included in this case to ensure single-phase flow and to eliminate the need to
inject corrosion inhibitor chemicals. The process is located downstream of JT since only Rio
Caribe and Mejillones have JT valve processes. The following diagrams represent s the typical
process flow considered:
TEG dehydration was installed as two 50% trains with the following total process parameters:
Table 13.22: Process Parameters for TEG Dehydration
Cir Rate Residue Spec Reboiler Duty Power Required
(gpm) (Lb H20/MMSCF) MMBtu/hr MW
12 7 1.8 0.4
13.9.1.7. Water Treatment

As separation occurs offshore, there is a need to dispose of the condensed water offshore. The
reservoir characteristic predicts little to no produced water. Water treatment facilities were sized
at 350 BPD and will treat the water for both oil and aromatics.
13.9.1.8. Condensate Stabilization

This concept considers the stabilization of condensate offshore for export to the LNG plant
where it will be metered without further processing. The condensate stabilization process is
shown below:
(On CPF Topsides)
Ovhd Gas
Compressor
To CPF Metering

7.Flare system

Stabilizer
Column

Due to the JT cooling and pressure drop upstream, a significant amount of liquids drop out from
Rio Caribe, and to a much lesser extent, the Mejillones production streams. The raw condensate
is fed to a stabilizer operating at 100 psia. The condensate is stabilized to 13 psia RVP and the
OGUD.2003.000012.01
overhead gas is compressed back into the produced gas stream. The following table lists the peak
process parameters for the stabilizer:
Column Feed Stabilized Cond Bottoms Temp Cond Cooler Duty Ovhd Gas
(BPD) (BPD) (Deg F) (MMBtu/hr) Comp (HP)
29,000 14,500 268 15 5,000
There is more discussion about offshore condensate processing in the next section.
13.9.1.9. Pumping
The pump horsepower required for the condensate pipeline export is 470 hp.

The electrical demand for this concept was partially determined through Process calculations, and
Power reqd
MW

Comp platform 2.48
Wellhead RC 0.2
Wellhead Pat W 0.2
Wellhead Pat E 0.2
Wellhead Drag W 0.2
Wellhead Drag E 0.2
Total 9.5
Adjusted Total 11.18

The pipeline route assumed for this concept is the direct overland route with two parallel single-
phase pipelines. The gas pipeline is a 30 in. and the condensate pipeline is a 12 in. pipeline.
There is no slugcatcher onshore.
13.9.1.12. Comparison
This section will examine the differences between various pipeline concepts (not routing):
OGUD.2003.000012.01
Compression Horsepower Demand

Reference vs Single Phase PL Concept
80,000
70,000
Horsepower 60,000
50,000
40,000
30,000
20,000
10,000
-
1
3
5
7
9
11
13
15
17
19
21
23
25
27
29
Production year
Concept 2 Conc 2 Single Phase PL
Figure 13.32: Compression Horsepower demand versus Single Phase PL concept.

The following table illustrates the differences in topside operating weights for the options:
Table 13.25: Topside Operating Weights
Platforms Concept 2 Conc 2 Single Phase PL

CAPEX Concept 2 Conc 2 Single Phase PL
Wellhead platform Mejillones/Rio Caribe 21,888 21,888
Slugcatcher at shore 11,101 0
Condensate pipeline to PDVSA terminal 0 0
CAPEX Total 1,052,825 1,278,064
PV CAPEX (7%) 671,588 822,820
PV OPEX (7%) 548,195 653,843
OGUD.2003.000012.01
This concept significantly increases offshore complexity, operating staff attention and consequent
increased safety exposure. The concept results in an incremental of $225 MM over the reference
case.
13.10. Condensate Handling and Export Sensitivity
13.10.1. Concept 1 – GBS Offshore Condensate Handling and Offloading
13.10.1.1. Overall Layout

This Concept is a variation from Concept 1 with the CPF located at Rio Caribe. The intent was
to examine any advantages or disadvantages for separating, stabilizing, storing, and offloading
condensate offshore.
Concept 1 – Offshore Condensate

Storage/Stabilization/Offloading via GBS
Water Water Water Water Water Water
RC Depth: 80m Depth: 90m Depth: 100m Depth: 115m Depth: 120m Depth: 130m
CPF P P D D
M East
West East West
S
T
O
R
A L= 26,667 m L=45,415 m
G D= 30” L=7735 m
D=30”
E D=20”
L=8108 m
L=62,130 m
D=30”
D=30”
RC1 RC2 RC3 RC4

M1 M2 M3 M4
P2 P3
M5 M6 P1 P5
D1
P4
D2 D4
Legend P6
D6
D3
= Central D5 D7
Facility
Figure 13.33: Concept 1 – offshore condensate via GBS.

The only difference for this case is on the CPF and bridged compression platform when
compared to Concept 1.
OGUD.2003.000012.01

The Central Production Facility in this case now has separation equipment on it for Rio Caribe
and Mejillones production. A Gravity Based Structure (GBS) with integral storage also supports
it. This case assumes that there will be storage vessel offloading of stabilized condensate for sea
transport to an onshore crude terminal, hence the need for storage capacity.
The following schematic illustrates the facilities on the CPF:
Rio Caribe Separated Gas
ANSI 900 (2220 psig) Mejillones Separated Gas

Rio Caribe
To Compression
Transfer Line from Patao & Dragon
Platform (Future)
Mejillones
Meter Two-phase PL
Meter
Meter
To From Compression Platform
Condensate Meter
(Future)
Supporting Infrastructure Stabilizer
Meter Ovhd Gas from
1. Heliport
2. Boat Docking ANSI 900 (2220 psig) Cond Stabilizer
3. Small Crane
4. Hydraulic Pumps
5. Lights Wells drilled from CPF Platform Turbine
Generator
10.Flare system Distribution Umbilical
Inhibitor
11. Pigging Facilities to Wellhead
Platforms
2 spares Hydrate
Inhibitor

Figure 13.34: CPF platform.
In contrast to Concept 1 where separation only occurred on the bridged compression platform
when compression was needed, there needs to be raw condensate separation from Year 1 in this
case for Rio Caribe and Mejillones condensate. Separation is therefore installed on the topsides
in Year 1, with separation equipment for Patao and Dragon installed on the bridged compression
platform later.
It is important to discuss phase envelope considerations when discussing separation. Following
is a basic phase diagram built for the Rio Caribe production mix at Year 1:
OGUD.2003.000012.01
Rio Caribe Phase Diagram
4000 Bubble Point

3500 Dew Point
3000 .13 Quality
Pressure (psia)
Gas .15 Quality

2500
2000 .18 Quality
.20 Quality
1500
.22 Quality
1000
Liquid .25 Quality
500
.28 Quality
0 .30 Quality
-300 -200 -100 0 100 200 300 400 500 .32 Quality
Temperature (Deg. F) .35 Quality
Figure 13.35: Rio Caribe Phase Diagram.

Quality lines (liquid volume fraction) are shown for the operating region of interest to the
project. In general terms, the amount of liquids that fall out of the separators are heavily
influenced by where in the pressure/temperature regime the fluids are in the process. Dropping
the pressure as low as possible at the CPF will generally maximize the liquid volume that falls out.
13.10.1.5. Condensate Stabilization

The condensate stabilization process is shown below:
OGUD.2003.000012.01

(On CPF Topsides)
Ovhd Gas
Compressor
To CPF Metering

7.Flare system

Stabilizer
Column
GBS Storage
50,000 Barrels (3 days)
Minimum

The raw condensate is fed to a stabilizer operating at 100 psia after passing through a 3-phase
separator. The condensate is stabilized to 13 psia RVP and the overhead gas is compressed back
into the produced gas stream. The following table lists the peak process parameters for the
stabilizer:
Column Feed Stabilized Cond Bottoms Temp Ovhd Gas
(BPD) (BPD) (Deg F) Comp (HP)
21,000 12,500 272 3,000
It was demonstrated by simulation that condensate production is maximized by separating the
liquid prior to mixing with the very lean gas from Patao and Dragon offshore. The lighter
components in the lean gas absorb part of the condensate and are not recovered by separation
onshore at the slugcatcher. Simulations were done for both onshore and offshore stabilization to
the same condensate specification (13 psia RVP). The results are as follows:
OGUD.2003.000012.01
Offshore vs Onshore Condensate Stabilization
14,000
Stabilized Condensaet
12,000
10,000 Stabilized Onshore
8,000 Condensate BPD
(BPD)
6,000 Stabilized Offshore

4,000 Condensate BPD
2,000
-
1
13
17
21
25
29
Production year
Figure 13.37: Offshore versus Onshore condensate stabilization.

There is a significant energy difference between the offshore and onshore stabilization cases as
shown below:
Energy Comparison for Onshore vs Offshore Condensate Processing
3,000 20.000
Compression (HP)
2,500
15.000
Reboiler Duty
Onshore Flash Gas HP

(MMBtu/hr)
2,000
Flash Gas
Offshore Flash Gas HP

1,500 10.000
Onshore Reboiler Duty (MMBtu/hr)
1,000
5.000 Offshore Reboiler Duty (MMBtu/hr)
500
- 0.000
1
3
5
7
9
11
13
15
17
19
21
23
25
27
29
Production year
Figure 13.38: Energy comparison: Offshore versus Onshore.

Significant more energy is required offshore due to the phase equilibrium established prior to
mixing with Patao and Dragon production. There are more light ends held in the condensate,
hence a higher reboiler and overhead gas compression energy requirement.

The pipeline route is the same as Concept 2, however, it is important to note that even with
condensate separation offshore, the pipeline is still in the two-phase flow regime since retrograde
condensation will occur in the absence of a hydrocarbon dewpointing process.
OGUD.2003.000012.01
13.10.1.7. Comparison and Conclusion

The only advantage in processing condensate offshore is if the total project (including LNG
plant) economics show there is some benefit when accounting for the issues discussed above.
This needs to be done in an integrated manner with the LNG Plant Team during the next phase
of the project.
The other potential advantage not previously discussed is if the ultimate export of the stabilized
condensate favors the offshore platform location over the LNG plant site at Guiria. Again, life
cycle cost implications would have to be considered in an integrated manner to justify offshore
stabilization.
13.11. Concept 1 – FPSO Offshore Condensate Handling and Offloading

This Concept is a variation on the one described above. Instead of a GBS structure with integral
storage, an FPSO is used to stabilize and store the condensate for offloading to a ship.

Concept 1 – Offshore Condensate

Storage/Stabilization/Offloading via FPSO
Water Depth: 115m Depth: 120m Depth: 130m
RC Depth: 80m Depth: 90m Depth: 100m
P P D D
CPF M East West East
West
Condensate
Handling FPSO
L=45,415 m
L= 26,667 m D=30”
D= 30” L=7735 m
D=20”
L=62,130 m L=8108 m
D=30” D=30”
RC1 RC2 RC3 RC4

M1 M2 M3 M4
P2 P3
M5 M6 P1 P5
D1 D6
P4
D2 D4
Legend P6
= Central D3 D5 D7
Facility
Figure 13.39: Concept 1 – Offshore Condensate via FPSO.
OGUD.2003.000012.01

The Central Production Facility is identical to Concept 3, except that the installation of Rio
Caribe and Mejillones separators are installed on the CPF instead of the compression platform,
and tie-ins are included for the Condensate Handling FPSO as shown below:

Rio Caribe
To Compression
Platform (Future)
Mejillones
Meter Two-phase PL
Meter
Meter
Transfer to From Compression Platform
Condensate Meter
(Future)
Supporting Infrastructure FPSO
Meter Ovhd Gas from
1. Heliport
2. Boat Docking ANSI 900 (2220 psig) Stabilizer (FPSO)
3. Small Crane
4. Hydraulic Pumps
Generator
Inhibitor
Platforms
2 spares Hydrate
Inhibitor

Figure 13.40: CPF Platform.
13.11.3. Concept 2 – Condensate Handling and Pipeline to Puerto La Cruz

This concept investigates a GBS structure with condensate stabilization and storage at Mejillones,
and a separate condensate export pipeline from the CPF to the nearest PDVSA oil terminal at
Puerto La Cruz.

The difference between this case and Concept 2 is at the CPF and an additional export pipeline is
included.

The Central Production Facility in this case now has separation equipment on it for Rio Caribe
and Mejillones production. It is also supported by a Gravity Based Structure (GBS) with integral
storage.
The following schematic illustrates the facilities on the CPF:
OGUD.2003.000012.01

Rio Caribe
To Compression
Platform (Future)
Mejillones
Meter Two-phase PL
Meter
Meter
To From Compression Platform
Condensate Meter
(Future)
Supporting Infrastructure Stabilizer
Meter Ovhd Gas from
1. Heliport
2. Boat Docking ANSI 900 (2220 psig) Cond Stabilizer
3. Small Crane
4. Hydraulic Pumps
Generator
Inhibitor
Platforms
2 spares Hydrate
Inhibitor

Figure 13.41: CPF Platform.

Offshore processing with a direct export line to a crude terminal is an alternative to storing and
offloading into a ship for transport. The ultimate disposition of the condensate (not yet defined)
will drive this issue, and needs to be considered during Concept Selection
13.11.7. Comparison Condensate Handling and Export Sensitivity

This section will compare options for handling condensate.
The following table compares the operating weights of topsides:
Table 13.28: Topsides Operating Weights
Platforms Concept 1 Concept 2 Conc 1 GBS Conc 1 FPSO Conc 2 GBS Cond
Condensate Condensate PL Export
Platform at CPF 2,200 2,300 5,255 1,154 5,360
Comp platform 6,200 6,200 6,100 1,431 6,100
Wellhead Mej/RC 550 450 550 723 450
Wellhead Pat W 400 400 400 823 400
Wellhead Pat E 400 400 400 925 400
Wellhead Drag W 350 350 350 1,236 350
Wellhead Drag E 500 500 500 1,418 500
OGUD.2003.000012.01
Electrical loads are compared as follows:

Platforms Concept 1 Concept 2 Conc 1 GBS Conc 1 FPSO Conc 2 GBS Cond
Condensate Condensate PL Export
Platform at CPF 0.79 0.79 3.50 0.90 3.50
Comp platform 1.86 1.86 1.86 1.86 1.86
Wellhead Mej/RC 0.20 0.20 0.20 0.20 0.20
Wellhead Pat W 0.20 0.20 0.20 0.20 0.20
Wellhead Pat E 0.20 0.20 0.20 0.20 0.20
Wellhead Drag W 0.20 0.20 0.20 0.20 0.20
Wellhead Drag E 0.20 0.20 0.20 0.20 0.20
Condensate FPSO 0.00 0.00 0.00 2.38 0.00
Total 3.65 3.65 6.36 6.14 6.36
Adjusted Total 4.30 4.30 7.49 7.23 7.49
Following is a comparison of costs for the Condensate handling and export sensitivity study:
Table 13.30: Condensate Handling and Export Sensitivity Costs
CAPEX Concept 1 Concept 2 Conc 1 GBS Conc 1 FPSO Conc 2 GBS
Condensate Condensate Cond PL
Export
Central Processing Facility 83,331 87,815 194,196 126,377 202,339
Compression platform linked to CPF 181,108 181,850 180,961 180,961 181,628
Wellhead platform Mejillones/Rio Caribe 25,122 21,888 25,122 25,122 22,758
Wellhead platform Patao West 25,585 25,585 25,585 25,585 25,585
Wellhead platform Patao East 26,406 26,406 26,406 26,406 26,406
Wellhead platform Dragon West 26,100 26,100 26,100 26,100 26,100
Wellhead platform Dragon East 30,979 30,979 30,979 30,979 30,979
Wells at Rio Caribe 79,409 79,409 79,409 79,409 79,409
Wells at Mejillones 93,370 93,370 93,370 93,370 93,370
Wells at Patao 57,395 57,395 57,395 57,395 57,395
Wells at Dragon 78,454 78,454 78,454 78,454 78,454
Flowline + umb - Mejillones to CPF 54,872 50,430 54,872 54,872 50,430
Flowlines + umb - Patao to CPF 100,456 61,850 100,456 100,456 61,850
Flowlines + umb - Dragon to CPF 128,437 90,171 128,437 128,437 90,171
Export pipeline - CPF to LNG plant 68,629 73,884 68,629 68,629 73,317
Slugcatcher at shore 11,101 11,101 11,101 11,101 11,101
Operations base at LNG plant 20,815 20,815 20,815 20,815 20,815
Marine base 35,323 35,323 35,323 35,323 35,323
FPSO Condensate handling + offloading 0 0 0 120,350 0
CAPEX Total 1,126,892 1,052,825 1,237,610 1,290,141 1,271,873
PV CAPEX (7%) 707,293 671,588 796,916 839,082 847,172
PV OPEX (7%) 550,874 548,195 606,520 621,407 616,464
OGUD.2003.000012.01
The above illustrates that there is an approximate cost of $200 MM USD to include stabilization,
storage, and offloading facilities offshore. It was not estimated onshore since onshore
stabilization is integral with the LNG plant. The choice offshore is similar in cost, with the GBS
structure having a CAPEX advantage. However; a leased option for a condensate handling
FPSO should be considered.
13.12. High Volume Sensitivity
13.12.1. Concept 2 – High Volume

The High Volume case represents the first attempt to determine the impact of the higher demand
curve scenario. The reservoir engineers prepared a forecast (using VLNG 2000 data) to match
the 5.2 mtpa LNG plant demand and 300 MMSCFD of Domestic gas in Year 1. This amounts
to 1,150 MMSCFD as shown below:
Concept 2 "High Case" Production Profile
1300
1200
1100
1000
900 Pat MMSCFD
MMSCFD
800 Drag MMSCFD

700
600 Mej MMSCFD
500
400 RC MMSCFD
300
200
100
0
1
4
7
10
13
16
19
22
25
28
Year
Figure 13.42: Concept 2 “High Case” Production Profile.

The infrastructure development is exactly as for Concept 2, but the demand curve has accelerated
field development and compression requirements are much higher. The VLNG 2000 reservoir
model could not fill the demand curve past about Year 16.
Integrated Process Description
Platform, transfer line and export pipeline capacities are shown in the following table:
OGUD.2003.000012.01
Table 13.31: Concept 2 Capacities

Phasing Gas Rate Gas Rate Cond Rate Water Prod
Platforms Year MMSCFD Well Count MMSCFD BPD BPD
Rio Caribe 1 150 4 150 17,000 0
Mejillones 1 1002 6 1150 17,000 0
Patao East 3 223 3 223 0 0
Patao West 3 223 3 446 0 0
Dragon East 6 573 5 573 0 0
Dragon West 6 229 2 725 0 0

Gathering-system pressure drop is shown in the following graph:
Gathering System DP
300
250
Mejillones
Delta P (psi)
200
East Patao
150 West Patao
East Dragon
100
West Dragon
50
0
0 5 10 15 20 25 30 35
Year
13.13. Concept 2 – Subsea with FPSO, Single Phase Pipelines, Condensate to Puerto La
Cruz
This concept combines elements for many of the concepts described previously, and was an
attempt by the team to frame an upper bound on the costs.
Elements from previous concepts are integrated and discussed in the following section.
OGUD.2003.000012.01

Concept 2 – High Case FPSO

Subsea Single Phase PL’s
Mejillones
FPSO
Water Water
Depth: L= 26,667 m Water
D= 30” Depth: Water Water
80m Depth: 100m
Double Lines 90m Depth: 115m Depth: 120m Water
Pig Loop Depth: 130m
L=19,708 m
D=30”
RC Mej L=7735 m
P D=20” L=36,256 m
West P D=30” L=8108 m
East D D=30”
West D
East
RC1 RC2 RC3 RC4

M1 M2 M3 M4
P2 P3
M5 M6
P1 P5
D1 D6
P4
Legend P6
D2 D4
= Central D3 D5 D7
Facility
Figure 13.44: Concept 2 – High Case FPSO Subsea Single Phase PL’s.

For this case, all wells are subsea wells and are drilled from subsea templates. Trunk lines
connect manifolds within each field, and a bulk transfer line connects each field hub to the
FPSO. The topsides on the FPSO contain the following processing components:
• Separation
• Compression
• Dehydration
• Power Generation
• JT dewpointing
• Condensate stabilization
OGUD.2003.000012.01
13.13.3. Subsea Hardware

Subsea template based drilling was assumed to analyze this case since it required no change in
well paths that were established from VLNG 2000. The templates included manifolds for
gathering and exporting production from each template.

The gathering system layout was the same as for Concept 2, but CRA materials were used to
avoid pigging that would be required otherwise for corrosion inhibition. The exception to this
occurs between Rio Caribe and Mejillones. Due to the instability of the two-phase line, a pigging
loop was included that will allow the line to be pigged, but will also utilize CRA material.
Gathering-system pressure drop is shown in the following table:
Gathering System DP
300
250
Mejillones
Delta P (psi)
200
East Patao
150 West Patao
East Dragon
100
West Dragon
50
0
0 5 10 15 20 25 30 35
Year
Figure 13.45: Gathering System DP.

The CPF topsides and bridged compression platform concept are identical to Concept 2, except
for system capacities. The largest impact was from the installed compression horsepower needed
as described in that section.
13.13.6. Separation
In contrast to Concept 2 where separation was not required until compression began, separation
is required immediately for this case. All 4 fields will have inlet separators on the FPSO to
separate condensate and/or free water from the production stream.
OGUD.2003.000012.01
13.13.7. Hydrocarbon Dewpointing

Dewpointing is required to ensure that there are no liquids dropping out in the export gas
pipeline. The process chosen for the study was a simple JT operation with heat exchange for the
Rio Caribe stream. The Mejillones stream would also have been a candidate, but the production
is so accelerated that the pressure drops off almost immediately, leaving no driving force for a
temperature drop.
JT Simulation
It was not desirable to apply JT to the mixed stream, as neither Dragon nor Patao need to be
dewpointed, and putting the mixed stream through a JT valve would result in a large amount of
unnecessary recompression horsepower. It was also not desirable to install JT valves on Rio
Caribe with a temperature specification on the outlet side of the valve. To do so would also use
excess horsepower as the lean gas streams from Patao and Dragon absorb some of the heavier
components resulting in a combined mix with a much lower hydrocarbon dew point temperature.
Therefore, JT valves were installed on Rio Caribe with a specified pressure drop (to the minimum
380 psia) to ensure no liquids were in the slugcatcher in the HSYSYS model. The results
previously simulated for the Rio Caribe stream under Concept 2 – Single Phase Pipelines were used to
estimate the process effect for the JT valve. This results in a conservative estimate, since most
likely the pressure drop required to achieve no liquids from the slugcatcher would not be to a 380
psia JT outlet pressure for the whole production life, especially since there is more dilution with
lean gas in this case.
13.13.8. Compression
The compression requirements for this case were influenced by the pressure drop through the JT
valve. As with Concept 2, the minimum pressure allowed at the compressor was 380 psia to
allow for single stage compression. The following graph shows the influence that the JT valve
has on the total compression horsepower for this case:
JT Impact & Field Influence on Total Compression

HP
120,000
100,000
Compression HP
JT HP
80,000 Drg
60,000 Pat
40,000 Rio Caribe
20,000 Mejillones
-
1
10
13
16
19
22
25
28
Production Year
Figure 13.46: JT Impact and Field Influence on Total Compression.
OGUD.2003.000012.01
13.13.9. Dehydration
TEG dehydration is included in this case to ensure single-phase flow and to eliminate the need to
inject corrosion inhibitor chemicals.
TEG dehydration was installed as two 50% trains as was the case for Concept 2 – Single Phase
Pipelines.
13.13.10. Water Treatment

As separation occurs offshore, there is a need to dispose of the condensed water offshore. The
reservoir characteristic predicts little to no produced water. Water treatment facilities were sized
at 350 BPD and will treat the water for both oil (25 ppm) and aromatics.
13.13.11. Condensate Stabilization

The condensate stabilization process is shown below:
Condensate Handling/Storage FPSO
Ovhd Gas
Compressor
To CPF Metering

7.Flare system

Stabilizer
Column
Storage
50,000 Barrels (3 days)
Figure 13.47: Condensate Handling / Storage FPSO.

Due to the JT cooling and pressure drop upstream, a significant amount of liquids drop out from
Rio Caribe, and to a much lesser extent, the Mejillones production streams. The raw condensate
is flashed and fed to a stabilizer operating at 100 psia. The condensate is stabilized to 13 psia
RVP and the overhead gas is compressed back into the produced gas stream. The following table
lists the peak process parameters for the stabilizer:
Column Feed Stabilized Cond Bottoms Temp Cond Cooler Duty Ovhd Gas
(BPD) (BPD) (Deg F) (MMBtu/hr) Comp (HP)
29,000 14,500 268 15 5,000
OGUD.2003.000012.01
13.13.12. Pipeline information

A 30 in. gas pipeline and a 12 in. condensate pipeline (single phase) were included.
In addition, there is a separate export line from the CPF to the nearest PDVSA oil terminal at
Puerto La Cruz. This pipeline was a 12-inch and was 400 km in length.

each other.
13.13.14. Comparison
This section will compare the impact of a 770 + 200 demand curve against a 770 + 300 Day 1
demand curve. It will also use the higher demand curve to study the impact of an elaborate
offshore infrastructure that sets an upper boundary on surface costs.
90,000
80,000
70,000
Horsepower
60,000
50,000
40,000
30,000
20,000
10,000
-
1
3
5
7
9
11
13
15
17
19
21
23
25
27
29
Production Year
Concept 2 Conc 2 High Volume
Figure 13.48: Compression Horsepower Demand – Reference versus High Volume

concept.
The following table compares topside operating weights between the reference and High Volume
cases.
Table 13.33: Operating Weights – Reference versus High Volume
Platforms Concept 2 Conc 2 High Volume
Wellhead Mej/RC 450 450
Wellhead Pat W 400 400
Wellhead Pat E 400 400
Wellhead Drag W 350 350
Wellhead Drag E 500 500
OGUD.2003.000012.01
Electrical loads are compared in the following table:

Platforms Concept 2 Conc 2 High Volume Conc 2 SS, FPSO, HIGH
Platform at CPF 0.79 0.79 0.00
Comp platform 1.86 3.22 0.20
Wellhead Mej/RC 0.20 0.20 0.20
Wellhead Pat W 0.20 0.20 0.20
Wellhead Pat E 0.20 0.20 0.20
Wellhead Drag W 0.20 0.20 0.20
Wellhead Drag E 0.20 0.20 0.20
FPU 0.00 0.00 11.89
Total 3.65 5.01 13.99
Adjusted Total 4.30 5.90 10.69

CAPEX Concept 2 Conc 2 High Volume Conc 2 SS, FPSO, HIGH
Central Processing Facility 87,815 88,230 538,243
Wellhead platform Mejillones/Rio Caribe 21,888 21,888 27,058
Wellhead platform Patao West 25,585 25,585 35,146
Wellhead platform Patao East 26,406 26,406 24,053
Wellhead platform Dragon West 26,100 26,100 24,073
Wellhead platform Dragon East 30,979 30,979 16,107
Wells at Patao 57,395 54,890 162,599
Wells at Dragon 78,454 78,454 90,980
Flowline + umb - Mejillones to CPF 50,430 50,430 112,951
Export pipeline - CPF to LNG plant 73,884 77,043 121,283
Operations base at LNG plant 20,815 20,815 20,815
Marine base 35,323 35,323 35,323
Condensate pipeline to PDVSA terminal 0 0 104,443
CAPEX Total 1,052,825 1,106,426 1,705,559
PV CAPEX (7%) 671,588 832,990 1,296,356
PV OPEX (7%) 548,195 702,353 1,000,271
13.14. Corrosion and Materials Sensitivity
13.14.1. Impact on Concept 3 for High CO2 and H2S

Hardware sensitivities up to this point have been based on either Concept 1 or 2. The materials
and corrosion sensitivity was applied to Concept 3, since it was done later in chronological order
OGUD.2003.000012.01
after revised geology was received. The intention remains the same, to compare the differences
in order to establish the relative importance of various hardware parameters.
Based on the contaminant matrix shown earlier in the report, a sensitivity was run based on the
impact of higher levels of H2S or CO2 that may be in the production streams. The impact of this
is discussed in detail in the corrosion section of this report, but a two-tiered approach was taken
to variation in acid gas content for Concept 3. The level of contaminant chosen was that which
would trigger the need for higher resistant materials as opposed to bare carbon steel.
The first variation is to consider a 500-ppm H2S level that will trigger the requirement for HIC
(Hydrogen Induced Cracking) resistant materials and SSC (sulfide stress cracking) resistant
materials. The CO2 level for this case remains the same as for Concept 3.
The next tier is to introduce 2.5% CO2 with the 500 ppm that triggers the need for CRA material
for the whole development. The results are shown below:
Table 13.36: CAPEX for 2.5% CO2
CAPEX Concept 3 Concept 3CT1 Concept 3CT2
Central Facilities CPF at Mejillones 104,620 104,909 107,017
Compression platform linked to CPF 127,463 128,111 133,860
Field Facilities Wellhead platform - Mej West 26,576 26,596 26,907
Wellhead platform - Mej East 26,547 26,565 26,872
Wellhead platform - Rio Caribe HUB 28,156 28,217 29,202
Wellhead platform - Rio Caribe West 27,134 27,169 27,763
Wellhead platform - Patao HUB 27,766 27,824 28,769
Wellhead platform - Patao West 25,474 25,494 25,805
Wellhead platform - Patao East 26,024 26,044 26,355
Wellhead platform - Dragon 29,442 29,489 30,245
Wells - mob/demob 39,011 39,011 39,011
Wells at Patao 119,753 119,753 119,753
Wells at Dragon 43,345 43,345 43,345
Flowlines + umb - Rio Caribe to CPF 71,520 72,709 100,256
Flowline + umb - Mej E+W to Mej CPF 33,412 34,088 53,886
Export System Export pipeline - CIGMA route 124,272 127,194 216,899
Onshore Facilities Operations base at LNG plant 20,815 20,815 20,815
Onshore domestic gas treatment plant 19,364 36,920 36,920
Marine base 35,323 35,323 35,323
0 0
CAPEX Total 1,303,201 1,330,385 1,587,176
PV CAPEX (7%) 724,231 736,541 878,681
OGUD.2003.000012.01
As shown in the above table, there is very little incremental investment required ($27 MM) to
protect the project against the risk of H2S presence. Since H2S was detected in Patao,
installation of HIC and SSC resistant materials seems a likely outcome.
In addition to a dehydration plant added onshore for the domestic gas, a sour gas treating process
was also included in the above costs.
However, a 2.5% CO2 level creates a definite step change in required CAPEX ($257 MM), and
should be carefully addressed moving forward to VAR-3.
13.15. Field Infrastructure Study

Field infrastructure setup is a function of several variables that must be optimized against each
other. A model was assembled that looked at the relative impact and attempted to optimize the
development infrastructure for each field independent of CPF location or export pipeline
routing.
This model is a work-in-progress model, and continues to get clearer with time. The most recent
model is based on an optimization of the following parameters in relation to their impact on
CAPEX:
• Drilling offset
• Water depth
• Number of wells
• Well location
• Well design
• Drilling method (platform, floater, jack-up)
Each field is laid out with the most recent well locations and well design criteria. A number of
cost inputs as a function of the above variables are inputs such that all fields are evaluated with
the same criteria. Costs were based on specific results from previous CES model runs and
drilling costs provided by the well engineer as a function of depth along hole. The absolute
numbers in each field are of no relevance, only the differences should be considered.
The well engineer’s drilling cost graph (see below) was fit to an equation by regression analysis
and used to estimate drilling costs.
OGUD.2003.000012.01
Platform 24.323.4
25
21.7
Jackup 18.6
Jackup Dragon 18.3
20 19.1
15.4 16.4
Floater 14.8
12.4 13.2 14.5
15 11.1
11.2 13.3
$MM
10.2 11.6
9.2 9.8
10 `
8.1
0
8,200 ft 10,000 ft 12,000 ft 15,000 ft 20,000 ft
Figure 13.49: Drilling cost estimate graph.

Note: There is a higher jack-up rate used to drill the deeper waters of Dragon. Currently, there
are only a couple jack-up rigs in the world that can drill at Dragon water depths.
Each case assumes that a pipeline and umbilical is already there to the geographic center of the
field. Cost differences for pipelines and umbilicals between various architectural layouts are only
considered based on a differential from the center.
Following are the four field models.
OGUD.2003.000012.01
Rio Caribe
Rio Caribe Field Layout Summary
$200
Cost ($MM USD)
$180
$160
$140 $128
$114 $114 $116
$120 $104
$100
$80
$60
ells ms ld s) plate
s
ea W latfor anifo ation
ll Subs d fr om p u b sea m ar ate loc fr om tem
a rille s ep d
y Ch
ain
ells d lus 1 led s ells d
rille
Dais - all w rm p a dril
r m s n e platfo (s ubs e te s - all w
latfo O ac ks m pla
rate p a tieb ea te
w o sepa e ll s ubse r a te subs
T
two w Two
s epa
with
P la tform
Single
Field Layout
Figure 13.50: Rio Caribe field layout summary.

