Technical Assurance Services

T&D Design Authority

Germanischer Lloyd – Service/Product Description

Contents

Service Description and Values Generated

Detailed Method Statement

The detailed method statements explain how thework is conducted, which inputs are required andwhich outputs and results can be expected.

Design Consultancy Service

Competent Design Authority

Case Studies and Examples

Design Authority Report on Overhead Lines &Substation Close to High Pressure Gas Pipeline

Replacement Water Heating System at City GateAbove Ground Installation (AGI)

Optimisation of High Pressure Venting on HP GasSites

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Pages 4 - 8

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b:

Pages 9 - 11

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b:

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T&D Design Authority

Service Title: Technical Assurance Services

Lead Practice: GL Technical Assurance (Germany)

Germanischer Lloyd – Service/Product Description

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Service Descriptionand Values Generated:

The increased demand for gas services worldwide also increasesdemand for design expertise and know how. When gas is brought tomarket via cross-country high pressure pipelines it is important toensure that the pipelines, associated plant and storage equipment aredesigned to the highest National and International Standards.

a. Germanischer Lloyd (GL) offers a consultancy service thatprovides solutions to the mechanical, electrical,instrumentation, software and civil design-related issuesinvolved in the construction of high pressure pipelines,storage equipment and pressure reduction plant. Thisservice is used by clients to support Feasibility, Conceptualand Front End Engineering Design (FEED) studies.

b. GL acts as Competent Design Authority for the UK’s majorgas transporter, providing detailed design assessment andappraisal of engineers engaged both internally andexternally by the company.

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SERVICE DESCRIPTION

a. Design Consultancy Service

How: GL produce feasibility, conceptual and FEED studiesto support commercial and technical pipeline projectdelivery. Perform gas network analysis and developrouting and costing options.

Input: User project scope requirements.

Output: Optimum design solution for pipeline projects.

Pipeline Feasibility

GL evaluate the technical and economic issues that determine theconnection of new gas supplies to existing or new gas networks. Theaim of a feasibility study is to determine the likelihood that gassupplies can be made available. This will involve an estimate of landrequirements, the impact of the pipeline construction on theenvironment demonstrated by a Preliminary Environmental Impactassessment and identification of any relevant geographical andarchaeological features that would be met in the pipeline constructionphase.

Typically, a preliminary analysis of gas demand is undertaken and thisfeeds into a Pipeline Investment Appraisal to examine demand growthprofiles with key inputs of:

� Capital costs

� Operating costs of the pipeline

� Annual and peak day transportation tariffs

� Annual demand volumes and growth during the pipelinelife cycle

GL have undertaken a large number of Feasibility studies for clientsboth in the UK and worldwide. Customers include National Grid (UK),Premier Gas (NI) and DEPA (Greece).

GL are involved in shaping legislation and standards that impact onpipeline codes and standards, including the areas of pipeline design,construction and operations. Important new legislation can be shapedby GL’s input and advice, as we are recognised in the UK as beingamong the leading experts in the field. An example is where GLprovided valuable expertise in assessing the impact of the EuropeanATEX regulations in the UK.

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DETAILED METHOD STATEMENT

Develop Conceptual Study

The following elements are just some of the considerations inproducing a conceptual report on a pipeline project:

� Pipeline Design Premise - the design code of practicetogether with relevant specifications will be chosen at thisstage.

� Pipeline Route Selection - The study should develop anyroute options identified in the Feasibility study. The routesshould be the shortest and most economic, takingaccount of ground conditions and environmental impact.The route will seek to avoid sensitive areas, areas ofspecial scientific interest, forestry and wetlands. At thisstage, pipe dumps and proposed above groundinstallations are considered.

� Pipeline Construction Considerations - The report willinclude all major road, river and rail pipeline crossings.

� Pipeline Construction Budget and Schedule - A budgetcost estimate is done. The estimate will have an accuracyof typically +/_ 10% and will lay down construction andcommissioning timescales for the project.

