Document No.Revision No.Date Page ::::P5248-006-MC-RP-XXXA

1 of X

CLIENT :

PETRONAS CARIGALI SDN. BHD [39275-U]

PROJECT TITLE:PROVISION FOR FRONT END ENGINEERING DESIGN FOR SKO PIPELINE REHABILITATION PROJECT

DOCUMENT TITLE:DEGRADATION DESIGN BASIS MEMORANDUM (PL-262)

DOCUMENT NO.:P5248-006-MC-RP-0006

CONTRACT NO.:CH2/C5/2003/DCE/146 WORK ORDER NO.:CHO/2013/DFE/0002(A)

WORK ORDER NO.:XXX

CTR NO.:MC-100

AISSUED FOR REVIEWMANNMSMKI

RevDateDescriptionPrepdChkdAppdClient

Document No.Revision No. Date Page ::::P5248-006-MC-RP-000x AXX March 201519 of XX

P5248-006-MC-RP-0006TABLE OF CONTENTSEXECUTIVE SUMMARY41.0INTRODUCTION61.1General61.2Purpose61.3Scope62.0PROJECT SCOPE72.1Project Background72.2Abbreviation103.0REGULATION, CODE AND STANDARD123.1Malaysia Government and Local Authority123.2PETRONAS Technical Standards123.3International Codes and Standard133.4Project Documents134.0DESIGN BASIS144.1Design Basis144.2Fluid Composition144.3Operating Envelop154.4Environmental Data154.5Formation Water164.6Fluid Analysis164.7Sour Service165.0ASSUMPTIONS176.0DEGRADATION ASSESSMENT AND MATERIAL RECOMMENDATION186.1Material Study Methodology186.2Acceptable Materials187.0DEGRADATION THREATS AND MECHANISMS217.1Identified Threats in PL-262 Pipeline218.0DEGRADATION CONTROL AND PROTECTION288.1Degradation Control for PL-262288.2Internal Degradation Control298.3Pigging298.4External Degradation Control309.0DEGRADATION MONITORING AND INSPECTION PROGRAMME339.1Purpose339.2Degradation Monitoring Techniques and Tools339.3Inspection3610.0DRYING AND PRESERVATION37APPENDIX 1 FORMATION WATER (PL-262)38APPENDIX 2 THE SUMMARY OF NON-METALLIC MATERIAL AND LIMITS41

EXECUTIVE SUMMARY

1.0 INTRODUCTION1.1 GeneralPETRONAS Carigali Sdn Bhd (PETRONAS Carigali) is undertaking the rehabilitation project of pipelines and associated topside facilities for Sarawak Operation (SKO).The SKO Pipeline Rehabilitation project shall look at the alternative replacements and/or upgrade options for its current pipeline facilities, with the objective to provide continuous pipeline uptime and availability for SKO assets for the next 30 years. The alternative means of replacement/upgrade which this Rehab project considers shall cover the possibilities of: Non-Carbon Steel pipeline replacement e.g. plastics and flexible pipes, Pipe-in-pipe insertion e.g. In-field Lining (IFL), Plastic lining in existing Pipeline

1.2 PurposeThe purpose of this Degradation Design Basis Memorandum is to provide recommendation of technically acceptable materials for further evaluation in the Material Option Study. Materials are recommended based on guidance as given in PTS 39.01.10.12. This document also identifies degradation threats, mitigation and monitoring for each recommended material. Key points of drying and preservation requirements are included in this report.1.3 Scopei.