Because of well-bore stability, the minimum drilling centers set forth by the Well Engineer was
two. This limited an analysis of single platform or single subsea template based drilling.
Mejillones
Mejillones Field Layout Summary

Cost ($MM USD)
$225
$200 $171
$160 $161 $167
$175
$150 $133
$125
$100
ain te s ck es
Ch pla orm ba pla
t
is y t em l atf t ie em
Da ea t eP SS at
ea bs ara lls se
bs su ep we s ub
Su s1 S er
plu ree t h s2
Th -o plu
orm orm rm
l atf atf tfo
op Pl pla
Tw le e
S ing On
Field Layout
Figure 13.51: Mejillones field layout summary.
OGUD.2003.000012.01
The minimum drilling centers in this case was three.

Patao
Patao Field Layout Summary

Cost ($MM USD)
$220
$200 $174 $178
$180 $171
$157
$160 $136
$140
$120
$100
ells ac k fold
s fold m s
ea
w tieb ani ani tfor
ubs ea m m Pla
ll S sub
s
sea sea rate
na ells s ub 1 sub epa
C hai rw s2 lus eeS
y the plu mp Thr
ais o m or
D wit
h tfor latf
orm e pla op
latf On Tw
P
gle
Sin
Field Layout
Figure 13.52: Patao Field Layout Summary.

Minimum drill centers were limited to three in this case.
OGUD.2003.000012.01
Dragon
Dragon Field Layout Summary
$130 $118
Cost ($MM USD)
$120
$107 $108
$110 $103 $103 $103 $105
$100
$90 $84
$80
$70
$60
n k te ate s ms
hai rill.
. d... bac
m
for mpla pl t fo r
i s y C sea d drille a tie e plat t e t e m pla
Da ub ea bse singl ubsea bsea arate
b s ea ks (s (subs ell su m s s u ep
c o e s
Su ieba acks
e s t w led fr singl r a te wo
t l a T
ea tieb furth lls dri from o sep
l s ubs bsea rm - l w e i lle d T w
l u o Al lls dr
we ll s latf
ree o we gle P we
- t h
- tw S in All
o r m rm
latf tfo
gle P le Pla
Sin Sing
Field Layout
Figure 13.53: Dragon field layout summary.

It was possible to drill all 5 Dragon wells from one location in this case, so there were more
combinations of field layouts to consider.
Comparison and Conclusion
While all the above field development options appear to be low cost with daisy chain subsea
development architecture, all the costs are very close; and most likely the decision on the best
method to develop each field will weigh more heavily on factors other than cost. This analysis
also does not account for infrastructure investment that must be made to provide pipelines and
umbilical utilities to the field in the first place. These issues will be better defined during the
Concept Selection process moving into VAR-3.
OGUD.2003.000012.01
14. PIPELINES
14.1. Summary and Conclusions

OGUP has completed a preliminary evaluation of the feasibility of the pipeline facilities; the
objectives and scope of which have been summarized in Section 7 above. The following sections
provide additional detail regarding:
• Detailed descriptions of the pipeline routes under consideration, including a preliminary
assessment of route feasibility
• Proposed route selection criteria and methodology to be used post-VAR-2
• Description of the methodology used for hydraulic calculations and slugcatcher sizing
• Results, recommendations and estimated CAPEX as a result of the preliminary hydraulic
calculations
• Results, recommendations and estimated CAPEX resulting from Concept-specific hydraulic
calculations
Key Conclusions
At this stage of the project, it is necessary to identify the range of options available and
understand the key uncertainties, risks and opportunities associated with each option. The
following table summarizes the key conclusions and recommendations to be addressed post-
VAR-2.
OGUD.2003.000012.01
Table 14.1: Key Conclusions and Recommendations

Issue Comment
Confirmation of Two Phase Steady state hydraulic modeling has been completed for the
Pipeline System various concepts. The two-phase flow behavior is such that
Recommendations under certain conditions, flow instability may occur. It is
recommended to perform dynamic analyses to confirm the
operability of the recommended two-phase systems in Section
14.3.2.10 – Table 14-26 Summary of Concepts 3-7.
Route Feasibility There are numerous issues, which must be better understood to
confirm the feasibility of the proposed pipeline routes. Specific
issues with the West and Reference Case routes include: 1)
feasibility of landfall on the north coast of the peninsula and 2)
potential environmental impact related to overland construction
through the mountains. CIGMA route issues include: 1)
feasibility of constructing parallel to the road from Mapire, 2)
feasibility of a directional drill shore crossing and perhaps most
importantly, 3) the feasibility of crossing the Paria National
Park. Specific issues with the Offshore Route include: 1)
feasibility of constructing through the Boca Grande Channel
(high currents and uneven seabed profile), 2) risks associated
with the possible presence of unexploded ordnance on the sea
bed in the Dragon’s Mouth, 3) potential for underwater
landslides in the Dragon’s Mouth and 4) feasibility of
constructing across the isthmus, which would require crossing
the Paria National Park.
Metocean Data There are high uncertainties associated with the near-bed
currents in Dragon’s Mouth primarily due to 1) Estimates on
the tidal and density current were based on literature sources
that provided information for the Gulf of Paria rather than
specifically for Dragon’s Mouth. 2) An assumption of a 1/7th
power law was made. In Dragon’s Mouth, the current profile
may not follow a 1/7th power law and there might be strong
current flows caused by the large gradients in bottom
topography. The collection of field data in the Dragons Mouth
is essential to properly identify the mechanisms at work and so
quantify the magnitude of normal and extreme currents with
greater certainty.
Updated Composition As the subsurface models become better defined, it is certain
that the fluid compositions will change. It will be necessary to
update the hydraulic models to assess the impact of the change
in composition over time. This is particularly important for the
two-phase systems due to the phase behavior and potential
impact of this on the required facilities: slug catcher volume,
compression horsepower required, required pressure at the
pipeline inlet and the inlet pressure of the LNG Plant, which
are all interrelated. This work should be done in parallel with
the dynamic analyses recommended above.
OGUD.2003.000012.01
14.2. Route Selection
14.2.1. Route Descriptions

As stated earlier in the report, the proposed pipeline facilities commence offshore at a point
approximately 32 km north of the Paria Peninsula at approximately 90 m of water depth. These
details are approximate and may vary depending on the selected location of the CPF. The
pipeline facilities will terminate at the proposed LNG liquefaction plant southwest of the town of
Guiria. The Paria National Park stretches along the mountains of the north coast of the
peninsula from a point due east of San Juan de Unare to the eastern most tip of the peninsula.
Overland segments of some routes may cross the national park.
Before describing the individual routes, it is important to define specific geographic and marine
locations, which will aid in the description. As such, Figure 14.1, depicts specific locations along
the proposed pipeline routes. The names and corresponding GPS coordinates of these locations
are listed in Table 14.2. These locations are referenced throughout the present document.
Figure 14.1: Geographic points of interest.
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Table 14.2: GPS Coordinates-Geographic Points of Interest
Supplemental to the geographic points of interest, GPS coordinates are provided for specific
marine locations around the peninsula and are depicted in Figure 14.2 and Table 14.3.
Figure 14.2: Marine points of interest.
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Table 14.3: GPS Coordinates-Marine Points of Interest

Number Coordinates Location
8 N 10o 43.16’, W 61° 52.54’ Bahía Cereza
9 N 10o 44.14’, W 61° 50.68’ Punta Piedras
10 N 10o 43.80’, W 61° 52.61’ Ensenada Palmas
11 N 10o 41.10’, W 62° 09.37’ Ensenada de Mejillones
12 N 10o 41.96’, W 62° 18.16’ Punta Cacao
Four pipeline concept options are currently under consideration and are depicted in Figure 14.3
below. It should be noted that onshore segments of the proposed pipeline routes are considered
the preferred corridors primarily for technical reasons and will not change significantly regardless
of the location of the CPF. Indeed, the lengths of the offshore sections will vary depending on
the CPF location. Route descriptions in Sections West Route through Offshore Route assume a
CPF location in the Mejillones field at approximately N 10° 56’, W 62° 09’.
Figure 14.3: Proposed pipeline routes.
OGUD.2003.000012.01
West Route
Offshore
The offshore section of the West Route extends from the proposed CPF location to a landing
point on the north coast of the Paria Peninsula near San Juan de Unare. The water depth at the
CPF is approximately 90 m and the seabed remains relatively flat (mild undulations between 70
and 90 m) over the 73 km offshore section. Over the final 5 km the seabed rises from 50 m
water depth to the landing point elevation at sea level.
North Coast Landfall
The coastline in the vicinity of San Juan de Unare is very rocky with steep cliffs and mountain
slopes rising sharply from the coast. The mountain slopes have medium to heavy vegetation and
become heavily forested moving inland. A conventional shore crossing would be difficult for
several reasons: lack of adequate access from the north or the south, the severity of the slope,
which may lead to slope instability and the rocky cliffs, which may require blasting. Slope
instability could be either localized erosion, possibly leading to pipe exposure or landslides, which
may subject the pipeline to extreme loading and, in the worst case, cause the pipeline to fail.
Other landfall methods such as directional drilling will be investigated further; however, the lack
of a suitable work and lay down area inland may preclude directional drilling from being a feasible
option.
Figure 14.4: North Coast landfall, vicinity of San Juan de Unare.
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San Juan de Unare to El Llano

Once onshore, the pipeline heads in a southeasterly direction across the mountain range. The
distance across the mountain range from San Juan de Unare to El Llano is approximately 14 km
and elevations in this area reach a maximum of 800 m. The mountains along the proposed route
have steep slopes and are moderately to densely forested. No roads have been identified along
the proposed pipeline route. Overland construction across the mountains would require a
considerable amount of deforestation and slope grading in order to clear the ROW and allow
access of equipment and materials along the pipeline route. Because of the narrow, steep slopes,
benching will be required in many areas whereby a level ledge is cut out of the hillside along
which the pipeline can be constructed. Slope instability and landslides are a key technical risk
associated with this type of construction across the mountains and would have to be mitigated.
This risk would continue to exist during the operation and maintenance phases of the project.
The potentially unstable geology of the peninsula further increases the severity of this risk;
however, it is unknown whether the pipeline route crosses active or inactive seismic faults.
A secondary effect of overland construction is that the pipeline corridor would result in a
permanent access route for inhabitants of the peninsula, which could lead to the proliferation of
the current slash and burn activities. Construction access must come from the south due to the
inhospitable terrain along the north coast. The proposed pipeline route does not pass through
the National Park.
Figure 14.5: San Jan de Unare to El Llano, forested area in mountains.
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El Llano to Guiria
Once across the mountains, the route reaches the vicinity of El Llano. The west to east corridor
from El Llano to Guiria is characterized by rolling hills and undulations near the foothills of the
mountains and relatively flat land near the coast. Several rivers are crossed and heavy vegetation
is found in the river valleys. The corridor is sparsely populated with the greatest concentration of
inhabitants along the highway to Guiria. The greater Guiria area, which is more heavily
populated, will be largely avoided given the proposed plant location southwest of the city.
Regarding construction, no major technical challenges are envisaged through this corridor. Social
issues (possible displacement, landowners, safety issues, etc.) are likely to provide the major
challenges.
Figure 14.6: El Llano to Guiria, west to east corridor.

The onshore section of the West Route totals 109 km, which gives an overall length of 182 km
from the offshore CPF to Guiria.
Key Risks and Uncertainties (Issues)

At present, key issues related to the West Route are as follows:
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Table 14.4: Key Issues

Issue Comment
As stated above, the overland pipeline corridor would provide
Pipeline Corridor as
access to previously unaffected areas in the mountain range. This
Access Road
could lead to a proliferation of slash and burn activities.
No suitable location for a conventional shore crossing was
observed during the Site Visit. Issues with a conventional shore
North Coast Landfall crossing include slope instability that could be either localized
erosion leading to pipe exposure or landslides, which may subject
the pipeline to extreme loading and/or failure.
Given the perceived difficulty with a conventional shore crossing,
directional drilling may be a preferable option. However, the
mountainous terrain inland may make a directional drill shore
Drill Feasibility of Landfall
crossing infeasible due to the lack of an adequate work area.
Locating an adequate area inland may make this option
impossible due to the length of the drill.
The impact of seismicity on slope stability (landslides) must be
quantified so that adequate mitigation measures can be
Seismicity of Region
developed. Further investigation is required to determine the
locations of active faults along the proposed route.
The length of the onshore section may increase the social impact
(positive or negative) along the El Llano to Guiria Corridor. The
Social Impact
extent of this impact will be assessed during stakeholder
engagement.
Reference Case Route
Offshore
The offshore section of the Reference Case Route extends from the proposed CPF location to a
landing point on the north coast of the Paria Peninsula in the bay west of Punta Cacao. The
water depth at the CPF is approximately 90 m and the seabed remains relatively flat (mild
undulations between 79 and 97 m) over the 35 km offshore section. Over the final 2 km, the
seabed rises from 50 m water depth to the landing point elevation at sea level.
The coastline in the vicinity of Punta Cacao is very rocky with steep, mountainous slopes rising
sharply from the coast. The mountain slopes are heavily forested along the coast. A small beach
area exists in the bay west of Punta Cacao (approximately N 10° 41.96’, W 62° 18.16’) and is
considered a potential landfall location. In this area, there is a steep, heavily forested mountain
face rising from the coast. As with the West Route, a conventional shore crossing would be
difficult due to the lack of access, potential slope instability (erosion or landslides) and rock.
Additionally, the combination of deforestation and the steep mountain slope rising from the
coast would increase the likelihood of erosion unless adequate grading and erosion mitigation
measures were implemented. Other landfall methods such as directional drilling are under
consideration and may be preferable to a conventional shore crossing. However, similar to the
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West Route, the mountainous terrain inland may make directional drilling infeasible unless an
adequate work area is located in the mountains.
Figure 14.7: North Coast Landfall, Punta Cacao.

Note: Small beach area can be seen to the right of Punta Cacao.
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Figure 14.8: North Coast landfall, Bay West of Punta Cacao.

Punta Cacao to Guiria
Once onshore, the pipeline heads due south across the mountain range. Along this corridor, the
mountain range has a north/south distance of approximately 7 km and a maximum elevation of
approximately 600 m. The mountains have numerous steep slopes and are densely forested
within the boundaries of the national park, which is thought to be 3-4 km in width along this
corridor. There is no visible road infrastructure in the mountains along the proposed pipeline
route. Closer to Guiria, the mountains and foothills have sparse vegetation. Overland
construction across the mountains would be similar to the West Route in that a considerable
amount of deforestation and slope grading would be required in order to clear the ROW and
allow access of equipment and materials along the pipeline route. Benching would be required in
most mountainous areas. To reduce the impact on the national park, a reduced work area will be
considered for the mountainous section.
Erosion and landslides are a key risk during the construction, operation, and maintenance phases.
Seismic fault crossings are a possibility given the known geology of the area, however, specific
fault crossings along the proposed pipeline route have not been identified. In the event a fault
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crossing cannot be avoided, certain mitigation measures can be implemented and may include
xxii
one or more of the following :
• Selecting a transverse crossing direction and angle to avoid compression of the pipe
• Selecting a crossing location at the narrowest point of the fault
• Shallow bury the pipe in an oversized trench with loose backfill
• Lay the pipe on the surface (unburied)
• Install additional block valves (Emergency Shut Down) at either side of the fault crossing
• Thicken the pipe wall locally
A secondary effect of overland construction is that the pipeline corridor would result in a
permanent access route to previously unaffected areas of the national park. This could lead to
the proliferation of slash and burn activities in the national park. Construction access must come
from the south, due to the lack of infrastructure and rough terrain on the north coast.
Tunnel Option
In order to minimize the impact on the national park, a tunnel option through the mountains is
under consideration. It would be necessary to construct a tunnel sufficiently large to allow the
installation of one or two parallel pipelines. Currently, it is assumed a tunnel through the
mountains would be 3 to 7 km in length. A tunnel 3 m in diameter is assumed adequate for one
or two NPS 24 parallel pipelines and limited access for maintenance. If full access is required a
larger diameter tunnel of 4 or 5 m can be constructed. It should be noted that the tunnel option
does not eliminate the surface impact on the national park. Because of the proposed length of
the tunnel, several ventilation shafts 1-2 m in diameter will be required on the surface.
Regarding seismic impacts, it is understood that the movement across a seismic fault is spread
over a wide area, therefore, it is unlikely that a true shearing of the pipeline/tunnel, whereby the
pipeline and tunnel are completely severed at a finite location, would occur. Furthermore, the
tunnel can be constructed sufficiently large in order to accommodate large movements. A casing
pipe may be considered to protect from rock falls within the tunnel. If the tunnel option is
selected, a thorough analysis must be carried out to predict the maximum displacement of any
faults crossed by the tunnel and determine their impact on the integrity of the pipeline(s).
The work area required for the tunneling operation is not significant. Most tunneling contractors
have extensive experience with urban projects (Boston or New York, for example) and therefore
can execute the work utilizing the absolute minimum work area. The main logistical issue that
impacts the required work area is the storage area required for water treatment and waste/spoil.
Material dumping and disposal is another issue that would have to be resolved. Potential options
include, but are not limited to: 1) finding a local market and trucking away, 2) barging away, 3)
dumping offshore in deep water (assuming the appropriate approvals were in place). In any case,
xxii See Reference 4 on page 21-3
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given the lack of a developed infrastructure in the mountains, the movement of materials and
equipment from the work area is considered a challenge.
There is the potential to affect the groundwater profile in the area, as the tunnel may act as a
preferential conduit for groundwater flow that could locally affect the groundwater regime in the
xxiii
area . A second potentially sensitive issue that may impact the groundwater profile (water
wells, aquifers) is the use of explosives. It is understood that the first 30 m of the tunnel would
require blasting in order to make a pilot hole for the tunneling machine. The issue of
groundwater is particularly sensitive in the Paria Peninsula and these effects must be clearly
understood in subsequent project stages as they both have a great social impact and, in the case
of the former, an impact on the operation, maintenance and integrity of the pipeline.
Once through the mountains, the route heads south toward Guiria. This section is sparsely
populated and the land is undulating near the foothills and relatively flat closer to Guiria. The
proposed route crosses several small rivers, some of which are seasonal. Construction through
this area is not considered technically challenging. Social issues are likely to be the greatest
challenge in this area.
Figure 14.9: Punta Cacao to Guiria, aerial view of National Park.
xxiii See Reference 4
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Figure 14.10: Punta Cacao to Guiria, area north of Guiria.

The onshore section of the Reference Case Route totals 20 km, which gives an overall length of
approximately 55 km from the offshore CPF to Guiria.
At present, key issues related to the Reference Case Route are as follows:
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Issue Comment
Construction 1) Environmental and regulatory restrictions related to
Within the overland construction through the national park must be clearly
National Park understood. Overland construction utilizing a reduced work
area will be considered to minimize the environmental impact
on the park. 2) An overland pipeline corridor would provide
access to previously unaffected areas in the national park, which
could lead to a proliferation of slash and burn activities. 3) The
boundaries of the National Park must be confirmed.
Seismicity of 1) The impact of seismicity on slope stability (landslides) must
Region be quantified so that adequate mitigation measures can be
developed. 2) Faults along the route must be identified. Route
adjustments and/or mitigation measures can then be
considered.
Landfall Method 1) Issues with a conventional shore crossing include slope
instability, which could be either localized erosion or landslides.
2) Given the perceived difficulty with a conventional shore
crossing, directional drilling may be a preferable option.
However, the mountainous terrain inland may make a
directional drill shore crossing infeasible due to the lack of an
adequate work area and potential length of the drill exceeding
technical limits of directional drilling.
Social Impact 1) In the event the tunnel option is selected, the effect on the
groundwater profile must be clearly understood. 2) The social
impact along the populated areas north of Guiria must be
assessed during stakeholder engagement.
CIGMA Route
Offshore
The offshore section of the CIGMA Route extends from the proposed CPF location to a landing
point on the north coast of the Paria Peninsula in Ensenada de Mejillones. The water depth at
the CPF is approximately 90 m and the seabed remains relatively flat (mild undulations between
90 and 100 m) over the 32 km offshore section. Over the final 2 km the seabed rises from 50 m
water depth to the landing point elevation at sea level.
The coastline at Ensenada de Mejillones is rocky with a few small beach areas. A heavily forested
mountain slope rises steeply from the coast to an elevation of approximately 200 m. A
conventional landfall is feasible; however, the combination of deforestation and the severity of
the slope rising from the coast would make erosion likely unless adequate slope grading, land
restoration and erosion mitigation measures were implemented. Slope instability due to landslide
activity is a concern as well. In lieu of a conventional shore crossing, a directional drill crossing
will be investigated further. Given that the mountain range is narrow and has lower elevations
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compared to the West and Reference Case routes, it is likely that an adequate work and lay down
area to execute the drill can be found further inland.
Figure 14.11: North Coast landfall, Ensenada de Mejillones.
Figure 14.12: North Coast Landfall, aerial view of Ensenada de Mejillones.
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Ensenada de Mejillones to Ensenada Mapire

Once onshore, the pipeline heads in a south-southeasterly direction toward Ensenada Mapire.
The north/south distance across the peninsula from Ensenada de Mejillones to Ensenada Mapire
at longitude W 62° 09.37’ is approximately 5 km with a maximum elevation of approximately 400
m. Along this corridor, the national park is thought to have a north/south distance of
approximately 1 km. The peninsula is mountainous and heavily to moderately forested along the
entire length of the Mejillones to Mapire corridor. The drainage basin of the Rio Mapire extends
from the south coast at Ensenada Mapire to a point approximately 4 km inland. A generally flat
river valley surrounds the Rio Mapire with mangroves growing in its river delta. The relatively
flat topography of the area surrounding the Rio Mapire makes this the preferred route across the
peninsula.
Figure 14.13: Mejillones to Mapire, vicinity of National Park.

The mountains along the Mejillones to Mapire corridor appear to be more affected by human
intervention than those along the West or Reference Case routes. Several roads exist along the
proposed pipeline route and a road is currently under construction that parallels the Rio Mapire
for approximately 2-3 km. It is proposed to construct the pipeline parallel to this road in order to
avoid the environmentally sensitive area of the river valley. In order to do this, the existing slope
grading (benching) must be widened by 20-30 m to provide adequate working area and slope
OGUD.2003.000012.01
stability. Construction along the road utilizing a reduced work area of 15-20 m will also be
considered. Furthermore, it will be necessary to assess the likelihood of slope instability along
the road in subsequent project stages. Given the existence of the road, it is likely that an
adequate work area can be found to execute a directionally drilled shore crossing. A drilled shore
crossing would be of sufficient length to avoid the national park, assuming the width of 1 km (or
less) is certain. Given the short north/south distance across the peninsula, a tunnel option is not
considered necessary.
The challenges of overland construction across the mountains are similar to those of the West
and Reference Case routes; however, the mountains in this area are not as severe in slope or
elevation and are less forested than other parts of the peninsula. Because of this, it is assumed
that the impact to the existing environment would be less than that of the West and Reference
Case routes. Slope grading/stabilization and deforestation would be required in the area along
the north coast in order to clear the ROW and allow access of equipment and materials along the
pipeline route. Slope grading and stabilization would be required to a lesser degree where the
pipeline route parallels the road along the Rio Mapire. As with the West and Reference Case
routes, erosion and landslides are a concern during the construction, operation, and maintenance
phases. Seismic fault crossings are likely given the known geology of the area; consequently
specific fault crossings along the proposed pipeline route will be identified in subsequent project
phases. Access would be gained from the south utilizing the existing road under construction
from Guiria to Macuro. Some improvements to these existing roads such as widening and slope
minimization will be necessary to accommodate heavy equipment and trailers.
A secondary effect of the overland section of the route is that the pipeline corridor would
provide a permanent access route to previously unaffected areas of the national park, thereby
leading to the proliferation of slash and burn activities. While this is a valid concern, the pipeline
would be constructed within existing access corridors and therefore it is assumed that the
pipeline corridor would not provide new access routes to previously unaffected areas.
OGUD.2003.000012.01
Figure 14.14: Mejillones to Mapire, road parallel to Rio Mapire.

The Gulf of Paria
Once across the peninsula, the pipeline enters the GoP at Ensenada Mapire. As stated in Section
3.3.3 – Climatic and Ocean Conditions, the waters in the GoP are shallow and the sea state is
normally calm with swells of less than 1 m. The seabed is flat and has a depth of 10-15 m along
the 22 km section across the GoP. Landfall is made southwest of Guiria giving a total length of
the CIGMA Route of 59 km.
It is assumed the pipeline will be buried in the GoP, however, construction activities and the
continued presence of the pipeline may have an impact on the local fishing industry. This is a
critical issue, which will be investigated further during stakeholder engagement.
At present, key issues regarding the CIGMA Route are as follows:
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Issue Comment
Construction 1) Environmental and regulatory restrictions related to
Within the overland construction through the national park must be clearly
National Park understood as this has an impact on the selection of the shore
crossing method and, more importantly, on the viability of the
CIGMA Route 2) It is debatable whether the overland pipeline
corridor would provide new access to previously unaffected
areas in the national park thereby aiding in the proliferation of
slash and burn activities 3) The boundaries of the national
park must be identified in order to confirm the width of the
park along the Mejillones to Mapire corridor.
Social Impact The impact of the pipeline on the local fishing industry in the
Gulf of Paria must be clearly understood. This will be a high
priority during stakeholder engagement.
Seismicity of 1) The impact of regional seismicity on slope stability
Region (landslides) must be quantified so that adequate mitigation
measures can be developed. This is particularly important along
the section parallel to the road to Mapire. 2) Faults along the
route must be identified. Route adjustments and/or mitigation
measures can then be considered.
Landfall Method 1) Issues with a conventional shore crossing include
deforestation and slope instability, which could be either
localized erosion or landslides. 2) A shore crossing utilizing
the directional drill method may be a feasible option given the
short distance over the mountains and potential work area
available along the road to Mapire.
Offshore Route
The Offshore Route commences at the proposed CPF location at a water depth of approximately
90 m. From this point the pipeline heads in a southeasterly direction to the Boca Grande
Channel at the eastern tip of the Paria Peninsula. Along this segment, the seabed remains
relatively flat (mild undulations between 80 and 112 m) until reaching the Boca Grande Channel,
which has a maximum depth of 324 m. Through the channel, the proposed pipeline route
follows a relatively flat contour at a water depth of approximately 200 m. Once through the
channel, the pipeline enters the GoP where the water depths decrease to approximately 50 m.
From this point, the seabed rises gradually over the last 45 km to sea level at the landing point
southwest of Guiria. The total length of the Sea Route is approximately 112 km.
At present, key issues related to the Offshore Route are as follows:
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Issue Comment
Strong Currents According to the Metocean Reportxxiv extreme surface and near-bed
in Boca Grande current speeds in Dragon’s Mouth are considered high primarily due to the
Channel large tidal prism of the GoP. Enormous amounts of water flow in and out
of the GoP, which flows mostly through Dragon’s Mouth. The flow rate
through Dragon’s Mouth can become 130,000 m3/s during spring tide.
For comparison, the average fresh water discharge of the Amazon River
(the largest river in the world) is about 100,000 m3/s. Given the above,
issues such as on-bottom stability, spanning and vortex induced vibration
are key risks to routing the pipeline in the Boca Grande Channel. In
subsequent project stages, it will be necessary to assess the magnitude and
impact of these risks on the pipeline design and integrity.
Potential for Regardless of the absence of loose sediment on the seabed, it is thought
Underwater that underwater landslides remain a possibility given the severity of the
Landslides slope around the eastern tip of the peninsula and the possibility for seismic
activity. The likelihood of these events and their impact on the integrity of
the pipeline must be clearly understood.
Unexploded Bathymetric maps issued by the United States Defense Mapping Agency
Ordnance on the show an explosives dumping area near Trinidad. Conflicting information
Seabed has been found regarding the existence of such an area. This contradiction
will be investigated further so that the existence of the area can be
confirmed and mitigation measures can be developed if necessary.
Seabed Given the strong currents in the Boca Grande Channel, it is assumed that
Conditions all soft sediment has been carried away from the seabed and near shore
Around the areas in the channel, thereby creating possibly rocky, uneven seabed
Eastern Tip of the conditions. During the site visit, a single sounding was taken near Punta
Peninsula Piedras in the channel (N 10° 44.14’, W 61° 50.68’). Seabed composition
was determined to be rock, and no soft material was measured. A key
concern is a rocky or uneven seabed profile, which may prevent the
pipeline from being placed in certain areas. Additionally, seabed
preparation may be required to prevent unacceptable spanning.
Currently, two options are being considered for the pipeline routing around the eastern tip of the
Paria Peninsula. The first option involves laying the pipeline on the seabed in the waters of the
Boca Grande Channel (Conventional Option). Key characteristics of this option have been
described above. The second option (Isthmus Option) involves avoiding the waters of Boca
Grande and routing the pipeline over the short isthmus separating Ensenada Palmas and Bahía
Cereza.
Isthmus Option: The aim of the Isthmus Option is to avoid one or more of the issues listed in
Table 14.7. The isthmus is approximately 100 m wide at its narrowest point and has an elevation
of less than 50 m. The north/south distance of the National Park is thought to be less than 50 m
xxiv See Reference 5 on page 21-3
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at this point. There are small beach areas on the north and south coasts and the overland section
of the isthmus is moderately forested. The profile of the isthmus is such that faulting cannot be
ruled out. Geotechnical specialists will investigate this further in subsequent project stages.
Figure 14.15: Isthmus Option, aerial view of Isthmus.

