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Meeting Agenda

1 Opening Mr Hoang Minh 8:30-8:402 Clarification for TNK’s queries Mr Pham Nghiem Viet 8:40-8:55

3 Business aspects supporting for proposal

TBA 8:55-9:15

4 Discussion and agreement All 9:15-10:00

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TNK’s queries (Letter TNK/OT/2012/04/0170 , dated 19th Apr 2012) :

TNK’s queries

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TNK’s Queries

• Actual metal loss features of the pipeline: provide with specific data including and identifying the pipe locates in each instance.

• Estimated Repair Factor (ERF): share methodology and NCSP’s detailed calculation of ERF. Provide assurance as to the industry practice of utilization of this methodology

• Water dew point: share risk analysis which suggest “the NCSP integrity may be potentially affected”.

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Clarification to TNK queries

• Bach Ho 16” pipeline from Bach Ho (BH) field to Dinh Co (DC) terminal and 16”/17”pipeline from DC to Phu My (PM) GDC were inspected by in-line inspection (ILI) in 2010. Feature No 20 on BH – DC pipeline: verified depth

(50.58% WT) was 1.7 times higher than that reported by ILI (29% WT)

Feature No 24 on BH – DC pipeline: verified depth (51.07% WT) was 3.6 times higher than that reported by ILI (14% WT)

“Actual metal loss features of the pipeline: provide with specific data including and identifying the pipe locates in each instance”

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Clarification to TNK queries

• In accordance with Pipeline Operator Forum “Specifications and Requirements for Intelligent Pig Inspection of Pipelines” Version 2009 the Estimate Repair Factor (ERF) is defined as ERF = Maximum Operating Pressure (MOP)/ Safe Operating Pressure (Ps).

• The defect is not accepted and is required to repair if ERF > 1. This come from acceptance criterion stated in ASME B31G 2009 “ Manual for Determining the Remaining Strength of Corroded Pipelines” and DNV RP-F101 2010 Corroded Pipelines.

“ Estimated Repair Factor (ERF): share methodology and NCSP’s detailed calculation of ERF. Provide assurance as to the industry practice of utilization of this methodology ”

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Clarification to TNK queries

• Safe operating pressure (Ps) is normally calculated in accordance with methods: ASME B31G, Modified ASME B31G, DNV RP-F101, Shell 92 and BS 7910.

• In accordance with Pipeline Defect Assessment Manual (PDAM), a Joint Industry Project (JIP), the methods ASME B31G and Modified ASME 31G have been widely used in the pipeline industry. The method Modified ASME B31G is less conservative than method ASME B31G.

• NCSP used method Modified ASME B31G to calculate safe operating pressure (Ps) and then ERF for defects.

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Clarification to TNK queries

• Formulas used (in accordance with ASME B31G)Ps = Sf*D/(2*t*Safety Factor)

Sflow = 1.1*SMYSD - Outside Diameterd – Depth of metal lossL – Length of metal losst – Pipe wall thicknessSMYS – Specified Minimum Yield Strength @ ambient conditions

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Clarification to TNK queries

• Slug samples taken at sphere receiver post the sphere runs recently had shown evidence of free water accumulated in the pipeline

• Spheres launched twice post the event “30.948 Mscm gas high water dewpoint put in the pipeline - Dec, 2011” with the purpose to sweep accumulated free water in the pipeline, 14th Jan and 02nd Feb 2012

• Apparently there was amount of free water accumulated since 23rd Dec 2011 when off-spec gas was started putting into the NCSP system until the 1st sphere was launched on 14th Jan 2012, as significant amount of water was found abnormally presented in the Liquid flash drum boot and condensate stabilizer water pot during the Process upset period, 23rd -26th Dec 2012.

“ Water dew point: share risk analysis which suggest “the NCSP integrity may be potentially affected”

No Lauching Date Receiving Date Slug at sphere receiver analysis

1 17-Dec-11 18-Dec-11 27.2 % water

2 14-Jan-12 16-Jan-12 14.9 % water

3 2-Feb-12 02/3/2012 16.5 % water

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NCSP had gone through the 2012 WP&B, and think that no chance for NCSP to cut-down/ reduce any other items for now

Clarification to TNK queries

TNK letter TNK/OT/2012/04/0166 dated 23rd Apr 2012 : Pls start process to identify within the approved 2012 WP&B : 1) Non-essential activities that can be eliminated or deferred to later year; and 2) acitivities that can be delivered more cost efficiency

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Business aspects

• KNOC has updated shutdown plan, 10 days on early Aug 2012 and 13 days on middle Sep 2012 : Inline inspection carry out during this period of time (Sept 2012) will help preventing gas reduction in 2013.

• 2012 gas demand would be less strain, when 2013 is very high gas demand forecasted

• Blk 05.2 will be in production by early of 2013• KNOC has planned shutdown for 5 days only in 2013

These available information indicates the difficulties in making arrangement for Inline inspection the 26” pipeline in 2013, which require gas flow rate reducing to 14-17 MMSCMD for 06 days

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Business aspects

Option 1Perform ILI in 2012

Option 2Perform ILI in 2013

Total cost of $700K Shortage of Budget in 2012 Cost will be budgeted in 2013Impact on Gas Demand Minimized and mitigated

because:- perform during shutdown in period of 13 Days Shutdown of Rong Doi in Sept 2012

Significant because:- Rong Doi only have a plan to

shutdown for 5 days.- It is uncertain on the time window

about the plan of Rong Doi -> may not combine with the ILI service

- According to the forecast by MOET, demand for electricity is very much higher than 2012. Therefore, reduction flow rate in long period for pigging works may be challenged by Government

Possible losses to Transporters

Minimized if carried out during Rong Doi Shutdown in 2012.

Transportation tariff losses: ~ $1,6 milShortfall penalty: ~ $569KTotal: ~ $2.1mil

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ILI Tendering plan (Normal case)

• With effort from NCSP internally :

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ILI Tendering plan (Stretch case)

• With effort from NCSP internally & NCSP Operator :

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ILI Tendering plan (Extreme Stretch case)

• With great effort from NCSP internally, NCSP Operator & Partners, commitment from Contractor :

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ILI Tendering plan - Suggestion

In order to achive the ILI runs in Sept 2012, taken opportunity when RongDoi shutdown, the following suggestion and proposal for BoC Partners consideration and supports :- To reduce time in approval process, PV Gas allows NCSP submitting tender document directly to BOC without prior endorsement by PV Gas as an internal consensus of the Operator. Such document include:

• Tender plan approval• ITT• Tender evaluation and contract award

- To set short lead-time (6-8 weeks) as a pre-requisite in the ITT/contract.- To require a strong performance bond and penalty term to minimize slippage in delivery.- The Condensate tank cleaning & inspection works planned in the period from 14-Aug to 30-Sep. During this inspection work, no sphere/pig runs is allowed to prepent potential of condensate off-spec and discolouration. Should arrange for these 2 works (condenstae cleaning/ inspection and 26” pipeline Inline inspection) not happening at the same time.