The Hydra Gas Development Project of Khalda Petroleum Company initiated on April 4th 2013, and is set to complete its first phase on March 31st this year with the second phase to end September 30th. Genesis has been contracted for engineering and procurement support, while construction and installation is contracted by Petrojet. The project’s budget is USD 50 million for a USD 2.1 million expenditure. The issue date for the project was October 10th 2013, and its project managers are Neil Clark and Eng. Mohamed Ismail.

Project Background
Hydra is a hot, normally pressured gas condensate field located in the Western Desert of Egypt that is being developed by Khalda Petroleum Company (KPC), a joint-venture between Apache Corporation and the Egyptian Government Petroleum Company (EGPC).

The field is located south of the Obayied Gas Plant and to the north of the Qasr field, approximately 8 km southwest of the pipeline that runs from the Shams manifold to the Obayied Gas Plant.

Phases I and II involve installing Hydra facilities which accommodate the fluids only in early field life where the pressures are sufficiently high enough to free flow to the host facilities. Fluids will be cooled and separated via a three-phase separator. The separated gas and condensate is comingled and transported to end of line EOL at Obayied for further processing via the existing Shams to EOL carbon steel pipeline. Water is further processed and disposed of locally.

Phase I
Hydra fluids will be cooled by two air cooler bays relocated from the Qasr start of line (SOL) prior to the fluids entering the CS pipeline to EOL. Phase I is the tie-in to the existing Hydra trunk line and the installation of the duplex air coolers, chemical injection, associated tie-ins for future phases and associated utilities.

Plot space shall be provided for all project phases inclusive of Phases I, II, and III.
The tie-in to the Shams Obayeid Pipeline will use the existing tie-in location downstream of the line break valve.

Off-takes and tie-ins for future phases shall be included to allow future expansions to be carried out without shutdowns.

Phase I is a temporary mode production prior to the installation of Phase II to remove free water.

Phase III
Hydra fluids will be separated via a new three-phase separator. The separated water will be sent for further treatment and the gas and condensate will be comingled and transported to the host facilities. The separator will require corrosion-resistant cladding or shall be entirely duplex and will be designed utilizing the same design philosophy as Qasr SOL, i.e., regarding internals, etc.

Phase II (Future phase not included in current project scope)
Phase III is an LP phase that will require compression. This is out of scope with regard to the design, however, tie-in points with DB&B valve isolation and spectacle blind in closed position shall be provided during Phase II for future installation of the compressor and its associated equipment during Phase III, i.e., the KO drum, cooler, auxiliaries, instrument air, and nitrogen packages.

This project will enable Khalda to sustain the current gas deliverables prior to Qasr compression project by producing gases up to 150 MMSCFD. Khalda plans to backfill the decline in Qasr deliveries to Obaiyed by initially producing gas from Syrah field and then substituting with Hydra gas.

Accelerating the development of the Hydra field is now considered to be a major priority for Khalda to achieve our target production goals and support the need for additional domestic gas supplies within Egypt. The following reports cover progress up to September 30th 2013.

Progress of the Engineering Phase and Procurement Support
For this phase, 71.68% of the process has been completed. Genesis Oil & Gas Company (GOGC) was contracted by KPC’s shareholder Apache to perform a conceptual study for the development of the Hydra Gas Development Project that they completed in March 2013. The study provided a number of options that could be implemented for the proposed development and it was eventually concluded that an optimum development would be based on a combination of two option, option 6 and 7, named option 6a.

After EGPC gave approval for the Hydra Gas Development Project in April 2013, Apache engaged GOGC to complete the required detailed engineering and procurement support for both phases of the Hydra Project. As a part of the scope of work, Genesis has developed a phased procurement strategy to enable Khalda to deliver the Hydra Project in two phases based on the schedule mandated by its shareholders—end Q1 2014 for Phase I and end Q3 2014 for Phase II.

• Piping isometrics for Phase I (excludes tie-in to trunk line) issued AFC, piping MTO for Phase I issued, piping special items list and data sheets issued. Phase II isometrics prepared and in GOGC checking cycle.
• Civil drawings and specification are being updated having received the soils report and the foundation drawing being progressed, awaiting vendor data to finalize foundations. Issue of structural steel work drawings commenced. Civil work being added to PDMS model.
• AFC issue of cold vent drum, production separator, fuel gas KO drum, fuel gas pre-heater, fuel gas super-heater, produced water treatment package, diesel storage tank and closed drains drum.
• Updating of electrical documentation to incorporate KPC confirmed power requirement of 400v.
• Manual firefighting equipment finalized and enquiry under preparation.
• P.O.S. and/or LOIs placed for valves, CCSS, chemical injection, tagged instruments, piping bulks, UPS, and MCC. Clarifications ongoing on E&I bulks and instrumental air package. Firefighting equipment tender to be issued.
• Phase II requisitions received for HP separator and LP vessels for review.
• Genesis target for issue of drawing at AFC issue by the end of October.
• HAZOP/SIL review arrangements being made for outstanding vendor supply, Phase I systems for instrument air, diesel system for power generation, and chemical injection package.
• Revised fence design proposed by KPC/Petrojet and accepted.
• HAZOP, HAZID, SIL, and constructability review study were completed in June 2013, further HAZOPS will be performed on vendor packages as documentation is received.
• 30%, 60%, and 90% model reviews have been carried out, with the 90% review having been held late July 2013. Model updates will incorporate vendor package interfaces.

Cost Control
Project approval for total cost of USD 50 million in circulation for AFE approval. Petrojet Construction awarded with the estimated cost of USD 13 million based on the current CSA. KPC allocated cost for engineering, materials, studied, procurement, contingency, etc, at USD 37 million.

Materials
Based on the approval procurement strategy by shareholders for Phase I, Apache is procuring the material to achieve the Phase I project target date for the following commodities:

• Manual and actuated valves P.O. issued.
• Combined control & safety system and fire & gas devices P.O. issued.
• Chemical injection packages P.O. to be issued.
• Piping bulks and fitting material LOI issued.
• UPS LOI issued.
• LV switchgear LOI to be issued early October
• Tagged instruments LOI to be issued early October
• E&I bulk tenders being evaluated and clarifications issued.
• Firefighting equipment tenders to be issued.

Based on the approval procurement strategy by shareholders for Phase II, GOGC will prepare and compile the tender requisition packages for KPC to procure the materials to achieve the Phase II project target date. Requisition for HP separator is being prepared for issue to KPC for review, and requisition for LP vessels being prepared for issue to KPC for review.

• Construction Phase
  Fax of award issued to Petrojet on August 28th 2013.
• Kick-off meeting held September 4th 2013.
• Petrojet delayed commencement, rough grading and leveling for process area from first week of September, and delayed to start in early October.
• Petroject scheduled completed geotechnical survey on September 2nd, and for the technical report to be issued on September 9th 2013. Report finally received September 16th, and this delay has impacted the civil work being carried out by GOGC.

Reporting by Wael Elserag