7th Romania Gas Conference & Exhibition 2015 Innovative technological solutions and services for competitiveness

No one doubts today Romania’s role, which due to its geographic location, wealth of resources, infrastructure and to the professional training level, will have a big say in regard to the security of gas supply and stability in the region. How will our country capitalize these advantages and especially the chance to participate to European projects of strategic importance were the issues debated by the participants to the seventh edition of Romania Gas Conference held by mid November 2015 in Bucharest. The conference was attended by government officials and by regulatory agencies officials, independent experts, consultants, specialists, analysts, top managers and project managers in the field.
The conference focused on the analysis of the natural gas market in Romania and in the region, on the work and plans of industry’s major players, the potential of the Black Sea, the importance of interconnecting Romania’s transport system to the countries in the region and in particular the contribution of the new technologies to increase production, without overlooking, however, issues related to the tax system in the oil and gas industry.

deschidere1OFFICIALS AND EXPERTS ON THE PROSPECTS OF GAS DEVELOPMENTS IN ROMANIA AND THE BLACK SEA REGION

With an experience of over 35 years in the oil and gas industry, Mihai Albulescu - Secretary of State for Energy, Small and Medium Enterprises and Business Environment, highlighted the challenges for Romania in terms of applying the European directives in the national legal framework, the main corridors of gas crossing Romania and their importance (ranking first is the BRUA corridor, Bulgaria - Romania - Hungary - Austria), and the national company Transgaz’s opportunity to transport natural gas, following the discoveries in the Black Sea, to the west of the old continent, thereby contributing to Europe’s interconnection and to its energy market integration.
Yet, the official issued a warning about the major problem of the drilling contractors in the country (ACFR) in the current market situation, and reiterated the issue of training the personnel who will work in the field in the future, given that the schools for operators and foremen were closed down, and the only institution of higher education to train professionals is currently the Petroleum-Gas University in Ploiesti.
The critical situation of the oil and gas industry was also highlighted by the President of the Romanian National Committee of World Energy Council (CNR-WEC) and Chairman of the Committee for Industry and Services with the Chamber of Deputies, Iulian Iancu, who recalled that, in the heat of the battle and of the geopolitical games for access to resources, it is for the first time when such a fall in investments (by 20-35%) is registered for two consecutive years, projects and works being cancelled and employees layoffs exceeding 11%. “The industry is going through a shock,” the deputy said, a situation which will continue in 2016, he added, highlighting the main negative consequences and the possible threats following the decline of the oil and gas industry in recent years.
Special mention was made to the EU’s need to address this industry and the new European approach, in which the major factors are security, solidarity and confidence between partners. On a fully integrated and efficient energy market, focus should lay on innovation, research and competitiveness. The diversification of supply sources at European Union level (natural gas transport pipelines, LNG and the storage facilities) is a prerequisite for ensuring the stability in the region and for the future of the energy single European market, the CNR-WEC President added. He also referred to the strengthening of foreign relations with the key players in the field (Azerbaijan, Turkmenistan, Canada, USA), and also to the development of the relations with Russia in order to ensure the security of supply, by observing the European rules on the development of the gas sector, under conditions of economic efficiency and environment protection.
In the general context of vulnerabilities on the oil market, Rodin Traicu, Member of the Committee for Industry and Services with the Chamber of Deputies, also expressed concern about the de-professionalization of the oil and gas sector, mentioning not only the senior staff, but also the direct production staff, with major implications for the hydrocarbon output growth.
Mihai Ramniceanu - Director General within the National Regulatory Authority for Energy (ANRE), noted one of the institution’s main achievements in 2015, namely the completion of the regulatory framework for the use of compressed natural gas to propel motor vehicles and specified, referring to priorities, the support for major infrastructure projects in the oil and gas industry.
A thorny issue, i.e. the royalties, was raised by Sorin Gal - Director General within the National Agency for Mineral Resources (NAMR). According to him, the royalties’ level will remain unchanged, and the section of the old law will be fully transposed into the new law, specifying that additional incentives will be offered for the fields located in the deep sea, which is the main challenge for the coming years in regard to the offshore area. The official added that the project was completed by the Ministry of Finance, following that the law is published for public debate while for the deposits, such as the offshore or depleted ones, royalties are to be reduced by up to 10%.
A special warning from NAMR mentions the decrease in gas consumption, while the production remained constant, a situation discouraging ACFR, following the delay of Romgaz’s development programmes (deferral in digging some wells). Currently, the natural gas production has been stabilized to about 11 billion cubic meters per year and for the next period estimates predict a similar value. The NAMR representative also mentioned four important discoveries in 2015 - one in the offshore area and three in the onshore area.
In addition, CNR-WEC President, Iulian Iancu, said he will propose to amend the legal framework so that NAMR, an institution with a crucial role in managing the country’s resources, to become the authority in the field, similar to ANRE, a status that would confer greater power and prestige.

