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ENERGY FOCUS EMEA Issue No.14 www.emea-energy.net THE BUSINESS MAGAZINE FOR ENERGY LEADERS ALSO IN THIS ISSUE: EAST ANGLIA ONE: Adding More Wind Power to the UK Energy Mix Shell SA / DONG Energy / Siemens Energy / Total

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Page 1: Energy Focus:EMEA April 2016

ENERGYFOCUS EMEA

Issue No.14 www.emea-energy.net

T H E B U S I N E S S M A G A Z I N E F O R E N E R G Y L E A D E R S

ALSO IN THIS ISSUE:

EAST ANGLIA ONE:

Adding More Wind Power to the UK Energy Mix

Shell SA / DONG Energy / Siemens Energy / Total

Page 2: Energy Focus:EMEA April 2016

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Page 3: Energy Focus:EMEA April 2016

EDITOR’S LETTER

www.emea-energy.net / Issue No.14 / 3

Welcome to our latest edition…

Joe ForshawEDITOR

GET IN TOUCH +44 (0) 20 8123 7859

[email protected]

Joe ForshawEDITOR

[email protected]

Hal HutchisonSALES MANAGER

[email protected]

Sophie BolderstoneSENIOR PROJECT MANAGER

[email protected]

Sam HendricksSENIOR PROJECT MANAGER

[email protected]

Shaun CousinsPROJECT MANAGER

[email protected]

Shannon JamesPROJECT MANAGER

[email protected]

Daniel ScottPROJECT MANAGER

[email protected]

John MulleyFINANCIAL DIRECTOR

[email protected]

Jane LarkmanACCOUNTS MANAGER

[email protected]

Design by Naked Marketing+44 (0) 1953 850211www.nakedmarketing.co.uk

// As the pace of development in the global wind energy

industry continues to grow, announcements are regularly being made about the biggest, fastest, most efficient, most powerful and most expensive projects in the world.

Last month, we heard from Statoil about the development of the Dudgeon Offshore Windfarm in the UK North Sea and this month we learn more about the East Anglia Offshore Wind Farm array that will be developed by ScottishPower Renewables and Vattenfall. East Anglia ONE is the first phase of the development and work is already underway with subsea scans revealing generally good conditions for the project, with a couple of very interesting surprises.

East Anglia is reaping the benefits of the offshore wind industry with around 15 projects already complete, underway or in planning stages around the coast and the local economy receiving many benefits including employment, skills development and growing investment and we know about this well, being located here ourselves.

Everyone from manufacturing companies, logistics providers, ports and builders, through to engineers, recruitment and tech companies have had the chance to get involved with the East Anglia Offshore Wind developments which are set to be underway for the next three decades at least.

We also learn more about the work of Siemens with wind energy after the company announced major projects in Morocco and Turkey. This is one of the world’s most important energy businesses and one with fingers in so many pies that you can never afford to take your eye off their work.

If you are working in wind energy right now, we’d like to hear from you. Get in touch online @EmeaEnergy

Published by CMB Multimedia

Chris Bolderstone – General Manager E. [email protected]

Sackville Place, 44-48 Magdalen Street, Norwich, NR3 1JU,

T. +44 (0) 20 8123 7859 E. [email protected] www.enterprise-africa.net

CMB Multimedia does not accept responsibility for omissions or errors. The points of view expressed in articles by attributing writers and/or in advertisements included in this magazine do not necessarily represent those of the publisher. Any resemblance to real persons, living or dead is purely coincidental. Whilst every effort is made to ensure the accuracy of the information contained within this magazine, no legal responsibility will be accepted by the publishers for loss arising from use of information published. All rights reserved. No part of this publication may be reproduced or stored in a retrievable system or transmitted in any form or by any means without the prior written consent of the publisher.

© CMB Multimedia Ltd 2016

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CONTENTS

14/EAST ANGLIA ONE:Adding More Wind Power to the UK Energy Mix A partnership between two energy giants, ScottishPower Renewables and Vattenfall, the East Anglia Offshore Wind development is set to get underway imminently and it will be one of the largest and most advanced projects in the global wind energy industry.

06/NEWS:The Month that was...A round up of some of the latest news stories in the industry.

10/FEATURE:The Replacement for Crude?Italian company GFBiochemicals is the first business in the world to produce levulinic acid, a potential replacement for oil in all its forms, on an industrial scale.

50/EXHIBITION CALENDAR:Key Upcoming Events Across the IndustryOur regular update to help you keep track of important events and exhibitions taking place across the industry.

14/

4 / Issue No.14 / www.emea-energy.net

Page 5: Energy Focus:EMEA April 2016

CONTENTS

26/SHELL SOUTH AFRICA:Adding Value to Our Mineral WealthShell South Africa has a nationwide retail network of strategically located service stations as well as interests in many business areas including manufacturing, aviation, chemicals, LPG and, potentially, natural shale gas.

32/DONG ENERGY:DONG Energy Makes Statement With Announcement of World’s Largest Offshore Wind FarmDenmark’s DONG Energy holds a significant position in the European Energy market, contributing to some of the EU’s most important economies. The company looks set to increase its stake in the market after making some big announcements in the past few months…

38/SIEMENS ENERGY:Electrifying Solutions the World OverA true global powerhouse, Siemens focuses primarily on the areas of electrification, automation and digitalisation, and is also among the world’s largest producers of energy-efficient, resource-saving technologies.

42/TOTAL:Securing Supply Further AfieldOne of the major global players in the sector, Total is a leading international oil and gas company with operations in more than 130 countries. It specialises in the production, refining and marketing of oil and manufacture of petrochemicals, committed to sustainably producing the oil and gas required the world over.

46/PREMIER OIL:Solan Oilfield Nears ProductionA leading UK-based independent exploration and production company, Premier holds oil and gas interests across the North Sea, South East Asia, Pakistan, the Falkland Islands, Africa and Brazil. In the UK these interests are spread across eight producing fields, notably its 2009 and 2012 acquisitions of Oilexco and EnCore respectively, as well as the significant Solan oilfield development located west of the Shetlands in the North Sea.

32/ 38/ 42/

www.emea-energy.net / Issue No.14 / 5

Page 6: Energy Focus:EMEA April 2016

NEWS ROUNDUP

Eni has been awarded a new exploration licence, the Cape Three Points Block 4, located in the prolific Tano basin, offshore Ghana. This acquisition will further strengthen the company’s position in the Ghanaian offshore.

The Cape Three Points Block 4 licence was awarded, following the ratification by the Parliament of the Republic of Ghana, to a joint venture which involves Eni Ghana (with 42.4691% stake) as operator, Vitol Upstream Tano (with 33.9753% stake), Ghana National Petroleum Corporation (GNPC with 10% stake), Woodfields Upstream Ghana (9.5556% stake) and GNPC Exploration and Production Company (Explorco, 4% stake).

The new block covers an area of 1,127 square kilometers in water depths ranging from 100 to 1,200 meters and partially surrounds the OCTP block also operated by Eni. In the event of a successful exploration outcome, the block will benefit from the OCTP project infrastructures, currently under development.

Eni operates the OCTP project, which involves the integration and synergic development of the various oil and gas discoveries (Sankofa Main, Sankofa East and Gye-Nyame). The project envisages the development of subsea wells tied-back to a FPSO which will be connected to shore via a gas transport line. The OCTP oil production start-up is expected in 2017 while the gas production, which will supply the domestic market for power generation, is expected in 2018.

Eni has been present in Ghana since 2009 where it operates through the subsidiary Eni Ghana. In the Country, the company has also undertaken important social programmes including the Health Project in the Western Region for the benefit of a population of over 300,000 people.

A Gazprom delegation headed by Vitaly Markelov, Deputy Chairman of the Gazprom Management Committee, visited the Socialist Republic of Vietnam (SRV) last month.

Hanoi hosted a working meeting between Vitaly Markelov and Nguyen Quoc Khanh, Chairman of the Board of Directors of PetroVietnam (Vietnam Oil and Gas Group).

The parties discussed cooperation in a number of areas, particularly within the Gazpromviet joint venture, as well as potential supplies of liquefied natural gas to Vietnam.

Another working meeting was held between Vitaly Markelov and Nguyen Vu Truong Son, President and CEO of PetroVietnam. The meeting addressed the implementation of the existing contracts and agreements on hydrocarbon exploration, production and sales, as well as participation in new joint projects to be executed in Vietnam, Russia, and third countries. The parties also discussed possible collaboration in the field of power generation.

Particular attention was given to the further joint implementation of the NGV project in Vietnam. The project aims at enhancing the transport system effectiveness in a number of towns, cities, and provinces of southern Vietnam, as well as at improving the environment in the most densely populated region of the country. The project entails, inter alia, the construction of an LNG plant and NGV stations.

As a result of the meeting, Gazprom and PetroVietnam decided to shortly draft a comprehensive plan of action on the wider use of natural gas as a vehicle fuel in order to achieve the main goals of NGV market development in Vietnam.

The state-owned PetroVietnam Group is focused on hydrocarbon exploration, production, processing, transportation and sales.

GAZPROM AND PETROVIETNAM DISCUSS JOINT PROJECTS

ENI AWARDED A NEW EXPLORATION LICENCE OFFSHORE GHANA

6 / Issue No.14 / www.emea-energy.net

Page 7: Energy Focus:EMEA April 2016

NEWS ROUNDUP

STATOIL LAUNCHES INNOVATIVE BATWIND SOLUTIONA new battery storage solution for offshore wind energy will be piloted in the world’s first floating wind farm, the Hywind pilot park off the coast of Peterhead in Aberdeenshire, Scotland.

Batwind will be developed in co-operation with Scottish universities and suppliers, under a new Memorandum of Understanding (MoU) signed in Edinburgh on 18 March between Statoil, the Scottish Government, the Offshore Renewable Energy (ORE) Catapult and Scottish Enterprise.

Battery storage has the potential to mitigate intermittency and optimise output. This can improve efficiency and lower costs for offshore wind. The pilot in Scotland will provide a technological and commercial foundation for the implementation of Batwind in full-scale offshore wind farms, opening new commercial opportunities in a growing market.