Crossing the isthmus may involve either an overland crossing or a drilled crossing. A drilled
crossing would be considered in the event geologic faults render an overland crossing infeasible
or in order to minimize the impact on the National Park. The overland crossing would require
some degree of deforestation and a moderate cut for slope grading and stabilization.
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Figure 14.16: Isthmus option, overhead view of Isthmus.
Figure 14.17: Isthmus option, view from South Coast.
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14.2.2. Route Selection Criteria

The route selection criteria and methodology presented in this section is for descriptive purposes
only. The actual implementation of the methodology and assessment and evaluation of each
route is outside the scope of the present report. Such work will be carried out post-VAR-2 in the
concept selection phase.
Methodology
In order to select the preferred pipeline route, a number of critical selection criteria have been
identified. These will be further defined by sub-criteria and then analyzed in detail.
The selection criteria are related to:
• Technical
• SDEA
• Local Content
• Costs
The qualitative assessment of the criteria identified above is based on information provided by
the various project teams: Upstream, Downstream, SDEA and Local Content.
The weighting methodology utilized in any complex ranking scheme is of critical importance to
the reliability of the result, which will be used for decision-making purposes. The weighting per
main criteria is indicated in a percentage expressing the relative importance of a specific criterion,
whereby the total percentages of all the main criteria add up to 100%. Each main criterion is
subdivided into sub-criteria for which the same weighting method is applied; the weighting per
sub-criteria is indicated in a percentage expressing the relative importance of that sub-criteria,
whereby the total percentages of all sub-criteria belonging to this main criteria add up to 100%.
Each sub-criterion is qualified with a score between 1 and 5. A score of 1 indicates a poor
qualification or restrictions noticed (mitigative measurements will be required) and a score of 5
indicates an excellent qualification or no restrictions. Experience shows that a weighting matrix,
although good at differentiating between pipeline routes may often miss the impact of certain
critical issues due to the fact that a minimum score for any issue is 0. It is therefore essential to
introduce the concept of “Blockers” which have the purpose to disqualify a potential pipeline
route. Potential blockers receive a score of 1 and are additionally shaded yellow. Real blockers
receive a score of 0 and are additionally shaded red. If insufficient information is available for a
sub-criterion, then it will receive a score of 3 and additionally shaded green.
Additionally a separate table, which lists all the cost differences between the different potential
pipeline routes, is made. The cost differences are calculated against the preferred pipe route
based on the selection criteria. The cost difference estimates used in the matrix are based on
rough estimates at the time of exercise and are subject to change as the design and the scope of
the project becomes better defined, hence cost figures used are only meant for pipeline route
comparison and not for cost estimating purposes.
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This methodology aims to give an objective method to select the best possible pipeline route and
because of the systematic approach it can very well be used in future discussions in a wider
audience, also when additional information becomes available.
Criteria
The main criteria have been identified with a recommended respective percentage distribution of
the total matrix score as shown in Table 14.8. Please bear in mind the criteria, sub-criteria, and
weighting percentages have not been finalized and will be better defined, discussed, and agreed
upon by the various project teams during the concept selection phase.
Table 14.8: Main Criteria Weighting
Main Criteria Weighting (%)
Technical TBD
SDEA TBD
Local content TBD
Costs TBD
The following justification is made for the weighting of the main criteria:
Technical
Technical characteristics of the pipeline route and the pipeline itself cannot be ignored. Physical
limitations can render an option infeasible, overly expensive, or impossible. Furthermore, given
the unique challenges such as constructing through an environmentally sensitive, seismically
active area, two-phase pipeline operation, etc. a robust technical solution is paramount.
SDEA
Sustainable development is an important aspect of any project and a priority for Shell projects
worldwide. The Paria National Park and surrounding areas are, in most places, unaffected by
human intervention and given the possibility of constructing a pipeline through the park, SDEA
becomes an integral part of the overall decision-making process.
Local Content
It is a project goal to maximise the utilization of Venezuelan labor and products. Local content is
introduced as a decision criterion to ensure that it is duly considered in the decision making
process.
Costs
The economic viability of a project is critical; therefore, costs will be given sufficient weighting to
reflect the importance of selecting a minimal cost option.
Sub-Criteria
The main criteria are subsequently divided into sub-criteria, as indicated in Table 14.9. The use
of sub-criteria increases the objectivity of the pipe route selection because it is easier to qualify a
well-defined specific sub-criterion than high-level broad main criteria.
The following tables list the sub-criteria weighting as a percentage of the Main Criteria.
OGUD.2003.000012.01
Table 14.9: Technical Sub-Criteria Weighting as a Percentage of the Main Criteria

Weighting (%)
Technical TBD
Resulting
Sub-Criteria
Weighting (%)
Dredging
Pipe landfall conditions
two-phase flow design possible
Pressure loss
Tunneling
Slug catcher volume
Degree of slope grading required
Seismicity consequences (landslides or faults)
Bathymetry influence on offshore pipe laying
Difficulty onshore routing (elevation, road/river
crossings)
Ease of pipeline maintenance
Line pack available
Weighting (%)
Technical TBD
Resulting
Sub-Criteria
Weighting (%)
Dredging
Pipe landfall conditions
Two-phase flow design possible
Pressure loss
Tunneling
Slug catcher volume
Degree of slope grading required
Seismicity consequences (landslides or faults)
Bathymetry influence on offshore pipe laying
Difficulty onshore routing (elevation, road/river
crossings)
Ease of pipeline maintenance
Line pack available
OGUD.2003.000012.01
Table 14.10: SDEA Sub-Criteria Weighting as a Percentage of the Main Criteria

Weighting (%)
SDEA TBD
Resulting
Sub-Criteria
Weighting (%)
Visual Impact
Influencing beach life (turtles)
Influencing fishing grounds
Avoiding access to national park (constr.and maint.)
Minimal claim of land for right of way (social
impact)
Minimal safety risk during construction
Influencing riparian environment
Table 14.11: Local Content Sub-Criteria Weighting as a Percentage of the Main Criteria
Weighting (%)
Local Content TBD
Resulting
Sub-Criteria
Weighting (%)
Use of local contractors for data gathering
Use of local contractors for welding and pipe laying
onshore
Increase knowledge of local contractors
Use of local labor
Table 14.12: Costs Sub-Criteria Weighting as a Percentage of the Main Criteria

Weighting (%)
Costs 30
Resulting
Sub-Criteria
Weighting (%)
Impact on offshore infrastructure (compression
HP, pressure rating, etc.)
Seismic design
Onshore infrastructure (access roads, etc.)
Landfall
14.3. Hydraulics
Hydraulic calculations for the project were carried out in two stages. The first stage, referred to
as the preliminary sizing calculations, was carried out using the limited amount of quality data
available at the time, specifically, composition, flow rate and route lengths, and profiles.
OGUD.2003.000012.01
Additionally, conclusions and recommendations for the pipeline facilities at this stage were made
independent of the field development scenarios upstream of the pipeline inlet. Subsequently, as
the project became better defined, the second stage of hydraulic calculations was carried out in
which specific field development scenarios were considered. Pipeline sizing calculations were
then performed given new parameters such as flow rate, CPF location (hence, updated pipeline
routing), composition, et al. This second stage of activities is referred to as the concept sizing
calculations. Conclusions and recommendations for the Concept Sizing Calculations were then
made taking into account the entirety of each field development scenario.
14.3.1. Preliminary Sizing Calculations

Preliminary sizing calculations were performed in Q1 2003 to gain an understanding of the flow
characteristics of each route under consideration. Route lengths and profiles used in this section
are considered preliminary and have since been better defined; consequently, some lengths and
elevations in this section vary from those stated in Section 14.2.1 – Route Descriptions.
Graphical and tabular representations of the preliminary sizing results are shown in Appendix C.
with the purpose of giving the reader an indication of the intrinsic flow behavior of each route,
which is particularly important for the two-phase calculations. Subsequently, in Section 14.3.2 –
Concept Sizing Calculations, only the recommended pipeline facilities are described.
Objectives of the preliminary studies are as follows:
• Optimize pipeline diameter
• Minimize liquid storage capacity at minimal operational constraints (minimizing the need for
regular pigging)
• Manage liquid surges and slugs
• Understand line pack available for specific cases
Sizing Parameters
Gas and Liquid Properties
Gas, condensate, two-phase compositions, and pseudo component properties used in the
preliminary hydraulic studies are shown in the tables below. It is important to note that these
compositions were used only for the preliminary calculations. Water content was not provided in
the compositional data and therefore was not included in the preliminary analyses. Variations in
composition can impact the results significantly; consequently, the acquisition of updated
compositional data is a critical task for subsequent project stages.
OGUD.2003.000012.01
Table 14.13: Gas and Liquid Compositions
Gas Stream Composition Liquid Stream Composition Two-Phase Composition
Component Mole Fractions Component Mole Fractions Mole Fractions

CO2 0.00223 CO2 0.00274 CO2 0.00223
Nitrogen 0.02041 Nitrogen 0.00008 Nitrogen 0.02011
Methane 0.94496 Methane 0.12370 Methane 0.93264
Ethane 0.01431 Ethane 0.07144 Ethane 0.01517
Propane 0.00898 Propane 0.11799 Propane 0.01061
i-Butane 0.00161 i-Butane 0.03270 i-Butane 0.00208
n-Butane 0.00284 n-Butane 0.08629 n-Butane 0.00409
i-Pentane 0.00088 i-Pentane 0.04130 i-Pentane 0.00149
n-Pentane 0.00081 n-Pentane 0.04401 n-Pentane 0.00146
n-Hexane 0.00037 n-Hexane - n-Hexane 0.00036
n-Heptane 0.00070 n-Heptane - n-Heptane 0.00069
n-Octane 0.00036 n-Octane - n-Octane 0.00035
n-Nonane 0.00007 n-Nonane - n-Nonane 0.00007
n-Decane - n-Decane - n-Decane -
n-C11 - n-C11 - n-C11 -
n-C12 - n-C12 - n-C12 -
RE C6* 0.00056 RE C6* 0.06484 RE C6* 0.00152
RE C7* 0.00048 RE C7* 0.09557 RE C7* 0.00191
RE C8* 0.00024 RE C8* 0.07881 RE C8* 0.00142
RE C9* 0.00011 RE C9* 0.06214 RE C9* 0.00104
RE C10* 0.00005 RE C10* 0.04739 RE C10* 0.00076
RE C11* 0.00002 RE C11* 0.03541 RE C11* 0.00055
RE C12* 0.00001 RE C12* 0.02601 RE C12* 0.00040
RE C13* 0.00000 RE C13* 0.01887 RE C13* 0.00029
RE C14* 0.00000 RE C14* 0.01352 RE C14* 0.00020
RE C15'* 0.00000 RE C15'* 0.00955 RE C15'* 0.00014
RE C16_17* 0.00000 RE C16_17* 0.01141 RE C16_17* 0.00017
RE C18_20* 0.00000 RE C18_20* 0.00730 RE C18_20* 0.00011
RE C21_54* 0.00000 RE C21_54* 0.00350 RE C21_54* 0.00005
RE C7+* 0.00000 RE C7+* 0.00542 RE C7+* 0.00009
1.00000 1.00000 1.00000
Table 14.14: Pseudo Component Properties

Pseudo Component Properties
Pseudo Component NBP [C] MW Liquid SG NBP [F] MW Liq Density [lb/ft3]
RE C6* 53.88 84.00 0.668 128.99 84.00 41.684
RE C7* 79.70 96.00 0.715 175.46 96.00 44.620
RE C8* 102.62 107.00 0.739 216.72 107.00 46.103
RE C9* 127.77 121.00 0.761 261.99 121.00 47.484
RE C10* 148.59 134.00 0.776 299.47 134.00 48.467
RE C11* 168.75 147.00 0.790 335.75 147.00 49.306
RE C12* 189.64 161.00 0.802 373.36 161.00 50.083
RE C13* 209.79 175.00 0.813 409.62 175.00 50.761
RE C14* 230.64 190.00 0.824 447.15 190.00 51.408
RE C15'* 252.12 206.00 0.834 485.81 206.00 52.033
RE C16_17* 281.16 228.52 0.846 538.09 228.52 52.834
RE C18_20* 320.82 260.92 0.863 609.47 260.92 53.891
RE C21_54* 405.44 336.67 0.885 761.79 336.67 55.271
RE C7+* 157.99 140.00 0.783 316.39 140.00 48.870
Flow Rates
Single phase and two-phase calculations assumed a gas flow-rate range of 80 MMscf/d to 1070
MMscf/d. Normal flow rate is 770 MMscf/d. There is a potential domestic gas market of an
additional 300 MMscf/d; however, there is uncertainty with regard to the timing of this demand.
OGUD.2003.000012.01
As such, slugcatcher sizing was carried out assuming 770 MMscf/d maximum flow rate. Single-
phase liquid calculations assumed a maximum condensate flow rate of 16,000 BPD.
Pressures and Temperatures
A pressure of 75 bar was assumed at the pipeline outlet (inlet to the LNG Plant). Regarding the
required pipeline inlet pressure, a maximum pressure of 153 bar was imposed; however, it is
recognized that a significant compression horsepower savings may be realized with a decrease in
the required pipeline inlet pressure. This benefit must be weighed against the potential upside to
a higher pipeline operating pressure, which would provide increased capacity should a 2nd LNG
train be contemplated in the future. An integrated study must be completed post-VAR 2 to
optimize various operational parameters related to the offshore facilities, pipeline/slugcatcher,
and LNG plant.
Fluid and environmental temperatures were assumed to be 60°C and 17°C, respectively.
Route Lengths and Profiles
Preliminary route lengths and profiles are given in Figure 14.18 through Figure 14.22 below.
Elevation Profile: West Route
700
600
500
Elevation (m)
400
300
200
100
0
-100
0 20 40 60 80 100 120 140 160 180
Stationing (km)
Figure 14.18: Elevation profile – west route.
OGUD.2003.000012.01
Elevation Profile: Reference Case
700
600
500
Elevation (m)
400
300
200
100
0
-100
0 10 20 30 40 50
Stationing (km)
Figure 14.19: Elevation profile – reference case route.
Elevation Profile: Reference Case Route, Tunnel
700
600
500
Elevation (m)
400
300
200
100
0
-100
0 10 20 30 40 50
Stationing (km)
Figure 14.20: Elevation profile – reference case route, tunnel option.
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Elevation Profile: CIGMA Route
700
600
500
Elevation (m)
400
300
200
100
0
-100
0 10 20 30 40 50 60
Stationing (km)
Figure 14.21: Elevation profile – CIGMA route.
Elevation Profile: Sea Route
700
600
500
400
Elevation (m)
300
200
100
0
-100
-200
0 20 40 60 80 100 120
Stationing (km)
Figure 14.22: Elevation profile – sea route.
OGUD.2003.000012.01
Methodology
Hydraulic Analyses
Analyses were performed using PIPESIM 2000 software. PIPESIM’S compositional fluid model
was used for single-phase gas and two-phase calculations while the black oil model was utilized
for single-phase liquid calculations. Because of the compositional uncertainty, condensate-gas
ratio (CGR) sensitivities were run during the two-phase analyses to gauge the impact of this
uncertainty. Steady state modeling was performed using Shell’s proprietary SCTRA flow
correlation. Dynamic modeling was not performed, but will be necessary in future project stages.
Slugcatcher Sizing
The objective of the two-phase flow analyses was to minimize liquid storage capacity at minimal
operational constraints. A key component to meeting this objective is selecting the optimal
slugcatcher size. Slugcatcher sizing was performed using the Modified Cunliffe Method.
Calculations assumed a ramp up from 50% to 100% of maximum flow rate at a ramp up rate of
100 MMscf/d per hour, which experience has shown is a “typical” ramp up rate for an LNG
plant. To account for uncertainties in liquid flow rates, a liquid handling capacity of 110% of
maximum liquid flow was assumed. Furthermore, a 25% margin was added to the calculated
required slugcatcher volume to accommodate liquid surges. As the project progresses and plant
details become better defined, the above parameters may be modified.
Other key calculations related to slugcatcher sizing included:
• Liquid flow rates at initial and final conditions
• Difference in steady state liquid hold-ups
• Gas and liquid residence time in the pipeline
• Period over which liquid surge arrives
• Peak liquid flow rate
Examples of the Cunliffe Method calculation sheets are included in Appendix C – Preliminary
Sizing Results.
Line Pack
Single phase and two-phase line pack calculations were performed for the Reference Case and
Offshore routes in order to gain a preliminary indication of the time the offshore platform or
onshore LNG plant can continue to operate given two shutdown scenarios:
I. During steady state operation, the offshore CPF discharges continuously at the pressure
required to reach the onshore LNG plant at 75 barg. A shutdown occurs at the onshore LNG
plant and the offshore CPF continues to operate and pack the pipeline until reaching a pressure
of 102 barg (1480 psig) at the pipeline inlet.
II. During steady state operation, the offshore CPF discharges continuously at 102 barg (1480
psig). A shutdown occurs at the offshore CPF and the LNG plant continues to operate until the
pressure at the pipeline outlet reaches a) 75 barg and b) 65 barg.
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Results
Graphical representations of the preliminary sizing calculations are shown in Appendix C –
Preliminary Sizing Results (C-1). Regarding the two-phase calculations, it is interesting to note
the trends in liquid holdup and its effect on the required pipeline inlet pressures. As one would
expect, the required inlet pressure increases with increasing flow rate and liquid holdup reduces
due to this increase in flow rate, which has the effect of “sweeping” the liquids through the
pipeline. Conversely, as flowrates decrease, liquid holdup increases and, in general, this also
results in an increase in the required inlet pressure.
Elevation greatly impacts these trends, and it can be seen that the Reference Case and CIGMA
routes, which have greater elevation differences than the West and Offshore routes, exhibit a
greater increase in required pipeline inlet pressure at the lower end of the flow rate range. Given
this behavior, it can be assumed that these routes are susceptible to terrain induced slugging.
Also of note is that under some conditions, specific pipeline diameters show flow instability, that
is, the graphs deviate from a linear trend. Finally, included in Appendix C – Preliminary Sizing
Results are summaries of the slugcatcher sizing calculations as well as graphs depicting the
required inlet pressure versus flow rate for the single-phase gas and liquid calculations. Single-
phase calculation results are as expected in that the required inlet pressure increases with
increasing flow rate. Table 14.15 and Table 14.16 summarize the results of the two-phase and
single-phase sizing calculations.
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Table 14.15: Two-Phase Sizing Summary
Net Slugcatcher Expected Lowest

OD ID Required Inlet Pressure (psig) Justification for
Pipeline Routes Length (km) Volume*** Stable Flow**
Selected Facilities
(in) (in) @ 770 mmscf/d @ 1070 mmscf/d (bbl) (mmscf/d)
24 22.45 1,563 1,875 1,900 250 The selected diameter covers

the widest range of flow while
Reference Case 44
26 24.32 1,427 1,663 2,500 400 minimizing the slugcatcher
size.
30 28.20 1,397 1,399 4,600 unstable

Reference Case the widest range of flow while
44
Tunnel 26 24.32 1,423 1,659 1,500 300 minimizing the slugcatcher
size.
30 28.20 1,333 1,394 3,500 600

the widest range of flow while
CIGMA Route 57
26 24.32 1,493 1,770 3,000 350 minimizing the slugcatcher
size.
30 28.20 1,374 1,460 6,600 600
The selected diameter covers a
24 22.45 2,024 2,582 500 200
wide range of flow and
Offshore Route 116 maintains the required inlet
30 28.20 1,459 1,723 1,000 200 pressure below ANSI 900
limits @ 1070 mmscf/d.
32 30.08 1,367 1,575 1,700 350
24 22.45 2,391 3,133 1,300 200

The selected diameter covers a
26 24.32 2,057 2,634 1,100 200
wide range of flow while
West Route 182 maintaining the required inlet
28 26.20 1,816 2,270 5,000 250 pressure below ANSI 900
limits @ 1070 mmscf/d.
30 28.20 1,629 1,987 19,000 300
32 30.08 1,501 1,788 30,000 350
Note:
Recommended facilities are highlighted in rose color.
** To be confirmed by dynamic simalation
*** Slugcatcher net volume: 25% to be added for operational margin
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Table 14.16: Single-Phase Sizing Summary

Length OD ID Inlet Pressure Outlet Pressure
Pipeline Route Design Case Comment
(km) (in) (in) (psi) (psi)
32 30.08 1,300 1,102 No pipeline diameter
Gas 30 28.20 1,364 1,102 offers a distinct
28 26.20 1,467 1,102 advantage.
Reference Case 44
Liquid 14 12.82 1,577 1,550 offers a distinct
12.75 11.64 1,593 1,550 advantage.
Reference Case 28 26.20 1,464 1,102 advantage.
44
Tunnel 14 12.82 1,392 1,320 No pipeline diameter
Liquid 12.75 11.64 1,430 1,320 offers a distinct
10.75 9.72 1,563 1,320 advantage.
28 26.20 1,543 1,102 advantage.
CIGMA Route 57
Liquid 12.75 11.64 1,414 1,360 offers a distinct
10.75 9.72 1,486 1,360 advantage.
30 28.20 1,675 1,102 advantage.
Offshore Route 116
14 12.82 1,016 950 No pipeline diameter
Liquid 12.75 11.64 1,054 950 offers a distinct
10.75 9.72 1,198 950 advantage.
30 28.20 1,932 1,102 advantage.
West Route 182
Liquid 14 12.82 1,305 1,200 offers a distinct
12.75 11.64 1,366 1,200 advantage.
Note:
-Recommended Pipeline Diameter
Calculated inlet pressures assume 1070 MMscf/d gas flow rate & 18,000 BBL/d liquid flow rate
OGUD.2003.000012.01
Line Pack
A summary of the results of the line pack calculations are shown in Table 14.17. It should be
noted that the two-phase calculations for the Reference Case Route (NPS 24) did not yield a
solution for a 102 barg (1480 psig) maximum pipeline inlet pressure at the CPF. Consequently,
line pack for this specific case was calculated assuming a maximum pipeline inlet pressure of 153
barg (2220 psig). As stated previously, two line pack scenarios were evaluated:
I. During steady state operation, the offshore CPF discharges continuously at the pressure
required to reach the onshore LNG plant at 75 barg. A shutdown occurs at the onshore LNG
plant and the offshore CPF continues to operate and pack the pipeline until reaching a pressure
of 102 barg (1480 psig) at the pipeline inlet.
II. During steady state operation, the offshore CPF discharges continuously at 102 barg (1480
psig). A shutdown occurs at the offshore CPF and the LNG plant continues to operate until the
pressure at the pipeline outlet reaches a) 75 barg and b) 65 barg.
Table 14.17: Line Pack Results
Scenario I: Scenario II:
Pipeline
OD ID Time to Pack Time to
Case Length
Line Discharge
(km/miles) (in) (in) (min.) (min.) Note
Scenario II-discharge to 75
32 33 barg
30 28.20
49 barg
Base Case Route 44/27.34
57 58 barg
36 33.95
81 barg
Single Phase
39 40 barg
30 28.20
82 barg
Offshore Route 116/72.08
122 128 barg
36 33.95
188 barg
n/a n/a barg
7 barg
Base Case Route 44/27.34 24 22.45
61* 63* barg
Two Phase
73* barg
33 32 barg
Offshore Route 116/72.08 30 28.20
74 barg
* Maximum pipeline inlet pressure of 102 barg (1480 psig) did not yield an adequate solution; therefore, a maximum pipeline inlet
pressure of 153 barg (2220 psig) was assumed.
OGUD.2003.000012.01
Conclusions and Recommendations

Two-Phase Systems and Slug Catcher Sizing
The combination of composition, elevation profile, and resulting liquid holdup greatly influences
the behavior of the two-phase systems. As shown in many of the graphs in Appendix C –
Preliminary Sizing Results, the required pressure at the pipeline inlet increases both when the
flow rate increases and decreases. Additionally, the pipeline liquid holdup tends to increase with
decreasing flow rate. Given the above, the range of solutions for the two-phase systems is
limited as some pipeline diameters exhibit unstable behavior under certain conditions and cannot
be properly analyzed with a steady state model.
It is desired to select a pipeline diameter, which will cover the widest range of expected flows
while minimizing the required slug catcher volume and the need for regular pigging of the
pipeline. Furthermore, this must be balanced with the expected pressure available at the CPF as
well as future compression requirements at the CPF. Specific recommendations are made for
pipeline diameters and slug catcher volumes and are highlighted (rose color) below in Table
14.18. The recommendations in Table 14.18 serve as the basis for the CAPEX estimates in Cost
Estimate section.
Single-Phase Systems
Single-phase gas systems exhibited more conventional behavior and thus afforded a wider range
of solutions. Multiple iterations were performed to determine the impact of pipeline pressure
drop on the CPF compressor phasing. As a result, multiple recommendations are made for the
single-phase gas systems in Table 14.18 below. The single-phase liquid system should be
analysed in more detail post VAR-2. It is required to maintain the pipeline pressure above 950
psig in order to remain above the bubble point of the liquid. Due to the maximum elevation and
resulting liquid head, this would result in required pipeline inlet and outlet pressures of greater
than 1500 psig. The impact of this on the CPF and LNG plant designs must be clearly
understood and the benefits of hydrocarbon dewpointing should be looked into in more detail.
At this stage, a single recommendation of NPS 12 is made for the single-phase liquid systems.
OGUD.2003.000012.01
Table 14.18: Summary of Recommended Pipeline Facilities

Facilities
Length Slugcatcher
Wall Slugcatcher* for
Case (offshore Design Case OD ID Wall thickness gross (incl extra delta P Pig launcher Shore
Cases thickness Ramp-up SSIV
Reference +onshore) 25%) or receiver Crossing
(km) (in) (in) mm in (bbl) (m3) psi Number Number Number
A1 Two Phase 24 22.45 20 0.78 1,900 378 2 1 1

Single Phase (Gas) 30 28.20 23 0.90 148
A2 4 2 2
Single Phase (Liquid) 12.75 11.64 14 0.56 30
Base Case 44 = 36 + 8 Single Phase (Gas) 24 22.45 20 0.78 413
A3 4 2 2
Single Phase (Gas) 36 33.95 26 1.03 60
A4 4 2 2
Base Case B1 Two Phase 24 22.45 20 0.78 1,000 199 2 1 1
Tunnel 44 = 36 + 8 Single Phase (Gas) 30 28.20 23 0.90 144
B2
Operation Single Phase (Liquid) 12.75 11.64 14 0.56 30
C1 Two Phase 24 22.45 20 0.78 1,200 238 2 2 3
Cigma Route 57 = (36+15) + 6 Single Phase (Gas) 30 28.20 23 0.90 177
C2
D1 Two Phase 30 28.20 23 0.90 1,000 199 2 1 1
Single Phase (Gas) 30 28.20 23 0.90 328
D2 4 2 2
Single Phase (Gas) 24 22.45 20 0.78 858
Offshore D3 4 2 2
116 = 116 + 0 Single Phase (Liquid) 12.75 11.64 14 0.56 80
Route
Single Phase (Gas) 26 24.32 21 0.84 623
D4 4 2 2
Single Phase (Gas) 36 33.95 26 1.03 143
D5 4 2 2
E1 Two Phase 30 28.20 23 0.90 19,000 3,776 2 1 1
West Route 182 = 80 +102 Single Phase (Gas) 30 28.20 23 0.90 493
E2
*Slugcatcher net volume: 25% to be added for operational margin
Cost Estimates
A cost summary of pipeline facilities is included in Table 14.19 below. Please note that costs
were not estimated for some cases. Table 14.20 is a graphical comparison of the costs, including
uncertainty ranges. When accounting for the uncertainties, it can be seen from the graph that no
route has a distinct cost advantage, although the west route is clearly the most costly of the
various routes.
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Table 14.19: Summary of Costs, Pipeline Facilities

COSTS
Length (offshore +
Case Reference Design Case OD CASE
Cases onshore) Offshore Onshore Slugcatcher
TOTAL
(km) (in) USDk USDk USDk USDk
A1 Two Phase 24 52,500 16,200 11,200 79,800

Single Phase (Gas) 30 61,000 16,800 0
A2 102,000
Single Phase (Liquid) 12.75 19,900 4,500 0
Base Case 44 = 36 + 8 Single Phase (Gas) 24 53,000 14,700 0
A3 92,000
Single Phase (Gas) 36 70,100 19,000 0
A4 113,300
Base Case B1 Two Phase 24 52,500 38,300 6,400 97,100
Tunnel 44 = 36 + 8 Single Phase (Gas) 30 0 0 0
B2
Operation Single Phase (Liquid) 12.75 0 0 0
C1 Two Phase 24 97,500 7,600 7,300 112,300
Cigma Route 57 = (36+15) + 6 Single Phase (Gas) 30 0 0 0
C2
Single Phase (Liquid) 12.75 0 0 0
D1 Two Phase 30 117,300 0 6,100 123,300
Single Phase (Gas) 30 120,400 0 0
D2 158,300
Single Phase (Liquid) 12.75 37,900 0 0
D3 136,800
Offshore Route 116 = 116 + 0 Single Phase (Liquid) 12.75 37,900 0 0
D4 144,600
D5 184,200
E1 Two Phase 30 93,200 90,200 60,400 243,700
West Route 182 = 80 +102 Single Phase (Gas) 30
E2
Single Phase (Liquid) 12.75
Estimating Notes: 1. All estimates include 15% contingency, are in USDk 50/50, RT 1/July 2002
2. Actual cost rates for pipelay spreads have not been verified, but for comparative purposes should be sufficient
3. Allowance for tunnelling costs in Case B1 are very preliminary - assumed 3m diameter unlined tunnel through rock
4. Pipelines all start at Rio Caribe
OGUD.2003.000012.01
Table 14.20: Pipeline Options - CAPEX
MSLNG - Pipeline Options - Capex - uncertainty ranges also shown
300
250
200
USD Million
150
100
50
0
A1 A2 A3 A4 B1 C1 D1 D2 D3 D4 D5 E1
Base Case Base Cigma Offshore Route West

Case Route Route
Tunnel
Option
14.3.2. Concept Sizing Calculations

Subsequent to the preliminary hydraulic analyses, additional calculations were performed for
specific field development scenarios, which included various combinations of pipeline routes,
pipeline types (i.e., two-phase, gas or liquid), and CPF locations. These “concepts” as they relate
to the required pipeline facilities are described in the following sections. The section below
relates to the Hardware Sensitivities described in detail in Section 13 while the concepts shown in
Sections Conclusion and Cost Summary through Concept 7 correspond to the Field Phasing
Scenarios and Demand Curve Sensitivities described in Sections 10 and 11.
14.3.3. Description of Concepts
14.3.3.1. Concept 1
This concept consists of a CPF in the Rio Caribe field and a two-phase export pipeline
connecting the CPF to the onshore LNG plant. The route chosen is the Reference Case Route
of 44 km total length. A production profile of 770 MMscf/d plus an additional 200 MMscf/d of
domestic gas (970 MMscf/d maximum flow rate) is assumed for this case.
Results and Recommendations
The results of Concept 1 are identical to those of the Reference Case preliminary sizing
calculations shown in Results in which the selected pipeline diameter is chosen because it
OGUD.2003.000012.01
provides flow stability over the widest range of flow rates while minimizing the size of the
slugcatcher. As such, the recommended configuration is as shown in Table 14.18 and
summarized below:
• Two-Phase Pipeline Diameter: NPS 24
• Slugcatcher Volume (gross): 2,400 BBL
As discussed previously, it is necessary to balance the required compressor horsepower versus the
pipeline diameter, required slugcatcher volume and LNG plant efficiency as a function of inlet
pressure. There is a potential compression cost savings that might be realized by increasing the
pipeline diameter to NPS 30, despite a possible increase in the required slug catcher volume.
Furthermore, a NPS 30 line would require an inlet pressure such that the design of the CPF
facilities would remain below ANSI 600 limits. Although preliminary steady state analyses
demonstrated possible flow instability as the flow rate increased, the feasibility of a two-phase
NPS 30 pipeline must be investigated post VAR-2.
14.3.3.2. Concept 2
This concept consists of an offshore CPF located in the Mejillones field and a two-phase export
pipeline from the CPF to the onshore LNG plant. The route chosen is the Reference Case
Route; however, the total length increases to approximately 55 km total length due to the new
CPF location. The production profile is identical to Concept 1: 770 MMscf/d plus an additional
200 MMscf/d of domestic gas (970 MMscf/d maximum flow rate).
Results and Recommendations
Despite the additional pipeline length, the recommendations, and selection rationale are the same
as those for Concept 1. The recommended configuration is summarized below:
As with Concept 1, there is a potential compression horsepower cost savings associated with
selecting a larger pipeline diameter; therefore, the feasibility of a two-phase NPS 30 pipeline must
be investigated post VAR-2.
Concept 1 and 2 Variations
As explained in Section 13 – Hardware Sensitivities, numerous variations to Concepts 1 and 2
were investigated (Table 14.21).
OGUD.2003.000012.01
Table 14.21: Concept 1 and 2 Variations

HC Offshore
CPF
Jacket +
Offshore Cond.