� Planning, Legislation and Consultation - Legalconsiderations, such as the UK Gas Act, EuropeanEnvironmental and Planning legislation plus Health andSafety Legislation are identified and considered at thisstage.

Front End Engineering Design (FEED)

The FEED study will result in detailed engineering designs and thedetermination of a fixed price for project investment and will formthe basis of for the award of a turnkey contract for EngineeringProcurement and Construction (EPC).

The full range of design services is supplied by GL. We currentlyemploy Engineers in all pipeline disciplines and provide expertise inpipeline design and routing, design of associated above groundinstallations such as pig-traps, pressure reduction stations andmetering installations.

The full range of electrical services are provided including the designof earthing systems for pipelines and installations, over-voltageprotection of equipment form AC faults, lighting and switchingtransients. The design of the E&I systems are based on the gasindustry standards/codes of practice.

GL’s Electrical and Instrumentation engineers define, develop anddocument the processes in designing safety-related instrumentsystems to reduce the risk of a hazardous event and eliminate the risksby defining the safety functions to be provided.

GL’s civil engineers provide design services that draw on their expertisein structural steelwork, concrete, pipeline protection slabs, roads anddrainage. They can be called upon to provide expert advice onspecifications and standards for the design, testing and constructionof civil and structural works on high pressure pipelines andinstallations.

Equipment design and selection of items that include gas heaters,regulators, valves, pipes, tees and fittings are undertaken byGL’s experts in Pressure Control and storage. This includes theknowledge of LNG and LP gas holder storage equipment. Our PCS(Pressure Control and Storage) engineers are also engaged informulating standards by active involvement on IGEM (Institute ofGas Engineers & Managers) committees plus CEN committees.

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DETAILED METHOD STATEMENT

Pipeline Lifecycle

The diagram below shows a typical pipeline lifecycle and also theareas where the Transmission and Control design team provideexpertise and input, namely the DESIGN BASIS DOCUMENT andQUALITY PLAN, the SAFETY and ENVIRONMENT DESIGN and thePRESSURISED SYSTEM DESIGN.

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DETAILED METHOD STATEMENT

b. Competent Design Authority

How: By the use of a formal Modification ControlProcedure to control every phase of work fromdesign, to commissioning and record retention. Thiswill ensure compliance with industry standards andlegislation, in particular, the Pressure Systems SafetyRegulations 2000, Pipeline Safety Regulations 1996,Electricity at Work Regulations 1989 and theConstruction and Design (Management) Regulations1994.

Input: Customer design submissions

Output: New works and modifications carried out to existingplant / equipment located on operational gas sitesare conducted in an appropriate manner to meetindustry standards and legislation requirements.

Process

GL uses a formal design appraisal process.

The design appraisal process applies to ALL works on pipeline pressuresystems and is applied to all disciplines. It applies to ALL Instrument,Electrical and Software systems, not just those attached to pressuresystems. The role of the Competent Design Authority (CDA) isundertaken by GL Engineers when applied to NG designs andmodifications. GL, as an organisation, has unrivalled experience inthis area due to the fact that we have undertaken in the region ofhundreds of design reviews, design audits, design appraisals andassessments over the full range of disciplines such as Mechanical, Civil,Electrical, Instrumentation, Software, Process, CP and Safety. We arethe appointed Competent Design Authority in ALL these disciplines.We believe no other organisation has the depth and breadth ofexpertise in this field as we have written, applied and amended theprocess and have briefed the process out to National Grid (NG) andit’s design organisations including Mouchel Parkman GEL, AMEC,SERCK (approximately 12 design organisations in total).

The benefits of having GL perform this role as a single organisation,are:-

1. Customer Service. Our design appraisers have readyaccess to all of GL’s highly qualified and experiencedengineers.

2. Compliance. It is a fundamental element of the designappraisal process that compliance to National andInternational codes and specs are implemented. A majorbenefit from using GL as the CDA is that our engineersand staff write and update many specifications in theirdaily work as well as undertaking assessments andappraisals.

3. Control of the Business. The design process, if badlymanaged, can cost a company both financially and byharming their reputation. GL have long experience of gasindustry design.