Stephen Bull, Statoil’s senior vice president for offshore wind, said: “Statoil has a strong position in offshore wind. By developing innovative battery storage solutions, we can improve the

value of wind energy for both Statoil and customers. With Batwind, we can optimise the energy system from wind park to grid. Battery storage represents a new application in our offshore wind portfolio, contributing to realising our ambition of profitable growth in this area.”

Statoil will install a 1MWh Lithium battery based storage pilot system in late 2018. This equals the battery capacity of more than 2 million iPhones.

The pilot will be part of Hywind Scotland, an innovative offshore wind park with five floating wind turbines located 25 km offshore Peterhead. The wind park is currently under construction and start of electricity production is expected in late 2017.

Scotland’s Energy Minister Fergus Ewing said: “The signing of this MoU will

allow the signatories to work together in the development of the Batwind battery storage solution. This will help maximise the renewable generation of the Hywind offshore wind farm, whilst informing the case for energy storage and demonstrating the technology’s ability to support renewables in Scotland and internationally.”

Maggie McGinlay, Director of Energy and Clean Technology at Scottish Enterprise, commented: “We’ve worked with Statoil for a number of years to deliver the Hywind project, so it’s fantastic to remain involved in this next stage of battery storage innovation. This is exactly the kind of innovation in the energy sector we’re keen to encourage and support as it may have potential to advance industry growth in Scotland.”

//THE SIGNING OF THIS MOU WILL ALLOW THE SIGNATORIES TO WORK TOGETHER IN THE DEVELOPMENT OF THE BATWIND BATTERY STORAGE SOLUTION//

www.emea-energy.net / Issue No.14 / 7

Page 8: Energy Focus:EMEA April 2016

8 / Issue No.14 / www.emea-energy.net

NEWS ROUNDUP

FIRST CHEVRON GORGON LNG CARGO DEPARTS FOR JAPANChevron Corporation announced in March that its first shipment of liquefied natural gas (LNG) from the Gorgon Project has departed Barrow Island off the northwest coast of Western Australia. The cargo will be delivered to one of Chevron’s foundation buyers, Chubu Electric Power, for delivery into Japan.

“Departure of the first cargo from the Gorgon Project is a key milestone in our commitment to be a reliable LNG provider for customers across the Asia-Pacific region,” said Mike Wirth, executive vice president, Chevron Midstream and Development. “This is also important for our investors as we begin to generate revenue from a project we expect will operate for decades to come.”

LNG is an essential fuel for power generation across Asia and natural gas is among the fastest growing segments of Chevron’s energy portfolio. Chevron’s Australian projects are well located to supply natural gas for the region and

more than 80 percent of Chevron’s Australian subsidiaries’ equity LNG from the Gorgon and Wheatstone projects is covered by sales and purchase agreements and heads of agreements with customers in the Asia-Pacific region.

The LNG cargo will be delivered by the Asia Excellence, one of Chevron’s new state-of-the-art LNG carriers. To support Chevron’s growing position as a leading LNG supplier, Chevron Shipping Company is in the final stages of its largest shipbuilding and fleet modernization program in recent history, which includes the addition of six new LNG carriers to its operated fleet.

The Gorgon Project is supplied

from the Gorgon and Jansz-Io gas fields, located within the Greater Gorgon area, between 80 miles (130 km) and 136 miles (220 km) off the northwest coast of Western Australia. It includes a 15.6 MTPA LNG plant on Barrow Island, a carbon dioxide injection project and a domestic gas plant with the capacity to supply 300 terajoules of gas per day to Western Australia.

The Chevron-operated Gorgon Project is a joint venture between the Australian subsidiaries of Chevron (47.3 percent), ExxonMobil (25 percent), Shell (25 percent), Osaka Gas (1.25 percent), Tokyo Gas (1 percent) and Chubu Electric Power (0.417 percent).

//DEPARTURE OF THE FIRST CARGO FROM THE GORGON PROJECT IS A KEY MILESTONE IN OUR COMMITMENT TO BE A RELIABLE LNG PROVIDER FOR CUSTOMERS ACROSS THEASIA-PACIFIC REGION//

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www.emea-energy.net / Issue No.14 / 9

NEWS ROUNDUP

Apprentice Jens Erik Eriksen in Kværner and Norway’s minister of petroleum and energy Tord Lien marked the construction start on the Johan Sverdrup utility and living quarters platform on the island of Stord, north of Stavanger at the end of March.

“Johan Sverdrup is the biggest industrial project in modern times in Norway, and will create considerable value for society for generations to come. Today we are kicking off the construction of the utility and living quarters platform, which is the second of four platform currently under construction in the first project phase,” says Kjetel Digre, Statoil’s project director for Johan Sverdrup.

Statoil awarded a joint venture between Kværner and KBR the contract for engineering and construction of the topside for the utility and living quarters platform for the Johan Sverdrup field in June 2015.

Stord is central in a comprehensive Johan Sverdrup project. Kværner Stord will fabricate parts of the topside steel frame, and will also assemble all parts for the utility and living quarters platform before the platform is installed on the field in 2019. At peak around 2000 Kværner employees will be involved in Johan Sverdrup deliveries.

Kværner’s sub-supplier Apply Leirvik on Stord will construct the accommodation module for the living quarters platform, which will be the biggest on the Norwegian continental shelf (NCS).

The other modules for the utility and living quarters platform will be constructed at the Energomontaz Polnoc Gdynia (EPG), Mostostal Pomorze Gdansk (MPG), Mostostal Chojnice and Crist Offshore in Poland, as well as in Gothenburg, Sweden. Detailed engineering is performed at KBR’s office in Leatherhead, London, and at Apply Leirvik on Stord.

The utility and living quarters platform will accommodate the crew working on the Johan Sverdrup field during the field life of 50 years. The platform will have the largest living quarters on the NCS with a capacity of 560 people. The platform will also accommodate the field’s control and emergency centre, and some utility systems covering the whole field centre.

The platform will be completed in the first quarter of 2019, before it is installed on the Johan Sverdrup field by use of the world’s largest heavy-lift vessel, the Pioneering Spirit.

China National Offshore Oil Corporation (CNOOC) and Shell Nanhai B.V. (Shell) announced in March the final investment decision to expand CNOOC and Shell Petrochemical Company’s (CSPC) existing 50:50 joint venture (JV) in Huizhou, Guangdong Province, China. This decision follows the announcement of a Heads of Agreement in December 2015 between the two partners. Subject to regulatory approvals, CNOOC and Shell have agreed that CSPC should take over CNOOC’s ongoing project to build additional chemical facilities next to CSPC’s petrochemical complex.

The project includes the ongoing construction of a new ethylene cracker and ethylene derivatives units, which will increase ethylene capacity by more than 1 million tonnes of per year, about double the current capacity. It will also include a styrene monomer and propylene oxide (SMPO) plant, which will be the largest such plant ever built in China.

Graham van’t Hoff, Executive Vice President for Royal Dutch Shell plc’s global Chemicals business, said: “I’m pleased to confirm that we are going ahead with this growth project. We are selective in our investments, and this decision underlines our confidence in the strong growth potential for chemicals in China. It will position Shell and our partner CNOOC well to help meet the growing needs of customers in this expanding petrochemicals market.”

“The expansion of the Nanhai petrochemical complex supports the Chinese long-term petrochemicals development plan and mixed ownership reform direction. We’re delighted that Shell will contribute to the project and our joint venture with industry-leading technology, with improved value through integration with nearby CNOOC refineries to produce high quality petrochemicals for China’s growing domestic markets,” said Dong Xiaoli, General Manager Assistant of CNOOC and General Manager of CNOOC Oil & Petrochemicals Co., Ltd.

CNOOC AND SHELL TO EXPAND PETROCHEMICAL COMPLEX IN CHINA

CONSTRUCTION BEGINS ON JOHAN

SVERDRUP PLATFORM

Page 10: Energy Focus:EMEA April 2016

FEATURE

THE REPLACEMENT FOR CRUDE?

Italian company GFBiochemicals is the first business in the world to produce levulinic acid, a potential replacement for oil in all its forms, on an industrial scale. Adding glamour to the story, one of the company’s secret financial backers is eco-conscious football-star Mathieu Flamini…

// Depending on your position in the energy market, the company that you work for

and your opinion on climate change, your views on the announcement from GFBiochemicals at the end of 2015 that it had succeeded in finding a way to produce levulinic acid (LA) on an industrial scale might be very different.

There’s those of us that are delighted with the news; the fact that a European company has discovered a method to produce LA on a large scale is hugely exciting – it has the potential to change the energy industry completely. Then there’s those who work deep in the oil industry, who have had a difficult time in the past few months, who might find themselves concerned.

It’s an interesting topic and somewhat new for the energy industry – a viable, long-term alternative to oil. And then, of course, there’s the added glitter that this story brings, through the involvement of an international soccer star.

But let’s start at the beginning. Firstly, what is LA and why has it got people excited? Well, simply put, LA is a substance which could, potentially,

EDITORIAL BY: Joe Forshaw

replace all forms of oil. It is a white powder that dissolves in water. It has been named as part of a group of materials called ‘platform chemicals’ which are sustainably produced from plant extracts and could be used as a replacement for oil used in the production of pharmaceuticals, plastics, solvents, cosmetics, flavour and fragrances, and herbicides and pesticides for agriculture to name just a few areas of use. The common misconception is that LA will replace oil completely and be used in power stations and cars but this is not the case. It can be used as an additive and mixed with diesel but you will not see acid-powered vehicles anytime soon.

A more complicated explanation will tell you that LA is an organic compound with the formula CH3C(O)CH2CH2CO2H and is classified as a keto acid, derived from degradation of cellulose.

The acid can be produced from wood chippings, straw and other bits of plants that would otherwise go to waste. The importance of using waste biomass cannot be overstated. It means

land won’t be tied up growing crops solely for chemicals and fuels, and could instead be used to produce food. This would reduce both our mountain of waste and our reliance on depleting fossil resources. Other waste products can also be used to produce the acid; just as long as they contain cellulose.

GFBiochemicals was founded in 2008 in Caserta, Italy with little fanfare. The region was known in the past for its production of quality silk but now, as the reputation of the company has grown, Caserta is becoming recognised for its contribution to the bio-based economy.

But it was at the end of 2015 that the company really started to garner a following and this was down to one of its previously anonymous Board members revealing his involvement. That man was France and Arsenal soccer star Mathieu Flamini and he has been praised by many for his contribution to the business and his determination to use his influence in a positive way.