2.0 PROJECT SCOPE2.1 Project BackgroundSKO, one of PETRONAS Carigalis three regional operations in Malaysia comprises the Baram Delta Operation (BDO) fields, Balingian field, Bintulu Crude Oil Terminal (BCOT) and Miri Crude Oil Terminal (MCOT). The BDO fields are located approximately 25km offshore Miri, Sarawak in water depths ranging from 30 76 meters, while MCOT is located onshore Miri, Sarawak. The BDO field is operated under three production clusters namely Northern Cluster (comprises Bokor, Betty and Baronia fields), Eastern Cluster (comprises Baram and Fairley Baram fields), and the Southern Cluster (comprises Bakau, Tukau, Siwa, West Lutong fields and MCOT). The Balingian field is located approximately 40 km offshore Bintulu, Sarawak in water depths ranging from 85 to 92 meters. The Balingian field is operated as a single production cluster and comprises J4, D35, D18, Temana, Bayan and BCOT. The BDO field started operating in 1976 while the Balingian field started operating in 1978.SKO currently produces about 100,000 bpd of net oil to MCOT and BCOT in addition to about 150 million scf/d of natural gas; which is forecasted to increase to 160,000 bpd oil and 250 million scf/d of natural gas from 2013 onwards. SKOs oil and gas production is evacuated through about 175 operating pipelines and about 104 production platforms/jackets. The pipeline assets arising from integrity risk assessment / premature failures/degradations have been confirmed with high internal degradation risk suspected arising from Microbiologically Influenced Degradation, necessitating a major asset rehabilitation program from 2014 to 2016.The schematic of the BDO and Balingian Pipeline Network are shown below.

Figure 2.1 Baram Delta Operations (BDO) Field Pipeline Network

Figure 2.2 PL-262 Route

SKO currently operates a total of 172 pipelines with estimated total length of 1477 km. Most of the SKO pipelines are offshore pipelines except for the terminal pipelines with onshore sections. The operating pipelines involved have the following services regimes: Stabilized crude oil evacuation from major platforms to crude oil terminals Multiphase crude oil and gas evacuation from jackets to main platforms. Wet gas evacuation for gas-lift service Wet gas evacuation service Dry gas (processed) evacuation Vent lines Water injection service

2.2 AbbreviationThe following definitions refer to abbreviations used throughout this document:AISIAmerican Iron and Steel Institute

ANSIAmerican National Standard Institute

APIAmerican Petroleum Institute

Bbl/dBarrel per Day

BNDP-ABaronia Drilling Platform A

BNJT-CBaronia Jacket Platform C

BOLBottom of Line

BWCBulk Water Degradation

CADegradation Allowance

CAPEXCapital Expenditures

CIDegradation Inhibitor

CISCCChloride Induced Stress Degradation Cracking

CO2Carbon Dioxide

CPCathodic Protection

CSCarbon Steel

CRADegradation Resistant Alloy

CWCCondensing Water Degradation

DCS Distributed Control System

DDBMDegradation Design Basis Memorandum

DSSDuplex Stainless Steel

ERElectrical Resistance

FFSFitness for Service

FWS Full Well Stream

GREGlass Reinforced Epoxy

HDPE High Density Poly Ethylene

HICHydrogen Induced Cracking

HPHigh Pressure

HSEHealth, Safety and Environment

H2SHydrogen Sulphide

IDInternal Diameter

IFLIn-field Liner

IPIntelligent Pigging

LCCLife Cycle Cost

LPLow Pressure

MICMicrobiologically Influenced Degradation

MMscfdMillion Standard Cubic Feet Per Day

MOCMaterial of Construction

NACENational Association of Degradation Engineers

ODOuter Diameter

PA Polyamide

P&IDPiping and Instrumentation Diagram

PCSBPETRONAS Carigali Sdn Bhd

PEPolyethylene

PEX Cross-linked Polyethylene consisting of long polymer

Chains in a 3-dimensional structure

ppmPart Per Million

PTSPETRONAS Technical Standard

PVDF Polyvinylideneflouride

RTPReinforced Thermoplastic

RBI Risk Based Inspection

ROVRemotely Operated Vehicle

SDSSSuper Duplex Stainless Steel

SILSafety Integrity Level

SKOSarawak Operation

SLCService Life Cycle

SRBSulphate Reducing Bacteria

SSCSulphide Stress Cracking

TOLTop of Line

UCRUnmitigated Degradation Rate

UT Ultrasonic Testing

WGR Water Gas Ratio

WTWall Thickness

3.0 REGULATION, CODE AND STANDARDThis study follows the requirements of the latest editions of the following in order of precedence: National or Local Regulation / codes PETRONAS Technical Specification (PTS) International Codes and Standards (API, ANSI, etc)

3.1 Malaysia Government and Local AuthorityThe design shall also comply and satisfies the Malaysian Government or Local Authority Laws and Regulations, including but not limited to the following: Petroleum (Safety Measures) Act 302,1984 [Reprint-2001]; Petroleum (Safety Measures) (Transportation of Petroleum by Pipeline) Regulation, 1985. Department of Occupational Safety & Health (DOSH), Malaysia.