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PRACTICAL APPLICATIONS, ENVIRONMENTAL IMPACT AND STORIES FROM THE FRONT LINE

The sustainable solutions from Siemens dedicated to the oil and gas industry include a portfolio of compressors providing long-term efficiency, availability and security. Thus, after a brief classification of Dresser-Rand reciprocating compressors, according to the principle of operation, Tomasz Rynkowski - Head of Client Services HSRC ERA, listed the most important practical applications of reciprocating compressors for various sectors of the industry: refining processes that require high pressure delivery of essential gases; transportation of gas; chemical plants, refrigeration plants; petrochemical refinery; gas gathering, processing and CNG and LNG storage applications.
This type of compressors, revealed by the Siemens representative as being the best solution for high compression ratio, fluctuating inlet parameters and controlled flow, have a broad use throughout the chain of activities in the oil and gas industry (upstream, midstream, downstream). Most units are distributed as compressor packages, complex compression installations with Dresser-Rand reciprocating compressors.
Schlumberger, the leading supplier of technology, integrated project management services and IT solutions to the oil and gas industry worldwide, has expressed its viewpoint on responsible enhancement of the natural gas production. Referring to the ‘Golden Rules’ of the Golden Age of Gas, namely the principles allowing governments, industry and other stakeholders to address the environmental and social impacts, Jonathan Abbott - Stimulation Technical Manager for Continental Europe, stressed the role of technology and integration. Technology, within the development strategy of the mentioned resource, contributes to reducing the impact on the environment, with considerable implications for the community and for the success throughout the entire process, from exploration to production. Concluding, the importance of responsible gas development was highlighted by Jonathan Abbott, who launched the invitation to the industry representatives to get involved together in order to achieve this goal.
The issues of environmental protection in the oil scaffolds were synthesized in the work released by a team of teachers from the Petroleum-Gas University of Ploiesti - Univ. Prof. Dr. Eng. Lazar Avram, Dr. Eng. Dipl. Valentin Tudorache, Univ. Prof. Dr. Eng. Niculae Napoleon Antonescu and Assistant Dr. Eng. Monica Stoica.
Given that the extracting industry and the oil processing industry affect the environment through the products involved (gaseous and liquid hydrocarbons lost during extraction, transportation and storage of crude oil and of petroleum products), but also due to technical and/or human reasons, very different and sometimes impossible to control, the authors point to a set of general principles and criteria that the environmental protection strategy in Romania should comply with: sustainable development; avoiding pollution by taking preventive measures; preserving human health; biodiversity conservation; preservation of cultural and historical heritage; defence against natural calamities and accidents; maximum benefit/cost ratio.
In Romania, an area of about 50,000 ha of soil is affected in various degrees by contamination with oil, salt water or mixed blends.
An unprecedented intervention in the technical discussions was the one of Zeta Petroleum representative - Andy Morrison, former CEO and currently Advisor to the Board. With high experience in the energy field, specialized in strategic management, he revealed an overseas SME perspective on developing gas business in Romania, trying to answer some key questions. Why are the small and medium-sized enterprises (SMEs) attracted by Romania - strengths, weaknesses, opportunities and threats? How do these companies see their activity in Romania? In his view, by analyzing the encountered impediments, things could be improved by using the following levers: investments in infrastructure, including in regional natural gas transport interconnectors; stimulating gas utilization technologies; promoting liberalization, dynamism and the newcomers on the gas market; introducing, in the future, of technologies based on ‘clean coal’; efforts for a larger cake, not for a bigger slice.

NEW ANTI-CORROSION TECHNOLOGIES FOR PIPING SYSTEMS AND TANKS

Corrosion, a common phenomenon for the systems of transmission, distribution and storage of natural gas, calls for effective solutions to control and minimize the effects.
The most advanced corrosion protection solutions for trenchless pipeline laying through multilayer coating were presented by Manuel Müller - Technical Customer Service Manager, Salzgitter Mannesmann Line Pipe. The analysis of various types of standard coatings, the technologies and materials used and the non-conventional laying procedures of pipes highlighted the need to develop special solutions for non-conventional laying procedures (including trenchless and sand bed less laying), especially when additional mechanical protection is needed.