Flamini’s work ethic on the pitch has never been questioned and has helped him to become one of the most respected players in the game, boasting a CV that most can only dream of. He has represented Marseille, Arsenal, AC Milan and the French national team, making more than 400 appearances for all, and scoring more than 20 goals. He is not the stereotypical type of investor for biofuel businesses and this is why the business has become popular in the media.

10 / Issue No.14 / www.emea-energy.net

Page 11: Energy Focus:EMEA April 2016

GFBIOCHEMICALS

Page 12: Energy Focus:EMEA April 2016

“We’re producing a bio-based product which can be used in different applications. This acid has the potential to replace or substitute oil.”

“I have always been concerned about climate change and problems with the environment.”

“We knew it was going to be difficult because many people tried and many people failed. Today we are very proud because we are the first company to achieve production of LA on an industrial scale and we are entering the commercialisation phase.”

Granata, who Flamini met after moving to Milan in 2008, said in an interview with Ilbioeconomista: “GFBiochemicals is a fantastic business that today can sustain itself on its own feet, without the need for government support. This is true sustainability. In general, the bioeconomy is an excellent tool for the development of the regions, and Italy.”

The two partners who provided finance for research and development over the years have helped install an

12 / Issue No.14 / www.emea-energy.net

But Flamini is not a scientist; he is not an engineer or a technology industrialist. His contribution has been mainly financial and promotional. Along with his friend and business partner, Pasquale Granata, Flamini invested in GFBiochemicals in 2008 but kept his involvement secret, from everyone, for seven years.

In a recent interview with Sky Sports, Flamini spoke of his attitude on the pitch and it’s easy to see how this helps in his business career.

“Everything is going well but obviously my priority right now is football. When things are not going well, it’s important to have other things in your life to focus on apart from football.

“We like to challenge ourselves... Why should the sky be the limit when there are footprints on the moon?”

Since the news of his involvement became public, the one question he has frequently been asked is ‘are you going to change the world?’, and he always responds the same way, demonstrating an understanding of his product: “I would not go that far,” he says.

FEATURE

Page 13: Energy Focus:EMEA April 2016

industry-leading management team made up of experienced leaders.

In July, CEO Maxim Katinov said: “GFBiochemicals has successfully achieved a substantial milestone – the start-up of commercial-scale production. I would like to praise and thank our engineering and R&D teams who have clearly demonstrated the company’s ability to deliver results on schedule.”

Chief Commercial Officer, Marcel van Berkel said: “Caserta is now the world’s largest operational production plant for LA. A fundamentally lower price range is now possible using our unique technology. This will give access to previously undiscovered market segments.”

The company reportedly employs around 80 people directly and 400 indirectly and Flamini, in an interview

with the Sun, said that he is extremely proud of what has been achieved.

“Yes, I invested a lot of money in this. It was a big risk. But to be successful you take risks. It was a challenge.

“There is the plant in Caserta in Italy, we have a lab there, an office in Milan with another in Holland, and we’re planning to open an office in the US soon.

“We have researchers, chemists and other scientists, from France, Italy, Russia, Holland, Germany and Egypt.

“And we work closely with the famous University of Pisa — one of the most prestigious universities in Italy.

“We are pioneers. We are opening a new market. And it’s a market potentially worth £20 billion.

“We’ve come here after seven years of work. We achieved something

www.emea-energy.net / Issue No.14 / 13

//WE HAVE RESEARCHERS, CHEMISTS AND OTHER SCIENTISTS, FROM FRANCE, ITALY, RUSSIA, HOLLAND, GERMANY AND EGYPT//

GFBIOCHEMICALS

that has never been done before - of that I am the most proud.”

Because of the amount of products that LA can be used in, the market potential for GFBiochemicals patented product is enormous. Flamini will not be walking around with £20 billion in his wallet but there are certainly huge possibilities.

Going back to the original question in this article – how do you feel about the hugely important announcement of industrial LA production? Well you should be excited; even if you operate in the oil industry where people are now talking about replacing your product. People will always need the traditional fuel – of that there is no question; but with this new concept, waste can be reduced, products can be made in a more environmentally friendly way and employment can be created in a growing industry that holds huge potential.

Bon travail Flamini! We will follow the story of GFBiochemicals with great interest and hope that the enterprise can continue to grow.

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14 / Issue No.14 / www.emea-energy.net

© SIEMENS - OFFHSORE TECHNICIAN

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EAST ANGLIA ONE

Adding More Wind Power to the UK Energy Mix

A partnership between two energy giants, ScottishPower Renewables and Vattenfall, the East Anglia Offshore Wind development is set to get underway imminently and it will

be one of the largest and most advanced projects in the global wind energy industry.

PRODUCTION: Joe Forshaw

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16 / Issue No.14 / www.emea-energy.net

BUSINESS PROFILE

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www.emea-energy.net / Issue No.14 / 17

// The UK’s ambitious target for renewable energy generation is progressing quickly. In the past

decade, England, Scotland, Wales and Northern Island have seen wind, solar, tidal, bio and other alternative renewable energy technologies implemented around the Kingdom and there are many more planned – like it or not, renewable energy is and will continue to be a growing part of energy mix.

Whether you believe that the renewable energy industry is one which genuinely makes a difference to the world in which we live, reducing carbon output and providing sustainable power for generations to come, or if you believe that the industry has been fabricated by corporates as a new revenue stream, either way you can’t deny that it is creating employment and generating turnover.

As we have discussed in recent editions of Energy Focus, because of the lack of sunshine in the UK, wind power has taken up the spotlight as the beacon for the renewable energy industry, reportedly contributing 17% of all electricity generated in December 2015. This is above the government’s target of generating 15% of all required power from renewable sources by 2020 as detailed in the Renewable Energy Roadmap 2013 published by the Department of Energy and Climate Change.

And this generation capacity will increase in the future with projects going up all over the country and around the 19,500 mile coastline. Two of the most notable projects are the Hornsea Project One windfarm led by DONG Energy, which we discussed last month, and the East Anglia ONE Offshore Windfarm.

East Anglia ONE will be located in the North Sea, between England and

the Netherlands. It will form part of a larger array which will include East Anglia ONE NORTH, East Anglia TWO and East Anglia THREE. As one of the world’s largest offshore windfarms, the project will completed in phases with the first set to begin in January 2017 and be completed in 2020.

Currently, the east of England has a number of offshore wind projects operational, under review or under construction. Westermost Rough (DONG), Humber Gateway (E.On), Triton Knoll (RWE), Race Bank (DONG), Inner Dowsing Lines (BlackRock), Dudgeon, Sheringham Shoal (Statoil & Statkraft), Scroby Sands (E.On), Norfolk Vanguard, Norfolk Boreas (Vattenfall), Galloper, Greater Gabbard (RWE), Gunfleet Sands (DONG), London Array (DONG & E.On), Kentish Flats, Thanet (Vattenfall), Rampion (E.On) are all located off the east coast, from Hull down to Brighton. Then there are the German, Dutch, French and Danish projects that are located in the area, highlighting the popularity and strength of the region when it comes to wind generation potential.

East Anglia ONE will sit approximately 30 miles off the coast of Lowestoft in a 300 km2 area of water and will generate 714 MW of clean energy from 102 state-of-the-art Siemens SWT-7.0-154 turbines. This will be the first phase of the development of the larger East Anglia Offshore Wind Zone, where 7.2 GW of renewable power capacity is proposed to be installed in an area of 6,000 km² off the coast of East Anglia.

POWERFUL OWNERSThe East Anglia Zone is a project being spearheaded by ScottishPower Renewables and Vattenfall. ScottishPower takes the lead on East Anglia ONE in the southern area of the zone, which will be the first windfarm to be constructed and Vattenfall will independently develop up to 3.6GW of capacity in the northern half of the development zone. ScottishPower expects the East Anglia ONE

//EAST ANGLIA HAS SOME OF THE BEST CONDITIONS ANYWHERE IN THE WORLD FOR THE DEVELOPMENT OF OFFSHORE WIND//

EAST ANGLIA ONE

Continues on 21 >>>

Page 18: Energy Focus:EMEA April 2016

www.abports.co.uk

Fifty percent of UK offshore wind production is supported by our extensive network of ports and know-how.

We look forward to continuing the journey with you.

Hull

Goole

Immingham

Grimsby

King’s Lynn

Lowestoft

Ipswich

Southampton

Teignmouth

Plymouth

Newport

CardiffBarry

Swansea

Port Talbot

Garston

Fleetwood

Barrow

Silloth

Ayr

Troon

SUPPORTING OUR FUTURESUPPORTING OUR CUSTOMERS

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www.abports.co.uk

Fifty percent of UK offshore wind production is supported by our extensive network of ports and know-how.

We look forward to continuing the journey with you.

Hull

Goole

Immingham

Grimsby

King’s Lynn

Lowestoft

Ipswich

Southampton

Teignmouth

Plymouth

Newport

CardiffBarry

Swansea

Port Talbot

Garston

Fleetwood

Barrow

Silloth

Ayr

Troon

SUPPORTING OUR FUTURESUPPORTING OUR CUSTOMERS

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Associated British Ports (ABP) has been awarded a major contract as part of the East Anglia ONE offshore development. The Port of Lowestoft, one of 21 operated by ABP around the UK, penned a deal which will see it act as a construction and operations hub for the 30 year lifespan of the wind farm. Consequently Scottish Power Renewables will be investing approximately £25 million over the lifetime of the project.

ABP Director Andrew Harston says: “ABP’s Port of Lowestoft already supports around 1,200 jobs and contributes around £80 million to the economy each year including long standing support of the renewables sector in the Southern North Sea. This significant investment by Scottish Power Renewables, with its potential to create long-term, skilled jobs and boost the economy, is another example of how the port can make a valuable contribution to the prosperity of the town and its hinterland.”

The programme of work will begin in 2016, and modifications will include dredging and construction of new pontoon facilities, site preparation and construction of onshore buildings including offices, warehouses, workshops, storage areas and a state-of-the-art operations and maintenance control building.

Port Manager, Paul Brooks says: “Right now, the work has not started, it’s all in the design and planning stage. There’s three phases to the construction work; the marine phase which provides berthing for the vessels, there’s the control building and then the warehousing and storage areas. All of this work will happen in the next 18-24 months and many of the contractors will be local.”