3.2 PETRONAS Technical StandardsThe design shall comply and satisfies the requirement of the latest edition of the PETRONAS Technical Standards (PTS), including but not limited to the following:PTS 30.10.02.13Non-Metallic Materials Selection & Application

PTS 30.10.02.31Metallic Materials-Prevention of Brittle Fracture (Jan 2010)

PTS 30.48.00.31Protective Coatings and Lining (Sep 2012).

PTS 31.38.01.11Metallic Materials-Prevention of Brittle Fracture (Jan 2010)

PTS 31.40.00.10Pipeline Engineering (Jan 2008)

PTS 31.40.00.19Degradation Mitigation Strategy Wet Sour Gas CS Pipelines (Jan 2010)

PTS 31.40.00.20Pipeline and Riser Engineering (Sept 2012)

PTS 31.40.10.20Spoolable Fibre-reinforce Plastic Pipe (Aug 2012)

PTS 31.40.30.34Thermoplastic Lined Pipeline (Jan 2011)

PTS 31.40.30.37External Field Joint and Rehabilitation Coating for Line Pipe (Jan 2010)

PTS 39.01.10.11Selection of Materials for Life Cycle Performance (EP) Materials Selection Process (Dec 2010)

PTS 39.01.10.12Selection of Materials for Life Cycle Performance (EP) Upstream Equipment (Dec 2010)

WW ALL E 04 001PCSB Degradation Management Guidelines (2009)

WW ALL M 04 002PCSB Inspection And Maintenance Guideline (Sep 2010)

MY ALL O 07002PCSB Quality Control Manual (Sept. 2002)

3.3 International Codes and Standard

API RP14ERecommended Practice for Design and Installation of Offshore Production Platform Piping Systems (Mar 2007).

API 1104Welding of Pipelines and Related Facilities (April 2010).

API 5LSpecification for Line Pipe (Nov 1992)

API RP 15LESpecification for Polyethylene (PE) Line Pipe

API RP 17BSpecification for Flexible Pipe

API RP 17JSpecification of Unbonded Flexible Pipe (Jan 2009)

DNV-RP-F101Corroded Pipelines (Oct 2010)

DNV-RP-F103Cathodic Protection of Submarine Protection by Galvanic Anodes (Oct 2010)

M-001Norsok Standard Material Selection (Aug 2004)

NACE MR 0175Petroleum and natural gas industries - Materials for use in H2S-containing environments in oil and gas production.

3.4 Project Documents

4.0 DESIGN BASIS4.1 Design BasisSummary of the data that has been used as the basis for the degradation study reported in this document are as follow:Design Life:

Design Pressure:

Inlet Temperature:

CO2 (in gas):

H2S (in water):

4.2 Fluid CompositionThe data used are based on the laboratory analysis report which provided by CoreLab. The gas composition for PL-262 is shown in Table 4.1 below:Table 4.1 Gas Composition for PL-262COMPONENTNAMEMOLE %WEIGHT %

CO2Carbon dioxide

N2Nitrogen

C1Methane

C2Ethane

C3Propane

iC4i-Butane

nC4n-Butane

C5Neo-Pentane

iC5i-Pentane

nC5n-Pentane

C6Hexanes

C7M-C-Pentane

Benzene

Cyclohexane

Heptanes

C8M-C-Hexane

Toluene

Octanes

C9E-Benzene

M/P-Xylene

O-Xylene

Nonanes

C10Decanes

C11Undecanes

C12+Dodecanes Plus

TOTAL100.00100.00

C12+ is considered pseudo component. The property of C12+ is shown in Table 4.2 below:

Table 4.2: Pseudo Components

CALCULATED RESIDUE PROPERTIESMOLE %WEIGHT %MOLE WEIGHT (g.mol-1)DENSITY AT 60F (g.cm-3)

