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HAZOP REPORT

KAZAKHSTAN – CHINA PIPELINE HAZOP REPORT PREPARED BY MAKETSTROY LLP

MAKETSTROY LLP KAZAKHSTAN, KYZYLORDA, MOSTOVAYA STREET Fax +7 7242 23 57 68

Job No. Doc No. Revision Date

File Ref.

0001 SCS-HAZOP-001-KCP A 21 DECEMBER 2012 S:Projects /JU-05674 SCS Design Review HAZOP/6.0ENGINEERING/6.10 Pipelines/HAZOP/JU-05674REPS0002 Rev A Pipeline HAZOP report.doc

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HAZOP REPORT Rev A Date 10 December 2012 21 December 2012 Issue for MKS Description of Change

B

Issued for Client Review

Name Signature

Prepared N.Shusharin

Checked A.Kudrin

Approved Y.Galimov

Reliance by any other party on the contents of the report shall be at its own risk. SCS makes no warranty or representation, expressed or implied, to liabilities with respect to any other party use of or damages resulting from such use of any information, conclusions or recommendations disclosed in this report.

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HAZOP REPORT CONTENTS ABBREVIATIONS 1.0 1.1 1.2 1.3 2.0 3.0 INTRODUCTION General Background HAZOP Team SCOPE OF WORK SUMMARY 3.1 High Risk Actions 3.2 Other Actions 4.0 4.1 4.2 4.3 4.4 5.0 HAZOP STUDY PROCEDURE HAZOP Process Study nodes Attendees Documentation

FINDING 5.1 High risk Actions 5.2 Medium risk Actions 5.3 Low risk Actions ENVIROMENTAL RISKS

6.0

APPENDIX I HAZOP GUIDEWORDS APPENDIX II HAZOP WORKSHEETS

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HAZOP REPORT ABBREVIATIONS ANSI CP CPPE e.g. EPC ESD ESDV HAZOP HHLS ILF KCP KING km LIT LAHH LALL LSHH LSLL MAOP MOV N/A NAH PA P&ID PS PV QED RV SCADA SNiP American National Standards Institute Cathodic Protection China Petroleum Engineering for example Engineering Procurement and Construction Emergency Shutdown Emergency Shutdown Valve Hazard and Operability Study High High Level Switch Ingenieur Gemeinschaft Lasser & Feizlmayer Kazakhstan China Pipeline Limited Kazakh Institute of Oil and Gas kilometre Level Indicator Transmitter Level Alarm High High Level Alarm Low Low Level Switch High High Level Switch Low Low Maximum Allowable Operating Pressure Motorised Operated Valve Not Applicable No Additional Hazard Pressure Alarm Piping and Instrumentation Diagram Pressure Switch Pressure-Vacuum QED International Relief Valve Supervisory Control And Data Acquisition USSR Construction Norms and Regulations

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HAZOP REPORT 1.0 1.1 INTRODUCTION General This report details the findings of a HAZOP study of the basic engineering design of the Kazakhstan-China Pipeline, stations 8, 10 and 11 on behalf of MKS LLP. The HAZOP was performed during 6th December to 21st December 2012 at the Project Office in Kyzylorda, Kazakhstan.

1.2

Background The Kazakhstan-China Pipeline will carry crude oil in a pipeline from Atasu in Kazakhstan to Alashankou in China, a distance 962,2 km. The project includes the design and construction of the pipeline; pumping facilities at the existing Atasu station; mainline block valves; intermediate pump station; pig trap stations for future pump stations and a metering station at Alashankou. The pipeline will be controlled using a computer operated SCADA system complete with dedicated data and voice communications. In addition the necessary ancillary control and maintenance buildings, emergency response and other supplementary facilities will be provided.

1.3

HAZOP Team The team was led by a highly experienced independent chairman who is also a process engineer. The HAZOP team consisted of an independent pipeline engineer, a process engineer as secretary and engineering personnel from MKS LLP. An interpreter was present for translation of English and Russian. The main objective of this HAZOP study was to systematically identify as many foreseeable hazards and operational concerns as possible that were associated with the design of the pipeline and Stations 8,10 and 11. At the start of the HAZOP study, the chairman briefed the HAZOP team on the HAZOP process and identified the guidewords to be used. HAZOP was reported in full using Microsoft Word software and the current worksheet was visually projected so that all team members could see the progress of the discussions as they were being recorded.