Scottish Power, operators of East Anglia ONE, have already submitted plans for the East Anglia THREE project which will potentially power nearly 900,000 homes, and this is something that the Port of Lowestoft is also looking to be a part of.

“As a company and a port we want to be involved in the entire development,” says Brooks.

ABP and the Port of Lowestoft has proven experience in the energy industry, acting as a hub for a fleet of supply and standby vessels serving windfarm installations and oil and gas facilities in the southern North Sea. One of the most recent operations the port has serviced is Greater Gabbard Windfarm and Brooks is confident that East Anglia ONE can replicate the success that was realised there.

“I think things will go in very much the same way,” he says. “We will be involved in construction and operation in the same way so we are well experienced – that project

was a real success. SSE also operate a helicopter from the port and it has been extremely successful.”

Importantly, the port remains inextricably linked with the marine, ocean and fishing industries and will ensure that the work carried out as part of the East Anglia ONE development will not disrupt local businesses.

ABP has also just concluded terms with RWE for the Galloper Windfarm Construction Port, which will be based at Port of Lowestoft within the OGN Properties site, which is ideally suited to this type of use having been the Shell Southern North Sea support base for many years with good facilities and quay access. This facility will support the construction and development of Galloper over the next three years and will again generate additional economic opportunities for the Lowestoft region.

“We work very closely with fishing and other related industries to ensure that everyone is fully informed and any effect is minimised,” says Brooks.

Overall, this is another hugely encouraging investment for East Anglia and Brooks is confident that the region is becoming a focal point for the offshore business.

“East Anglia as a whole will become a hub but more specifically, Lowestoft is becoming a centre of excellence for the offshore wind industry in terms of the port and what it can provide and also the amount of support services that are building up in the area including diving, vessel repair, dry docks etc.

“It’s always good to get these things across the line. It takes a lot of effort so the job satisfaction is high when it all goes well. For ABP and for me personally this has been extremely positive,” he concludes.

Director, Andrew Harston says: “ABP is active in many of its East Coast UK ports at present with the exciting Green Port Hull project taking shape in partnership with Siemens at Hull and the Port of Grimsby providing Operations and Maintenance support for a number of offshore wind farms including Westernmost Rough, Humber Gateway, Lincs and Lynn and Inner Dowsing, in addition to the very positive developments at Lowestoft.”

He stresses that the important factor is to achieve the scale economies, local content and long term skills development and that clustering around established ports has to bring advantages in all of these aspects.

He adds: “ABP looks forward to working more closely with the offshore wind sector as it enters this next intensive phase of development.”

//ASSOCIATED BRITISH PORTS (ABP)PORT OF LOWESTOFT TO BE CONSTRUCTION AND OPERATIONS HUB FOR THE EAST ANGLIA ONE OFFSHORE WINDFARM

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development to produce enough power to provide for over 500,000 homes.

Charlie Jordan, ScottishPower Renewables East Anglia ONE project director, says: “East Anglia ONE will deliver substantial environmental benefits for the UK, it will stimulate considerable UK investment, and it will support thousands of jobs.

“Offshore wind has proven itself as a technology that works, and the more offshore wind capacity we have in the UK, the more secure our energy supplies will be.

“East Anglia has some of the best conditions anywhere in the world for the development of offshore wind, and we are fully committed to the region, with future developments already in the pipeline.

“ScottishPower Renewables is leading the way with its approach of actively working towards a target of at least 50% UK supply chain content over the lifetime of the East Anglia ONE project. We have already worked with a wide range of companies across East Anglia and we look forward to working with many more.”

Proving its commitment to the industry and to the region, ScottishPower Renewables has already submitted plans for East Anglia THREE, a 1,200 MW windfarm in the development zone. The East Anglia THREE development will require up to 172 wind turbines, and will cover an area of 305 km2. Once completed, the windfarm could power the annual electricity demands of more than 850,000 homes.

The company submitted its plans in November last year, at the same time

that UK Secretary of State for Energy and Climate Change, Amber Rudd announced that funding mechanisms will be available for three auctions in this Parliament to support offshore wind.

ScottishPower Renewables CEO, Keith Anderson says: “We were very pleased to hear Amber Rudd’s commitment to support the continued growth of offshore wind power. The more offshore wind capacity we have in the UK, the more secure our energy supplies will be. It already powers 3.5 million homes per year, and with wind around our coasts in plentiful supply, it has the potential to play an even more significant role.

“Our East Anglia ONE project was successful in the last government auction with a price of £119/MWh, which will make it the best value offshore windfarm ever developed in the UK. But we want to see costs come down even further. Our entire industry wants to get to a place where subsidy is not required, and significant

//EAST ANGLIA ONE WILL DELIVER SUBSTANTIAL ENVIRONMENTAL BENEFITS FOR THE UK//

EAST ANGLIA ONE

THE NEW SIEMENS SWT-7.0-154 IS

CURRENTLY BEING TESTED IN ØSTERILD,

DENMARK © SIEMENS

<<< Continued from 17

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BUSINESS PROFILE

progress is being made to deliver this in the near future.

“The offshore wind industry in the UK now benefits from more powerful and more efficient turbines. We have better vessels, more experience of working offshore, a healthier supply chain, a growing engineering skills base, increased capability to export our products and expertise around the globe, as well as ever increasing investment in UK infrastructure. All of these factors mean that costs are reducing quickly, and large projects are achievable.”

EASTERN REGION TO BENEFITThe east of England, and particularly the coastal towns of Lowestoft and Great Yarmouth, have become central in the regions wind energy industry

development. Some of the biggest companies from around the world who operate in the offshore markets have based their UK operations here and the East Anglia ONE development will bring further investment to the region. It was announced in November that the Port of Lowestoft would become the base for construction for East Anglia ONE for the next 30 years. Then, in March, it was announced that Peel Ports Great Yarmouth was selected as the port for construction and installation activities.

Port Director Peel Ports Great Yarmouth, Richard Goffin says: “We are delighted to be working in partnership with ScottishPower Renewables on the large scale turbine installation programme. The co-investment in the Port of Great Yarmouth further

consolidates our position as a leading offshore energy port facility in the UK whilst providing valuable jobs and economic benefits to the region.”

Great Yarmouth’s Member of Parliament, Brandon Lewis says: “It is welcome to see Great Yarmouth directly benefiting from the East Anglia ONE project. With so many offshore windfarm projects being developed off the coast of East Anglia, this bodes well for future investment and job opportunities for the region.”

Jonathan Cole, Managing Director of Offshore Wind at ScottishPower Renewables, says: “East Anglia ONE is progressing quickly, and we are delighted that Peel Ports Great Yarmouth has been chosen to support construction and installation work on our project.

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“We are committed to delivering local investment, job creation and training opportunities as part of this project, so it is pleasing that two of our earliest decisions have gone in favour of Lowestoft and Great Yarmouth.

“East Anglia ONE is the first of up to four projects we would like to build in the Southern North Sea, and we hope that our plans will continue to create jobs and investment in the region for decades to come.”

He said of the contract with the Port of Lowestoft: “This announcement will help to make the East Anglia region

the leading destination for investment and job creation in the UK’s Offshore Wind Power industry.

“A new vision document published recently highlighted the huge potential of offshore wind power to contribute sustainable, cost-effective electricity for the UK, as well as helping the economy to grow. What happens in East Anglia will be fundamentally important in delivering this vision. Off the coast of Norfolk and Suffolk billions of pounds of investments are being made, and tens of thousands of job opportunities are being created.

“In Lowestoft, we will manage construction activities and operate and maintain our East Anglia ONE project for at least the next three decades. This will support highly skilled, long-term jobs, both directly and across our supply chain. Every year during the construction phase and operations phase of the project, millions of pounds will be injected in to the local economy.

“Our East Anglia THREE planning submission also highlights our continued commitment to the region, and the tremendous potential in the East of England to develop further large offshore wind projects. We have helped to drive costs down in the industry, which increases the prospects of these major infrastructure projects being delivered. We hope for a successful

//THE OFFSHORE WIND INDUSTRY IN THE UK NOW BENEFITS FROM MORE POWERFUL AND MORE EFFICIENT TURBINES//

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EAST ANGLIA ONE

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outcome to our application, and we look forward to continue growing the offshore wind industry in East Anglia.”

UNDERSEA HURDLESWhen the 102 turbines are installed, the subsea cables that bring the valuable power ashore will be connected to the grid at Bramford, Suffolk. But while connecting the cables, the contractors will have to ensure they do not disturb the wreck of a German submarine that was discovered, previously thought lost forever, around 50 miles off the coast of Norfolk, England.

While scanning a massive area of seabed for two years, ScottishPower and Vattenfall found the wreck, along with 60 others, most of which were already known about. The scanning work is an essential part of wind farm development as it is critical to

understand seabed conditions, and allow the companies to design the layout of their proposed projects. The scans were carried out using advanced sonar technology in 2012.

The U-boat is 57.6 metres in length, 4.1 metres in width and 4.6 metres in height. Divers discovered that he bow had been damaged and this suggested that the original length could have been even longer. It was lost in 1915 and is now sitting 30 metres below the surface. It has been confirmed that the submarine is the Type U-31 which left Wilhelmshaven for patrol on 13 January 1915 never to return. All 35 men on board died and it is believed that the U-boat hit a mine before reaching its resting place where it remains partially buried and untouched until divers from Lamlash North Sea Diving descended to identify the wildlife-covered structure.

Charlie Jordan says: “The scanning team were expecting to see wrecks, but such a discovery was quite a surprise and has been extremely interesting.

“Unravelling the whole story behind the submarine has been fascinating and it’s heartening to know that the discovery will provide closure to relatives and descendants of the submariners lost who may have always wondered what had happened to their loved ones.”

Initial thoughts were that this wreck could have been the O-13, a Dutch sub which went missing in

//OUR ADVANCED MODEL OF OUR PROVEN DIRECT DRIVE WIND

TURBINE WITH AN OUTPUT OF 7 MW WILL LEVERAGE THE ENERGY

OUTPUT OF EAST ANGLIA ONE OFFSHORE WIND FARM AND

CONTRIBUTE TO LOWERING THE COST OF ELECTRICITY//

24 / Issue No.14 / www.emea-energy.net

Miros is a world leading supplier of wave and weather monitoring products and solutions for the global offshore oil and gas market, windfarm developments, airports and onshore oil production and coastal environment.