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Of the special solutions, using the coating with flexible cement membrane (FCM) is characterized by an optimal mechanical protection of the pipes during transportation, excavation; interlocking of cement mortar and polyethylene coating contributes to the partial takeover of longitudinal loads; the development of the polyurethane (MAPUR) - field coating opens the supply possibility for advanced pipe system with shortened construction times; the using of conventional systems of the field coating is anytime possible. As an alternative, the polyamide coating of steel pipes has in turn a number of advantages: extraordinary impact resistance and toughness, even at low temperatures, excellent resistance to stress cracking, outstanding abrasion resistance, low coefficient of sliding friction.
Marc Rausch - Area Manager Eastern Europe, Canusa CPS, continued with a set of guiding principles based on the company’s wealth of experience in the execution of projects for pipelines, focusing on joint coating systems Factory Grade 3LPE (three layers of polyethylene) and 3LPP (three layers of polypropylene). In general, the type of pipe anti-corrosion coatings should consider various parameters such as the operating temperature, pipe diameter, mechanical forces associated with pipelay, external pressure, flexibility, local ambient conditions, type of mainline coating and thickness, contractor’s capabilities (equipment, personnel, etc.), the Canusa representative underscored.
He stressed that while the coating is applied to a compatible material, the key to success lies in: the proper surface preparation, sufficient and uniform heat energy, controlled and consistent application of pressure for a controlled and consistent amount of time. Factory Grade Systems may have a slight cost impact, but it is a minor small investment considering the significant risk associated with failures. Use of efficient equipment can actually add to productivity and lower project costs. Further automation can also improve cost certainty, as well as process control.
Combining the active and passive methods for corrosion protection, as well as ways to maximize the protection of pipes, both were put forward by Przemyslaw Wiackiewicz - Export Manager, Atagor, Poland. The protection of pipes against corrosion - by the use of corrosion-resistant materials (high grade steel, non-corrosive metals, composite materials) or by changing the installation environment (reducing the moisture, minimization of mechanical load or vibrations) - can be complicated, costly and time consuming.
Under such conditions, various measures to reduce corrosion are to be used: protection coatings (the principal method, but never 100% effective), cathodic protection, corrosion inhibitors, complex corrosion protection (a combination of coatings and cathodic protection). After explaining the weaknesses of anti-corrosion protection and the methods to combat them, the representative of the Polish company showed the most effective solutions to the problem – the use of Inover technologies (Stone and PUPP) and of cathodic protection, supported with examples of practical cases.
The marginal assets recovery using the Zap-Lok Tuboscope technology method from NOV Wellbore Technologies, presented by Dr. Ben Chapman - Director for Eastern Hemisphere, captured the audience’s attention in particular. The system, discovered more than 45 years ago, as a method of interconnecting pipelines, a more reliable and safer method than welding, was used to install more than 100,000 km of pipelines onshore and offshore worldwide and for over 6,500 km of subsea pipelines installed at a depth of over 110 meters in the Gulf of Mexico, West Africa and South East Asia. The essential steps of the interconnection process are: the preparation of pipe ends, followed by the coating process, consisting of pre-cleaning, thermal cleaning, internal blasting, internal primer application, pre-heating, powder application. Tuboscope ensures the system installation, training and certification of the contractor’s personnel. Conclusions show that the Zap-Lock method helps reduce the investment budget (CAPEX), reduces the operational budget (OPEX) and also reduces the life cycle costs and ensures longevity through increased mechanical integrity.
About the technologies to reduce the influences between high voltage (HV) power lines and the buried pipelines (corrosion induced by stray currents) we received details from Liviu Ancas - engineer in the Department of Research and Design with Transgaz Medias. The exposure, structured in four chapters, included a mathematical model to analyze the influence of high voltage power lines on buried metallic pipelines; measurements of buried pipelines nearby HV power lines; measurements carried out to highlight the adverse effects of stray currents coming from HV power lines on underground high-pressure gas transit pipes; the design, testing and simulations of a system designed to mitigate stray currents; the study’s conclusions.
There were also reviewed the factors that influence the corrosion processes of gas transportation pipelines under the action of dispersive alternative stray currents, an important observation is that at a current of 1 A, in 40 years (an interval corresponding to the calculations for the projection of pipelines for the transportation of natural gas) there is a weight loss of 360.5 kg, an impressive figure. Regarding the corrosion under the AC currents, the electric currents are lower, of some mA. Thus, for a pipe with a wall thickness of 8 mm, with the polyethylene insulation having an insulation failure on an area of 1 cm2, at a density of iron of 7.860 kg/m3 and a current of 0.1 mA during 6.8 years, the pipe wall is holed.