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HAZOP REPORT 2.0 SCOPE OF WORK The scope of work was to conduct a HAZOP on the basic design of the Kazakhstan to China pipeline and stations 8, 10 and 11 owned by KCP to identify the areas where changes could be made to reduce any hazard associated with the operation of the pipeline and improve its operability. The HAZOP process was applied to each station (8,10,11) and section of the pipeline and associated piping and equipment. The extent of the study was from immediately upstream of the Kumkol and West Siberia pig receivers at Atasu to immediately downstream of the metering runs at Alashankou using the PEtlD's provided. The electrical, communications, buildings and other portions of the project which are ancillary to the basic process and not shown on the P&ID's were excluded from the HAZOP. SUMMARY The HAZOP addressed the basic engineering design of the stations 8, 10, 11 and Kazakhstan-China Pipeline and associated facilities. There were no hazards identified that were considered to be of sufficiently high level of risk to result in a substantial delay to project completion.

3.0

3.1

High Risk Actions Hazards identified where the Pipeline Operation and stations 8, 10, 11 considered to be exposed to major risks are: • Operation, Maintenance and Control Philosophy Document There is a requirement for an approved Process Control, Shutdown, Emergency Shutdown and Start-up Philosophy to be in place before proceeding to detailed engineering. The risks associated-with not having an approved Philosophy in place are high because there could be a loss of integrity in the detailed design leading to hazardous situations, loss of production, and which could have an impact on the reputation of the Operating Company. • Meter Precision The precision of the Atasu and Alashankou meters will be compromised because of leakage paths to or from the meter prover circuit during meter proving. Also, oil could leak through the meter run discharge valve while meter proving. These will result in errors in the metered volumes. • Pipeline Plugging The problem of pipeline plugging must be studied and recommendations made to minimize it and clear the plugged line. The temperature of the oil could fall below the pour point resulting in wax formation with the possibility of complete line blockage. If the line becomes blocked then there will be a significant loss of production.

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HAZOP REPORT • Drainage of Impressed Current of the Pipeline Cathodic Protection System There is a potential for the cathodic protection impressed current to drain through the valve stem and motor operator of the pipeline block valves. If this occurs then the corrosion rate along the pipeline will be increased resulting in eventual pipeline failure, loss of containment of crude oil and loss of production. • Internal Corrosion The anticipated internal rate of corrosion should be established to determine the design pipeline corrosion allowance to ensure that the wall thickness at the end of the life of the pipeline meets code requirements. Failure to establish the internal rate of corrosion could result in pipeline failure with the consequent loss of crude oil containment and loss of production.

• Overpressure of Piping and Valves At Pump Stations 8, 10, 11 and Alashankou there are sections of piping that are not designed to withstand the pressures that could be generated by the system. Also at these Pump Stations there are two valves upstream of the surge relief valves that are underrated. These sections of piping and the valves must be uprated or protected against overpressure because the risk of overpressure is high and the potential consequences resulting from a valve failure or piping rupture are unacceptable.  System of smoothing waves of pressure In the operation process of pipeline there are risks related with emergence of pressure waves which can lead to a rupture of pipes in certain places. Such risks are avoided generally by use of systems of smoothing pressure waves and valves which are independent of electricity consumption. 3.2 Other Actions A complete listing of all identified hazards is given in Appendix II. This listing includes recommendations to address the identified hazards. HAZOP STUDY PROCEDURE HAZOP Process The aim of the HAZOP process is to identify potential deviations in process and control parameters that may lead to possible hazardous situations or operability problems. A systematic analysis is used for challenging the design by applying guidewords rigorously to each part of the process system identified on the P&IDs. The process systems are divided into nodes which provide manageable sections of plant for analysis. The purpose of the HAZOP process is to assist the design engineer by identifying hazards so that the design engineer can assess them and mitigate the hazards as appropriate.
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4.0 4.1