Miros ASSolbråveien 20NO-1383 Asker, NorwayPhone: +47 66 98 75 00Fax: +47 66 90 41 70E-mail: [email protected]

Measuring the ocean surface

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action in June 1940, after the crew were tasked to patrol the waters between Denmark and Norway.

Andy Paine, Vattenfall project director of East Anglia Offshore Wind Farm says: “Following the discovery the team reported its findings to the relevant authorities, including RoW (Receiver of Wreck) in the UK. The seabed scanning had been undertaken by Netherlands-owned company Fugro, and their team made us aware of the Dutch Navy’s hunt for its last remaining missing WWII submarine.

“We were all extremely keen to make contact with the Dutch Navy to see if this could be the submarine they have been looking for over so many years: could we at last have solved the mystery?”

It did take some time to clarify that this wreck was not that of the O-13 but after several dives the true identity was revealed.

While this discovery will not directly impact of the progress of the East Anglia ONE wind farm, it does give the developers another element to consider as this site is now marked as

an official military maritime grave and therefore must remain undisturbed.

WIND DEVELOPMENT ScottishPower and Vattenfall are just two of many big names who have become increasingly involved in wind energy over the years and right now some of the biggest technology and engineering companies in the world are helping to make wind energy and renewables as a whole more efficient, cheaper and better for the environment and consumer.

At East Anglia ONE, the turbines will be supplied by Siemens, a tried and tested supplier of best-in-class technology and both Siemens and ScottishPower are happy to contribute to the development of the industry. Siemens has even inked a contract to build a new facility in Hull, Yorkshire for manufacturing the wind turbine blades.

Michael Hannibal, CEO Offshore of Siemens Wind Power and Renewables Division, says: “We are pleased that ScottishPower Renewables has selected Siemens for this project. Our advanced model of our proven Direct

Drive wind turbine with an output of 7 MW will leverage the energy output of East Anglia ONE Offshore Wind Farm and contribute to lowering the cost of electricity. We will manufacture the wind turbine blades for East Anglia ONE at our new factory in Hull and work with ScottishPower to further promote the growth of the UK offshore industry.”

As the UK government looks to reduce greenhouse gas emissions by at least 80% by 2050 as part of its Climate Change Act 2008, projects like East Anglia ONE are going to become more and more important and as employment and innovation in the sector grows, wind energy will form a bigger part of the energy mix – surely a good thing for everyone involved?

EAST ANGLIA ONE

+44 141 568 2000 [email protected]

www.eastangliawind.com

EAST ANGLIA ONE

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Shell South Africa has a nationwide retail network of strategically located service stations as well as interests in many business areas including manufacturing, aviation, chemicals, LPG and, potentially, natural shale gas. But is South Africa prepared for the challenge of producing shale gas and is Shell prepared to wait for the country to be ready?

// Over the past 18 months, the story surrounding South Africa’s shale gas industry development

has been one with many ups and downs but in the early part of 2016, the picture has become slightly clearer with the government now seeming to back the growth of the industry and the big corporates looking to the future and how they can move forward with this exciting energy sector that has proved so successful in the USA.

The development of shale gas in South Africa goes back to 2009 when the Petroleum Agency South Africa (PASA) awarded Shell a Technical Cooperation Permit (TCP) for a one-year study to determine the Karoo’s natural gas potential. Early signs suggested that there was a plentiful supply of gas laying under the dry, arid Karoo desert – as much as 480 trillion cubic feet (TCF); some of the largest reserves in the world, but these figures have been disputed.

In December 2010, Shell submitted

three separate exploration licence applications for areas of around 30,000 square kilometres each. These areas are in the Western Cape, Eastern Cape and Northern Cape.

All seemed to be on track for the fast and efficient growth of the market as SA looked to follow the example of America and profit from vast reserves, but development turned out to be slower than everyone wanted. The government are yet to award rights for development, the global oil price crash has caused many companies to revaluate their involvement in shale exploration and there are many groups that are opposed to shale gas exploration because of the nature of the techniques involved in releasing the valuable product.

The main method is of course ‘Fracking’ or hydraulic fracturing where exploration and production companies will drill into the earth before injecting a high-pressure water, sand and chemical

SHELL SOUTH AFRICA

Adding Value to Our Mineral WealthPRODUCTION: Timothy Reeder

mix into the well, breaking the rock buried deep in the earth and releasing the gas trapped inside.

Mineral Resources Minister, Mosebenzi Zwane said in January: “Currently South Africa is a net importer of energy sources such as crude oil, refined petroleum products and natural gas. It is estimated that the Karoo shale gas resources would mean South Africa has the fifth largest reserves, estimated at 485 TCF.

FRACKING FOR GAS“We have taken a decision to diversify our energy basket in our pursuit to provide not only cost-competitive energy security, but also significantly reduce the carbon footprint and drive our industrialisation and beneficiation programme to grow the economy inclusively in order to create a critical mass of employment, amongst others.”

He also said that producing shale gas is not only a tool for economic growth, but something which should benefit everyone. He was speaking at a community engagement event in the Eastern Cape.

“It is my firm belief that the excitement we have about the discovery of this resource needs to be shared and also enjoyed by communities.

“We have also taken measures to ensure the farming community benefits

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from the development of shale gas, whilst the astronomy programme, such as the Square Kilometre Array (SKA) would not be affected through such development.”

The ongoing success of the SKA project and the impact that Shell’s work could have on that ground-breaking project have long been concerns but as far back as 2014, organisers of the SKA project have stated that the projects can cooperate.

“We’re looking for a co-existence with fracking,” said Science and Technology Department Chief Director for Astronomy, Val Munsami. “What’s very important is that there must be concurrence… from the Science and Technology Minister around any licences for exploitation and exploration around fracking.”

Just last month, the SA government said that it will give the green light in the next 12 months to companies looking to explore for shale gas. This comes as great news for Shell who have been patiently waiting along with a handful of other companies for the government to progress with license allocation.

At this time last year, the company was looking at scrapping its shale activities in SA thanks to ‘lower energy prices and delays in obtaining an exploration licence for the onshore Karoo Basin’; Country Chairman, Bonang Mohale was even quoted saying: “Capital is mobile and is looking for the best commercial terms everywhere else in the world. We were hoping that we would have had a licence (for Karoo) in 36 months” – this was after six years of waiting.

But now that the government has expressed an interest in exploring the shale industry, after years of under supply in the country’s energy business, Shell’s attention has been refocussed.

“One area of real opportunity for South Africa is the exploitation of shale gas. Shale gas regulations were published in the second quarter of 2015/16. Exploration activities are scheduled to commence in the next financial year. This will lead to excellent prospects for beneficiation and add value to our mineral wealth,” said Gugile Nkwinti, Economic Sectors, Employment and Infrastructure Development Cluster minister when briefing the media in March.

Clarification like this from a minister is exactly what the industry has been waiting for, albeit still not concrete. Even business advisory company, Teneo Intelligence was clear when detailing the problems caused by indecision: “At a time of low oil prices and exploration budgets being slashed, the onus is on governments to put in place clear and attractive investment conditions,” said senior vice president Anne Fruhauf.

“The longer the government takes

//EXPLORATION ACTIVITIES ARE SCHEDULED TO COMMENCE IN THE NEXT FINANCIAL YEAR. THIS WILL LEAD TO EXCELLENT PROSPECTS FOR BENEFICIATION AND ADD VALUE TO OUR MINERAL WEALTH//

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SHELL SOUTH AFRICA

to clarify fracking regulations, the less sense it makes for a company like Shell to maintain anything more than a holding operation in relation to its South African shale project.”

And then, of course, there are those that are against fracking, and this is a big concern for companies like Shell as well as the SA government. Getting local communities on board with projects like this has long been a

desire for exploration and production companies and where they have succeeded in with this, operations have often run with less resistance.

Those opposed to fracking in the Karoo made their intentions clear in March, saying they would quickly challenge the government, in the High Court if necessary, to halt the progress of Shell and the other oil corporates who are interested in investing in the region.

Jonathan Deal, CEO at Treasure Karoo Action Group (TKAG) in the Eastern Cape said: “They have overlooked the fact that the shale gas regulations are the subject of a High Court application brought against the Department of Minerals Resources by AfriForum and TKAG as an alliance. Effectively and logically, those regulations are under attack by terms of being completely and wholly inadequate to regulate something like shale gas exploration. If they go under those circumstances and still see fit to issue exploration licenses, we will have the way cleared for us to approach the High Court for urgent release to have the exploration licenses set aside so government has still got a lot of work to do - not the least to involve some High Court activity before they can make promises like that.

//THOSE THAT ARE TRUTHFULLY INFORMED AND UNDERSTAND WHAT FRACKING HAS DONE OVERSEAS AND HOW LITTLE IT HAS BEEN ABLE TO DELIVER AT THE HANDS OF LOCAL COMMUNITIES IN TERMS OF BENEFITS, AND WHAT RISKS IT HAS BROUGHT WITH IT ARE VERY CONCERNED//

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//SHOULD SUPPORTIVE PETROLEUM LEGISLATION AND ATTRACTIVE COMMERCIAL TERMS BE PUT IN PLACE, THE KAROO PROJECT COULD COMPETE WITHIN SHELL’S GLOBAL SHALE GAS AND OIL PORTFOLIO//

//WE WILL NOW BRING ELECTRICITY, WE WILL BRING JOBS, WE WILL

CREATE SMALL AND MEDIUM ENTERPRISES AND WE’LL GENERALLY

STIMULATE THE ECONOMY//

Fortunately for Shell, the business has strong assets in South Africa including an excellent supply chain, a robust brand and strong, visible leadership in the form of Mohale.

LEADERSHIP In 2015, at the Future CEOs event in Johannesburg, Mohale spoke of his own credentials and those of Shell, leaving the aspiring young leaders in the audience in no doubt that the company is in good hands and the decisions it makes are in the interest of all stakeholders.

“Even if you hate me, you cannot deny the extraordinary results that have been achieved because I’ve always known that to be the best you have to go the extra mile and work the extra hour.