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DETAILED METHOD STATEMENT

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DETAILED METHOD STATEMENT

GL work in accordance with the following UK industry documents:

� IGE/GL/5 Plant Modification Procedures.

� T/PR/G/19 Management Procedure for NG Gas’Application of Model Design Appraisals.

The way GL controls the management of the CDA role is as follows:

� By the implementation of the Management Procedure forControl of Modifications T/PR/G17.

� By the establishment of the Competent Design Authorityfor all disciplines.

� By the assessment and interview process for theappointment of Approvers and Appraisers.

� By the registration and control of Approvers andAppraisers, including establishment and maintenance ofthe national register.

� By the implementation of a Deviation Procedure forunavoidable non-compliances with National standards.

� By the implementation of an Audit process to ensurecompliance with requirements and makerecommendations for the improvement of the designappraisal process.

GL developed an original design appraisal process, in partnership withthe UK’s major gas transporter, NG, and currently controls theassessment and appointment of Appraisers and Approvers of alldisciplines. The design appraisal process has recently been expandedby GL to include LNG plant as well as pipelines, AGIs and storage.

GL work to enhance and improve the design appraisal process byexpanding the assessment and appointment process to include, forexample, commissioning engineers. This would be part of a stagedprocess to make sure that all engineers involved in a role of designappraisal will have been formally assessed as to their competence inthe role.

GL undertake training and assessment seminars specifically aimed atdesign engineers to develop companies’ in-house capability toundertake a greater amount of design appraisal in-house. This willhave a positive impact on costs and project timescales by eliminatingsome of the requirement to externally source design expertise and atthe same time increase the engineering competence of staff. Thisbenefits a company’s business performance by adopting best practiceto manage value for money.

Systems

The systems to control design appraisal process are a primarily anumber of specially developed databases and a national register. Forinstance, GL manages and administers an Appraiser/Approver register,to formally register Approvers and Appraisers previously assessed asbeing competent to do design appraisals and approvals.

The number and types of design appraisal are held on a PressureSystems database which can track that status of a design appraisal atany given point in the process, as each design appraisal has a uniquepressure systems identifier.

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CASE STUDIES

a. Design Authority Report on Overhead Lines & SubstationClose to a High Pressure Gas Pipeline

Date: 2007Customer: National GridSavings: Risk mitigation

Issue:

AGI built too close to high voltage power lines.

Resolution:

Examine implications on Cathodic Protection system

Method:

Site survey and report on findings

Forsbrook 132kV Substation:

HV Overhead lines & Primary Substation close to HP pipeline

Sub - Issue 1 NG Procedure ECP/2 states that overhead lines (132kV or greater)running in parallel with a gas pipeline should be avoided or at leastminimised. The procedure gives separation distances for the overheadline and pipeline and the distance that parallelism applies.

The length of the overhead line and pipelines parallelism wasmeasured on a scaled drawing and found to be in the region of4.9km, with a distance between the overhead line and gas pipelinemeasured as 75.2m.

Procedure also ECP/2 indicates that for parallelisms greater than 3km,the separation distance between the overhead line and theunderground gas pipeline should be 500m. Distances closer than thatrecommended in ECP/2 could give rise to both current density andvoltages on the pipeline.

RecommendationNG should ensure that Procedure ECP/2 is made available andunderstood by all parties contracted to work on Substations andoverhead lines in the proximity of pipelines.

Sub - Issue 2Overhead power lines can generate values of current density greaterthan 100 A/m² on pipelines with the subsequent risk from AC corrosion.At values of current density 30 A/m² the corrosion risk is uncertain.

RecommendationConsideration should be given to measuring any standing voltagesand current densities on the pipeline.

Sub - Issue 3 Insulation Joints are typically installed on a pipeline as it leaves theAGI’s/PRS’s prior to the pipe-work heading belowground. Typicallyinsulating joints on a 69 BAR pipeline are tested at the manufacturersin dry conditions to 3kV where they do not breakdown and passcurrent. However when damp and in a working environment theinsulation joints are considered to be good for 2kV.