Concept 2 - Field

Concept 1 -
Offshore
Condensate CPF GBS
Concept 2 -
Compression &
Overland
Direct
Overland
Concept 2 - + Cond
With regard to the variations outlined in Table 14.21, the pipeline facilities recommended for
Concepts 1 and 2 do not change with the exception of the following cases:
Concept 2 – Single Phase Pipelines
This variation to Concept 2 assumes two parallel single-phase pipelines - one dedicated to gas
and the other dedicated to liquid (condensate). Results are similar to those of the Reference Case
single-phase preliminary sizing calculations shown in Appendix C on page C-1. Recommended
facilities are:
• Gas Pipeline Diameter: NPS 30
• Liquid Pipeline Diameter: NPS 12
Concept 2 – Compression and Power Generation Onshore
This variation assumes a CPF at Mejillones and compression onshore upstream of the LNG
plant. A variable production profile is assumed: in the early years, the pressure reaches a
maximum of 2603 psig and the maximum flow rate is 770 MMscf/d. In later years, the available
OGUD.2003.000012.01
pipeline inlet pressure decreases to 445 psi while the maximum flow rate increases to 970
MMSCFD. To accommodate the wide range of pressures and flow rates, the following facilities
are recommended:
• Two parallel NPS 30 two-phase pipelines
In early years, only one pipeline would be in service to ensure sufficient velocity to manage the
large liquid volume in the pipeline. In later years, the pressure available at the CPF declines and
the second pipeline would be placed in service to minimize pressure drop. The flow stability of
the NPS 30 pipelines over the wide range of pressures and flow rates must be studied further by
dynamic simulation in the next phase of the project.
Concept 2 – Subsea FPSO, Single Phase, Condensate Line to Puerto La Cruz
This variation combines elements from many of the concepts described previously and was an
attempt by the team to frame an upper bound on the costs. It assumes an FPSO in the
Mejillones field and a two-phase pipeline connecting to the LNG plant via the CIGMA route.
Also included is a dedicated condensate line to the nearest PDVSA terminal in Puerto La Cruz,
approximately 400 km away. The production profile for this concept assumes 852 MMscf/d plus
300 MMscf/d of domestic gas (1152 MMscf/d maximum flow rate). Recommended facilities
are:
• Liquid Pipeline Diameter: NPS 12
Concept 2 – Condensate Handling, Condensate Pipeline to Puerto La Cruz
The final variation assumes condensate stabilization and storage at a CPF located in the
Mejillones field. A two-phase pipeline will connect the CPF to the LNG plant and a separate
condensate pipeline will connect the CPF to the aforementioned PDVSA oil terminal at Puerto
La Cruz. Recommended facilities are:
• Condensate pipeline diameter: NPS 12
14.3.3.3. Concepts 1 and 2 - Conclusions and Cost Summary

Hydraulic calculation results for Concepts 1 and 2 are identical to those of the preliminary sizing
calculations in the previous section. The preliminary sizing calculations demonstrate that the
combination of composition, elevation profile, and resulting liquid holdup greatly influences the
behavior of the two-phase systems. Given that some pipeline diameters exhibit potentially
unstable behavior under certain conditions, it is recommended to confirm each two-phase
concept recommendation above with a dynamic analysis. Table 14.22 below summarizes the
OGUD.2003.000012.01
recommendations and estimated CAPEX for Concepts 1 and 2 as well as the multiple variations
of those concepts.
Table 14.22: Summary of Concepts 1 and 2
Gas Flow Recommended Facilities CAPEX (USDk)
Rate Slug
Slug Catcher (BBL)
Concept Pipeline Type Route (MMscf/d) Pipeline Pipeline Catcher Total
Reference
1 Two-Phase 970 NPS 24 2,400 68,629 11,101 79,730
Case
Reference
2 Two-Phase 970 NPS 24 2,400 73,884 11,101 84,985
Case
Reference
Single Phase Gas 1070 NPS 30 n/a 77,800 77,800
2-Single Phase Case
Pipelines Reference
Single Phase Liquid 16,000 BPD NPS 12 n/a 24,400 24,400
Case
2-Compression &
Reference
Power Generation Two-Phase 770-970 2-NPS 30 6,000 146,723 11,101 157,824
Case
Onshore
Reference
2-Subsea, FPSO, Two-Phase 1152 NPS 30 2,400 80,056 11,101 91,157
Case
Single Phase, Line to
Puerto La Cruz to Puerto
Single Phase Liquid 16,000 BPD NPS 12 n/a 104,443 104,443
La Cruz
2-Condensate Reference
Two-Phase 1070 NPS 24 2,400 73,317 11,101 84,418
Handling, Condensate Case
Line to Puerto La to Puerto
Cruz Single Phase Liquid 16,000 BPD NPS 12 n/a 104,443 104,443
La Cruz
Notes: Venture costs NOT included

All costs are 50/50 RT 1/7/2002
Pre-start up costs not included
CAPEX includes contingency at 15%
Tariffs for electricity, final oil export, etc are not included in this estimate
Condensate stabilisation and dehydration are not included
14.3.3.4. Updated CAPEX Estimates

Upon completion of the hydraulic calculations and CAPEX estimates for Concepts 1 and 2, it
was necessary to update the CAPEX estimates for the Reference Case, CIGMA and Offshore
routes based on updated information regarding the pipeline route, pipeline diameter and cost
details. The purpose of this exercise was to determine if either of these three routes had a
distinct cost advantage. Figure 14-23 below shows the results of the updated CAPEX estimates,
which will be carried forward for Concepts 3-7 in the following sections. The graph illustrates
that none of the routes has a clear cost advantage.
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200,000
180,000
160,000
140,000
120,000
USD Million
100,000
80,000
60,000
40,000
20,000
0
A1 A2 A3 A4 C1 D1 D2 D3 D4 D5
Base Case - shortest route CIGMA Offshore Route - all marine

Route
Figure 14.23: Updated CAPEX estimates.
14.3.3.5. Concept 3
Concept 3 is an update of Concept 2 that is based on new geological interpretations provided by
the Subsurface Team. Six gas uptake profiles were introduced and are listed in Table 14.23
Concept 3 assumes a CPF in the Mejillones field and a two-phase export pipeline (and
slugcatcher) connecting the CPF and the onshore LNG Plant. The pipeline route chosen for
Concept 3 is the CIGMA route, approximately 55 km in length. An additional constraint
introduced into the Concept 3 calculations was the requirement to maintain a required pipeline
inlet pressure less than 1480 psig (ANSI 600 limit). Because of the behavior of the two-phase
systems, it is recommended to confirm all recommendations through dynamic analyses in
subsequent project stages. Pipeline facility recommendations for Concept 3 are shown in Table
14.23 below.
OGUD.2003.000012.01
Table 14.23: Demand Curve Sensitivities
Recommended
Pipeline Diameter Recommended Slug
Concept Gas Uptake Profile (NPS) Catcher Volume (BBL)
770 MMscf/d+200
3 MMscf/d domestic gas 30 2800
build up.
852 MMscf/d+300
from Year 1
3-2 770 MMscf/d 28 2800
770 MMscf/d+300
build up.
3-4 682 MMscf/d 28 2800
770 MMscf/d+300
from Year 1
14.3.3.6. Concept 4
This Concept examines the impact of accelerated condensate delivery from the CPF located in
the Rio Caribe field and includes a two-phase pipeline and slugcatcher. Again, the CIGMA
Route is assumed and the total distance from the Rio Caribe CPF to the onshore LNG plant is
approximately 61 km. Phasing assumes maximum condensate production from Rio Caribe from
Year 1 (800 MMscf/d maximum gas flow rate) until Year 16 (770 MMscf/d maximum gas flow
rate), the final year of condensate production. From year 17 onward, the stream gradually gets
leaner until Year 27 when there is no liquid holdup and a maximum gas flow rate of 970
MMscf/d. Pipeline and slug catcher sizing was performed assuming the above phasing and a
maximum allowed pipeline inlet pressure of 1480 psig. Recommendations are as follows:
• Slug Catcher Volume (gross): 4,000 BBL
It is recommended to confirm the operability of the NPS 30 two-phase pipeline through a
dynamic analysis in subsequent project stages.
14.3.3.7. Concept 5
Concept 5 assumes two separate CPF’s: One CPF is located in the Rio Caribe field and has a
single two-phase pipeline transporting Rio Caribe condensate production to the onshore LNG
plant. The second CPF is located in the Dragon field and has a single lean gas pipeline
transporting Dragon production (and later Patao and Mejillones production) to the onshore
LNG plant. The Rio Caribe stand-alone pipeline is approximately 61 km and follows the
OGUD.2003.000012.01
CIGMA Route while the Dragon lean gas pipeline follows the Offshore Route and is
approximately 100 km in length. Recommendations are shown in Table 14.24.
Table 14.24: Concept 5 Summary
Recommendations
Maximum Gas Slug
Pipeline Type Pipe
Flow Rate Catcher
Diameter
Volume
Dragon CPF to LNG Plant Single Phase-Gas 900 MMscf/d NPS 32 n/a
Rio Caribe Stand Alone Two-Phase 330 MMscf/d NPS 18 2000 BBL
Regarding the NPS 18 two-phase pipeline, it is recommended to perform a dynamic analysis to

confirm the pipeline operability at low flow rates. Additionally, it will be necessary to confirm
the absence of retrograde condensation in the single-phase gas pipeline.
14.3.3.8. Concept 6
Concept 6 is similar to Concept 3 except that early subsea tiebacks to the Mejillones CPF are
made from Patao and Dragon. The effect of this is that the gas stream is leaner in earlier years,
however, the gas uptake profile remains identical to Concept 3 (770 MMscf/d + 200 MMscf/d
domestic gas buildup – 970 MMscf/d maximum flow rate). It is assumed that the effect of the
leaner composition on pipeline sizing is minimal and therefore the original recommendations for
Concept 3 remain valid. Recommended export pipeline faculties are:
• Slug Catcher Volume (gross): 2,800 BBL
14.3.3.9. Concept 7
Concept 7 assumes a stand-alone 61 km two-phase pipeline from a subsea manifold in the Rio
Caribe field to the onshore LNG plant. The pipeline will follow the CIGMA Route and gas
compression will take place onshore. Production from the Mejillones, Patao, and Dragon fields
will be gathered by a subsea manifold located in the Mejillones field and then transported to
shore via a 71 km two-phase pipeline following the CIGMA route. Please note that new
locations for the subsea manifolds have been selected and therefore the route lengths have
increased. Recommended export pipeline facilities are shown in Table 14.25.
Table 14.25: Concept 7 Summary
Recommendations
Maximum Gas Slug
Pipeline Type Pipe
Flow Rate Catcher
Diameter
Volume
Mejillones Subsea to Onshore Two-Phase 900 MMscf/d NPS 30 2,800 BBL
Rio Caribe Subsea to Onshore Two-Phase 180 MMscf/d NPS 22 3,400 BBL
It is recommended to perform a dynamic analysis on the two-phase pipelines to confirm the

pipeline operability at low flow rates.
OGUD.2003.000012.01
14.3.4. Conclusions and Cost Summary

Two-Phase Systems and Slugcatcher Sizing
Given the potential compression cost savings, the pipeline diameter selection during the concept
analyses was driven primarily by the requirement to remain below ANSI 600 pressure limits at
the CPF while minimizing the required slugcatcher volume. As shown in the preliminary sizing
calculations, the combination of composition, elevation profile, and resulting liquid holdup
greatly influences the behavior of the two-phase systems. Given that some pipeline diameters
exhibit potentially unstable behavior under certain conditions, it is recommended to confirm each
two-phase concept recommendation above with a dynamic analysis.
Single-Phase Systems
As with the two-phase analyses, the pipeline diameter selection for the single-phase gas systems
was driven by the requirement to remain below ANSI 600 pressure limits at the CPF. Given the
predictable behavior of the single-phase gas systems, this requirement can be met economically.
Regarding the single-phase liquid analyses, it is required to maintain the pipeline pressure above
950 psig in order to remain above the bubble point of the liquid, which would result in pipeline
inlet and outlet pressures above 1,500 psig. It is recommended to further study the possibility of
hydrocarbon dewpointing to minimize the impact on the CPF and LNG plant designs.
Table 14.26 below summarizes the recommendations and estimated CAPEX for Concepts 3-7.
Table 14.26: Summary of Concepts 3-7
Gas Flow Rate Recommended Facilities CAPEX (USDk)
Concept Pipeline Type Route (MMscf/d) Pipeline Slug Catcher (BBL) Pipeline Slug Catcher Total
3 Two-Phase CIGMA 970 NPS 30 2,800 124,272 10,666 134,938
3.1 Two-Phase CIGMA 1152 NPS 32 2,800 128,384 10,666 139,050
4 Two-Phase CIGMA 770-970 NPS 30 4,000 128,255 14,244 142,499
Two-Phase CIGMA 330 NPS 18 2,000 97,813 9,287 107,100
5
Single Phase Gas Offshore 900 NPS 32 n/a 95,433 95,433
6 Two-Phase CIGMA 970 NPS 30 2,800 124,272 10,670 134,942
7
Notes: Venture costs NOT included

All costs are 50/50 RT 1/7/2003
Pre-start up costs not included
CAPEX includes contingency at 15%
Tariffs for electricity, final oil export, etc are not included in this estimate
OGUD.2003.000012.01
15. COST ENGINEERING
15.1. Estimating of Options
15.1.1. Initial Stage – Hardware Sensitivities

Cost estimating for the MSLNG project commenced with evaluation of the options by their
hardware elements. Hardware sensitivities were developed and the twelve cases were each
estimated in detail. The descriptive and parametric elements of these cases are shown elsewhere
in this report but for convenience these are listed below with the results of the cost estimates.
These results indicate the CAPEX and OPEX totals for each. Figure 15.1 shows the
comparative cost of each case in Real Terms, Figure 15.2 below shows the case in values, which
take account of the phasing of each element of the individual project, assuming a present value of
money of 7% (also referred to as PV7).
Concept summary - Capex - USDk, RT 2002 Concept 1 = 100%
160%
140%
120%
100%
80%
60%
40%
20%
0%
p
b
nd
ph
re
l
nd
ea
U
1
Vo
Su
GB
FP
ho
Co
bs
Co
co
le
O,
gh
ns
ng
Su
+
1
SO
PS
Hi
BS
O
el
Si
1
,F
FP
Fi
2
2
G
2
Hi
2
2
1
Figure 15.1: Concept summary – CAPEX USDk, RT 2002, Concept 1=100%.
OGUD.2003.000012.01
200%
180%
160%
140%
120%
100%
80%
60%
40%
20%
0%
ub
nd
nd
BS
U
l
ph
ea
1
re
Vo
FP
S
Co
ho
bs
O,
co
+C
gh
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PS
1
SO
BS
d
Hi
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1
FP
G
2
Fi
2
Hi
2
2
1
2
Figure 15.2: Concept summary – CAPEX – USDk, NPV 7% Concept 1=100%.
15.1.2. Pipeline Routing Reviews

At this early stage of cost checking of the options, one of the main areas of examination was that
of the export pipeline routes. The chosen location for the LNG plant site, and therefore the end
of the export pipeline is Guiria. The commencement of this export line, or lines, is very much in
abeyance and options have been reviewed from both technical and cost viewpoint
The results of these initial estimates are shown below in Table 15.1. The routes selected take into
account both onshore and offshore sections, where applicable as well as the cost of the
appropriate slugcatcher. There is also an option, which calls for the construction of a tunnel
through the mountainous peninsula, such construction being very difficult to estimate without
the benefit of any design or engineering input at this stage. The option referred to here as the
reference case assumes that the onshore element of the pipeline will travel South from the
landfall on the North side of the peninsula on a direct route to Guiria. This entails traversing the
National Park. An extra cost allowance has been included for the anticipated physical work
involved in forming the right of way and it’s subsequent restoration; it does not attempt to cater
OGUD.2003.000012.01
for any costs which may be incurred in fees, permits, or other such expenditure. For the
purposes of direct comparison it has been assumed that there is a single point of export from the
field to the LNG plant, and this point has been selected as lying within the Rio Caribe sector.
Table 15.2 set out further down indicates the values of the various options in comparative terms.
On the x-axis of the chart in Table 15.2 are CAPEX figures in USD Millions (USDM) and these
are 50/50 values, including a 15% contingency. This chart also attempts to indicate the range of
estimate uncertainty. From inspection of this table, it can be seen that within such band of costs,
whilst there are indications of cost ranking, there are certainly no clear “winners.”
Table 15.1: MSLNG Pipeline Sizing Cost Comparison
MSLNG Pipeline Sizing Cost Comparison
COSTS
Length (offshore + CASE
Case Ref Design Case OD Offshore Onshore Slugcatcher
Cases onshore) TOTAL
(km) (in) USDk USDk USDk USDk
A1 Two Phase 24 52,500 16,200 11,200 79,800

Single Phase (Gas) 30 61,000 16,800 0
A2 102,000
Base Case 44 = 36 + 8 Single Phase (Gas) 24 53,000 14,700 0
A3 92,000
Single Phase (Gas) 36 70,100 19,000 0
A4 113,300
Base Case B1 Two Phase 24 52,500 38,300 6,400 97,100
Tunnel 44 = 36 + 8 Single Phase (Gas) 30 0 0 0
B2
Operation Single Phase (Liquid) 12.75 0 0 0
C1 Two Phase 24 97,500 7,600 7,300 112,300
Cigma Route 57 = (36+15) + 6 Single Phase (Gas) 30 0 0 0
C2
Single Phase (Liquid) 12.75 0 0 0
D1 Two Phase 30 117,300 0 6,100 123,300
D2 158,300
Offshore D3 136,800
116 = 116 + 0 Single Phase (Liquid) 12.75 37,900 0 0
Route
D4 144,600
D5 184,200
E1 Two Phase 30 93,200 90,200 60,400 243,700
West Route 182 = 80 +102 Single Phase (Gas) 30
E2
Single Phase (Liquid) 12.75
*Slugcatcher net volume: 25% to be added for operational margin
Estimating Notes: 1. All estimates include 15% contingency, are in USDk 50/50, RT 1/July 2002
2. Actual cost rates for pipelay spreads have not been verified, but for comparative purposes should be sufficient
3. Allowance for tunnelling costs in Case B1 are very preliminary - assumed 3m diameter unlined tunnel through rock
4. Pipelines all start at Rio Caribe
OGUD.2003.000012.01
300
250
200
USD Million
150
100
50
0
A1 A2 A3 A4 B1 C1 D1 D2 D3 D4 D5 E1
Base Case Base Cigma Offshore Route West

Case Route Route
Tunnel
Option
Figure 15.3: MSLNG Pipeline Options – CAPEX.

For details of the routes, and the technical aspects related to these cases, please refer to the
Pipelines section of this report.
15.1.3. Other Elements

At this stage of the option review process, other elements including drilling were not evaluated
on a comparative basis. The anticipated CAPEX and OPEX for such elements was carried out
and included in the overall cost estimate for each option, but no comparisons for alternative
solutions for these aspects were done.
Considerable time was actually spent on the determination of the wells costs in particular, and
results of the costs determined by the Upstream team are incorporated into the estimates. More
detail is provided on this section of the project in the report issued by the well engineer.
The latest views on drilling rig rates, the physical capabilities of these rigs and the possibility of
alternative drilling styles were investigated, but kept independent from the hardware selection
work described both above and in other sectors of this report.
The two major alternatives of drilling by use of floating vessels versus jack-up drilling rigs was
reviewed and it was the considered view that jack-up units, which are now able to work in the
water depths evident in this project were the preferred solution. Further, reviews took place on
the feasibility of employing platform-mounted drilling facilities as against jack-ups. Cost
estimates were carried out and the results of this investigation clearly demonstrated that jack-up
units were far more cost effective. These cost results are shown below in Table 15.2.
OGUD.2003.000012.01
Table 15.2: Cost Comparison – Jack-up Drilling versus Platform Drilling

MSLNG
Cost comparison between jack-up drilling option and

platform drilled wells
Based on Mejillones 6
well case.
Cost Cost
Drilling method Quantity CES 50/50 CES 50/50
USDM USDM
Wells Jack Up 6 no 93.4

Platform Based 6 no 86.8
Platform jacket Jack Up 900t 8.6

Platform Based 2300t 22.1
Platform topsides Jack Up 550t 16.5

Platform Based 7400t 118.2
Jack Up 118.5
Platform Based 227.1
15.1.4. Conclusions
The detailed work has been summarised into separate sheets and these are presented in an
Appendix to this overall report. Conclusions drawn and lessons learned from these early
evaluations have considerably assisted the team in stepping forward into the evaluation of
schemes using the updated subsurface scenarios, which formed the next phase of our work.
15.2. Field Phasing Sensitivities
15.2.1. Comparison to the Earlier Stage

The next step taken in the option selection process by the Upstream was to take the knowledge
gained from the Initial Phase of the work and incorporate into this the revised hydrocarbon
interpretations derived by the subsurface experts. A new scenario, referred to as Concept 3, was
compiled and the new CAPEX estimate for this was compared with that for the earlier Concept
2. A table showing this comparison is attached below in Table 15.3.
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Table 15.3: Concept 3 (Latest) Comparison with Concept 2
Comparison with Concept 2 - note this is the latest version of Concept 3
Concept 2 Concept 3 Cost difference

Number Cost Number Cost
Wellhead platforms 5 130 8 217 87
First gas wells 23 298 25 254 -44
Infill wells 0 0 7 70 70
Well mob/demobs 3 8 7 39 31
Flowlines 202 281 79
Compression platform 185 125 -60
CPF 90 105 15
Export pipeline 24"/44km 75 30"/55km 124 49
Domestic gas plant 0 20 20
Other items 86 69 -17
1074 1304
Net extra 230

Concept 3 1304
Concept 2 1074
230
15.2.2. Phasing and Flows

In this next sector of the option estimating, several alternatives of the overall scheme were
reviewed. A variety of export routes, locations for the central processing facility (CPF) and the
use of subsea and platform-based wellheads were investigated.
A total of 5 additional cases were examined, referred to as Concept 3, 4, 5, 6, and 7.
Again, the overall cost estimate comparison summary is contained within a separate section of
this report and the individual detailed summaries, one for each Concept, are contained within
Appendix D – Cost Summary Sheets (beginning on page D-1 and available only in the printed
form of this report). The numbering of the Tables in Appendix D has been selected to assist in
the reading of the report.
For a high level summary of these Concepts, please refer to Section 5 –- Concept and Cost
Summary.
OGUD.2003.000012.01
15.3. Demand Curve Sensitivities
15.3.1. Further Concepts

Following on from the Field Phasing review work examination of the effects of varying
volumetric flows was carried out. The flows scenarios were all compared with that of Concept 3,
this being used as the basis of most of the comparative exercises.
For reference Concept 3 has a production regime of 770 MMscfd, with a gradual build up over
field life to an additional 200 MMscfd of gas. This extra above the 770 MMscfd (gas required to
provide the LNG plant with the capability to produce 4.7mta) being used for the local domestic
gas market.
The additional cases are-
• Concept 3.1 – 852 MMscfd (to provide 5.2 mta of LNG) + 300 MMscfd from day 1
• Concept 3.2 – 770 MMscfd only
• Concept 3.3 – 770 MMscfd + gradual increase to 300 MMscfd
• Concept 3.4 – 682 MMscfd only (to provide 4.2 mta of LNG)
• Concept 3.5 – 770 MMscfd + 300 MMscfd from day 1
Again, high-level cost summary charts for these cases, and their relation to Concept 3, are shown
in the Summary above.
As with the Hardware Sensitivity, the detailed individual spreadsheets giving the full breakdown
xxv
of CAPEX and OPEX costs are available only in hardcopy .
15.4. Updated Geology Concepts

During this phase of the project considerable work has been carried out by the subsurface team
in terms of the ongoing evaluation of the geological data in hand and also in terms of analogous
projects and fields. The geological updating work has caused several further cases to be run
where the produced water volumes are increased from the reference case, additional condensate
may be in place and recoverable from the Rio Caribe sands, general recoverability of gas from the
reservoirs may be improved and also where a reduced volume of gas recovered occurs.
Further, the use of analogies in comparable projects has resulted in the assessment of the number
of wells required to evacuate the maximum amount of gas from the reservoirs being markedly
increased. Using a value given by the subsurface team of 200 Bcf per well as the amount that a
well can deliver in its lifetime, the number of wells for Concept 3 rises from approximately 30 to
around 50. On top of this a number of sidetrack wells are thought by the subsurface engineers to
be required. Again for Concept 3 this is given as 19. The cost estimates have been revised in
xxv See Reference 21 on page 21-3.
OGUD.2003.000012.01
accordance with these new requirements and the new CAPEX and OPEX computed gives rise to
much higher levels for the UTC.
The brief titles included in the following tables and charts simplify the Cases reviewed and for a
more technical description reference should be made to the Geological Realization section earlier
in this document.
15.5. Other Sensitivities
15.5.1. Contaminants
As a check on how certain physical properties, which may be contained within the gas to be
supplied to the LNG plant, could affect the Upstream facilities, further cost estimating has been
carried out. These estimates are again related back to Concept 3 but have been reviewed on two
bases; firstly assuming 500ppm of H2S in the gas resulting in the need for changes to materials
used in the scenario. More precise details of these changes can be read in the detailed description
in a separate part of this report document.
The second level of contamination of the gas assumes that in addition to the 500ppm of H2S, the
gas also contains CO2 at approx 2.5%. There is assumed there will be no attempt to treat the gas
on the Upstream facilities, merely using appropriate materials to cope with the transported
product.
A before, the detailed cost estimate breakdowns for each of these options are contained in an
Appendix to the overall report and a high level summary, comparing the results with Concept 3 is
included in Section 5 of this document.
15.6. OPEX
Operations and maintenance expenditure (OPEX) has been determined for all scenarios in all
Sensitivity options. Currently the project is at far too early a stage to permit the construction of a
detailed Operations Reference Plan and consequently it is necessary to calculate the approximate
cost of the OPEX by higher-level means.
The calculation is carried out in two parts, the sum of which is shown in the charts in the
Concept descriptions, the detailed cost summaries, and elsewhere.
The two elements relate to the total capital expenditure (CAPEX) for each separate hardware
item (a platform, pipeline, well, etc.) by use of an appropriate percentage applied to that CAPEX
value. In addition, and to capture the specific throughput of a given feasibility case, a value in
terms of US dollars per barrel of oil equivalent (such that both oil and gas projects can be
evaluated) relative to each years hydrocarbon production.
It has been found over many years and over many projects, that this combination of attributes,
when applied in total across the field life of a project, to result in a good approximation of the
actual OPEX. Validation exercises and benchmarking have shown that both the annual total and
the field life total values arrived at, when used correctly, generally give results within the range of
accuracy of the estimates possible at this stage of a project.
OGUD.2003.000012.01
15.7. Determination of UDC and UTC

To improve the evaluation of cases a simple calculation has been performed for each Concept
which takes into account the Concept’s CAPEX, OPEX, project phasing and gas production
throughout the envisaged 30-year field life. In arriving at the result for this, it is necessary to use
a cost-discounting factor, bringing the costs back to a “present value” (PV). The discount factor
chosen for this calculation is 7 %, thus the indicator PV7.
The UDC, or Unit Development Cost, is defined as the CAPEX of a project divided by its
productivity, both in present value terms.
UOC, or Unit Operating Cost, is similarly its OPEX divided by the total production, also
adjusted for present value. This function has not been shown in our cases here, it being merely
the difference between UTC and UDC.
For its part UTC, meaning Unit Technical Cost, is the present value of CAPEX plus the present
value of OPEX all divided by the present value of production. Set out in the Cost Summary
section of this document is the result of the calculations carried out on Concepts 3 to 6 and also
Concepts 3.1 to 3.5, this last table also showing the relative figures for Concept 3 to assist in
comparison.
The tables depicting the UDC and UTC values for the various Concepts are shown in terms of
both cost per barrel of oil equivalent and cost per million Btu.
A brief exercise has been carried out showing how the UTC for each Concept compares with its
intended maximum daily gas production, whilst another comparison relates the Upstream
CAPEX to the anticipated gas reserves recovered. These charts, set out below, are intended
purely to give an indication as to where greater value can be delivered – a higher PV CAPEX
project may not necessarily deliver more gas and a project with higher throughput will probably
result in better UTC.
4.00 1200 Max Daily Production

3.50 1100
UTC in USD/boe
3.00 1000
2.50
900
2.00
800
1.50
1.00 700
0.50 600
0.00 500
Hi gh lls
W R
eo
gh te r
Hi W d
1
2
3
4
0B da 5
3
4
5
6
7
cf te
gh G
3.
3.
3.
3.
20 Up 3.
G
Hi a
C
Figure 15.4: UTC in USD/boe.
OGUD.2003.000012.01
1,400,000 14.0
Recovered Reserves - Tcf

1,200,000 12.0
1,000,000 10.0
PV Capex
800,000 8.0
600,000 6.0
400,000 4.0
200,000 2.0
0 0.0
Hi gh ells
Hi Wa R
eo
r
Hi f W d
1
2
3
4
0B da .5
3
4
5
6
7
gh te
c te
gh CG
3.
3.
3.
3.
20 Up 3
G
Figure 15.5: PV CAPEX.
15.8. Estimate Benchmarking and Checks

A formal cost estimate review has been carried out by a senior member of the cost engineering
fraternity in Shell, in line with standard quality control techniques laid down in team procedures.
This has been carried out by an independent estimator, provided with the full details of the scope
and Concept particulars. Resulting comments and observations from this review have been
discussed between the relevant personnel and ensuing action points dealt with.
With regard to the possible subsea facility items, a workshop was held in which an expert in this
field was invited to give his guidance on systems, methods, and costs, which the Upstream team
had proposed. Many areas of the projected scenarios were reviewed and the detailed knowledge
gained by the team was incorporated in the layouts, functions and their ensuing cost estimates.
The use of subsea separation and compression were discussed but at this time, due to the relative
uncertainty in likely CAPEX and OPEX, these items were not progressed into firm concepts.
Information received at this workshop on the topic of umbilical cables was very useful and it
confirmed the expectation of the team in the scoping out of certain of the Concepts.
The cost estimating in use for this project (Shell’s CES) is the pre-eminent tool in its class. It has
been benchmarked against all other tools and systems in use by major companies in the upstream
industry and proved first class. Twice-annual upgrades are made to the system and with it’s use
by almost all Shell’s Operating Units (OU), the input and feedback generated are found to
provide confidence to the selection process with regard to CAPEX and OPEX values. CES is
used by the Shell OU in Venezuela and additionally, personnel in the MSLNG upstream project
have been gathering cost data on other projects in the vicinity, which has been used in generating
the estimates.
OGUD.2003.000012.01
The day rates for the drilling rigs used in determining the cost of the wells has been cross-
checked with specialists in the wells engineering department in Houston, answers being almost
identical with those existing in the CES.
15.9. Cables and Umbilicals

As the scope of these elements is likely to form a significant portion of the cost of a concept,
considerable time was devoted to the determination of the cost of supply (procurement) and
installation of these facilities.
Using one of the proposed scenarios in the initial phase of evaluation, a scope of inter-platform
cabling and umbilical layouts was evolved. The quantities derived were handed to a major
product manufacturer in this field and detailed budget cost estimates were provided by them.
They also provided information in the areas of installation, scheduling, and logistics relating to
the cables and umbilicals.
The procurement rates quoted by the supplier have been cross-checked with information
currently held in the cost engineering department and are viewed as realistic, the new information
benchmarking well with in-house data. As for this particular project, the rates derived from the
quotes have been used in the estimates, adjustments being made to cater for amendments in
proposed platform layout, final connections, major pipeline routing and other scenario-specific
related items
The table of cable and umbilical quantities, the budget quotations and the product specifications
used in this work are not included in this report.
15.10. Decommissioning
The costs for decommissioning (abandonment) of the Upstream facilities at the termination of
the project need to be determined in order for such expenditure to be incorporated in the
economic evaluation. No such costs are shown in the cost summary sheets, but they will form
part of the overall calculation of net present value and value investment ratio.
A detailed cost estimating device is in service with the Upstream cost engineering department and
can be employed to determine the likely expenditure. This is however only possible if a scope of
work is known. No such requirements appear to exist for the project at present. A solution
would be to apply an assumed scope and specify to the appropriate parties what the Concept cost
allows for in this regard.
15.11. Infill Wells

As part of the cost estimation of two of the later elements of the project evaluation (Field
Phasing and Demand Curve Sensitivities), additional costs have been included for the probable
requirement for additional gas producing wells, over and above those already installed and
forming part of the scenario total.
Detailed well engineer evaluations have determined that additional infill wells are needed. Cost
estimates for them have been carried out using similar inputs, rates, etc., as for the base wells.
OGUD.2003.000012.01
Some reduction in cost is assumed, though due to certain elements of the well components
already being in place.
The quantity of infill wells and their timing have been determined by the well engineer, a detailed
spreadsheet being used to calculate the requirements on a field-by-field basis. A copy of this
sheet is included in the Well Engineer’s Report.
15.12. FPSO Costs

One of the alternative scenarios under Concept 1 contains provision for a floating production
and storage and offloading facility (FPSO). In calculating the cost of this scenario, the
assumption has been made that the vessel would be a new build. There are other alternatives to
this, for example, rental of a vessel and modification of an existing vessel into the requirement
facility.
Each of these options is considered appropriate, and should this scenario be considered for
further investigation then all possibilities would be reviewed.
In the cost estimating process for the option, crosschecks were carried out with other similar
schemes to validate the amount ascertained using CES. The check values gave figures well within
the present range of estimating accuracy.
15.13. Domestic Gas Plant

Several Concepts provide for cases where in addition to the gas supply to the LNG plant, gas is
to be provided to the local market. The volumes to be supplied have not yet been finalised but
the two sizes catered for by the project are 200 MMscfd and 300 MMscfd.
These volumes may be delivered at the commencement of the project (day 1) or gradually build
during the field life. The plant capacities are however constructed in one phase to take the
maximum that can be delivered per scenario.
In addition to the basic processing of the gas, which is required (dehydration only), there are
cases where gas sweetening may be required. As mentioned in sections previously dealing with
“Corrosion Cases” both CO2 and H2S may be in evidence and in these cases the extra gas
treatment systems have been included in the relevant cost estimate.
A table of these cost estimates is shown below:
Table 15.4: Gas Processing Cost Estimate
Onshore Domestic Gas Plant
Capacity Gas sweetening Capex

mmscfd USDM
200 No 19.4
200 Yes 36.9
300 No 23.8
300 Yes 46.6
OGUD.2003.000012.01
15.14. Operations Base

Cost estimates to determine the CAPEX for the proposed Operations and Supply Bases were
carried out using alternative options. In essence, and as set out in full detail in the Operations
Engineer’s separate document, there are alternative ways in which the Operations Base can be
formulated either as a completely stand-alone unit or as an add-on, integrated with the LNG
plant facilities. The Operations Philosophy document promotes the construction of an
integrated facility, giving benefits in terms of CAPEX, OPEX, and operational procedures.
The cost estimates within this report are all calculated on the basis of an integrated facility. A
cost estimate was also carried for the construction. Alternative costings were carried out and
these are shown below.
Marine (supply) Base – located near Guiria - approx CAPEX USD 36M
Operations Base – standalone - approx CAPEX USD 57M
Operations Base – integrated with LNG plant Ops Base - approx CAPEX USD 22M
15.15. Subsea Isolation Valves (SSIV)

In every case, each export line is assumed to be fitted with an appropriately sized subsea isolation
valve (SSIV). The location of these valves is not fixed at present; they can be installed at the foot
of platform risers, at landfalls, or elsewhere. For the purposes of the cost estimates, the total
CAPEX for supply and install is included.
15.16. Landfalls and Seismic Crossings
15.16.1. Landfalls
Where export pipelines change from being offshore to onshore, it is necessary to construct a
landfall. These will vary in cost depending on the nature of the beach, if any, the type of terrain
at both the land and the immediate sea area, the topography and bathymetry, whether the areas
are populated and several other factors. In each export pipeline routing landfalls are always
required, the quantity depending on the route selected.
The method of construction of such civil engineering works are outside the remit of this report;
suffice it to say that typical CAPEX allowances have been incorporated into the total for each
scenario.
It is worth noting that the route referred to as the “CIGMA route” has in fact three landfalls, as it
involves effectively two offshore pipelines and one onshore pipeline.
15.16.2. Seismic Crossings