“This company has been in this country for 112 years and we employ around 20,000 people across various businesses. Last year, we made earnings before expenses of $384 million.”

In a country going through an energy crisis and with the need for a long-term solution as soon as possible, supporters of the shale gas initiative are keen to have an experienced global operator on their doorstep.

Mohale said in 2012, after the fracking moratorium was lifted, in an interview with Moneyweb: “We will

exploration, could be as much as R2.5 billion. The company told IOL last month that it was monitoring the situation and was ready to invest if a viable environment presents itself. “We will continue our ongoing consultation with government, industry and the people of South Africa about the long-term opportunities of shale gas exploration and the regulations that will govern this industry,” Shell said.

“Should supportive petroleum legislation and attractive commercial terms be put in place, the Karoo project could compete within Shell’s global shale gas and oil portfolio.”

“I think, as a community, those that are truthfully informed and understand what fracking has done overseas and how little it has been able to deliver at the hands of local communities in terms of benefits, and what risks it has brought with it are very concerned. I think the big elephant in the room in South Africa at the moment is something that is facing every single person in this country- that is that we have a water shortage. So for our government to even consider an activity that takes place in above and around our very precious water source which has the potential to pollute it, is really nonsensical,” added Deal when speaking to SABC.

But despite the claims of those who are opposed to the development of a shale gas industry in South Africa, the government is unwilling to ignore the potential investment that Shell and similar companies could bring. Some reports have suggested that even the initial investments, aimed at just

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SHELL SOUTH AFRICA

+27 11 996 7000 [email protected]

southafrica.shell.com

SHELL SOUTH AFRICA

International Director, said: “This new start up is another important milestone for Bonga, adding valuable new production to this major facility.”

These signs of commitment to Africa, along with the plans to begin with shale gas exploration in the near future, mean that people can be sure that Shell has a long-term future in Africa that is set to be profitable or both the continent and the company.

“Shell is committed to South Africa and determined to build our business with all communities that endorse our license to operate. In the years to come we will continue to conduct our business according to our core values of honesty, integrity and respect for people,” the company says.

some predicting the price to drop to $20 in the near future. Other reports suggest that the US now has some of the largest stock piles of oil that it has ever had. This of course makes life difficult for companies likes Shell and can hamper investment into new projects. For consumers, the news might be more welcome and some sources have suggested the low price might even cause pumps at fuelling stations to drop the price by as much as 59 cents per litre.

In West Africa, Shell Nigeria, a sister of Shell South Africa, realised success in October when it announced the start-up of the Bonga Phase 3 project - an expansion of the Bonga Main development, with peak production expected to be some 50,000 barrels of oil equivalent. The Bonga field, which began producing oil and gas in 2005, was Nigeria’s first deep-water development in depths of more than 1,000 metres. Bonga has produced over 600 million barrels of oil to date.

Andrew Brown, Shell’s Upstream

now bring electricity, we will bring jobs, we will create small and medium enterprises and we’ll generally stimulate the economy.

“This technology is being deployed in four continents, it is 60 years old. We are a responsible company that has a brand to protect. We are going to continue to work with all the stakeholders in the Karoo, including TKAG, to look at improving the quality of lives of the majority of the people.”

And hopefully progress will be swift as the energy industry continues to battle through what has been a tough period thanks to falling oil and commodity prices.

“All the data out there is suggesting higher supply and lesser demand for oil, and that could only mean lower prices,” said Phillip Streible, market strategist at RJO Futures in Chicago in a recent statement.

After a brief period of stability, global oil prices have once again dropped and in March the price was sitting at around $35 a barrel with

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© DONG ENERGY

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DONG ENERGY

Making a Statement With Announcement

of World’s Largest Offshore Wind Farm

Denmark’s DONG Energy holds a significant position in the European Energy market, contributing to some of the EU’s most

important economies. The company looks set to increase its stake in the market after making some big announcements in

the past few months…

www.emea-energy.net / Issue No.14 / 33

PRODUCTION: Joe Forshaw

across the Atlantic. In that same year, the European Wind Energy Association (EWEA) was founded and the promotion of the industry began.

Today, more than three decades on from its formation, the association is still working hard to promote all aspects of wind energy and is now a recognised global player in the wider energy sector.

Former EWEA CEO, Christian Kjaer, recalls some of the advancements that have been made over the years: “Wind turbine generators have grown from 55 kW in 1982 to more than 5,000 kW today and rotor diameters from 15 metres to over 126 metres. In Europe, wind energy’s share of power supply has increased from 0.001% to 4%, and European manufacturers continue to dominate the rapidly growing global market. Wind power is indeed one of the biggest European industrial success stories in the past quarter of a century.”

// The European wind energy market is a complex and constantly changing

environment. Its development over the years has certainly been rocky but today, it is pretty widely accepted that wind energy forms an integral part of the energy mix and its contribution will only grow as time goes by and the demand for more and more clean energy grows.

The winds of change began blowing through the European energy market in 1982 when European engineers travelled to California, USA to explore the viability of entering the relatively untapped market of wind energy. Those engineers returned after just a few weeks in the States with a full order book and quickly started producing turbines. In the first year, around 30 were installed and the following year, 350 were shipped

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The Global Wind Energy Council (GWEC) published a report in 2015 that stated installed capacity around the world is now up to 432,000 MW. Secretary General of GWEC, Steve Sawyer said: “Wind power is leading the charge in the transition away from fossil fuels. Wind is blowing away the competition on price, performance and reliability, and we’re seeing new markets open up across Africa, Asia and Latin America which will become the market leaders of the next decade.”

But it’s not just good intentions that have seen this industry boom. The work of the private sector has been vital; innovation, creativity, advancement, invention and pioneering spirit have all been drivers of wind energy and

//WE ARE EXCITED ABOUT BUILDING THIS HUGE WIND FARM AND PUSHING THE BOUNDARIES OF THE OFFSHORE WIND INDUSTRY. HORNSEA TOGETHER WITH RACE BANK, WESTERMOST ROUGH AND LINCS WILL MAKE UP A GIANT PRODUCTION AREA OFF THE BRITISH EAST COAST//

34 / Issue No.14 / www.emea-energy.net

© DONG ENERGY

all of these positives come from the continents energy businesses.

One of the key players in the European energy mix is DONG Energy. The company has vast expertise in generating clean energy from wind and is looking to build on its experience. DONG was threw itself into the spotlight in February when it made the official announcement that it would embark on a project to build the world’s first offshore wind farm to exceed 1,000 MW in capacity and by a large margin become the world’s largest offshore wind farm.

HORNSEA ONE DONG, which is headquartered in Denmark and which was founded in

2006 following the merger of six Danish energy companies, will construct the giant Hornsea Project One offshore wind farm in the UK North Sea, 120 km off the coast of Yorkshire. The project is set to cover 407 km2 and will be made up of 240 wind turbines, each between 5 MW and 8 MW capacity.

DONG Energy is headed by CEO Henrik Poulsen who joined the business in 2012 after holding senior management positions in a host of other companies and industries. He is understandably enthusiastic about the Hornsea project and says: “We are excited about building this huge wind farm and pushing the boundaries of the offshore wind industry. Hornsea together with Race Bank, Westermost Rough and Lincs will make up a giant production area off the British east coast, supporting our efforts to deliver green and independent energy to society.”

The project is expected to be fully commissioned by 2020 and will contribute to the target set by DONG of installing 6.5 GW of offshore wind by 2020.

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DONG ENERGY

“Reaching our strategic target is important as volume is required to reduce the cost of a new technology. It is vital in order to make all players in the value chain advance up the learning curve. As such Hornsea will be another major step in our ongoing efforts to significantly reduce the cost of electricity for offshore wind,” Poulsen says.

Also a project from DONG Energy, the previous contender for world’s largest offshore wind farm was the Walney Extension, located off the coast of North West England in the Irish Sea. The final investment decision at Walney was taken in October last year and the announcement was made that the project would have a

capacity of 660 MW – Hornsea will be nearly double the size.

Brent Cheshire, DONG Energy UK Country Chairman, says: “Our decision to construct this giant wind farm underlines our commitment to the UK market. Hornsea Project One will support the supply chain and help create local jobs. To have the world’s biggest ever offshore wind farm located off the Yorkshire coast is hugely significant, and highlights the vital role offshore wind will play in the UK’s need for new low-carbon energy.”

UK WIND POWER In 2015, Europe added almost 14,000 MW of wind power to its mix with the UK being the fourth biggest contributor

//WIND POWER IS LEADING THE CHARGE IN THE TRANSITION AWAY FROM FOSSIL FUELS//

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www.emea-energy.net / Issue No.14 / 35

behind Germany, France and Poland (according to GWEC). The country is working towards a target of supplying 15% of all energy needs from renewables by 2020 as part of a European Union target to source 20% of the continent’s energy from renewables by 2020.

The UK is still described by many industry bodies as the world leader in offshore wind, with as much capacity already installed as the rest of the world combined.

Over the next few years, the UK will be bringing a number of large projects online, adding significant capacity to the country, continent and global totals.

One major project that is being overseen by DONG Energy UK is the Race Bank Windfarm – a sizeable 91 turbine development off the East coast of England.

Jason Ledden, DONG’s Construction Project Manager for Race Bank tells

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BUSINESS PROFILE

Energy Focus: “Our Race Bank offshore wind farm is expected to be fully operational in 2018 and will have a capacity of up to 580 MW, providing enough green energy to power over 500,000 UK homes.

“Construction work is currently ongoing and the unexploded ordnance (UXO) campaign has now been completed alongside the first phase of the boulder campaign, which saw the successful removal/relocating of 4,500 boulders.

“Looking forward, export cable installation is due to commence mid-2016 and foundation installation is due to commence in Q3 2016.”

The UXO campaign took place at the end of 2015 and saw more than 40 items from World War II detonated or removed from the North Norfolk coast. The items were discovered during the laying of export cables and included everything from small rockets to larger 1,000 lb high explosive bombs. Reports also confirmed that the most ‘attractive’

device discovered was a German Luftmine B ground mine containing a net explosive quantity (NEQ) of 698kg of hexanite.

DONG said that during this period it was working closely with the Marine Management Organisation and Natural England to negate any negative impact on the surrounding environment.

