Project: Ohanet gas development
Client/partner: BHP Billiton and its joint venture partners, the Petrofac/ABB Lummus collaboration
Scope: Investment expertise, partnership approach, engineering and construction capabilities
Petrofac’s engineering and construction capabilities, coupled with its partnering approach and investment expertise, were key elements of the success of the US$1 billion Ohanet development in southern Algeria. Wet gas production started on 27 October 2003, heralding the simultaneous export of the project’s three products - dry gas, liquefied petroleum gas and condensate.
Not only did this signify a great success for joint operators BHP Billiton and Sonatrach, the Ohanet project represented a major milestone for Petrofac, which held a 10% interest in the development.
The delivery of the Ohanet development is a major achievement given the complexity of the project and the challenging operating environment. Whilst we have pursued an aggressive project schedule, it has not been at the expense of a safe working environment. The alignment between BHP Billiton and its joint venture partners, the Petrofac/ABB Lummus collaboration and the many subcontractors in the areas of health, safety and environment has delivered real benefits to all involved.
Innovative commercial structure
The Ohanet development pioneered Petrofac’s unique business model, whereby we co-invested alongside BHP Billiton and Sonatrach, creating an innovative development and ownership structure. We risked our capital alongside that of our clients, to ensure complete alignment with our partners and deliver mutual reward.
By becoming a partner, we were able to assist in the challenges faced by the joint venture, enabling a competitive bid by the partnership to secure the risk service contract (RSC). Our partnership approach also created a platform for our engineering and construction capabilities to deliver the project within budget and ahead of schedule in just 39 months.
The development involved commercialising the gas condensate reserves from four reservoirs in three fields. Working in partnership with ABB Lummus Global, we were tasked with delivering a 168 km gathering system of flowlines, manifolds and trunklines feeding to a central processing facility (CPF).
The CPF was designed to treat around 710 million standard cubic feet per day of wet gas and produce a maximum of 30,000 barrels per day of condensate and 26,000 barrels per day of liquefied petroleum gas (LPG), together with a stream of dry pipeline sales-quality gas for Sonatrach. Sales gas, LPG and condensate were pumped through three new export spur lines to join the existing Sonatrach pipeline network.
A further part of the contract was to design and build a 150-person permanent camp, together with a fully serviced industrial area to support field operations.
Engineering and procurement was carried out from Petrofac’s offices in Sharjah and at ABB Lummus Global in The Hague, where approximately one million man-hours were expended.
By any measure - technical, financial, or health and safety - the project is an outstanding success and I applaud all those involved who participated in the development for achieving this major milestone.
In October 2011, at the completion of the contracted RSC term, all operations were successfully transferred to a 100% Sonatrach operation and the Joint BHPB/Sonatrach Ohanet Operating Organisation was dissolved.