It is apparent that the fields, the landmass in question, and the intervening sea areas are all within
seismically active areas.
Where there are pipelines crossing these seismic faults, it will be necessary to construct the lines
such that they are able to withstand the movement. Looping and other methods can be
OGUD.2003.000012.01
employed and allowance has been made within the cost estimates for carrying such additional
work. Major civil engineering structures or other very expensive items have not been allowed
for.
Offshore structures will also be required to withstand seismic activity, and again the estimates do
allow for additional strengthening, piling as may be required.
15.17. Phasing and Scheduling of the Project

The phasing of a project is affected by many factors. This project in particular is very complex in
this regard and there are a large number of possible ways in which the various elements can be
connected, both physically and in time.
The Concepts which have been estimated all vary widely in terms of when wells are to be drilled,
platforms or subsea wellheads installed, pipelines laid, etc. Whilst the CAPEX for these
individual facilities is one calculation it is also important to allow for the necessary mobilisation
and demobilisation costs involved with the various installation vessels, barges, cranes, etc. These
costs are considerable and the more, individual or isolated “mob/demobs” are required the
greater the total expenditure.
There is no doubt that some optimisations can be carried out between well drilling, platform
installation, pipe lay work and the laying of cables and umbilicals which will result in CAPEX
reduction. However, the subsurface realisations stipulate when wells are required and this reflects
back to the other project elements. No attempt has been made to rearrange the project phasing
at this stage.
Currently, the firm dates relating to the Final Investment Decision (FID), first gas and first LNG
cargo – the dates which set the bounds of the construction of the Upstream portion of the
prospect - have not been finalised.
The dates, which are presently mooted, provide a period of approximately 30 months between
FID (assumed for present purposes to be early in 2006) and first gas delivered to the LNG plant
(taken as mid 2008). In the case of the majority of Concepts, this will be an adequate period,
always providing that the projected construction work is ready to commence immediately the
FID is granted. For some Concepts, particularly those with compression facilities required on-
line from day one, this period will be very challenging. In such cases, it may well be necessary to
have first gas being provided to the LNG plant with various aspects of the project still in
progress. For example, commissioning of the compression platform may be proceeding after the
first gas date.
In addition, there are no formalised contract or construction strategies in place. It has been
assumed that several EPC-type contracts would be let, depending on the phasing, hardware
items, and production profiles selected. The cost estimates produced and incorporated into this
report have been carried out on the basis of the above philosophies; major changes to these
processes could seriously affect the CAPEX and OPEX outcomes.
The work scopes defined during this phase of the studies are felt to be capable of being carried
out within the time period described above; should the actual work scope be increased noticeably
then again the likelihood of meeting the required dates would be adversely compromised.
OGUD.2003.000012.01
15.18. Power Generation and Compression Philosophy

In the construction of the facilities to cater for the power generation and compression sets, the
philosophy has been to assume that all power generation requirements for all stages/phases of a
project will be installed on day one. In general, the amount of power required to be generated
and transmitted is not very large. The additional cost involved in retrofitting additional gensets,
together with their related disruption to the existing platforms is considered to far outweigh the
upfront cost saving by only installing what is required on a stage-by-stage basis.
For cost estimating purposes the assumed sparing ratio is taken, in all scenarios, to be 3 x 50%,
i.e., always installing three machines and having allowance in hand to provide full power in case
one machine is out of service.
With regard to the compression equipment however, this is somewhat different. The various
Concepts tend to require upgrades to the compression sets with several years between each stage.
As in all cases, a separate compression platform is installed in a scheme (where of course
compression is actually required) and this facility is linked by bridge to the central processing
facility. Upgrades to such stand-alone platforms are far easier than modifications to a complex
processing platform. There are a few isolated cases where two 50% machines have been
installed, but this does not apply to Concepts 3 to 7.
It is relatively straightforward to construct the compression platform jacket with enough space
and enough structural capacity to handle the future additional compression trains, and this has
been the philosophy employed in the cost estimates in this project.
As far as the sparing ratios assumed for the compression requirements, the arrangement has been
that the initial stage of compression always has spare capacity but subsequent stages do not,
unless the later stages require far more horsepower than the early stages. In such events,
adjustment to the sparing scheme has been made.
15.19. Interface with Downstream Cost Engineers

At this stage of the project, the opportunity for interface and dialogue with the Downstream cost
engineers has been limited. It is certainly planned that for the next phase of the work there will
be formal liaison and cost data sharing for the benefit of the project.
A cost and capability data gathering visit is tentatively planned for Q3 this year, this will be a
follow up to the preliminary meetings held in Venezuela by some of the Downstream personnel
last month.
As mentioned elsewhere, there is already a good level of knowledge in the Upstream cost
department on such elements as labour rates, labour productivities locally; where additional
information is sought is more related to skill availability, fabrication capability and capacity,
material procurement, transport logistics and the existing infrastructure as well as reviewing the
practical side of the construction work.
It is anticipated that several areas of synergy will be developed with the Downstream plant and
it’s associated facilities.
OGUD.2003.000012.01
16. FLOW ASSURANCE

Shell internal experts in the Flow Assurance group studied the data and made recommendation
for hydrates, wax, and asphaltenes. This section summarizes their findings and recommendations
for prevention or mitigation.
16.1. Hydrates
16.1.1. Summary
In this brief study, we have examined the hydrate inhibition options for the reservoir fluids that
constitute the feedstream for the MSLNG facility in Venezuela. The study was limited to a
saturated gas analysis without the presence of free water. Major conclusions from this study are
summarized as follows:
• Rio Caribe reservoir fluid is the most susceptible of the four reservoirs from a hydrate
stability perspective. The hydrate phase boundary of the Mejillones, Patao, and Dragon
reservoir fluids are similar to each other.
• The hydrate subcooling (temperature extent to which a system resides within the hydrate
stability region) of all four reservoir fluids is relatively low and ranges from 9° to 18° F.
• Due to the high ambient seabed temperatures, only a fraction of the water from the saturated
gas will condense out of the gas phase. Consequently, the total hydrate inhibitor rates are
also quite low.
• The inhibitor dosage rates for methanol range from 6 to 18 gallons/MMscf; while those for
mono-ethylene glycol (MEG) range from 3 to 8 gallons/MMscf.
• Between methanol and MEG, we recommend the use of MEG since it requires a lower
dosage rate and does not carry with it the risk of contaminating the gas stream that
constitutes the feedstream for the MSLNG facility.
• A high-level feasibility study of low dosage hydrate inhibitors (LDHI’s) indicates that the
kinetic hydrate inhibitors (KHI’s) are likely to provide a robust hydrate management option
for all the reservoirs fluids. The anti-agglomerant (AA) type of LDHI is not recommended
since Rio Caribe is the only reservoir that produces enough of a liquid hydrocarbon stream to
suspend the hydrate crystals.
• Based upon the relatively low inhibitor dosage rates, we recommend a chemical treatment
option rather than pipeline insulation as the basis of design.
• We recommend a detailed study of KHI’s in the next phase of work in order to identify the
optimal KHI product and dosage rate. An economic evaluation study to compare the KHI
alternative to MEG is also recommended in the next phase of work.
OGUD.2003.000012.01
16.1.2. Reservoir Conditions

The study was based on the reservoir conditions shown below, and on the PVT data previously
summarized.
Table 16.1: Reservoir Conditions
16.1.3. Hydrate Stability Analysis

A detailed hydrate stability analysis was carried out for each reservoir fluid. Based upon the PVT
properties and the reservoir conditions above, the Multiflash hydrate prediction program was
used to determine the hydrate phase boundary for each fluid. A composite figure showing the
hydrate phase boundary for all four reservoir fluids is shown below:
4000
3500
3000
2500
Pressure [psi]
2000
1500
1000
500
0
30 35 40 45 50 55 60 65 70 75 80
Temperature [F]
Rio Caribe Dragon Patao Mejillones
Figure 16.1: Hydrate phase boundaries for MSLNG reservoir fluids.
OGUD.2003.000012.01
The hydrate phase boundaries of the Dragon and Patao reservoir fluids are virtually identical.
The phase boundary of the Mejillones fluid is also similar to that of Dragon and Patao fluids.
The hydrate phase boundaries are similar due to the relatively identical compositions of these
three fluids.
The hydrate phase boundary of the Rio Caribe fluid however, stands out from the rest. The
hydrate stability zone for the Rio Caribe fluids is much larger than those of the other fluids, due
to its high concentration of hydrate formers such as ethane and propane in addition to methane.
At a given pressure, hydrates with the Rio Caribe fluid will thus begin to crystallize at much
higher temperatures compared to the other three fluids.
For example, at a pressure of 2500 psi, hydrates will start to form at a temperature below 74° F
with the Rio Caribe fluid, but will only start to form once the temperature is below 64° F for the
other three reservoir fluids. A summary of the hydrate equilibrium temperature, more commonly
referred to as the hydrate dissociation temperature (HDT) for each reservoir fluid at various
pressures is provided in Table 16.2 below. The accuracy of these predictions is expected to be
within ±1 °F based upon a benchmarking of the Multiflash hydrate prediction model against a
large collection of hydrate phase-behavior data. The hydrate inhibition requirements for the
MSLNG reservoir fluids are based upon these HDT predictions and they consequently form the
basis for the hydrate inhibition strategy for each fluid.
Table 16.2: Hydrate Phase Behavior Predictions
Rio Caribe Mejillones Patao Dragon
Pressure HDT HDT HDT HDT
[psi] [F] [F] [F] [F]
500 56.9 42.8 37.9 36.9
750 62.0 48.8 44.4 44.3
1000 65.4 52.8 49.4 49.3
1250 67.7 55.7 53.2 53.0
1500 69.5 57.9 56.1 56.0
1750 70.8 59.7 58.5 58.4
2000 71.9 61.2 60.5 60.5
2250 72.9 62.5 62.3 62.2
2500 73.7 63.7 63.8 63.7
2750 74.5 64.8 65.2 65.1
3000 75.2 65.8 66.4 66.4
3250 75.9 66.9 67.6 67.5
3500 76.6 68.0 68.6 68.6
3750 77.3 69.0 69.6 69.5
4000 78.0 69.9 70.5 70.5
OGUD.2003.000012.01
16.1.4. Hydrate Inhibition Options

There are several hydrate control options available for each of the MSLNG reservoir fluids. The
most common means for achieving hydrate control is by the injection of inhibitors such as
methanol and glycol. These inhibitors are known as thermodynamic inhibitors and the amount
of hydrate inhibition achieved is directly proportional to the concentration of inhibitor in the
aqueous phase. The action of a thermodynamic inhibitor is based solely upon its concentration
in the aqueous phase and hence any inhibitor that is dissolved in the liquid hydrocarbon phase or
present in the gas phase, does not provide any hydrate inhibition. Consequently, a careful
accounting is necessary to determine the required hydrate inhibitor dosage rate to compensate for
the amount of inhibitor that is lost to the hydrocarbon phases.
In the case of a volatile inhibitor such as methanol, the amount of inhibitor lost to the
hydrocarbon phase can be very high (often greater than 50% for gas condensate systems) and
consequently relatively large dosages of methanol are necessary for achieving hydrate inhibition.
On the other hand, a relatively heavier and non-volatile inhibitor such as MEG (monoethylene
glycol) has relatively minimal losses to the hydrocarbon phases. There are pros and cons to using
each of these inhibitors, some of which are highlighted later in this section.
The other class of inhibitors is the LDHI’s – low dosage hydrate inhibitors. LDHI’s are relatively
new in the industry and they have only recently started to make penetrations into the market
following successful field trials and implementations in various oil and gas fields worldwide. A
major advantage of LDHI’s over conventional thermodynamic inhibitors such as methanol or
glycol is the order of magnitude reduction in the overall inhibitor injection rate. The lower rates
allow for smaller chemical injection lines and lower storage and transportation costs. Typical
LDHI dosage rates are on the order of less than a gallon per barrel of water, a dramatic reduction
in volume compared to dosage rates of over a barrel of methanol (or MEG) per barrel of water.
There are two major types of LDHI’s: Anti-agglomerants (AA’s) and Kinetic hydrate inhibitors
(KHI’s). The anti-agglomerants have been the subject of active research within Shell for over a
decade and were designed for application in gas condensate and oil systems. Two types of AA’s
have been developed in the Shell labs; an oil soluble product and a water-soluble product. These
AA’s have been licensed to oilfield chemical service companies for deployment in the field. AA’s
have been recently successfully implemented in the deepwater Gulf of Mexico at Popeye. Several
new deepwater developments in the GoM as well as shallow water applications in the North Sea
are currently being planned around the use of LDHI’s.
The principle of AA’s is not to prevent the formation of hydrates per se, but rather to inhibit
their accumulation into a larger mass that can cause a line blockage. AA’s create a fine dispersion
of hydrate particles and suspend them in the condensate or oil phase. These hydrate crystals are
transported with the condensate/oil phase through the pipeline and then melted in the separator
or other topsides equipment. A unique feature of the AA’s is that the hydrate crystals do not
accumulate into a larger hydrate mass even during a shut-in of flow. Due to their density, the
hydrates migrate to the water-hydrocarbon interface or sink to the bottom of the flowline if all
the water has been converted to hydrates. Upon re-start of the flowline, the hydrates will flow
easily without any resistance or significant increase in the viscosity of the fluids and again be
transported out of the pipeline. The AA’s however require the presence of a liquid hydrocarbon
OGUD.2003.000012.01
phase in order to suspend the hydrate crystals. AA’s cannot therefore be used strictly in dry gas
applications such as the reservoir fluids at Patao and Dragon.
The principle of KHI’s is to completely block the formation of hydrate crystals for a finite period
of time that exceeds the residence time of the fluid in the pipeline. KHI’s do not require the
presence of a condensate/oil phase to be effective. If the residence time of the fluid exceeds the
hold time of the KHI (time during which it is effective in preventing the nucleation and growth
of hydrates), rapid conversion of the water into hydrates is possible. KHI’s have also been
studied extensively for several years and are currently in use at several (non-Shell) fields
worldwide. A major limitation of the KHI’s however, is that they are not capable of inhibiting
hydrates at high subcoolings. KHI’s have a subcooling limitation of approximately 22°F (12°C).
In order to determine the applicability window of each hydrate inhibition option, the first step
was to determine the maximum subcooling for each of the reservoir fluids. The subcooling is a
measure of the temperature extent to which the system resides within the hydrate stability region.
It can be simply stated as follows:
Subcooling ( ∆T) = Hydrate Dissociation Temperature (HDT) minus Ambient Temperature
The hydrate inhibitor dosage rate is based upon the HDT corresponding to the highest pressure
that is expected in the system (usually the SITP) and the lowest expected ambient temperature.
Usually, the lowest ambient temperature is the seabed temperature at the greatest depth of the
flowline. In the reservoir fluids that constitute the MSLNG project, the greatest water depth is
for the East Dragon (130 m) field. At these depths, the seabed temperature has been reported to
be in the range of 16° to 19° C. Assuming a 2-sigma variation as a safety factor, the lowest
temperature expected in these fields is 11° C (52° F). Similarly, the seabed temperature at Rio
Caribe, Mejillones, and Patao (90 m to 120 m water depth) is in the range of 19° to 22° C. Again
assuming a 2-sigma variation factor, the lowest temperature expected in these fields is 15° C (59°
F). The highest pressure that is expected in any of these producing fields is the SITP. The HDT
corresponding to each SITP and the effective subcooling is shown below:
Table 16.3: Subcooling in each Reservoir Fluid
Reservoir SITP HDT Amb. Subcooling
Temp
Fluid [psi] [°F] [°F] [°F]
Rio Caribe 2844 74.8 59.0 15.8
Mejillones 3475 67.9 59.0 8.9
Patao 3586 69.0 59.0 10.0
Dragon 3628 68.5 51.8 17.3
As seen in the table above, the maximum subcooling is for the Dragon fluid, which has a
temperature differential of 17.3°F. The high subcooling here is attributable to a lower sea
bottom temperature of 52° F and a relatively higher SITP compared to the other fluids. Next in
hydrate severity (in terms of subcooling) is the Rio Caribe fluid that has a temperature differential
of 15.8° F. Rio Caribe has a high subcooling, despite having a lower SITP due to its wellstream
OGUD.2003.000012.01
composition having a relatively higher concentration of hydrate formers. The Mejillones and
Patao fields, on the other hand, have relatively lower subcoolings of less than 10° F.
The hydrate inhibitor requirements for methanol and MEG were determined based upon the
conditions shown in the table above. The saturation water content for each system was based on
reservoir conditions. The following table shows the methanol and MEG dosage rates that will be
necessary for each field.
Table 16.4: Methanol and MEG Dosage Rate Requirements
Reservoir Methanol MEG Methanol MEG
Fluid (bbls/MMscf) (bbls/MMscf) (gallons/MMscf) (gallons/MMscf)
Rio Caribe 0.35 0.16 14.9 6.9
Mejillones 0.11 0.06 4.5 2.3
Patao 0.11 0.05 4.6 2.0
Dragon 0.16 0.07 6.9 3.0
The relatively low inhibitor dosage rates can be attributed to the following two reasons:
• The ambient temperature is relatively quite high (52° F being the lowest temperature) leading
to correspondingly low subcoolings for all the reservoir fluids.
• Only a fraction of the total saturated water actually condenses out of the gas stream due to
the relatively high ambient temperatures. Since only the water that condenses requires
hydrate inhibition, the overall inhibitor dosage rates are not very high.
There are specific advantages and disadvantages with each type of inhibitors. Methanol has the
advantage of being relatively cheap and it can be used on a once-through basis with overboard
disposal of the produced water. The dosage rates for methanol are however higher than those
for MEG since a significant fraction of the methanol is lost to the hydrocarbon phases.
MEG on the other hand is relatively expensive, but it requires a much lower dosage rate
(approximately half that of methanol). MEG however is typically not disposed overboard with
the produced water due to its higher cost (generally a factor of four to five times higher than
methanol). It is instead regenerated, either onshore on directly offshore. MEG recovery
efficiencies are generally very good (>99%).
Methanol regeneration systems on the other hand are not as widely used in industry and are
known to be more problematic in operations compared to MEG. Methanol also has an added
disadvantage for gas that is transported directly to an LNG facility. Methanol carryover in the
gas phase is known to cause problems in the molecular sieves that are used to dehydrate the gas
at the LNG facility. Consequently there are usually very strict specifications on the allowable
methanol content in the gas that is received at the LNG facility.
The hydrate inhibitor requirements should however be kept in perspective since these are based
upon rather conservative assumptions of the lowest possible ambient temperature. Any upward
adjustment in the assumed value of the ambient temperature or a reduction in the assumed SITP
will lead to lower inhibitor dosage rates. In general, the Rio Caribe reservoir fluid is likely to have
the highest need for continuous hydrate inhibition.
OGUD.2003.000012.01
In addition to the methanol and glycol, LDHI’s should also be considered for use in the MSLNG
reservoir fluids. The subcoolings are relatively very low for all the reservoirs, ranging from 9° to
18° F. At these relatively low temperature differentials, the kinetic hydrate inhibitor (KHI) type
of LDHI’s can be very easily applied to each of the four reservoir fluids. KHI’s are known to be
very effective at subcoolings of less than 22° F, and the worst-case subcooling of all the reservoir
fluids considered here is less than this upper limit. The anti-agglomerant (AA) type of LDHI’s
on the other hand are not recommended here since AA’s require the presence of a liquid
hydrocarbon phase as a carrier for the hydrates.
Only the Rio Caribe reservoir produces a high enough liquid condensate rate for the AA’s to be
effective. Mejillones produces some condensate, while Patao and Dragon produce none.
Consequently, for the ease of operation, it is recommended that only a single type of LDHI be
considered for the MSLNG project, and that inhibitor should be the KHI class of products. The
precise dosage rate of KHI’s cannot be determined in the absence of actual testing of the fluids
under realistic operating conditions. In general though, their dosage rate ranges from
approximately 0.5 to 2.0 gallons/bbl of water. These dosage rates are significantly lower than
those corresponding to methanol or glycol, and thus KHI’s should definitely be considered as a
viable option for achieving hydrate control in the MSLNG reservoir fluids. Note also that the
LDHI’s can be co-injected with other inhibitors such as methanol, glycol, and corrosion
inhibitors.
In summary, all the hydrate inhibition options are viable for the MSLNG reservoir fluids. The
dosage rates of all inhibitors are very modest. At these low dosage rates, inhibitors such as
methanol or LDHI’s could be used on a disposable basis, leading to a reduced CAPEX. LDHI’s
are likely to offer the cheapest option for treating these reservoir fluids and this option should be
explored in detail in the next phase of work.
16.2. Wax
An assessment of wax properties and asphaltene stability has been completed on condensates in
the Rio Caribe, Mejillones, Dragon, and Patao fields based on known reservoir conditions and
estimated CGRs.
Standard cloud points for condensates can be highly variable. Based on Shell proprietary
calibrations, cloud point variations in condensates are largely controlled by three key variables –
reservoir temperature, reservoir pressure, and the condensate/gas ratio. In general, these
parameters control the solubility and partitioning of normal paraffins in the gas phase under
reservoir conditions. These parameters for the four condensates have been reviewed and were
compared to other gas reservoirs in Table 16.5. Based on a simple analog approach, the wax-
related fluid properties in these fields should be similar or lower than those encountered at Field
5 (Table 16.5).
OGUD.2003.000012.01
Table 16.5: Condensate Parameters

Sample ID Prospect HTGC Reservoir Reservoir CGR
Cloud PT Pressure Temperature (bbl/MMcf)
(F) (psi) (F)
LA-O-1676 Field 1 113 11,265 262 28
NG-O-1741 Field 2 56 10,040 176 1.7
NG-O-1101 Field 3 39 7837 155 57
NG-O-1406 Field 4 32 7485 131 17
NG-O-1154 Field 5 4 5050 205 4
Dragon n/a 4149 149 <4
Mejillones n/a 3927 167 <4
Patao n/a 4086 156 <4
Rio Caribe n/a 3928 179 100
Using the internal Shell calibration set, a number of empirical correlations have been established
for determining the standard cloud point of condensates based on either reservoir temperature
and pressure alone, or reservoir temperature, pressure, and CGR (Westrich, et. al., 1998). For
both cases, two trends are fit to the data. One trend is for reservoirs that are at/near saturation
(i.e. reservoir pressure is approximately equal to the dew point pressure). The other trend is for
all of the data points, including the undersaturated gas reservoirs.
In general terms, values determined using the “saturated” trends are considered maximum values
and have error bars of about 12°-14°F, and values determined using the “all data” trends are
considered more reasonable, but have significantly larger error bars ( 20°-30°F). These
uncertainties are for 95% confidence limits. What we have seen to date is that actual cloud point
temperatures occur somewhere between the calculated min and max per a given condensate. The
calculations for the 4 offshore Venezuela fields as well as the condensates previously listed are
provided in Table 16.6. All results indicate that wax will not be an issue for any of the fields.
Table 16.6: Predicted Cloud Point Temperature
Prospect HTGC Measured Predicted Cloud Point Temperature ( F)
Cloud PT Cloud Pt
(F) (F)
at/near saturation empirical fit to all
T/P (sat) T/P/CGR T/P (all) T/P/CGR
(sat) (all)
Field 1 113 123 185 161 61 80
Field 2 56 52 104 75 52 52
Field 3 39 21-28 44 49 34 48
Field 4 32 n/a 10 22 31 36
Field 5 4 <38 10 3 7 24
Dragon n/a n/a <0 <0 11 9
Mejillones n/a n/a <0 <0 11 9
Patao n/a n/a <0 <0 11 9
Rio Caribe n/a n/a <0 <0 12 26
OGUD.2003.000012.01
16.3. Asphaltenes
The same principles governing the solubility of high molecular weight waxes into a gas phase
even more strongly apply to asphaltenes. Asphaltenes are large hetro-compounds that by
definition are insoluble in organic solvents. In general, asphaltene stability work is not done on
condensates due to the extremely low asphaltene content found. The asphaltene content of
condensates we have analysed are listed in Table 16.7. Note that analytical error is between 0.1
and 0.2 % wt. As seen with the wax properties, asphaltene should be negligible in these
condensates due to the low pressure and temperatures of the reservoirs.
Table 16.7: Asphaltene Content of Condensates
topped whole oil-->
Res
RESERVOIR/FO Res.
SAM DEPTH Pressur
RMATION Temp ASPH ASPH WO
e
AUS-O-15A . . 0.08 0.03
AUS-O-22A . . 0.00 0.01
AUS-O-19A . . 0.00 0.02
AUS-O-20A . . 0.00 0.02
AUS-O-21A . . 0.00 0.03
AUS-O-23A . . 0.00 0.03
NG-O-1027A Yellow (N1 Sand)16467-16556 0.40 0.21
NG-O-1028A Yellow (N1 Sand)16467-16556 0.59 0.24
NG-O-1729A Purple 15562 0.10 0.03
NG-O-2526A C1 14271.6 8193 144 0.13 0.04
NG-O-2529A E1 16504.3 9472 158 0.02 0.01
NG-O-2532A E6(A) 16817.7 9483 161 0.04 0.02
NG-O-2656A G3 20432 11117 176 0.13 0.06
NG-O-2657A G2A 17099 0.09 0.05
NG-O-2659A G2A 17099 0.13 0.06
NG-O-2660A H2 (UPPER) 17770 0.22 0.13
NG-O-3116A H2 (UPPER) 17770 0.26 0.15
NG-O-1407A CM2 19818 0.17 0.10
NG-O-1408A . 20530 0.15 0.10
NG-O-1409A BS50 Massive 16643.92 0.05 0.01
NG-O-1410A BS50 Laminated 16553 0.03 0.01
NG-O-2492A . 11634 0.00 0.00
NG-O-2501A G 15318-15451 0.07 0.02
NG-O-1418A L 13399-15805 0.21 0.06
NG-O-1419A . 12136 0.11 0.05
NG-O-2008H SE-55A Sand 20582 0.07 0.04
NG-O-1614A . 18476-18632 0.06 0.02
NG-O-1520A . 18476-18632 0.06 0.02
NG-O-44H . 18476-18632 0.01 0.00
OGUD.2003.000012.01
Reference
Westrich, J. T., Utech, N. M., and O”Neal, P. M. (1998), Origin and Control of High-Molecular-
Weight Paraffins in Gulf of Mexico Petroleum, TIR, BTC-3559, SEPCo., BTC, Houston.
OGUD.2003.000012.01
17. CORROSION AND MATERIALS

This section was the result of an assessment by Shell Corrosion Engineering experts to assess
corrosion potential for the surface infrastructure, given process and compositional information
form the Process Engineer. In summary, for the base contaminant level case, corrosion inhibitor
injection as a minimum is necessary on all gathering and export pipelines, unless CRA is
specified. This section also provides the foundation moving forward to VAR-3 to select
materials for different system components as a function of pressure, temperature, and
compositional environment.
17.1. Scope of Assessment

Parameters provided by the Process Engineer were examined to determine technically suitable
options for materials of construction based upon recommendations in Selection of Materials for Life
xxvi
Cycle Performance (EP) . Corrosion rate modeling was performed using Shell’s HYDROCOR
2001 Version 3.01 software (Hydrocor).
17.2. Threats Considered

Threats to pressure-containing components of the upstream surface facilities that were
considered during the assessment are listed and described below.
Corrosion of Carbon and Low Alloy Steel by Wet CO2

CO2 can combine with water to cause corrosion of carbon steel. The tendency for corrosion to
occur depends upon various factors such as the partial pressure of CO2, the temperature, the pH
of the water, etc. Hydrocor bases predictions of corrosion rates of carbon steel upon values
input for these parameters.
Wet CO2 corrosion of carbon steel that occurs at a moderate rate can be mitigated by injection of
corrosion inhibitors, but corrosion resistant alloys (CRAs) may be required to mitigate aggressive
corrosion.
Sulfide-stress Cracking (SSC) of Metals due to Wet H2S

H2S can combine with water to cause corrosion of carbon steel. Under certain conditions,
corrosion of carbon steel can result in multiple types of hydrogen damage susceptible materials,
such as sulfide-stress cracking (SSC). Metals for Sulfide Stress Cracking and Stress Corrosion Cracking
xxvii
Resistance in Sour Oilfield Environments provides recommendations for selection of materials that
are resistant to SSC.
SSC is mitigated through hardness control of materials during manufacturing and assembly.
MR0175 specifies maximum hardness limits for materials resistant to SSC.
xxvi See Reference 12 on page 21-3

xxvii See Reference 16 on page 21-3
OGUD.2003.000012.01
Hydrogen-induced Cracking (HIC)

Hydrogen-induced cracking (HIC) is one of the hydrogen-damage mechanisms that can affect
susceptible carbon steels. Susceptibility to HIC is determined primarily by steel making practice,
but subsequent forming and heat treatment can also affect susceptibility and resistance to HIC.
xxviii
Evaluation of Pipeline and Pressure Vessel Steels for Resistance to Hydrogen-Induced Cracking describes
testing methods that can be used to evaluate resistance of materials to HIC.
Chloride Stress-corrosion Cracking (SCC)

The combination of relatively high concentrations of chloride in water and elevated temperatures
can cause chloride SCC of austenitic stainless steels such as Type 316L and other austenitic
CRAs. The potential for chloride SCC may exist on both the inside surface due to contact with
produced water and on the outside due to contact with seawater spray.
Chloride SCC of austenitic CRAs can be mitigated through selection of specific alloys based
upon the maximum anticipated service temperature and chloride concentration.
Minimum Design Metal Temperature (MDMT)

The possibility of brittle fracture due to a relatively cold MDMT was not assessed in detail. The
MDMT of components exposed to the primary produced fluids is anticipated to be 0ºF (minus
17.8°C) to minus 20ºF (28.9°C), which is generally warmer than the ductile-to-brittle transition
temperature of modern carbon steels. Of course, the MDMT of pressure relief systems will likely
be significantly colder than minus 20ºF, and due consideration to avoiding brittle fracture in the
pressure relief systems must be considered in later phases of this project.
17.3. Types of Facilities That Were Assessed

The following types of facilities were assessed for material selection and corrosion mitigation.
Flowlines
From subsea wellheads to production platforms

Injection of corrosion inhibitor into flowlines at subsea wellhead is common, but reliable
injection is more technically challenging than injection of corrosion inhibitor into flowlines from
surface mounted wellheads. Monitoring of actual corrosion rates in flowlines from subsea
wellheads is also more technically challenging than monitoring of flowlines on the surface.
Consequently, material selection and corrosion control of flowlines from subsea wellheads to
production platforms should be assessed separately from flowlines that originate on the surface.
From platform wellheads to gathering platforms

Injection of corrosion inhibitor and monitoring of corrosion rates into flowlines from surface-
mounted wellheads are both common practice.
xxviii See Reference 17 on page 21-3
OGUD.2003.000012.01
Pipelines
Gathering pipelines
Material selection and corrosion control of gathering pipelines transporting unprocessed fluids
from production platforms to processing platforms is similar to that for flowlines that originate
on the surface, but gathering pipelines should be assessed separately from flowlines due to the
possibility of different design conditions.
Export pipeline(s) to LNG plant

Depending upon the processing scheme that is selected, the export pipeline(s) to the LNG plant
could transport produced fluids, condensate, or dehydrated gas.
Topsides
Primary separation
While corrosion inhibitors may mitigate corrosion within primary separators, injecting sufficient
corrosion inhibitor to maintain an adequate film on all surfaces of a separator may not be cost
effective. Options to improve mitigation of corrosion may include application of organic coating
and installation of sacrificial anodes in water sections application of CRA cladding or overlays to
al surfaces.
Industry experience has shown that organic vessel coating should be inspected and repaired after
approximately 10 years of service. Consequently, selection of organic vessel coatings will require
at least two shut downs for internal inspection and coating repair during a 30-year service life.
Application of CRA cladding or overlay involves greater initial cost, but no subsequent internal
inspection and repair would be anticipated.
Topside piping
Mitigation of corrosion in gas outlet piping in corrosive service with corrosion inhibitor can
present technical challenges, because most of the previously injected corrosion inhibitor remains
with the liquid hydrocarbon and water phases. Injection of vapor phase inhibitor in gas outlet
piping may not mitigate corrosion where water condenses.
Installation of CRA piping can be more cost effective for relatively short runs of wet-gas piping,
which is typical of topside piping, than injection of corrosion inhibitor at the outlet of primary
separators.
Compression
Corrosion typically requires that liquid water be present but compressors have a relatively low
tolerance for liquid water. Consequently, mitigation of corrosion within a compressor is typically
not a major consideration.
OGUD.2003.000012.01
Coolers
Inlet coolers and interstage cooler are likely to be aerial coolers, but plate exchangers cooled with
seawater are also an option.
Aerial coolers
While corrosion inhibitors may mitigate corrosion within aerial coolers, injecting sufficient
corrosion inhibitor to maintain an adequate film on all surfaces of an aerial cooler may not be
cost effective. The technical challenge is to assure that sufficient corrosion inhibitor is present to
combine with water that condenses before it causes corrosion of the relatively thin wall of a tube.
Injection of corrosion inhibitor in sufficient quantity to mitigate corrosion in condenser tubes
can have negative effects upon downstream processing, such as causing emulsions that are
difficult to separate, glycol foaming, fouling of molecular sieves, etc.
Specification of CRA materials for tubes and header boxes is common for aerial coolers exposed
to significant corrosion. The specific type or grade of CRA depends primarily upon the presence
of chlorides and the maximum operating temperature.
Plate seawater exchangers

