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15 January, 2019 Salts news

10 major Oil & Gas projects to watch in 2019.

What does 2019 hold for the global oil and gas industry? As experts in engineering and specialist workforce solutions, Fircroft always strives to maintain an informed view of the major projects that are expected to start up during any given year- and the skills and expertise that these project owners will need to recruit.

As such, we’ve taken a look at the 10 biggest upstream, midstream and downstream oil and gas projects that are expected to start-up throughout 2019.

In picking out the top 10 projects to watch, we have made our selection based primarily on the size of capital expenditure. However, we have also factored in the projects that are likely to make a sizeable contribution to oil industry employment and/or add a significant volume to global oil or gas production.

1. East Natuna Block (Natuna D-Alpha) Project
Cost: $30bn
Location: Offshore Indonesia

Operated by Pertamina, the Indonesian state-owned oil and natural gas corporation based in Jakarta, the East Natuna Block project is a natural-gas focused project which is situated on a block containing an estimated 220 trillion cubic feet (tcf) of gas. However, due to the high CO2 content (70%) the gas is difficult to extract, and only 46 tcf of the reserves are thought to be commercially recoverable. The project underwent a change of name and was formerly known as the Natuna D-Alpha project. In addition to a possible 16 platforms, the East Natuna Block project will also include a 2,000km pipeline from Natuna to PTTEP’s infrastructure in the Gulf of Thailand.

2. Pengerang Refinery and Petrochemical Integrated Development (RAPID)
Cost: $27bn
Location: Malaysia

Located at Pengerang in south-eastern Johor, Malaysia the Refinery and Petroleum Integrated Development (RAPID) project is part of the Pengerang Integrated Petroleum Complex (PIPC) and will be one of the biggest downstream projects to start up in 2019. The project involves a comprehensive range of assets including a 300,000 b/d oil refinery, a 3 million tonne-per-annum (tpa) naptha steam cracker able to produce 1.2 MMtpa of ethylene, plus propylene and C4-C6 olefins. The refinery and steam cracker will provide feedstock to around 20 petrochemical units with a total capacity of 7.7 MMtpa of chemicals.

3. Zhoushan (Zhejiang) Refinery and Petrochemical Complex (Phases 1 and 2)
Cost: $25bn
Location: China

Another large-scale downstream project for 2019 is the Zhoushan refinery complex located in the Zhejiang province in China. Operated by the Zhejiang Petroleum and Chemical Company, the new refinery is expected to begin production in the third quarter of 2019. The complex itself is being constructed in two phases and will have a refining capacity of 800,000b/d when completed. Other downstream products that will be produced at the complex include polyethylene (PE), polypropylene (PP), ethylene oxide/ethylene glycol (EO/EG), ethylene vinyl acetate (EVA), styrene, butadiene (BD) and many others. As demand for downstream and chemicals products continues to increase in China, this project will play a major role in meeting anticipated future demand.

4. Kitsault Energy Corridor and FLNG Export Terminal
Cost: $22.5bn
Location: Canada

2019 is shaping up to be a big year for Canada’s energy industry with several large-scale LNG and oil sands projects either approaching operation or approval. Perhaps the most high-profile of these to date has been the massive LNG Canada project in Kitimat which received FID in October 2018 and will be constructed through 2019 and beyond. However, there’s another project to watch this year- the Kitsault Energy Corridor and FLNG Export Terminal.

The Kitsault project centres on a proposed 20 mtpa LNG liquefaction plant (either floating or land-based) located, as the name suggests, in Kitsault, 800km north of Vancouver BC and 115km north of Prince Rupert. The project is expected to involve four stages:

• Phase 1- Construction of a pipeline from North East British Colombia at Dawson Creek, Canada to Kitsault, BC (East to West), including the planned FLNG facility.

• Phase 2- Will bring a North to South pipeline from Fort Nelson to Dawson Creek, BC.

• Phase 3- Will include a land-based LNG Plant, and LNG Export Facility at Kitsault, BC.

• Phase 4- Includes other plans for expansion in the future.

With the project’s operator Kitsault Energy, awaiting the decision of their planning consent application, this will be a project to monitor throughout 2019.

5. Abreu e Lima Refinery (RNEST)
Cost: $21bn
Location: Brazil

Brazil’s semi-public oil company Petrobras is also adding to the new downstream projects to watch in 2019 with its Abreu e Lima Refinery complex situated in north-eastern Brazil. The refinery is being planned to have a processing capacity of 230,000 barrels per day. The plant will feature two refining trains with a capacity of 115,000 b/d each. The project also features an 8.5km pipeline which will link the refinery to the Suape port complex, connecting to Transpetro’s terminal and other distributors in the area. The first refining train started partial operation in November 2014. Construction of the second train is currently on hold.