C7+ Heptanes Plus

4.3 Operating Envelop

4.4 Environmental Data The environmental data is taken from BARDEGG Pipeline Hydraulic Report

Ambient Air Temperature (Max) : 40CAmbient Air Temperature (Min) : 21CSeabed Temperature (Max) : 30CSeabed Temperature (Min) : 17CAir Velocity : 24.2m/s4.5 Formation WateR

4.6 Fluid AnalysisFluids in PL-262 comprise gas lift and condensed water. These have been analyzed for degradation and species that may be present in the water stream.Analyses of water indicate calcium carbonate and strontium carbonate scale formation. Other species having 10-2 mg/L or greater expected to be formed are listed in Table 4.3 below.4.7 Sour ServiceNACE MR0175/ISO15156 defines sour service in multiphase systems and recommends materials that are resistant to SSC in sour service environment as shown in Figure 4.1.

Figure 4.1 Sour Service RequirementAt operating pressure of 61 barg and no detectable H2S in water phase, the system will be in region 0 or non-sour service.

5.0 ASSUMPTIONS6.0 DEGRADATION ASSESSMENT AND MATERIAL RECOMMENDATION6.1 Material Study MethodologyMaterial is evaluated based on the recommendation of technically acceptable materials as given in PTS 39.01.10.12. Final analysis of material optimization will be based on economic assessment of life cycle cost of each material considered for PL-262 pipeline.

6.2 Acceptable Materials

7.0 DEGRADATION THREATS AND MECHANISMS7.1 Identified Threats in PL-262 PipelineThe following degradation mechanisms and threats have been identified for the recommended materials to be studied for PL-262 pipeline. Table 7.1- Degradation mechanism and threats identified for PL-262 pipelineTHREATSMaterial Recommended For PL-262

Reference section

TypeCorrosive Process

Internal DegradationCO2 Degradation7.2.1

Galvanic Degradation7.2.2

Sulphide Stress Degradation Cracking7.2.3

Hydrogen Induced Cracking (HIC) & Step Wise Cracking (SWC)7.2.3

Oxygen Degradation7.2.4

Microbiologically Influenced Degradation (MIC)7.2.5

Erosion Degradation7.3.1

Under-deposit Degradation7.3.2

Low Temperature Embrittlement7.3.3

Permeation7.3.4

Absorption7.3.5

External DegradationAtmospheric Degradation7.4.1

Seawater Degradation7.4.2

Chloride Stress Degradation Cracking7.4.3

Degradation Under Insulation7.4.4

Crevice Degradation7.4.5

UV Degradation7.4.6

7.2 Internal Degradation7.2.1 CO2 Degradation7.2.2 Galvanic Degradation7.2.3 H2S Degradation7.2.4 Oxygen Degradation 7.2.5 Microbiologically Influenced Degradation7.3 Other Internal Degradation Mechanisms7.3.1 Erosion Degradation7.3.2 Under Deposit Degradation7.3.3 Low Temperature Embrittlement7.3.4 Permeation7.3.5 Absorption7.4 External Degradation7.4.1 Atmospheric Degradation7.4.2 Seawater Degradation7.4.3 Chloride Induced Stress Degradation Cracking (CISCC)7.4.4 Degradation Under Insulation7.4.5 Crevice Degradation7.4.6 UV Degradation8.0 DEGRADATION CONTROL AND PROTECTION8.1 Degradation Control for PL-2628.2 Internal Degradation Control8.3 Pigging8.4 External Degradation Control8.4.1 Pipeline Coating8.4.2 Riser Coating8.4.3 Cathodic Protection9.0 DEGRADATION MONITORING AND INSPECTION PROGRAMME9.1 Purpose9.2 Degradation Monitoring Techniques and Tools9.2.1 Sampling and Analysis9.2.2 Polymer Probe .9.2.3 Degradation Monitoring for Flexible Pipe9.3 Inspection9.3.1 Risers10.0 DRYING AND PRESERVATIONAPPENDIX 1 FORMATION WATER (PL-262