Plate exchangers for seawater cooling are often fabricated with titanium plates that are resistant
to both seawater and produced fluid corrosion. Some nickel-base alloys may also be useful in
plate exchangers for seawater.
Dehydration
Injection of corrosion inhibitors may not be cost effective for mitigation of corrosion in carbon
steel inlet separators and the bottom section of carbon steel glycol contactors. Options to
improve mitigation of corrosion may include installation of sacrificial anodes in water sections,
application of organic coatings or application of CRA cladding or overlays. Organic coatings
may not be satisfactory for exposure to glycol in the lower section of a contactor so that CRA
cladding or overlay is more cost effective.
17.4. Hydrocor Modeling

Table 17.1, Table 17.2, and Table 17.3 summarize the results of approximately 50 Hydrocor runs
to model a range of conditions for a selected flowline and two types of export pipeline. The
conditions for the Hydrocor runs were selected to explore the sensitivity of the estimated
corrosion rates for carbon steel to the range of conditions. The limited amount of data available
for influential parameters such as the CO2 and H2S concentrations justify exploring the sensitivity
to variations in the influential parameters. The estimated corrosion rates in these tables must be
used with caution given the uncertainty in CO2 and H2S concentrations.
Hydrocor modeling of estimated corrosion rates should be refined if the anticipated CO2 and
H2S concentrations are determined with greater precision.
Corrosion rates estimated from Hydrocor modeling of flowlines and pipeline were assumed to be
representative of corrosion rates that can be anticipated in topside piping, separators, and
OGUD.2003.000012.01
exchangers. Additional examination of anticipated corrosion rates in these locations would be

appropriate as the design conditions are refined.
Line Identification
The sequential numbers on the left and right columns of Table 17.1, Table 17.2, and Table 17.3
were used to link the Input-Output screens from Hydrocor modeling to the applicable line of the
tables.
Operating Condition Assumptions
The leftmost columns in Table 17.1, Table 17.2, and Table 17.3 describe the conditions used in
the Hydrocor modeling runs.
CO2 concentration
CO2 partial pressure (product of CO2 concentration and system pressure) and temperature have a
significant effect upon corrosion rates estimated by Hydrocor. The uncertainly in the CO2
concentration of produced fluids results in uncertainty in the corrosion rates that should be
assumed during final design of the production facility.
H2S concentration
Relatively small concentrations of H2S can result in decreased corrosion rates due to wet CO2.
The uncertainty in H2S concentration adds to the uncertainty in the corrosion rates that should
be assumed during final design of the production facility.
Inhibitor Injection Assumptions
The two columns in Table 17.1, Table 17.2, and Table 17.3 labeled as “Inhibitor Availability” and
“Inhibited CR” describe the assumptions that were selected for estimation of the range of
corrosion rates that could occur in this development.
Inhibitor availability
“Inhibitor Availability” is a parameter that is used to describe the percentage of time that the
treated metal surface is protected by the injected corrosion inhibitor. The table rows with 0%
Inhibitor Availability estimate the uninhibited corrosion rate for the conditions described in the
leftmost columns of the tables.
The table rows with 95% Inhibitor Availability estimate the overall corrosion rate when the
inhibitor is providing the assumed inhibited corrosion rate for 95% of the time. For example, a
95% Inhibitor Availability indicated that the inhibitor is not functioning 5% of the time or
approximately 18 days each year (365 days per year x 0.05 = 18.5 days).
The table rows with 98% Inhibitor Availability likewise estimate the overall corrosion rate when
the inhibitor is providing the assumed corrosion rate for 98% of the time, or is unavailable
approximately 7 days per year.
The Inhibitor Availability that can be achieved in a particular application depends upon a variety
of factors. More specifically, greater Inhibitor Availability is more likely in a location with well-
developed infrastructure, such as the Gulf of Mexico or North Sea, compared to a remote
OGUD.2003.000012.01
location with limited oil and gas production in the area. Greater Inhibitor Availability is likewise
more achievable at facilities manned full time than at facilities operated remotely. Investment in
more reliable injection pumps and redundant duplicate injection pumps can improve Inhibitor
Availability. Employment of staff specifically responsible for operating and maintaining inhibitor
injection equipment can also improve Inhibitor Availability compared to situations where
production operators are assigned responsibility for injecting corrosion inhibitor.
Inhibition at ordinary injection rates could require several days to establish effective corrosion
protection for the full length of a pipeline. Applying a slug of inhibitor between pigs at startup
and after extended periods of downtime can coat an entire pipeline within a relatively short time
after startup. Consequently, application of inhibitor slugs during startup can significantly
improve Inhibitor Availability, especially on longer lines. Achieving Inhibitor Availability of 98%
and greater likely requires application of slugs of inhibitor at startup.
Inhibited CR
“Inhibited CR” or inhibited corrosion rate is a parameter used to describe the typical corrosion
rate during the periods that the corrosion inhibitor is present and protecting the surface.
The inhibited corrosion rates used in these assessments were 8 mills per year (mpy) or 0.2
millimeters per year (mm/y) and 4 mpy or 0.1 mm/y. Achieving an inhibited corrosion rate of 4
mpy (0.1 mm/y) required careful testing and selection of a corrosion inhibitor as well as injection
at an aggressive rate. An inhibited corrosion of 8 mpy (0.2 mm/y) can typically be achieved with
less diligence than required to achieve 4 mpy (0.1 mm/y).
Estimated Corrosion Rates
The three columns at the right of Table 17.1, Table 17.2, and Table 17.3 are the estimated
corrosion rates at the conditions described by the leftmost columns and with the indicated
Inhibitor Availability and Inhibited CR. The Hydrocor software assumes that the metal is
corroding at the Inhibited CR during the time of Inhibitor Availability and at the uninhibited
corrosion rate for the remainder of the time.
Values reported in the columns labeled “Bottom of Line” and “Top of Line” are estimated
maximum corrosion rates at those locations. In general, the estimated rate of Top of Line
corrosion is the same as Bottom of Line in pipelines containing a significant amount of liquid to
distribute the corrosion inhibitor around the full circumference of the pipeline.
OGUD.2003.000012.01
Table 17.1: Results of Hydrocor Modeling of Conditions Assessed for the Rio Caribe Flowline
Pipe Length Water Depth Gas Rate Liquid Rate, bbd Pressure Temperature, Inhibitor Inhibited Bottom of Typical Top of
Size °F CO2 H2S Availability CR Line Line
NPS km Inlet, Outlet, MMscfd Cond. H2 O psi Water Inlet % ppm % mpy mpy mpy mpy
m m
1 8 10 80 80 38 6000 0 3000 60 190 4 500 0 na 680 680 1
2 95 8 41 23 2
3 95 4 38 20 3
4 98 4 18 10 4
5 120 0.75 0 0 na 102 102 5
6 95 8 13 13 6
7 95 4 9 9 7
8 98 4 6 6 8
9 100* 0 na 203 120 203 9
10 95 8 18 14 18 10
11 95 4 14 10 14 11
12 98 4 8 6 8 12
13 100* 2500 72 140 0.25 0 0 na 134 80 134 13
14 95 8 14 10 14 14
15 95 4 11 6 11 15
16 98 4 7 5 7 16
OGUD.2003.000012.01
Pipe Length Water Depth Gas Rate Liquid Rate, bbd Pressure Temperature, Inhibitor Inhibited Bottom of Typical Top of
Size °F CO2 H2S Availability CR Line Line
NPS km Inlet, Outlet, MMscfd Cond. H2 O psi Water Inlet % ppm % mpy mpy mpy mpy
m m
17 0 2220 60 120 2.5 50 0 na 208 208 17
18 95 8 18 18 18
19 98 4 8 8 19
20 1480 0 na 175 175 20
21 95 8 16 16 21
22 98 4 7 7 22
23 40 40 0.25 0 0 na 23 nil 23 23
24 95 8 8 nil 8 24
25 98 4 5 nil 5 25
* 16,000 ppm chloride
OGUD.2003.000012.01
Table 17.2: Results of Hydrocor Modeling of Conditions Assessed for an Export Pipeline Transporting Saturated Gas
Pipe Water Inhibitor Inhibited Bottom Top of

Size Length Depth Gas Rate Liquid Rate, bbd Pressure Temperature, °F CO2 H2S Availability CR of Line Typical Line
Inlet, Outl
NPS km m et, m MMscfd Cond. H2O psi Water Inlet % ppm % mpy mpy mpy mpy
26 0 na 350 80 155 26
27 95 8 25 12 15 27
4
28 95 4 21 8 11 28
29 98 4 11 6 7 29
30 0 na 275 80 111 30
500
31 2.5 95 8 21 12 13 31
32 30 56 100 0 950 1 1 1480 60 90 98 4 9 6 6 32
33 0 na 59 8 17 33
34 95 8 10 8 8 34
35 98 4 5 4 4 35
0.25
36 0 na 73 16 23 36
37 0 95 8 11 9 9 37
38 98 4 9 9 8 38
OGUD.2003.000012.01
Table 17.3: Results of Hydrocor Modeling of Conditions Assessed for an Export Pipeline Transporting Saturated Gas and
Condensate
Pipe Liquid Rate, Inhibitor Inhibited Bottom Top of

CO2 H2S Typical
Size Length Water Depth Gas Rate bbd Pressure Temperature, °F Availability CR of Line Line
Inlet, Outlet,
NPS km m m MMscfd Cond H2O psi Water Inlet % ppm % mpy mpy mpy mpy
39 0 na 375 85 - 39
40 95 8 26 12 - 40
4
41 95 4 23 8 - 41
42 98 4 11 6 - 42
43 0 na 290 60 - 43
500
44 2.5 95 8 22 12 - 44
45 30 56 100 0 950 16,450 0 1480 60 90 98 4 10 5 - 45
46 0 na 63 10 - 46
47 95 8 11 8 - 47
48 98 4 5 4 - 48
0.25
49 0 na 78 16 - 49
50 0 95 8 11 8 - 50
51 98 4 5 4 - 51
OGUD.2003.000012.01
17.5. Flowlines
Input-output screen for Line 9 – Rio Caribe flowline - uninhibited

Figure 17.1 is the Input-Output Screen from Line 9 of Table 17.1. The input parameters are in
the leftmost column of the screen while the Main Output is in the upper center column. The
plot at the lower left shows the elevation profile of the flowline with the depth in meters on the
right vertical axis and the length on the bottom axis. The plot of estimated bottom-of-line
corrosion rate is against the corrosion rate in mm/y on the left axis.
The plot of estimated uninhibited corrosion rate declines from a maximum of 203 mpy (5.1
mm/y) near the beginning of the flowline to approximately 40 mpy (1 mm/y) near the end of the
flowline. These results reveal that uninhibited carbon steel flowlines operated at these conditions
would have an anticipated useful life significantly shorter than the anticipated life of the field.
Figure 17.1: Input-output screen for Line 9 of Table 17.1.
Input-output screen for Line 12 – Rio Caribe flowline – inhibited

Figure 17.2 is the input-output screen from Line 12 of Table 17.1. These results reveal that
injection of corrosion inhibitor with an availability of 98% and a residual corrosion rate of 4 mpy
(0.1 mm/y) at these conditions could reduce the estimated corrosion rate of a flowline to
OGUD.2003.000012.01
approximately 6 to 8 mpy (0.15 to 0.2 mm/y). Consequently, a corrosion allowance of

approximately 0.250 inch (6.35 mm) would be required for a useful life of 30 years.

Saturated Gas Export Pipeline
Input-output screen for Line 36 – saturated gas pipeline - uninhibited

Figure 17.3 is the input-output screen for Line 36 of Table 17.2. The plot of bottom-of-line
corrosion at these conditions estimates a maximum uninhibited corrosion rate of approximately
73 mpy (1.85 mm/y) that declines to approximately 16 mpy (4 mm/y) in the downstream portion
of a saturated gas pipeline.
Input-output screen for Line 38 – saturated gas pipeline - inhibited

corrosion at these conditions, which includes a 98% inhibitor availability and an residual inhibited
corrosion rate of 4 mpy (0.1 mm/y), estimates a total corrosion rate of approximately 9 mpy
(0.23 mm/y) that declines to approximately 8 mpy (0.2 mm/y) downstream. Consequently, a
corrosion allowance of approximately 0.250 inch (6.35 mm/y) would be required for a useful life
of 30 years.
OGUD.2003.000012.01
OGUD.2003.000012.01
Multiphase Gas and Condensate Export Pipeline
Input-output screen for Line 49 – multiphase pipeline - uninhibited

Figure 17.5 is the input-output screen for Line 49 of Table 17.3, which summarizes Hydrocor
runs for a multiphase gas-condensate pipeline at the listed conditions. The primary differences in
results for the saturated gas export pipeline and those for the multiphase export pipeline is that
the liquid component in the multiphase pipeline cause estimated corrosion rates to be uniform
around the circumference of the pipeline.
Input-output screen for Line 51 – saturated gas pipeline - inhibited

corrosion at these conditions, which includes a 98% inhibitor availability and an residual inhibited
corrosion rate of 4 mpy (0.1 mm/y), estimates a total corrosion rate of approximately 5 mpy
(0.13 mm/y) that declines to approximately 4 mpy (0.1 mm/y) downstream. Consequently, a
corrosion allowance of approximately 0.150 inch (3.8 mm/y) would be required for a useful life
of 30 years.
OGUD.2003.000012.01
17.6. Effects of H2S Concentration

Sulfide-stress Cracking (SSC)
Paragraph 1.4 and Figure A-2 of MR0175 state that an H2S partial pressure of 0.05 psia and
greater can cause SSC in susceptible metals. Table 17.4 lists H2S concentrations in ppm that can
result in a partial pressure of 0.05 psia at the MAOP for common flange classes.
Table 17.4: H2S Concentrations that Can Result in 0.05 psia (3.5 m bar) Partial
Pressure of H2S at the MAOP for Common Flange Classes
Flange Class MAOP,psi H2S Concentration at 0.05 psia pp H2S
150 285 167
300 740 66
600 1,480 33
900 2,220 22
1500 3,705 13
Application of Table 17.4 to this project is difficult because anticipated H2S concentrations in the
produced fluids were uncertain when this report was prepared. Furthermore, accurate analysis of
produced fluids for H2S concentration is a technical challenge making the making the available
H2S concentration data suspect. Furthermore, the H2S concentrations listed in Table 17.4 for
OGUD.2003.000012.01
Class 600, 900 and 1500 are relatively low, making the tolerable margin for error in determination
of H2S concentration relatively small. Consequently, serious consideration should be given to
specifying the flowlines, pipelines and topsides equipment for sour service including resistance to
SSC in accordance with MR0175 unless reliable testing is performed to demonstrate that the H2S
concentrations are less than those listed in Table 17.4.
17.7. Hydrogen-induced Cracking (HIC)

Industry experience has shown that HIC may occur in susceptible metals when the concentration
of H2S in the water phase is 50 ppm or greater. No data relating to H2S concentration in the
water phase has been discovered in the available information. Specification of the flowlines,
pipelines and topsides equipment to be resistant to HIC should be considered unless reliable
testing is performed to demonstrate that the H2S concentrations in the water phase will be less
than 50 ppm throughout the system.
CONSEQUENCES OF SPECIFYING ORDINARY-SERVICE MATERIALS FOR SOUR-SERVICE
APPLICATIONS
Monitoring subsea flowlines and pipelines to detect SSC and/or HIC is neither practical nor cost
effective. Furthermore, the most practical repair of subsea flowlines and pipelines that have
suffered SCC or HIC is replacement. Therefore, the consequences of installing ordinary-service
materials for subsea flowlines and pipelines that are subjected to sour-service conditions (see
Table 17.4) can include unexpected ruptures and the need to reinstall the flowlines and pipelines
using sour-service materials and sour-service fabrication practices to assure resistance to SSC and
HIC.
Economic Incentive to Verify H2S Concentration in Produced Fluids
The economic incentive to verify the anticipated H2S concentration of produced fluids should be
investigated. For example, the consequences of installing ordinary-service materials in sour-
service environments could include the cost of unanticipated ruptures plus the cost required to
replace a significant portion of the production facility with sour-service materials. On the other
hand, installation of sour-service materials in an environment that eventually proved to have H2S
concentrations lower than those listed in Table 17.4 would increase project costs with a
corresponding benefit. The cost to explore the anticipated range of H2S concentration could
include drilling additional exploration wells for testing of produced fluids. Since H2S
concentrations can vary between reservoirs and within reservoirs, confirming that sour-service
materials and fabrication practices were not required might require multiple wells.
17.8. Chlorides and Service Temperature

CRAs are candidate materials for fabrication of aerial coolers. Certain classes of CRAs are
susceptible to pitting corrosion and stress-corrosion cracking when exposed to water containing
chloride. The suitability of each CRA grade to exposure to chloride containing water depends
upon the chloride concentration and service temperature. Equipment installed in a marine
environment may be at risk of chloride cracking from both the external and external surfaces.
EXTERNAL PITTING AND STRESS-CORROSION CRACKING
OGUD.2003.000012.01
Type 304 is susceptible to pitting corrosion when exposed to a marine environment and tropical
temperatures, so Type 304 is not suitable for fabrication of the aerial coolers or other offshore
facilities.
xxix
According to Paragraph 3.1.4 of DEP 39.01.10.11-GEN , external chloride cracking can occur
in three common stainless steels at the temperatures listed in Table 17.5. External pitting of
these CRAs can occur at significantly cooler temperatures. More specifically, industry experience
has shown that some Type 316 tubing pits when exposed to temperatures warmer than 100ºF
(37.8ºC) in Gulf of Mexico Service.
Table 17.5: Maximum Service Temperatures for Three Stainless Steel Alloys Exposed
to Marine Environments
Alloy Grade Maximum Service Temperature
deg C deg F
Type 316 60 140
22% Cr DSS 100 212
25% Cr DSS 120 248
Reportedly, external coating has been used to mitigate pitting corrosion and chloride cracking of
these three CRAs, but external coating of the tubes of an aerial cooler may have a negative effect
upon heat transfer. Aluminum fins can protect the exterior surface of CRA tubes where the
CRA is completely covered. Achieving complete coverage of the exterior surface necessary for
the protection at the tube- to-tubesheet junction can be problematic.
INTERNAL PITTING AND CHLORIDE CRACKING
DEP 39.01.10.11-GEN suggests the maximum service temperature listed in Table 17.5 for the
three CRA materials when used in aerial coolers.
17.9. Material Selection Recommendations

Table 17.6 contains material selection recommendations for three situations.
REFERENCE CASE
The material selection recommendations for the reference case assume that no H2S is present and
the CO2 concentration is 0.25% or less. If either of these assumptions is anticipated to be
incorrect, alternate material selections should be considered.
SOUR SERVICE CASE
If the H2S partial pressure is anticipated to exceed 0.05 psia (3.5 m bar) or the H2S concentration
in ppm at a location exceeds the levels listed in Table 17.4, the materials should be specified as
resistant to HIC and SSC and the fabrication practices should be specified as complying with the
hardness limits in MR0175.
CORROSIVE APPLICATION CASE
xxix See Reference 12
OGUD.2003.000012.01
Should the estimated corrosion rate of inhibited carbon steel averaged over the 30-year design life
of the project exceed 8 mpy (0.2 mm/y) the total corrosion over the design life would exceed
0.240 inch (6 mm). DEP 39.01.10.11-Gen. recommends that carbon steel not be used when the
total wall loss due to corrosion over the line of a facility (described as Service Life Corrosion or
SLC) exceeds 0.240 (6 mm). CRAs without corrosion inhibitor can be selected in these
situations.
Table 17.6: Summary of Material Selection Recommendations for Three Situations
Component of Reference Case Sour-Service Case Corrosion Resistant
the Alloy Case
Production H2S pp* ≥ O.05 psia or SLC *≥ 6 mm (
Facility H2S ppm ≥ Table 17.1 0.236 inch) or
CR* ≥ 0.2 mm/y
(8 mpy)
Flowlines
from subsea CS* w/ 6 mm CA* + HIC CS* w/ 6 mm CA HIC CS lined w/ CRA,
wellhead CI*; + NACE Fab* + CI; grade by Table 17.2, no
maint. and smart maint. and smart pigging CA, CI or pigging
pigging OR
OR HIC CS lined w/ CRA,
CS lined w/ CRA, grade by Table 17.2, no
grade by Table 17.2, no CA, CI or pigging
CA, CI or pigging
from surface CS w/ 6 mm CA + CI HIC CS* w/ 6 mm CA CRA, grade by
wellhead maint. and smart + NACE Fab* + CI; Table 17.2
pigging maint. and smart pigging
Gathering CS w/ 6 mm CA + CI HIC CS* w/ 6 mm CA CRA, grade by
Pipelines maint. and smart + NACE Fab* + CI; Table 17.2
pigging maint. and smart pigging
Primary CS w/ 6 mm CA + HIC CS w/ 6 mm CA + CRA, grade by
Separation organic coating + organic coating + Table 17.2
sacrificial anodes sacrificial anodes
OR OR
CS w/ CRA cladding or CRA cladding or overlay
overlay (see Table 17.2) (see Table 17.2) no CA
no CA or CI or CI
Topside Piping CS w/6 mm CA + CI HIC CS w/6 mm CA + CRA, grade by
OR CI Table 17.2
CRA, grade by OR
Table 17.2 CRA, grade by
Table 17.2
Gas coolers
Aerial coolers CRA –see Table 17.2 CRA –see Table 17.2 CRA – see Table 17.2
Plate seawater Titanium or nickel-base Titanium or nickel-base Titanium or nickel-base
coolers alloy alloy alloy
OGUD.2003.000012.01

the Production Alloy Case
Facility
H2S pp* ≥ º05 psia or SLC *≥ 6 mm
H2S ppm ≥ Table 17.1 (0.236 inch) or
CR* ≥ 0.2 mm/y
(8 mpy)
Compression Mfg standard matls. Mfg sour-service matls. Mfg corrosive service
matls.
Suction CS w/ 6 mm CA + HIC CS w/ 6 mm CA CRA, grade by Table 17.2
scrubbers organic coating + + organic coating +
sacrificial anodes sacrificial anodes
OR OR
CS w/ CRA cladding or CRA cladding or
overlay (see Table 17.2) overlay (see Table 17.2)
no CA or CI no CA or CI
Interstage CRA –see Table 17.2 CRA –see Table 17.2 CRA – see Table 17.2
coolers
Dehydration
Inlet scrubber CS w/ 6 mm CA + HIC CS w/ 6 mm CA CRA cladding or overlay
organic coating + + organic coating + (see Table 17.2) no CA or
sacrificial anodes sacrificial anodes CI
OR OR
CRA cladding or overlay CRA cladding or
(see Table 17.2) no CA or overlay (see Table 17.2)
CI no CA or CI
Contactor
Bottom section CS w/ CRA cladding or HIC CS w/ CRA HIC CS w/ CRA
overlay cladding or overlay cladding or overlay
Above trays CS w/ 6 mm CA HIC CS w/ 6 mm CA HIC CS w/ CRA
316L Internals 316L Internals cladding or overlay +
CRA internals
Regeneration
Reboiler 316L
Still column 316L
Condenser coil 316L
Glycol-glycol 316L
exchangers
Surge drum CS w/ 3 mm CA
Glycol flash CS w/ 3 mm CA
vessel
OGUD.2003.000012.01

the Production Alloy Case
Facility
H2S pp* ≥ O.05 psia SLC *≥ 6 mm
or (0.236 inch) or
H2S ppm ≥ Table 17.1 CR* ≥ 0.2 mm/y
(8 mpy)
Export pipelines
Condensate CS w/ 6 mm CA + CI HIC CS w/ 6 mm CA HIC CS w/ 6 mm CA +
+ CI CI
Dehydrated gas CS no CA CS no CA CS no CA
Saturated gas CS* w/ 6 mm CA* + HIC CS* w/ 6 mm CA HIC CS lined w/ CRA,
CI*; + NACE Fab* + CI; grade by Table 17.2, no
maint. and smart maint. and smart CA, CI or pigging
pigging pigging
Multiphase CS* w/ 6 mm CA* + HIC CS* w/ 6 mm CA HIC CS lined w/ CRA,
CI*; + NACE Fab* + CI; grade by Table 17.2, no
maint. and smart maint. and smart CA, CI or pigging
pigging pigging
Condensate CS w/ 6 mm CA HIC CS w/ 6 mm CA HIC CS w/ CRA
stabilizer cladding or overlay
*Notes:
pp = partial pressure, SLC = Service Life Corrosion, CR = corrosion rate, CS = carbon steel, CA
= corrosion allowance, CI = corrosion inhibitor, HIC CS = carbon steel tested to TM0284,
NACE Fab = hardness control per MR0175,
OGUD.2003.000012.01
18. TECHNOLOGY
The infrastructure required to connect the North Paria reservoirs to the inlet of the LNG plant
can be built with proven components and processes. Development of or application of new
technologies are not required as enablers. New technology can however contribute to an
increased project value through a reduction in life cycle cost and through the improvement of the
Health, Safety, and Environmental profile of the operations.
The following main components form the supply chain between wellhead and LNG plant inlet;
• Instrumentation Control and Automation
• Wellhead platforms and or subsea templates
• Flowlines connecting wellheads/subsea templates to the CPF; export pipelines
• CPF
• Compression Platform
• Onshore Facilities
Availability of technologies has been assessed in the context of the overall project schedule.
Phase 1 requires a technology selection for the major system architecture by the end of the year,
and detailed system design by late 2004. Therefore, only fully developed technologies can be
considered.
Where compression facilities are required, there are cases in which this equipment is only
required by late 2011 and technologies that are still under development can be considered in
concept definition.
Summary Project Schedule
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Concept Selection
BoD and Project Spec
First Gas
Compression Concept Selection notional
Compression Start-up notional
Figure 18.1: Summary project schedule.
18.1. Instrumentation Control and Automation

Functional components for control and automation system can be applied throughout the
integrated upstream systems and possibly beyond. In this category, the TIPS and Field Bus
Development will be reviewed for application on the project as part of the select and define
phases.
OGUD.2003.000012.01
Main characteristics of the TIPS (Total Instrumented Protection System) are that the reliability of
the components used is so high that any upstream high-pressure source can be isolated to
prevent over pressurisation of the downstream equipment. Benefits include the elimination of a
significant part of the relief and blowdown systems for normal operational up-sets. Relief
capacity is only required for fire relief scenarios. The self-diagnostics function included in these
instruments also significantly reduces the effort for instrument calibration and maintenance.
Field Bus uses an Internet-type architecture that eliminates dedicated cabling for most of the
instruments and introduces plug and play characteristics to the system. This results in
significantly shorter instrument and control system pre-commissioning activities and during
operation, enhances capabilities for monitoring and control of processes and equipment and
significantly reduces the effort of calibration and maintenance.
Benefits of these technologies are predominantly seen in the reduction of OPEX. These benefits
will be reviewed in the next phases and further quantified in combination with such information
management packages as Data Broker, Production Universe, and relevant field ware packages.
18.2. Well Head Platforms and / or Subsea Templates

Technologies already implicitly included in the concepts studied are the various structural
supports for dry wells and the components available for subsea developments.
The costs of subsea components are based on current standard deepwater development building
blocks.
Latest technology selection and application will centre on minimum metering requirements for
royalty calculation, production allocation, and reservoir management.
Technologies considered are direct measurement through multi-phase meters included in most
concepts presented in this report or indirect measurement through simple pressure
measurements, statistical real time analysis, and occasional sampling and emerging technology.
18.3. Flowlines Connecting Well Heads / Subsea Templates to the CPF; Export Pipelines
Initiatives have been kicked off as part of the Shell Technology Development Programme to
evaluate the development of materials that have similar or lower costs than standard Carbon steel
but with improved corrosion and stress cracking resistance. Developments in this field are not
that far advanced that application in the first phases of the MSLNG project is being considered.
Use of the low-dosage hydrate inhibition techniques is included in the evaluation of the reference
case.
18.4. Central Production Facility

The central processing facility is initially a relatively simple manifold platform with utility and
accommodation facilities. Application S3 slug suppression technology is included in the
reference case, eliminating the need for large volume slugcatchers on the offshore facilities.
During the selection process, it will be reviewed whether the concepts of the “smart Camera” is
sufficiently well progressed to replace Heat, Fire, Gas and Smoke detection duties and also take
OGUD.2003.000012.01
over some of the supervisory duties of the Operations Staff. This should result in improvements
to both CAPEX and OPEX.
18.5. Compression Platform

The compression plant cases scheduled for later in the project field life provide the most likely
candidates to benefit from new Technology developments.
Development can also be expected in the application of the Smart Separation Modules which
consist of low volume, low weight inline separation modules. The resulting low footprint,
reduced equipment costs and reduced structural support requirements, would typically result in a
reduction in overall Separation system CAPEX cost of some 30%.
The compressor itself can likely be replaced by maintenance-free and seal-less compression units.
This compressor solution is also characterized by a significant reduction in the number and
weight of equipment. Gearbox, lube-oil system, seal system, and compressor bedplate will all
have been replaced by one integrated electric driven compression unit. The weight of this unit is
less than 50% of the conventional unit and associated CAPEX savings are linked to the reduction
in structural load bearing capacity. The associated OPEX savings, independent from fuel, are
anticipated to be 50% of the conventional unit. The first commercial applications of these
compressors will be commissioned in the second half of 2003.
A parallel and equally interesting development is the application of multiphase pumping, some
units already in operation, and compression technologies either for dry operation on an offshore
structure, or as a subsea application. Innovation in support of deepwater developments has a
high priority, and it is therefore likely that significant progress will be made with the development
of these components. Impact of these technologies will, in addition to the benefits of the seal-
less compressor, also allow for the elimination of the upstream separation equipment.
18.6. Conclusion
In conclusion, the benefits of new technology in initial stages of the project will primarily impact
on the OPEX element of the expenditure and is estimated to result in a reduction of
approximately 5 to 10% in the overall OPEX cost estimate.
Using Concept 3 as a reference, in later phases of the development, relating primarily to the
installation of novel compression and separation techniques, a potential upside CAPEX
reduction in the order of USD 30 million (RT) can be expected and a additional expected OPEX
cost reduction of USD 10 million (RT) can be projected. For the larger throughput scenarios,
Concept 3.1 for example, a Real Terms CAPEX saving in excess of USD 50 million is
anticipated. This gives rise to an improvement in UTC of around 2%.
These projected cost reductions are related only to the compression and separation technology
changes mentioned above; many more technological improvements are possible.
OGUD.2003.000012.01
19. OPERATIONS AND MAINTENANCE

xxx
The MSLNG Operations Philosophy describes operational issues of importance to the
project. It also includes maintenance issues.
19.1. Operating Philosophy
19.1.1. Introduction
An Operating Philosophy is a document that consists of a set of concise statements that set the
Operating framework against which the facility design will be performed. It takes account of
internal and external factors to the project.
This will ensure:
1. The simplicity of the facilities.
2. The fit for purpose design.
3. That due care is taken of the competency of the staff.
4. That the facilities will be self-regulating within the design envelope to minimize risk to staff,
Environment and Assets.
5. That Experience is fed back to new Opportunity designs.
The Operations philosophy links the business objectives to direction setters for both the venture
and the project needs.
xxx See Reference 7
OGUD.2003.000012.01
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An Operations Philosophy is a live document, which is initially developed pre VAR-2. It
continues to evolve as the design progresses and will be formally reissued prior to each project
milestone.
Figure 19.2: Operations Methodology.
OGUD.2003.000012.01
19.1.2. Manning
Manning Strategy
The key objective of the manning strategy is to ensure that the lifecycle costs are optimized by
minimizing the levels of manning on the Assets commensurate with the control technology
adopted.
This will be achieved by:
• Adopting a “bottom up” approach to establishing manning requirements.
• Evaluating manning levels through an assessment of actual operational activities associated
with the installed facilities,
• Adopting a multi tasking approach during steady state operations for operations and
maintenance staff in order to optimise staff levels, ensuring maximum flexibility, and
competency of staff in all areas of operations.
• Establishing a competency framework /matrix by which all new staff can be assessed and
verified.
• Adopting strict staff competence assessment and development methods.
• Provide a framework for replacing expatriates by Venezuelans of identified positions within
“n” years of facility start up
• Carry out campaign type of major maintenance of the facilities by a dedicated maintenance
organisation that will use contract manpower. Operations staff will carry out certain first-line
maintenance tasks.
An important aspect and also a key to success for the project is the Integration of the EP
operation and the LNG Operation.
Manning Philosophy
Operational phase manning levels will be formally assessed using an appropriate assessment tool
(such as Shell’s “Minimum Impact Costing Tool”).
It is envisaged that all wellhead platforms will be designed for unmanned operation, though
depending on the outcome of a security review it may be necessary to station semi-permanent
guards on board of the platforms to ensure that the uptime is not affected by the criminal
activities and/or vandalism. Monitoring and control of essential parameters will be from a
central control room.
All potential subsea developments will be designed for unmanned and diver-less operations and
minimum subsea interventions. Control and monitoring will take place from the offshore
Central Production Facility and the Central Control Room located onshore.
The central facility will be designed for unmanned operation. To ensure a high enough uptime
however, it may be necessary to man the platform (staff could be on a rotational schedule),
particularly when compression starts. If so, daytime operational activities only are currently
OGUD.2003.000012.01
envisaged. A control room will monitor and control the operation of the wellhead platforms and
Central Facility. This control room is manned during the day.
The Onshore Central Control Room will be manned on a 24 hours basis. This shall be integrated
with the LNG plant Central Control Room to achieve synergy in communication and
infrastructure and to promote “cross fertilization” between upstream and downstream operations
and foster integration.
EP management, engineering, and support staff will be based in an On-shore EP-base. Though
the on-shore EP base (including offices and other utilities) should ideally be integrated with the
LNG plant base to achieve a maximum level of synergy, an alternative site could be selected. The
actual site selection depends on considerations like, HSE, Total Cost of Ownership, existing
infrastructure, regional development plans, and others. This requires a further review and a site
will be selected post VAR-2.
Recruitment and training