6. 20 New Fields Development Project
Cost: $20bn
Location: Offshore and Onshore Mexico

Mexico’s state-owned oil company Pemex discovered 20 new oil fields during the course of 2018 (17 marine fields in shallow waters of the Mexican Gulf and 3 on land). Since then, Pemex has placed the fields in its New Fields Development Plan to be fast-tracked to first hydrocarbon. The offshore discoveries, in water depths ranging from 11 metres to 90 metres, are: Xikin, Esah, Kinbe, Koban, Mulach, Manik, Pokche, Uchbal, Cheek, Tlacame, Cahua, Jaatsul, Octli, Tetl, Teekit, Hok, and Suuk. Peak production from the fields is expected to be in the region of 340,000 bbl/d. For the offshore fields, 13 offshore platforms are expected to be used, with 117 wells drilled across all the fields.

Whilst the various fields are largely at prequalification status, this will be a project to keep a close eye on throughout 2019 as Pemex begins to award numerous offshore infrastructure packages of work and contracts.

7. Zubair Oil Field- Rehabilitation Phase (RP) and Enhanced Re-Development Phase (EP)
Cost: $18bn
Location: Iraq

One of the largest oil fields in the world, the Zubair field, located in southern Iraq, west of Basrah will be the subject of considerable development throughout 2019 as Italian energy giant Eni seeks to boost production. According to the plans, Eni wants to boost Zubair production from 195,000 b/d to a plateau of 700,000 b/d in seven years.

The project is being carried out in two phases: Rehabilitation Phase (RP) and Enhanced Re-Development Phase (EP). The first RP phase is expected to take two years whilst the EP phase is expected to take 6 years.

Elements of the project of particular note are: the design, supply and commissioning of an 18-inch carbon steel gas pipeline to carry up to 100 million cubic feet a day of gas from a depot at the Zubair field to the Fao depot; construction of five degassing stations; revamp of existing degassing stations; overhaul of existing wells and construction of a new water injection project.

All of which will further cement Iraq’s position as an oil producing nation of global importance.

8. Sakha (Yakutia) – Khabarovsk – Vladivostok (Pacific Port) Gas Pipeline (Power of Siberia)
Cost: $17.5bn
Location: Russia

One of the most impressive midstream projects of recent years the Power of Siberia pipeline involves the construction of a 3,968-kilometre gas pipeline from Sakha to the Pacific Port of Vladivostok. With an estimated export capacity of 38 billion cubic metres per year, the Power of Siberia pipeline is a sign of Russia’s growing partnership with China, as the pipeline will supply much needed natural gas energy to consumers in China (via the pipeline’s eastern route).

The section of pipeline to China will be built in three phases. Phase One will run 265km from Heihe City, on the Russian border, to Changling County, Jilin. A 115km spur will connect Changling to Changchun. Phase Two will run from Changling to Yongqing, Hebei Province. Phase Three will run from Yongqing, in Heibei to Shanghai.

Running through swampy, mountainous, seismically active, permafrost and rocky areas with extreme environmental conditions, the Power of Siberia pipeline is a truly impressive feat of engineering and is expected to start-up in December 2019.

9. Horizon Oil Sands Upgrader Project- Phases 4-5
Cost: $16bn
Location: Canada

Despite being badly impacted by the recent cratering of oil prices, Canada’s oil sands industry continues to pursue new projects across the country, perhaps the most notable being the Horizon Oil Sands Upgrader Project.

The operator of the Horizon Oil Sands project, Canadian Natural Resources (CNR) is seeking to boost production of sweet synthetic crude oil from the project by 265,000 b/d in two phases (Phase 4 and Phase 5), boosting total output from development to 500,000 b/d.

The Horizon Oil Sands Upgrader Project remains in the planning stage and whilst Canadian Natural Resources hasn’t provided any recent updates on the project’s status we would assume that it remains scheduled for development.

10. Chayandinskoye Oil & Gas Condensing Deposit Development
Cost: $13.6bn
Location: Russia

The Chayandinskoye field is one of the largest oil, gas and condensate fields in eastern Russia and forms the resource base for the Power of Siberia gas pipeline (outlined above). Led by Gazprom, this project envisions the development of the Chayandinskoye oil and gas condensing deposit, gas transportation to the export gas main and its export. The project includes the development of the Upper Vilyuchanskoye, Middle Tyungskoye, Tas-Yuryakhskoye and Sobolokh-Nedzhelinskoye blocks. The project hopes to eventually exploit the field’s substantial reserves which are estimated to include 1.4 trillion cubic metres of gas, and 76.7 million tons of oil and condensate.