DONG’s Executive Vice President for Wind Power, Samuel Leupold said of the Race Bank development: “I’m very excited about the fact that we can start building the Race Bank

offshore wind farm… It is yet

another enabler for the growth of the offshore wind supply chain in UK, and the project will create jobs in the UK at all levels of the supply chain.

“The size of this project will enable us to utilize the economies of scale to continue to drive down cost of electricity produced by offshore wind farms. This is a must win battle and we are getting one step closer with the decision to build this offshore wind farm.”

Siemens was chosen as the preferred supplier of turbines for Race Banks and Michael Hannibal, CEO Offshore of the Wind Power and Renewables Division at Siemens said: “We are pleased that DONG Energy has once again chosen our 6 MW direct drive wind turbine, the workhorse for offshore wind power plants.

“We are working hard to bring the

//OUR RACE BANK OFFSHORE WIND FARM IS EXPECTED TO BE FULLY OPERATIONAL IN 2018 AND WILL HAVE A CAPACITY OF UP TO 580 MW, PROVIDING ENOUGH GREEN ENERGY TO POWER OVER500,000 UK HOMES//

//DONG ENERGY IS ABSOLUTELY COMMITTED TO THE UK AND WE HAVE INVESTED £6 BILLION HERE TO DATE//

36 / Issue No.14 / www.emea-energy.net

© DONG ENERGY

© DONG ENERGY

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costs of offshore wind energy down to make it competitive with other sources of power generation. Recent analysis show that our efforts are paying off: in the last five years the costs of offshore wind has fallen by 11%, according to study recently published by Renewable UK. Thus, the offshore industry is fully on track to meet the 2020 cost targets.”

Jason Ledden adds: “DONG Energy is absolutely committed to the UK and we have invested £6 billion here to date – we hope to double this investment by 2020. We recently announced that we will be building the giant Hornsea Project One offshore wind farm, capable of powering well over 1 million UK homes, off the Yorkshire coast after taking a final investment decision. With a capacity of 1.2 GW, Hornsea Project One will be the world’s first offshore wind farm to exceed 1 GW in capacity.”

In total, DONG Energy is currently involved in 18 wind projects in Europe; nine in UK, seven in Denmark and two in Germany.

In Germany, the Gode Wind 2

project followed Gode Wind 1 and together, both projects have a total capacity of 582 MW, enough to supply power to approximately 600,000 households. Construction of the Gode Wind 2 project started with the first installation works at sea in April 2015.

Gode Wind 2, which consists of 42 wind turbines started producing power and feeding into the German grid on February 18th 2016.

Trine Borum Bojsen, Country Manager of DONG Energy and responsible for the offshore wind business in Germany, said: “It is a huge milestone that we started producing power, and I am glad that with our wind farm Gode Wind 2 we can contribute considerably to the German energy transition.”

At DONG Energy, the years of experience and the excellent reputation that the company has garnered over the years make the company the perfect business partner for renewable energy project, throughout the value chain.

The company says that ‘energy is a

prerequisite for modern society’ and it is working hard to bolster the mix with a sound, well-though out strategy. “DONG Energy is working hard to provide more energy while reducing CO2 emissions from traditional energy production. We are converting the energy system to a more renewable and sustainable energy. We do this by introducing more offshore wind power and by increasing the use of biomass at our power stations. At the same time, we are increasing the production of oil and gas, which we will still be needing for many years to come in order to deliver stable energy,” and by working throughout the chain, DONG remains relevant in all areas and will be an important player for the long-term future of European supply.

www.emea-energy.net / Issue No.14 / 37

DONG ENERGY

DONG ENERGY

+44 (0) 20 7811 5200 [email protected]

www.dongenergy.co.uk

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© SIEMENS

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SIEMENS ENERGY

Electrifying Solutions the

World OverA true global powerhouse, Siemens focuses primarily on the areas of electrification, automation and digitalisation, and is

also among the world’s largest producers of energy-efficient, resource-saving technologies. It is a leading supplier of systems

for power generation and transmission as well as medical diagnosis, and has focussed much of its efforts of late on

building its presence in various territories across the world.

PRODUCTION: Timothy Reeder

// In March of this year came one major announcement from Siemens with regard its global

footprint, with the company having reached a landmark agreement with the Moroccan government to see it construct a factory to manufacture rotor blades for onshore wind turbines. This is not Siemens’ first foray into Morocco, where it initially supplied electrical installations to a cement plant in Casablanca as far back as 1929, but will create as many as 700 jobs and thereby triple Siemens’ footprint in the country.

Since 1956, the company has been continuously present in Morocco with its local legal entity Siemens Maroc, and has already put in place a number of key renewable energy projects such as the 300-MW-Tarfaya wind farm. Construction

of this new facility is expected to start as early as the spring of 2016, with operations scheduled to commence in spring of the following year.

Of this important development, Markus Tacke, CEO of the Siemens Wind Power and Renewables Division, explained: “We invest where we see strong business opportunities, and Morocco is the perfect location from which to serve the growing onshore wind power markets in Africa, the Middle East and Europe. The economy is strong, the political climate is stable, and Morocco has a young, skilled and motivated workforce. These factors make Tangier the ideal site for this new state-of-the-art factory.”

The planned production facility will have a surface area of some 37,500 square meters and will be located

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BUSINESS PROFILE

approximately 35 kilometres from Tanger Med port in Tanger Automotive City. Its central location between Europe and Africa gives Tanger Med port the ideal conditions for the handling and export of blades to various locations in Africa, the Middle East and Europe. Morocco is experiencing a vast and growing current energy demand, and clean and renewable power will be at the centre of meeting it.

TURKEYBroadening its operational scope yet further, Siemens also turns its attention to the installation of a 54-megawatt onshore wind power plant in western Turkey, in the province of Kinik north of the city of Izmir. The award of this order will see Siemens construct 17 direct drive wind turbines, each with a rating of 3.2 megawatts capacity, at the onshore project close to the coast of the Aegean Sea. Installation at the site will start in the summer with commissioning

scheduled for autumn 2016, at a site boasting excellent wind conditions which finds itself along a mountainous ridge exposed to strong breezes from the Aegean Sea.

Thomas Richterich, CEO Onshore at Siemens Wind Power and Renewables Division, explains the role of growing significance that Turkey plays in its plans: “With a fleet of around 100 wind turbines installed over the last six years, Turkey is becoming more and more important for Siemens. We are glad to collaborate with Esinti Enerji A.S., as Kinik has a high significance for the region – reducing CO2 emissions by approximately 100.000 tons per year and providing a large contribution to the local economy.”

//WE INVEST WHERE WE SEE STRONG BUSINESS OPPORTUNITIES, AND MOROCCO IS THE PERFECT LOCATION//

40 / Issue No.14 / www.emea-energy.net

© SIEMENS

© SIEMENS

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Siemens Wind Power entered the Turkish wind market in 2009. Since then 235 MW of generating capacity have been commissioned by Siemens Wind Power and another 350 MW are already under construction or contracted, with the local economy also benefitting from both the construction works and longer term employment, given the scope of service and maintenance of the projects.

The order for the key components of the Azura-Edo IPP power plant represents Siemens’s fourth dealing with Nigeria, with this latest comprising a long-term service contract spanning some 12 years. The turnkey plant will have a total installed electrical generating capacity of 459 megawatts, to which Siemens will supply three SGT5-2000E gas turbines, three

SGen-100A generators as well as the SPPA-T3000 control system for the turbines. This forms part of a planned power plant project by Azura Power West Africa in which a total capacity of 1.5 gigawatts is set to be installed, in several phases.

“This power plant project by Azura Power will strengthen the collaboration between Siemens and Nigeria. We are pleased that our customer is placing its trust in our proven SGT5-2000E gas turbine,” stated Andreas Pistauer, sales head of the region Southern, Western & Central Africa within Siemens Power and Gas.

CARON NEUTRALWithin the context of such significant developments, Siemens aims to be the world’s first major industrial company to

achieve a net-zero carbon footprint by 2030, which will see it halve its carbon dioxide emissions before 2020.

Siemens will invest some €100 million over the next three years in order to reduce the energy footprint of its production facilities and buildings. By investing in innovative technologies � such as energy management systems and automation systems for buildings and production processes as well as energy-efficient drive systems for manufacturing � Siemens expects to slash its energy costs by €20 million a year.

“Cutting our carbon footprint is not only good corporate citizenship, it’s also good business”, summed up Joe Kaeser, President and CEO of Siemens AG.

//WITH A FLEET OF AROUND 100 WIND TURBINES INSTALLED OVER THE LAST SIX YEARS, TURKEY IS BECOMING MORE AND MORE IMPORTANT FOR SIEMENS//

SIEMENS ENERGY

+49 180 524 7000 [email protected]

www.energy.siemens.com

SIEMENS ENERGY

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TOTAL

Securing Supply

Further Afield

One of the major global players in the sector, Total is a leading international oil and gas company with operations in more than

130 countries. It specialises in the production, refining and marketing of oil and manufacture of petrochemicals, committed to sustainably producing the oil and gas required the world over.

PRODUCTION: Timothy Reeder

// Total has built up a wealth of experience and expertise in the United Kingdom over

more than 50 years and is today one of the country’s leading oil and gas operators. Its activities span the entire energy chain, from the exploration and production of crude oil and gas, energy trading and retailing and refining through to the manufacture and marketing of petrochemicals. Total’s production in the UK comes from several operated fields, all located offshore in three major zones, these being the Alwyn/Dunbar area in the Northern North Sea, the Elgin/Franklin area in the Central Graben region and the newly developed Laggan-Tormore hub in the West of Shetland area.

The Laggan-Tormore development is an innovative subsea-to-shore development concept and the first

of its kind in the UK. Located in 600 meters of water, the gas and condensate fields will ultimately produce 90,000 barrels of oil equivalent per day (boe/d), while having no offshore surface infrastructure means that it benefits from both improved safety performance and lower operational costs. Arnaud Breuillac, President of Exploration & Production, described the development as “a key component of our production growth in 2016 and beyond. By opening up this new production hub in the deep offshore waters of the West of Shetland, Total is also boosting the United Kingdom’s production capacity and Europe’s energy security.”