To ensure the quality of company staff, staff will be recruited based on competence, capability,
and potential of candidates against established and documented criteria. Identified competency
gaps will form the basis for the training and development plan. During the initial years of
Operation the numbers of expatriates will be at their highest. During the operation this will
gradually decline as more local staff are trained and replace expatriates.
19.1.3. Standards and Criteria for Design

Shell, PDVSA and International recognized oil and gas engineering standards (API, NACE, ISO,
etc) and applicable local rules, regulations and legislation will be applied in the project.
19.1.4. Standardization and Sparing Philosophy

Where possible similar types and makes of equipment will be selected to:
1. Reduced need for different types of spare parts and hence minimizes Stockholdings
2. Allowing interchangeability of equipment
3. Reducing maintenance efforts
4. Increasing prospect for long-term service contracts and supply chain management
opportunities.
The sparing philosophy will be based on an Availability and system effectiveness study.
Appropriate spares have to be in place for uninterrupted operation following handover. This
includes the Capital Insurance Spares, which have been identified by the project team.
19.1.5. Isolation Philosophy

The philosophy will be developed prior to VAR-4 but will take account of issues like
maintenance philosophies, production scenarios, and Availability requirements. The philosophy
will also take account of EP-95000 prescribed isolation requirements
OGUD.2003.000012.01
19.1.6. Control and Monitoring Philosophy

This philosophy provides guidelines on how the Control and Monitoring system should be
designed in order to achieve the right functionality and the lowest TCoO over the lifecycle of the
project.
The aspiration of the JV is to install equipment, which allows full monitoring and control
capabilities of appropriate parameters of the JV’s facilities and wells from a central control room.
All on-shore equipment should be compatible and identical in philosophy to the LNG
installation. Ideally, one Main Instrumentation Vendor should be selected for the LNG plant and
all Upstream facilities to prevent compatibility clashes.
The use of emerging “smart fields technology” and Novel types of instrumentation systems (e.g.,
Fieldbus), requiring minimum operational and maintenance interventions will be considered.
More details can be found in the Operations Philosophy.
19.1.7. Maintenance Philosophy

Major maintenance activities for the Central Platform and its satellites will be carried out during
maintenance campaigns that will be synchronized with the LNG plant maintenance campaigns.
Equipment selection should take account of this criterion.
The maintenance strategies will be based on the principles of Risk and Reliability Management
(RRM) which include Reliability Centered Maintenance (RCM), Risk Based Inspection (RBI) and
Instrument protective functions (IPF) techniques
19.1.8. Inspection Philosophy

The inspection philosophy will be developed post VAR-2. It will aim at the lowest TCoO whilst
maintaining Technical Integrity. A Technical Integrity Management system will be developed
RBI techniques will be used to assess inspection frequencies.
19.2. Operations and Maintenance Facilities
Offshore
It is envisaged that production facilities will be installed at the offshore gas fields. The exact
location and configuration will be determined during the concept selection phase (VAR-3).
Onshore
An Operations base will be installed onshore. This will either be integrated with the LNG
Operations base or be standalone. Reference is made to the Operations base-selection criteria
reportxxxi, which proposes the method to select the optimum location for the Operations base.
xxxi See Reference 14 on page 21-3
OGUD.2003.000012.01
The requirements for the base will be further detailed during the concept Selection Phase but
now the following is envisaged:
Figure 19.3: Operations Base Requirements.
19.3. Integrity Management

An Integrity Management System will be developed before completion of the FEED, which can
be based on Risk Based Inspections techniques.
After some time (expected around 3-6 months after the start of Operation), a Focused Asset
Integrity Review will be carried out to analyze the performance of the Integrity Management
System in place.
The Technical Integrity management system ensures that the design meets the minimum integrity
standards and that the risks of the chosen concept are As Low As Reasonably Practicable
(ALARP) whilst aiming to minimize the Total Cost of Ownership over the lifecycle of the
project.
OGUD.2003.000012.01
The Operations Philosophy covers several Technical Integrity aspects like:

• Structures
• Flowlines and Pipelines
• Corrosion
• Wellhead Protection
• Annulus Integrity on dry and wet Wellheads
• Shutdown systems
• Pressure Protection
• Monitoring of Chemical Injection essential for Technical Integrity
• Firefighting Philosophy
• Fire, Gas and H2S detection Philosophy
Brownfield activities
Initially no brownfield activities are envisaged, however as the project matures, brownfield
activities cannot be excluded.
Therefore where known in advance, potential future upgrade projects (e.g., future tie-backs,
compression, etc.) should be taken into account in the design with an aim to minimize the impact
of these future brownfield modifications on plant Availability and HSE.
19.3.1. Safeguarding Systems

The safeguarding philosophy will be developed during the FEED. It will include the following
main features:
• A simple and clear safeguarding system to ensure that the TCoO will be minimized whilst
maintaining technical integrity.
• Safe and reliable fully automatic shutdown systems with different levels of shutdown will be
designed during the FEED. The safeguarding system will be separated from the control
system. The shutdown system for the offshore facilities should at least include but not be
limited to the following levels:
1. Process Shutdown (PSD), which shuts down the process after a process failure has been
detected.
2. Emergency Shutdown (ESD), which shuts down and depressurizes the installation after
an emergency has occurred.
Pressure Protection will be simple, reliable and should ensure a high uptime. This will ensure a
minimize TCoO whilst achieving the desired Technical Integrity standard. Where possible flares,
vents, and blowdown systems should be avoided.
OGUD.2003.000012.01
19.3.2. Fire and Gas Detection and Protection
Firefighting
The firefighting philosophy will be detailed during the Feed.
Where supported by TCoO, preference will be given to passive types of fire protection instead of
active deluge protection systems to reduce maintenance.
However, subject to a QRA study confirmation, the following aspects are envisaged and will be
addressed in this philosophy:
• Wellhead Platforms may be equipped with a fire detection system, which only shuts down the
platform after detection of a fire (following the Cause and Effects Matrix). No firefighting
equipment other than portable extinguishers is envisaged (placed at locations determined
during the FEED).
• The Central Platform process area may be equipped with a deluge system, fire, and blast walls
that provide personnel sufficient time (at least 20-30 minutes, to be confirmed during the
FEED) to escape via an emergency escape craft (located in the safe zone of the living
quarters) after a catastrophic event. The deluge system must be testable on a regular basis.
Consideration should be given to an inhibited closed sweet water system (to prevent marine
growth and corrosion inside the deluge system) with external seawater supply in case of a fire.
Portable fire extinguishers will be placed at locations determined during the FEED.
• The Central Platform Living quarter may be provided with a testable sprinkler system and
portable fire extinguishers where deemed necessary (to be determined during the FEED)
• The slugcatcher area, located near the on-shore LNG plant should adopt the LNG plant
firefighting philosophy and should be integrated with the LNG plant firefighting system.
Fire, Gas, and H2S detection philosophy

The fire, gas, and H2S detection system ensures amongst others that a high uptime is achieved
(i.e., LNG plant is supplied with agreed daily quantities) whilst maintaining Technical Integrity and
hence achieving a minimum TCoO over the lifecycle of the project.
Executive actions following the activation of detectors should be carefully assessed during the
FEED and due consideration will be given to a minimum number of detection devices and two
out of three voting systems to minimize nuisance trips.
Considerations should include the use of the latest technology in detection devices (e.g., camera
type detection), which should also provide diagnostics systems. This should minimize
Operational interventions and Maintenance requirements.
OGUD.2003.000012.01
19.4. IT and Telecoms
Telecoms
Telecommunications requirements should achieve the right functionality and lowest TCoO over
the lifecycle of the project.
The detailed technical requirements and procedures for the lines of communications will be
established before completion of the FEED. This should include:
• Operational and emergency communication (e.g., Hotlines) between the Offshore and On-
shore operation, the LNG plant, the JV Operations management, and if applicable to third
parties
• The agreed “day to day” lines of communication
• A Public Address system for the offshore facilities with visual warnings in noisy areas
• Hardware requirements for infield and inter field communication (radio’s, telephone links,
fax, computer network systems, satellite communication and data links, etc). The fact that
radio signals may be obstructed by the steel platform modules shall be taken into account
when the platform communication system is being selected.
• Integration with the LNG plant
• UPS systems
• License and appropriate government approval requirements
• Availability requirements
IT
Advanced production software for data management and production optimization purposes can
assist in field and production management to achieve a minimum TCoO during the lifecycle of
the project.
During FEED (prior to Var-4), advanced production software packages will be reviewed and
selected as determined appropriate for the MSLNG project. Advanced software including (but is
not limited to):
1. “Energy Components” for Hydrocarbon Accounting
2. “Fieldware” for managing of well tests and other appropriate software tools
3. “Production Universe” for production optimization
4. Data historian like “PI” for on line data gathering
Where appropriate, synergy should be sought between the LNG plant and upstream production
monitoring software, and as a minimum compatibility needs to be ensured.
OGUD.2003.000012.01
19.5. Availability
Upstream Availability considerations for the project are driven by the following high-level
parameters;
• Capability of the integrated Upstream/LNG plant to load LNG tankers within the
contractually agreed time periods.
• Capability to deliver to the market a total quantity of 4.7 Mt per year.
• Capability to meet on a continuous daily basis the demand from the Domestic Market up to a
level of 300 MMSCF/d.
Detailed availability evaluations have not been carried out in this stage of the study. In the next
stage, concept selection availability will be derived from a qualitative basis to support the
selection of the preferred concept. System DCQ levels are based on the delivery of 4.7 Mta in
347 stream days.
The main elements in the Upstream supply chain affecting the availability of the required system
output are:
• Availability of individual well capacities
• Availability of the individual field production systems
• Availability of area production system
• Availability of the export system to the plant inlet
Ultimately, the area will be developed with some 20 to 30 wells producing from either subsea
wells or small (up to 3 wells) wellhead platforms.
The availability of the production system can be improved by an accelerated drilling program,
which will introduce capacity in excess of requirements. Also the robustness of the selected well
designs affects the availability, e.g., overall Platforms well reliability will be lower than a typical
subsea well however MTTR for most breakdowns will be significantly shorter.
The field production systems consist of relatively simple manifold facilities, which include some
utility functions. Availability of the individual field production systems will mainly be influenced
by the availability of the utility functions and the availability of the interconnecting flowlines.
Provision of the utility services by umbilical from the area production system or from the CPF
and the installation of parallel flowlines (for improved multiphase flow management) are key
parameters affecting the availability for these components.
The area production system will, in the initial years, have a similar functionality as the field
production systems.
Availability analysis will become critical with the selection of the Compression concepts. In this
feasibility phase, area compression concepts have been based on systems with 3 times 50%
capacity. The ultimate line up will be further refined as part of a future (approximately 2011)
concept selection phase.
OGUD.2003.000012.01
In the next phase some further definition will be created on the relative merits to distribute
compression to the individual fields.
The availability of the export system is of vital importance to the supply of gas to the LNG plant.
In the concept selection phase additional definition will be provided on the relative merits for the
concepts that have:
• Only one export route either multi or single phase
• Two parallel 50% capacity systems
• A system with two area centers and two export systems.
The main parameters in this evaluation will be the impact of the seismic activity in the area, the
pipeline fault crossings, fishing and shipping activities, and the internal corrosion potential linked
to the selected operating mode.
The challenge for the both the offshore and onshore system design is to combine the 365 days a
year domestic market demand with a LNG plant system design that is based on an average
number of 347 stream days per year.
Figure 19.4: Effective Capacity (on a monthly basis) of the combined system
(production+LNG), artificial data.
OGUD.2003.000012.01
365
345
325
Streamdays/year
305
285
265
245
0
10
12
14
16
18
20
22
24
26
28
Year
Figure 19.5: Associated nr. of stream days of typical LNG plant.
OGUD.2003.000012.01
20. PROJECT EXECUTION

The definition of a Project Execution strategy will be initiated after completion of the feasibility
phase. The first draft of the project execution plan will be finalised as part of the FDP that will
be defined at the end of the Select Phase (VAR3).
A number of explicit execution related decisions have been made to-date:
• Shell Houston-based technical staff will provide the lead in the Identify and Assess and
Selection Phase of the project, and will carry out these activities with primarily in house
resources with regular input and reviews by partners.
• A Joint Venture will be formed towards the end of 2003 and will be resourced to take the
project into the Define and Execute phases immediately thereafter.
Execution and Contracting Strategy decisions that need to be made at the end of the Identify and
Assess phase are:
• Is a design competition for concept definition and selection an appropriate tool for concept
definition and selection?
• Is Alliancing a possible contracting strategy and should the Alliance start at the beginning of
the define phase (Post VAR3)?
All other execution and contracting strategy elements can be considered and defined during the
xxxii
select phase .
The execution of a design competition already excluded by the agreements made as part of the
PDA and, furthermore, an upstream surface facility would not be an appropriate execution
method given the dominant role of iteration and interaction between the Subsurface and
Downstream activities. The effort in maintaining a level playing field between the competing
Design consultants would be significant and not commensurate with the benefits one expects
from a design competition.
Alliancing are considered risk/reward sharing and schedule accelerations. These contracts should
be considered in conditions where;
• Design and execution risks are dominant risk factors
• Upstream schedule is critical and acceleration is key value driver
• JV and contractor are receptive to the contractual and behavioural requirements of this
contract type.
xxxii See Reference 18 on page 21-3
OGUD.2003.000012.01
In this project design and execution risks are not dominant, Upstream is not the only schedule
driver, and implementing an Alliance as one of the first major contracts of the JV where the
following are not well defined and continue to be main risk factors in this phase of the project.
• Project Financing requirement
• Local content requirements
• Current and projected local capabilities
• JVA and Licence Conditions definitions
• The current political and economical situation in Venezuela
• And are risks better taken by the JV than transferred to the Alliance
Incentives and risk sharing/alliancing arrangements continue to be a viable alternative for
execution elements beyond the VAR4 milestones and should at that stage be reviewed for
potential scope synergies with the downstream project activities.
The definition of the execution strategy in the select phase will be influenced by the JV
organisational set-up, legal arrangements, SDEA stakeholder engagement, any TSA agreements,
the local content objectives and last but not least the selected technical concept. The concept
selection will be an interactive process where JV organisation, TSA’s, SDEA, Legal, Commercial,
and Local Content will steer the selection of certain technical system concepts.
The technical concepts identified as part of this study vary in local content. A first high
indicative assessment has been made to differentiate the concepts in terms of the potential for
local contents provisions. This evaluation will have to be re-assessed after completion of the
local capability and cost survey and after the definition of local content has been finalized.
OGUD.2003.000012.01
% of total CAPEX (for reference case) 27% 12% 7% 16% 25% 7% 5% 100%
Wellheads - Flowlines
Platforms and Export Onshore
Drilling or Subsea CPF Compr. Umbilicals System Facilities Total
Concept 1 12% 63% 40% 15% 10% 40% 60% 24%
Concept 1 SS 10% 10% 40% 12% 10% 40% 60% 16%
Concept 1 GBS 12% 63% 30% 12% 10% 40% 60% 24%
Concept 1 FPSO 12% 63% 20% 12% 10% 40% 60% 22%
Concept 2 12% 63% 40% 12% 10% 40% 60% 25%
Concept 2 FPU 12% 63% 15% 15% 10% 40% 60% 24%
Concept 2 Field Compression 12% 63% 45% 20% 10% 40% 60% 39%
Concept 2 Onshore Compression 12% 63% 50% 40% 10% 35% 50% 30%
Concept 2 Single Phase Pipeline 12% 63% 20% 10% 15% 35% 60% 23%
Concept 2 Pipeline to Puerta La Cruz 12% 63% 25% 12% 10% 35% 60% 25%
Concept 3 12% 63% 35% 15% 13% 35% 73% 29%
Concept 3-1 12% 63% 35% 10% 13% 35% 65% 25%
Concept 3-2 12% 63% 35% 15% 13% 35% 55% 28%
Concept 3-3 12% 63% 35% 15% 13% 35% 70% 28%
Concept 3-4 12% 63% 35% 15% 13% 35% 55% 28%
Concept 3-5 12% 63% 35% 10% 13% 35% 73% 26%
Concept 4 12% 63% 35% 12% 10% 34% 73% 26%
Concept 5 12% 60% 25% 20% 15% 45% 73% 30%
Concept 6 10% 40% 35% 12% 15% 35% 73% 24%
Concept 7 10% 0% 0% 0% 8% 35% 65% 17%
local Venezuela capability is expected to exist to fabricate and install most of the components of this = high
CAPEX item (50 % or higher)
medium = local Capability is expected to exist to fabricate and install between 25 and 50%
of the value of the components =medium
low = limited local capability is expected to exist to contribute to the item ( less than 25%) = low
Note;
First indicative assessment of Local Content potential of various Upstream Concepts
This assessment will have to be validated by a detailed capability assesment prior
to finalisation of concept selection
Drilling
Drilling tubulars, casing & conductors and limited numbers of rig personnel are local content, rigs and wellheads are external.
Applies for all concepts except where platform based drilling rigs are included
Confirm tubulars can be procured locally and wellheads are imported
Wellheads and Wellhead platform
Installation requires external equipment and crews. All Subsea facilities are external
CPF
Modules can be fabricated locally, all module instruments, power gen, rotating equipment & valves are imported. Assembly is local
CPF support structure can be fabricated locally
Compression Modules
Similar as for CPF structure can be fabricated locally, all components have to be procured externally.
Flowlines and Export System
All standard pipeline and flowline material can be procured locally. Installation is external and all cable/umbilical costs are external
Onshore Facilities
Most activities can be carried out locally. Gas treatment equipment and specialist construction is external
Engineering & Design and Project Management
Where facilities are constructed in country it has been assumed that the detailed design will also be carried out in country
In all cases, an element of costs for Project Management have been allocated as being local expenditure
General Comment
The calculations above assume that all the possible local content can be achieved. The actual capacities and capabilities of
local labour, construction yards, manufacturing plants and infrastructure can resource the project's requirements
Figure 20.1: Local capability.
OGUD.2003.000012.01
21. INTERFACES
The following interfaces essential for the definition of the feasible concepts have been addressed
between the Upstream, SDEA, Local Content, and Downstream Teams. All Topics except for
the External Affairs Information Plan are addressed in this feasibility report and/or in the
interface document xxxiii.
Upstream Upstream Upstream HSESD Focal CC. Upstream
DS Focal Point Subsurface Wells Facilities Local Content Point Coordination Issue
Adri van Driel Bill Finch Kevin Pascoe Feedgas Quality and Composition
Adri van Driel Bill Finch Kevin Pascoe Minimum Condensate Requirement
Adri van Driel Bill Finch Kevin Pascoe HHV range
Adri van Driel Bill Finch Kevin Pascoe Feedgas Pressure, Temperature
Adri van Driel Bill Finch Kevin Pascoe Q, Variation day to day, year to year
Adri van Driel Kevin Pascoe Domgas Scenarios
Adri van Driel Martin Geven Katharine Gotto Kevin Pascoe Operating Philosophy
Pieter Krijn Martin Geven Katharine Gotto Kevin Pascoe Infrastructure on Peninsula, OPS,Supply, Housing etc.
Pieter Krijn Ed Hernandez Katharine Gotto Kevin Pascoe Site Selection CIGMA
Dyo Agterhuis Ed Hernandez Katharine Gotto Kevin Pascoe Permits
Dyo Agterhuis Ed Hernandez Kevin Pascoe Pipeline Interface Line Pack and Slugcatcher
Adri van Driel Bill Finch Kevin Pascoe Integrated process options study
Pieter Krijn Ed Hernandez Katharine Gotto Kevin Pascoe Pipeline Rout Selection
Adri van Driel, Dyo Agterhuis Hein Hilhorst Kevin Pascoe Integrated Availability Study
Dyo Agterhuis Eirik Sorgard Hein Hilhorst Kevin Pascoe Contracting Strategy/PEP
Dyo Agterhuis Stewart Hayward Kevin Pascoe Integrated Schedule
Adri van Driel Hein Hilhorst Jesus DelVecchio Katharine Gotto Kevin Pascoe Interface Document
Dyo Agterhuis, Pieter Krijn Jesus DelVecchio Katharine Gotto Kevin Pascoe External Affairs Information Plan
Pieter Krijn Eirik Sorgard Hein Hilhorst Jesus DelVecchio Katharine Gotto Kevin Pascoe Data Gathering/Metocean Geotechnical
Dyo Agterhuis Stewart Hayward Jesus DelVecchio Kevin Pascoe Cost Data
Adri van Driel, Dyo Agterhuis Eirik Sorgard Hein Hilhorst Kevin Pascoe HSE Premises/Standards and Activities
Dyo Agterhuis, Pieter Krijn Eirik Sorgard Hein Hilhorst Jesus DelVecchio Katharine Gotto Kevin Pascoe Local Content Strategy and Implementation
Tony Lanson Eirik Sorgard Hein Hilhorst Katharine Gotto Kevin Pascoe ESHIA stage 1 and 2
Adri van Driel Tony Lanson Eirik Sorgard Hein Hilhorst Katharine Gotto Kevin Pascoe Field Visit Coordinators
Figure 21.1: Essential interfaces.

The key interfaces issues worked as part of the feasibility studies are:
• Subsurface and surface interface as reflected in the integrated scenarios defined by
production profiles, phasing and well counts and in the compositional analysis of the fluids.
• The Upstream surface/Downstream interface with a focus on Pressure, Quality and Volume
of the transferred hydrocarbons and onshore system requirements (cost and capacity) in
support of the Upstream functions
The Upstream/SDEA interface with a focus on pipeline route identification and selection and
ESHIA preparation.
These interfaces will in the next phase be characterised through;
• Fluids flows and their range of physical and chemical characteristics
• Component interfaces (size, location, etc.)
• Intermediate project milestones and deliverables
• Execution interfaces (scope limits, contract strategies)
• Operations information data handover.
xxxiii See Reference 19
OGUD.2003.000012.01
Based on the final upstream concept selected the Interface documentxxxiv will be transformed to
describe the elements in the necessary details.
In addition to these technical interfaces local content, economics, legal, finance, and
organsiational teams are needed to identify and monitor the issues that may impact concept
selection and definition of the execution strategy.
xxxiv See Reference 19
OGUD.2003.000012.01
REFERENCES
1. VNLG Project VAR 1.
2. Upstream Joint Development Agreement Scope.
3. MSLNG Site Visit Report, June.
4. Site Comparison Report for the VNLG Project July.
5. Latin Petroleum Analytics (2003), Preliminary Metocean Design and Operational
Conditions for the Mariscal Sucre LNG Project, Venezuela, Alexander’s Gas and Oil
Connections, Inc.
6. McClellan, R. (2001), Subsurface Engineering Report FHWA-IF-01-011.
7. Pals, F. (2003), MSLNG Operations Philosophy, Beacon Interactive, Inc.
8. ESHIA, Inc., (1998), ESHIA Terms of Reference.
9. SEPTAR, (2002), SEPTAR report Subsurface feasibility Evaluation MSLNG, (unpublished).
10. Mendez, M. (1996), Cristobol Colon Project Offshore Report, ISBN: 1-56927-217-4.
11. Killick, C., (2003), Mariscal Sucre LNG (MSLNG) (Upstream Facilities) conceptual hazid
report, OG 03-30362, The Hague.
12. Neville, A. (2001), DEP 39.01.10.11-General Selection of Materials for Life Cycle
Performance (EP), Environmental Protection, Inc.
13. Feld, L. (2003), Capital to Value Report for MSLNG (unpublished).
14. GAO, Inc. (2003), Operations Base Selection Criteria Report.
15. Compiled by Lanson, A. P., Jr. (2003), MSLNG project Upstream Plan for the Phase 1
Polygon, Part 1 - Field Development Feasibility Study- Subsurface Team,
(Volume 1 of EP 2003-3116).
16. Nace® International The Corrosion Society, (2003), NACE MR0175-2003 Metals for Sulfide
Stress Cracking and Stress Corrosion Cracking Resistance in Sour Oilfield Environments,
ANSI/Nace® Standard MR0175-2003, Item No. 21302.
17. Nace® International The Corrosion Society, (2003), NACE TM0284 Evaluation of Pipeline
and Pressure Vessel Steels for Resistance to Hydrogen-Induced Cracking, ANSI/Nace®
Standard TM0284-2003, Item No. 21215.
18. Shell Middle East Global Implementation Team, Opportunity and Project Management
Guide (OPMG) provided on CD, (unpublished).
19. Ohep, E. (2003), Interface Report, Petroluemworld, Inc.
20. PCC Corporate Center, (2003), PCC Report, PCC Coporate, Inc.
21. Cost Summary Sheets (Located in Appendix D in Volume 2)
22. Sorgard, E. (2003), Presentation for VAR 2 MSLNG Venezuela in the Well Engineering
section of the MSLNG Subsurface Feasibility Report (unpublished).
OGUD.2003.000012.01
EP 2004-5167 -A- 1 - Restricted to Shell Personnel Only
APPENDIX A. SUMMARY TABLES OF WIND AND WAVE CRITERIA

Ca rib b e a n Se a (Fine : 1 1 3 2 6 ; Coa rse : 1 0 6 4 )
o
Latitude 11 00'00"N
o
Longitude 62 15'00"E
Water depth (relative to LAT) 88.3
Mean Sea Level (rel. to LAT) 0.27 re turn p e riod (yr)
Total water depth in metres = 8 8 .5 7
1 2 5 10 20 50 100
Hs m 2.8 3.1 3.7 4.3 5.1 6.1 7.5
Maximum wave height [Hmax (3hrs)] m 5.2 5.8 6.9 8.0 9.5 11.3 13.9
Shortest exp. spectral peak period (Tp) s 7.3 7.7 8.4 9.0 9.8 10.7 11.9
Longest exp. spectral peak period (Tp) s 17.0 15.5 14.5 13.5 13.0 13.0 13.0
Shortest exp. Mean zero-crossing period (Tz) s 5.4 5.6 6.2 6.6 7.2 7.9 8.8
Longest exp. Mean zero-crossing period (Tz) s 14.0 12.0 10.0 9.5 9.5 9.5 9.5
1 hour mean wind speed (at 10 m elevation) m/s 12.0 15.0 18.0 21.0 24.0 27.0 30.0
1 minute wind speed (at 10 m elevation) m/s 14.9 18.6 22.3 26.0 29.7 33.5 37.2
3 sec gust speed (at 10 m elevation) m/s 18.3 22.9 27.5 32.1 36.7 41.2 45.8
Current speed (surface) m/s 1.64 1.70 1.74 1.80 1.88 1.94 2.00
Current speed (1 m above seabed) m/s 0.86 0.90 0.92 0.95 0.99 1.02 1.05
Positive total height (rel. to MSL) m 0.43 0.45 0.47 0.49 0.51 0.52 0.53
Notes:
Wave and wind criteria are derived from POT analyses of data from the storm OSW model for return periods 20, 50 and 100 yr
Wave and wind criteria are derived from CFD analyses of data from the operational OSW model for return periods 1, 2, 5, and 10 yr
Current criteria are derived by summation of the mean spring-tidal current, a wind-induced current and a density-induced current. A 1/7th power
law profile is assumed for all these currents.
The postive total height is the sum of the surge height (rel. to MSL) and the Highest Astronomical Tide (rel. to MSL)
2-Jun-03
OGUD.2003.000012.01
Dr a gons Mouth ( Fine : 1 1 0 4 1 ; Cour se : 9 6 1 )

o
Latitude 10 45'00"N
o
Mean Sea Level (rel. to LAT) 0.5 r e tur n p e r iod ( yr )
Total water depth in metres = 56.3
1 2 5 10 20 50 100
Hs m 2.5 2.9 3.4 3.8 4.2 4.8 5.5
Notes:
Current criteria are derived by summation of the mean spring-tidal current, a wind-induced current and a density-induced current. A 1/7th power law
profile is assumed for all these currents.
2-Jun-03
OGUD.2003.000012.01
G ulf of P a ria (Fine : 1 0 8 1 0 ; Coa rse : 8 6 0 )

o
Latitude 10 30'00"N
o
Mean Sea Level (rel. to LAT) 0.85 re turn p e riod (yr)
Total water depth in metres = 31.55
1 2 5 10 20 50 100
Hs m 1.8 2.2 2.6 3.0 3.7 4.4 5.0
*Current speeds are specified for an area 30 km west of grid point 860, about 10 km offshore Guiria. Total current speeds at the grid point
location are for all return periods 0.3 - 0.5 m/s lower.
Notes:
Current criteria are derived by summation of the mean spring-tidal current, a wind-induced current and a density-induced current. A 1/7th power law
profile is assumed for all these currents.
2-Jun-03
OGUD.2003.000012.01
EP 2004-5167 -B-1 - Restricted to Shell Personnel Only
APPENDIX B. RISK MATRIX