The Chayandinskoye development is set to utilise some innovative approaches including lightly manned technologies that provide for automated control and integrated facility management. According to Gazprom, this approach will help optimise staffing, reduce travel costs for passenger operations, and avoid constructing redundant residential infrastructure. Since the field occupies a large area, it is planned to use stand-alone renewables-based power systems at remote gas well clusters in order to save money on building power transmission lines.

Other Oil & Gas projects and trends to note in 2019
So, you’ve just read about the 10 biggest oil and gas projects to start-up in 2019, but what are some other significant projects and trends to watch?

U.S. Shale

2018 saw the U.S. Shale industry perform exceptionally well with production from fields such as the Permian Basin, Barnett, Fayetteville, Haynesville, Eagle Ford and many others increasing exponentially, causing a major shake-up for global oil markets. To put this into context, in December 2014 U.S. shale oil production stood at 5.23m barrels per day; by December 2018 this production figure had risen to over 8m barrels per day (according to the Energy Information Administration EIA).

As we recently wrote in our ‘Top Oil & Gas industry trends to watch in 2019’ blog, the U.S. shale industry has disrupted OPEC’s pricing power, as it offers a medium-term oil supply balancing mechanism which is able to respond quickly to changes in supply and demand.

What impact will this have on employment in the U.S. shale industry in 2019? With the White House administration prioritising energy security for the U.S. and 2019 likely to be the year of record production (EIA), we should expect to see higher employment demand from shale producers and oilfield service companies over the next 18 months. A recent study from IHS revealed that the unconventional oil and gas industry in the U.S. currently supports more than 1.7 million jobs, with that amount projected to rise to over 3 million jobs by the end of the decade.

As we’ve written about previously on EngineeringPro, the increased use of technology amongst oil and gas producers will also lead to the creation of unimagined, new and unique work profiles. As Ben Williams, Chief Information Officer at Devon Energy (a major U.S. shale producer) describes it:

“Every time there has been a big inflection point in technology in the world, there’s always been this fear. It has never ended up with fewer jobs on the other end of these industrial transformations. We do not expect there to be fewer people in the workforce, but I for sure envision many of the jobs that even our most senior technical people do are going to be influenced by these highly available and very effective technologies. The workforce of the future is not the same as the workforce of today”.

A growing global LNG market

2019 is expected to see several very-large scale LNG projects receive FID, including the $40 billion Canada LNG project, Mozambique LNG, Fortuna LNG (offshore Equatorial Guinea), Arctic LNG 2, Jordan Cove LNG, and others.

What this equates to is a growing global LNG market.

Whilst supply is growing, so too is demand, especially from Asia. Total Asia-Pacific LNG demand is set to grow a further 60% to reach 337 MMtpa by 2030.

This should all be good news for the engineering and technical jobs market, as LNG projects- like many large-scale energy projects- require the skills, expertise and experience of a wide variety of people from across multiple disciplines. Some of these positions are generalised positions which are transferable across industries (think commercial positions such as Business Development Manager, or Marketing Executive), through to highly specialised roles that are unique to the LNG industry (think Vessel Manager (LNG), or LNG Market Analyst etc).

Deepwater projects make a comeback

After years of limited activity, 2019 is the year that deepwater projects make a comeback.

Thanks to a relative recovery in oil prices, improved break-even prices and the opening up of new leases offshore the Gulf of Mexico, West Africa and other global locations, capital-intensive deepwater projects are once more an attractive proposition to oil producers. Deepwater projects to watch throughout 2019 include Mad Dog Phase 2, ACG, Tortue and Bonga Southwest.

Once again, the resurgence of deepwater projects will have a positive impact upon the technical and engineering job markets. There are likely to be new opportunities both for local content and expatriate workers who have skills and experience in offshore projects.

As we wrote in 2018 the oil and gas industry continues to undertake large scale projects. Are there any projects that you think we should add to this list? Let us know in the comments below!

Major projects need major talent

As the global leader in the provision of workforce solutions to the oil and gas industry Fircroft is well placed to help you secure your next premium job role.

Since 1970 we’ve served the biggest operators in oil and gas and enjoy a reputation for excellent contractor customer care. Open up a world of opportunity and register your CV with Fircroft today and be the first in line to secure employment on the major oil and gas projects of 2019.

Fircroft’s roots may be in Oil & Gas, but our innovative approach to recruitment and workforce solutions has been much sought after by the leading names of other technical engineering industries. Today, Fircroft has executive and senior level positions available in industries as diverse as Automotive, ICT, Mining & Minerals, Infrastructure & Construction, Petrochemicals, and Power, Nuclear & Renewables.