PROCESS EFFICIENCY THROUGH INNOVATION AND VALUE CREATION

Regarding innovation, the best example is the Romanian Research and Development Institute for Gas Turbines COMOTI, the only specialized unit in the country which integrates scientific research, design, production, testing, technology transfer and innovation in the field of aircraft turbo engines, industrial gas turbine engines and high speed bladed machines. Incidentally, last year, the institute has inaugurated a new research infrastructure for civilian, military and industrial purposes, which enables the researchers to develop new programmes and research projects at national and European level.

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The solutions for the natural gas market, presented by the Technical Director of the Institute, Gheorghe Fetea, include high efficiency compression systems (centrifugal air compressors, screw compressors), the group expander - electric generator, co-generation thermal power stations, centrifugal air compressors. Among these, the family of high pressure discharge screw compressors (developed in partnership with GHH-Rand) stands out. The institute also provides automation solutions for gas turbines, compressors and electric motors, maintenance and service for the automation systems and electric drives in the oil and gas field, technical assistance, training of the personnel; design, 3D modelling and numerical simulations in the energy field.
The problem of fugitive emissions, common in various activities in the oil and gas field, was addressed by the Bureau Veritas Romania representative - Claudiu Gavrila, New Product Coordinator, who presented the most effective solutions to solving it. By enumerating the determinants of the phenomenon, in various environments, the specialist indicated the general methods of inspection, the detection and measurement technologies, the equipment used, and the operating principle, both in the case of pipes above ground and underground. The main benefits identified relate to: compliance with local legal regulations, health and safety improvement, environmental care, maintenance improvement, return on investment - reducing production losses, image improvement - extreme proximity of residents.
Specialized in detecting all types of fluids, the ECS Division of Bureau Veritas is No. 1 in Europe in terms of controlling and reducing the fugitive gas emissions and of the volatile organic compounds (VOCs), the company representative also said.
Hasel Invent is a company operating in the field of automation for hazardous environments, carrying out works of systems integration, design, technical support, installation, repairs and maintenance for installations and electrical equipment for oil and gas industry. During 2008-2014 it dealt in particular with the development of products exclusively intended for the automated management processes for the natural gas industry. The two representatives, Mircea Popescu - Business Development Manager, and Alecu Sorin Huidan - Director General, clearly and concisely described the company profile, the main lines of business, the future plans in which a leading role lies with innovation, and the most important grounds to choose Hasel Invent.
For the companies in the oil and gas field, the BlueCielo Asset Lifecycle Information Management solution is an optimal tool for improving the efficiency and reliability of production assets in order to control operational costs, in a more sustainable and responsible way, said Marijana Eijkenaar - Partner Manager Europe, BlueCielo ECM Solutions.
Considering the multitude of challenges the energy companies and others face, BlueCielo provides them with the solution Asset Lifecycle Information Management (ALIM), which brings major benefits: faster time to value by using pre-configured templates based on industry best practices and standards; faster path to adoption by leveraging the latest BlueCielo technology, industry best practices, and the expertise of the BlueCielo Professional Services team; reduces risk by implementing a reputable and proven system in shorter time frame, with significantly higher chances of project success; offers solutions to meet the growing business needs and maximize the competitive advantage. Mensch und Maschine German group, by partnering with BlueCielo, provides ECM and ALIM solutions, to support companies with the vision and experience in the implementation of dozens of projects to streamline work processes.
A modern approach to the production and use of biogas and bio-methane in Romania was made by the Secretary General of Biofuels Association in Romania (ABR), Nicolae Sdrula, and by the technical coordinator of the Biogasinno Cluster, Simina Stefan. Starting from the basic principles of the EU strategy on promoting renewable energy sources and considering the growing needs of fossil fuels for transportation, the two authors of the paper suggest an important alternative on short and medium term. The study is focused on practical and concrete examples of the use and production of biogas and also includes a brief history of biogas in Romania. The paper reveals the basic outline of a biogas plant, the manufacturing technology, the biogas production situation in Romania, the sources of raw materials, areas of use for bio-methane, etc. By establishing the Biogasinno Cluster - Sustainable Energy, the founders foresee the setting up of a national biogas market and its integration into the European market.