GL considered given to two possible scenarios for the failure of the In-sulation Joints:

Earth Fault - Earthing Risk Management’s document ERM R202 coversrisk to CP operators from an earth fault on the 132kV system at thesubstation (the risk being within the broadly acceptable region – of 1in 1.2m). The report also demonstrates that the voltage levels alongthe gas pipeline fall off over distance and by the time they are at theinsulation joints at both ends of the gas pipeline (i.e. AGI’s/PRIs) theyhave fallen away to under 185 volts.

RecommendationThis level of voltage is well below the breakdown value of theinsulating joint so therefore no voltage from a Substation fault shouldfind its way onto the AGI.

Sub - Issue 4Lightning strike – A lightning strike on the 132kV or 33kv overheadlines. A lightning strike on these lines could travel and earth itself atthe primary substation. The magnitude of the voltage and hencecurrent from the lightning strike could be higher than that from afault as mentioned above, with the potential to produce a voltagelarge enough to breakdown the insulation joint with the subsequentpotential explosion risk and instrument damage at the AGI.

RecommendationNG should take steps to mitigate the risk of lighting strikes.

b. Replacement Water Heating System at City Gate AGI

Date: 2006Customer: National GridSavings: Improvement in safety and efficiency

Issue:

Existing heating system is old and 50% efficient

Resolution:

Increase thermal efficiency of the system:

Method:

Provide a ‘Fit for Purpose’ design, inclusive of appropriate calculations, etc

To include:

� Design for the installation of the new heat exchangers,to replace the existing water bath heaters.

� Design for the installation of the boilerhouse unit.

� Design for the installation of the boiler gas breakdownsystem.

� Design the water and gas pipework between theboilerhouse, heat exchangers and boiler gas breakdownfeed system.

� Assess existing support slabs.

� Design new slabs, supports and support bases asrequired, installation and construction by others.

� Design new raft type foundation for boiler house unit,installation and construction by others.

� Full Civil and Mechanical design appraisal of works.

� Provide Technical Support to Clients’ Site Personnel andConstruction Contractor.

� Produce ‘as-laid’ package after installation complete,installation and commissioning by others.

� Produce on behalf of the client an initial Pre-Tender HS&EPlan.

� Produce a compliant stress analysis report on the new siteto IGE/TD/12.

� Produce hazardous area classification for complete site toIGE/SR/25.

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CASE STUDIES

c. Optimisation of High Pressure Venting on HP Gas Sites

Date: 2006Customer: National GridSavings: Noise reduction and efficiency improvements

Issue:

High levels of noise associated with operational venting of highpressure gas from gas compressor stations.

Resolution:

Examine existing practice for venting gas for routine and maintenanceoperations.

Method:

Complete a design review of high pressure venting to includeestablishing a record of HP venting operations in the UK.

Conduct an investigation of engineering and procedural requirementsand practices benchmarking against standards and practices.

Develop methodologies for predicting and reducing noise fromventing, testing of silencers and/or development and testing of gascapture devices for emissions reduction.

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CASE STUDIES

Germanischer Lloyd does not warrant or assume any kind of liability for theup-to-date nature, accuracy, completeness or quality of the information provided.Liability claims against Germanischer Lloyd arising out of or in connection withmaterial or non-material loss or damage caused by the use or non-use of informationprovided, including the use of incorrect or incomplete information, are excludedunless such loss or damage is caused by the proven wilful misconduct or grosslynegligent conduct of Germanischer Lloyd.All offers are subject to alteration and are non-binding. Germanischer Lloyd expresslyreserves the right without notice to change, supplement or delete parts of the pagesor the entire offer or to stop the publication temporarily or definitively.

Germanischer LloydIndustrial Services GmbH

Oil and Gas

Steinhöft 9

20459 Hamburg, Germany

Phone +49 40 36149-7700

Fax +49 40 36149-1781

glis@gl-group.com

www.gl-group.com/glis

Issue no.001 15.05.2008

Technical Assurance Services

� T&D Design Authority