© 2013 Chevron

LNG Adaptation & Process

Change

Environmentally Friendly Drilling Systems Program

September 5, 2013

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Hazard ID and Tenet of the Day

Pressure: Tenet 5

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Energy applied by a liquid or gas

which has been compressed or is

under a vacuum.

Examples: pressure piping,

compressed cylinders, control

lines, vessels, tanks, hoses, and

pneumatic and hydraulic

equipment

Always meet or exceed customer’s

requirements

General description: Chevron’s goal is to be the global energy

company most admired for its people, partnerships and

performance. Whether working as a company representative,

contractor or partner with interest in a joint project, it is important

that all team members earnestly strive to meet the expectations,

agreements, requirements, standards and goals of the endeavor

that is set before them. This commitment to operational excellence

is one of the defining principles guiding our efforts to achieve this

goal and it is up to each of us as individuals to strive for a level of

performance indicative of a world-class organization.

Examples of Tenet 5: Customer’s Requirements topics

•We adhere to the ten Tenets of Operational Excellence

•We follow the two key principles: Do it safely or not at all and There

is always time to do it right

•We follow company policies and procedures

•We are committed to supporting with the Chevron Way

•We strive to conduct incident free operations

•We report all incidents, accidents, near misses and environmental

events

•We exercise Stop Work Authority when appropriate

•We believe all incidents are preventable

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Forces behind change

Community Stewardship –

– Right thing to do in the communities we operate

Environmental Impacts

– Reduces Spills

– Reduced Emissions

– Lower SPL’s (noise impacts – 100% gas operation)

Limits contractor exposure –

– No more daily fuel deliveries, fewer trucks through townships

Operational Improvements

– Reliable consistent gas quality with LNG

– LNG supports high volume – extended completions operations (sleeves)

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Comparisons analyzed

Bi-Fuel Applications

– No/Low torque loss

– Lower entry costs

– Best with OEM support

– Plug-n-play operation

Mono-Fuel Applications

– Low/No spills

– Meet Tier IV emissions

– Torque demands can be

offset with camp gen

(drilling)

– Extended OEM service

intervals

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Technology Adaptation – Chevron’s learning curve

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Stranded Operations

– Compressed Natural Gas (CNG)

– Liquefied Natural Gas (LNG)

Currently delivery through LNG Partnership(s)

• Conducive to asset programs

• Manageable

Technology adaptation

Drilling & Completions partnership

growth

Reduced our organizational burdens

– provide turnkey operation.

• LNG part of long-term programs

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Challenges faced for deployment – natural gas supply

(LNG)

Risk Management

Management of Change

Process Safety Information

Operating Procedures

Technical Codes and Standards

Safeguards, ESD, Facility Siting

Maintenance Reliability / Asset Integrity

Managing safe Work / Permit to Work / JSA /

Hazard Assessment

Internal Audits & Assessments

Continual Improvement by LNG Suppliers

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Example Process Change

Methane Supply Lines / Return

Lines

– Develop Standard

• Explore high grade CS

or SS application.

• Decommissioning /

Removal / Re-use of

buried gas lines

• Is poly sufficient in the

event of RGFS failure or

spill?

• Well pad

standardization and pre-

planning.

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Key Process Safety Findings

Process Safety Information:

Up to date P&IDs regarding LNG

units

Hazardous/Electrical area

classification – for RFS startup

Plot plan to be standardized with

business partner

MSDS

Operating Procedures:

In place for start-up, shut down,

and refueling

Classroom training for field

personnel and tracked through

Chevron LMS

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Power cord from the rig

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Conclusions

Natural Gas powered equipment is not a cheaper alternative

to Diesel

– Best for our environment

– Safe when operated correctly

– Provides sustainable operation for Operators and Drilling

Contractors

– LNG not likely to be replaced by field gas near future.

• LNG plant expansion (demand) – Marcellus gas

• Fracturing – extended operations

• Cementing – future operation – shared with rig

Must be operated safely as with any fuel

– Adaptation and sharing of “best practices” for supply

lines, manifolds, compression, etc.

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