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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
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© 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.
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© 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.
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© 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
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© 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
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© 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
8/9/2019 2 Chevron Progress in Associated Gas Utilization
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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.
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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
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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.
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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
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The Angola LNG Journey
13
July 2008 December 2009November 2011
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© CVX 2011 14
The “Early Keys” enabled Angola LNG’s Success and Canserve as a Model for any Large Scale Associated GasDevelopment ….
November 2011