2 chevron progress in associated gas utilization

8/9/2019 2 Chevron Progress in Associated Gas Utilization

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© CVX 2011

Global Gas

Chevron Progress inAssociated Gas UtilizationFocus on Kazakhstan and

Angola Flare ReductionPrograms

GGFR Steering Committee30Nov2011

Babak FayyazJim Wisner



© CVX 2011

Chevron Successes Part of Long-TermIntegrated Flare Reduction Plan

• Chevron has fully incorporated GGFR Associated Gas

Recovery Planning processes.

• Six years of repeated annual planning, execution and

review.

• Strong integration with commercial major capital

project activities of business units.

• Strong cooperation with government programs and

development of regional infrastructure.

• 40-50% overall global reductions achieved over past 6

years.

• Major lessons learned from successes and challenges.



© CVX 2011

Example Success Stories

Kazakhstan

• 90% flaring reduction while increasing production by

150%

• Integrated planning and execution with Kazakhstan

government and Tengiz Chevroil (TCO) partners andMajor Capital Project programs

- Intentional operator-government planning to

reduce flaring while enhancing production

- Achieved with high local content

• Part of $2.2 Billion environmental improvement project

program of TCO

Additional detail on GGFR Success Story website.



© CVX 2011

Global Gas

Angola LNG:

Key Insights from a

Successful Associated GasLNG Project

Prepared by: Jim Wisner, Commercial GeneralManager, Southern Africa, Chevron ;Chevron Lead, GGFR Steering Committee

Presented by: Babak Fayyaz, Coordinator ChevronAGRP Process

Washington D.C.November 29, 2011

4



© CVX 2011

Keys to A Successful Associated Gas LNGProject

1. Opportunity Identification (resource, land and

marine access)

2. Clear Project Vision

3. Government Support and Stakeholder Alignment

4. Aligned Upstream and Midstream Objectives

5. Market solution

6. Effective Project Planning and Execution

7. Environmental Mitigations

8. Host Community Acceptance5

Early Development Phase

Later Development Phases



© CVX 2011

Project Scope

Anchored by Associated Gas supply

• Future Non-Associated Gas

Gathering from multiple gas sources

Single train 5.2 mmtpa LNG plant

LNG and LPG loading facilities

7 dedicated LNG ships Employee housing and infrastructure

Construction team of ~7,000

• ~50% Angolan

Multiple Community Projects

Key Milestones

December 10, 2007:

Final Investment Decision

LNG Ship Delivery In Progress

LNG Plant Commissioning in Progress

Q1 2012: 1st LNG cargo

Angola LNG: A Case Study in ValueChain Integration

36.4%22.8% 13.6% 13.6% 13.6%


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Key #1:Identify Gas Resource, Land and Marine Access

Early Angola studies found:

Sufficient gas resource for reliablesupply: both associated and non-associated gas

Long term solution for associatedgas required to enable continuedoil development

Potential plant locations provided

acceptable marine access

Sufficient LNG market demand

Project could be economicallyviable

Importance: LNG is only feasible with reliable gas supplies, land and portaccess


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Block 15 AG

Block 17 AG

Block 0 & 14

AG & NAG

SOYO

CONGO RIVER

LOMBO EAST

CABINDA

LNG Plant

Block 15 AG

(EM)

Block 17 AG

(TOTAL)

Block 18 AG

(BP)

Block 0 & 14 AG

(CVX)

SOYO

CONGO RIVER

LOMBO EAST

One 5.2 MMTPA LNG Train

on Kwanda Island

next to Kwanda Base

CABINDA

Quiluma

NAG

Atum &

Polvo NAG

Enguia

NAG

Key #2:Clear Project Vision

Importance: A clear project vision is necessary to create stakeholderalignment and government support

Angola LNG Vision:

Gather associated gasfrom multiple upstreamsuppliers, with some

participating in the LNGproject

Develop a regionalintegrated gas solution toenable oil development

Contribute to the socialand economicdevelopment of Angola.

Develop an economicallyviable project for allstakeholders


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Key #3:Stakeholder Alignment and Government Support

ALNG aligned with Angolangovernment objectives and strategies

Strong support and resources fromSonangol

Solution for associated gas to enableoil development and align interests

Foundation for regional gas gatheringnetwork

Foundation for domestic gas supplyby Sonangol

Significant local content

Enabling legislation and fiscal regimetimed to support major project

commitments9

Importance: stakeholder alignment and government support wereneeded to ensure smooth project development and implementation.



Key #4:Aligned Integrated Upstream & Midstream

10

Integrated value chain alignsinterests from field to LNG

Multiple sub-projects requirecoordinated planning

Upstream stakeholders and alignedvalue chain helps to ensure gassupply is reliable

Back-up non-associated gassupply

Robust value chain governance

Multiple Companies bringingresources to a large LNG project

LNG expertise

Human and financial capital

ALNG shareholders in LNG offtakechain

Importance: Close planning between upstream and midstream is necessaryto ensure reliable flow of associated gas to the LNG plant

36.4%22.8% 13.6% 13.6% 13.6%

Block 0 & 14Gas

Block 15Gas

Block 18Gas

Block 17Gas

OtherGas

Angola LNG

Shipping

InternationalMarkets

Al i gn e d

I n t er e s t s

enh an c

er el i a b i l i t y



Key #5:Aligned Marketing Solution

11

Product offtake assurance wascritical to avoid impact on oiloperations

Supply competition increasing,

LNG market evolving

Different marketing modelswere considered

Early alignment of Angola LNG

shareholders on the preferredmarketing model supported thefinal investment decision.

• For Angola LNG, 3 LNG Ships will be owned bySonangol-E.P. Shipping Holding Ltd.

• Sonangol/Chevron ship operations joint venture

Importance: reliable market access for LNG is essential for gas flowassurance through the entire value chain.



© CVX 2011

Key #8:Host Community Acceptance

12

~US$ 1.7 billion Angolan content during project construction

~3,800 Angolans employed during the construction phase

Includes skill training

Soyo area road and bridge new construction and roadrefurbishment

Construction of 22 MW power plant for Soyo community

Regional hospital major expansion and refurbishment

School major expansion and refurbishment

Major community housing project

ALNG staff residential housing integrated with Soyo community

Soyo airport upgrades Support for regional health initiatives

Multiple other community projects.

Extensive use of Soyo community services and businesses.

Importance: Acceptance by a project’s host community is critical for longterm success



© CVX 2011 14

The “Early Keys” enabled Angola LNG’s Success and Canserve as a Model for any Large Scale Associated GasDevelopment ….

November 2011

2 chevron progress in associated gas utilization

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