This site, where production began in February of this year, consists of a 140 kilometre tie-back of four subsea wells to the new onshore Shetland Gas Plant, which itself boasts a capacity of

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BUSINESS PROFILE

leader in the downstream sector of the Nigerian oil and gas industry since 1956. This is in large part thanks to an extensive distribution network of over 500 service stations nationwide and a range of top quality energy products and services. The Egina oil field was discovered in December 2003, 150km off the coast of Nigeria, through the drilling of the Egina-1 well. The five wells drilled in total on the Egina field encountered between 60m and 80m of oil in Miocene sands, oil reserves estimated at 550 million barrels and rated at 28° API. Initially intended to be developed as a subsea tieback to the Akpo floating production storage and offloading vessel (FPSO), the subsequent major discoveries in the

500 million standard cubic feet per day. Following treatment at the gas plant, this is then exported to the mainland via the Shetland Island Regional Gas Export System (SIRGE). The condensates can then be exported via the Sullom Voe Terminal, dedicated to handling production from oilfields in the North Sea and East Shetland Basin. With almost one fifth of the UK’s remaining oil and gas reserves thought to lie in the area to the west of Shetland, the Plant is expected to be capable of supplying energy to some two million homes.

NIGERIATotal Nigeria Plc represents another of Total’s Marketing and Services subsidiaries, and has remained the

area led to its standalone development.Egina is Total’s third deep

offshore development in Nigeria, currently under development and with production scheduled to begin in 2018. The field is being developed as a collaboration between serval parties, with Total Upstream Nigeria (24%) working in tandem with CNOOC (45%), Sapetro (15%) and Petrobras (16%). It is located around 20km away from Akpo field and covers an area of around 500 square miles, situated at a water depth of up to 1,750m. The field infrastructure at Egina will comprise an FPSO unit, an oil offloading terminal and subsea production systems such as risers. It will also entail some 52km of oil and

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TOTAL

water injection flowlines, 12 flexible jumpers, 20km of gas export pipelines, 80km of umbilicals, and subsea manifolds. The site’s FPSO will measure approximately 330m in length, 61m in width and 33.5m in depth. It is expected to have an oil storage capacity of approximately 2.3 million barrels, and a production capacity of 208,000 barrels each day.

The Egina field is expected to come on stream in 2018. Production from the Egina-5 well is estimated

to reach 12,000 barrels a day, while the oil field in total is expected to produce at a peak production rate of 200,000 barrels per day. For Total, the emphasis at this significant project is also on Nigerian content. Several thousand local jobs will be created and extensive local infrastructure, in large part in the form of yards, will be either upgraded or built, again contributing to Nigeria’s sustainable development. Drilling began in December 2014 and will see two rigs

active for a total of 3,000 days, in order to drill 44 wells in water depths ranging between 1,400 and 1,700 meters. “This is the deepest offshore project ever operated by Total,” stated Jean-Michel Guy, Executive General Manager of the Egina Project. “With production of 200,000 barrels per day, it will contribute significantly to achieving Total’s 2017 production objectives.”

//THE EGINA PROJECT WILL CONTRIBUTE SIGNIFICANTLY TO ACHIEVING TOTAL’S 2017 PRODUCTION OBJECTIVES//

TOTAL

+44 1224 297000 [email protected]

www.total.co.uk

www.emea-energy.net / Issue No.14 / 45

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PREMIER OIL

Solan Oilfield Nears ProductionA leading UK-based independent exploration and production company, Premier holds oil and gas interests across the North Sea, South East Asia, Pakistan, the Falkland Islands, Africa and Brazil. In the UK these interests are spread across eight producing fields, notably its 2009 and 2012 acquisitions of Oilexco and EnCore respectively, as well as the significant Solan oilfield development located west of the Shetlands in the North Sea.

PRODUCTION: Timothy Reeder

// The discovery of the Solan oilfield by Hess Corporation, a global company devoted to

exploring oil, gas and energy solutions, was made in 1991, before it was further appraised by Chrysaor with two wells in 2008 and 2009. Premier acquired a 60% equity interest in the Solan field in May of 2011, while in April 2012 approval of the Solan Field Development Plan was granted by the Department of Energy and Climate Change (DECC). This allowed the drilling of the site’s four development wells to follow, with the first pair completed in the summer of 2014. Onshore construction of the subsea storage tank, jacket and topsides was completed in 2014, a milestone on which Tony Durrant, CEO, commented: “We are very pleased to have successfully installed the Solan facilities within two and a half years of receiving approval from the UK government. This achievement was only made possible by the co-operation and skills of the teams and contractors involved.”

The site’s facilities were installed during August and September of the same year, while Premier went on to successfully acquire Chrysaor’s 40% interest in the Solan field for nil upfront consideration in May 2015. It is expected that the Solan oilfield will ultimately produce approximately 40 million barrels of oil, with an estimated initial production rate of 24,000 barrels of oil per day. The project will entail the drilling of four subsea wells - two producers and two water injectors - tied back to a processing deck and supported by a jacket. Oil will be stored in a subsea tank prior to being offloaded to shuttle tankers, and it is planned that after one year of operations the facilities will not need to be permanently manned.

Commissioning of the facilities has been hampered by poor weather in the North Sea since its commencement in November 2014, with low productivity over the winter period only compounding this. However, the Victory flotel was replaced as planned with the

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BUSINESS PROFILE

Siem Spearfish ‘walk-to-work’ vessel, a Multi-Purpose Offshore Vessel designed for subsea operation duties such as construction and installation work, inspection and maintenance, which provided continuity of resources on the platform until the arrival of the larger Regalia flotel in August. The setback in the commissioning schedule underlined the scale of the challenges involved when operating in the stormy waters off Shetland. However, such majors as BP and Shell also appear to remain enthusiastic about the area, into which they are investing significant sums developing giant fields.

Premier itself commented: “With improved weather, better progress has been made with the commissioning work on the Solan facilities.” In November 2015, Premier expected to see the first oil from the Solan field by the end of the year. However, the West of Shetlands area experienced an unprecedented number of different storm fronts during November and early December, which the company explained was hugely damaging to its progress. “After a favourable weather

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CONSTRUCTIONWORK IN PROGRESS AT SOLAN OIL PLATFORM

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period for much of September and October, the West of Shetlands area experienced an unprecedented number of different storm fronts during November and early December. This resulted in poor bridge connectivity between the flotel and the Solan platform and a number of lost days,” The schedule was then revised to reflect this, with progress continuing to be made on the final commissioning of the offshore installation systems required for first oil, despite these unprecedented weather conditions in the West of Shetlands area.

The ramp-up of the Solan field’s production will be a key focus for Premier in the coming months, particularly given

the company’s writing off $558m of its value. This came as a result of lower near-term oil price assumptions used in balance sheet tests, which has seen the company forced to significantly downgrade its valuation of the asset due online shortly. Premier did also report, however, average production of 57,600 boepd for 2015, putting it ahead of market guidance in spite of asset disposals. Solan aside, the group’s recently announced acquisition of E.ON’s North Sea assets is expected to add a further 15,000 boepd to its production profile for 2016.

Meanwhile, it highlighted that the Catcher field development, also in the North Sea, is on schedule for a 2017 start

and it is currently under-budget. Tony Durrant summed up how well placed Premier is to tackle these challenging conditions. “As we move into 2016 there remains considerable uncertainty over the direction of oil prices. Premier was quick to react to the fall in the oil price, rationalising our business while retaining our core skills and never compromising the safety or performance of our operations. A low operating cost base ensures that we can operate effectively through a period of low oil prices and positions us well to take advantage of any future recovery.”

//PREMIER WAS QUICK TO REACT TO THE FALL IN THE OIL PRICE, RATIONALISING OUR BUSINESS WHILE RETAINING OUR CORE SKILLS//

PREMIER OIL

+44 20 7730 1111 [email protected]

www.premier-oil.com

PREMIER OIL

www.emea-energy.net / Issue No.14 / 49

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EXHIBITION CALENDAR

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KEY UPCOMING EVENTS ACROSS THE INDUSTRYOur regular update to help you keep track of important events and exhibitions taking place across the energy sector.

INTERNATIONAL SAP CONFERENCE FOR OIL & GAS12 - 14 APRIL 2016This unique event has been specifically designed to give you an authentic view of what it takes to innovate business processes, increase transparency, and ultimately drive business excellence. CIO’s and senior executives from leading oil and gas companies will share how they are using cutting-edge innovations to overcome common challenges in a reshaped economy, simplify their business and drive agility.

LNG 1811 - 15 APRIL 2016LNG 18 features the largest number and highest level of LNG industry leaders worldwide as plenary speakers. For the first time the CEOs from Shell, Chevron and Woodside will jointly address delegates in the Opening Plenary speaking about “The Transformation of Gas”. Australia is developing the fastest growing LNG projects worldwide and is on track to becoming the largest LNG exporter in the world by 2020. LNG 18 will showcase current Australia’s world-firsts and innovative projects such as Floating LNG, subsea technology and coal bed methane to LNG.

PIPELINE OPERATIONS & MANAGEMENT MIDDLE EAST 201611 - 14 APRIL 2016This major multi-track conference will bring together experts from within and outside the region to discuss some of the latest technologies and concepts for maintaining and operating oil and gas pipelines in the most efficient, cost-effective, and professional manner, while taking account of the environmental and other concerns of the communities through which they pass.

//TABLE OF ALL EVENTS:EUROPEAN OFFSHORE ENERGY 2016 Birmingham NEC, UK 12-14 April

LNG 18 Perth Convention Centre, Australia 11-15 April

WORLD NUCLEAR FUEL CYCLE 2016 Ritz-Carlton, Abu Dhabi 04-06 April

SUSTAINABLE NUCLEAR ENERGY CONFERENCE East Midlands Conference Centre, UK 12-14 April

INTERNATIONAL SAP CONFERENCE FOR OIL & GAS The Hague 12-14 April

GHANA OIL & GAS SUMMIT Accra ICC 20 -21 April

MOZAMBIQUE MINING, OIL & GAS AND ENERGY CONFERENCE AND EXHIBITION Maputo ICC, Mozambique 27-28 April

PIPELINE OPERATIONS & MANAGEMENT MIDDLE EAST 2016 Gulf Hotel Convention Centre, Manama, Bahrain 11-14 April

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Energy Focus EWEA.indd 2 03/03/2016 08:43:32