Item Title Description/Cause Consequence Action Who When Probability Impact Risk Value Driver
TEC Rating
OP
7.0 SURFACE
7.1 T Reservoir Fluids and C7+ and “trace” fluid High uncertainty may exist in all Model with “pseudo components” Bill Finch Aug-03 H H H NPV
PVT samples analysis not apparent in fluid models. May not be able to and appropriately quantify the risk
the available to date accurately model surface facilities, on the risk register. Impact of
two-phase flow, and condensate uncertainty will be presented on
handling facilities. feasibility report and followed up in
VOI post VAR2.
7.2 T H2S Ambiguous or no Impact on operational safety and Define range and impact of H2S Bill Finch VAR2 m m M NPV HSE
measurement of H2S material selection. Potential range
downstream impacts on LNG
plant
7.3 Shore Approach Seismic activity can cause Stability and integrity of pipeline is Review extent of problem and Ed Hernandez Oct-03 h m H HSE, NPV
stability significant mud slides at jeopardized identify if issue can be designed out
North Side of Peninsula or is inherent risk in running
pipelines in the area. Include in
Pipeline selection criteria.
7.4 T Seismic Activity Active faults in the area Stability and integrity of pipeline is Review extent of problem and Ed Hernandez Oct-03 h m H HSE, NPV
which have to be crossed jeopardized identify if issue can be designed out
by the pipelines, or is inherent risk in running
pipelines in the area. Include cost
impact in costs included in
feasibility study and in selection
criteria
7.5 T Seismic Activity seismic activity impacts Stability of structure and process Impact on design of structures can Bill Finch Oct-03 h m H HSE, NPV
design and stability of the during earthquakes be designed in and will be reviewed
offshore structure post VAR2.
7.6 T 8 Month Start-up of Flow regime during start-up phase not defined, which can lead to Understand LNG plant Bill Finch Oct-03 m h H NPV
LNG plant unintended corrosion issues commissioning requirements and
align with Upstream execution
schedules
7.7 C Local Content Understand capabilities Accuracy of cost and planning Align assumptions and cost data Stewart Hayward h h H NPV
and understand forecast. Quality of final product with LNG and local content team
cost/schedule implications
of local content providers
OGUD.2003.000012.01
TEC Rating
OP
7.8. T Material Selection Life cycle costs for Excessive operating cost or Develop material selection Bill Finch Q1 2003 m h H NPV
different elements of the downtime. Occurrence of SSC, philosophy and linked corrosion
transport chain taking into HIC, SCC and MDMT management strategies. Taking into
account varying levels of account acceptable levels of
H2S/CO2 presence chemical injection systems
7.9 T Route Selection Approval 13 months after Delayed execution of project Focus on data acquisition, including Ed Hernandez Q1 2003 m m M NPV
close out of selection schedule soil sampling, seabed surveys etc
phase. where necessary.
7.10. T Operating Base LNG or PDVSA driven Short term driven decisions in Execute TECOP/SD based Martin Geven VAR2 h m H Rep, NPV
preferences not necessary support of venture set-up may operating base location selection
aligned with optimum increasing life cycle costs process
value considerations
7.11. T Subsidence Pressure reduction in Waves hitting cellar deck can Definition of air gap to be included Tony Lanson Pre-VAR3 L L L NPV
reservoir causes overload the structure in BoD document post VAR3
compaction in reservoir
and subsidence of seabed
7.12. T Corral reefs Old Corral Reefs will Affect selection of pipeline route Define and carry out seabed Bareld ASAP after VAR3 L M NPV
impact on soil strength and location of drilling rigs and surveys Hospers
subsea wells and platforms
7.13. E Pre-investment for DomGas uptake profile Not fulfilling contractual Define realistic off take scenarios Bill Finch VAR2 H H H NPV
next Phase and impact on pre- requirements and/or unnecessary and associated surface/subsurface
investments pre- upfront investments realisations
investment for 2nd train
7.14. E Misalignment in Availability of all critical Missed shipping windows or over Define integrated availability model Hein Hilhorst Oct-03 H H H NPV
availability elements in the supply investment in capacity
investment chain must be of the same
order of magnitude
7.15. T Floating LNG Floating LNG is not considered. Government drive L L L NPV
to create industrial zone in the area requires LNG
plant to be land based
7.16. T Excessive water influx Inadequate water handling capacity Create water production forecasts Tony Lanson VAR2 H H H NPV
requiring production reduction and (with range) for all scenarios
plant well mods
OGUD.2003.000012.01
TEC Rating
OP
Salinity in Produced Water and impact on corrosion of pipeline Bill Finch VAR3 M L L NPV HSE
7.18. T Sand Control and its Unconsolidated reservoirs Improper sand control will pose, Review need for anything more Eirik Sondberg VAR3 H H H NPV, HSE
requirements may require sand control availability integrity and HSE risks than normal sand detection sensors
and
7.19. T Explosive Dumping Mention of Explosive Dumping area may be Review status of dumping ground Ed Hernandez VAR2 H H H NPV
area in Eastern Sea Dumping area in Eastern showstopper for offshore pipeline and measures and alternative routes
route Sea route for pipeline routing
7.20. T Corral Reefs within Corral Reefs within the Improper support of jack-up and Include in geotech surveys Frank Sliggers ASAP after VAR3 H H NPV
the Mejillones Mejillones field may structures
impact location of the
structure placement
7.21. C Prior Commitment during PDA negotiations Review any action item based on Hein Hilhorst ASAP L H M Rep
PDS commitments
7.22. C Impact of financing requirement on surface Allocation of insufficient time and funds result in missed deadlines Stewart Hayward L H H NPV
project schedule
7.23. T Soft Soil conditions Rio Caribe Frank Sliggers VAR3 H L M NPV
7.24. T Mercaptens and Mercaptans may be Impact on operational safety and Review impacts of Mercaptans over Bill Finch VAR2 L H M NPV HSE
impact on facility present in reservoir fluids material selection. Potential and above those for H2S
design downstream impacts on LNG
plant
7.25. T Heavy Metals and Possible but unconfirmed Heavy metal accumulation in LNG Confirm absorption of heavy Bill Finch VAR2 L H M NPV
LNG inlet components of the system metals through piping system and
reservoir fluids time span available for corrective
action
7.26 T LSA/Norm LSA production over time HSE exposure Evaluate possibility of LSA scale Bill Finch VAR4 L M L NPV HSE
production in operations phase
7.27 C Impact of PDVSA Impact accurate assessment of Identify alternative data sources Ed Hernandez VAR2 L L L NPV
discontinuity on structural and pipeline routing
schedule requirements
OGUD.2003.000012.01
TEC Rating
OP
7.28 T LNG interfaces Duplication of Loss of Value Actively work interface with SGSi Bill Finch VAR2 L M L NPV
pressure, processing functionality or NL for LNG
and composition functionality not provided
ranges at the lowest possible costs
7.29 T Evaluate daisy chain Possible more cost effective solution, may require detailed review of Bill Finch VAR2 M M M NPV
arrangement for availability of production
individual fields
7.30 E Integrated Data collection for pipeline and Create one integrated data Hein Hilhorst VAR2 L L L NPV
structures with DS and HSE/SD collection package.
7.31 T Base Bathymetry Map was created from Should not be used for post-VAR Awareness of team working on Bill Finch VAR 3 L L L NPV
and topographic several commercially 3 detail design. project in the future.
map available maps.
7.32 T Alluvial Fans/Mud Recent large Caracas area Destruction of pipeline where Evaluate proposed pipeline routing Ed Hernandez VAR2 M H H NPV HSE
slides mudslides highlights the pipeline crosses mudslides in context of Alluvial fan mudslides REPT
possibility of large high
speed mudslide
7.33 T Alignment of LNG e.g. Malampaya has unnecessary inefficiencies Define standardisation alignment Hein Hilhorst VAR3 M L M NPV
and EP standards different standards for plan between Upstream and
Plant and offshore this downstream immediately after VAR
introduces inefficiencies 2
7.34 P Measurement metering systems have to Metering systems not suitable to Definition of metering philosophy Hein Hilhorst Sep-03 M H H NPV
requirement as serve at least three serve all needs (reservoir, immediately in combination with
included in gas law independent functions operations, royalty, gas law) or too discussion with regulator on
and PDA expensive acceptable metering requirements.
7.35 T Location of Fault Conflicting data eliminate inconsistency in fault data Finch Bill VAR2 M H H NPV
line in vicinity of
LNG plant not
understood
7.36 O Clarification of Iterative process of Misaligned decisions reducing Define integrated VAR3 decision Hein Hilhorst VAR2 M H H NPV REPT
VAR3a/b decision decision making between overall project value process
vis-à-vis technical the work stream to be
upstream to be understood
clarified
OGUD.2003.000012.01
TEC Rating
OP
7.37 P Misalignment of Concept Selection has to Consolations with International Align SDEA and stakeholder Hein Hilhorst VAR2 M H H NPV REPT
SDEA timeline and occur before effective NGOs is seen by NGO as not management objectives with
need to make consultation has been sincere and after the event upstream schedule
pipeline route completed participation. Loss of credibility,
selection as part of reputation
concept selection
7.38 P Potential Misalignment in Potential for increased project cost Develop proposal for base selection Hein Hilhorst VAR3 L M L NPV REPT
misalignment of project/partner or and schedule delays early after VAR2
schedule on the CIGMA aspirations
issue of Operating obstruct decision making
base selection and on the issue
concept selection
decision
7.39 T Data (un) availability Unavailability of accurate Sub-optimum development Fully understand subsurface Bill Finch VAR2 H H H NPV
on the overall reservoir definition and concept and impact on availability uncertainties, and consequences on
schedule and PVT data of the LNG plant Upstream Concepts and LNG plant
concept selection design
activities.
7.40 P Impact on Commitments made as Unintended additions to project Develop project wide commitment Kevin Pascoe VAR2 H H H NPV REPT
infrastructure needs part of stakeholder scope, value erosion and schedule control procedure as part of all
through SDEA consultation and/or and reputation impact negotiations
initiatives, JV, agreement/license
License, Local negotiations
Content
7.41 T Availability of the Sub-optimum availability Value erosion in CAPEX and/or Develop integrated availability Hein Hilhorst VAR3 M M M NPV
export system from analysis for integrated OPEX phase model in support of concept
offshore area to production chain selection and BoD
LNG plant
7.42 T Availability conflict LNG stream days are 347, Integration benefits of DOMGAS Develop DOMGAS concepts from Kevin Pascoe VAR3 H L M NPV
between DOMGAS DOMGAS 365. facilities in LNG plant may be an availability perspective
and Typical LNG limited due to different uptime
facility requirements
7.43 P Multi Tasking and Manning levels and Misalignment with Union on Start dialogue with Unions at an Kevin Pascoe VAR3 M H H NPV REPT
acceptability to competency requirements preferred manning strategy early stage to have buy-in of
Unions are based on Multi tasking. Operations Philosophy
Multi Tasking not
recognised by Unions
OGUD.2003.000012.01
TEC Rating
OP
7.44 T Hydrate Formation Hydrates in flow system Blockage of well or flow lines Issues will be addressed in next Bill Finch VAR3 L M M NPV
phase and will be challenged as part
of Concept Engineering Hazop
7.45 T Security Unmanned platforms may Security defines operating mode of Carry out security assessment in Kevin Pascoe Oct-03 H H H NPV HSE
not be feasible based on offshore facilities context of threat to any offshore
the threats of vandalism facilities. See also HAZID
7.46 T Stability of two Changes in PVT over the In-ability to produce well over the Carry out detailed multi phase flow Ed Hernandez VAR 3 L M L
phase flow through life time of the project planned life cycle evaluations
out the operating
range of the
individual flow lines
OGUD.2003.000012.01
EP 2004-5167 -C- 1 - Restricted to Shell Personnel Only
APPENDIX C. PRELIMINARY SIZING RESULTS

West Route
Two-Phase Analyses
Figure AC. 1: West Route system analysis (Parrival=75 barg).
OGUD.2003.000012.01
Figure AC. 2: West Route Route total liquid holdup (Parrival=75 barg).
OGUD.2003.000012.01
Figure AC. 3: West Route Route system analysis (24 in.–32 in.), Parrival=75 barg.
OGUD.2003.000012.01
Table AC. 1: Slugcatcher Sizing – 30 in. West Route
"Modified" Cunliffe method for slugcatcher sizing EP-93-2270 Engineering Units
Case: 30" Pipeline West Route Pipeline: 30" Pipeline Design
Remarks: First Run

Flowrates mmscf/d 770 700 580 385 190 80
100% 91% 75% 50% 25% 10% File name: Cunliffe-Slugcatcher Sizing for MSLNG-Jan2003
Mixture velocities in ft/s 18.8 18.0 16.3 11.7 5.7 2.3
out ft/s 23.0 20.9 17.3 11.5 5.7 2.4
Average ft/s 20.9 19.5 16.8 11.6 5.7 2.4 Section 1
Liquid flow out bbl/d 9,754 8,867 7,347 4,877 2,407 1,013 Length (m) 182,000
m3/d 1,551 1,410 1,168 775 383 161
Liquid hold up bbl 10,408 10,651 11,172 29,506 100,787 170,705 Pipeline length (ft): 597,142 182.0 km
Time estimate to reach steady state Days N/A 0.0 0.1 3.9 37.6 158.2 Max liquid flow (bbl/d) 9,754
SGV bbl 5,576 5,936 6,790 23,988 87,802 14,539 m3/d 1,551
Liquid handling 100% 110% 125% 150% 200%

Ramp up Period Mixture Surge Flowrates bbl/d 9,754 10,729 12,193 14,631 19,508
mmscf/d change residence Production Initial Peakrate Final Slug size m3/d 1,551 1,706 1,939 2,326 3,102
from to hrs hrs hrs bbl/d bbl/d bbl/d bbl bbl bbl bbl bbl bbl
80 770 8 8 16 1,013 251,158 9,754 160,297 Required 160,297 159,649 158,678 157,059 153,820
80 700 8 9 17 1,013 241,276 8,867 160,054 Slugcatcher 159,443 158,772 157,764 156,085 152,726
80 580 8 10 18 1,013 221,565 7,347 159,533 Volume 157,741 157,014 155,925 154,109 150,477
80 385 8 14 22 1,013 156,844 4,877 141,199 (bbl) 136,668 135,761 134,402 132,136 127,605
80 190 8 29 37 1,013 47,636 2,407 69,918 58,560 57,053 54,791 51,021 43,482
190 770 8 8 16 2,407 145,863 9,754 90,379 90,379 89,731 88,760 87,141 83,902
190 700 6 9 15 2,407 157,769 8,867 90,136 89,599 89,009 88,123 86,647 83,695
190 580 4 10 14 2,407 162,375 7,347 89,615 88,224 87,660 86,814 85,405 82,585
190 385 2 14 16 2,407 109,835 4,877 71,281 67,969 67,306 66,313 64,657 61,344
385 770 4 8 12 4,877 48,153 9,754 19,098 19,098 18,613 17,885 16,672 14,247
385 700 2 9 11 4,877 51,849 8,867 18,855 18,466 18,038 17,396 16,327 14,187
385 580 1 10 11 4,877 47,814 7,347 18,334 17,244 16,802 16,139 15,034 12,824
580 770 2 8 10 7,347 11,599 9,754 764 764 360 - - -

580 700 1 9 10 7,347 10,180 8,867 521 169 - - - -
700 770 1 8 9 8,867 10,407 9,754 243 243 - - - -
OGUD.2003.000012.01
Single Phase Gas Analysis
Figure AC. 4: West Route, single-phase gas analysis.
OGUD.2003.000012.01
Figure AC. 5: West Route, single-phase liquid analysis.
OGUD.2003.000012.01
Reference Case Route

Two Phase Analyses
Figure AC. 6: Reference case route system analysis (Parrival=75 barg).
OGUD.2003.000012.01
Figure AC. 7: Reference case route total liquid holdup (Parrival=75 barg).
OGUD.2003.000012.01
Figure AC. 8: Reference case route system analysis (24 in.–30 in.), Parrival=75 barg.
OGUD.2003.000012.01
Table AC. 2: Slug catcher sizing – 24 in. reference case route
Case: 24" Pipeline Reference Case Pipeline: 24" Pipeline Design
Remarks: First Run

out ft/s 36.3 33.0 27.3 18.2 9.0 3.8
m3/d 1,544 1,404 1,163 772 381 160
Time estimate to reach steady state Days N/A 0.0 0.0 0.4 3.3 24.7 Max liquid flow (bbl/d) 9,711
SGV bbl 558 621 750 2,584 7,776 20,840 m3/d 1,544
Liquid handling 100% 110% 125% 150% 200%

80 770 8 1 9 1,009 74,737 9,711 24,904 Required 24,904 24,532 23,974 23,044 21,185
80 700 8 1 9 1,009 73,098 8,828 24,854 Slugcatcher 24,513 24,137 23,574 22,635 20,757
80 580 8 1 9 1,009 69,956 7,315 24,764 Volume 23,817 23,433 22,857 21,897 19,978
80 385 8 2 10 1,009 58,796 4,856 22,852 (bbl) 20,795 20,384 19,766 18,738 16,681
80 190 8 4 12 1,009 35,225 2,396 16,938 13,164 12,663 11,911 10,659 8,154
190 770 8 1 9 2,396 30,511 9,711 7,966 7,966 7,594 7,036 6,106 4,247
190 700 6 1 7 2,396 34,921 8,828 7,916 7,648 7,354 6,912 6,175 4,702
190 580 4 1 5 2,396 41,539 7,315 7,826 7,278 7,056 6,723 6,168 5,057
190 385 2 2 4 2,396 38,912 4,856 5,914 5,071 4,902 4,649 4,228 3,385
385 770 4 1 5 4,856 19,197 9,711 2,052 2,052 1,842 1,527 1,002 -
385 700 2 1 3 4,856 23,472 8,828 2,002 1,881 1,749 1,549 1,217 554
385 580 1 1 2 4,856 25,759 7,315 1,912 1,664 1,563 1,412 1,160 657
580 770 2 1 3 7,315 10,764 9,711 140 140 11 - - -

580 700 1 1 2 7,315 9,775 8,828 90 6 - - - -
700 770 1 1 2 8,828 10,259 9,711 50 50 - - - -
OGUD.2003.000012.01
Figure AC. 9: Reference case route single-phase gas analysis.
OGUD.2003.000012.01
Figure AC. 10: Reference case route single-phase liquid analysis.
OGUD.2003.000012.01
Reference Case Tunnel

Two Phase Analyses
Figure AC. 11: Reference case route tunnel option system analysis (Parrival-75 barg).
OGUD.2003.000012.01
Figure AC. 12: Reference case route tunnel option total liquid holdup (Parrival=75 barg).
OGUD.2003.000012.01
Figure AC. 13: Reference case route tunnel option system analysis (24 in.–30 in.), Parrival=75 barg.
OGUD.2003.000012.01
Table AC. 3: Slugcatcher Sizing – 24 in. Reference Case Route, Tunnel Option
Case: 24" Pipeline Reference Case Tunnel Option Pipeline: 24" Pipeline Design
Remarks: First Run

out ft/s 36.2 33.0 27.3 18.1 8.9 3.8
m3/d 1,552 1,411 1,169 776 383 161
Time extimate to reach steady state Days N/A 0.0 0.0 0.2 2.4 20.0 Max liquid flow (bbl/d) 9,762
SGV bbl 557 617 736 1,767 6,129 18,585 m3/d 1,552
Liquid handling 100% 110% 125% 150% 200%

80 770 8 1 9 1,014 62,654 9,762 20,257 Required 20,257 19,883 19,322 18,388 16,518
80 700 8 1 9 1,014 61,147 8,875 20,210 Slugcatcher 19,867 19,489 18,923 17,980 16,093
80 580 8 1 9 1,014 58,292 7,353 20,132 Volume 19,180 18,794 18,215 17,251 15,322
80 385 8 2 10 1,014 50,138 4,881 19,108 (bbl) 17,047 16,635 16,017 14,986 12,926
80 190 8 4 12 1,014 30,645 2,409 14,431 10,673 10,174 9,426 8,178 5,684
190 770 8 1 9 2,409 24,974 9,762 5,826 5,826 5,452 4,891 3,957 2,087
190 700 6 1 7 2,409 27,928 8,875 5,779 5,510 5,214 4,770 4,029 2,549
190 580 4 1 5 2,409 32,297 7,353 5,701 5,150 4,927 4,593 4,035 2,919
190 385 2 2 4 2,409 32,040 4,881 4,677 3,836 3,668 3,416 2,996 2,155
385 770 4 1 5 4,881 15,074 9,762 1,149 1,149 938 621 93 -

385 700 2 1 3 4,881 16,940 8,875 1,102 981 847 647 314 -
385 580 1 1 2 4,881 17,242 7,353 1,024 775 673 522 269 -
580 770 2 1 3 7,353 10,702 9,762 125 125 - - - -

580 700 1 1 2 7,353 9,696 8,875 78 - - - - -
700 770 1 1 2 8,875 10,277 9,762 47 47 - - - -
OGUD.2003.000012.01
Single-Phase Gas Analysis
Figure AC. 14: Reference case route tunnel option single-phase gas analysis.
OGUD.2003.000012.01
Single Phase Liquid Analysis
Figure AC. 15: Reference case route, tunnel option single-phase liquid analysis.
OGUD.2003.000012.01
CIGMA Route
Two-Phase Analyses
Figure AC. 16: CIGMA route system analysis (Parrival=75 barg).
OGUD.2003.000012.01
Figure AC. 17: CIGMA route total liquid holdup (Parrival=75 barg).
OGUD.2003.000012.01
Figure AC. 18: CIGMA route, system analysis (24 in.–30 in.), Parrival=75 barg.
OGUD.2003.000012.01
Table AC. 4: Slugcatcher Sizing – 24 in. CIGMA Route
Case: 24" Pipeline Cigma Route Pipeline: 24" Pipeline Design
Remarks: First Run

out ft/s 36.2 32.9 27.3 18.1 8.9 3.8
m3/d 1,556 1,415 1,172 778 384 162
SGV bbl 734 810 964 2,124 8,283 25,658 m3/d 1,556
Liquid handling 100% 110% 125% 150% 200%

80 770 8 2 10 1,017 80,115 9,787 28,098 Required 28,098 27,707 27,120 26,143 24,188
80 700 8 2 10 1,017 78,214 8,897 28,033 Slugcatcher 27,673 27,277 26,684 25,694 23,715
80 580 8 2 10 1,017 74,574 7,372 27,921 Volume 26,918 26,511 25,901 24,884 22,851
80 385 8 3 11 1,017 64,360 4,894 26,780 (bbl) 24,576 24,136 23,474 22,373 20,169
80 190 8 6 14 1,017 37,933 2,415 20,151 15,969 15,413 14,580 13,192 10,416
190 770 8 2 10 2,415 29,678 9,787 7,947 7,947 7,556 6,969 5,992 4,037
190 700 6 2 8 2,415 33,445 8,897 7,882 7,596 7,282 6,811 6,025 4,454
190 580 4 2 6 2,415 38,600 7,372 7,770 7,169 6,926 6,560 5,952 4,734
190 385 2 3 5 2,415 37,983 4,894 6,629 5,649 5,453 5,158 4,668 3,688
385 770 4 2 6 4,894 15,447 9,787 1,318 1,318 1,090 748 178 -
385 700 2 2 4 4,894 17,012 8,897 1,253 1,116 964 738 360 -
385 580 1 2 3 4,894 16,588 7,372 1,141 842 721 539 236 -
580 770 2 2 4 7,372 10,971 9,787 177 177 31 - - -

580 700 1 2 3 7,372 9,891 8,897 112 12 - - - -
700 770 1 2 3 8,897 10,390 9,787 65 65 - - - -
OGUD.2003.000012.01
Single-Phase Gas Analysis
Figure AC. 19: CIGMA Route, single-phase gas analysis.
OGUD.2003.000012.01
Single-Phase Liquid Analysis
Figure AC. 20: CIGMA route single-phase liquid analysis.
OGUD.2003.000012.01
Offshore Route
Two-Phase Analysis
Figure AC. 21: Offshore route system analysis (Parrival=75 barg).
OGUD.2003.000012.01
Figure AC. 22: Offshore route, total liquid holdup (Parrival=75 barg).
OGUD.2003.000012.01
Figure AC. 23: Offshore route, system analysis (24 in. – 32 in.), Parrival=75 barg.
OGUD.2003.000012.01
Table AC. 5: Slugcatcher Sizing – 30 in. Offshore Route.
Case: 30" Pipeline Offshore Route Pipeline: 30" Pipeline Design
Remarks: First Run

out ft/s 23.0 20.9 17.3 11.5 5.7 2.4
m3/d 1,553 1,412 1,170 777 383 161
SGV bbl 3,481 3,708 4,174 5,353 41,426 91,147 m3/d 1,553
Liquid handling 100% 110% 125% 150% 200%

80 770 8 5 13 1,015 178,098 9,768 89,662 Required 89,662 89,142 88,361 87,061 84,459
80 700 8 5 13 1,015 172,232 8,880 89,552 Slugcatcher 89,065 88,530 87,726 86,388 83,710
80 580 8 6 14 1,015 160,152 7,358 89,283 Volume 87,875 87,304 86,448 85,021 82,167
80 385 8 9 17 1,015 132,435 4,884 88,384 (bbl) 85,000 84,323 83,308 81,615 78,231
80 190 8 17 25 1,015 51,686 2,410 51,435 43,755 42,735 41,206 38,657 33,559
190 770 8 5 13 2,410 81,535 9,768 38,227 38,227 37,707 36,926 35,626 33,024
190 700 6 5 11 2,410 90,873 8,880 38,117 37,704 37,250 36,569 35,434 33,163
190 580 4 6 10 2,410 97,975 7,358 37,848 36,841 36,433 35,821 34,801 32,762
190 385 2 9 11 2,410 88,304 4,884 36,949 34,786 34,353 33,704 32,622 30,459
385 770 4 5 9 4,884 13,260 9,768 1,278 1,278 921 384 - -

385 700 2 5 7 4,884 12,797 8,880 1,168 903 612 175 - -
385 580 1 6 7 4,884 10,429 7,358 899 194 - - - -
580 770 2 5 7 7,358 11,109 9,768 379 379 103 - - -

580 700 1 5 6 7,358 9,929 8,880 269 41 - - - -
700 770 1 5 6 8,880 10,224 9,768 110 110 - - - -
OGUD.2003.000012.01
Single Phase Gas Analysis
Figure AC. 24: Offshore route, single-phase gas analysis.
OGUD.2003.000012.01
Single-Phase Liquid Analysis
Figure AC. 25: Offshore route, single-phase liquid analysis.
OGUD.2003.000012.01
EP 2004-5167 -D-1 - Restricted to Shell Personnel Only
APPENDIX D. COST SUMMARY SHEETS

The following link includes the Cost Summary Sheets:
Summary of summaries.xls
OGUD.2003.000012.01
EP 2004-5167 -E-1 - Restricted to Shell Personnel Only
APPENDIX E. GLOSSARY
Acronym/Abbreviation Definition
ANSI American National Standards Institute
BPD or bpd Barrels per Day
BnUS$ Billions of US Dollars
btu/SCF Units to measure heating value
CAPEX Capital Expenditure
CES Shell Cost Engineering System
CGR Condensate to Gas Ratio
CPF Central Processing Facility
CRA Corrosion Resistant Alloy
C2V Capital to Value
DP Pressure Drop
DRILLEX Drilling Expense
ESHIA Environmental, Safety and Health Impact Assessment
FA Framing Agreement
FID Final Investment Decision
FPSO Floating Production Storage and Offloading
FPU Floating Production Unit
G&G Geologists and Geophysicists – typically in reference to
subsurface
GBS Gantry Based Structure
GoP Gulf of Paria
gpm Gallons per Minute
HHV Higher Heating Value
HIC Hydrogen-Induced Cracking
HIPPS High Integrity Pressure Protection System
HP (hp) Horsepower
HR (hr) Hour – as in per hour
HSE Health, Safety, Environment
HUB Central Gathering Center
HYSYS Process Simulation software
JT Joule-Thompson
JV Joint Venture
JVA Joint Venture Agreement
LDHI Low Dose Hydrate Inhibitor
LNG Liquefied Natural Gas
M BBI Barrels X 10 -3
OGUD.2003.000012.01
MBbl Thousands of Barrels
Mej Mejillones field
MEM Ministry of Energy and Mines
mmbtu British Thermal Units in millions
MMscfd Millions of cubic feet per day
MSLNG Mariscal Sucre Liquefied Natural Gas
mta or mtpa Millions of Tons per Annum
MULTISIM Reservoir Modeling software
MW Mega-watts
NGO Non-Government Organizations
NPS Nominal Pipe Size
NPV Net Present Value of money
OGUD Oil and Gas Upstream Development in SGS
OGUP Oil and Gas Upstream Pipelines in SGS
OPEX Operational Expense
O&M Operations and Maintenance
Pat Patao field
PCC Proyecto Crystobal Colon
PDA Preliminary Development Agreement
PDVSA Venezuelan National Oil Company
PIPESIM PIPESIM 2000 – PIPESIM’S Compositional Fluid Model
PL Pipeline
PLEM Pipeline End Manifold
ppm Parts per Million
psi Pounds Per Square Inch
psia Pounds Per Square Inch Absolute
psig Pounds Per Square Inch Gauge
PT Production Technologist
PV Present Value of money
PVT Pressure, Volume, Temperature Data related to composite
P15 15% Probability Limit
P85 85% Probability Limit
QRA Quantitative Risk Assessment
RC Rio Caribe
RE Reservoir Engineering (or Engineers)
ROW Right of Way
RSH Refers to sulfur-bearing compounds
RT Real Terms
OGUD.2003.000012.01
RVP Reid Vapor Pressure
SD As in SD activities in 3.3.5
SDEA Sustainable Development and Environmental Affairs
SEPTAR Subsurface Engineering Team
SGS Shell Global Solutions
SGSUS Shell Global Solutions (United States)
SITP Shut-in Tubing Pressure
SSC Sulfide Stress Cracking
TAD Tender-Assisted Drilling
TEG Tri-ethylene Glycol
TSA Technical Services Agreement
UDC Unit Development Costs
ug micro grams
USDk US Dollars X 1,000
UTC Unit Technical Costs
UTM Map Coordinate System
24X7 (24/7) 24 hours per day, 7 days per week => all the time, every day
VARx Value Assurance Review
VLNG Venezuela LNG
VOI Value of Information
V2V Volume to Value
WWF World Wildlife Federation
OGUD.2003.000012.01
DISTRIBUTION LIST
OU Recipient Ref.ind. No. of copies

SIG R. Baghdjian SIG, GPWV 1 DVD
SGSi B. Finch OGUS-OGUD 1 DVD
SERC B. Fermin EPW 1 DVD
SGSi H. Hilhorst OGUS-OGUD 1 DVD
SEPCo B. Jefferis EPW 1 DVD
SGSi J. Lamond EPT-SCQE 1 DVD
SIEP A. P. Lanson EPT-SPNO 1 DVD
SVSA K. Pascoe SVSA, AP 1 DVD
Petroleos De Venezuela C/o Mr. Carlos Gonzalez 6 DVDs
Mitsubishi Corporation C/o Mr. Minoru Aizawa 4 DVDs
OGUS M. Geven OGUD 1 DVD
SIEP VAR Team C/o EPT-SPNO 1 DVD and
A. P. Lanson 1 paper copy
SIGFMDM S. Gilmore EP Global Library, Houston 2 DVDs and
2 paper copies
Total 22 DVDs and
3 paper copies
OGUD.2003.000012.01
The copyright of this document is vested in Shell International Exploration and Production B.V., The Hague, The Netherlands.
All rights reserved.
Neither the whole nor any part of this document may be reproduced, stored in any retrieval system or transmitted in any form or
by any means (electronic, mechanical, reprographic, recording or otherwise) without the prior written consent of the copyright
owner.
OGUD.2003.000012.01

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Restricted to Shell Personnel Only EP 2004-5167

Sponsor: Shell International Gas

SHELL INTERNATIONAL EXPLORATION AND PRODUCTION B.V., RIJSWIJK

1. EXECUTIVE SUMMARY AND CONCLUSIONS

Volume 2 MSLNG Upstream Surface Team as compiled by Hein Hilhorst:

13.2.1. Overall Layout 13-16

13.11.5. Central Production Facility 13-52

15.3.1. Further Concepts 15-7

18.6. Conclusion 18-3

Figure 10.6: CPF Platform – Mejillones. 10-8

Figure 13.6: Central Processing Facility (CPF) platform. 13-9

Figure 13.40: CPF Platform. 13-52

Figure 14.23: Updated CAPEX estimates. 14-46

Table 10.17: Jacket Load Cost Estimate Basis 10-43

Table 13.19: CAPEX Summary 13-38

Table 14.22: Summary of Concepts 1 and 2 14-45

2. INTRODUCTION AND BACKGROUND

Rio Caribe Area

Figure 2.1: Phase 1 polygon.

3. CONTENT AND CONSTRAINTS

3.1. Business Context

3.2. Venture Description/Background

Figure 3.2: MSLNG wider polygon.

ii See Reference 4 on page 21-3

3.3. Boundary Conditions and External Factors

3.3.1. Geographical Description of the Paria Peninsula

Figure 3.3: Geographical Features.

iii See Reference 3 on page 21-3

3.3.2. National Park

Figure 3.4: Paria National Park.

3.3.3. Climatic and Oceanographic Conditions

Figure 3.5: Study area for metocean conditions.

3.3.4. Primary Socio-Economic Features

vii See Reference 5

3.3.6. LNG Plant Location

Figure 3.6: Alternative sites.

VAR 1 VAR 2 VAR 3 VAR 4 VAR 5

STRATEGIC DECISIONS OPERATIONAL DECISIONS

Figure 4.1: Value identification / realization process.

4.1. Deliverables of the Feasibility Phase

xii See Reference 9

4.2. Defining Parameters

• Impact from platform outages

5. CONCEPT AND COST SUMMARY

Hardware Sensitivities Field Phasing

Each of these are summarized as follows:

Concept 2 - High VLNG - 5.2 mtpa + Direct

Concept 2 - Single 4.7 mtpa + Domgas Single Direct Bridged to

Field Phasing Sensitivities:

Table 5.2: Field Phasing Sensitivities

Demand Curve Profiles

1200 4.2 mtpa

Figure 5.1: Demand Curve Profiles

5.1. Summary of Hardware Sensitivities

Table 5.5: General Summary – USDk RT 2002

1 2 1 Subsea 1 FPSO Cond 2 High Vol 2 FPU

CPF 83,331 87,815 83,331 259,406 88,230 275,627

TOTAL 1,126,893 1,052,827 1,344,055 1,302,820 1,106,426 1,143,749

2 Field comp 2 Single ph 1 GBS 2 GBS+Cond 2 Hi,FPSO,Sub 2 Onshore