THE NEW TAX REGIME IN THE OIL AND GAS INDUSTRY AS SEEN THROUGH THE EYES OF OPERATORS

The Romanian Petroleum Exploration and Production Companies Association (ROPEPCA) is a strong voice in the industry and also a promoter of the onshore segment, in order to support the development, diversification and competitiveness of the industry. Currently bringing together 19 members, the association has a respected position and a major say in the oil and gas industry. ROPEPCA’s view on the new tax regime in industry was submitted to the participants at the conference by the president of the association - Artur Stratan. In his speech, he insisted in particular on the legal and tax implications of the new royalties system.

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Reviewing the strengths, the weaknesses, the risks and the associated opportunities, ROPEPCA President summarized the factors with significant impact on the Romanian economy: the upstream segment of the oil and gas industry is the main driver of the national economy, with the largest contribution to the state budget; ROPEPCA employs 18,200 people; the association’s investments in 2014 amounted to EUR 1.5 billion, while the turnover in the same period amounted to EUR 5 billion and the contribution to the state budget was of EUR 2.5 billion. Also, Artur Stratan underlined the negative effects of excessive taxation in Romania as compared to the European level, and mentioned the provisions of the new tax regime that will come into force as of 2017.
Also about the legal provisions, referring to the upstream projects in the Black Sea, spoke Bryan Jardine - Managing Partner, Wolf Theiss Romania. The viewpoint of Wolf Theiss, a top law firm in the business sector in Central and Eastern Europe (CEE), which recently celebrated 10 years of activity in our country, emphasized that Romania aspires to improve its status in the region and also to become energy independent but also a genuine energy hub in Eastern Europe. The Wolf Theiss representative included in his presentation the latest projects and investments in regional natural gas interconnector pipelines (Eastring, Southern Corridor, Central Corridor for gas transportation from the Black Sea), the situation of exploration operations in the Black Sea and the environmental implications, as well as the new legal provision regarding the activity in the area – Directive no. 30/2013 on the safety of offshore oil and gas operations, not yet implemented in Romania.
On behalf of KPMG Romania, a company which provides services of audit, tax and business consulting, Dragos Doros - Director Taxation Services, explained the most significant changes of the tax system with implications including in the oil and gas industry, offering several recommendations to those interested. One action plan initiated by the Organisation for Economic Cooperation and Development (OECD) against the erosion of the tax base and the profit transfer BEPS (Base Erosion Profit Shifting) has as stated aim to encourage greater transparency, a more efficient reporting framework and closer cooperation between the countries in which multinationals operate.

ROMGAZ, MAIN DIRECTIONS OF DEVELOPMENT IN EXPLORATION AND PRODUCTION OF NATURAL GAS

The largest producer and main supplier of natural gas in Romania, with a history of more than 100 years, has revealed its main objectives and directions of business development in the future, as well as its investment plan. Valentin Sandu - Head of the drilling technologies Department, said that in 2012 the exploration-production budget was less than RON 200 million, while the programme for 2015 exceeds RON 600 million. Currently, Romgaz has agreements for new oil exploration blocks in Romania with a total area of approximately 17,797 square kilometres, the exploration phase under oil agreements is to be finalized by 2016, the company representative said. In order to rehabilitate production, by increasing reserves, Romgaz cooperates with Schlumberger in the perimeter of Laslau Mare in the Transylvania Basin and with Aurelian Petroleum, Raffles Energy and Europa Oil & Gas in two exploration-development-oil exploitation blocks, concentrated in the northeast. In the Black Sea, Romgaz is associated with Lukoil Overseas in exploring two offshore exploration-development-exploitation blocks on the continental shelf (EX 29 Est Rapsodia and EX 30 Trident).
A vital part of the natural gas industry, underground storage provides certainty of supply during periods of high demand, by increasing supplies, being a safety measure in the case of interruption of the current output. Another main objective of Romgaz is to increase the capacity of underground storage for natural gas through specific works.

The event presentations and the photo gallery are available in full at www.romaniagasconference2015.blackseaevents.com

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