HAZOP REPORT The identified hazards relate to protection of people, protection of equipment, protection of production, protection of the environment; and the engineering design must address ways of mitigating, these hazards. Eliminating these hazards through design increases the integrity of the design, minimises loss of production and protects the reputation of the Operating Company. Hazards or operability problems were identified during the analysis. The hazards or problems were then discussed and recorded, taking into account design safeguards and mitigating measures. If the system arrangements were considered inadequate or deemed to require further review then an action was recorded.

4.2

Study nodes NODE Station 11

Station 8

Station 10

Alashankou Atasu

1a 1b 1c 1d 2a 2b 2c 2d 3a 3b 3c 3d 4a 5a 5b 5c 5d 5e 5f 5g 5h 5i, 5j, 5k

DESCRIPTION Station 11 Pig Receiver Suction to Pig Launcher Discharge Station 11 Pig Receiver Operation Station 11 Pig Launcher Operation Pig Station 11 Trap Drainage System Station 8 Pig Receiver Suction to Pig Launcher Station 8 Pig Receiver Operation Station 8 Pig Launcher Operation Pig Station 8 Trap Drainage System Station 10 Pig Receiver Suction to Pig Launcher Station 10 Pig Receiver Operation Station 10 Pig Launcher Operation Pig Station 10 Trap Drainage System Drains system (ST-12101) Kumkol to RV to Filter to Heat Exchanger Inlet West Siberia to Filter to RV to Heat Exchanger Inlet/tankage Heat Exchanger Inlet to Outlet Tanks (new build) Metering to pipeline Metering prover loop Pipeline Pig Launcher Pump set P07405/6/7 vertical Drain system

5l Firewater

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Total System HAZOP REPORT

6a 6b 6c 6d 6e

General Normal Operation Controlled Shutdown Emergency Shutdowns Restart

4.3

Attendees Должность Chief Executive Officer Deputy CEO Process Engineer Independent Pipeline Engineer Inspection Engineer Head of HSE department Engineer Engineer (ISO 9001) Process Engineer Process Engineer Process Engineer Process Engineer Process Engineer Process Engineer Компания SCS SCS SCS SCS SCS SCS SCS SCS CIS CIS CIS CIS CIS CIS

Имя Yerkebulan Aimurzayev Anuar Mustafin Nartay Orazbek Bolat Kudaibergenov Alish Bazarbayev Nurdilda Sagimbayev Hamit Zhumabekov Zhanna Sadikova Kerkez Miodrag Bovan Milan Hornyak Misho Gligich Miodrag Kaprish Stevica Vrovak Miodrag

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HAZOP REPORT 4.4 Documentation P&ID KCPP-06-E-IN-DW-0002 REVISION Rev 0 28/01/05 Rev0 13/11/12 NAME MPS Atasu Reconstruction P&ID № 10 Pump Station P&ID Platform of valves of dumping of waves of pressure at the exit to NPS 10

KCPK2-10-E-PR-DW-0001

KCPK2-10-E-PR-NM-0008

Rev0 12/11/12

КСPP-0201-E-PR-DW-0001

Rev0 16/06/10

№11 Pump Station technology scheme

KCPP-0201-E-WF-DW-0010

Rev0 20/05/10

№ 11 Pump Station plan of networks of water supply, sewerage and fire extinguishing № 10 Pump Station Platform of the pump of the return injection No. 8 Pump Station P&ID

KCPK2-10-E-PR-NM-0005

Rev0 12/11/12

KCPK2-08-E-PR-DW-0001

Rev0 12/07/12

KCPK2-08-E-MA-DW-0001

Rev0 18/11/12

No. 8 Pump Station Fire Fighting System P&ID Alashankou Metering Station P&ID

KCPK2-10-E-AF-OT-0002-00

Rev0 18/11/12

KCPB01 -E-IN-DW-0001 001 -0

Rev 0 17/05/05 Rev 1 08/06/05

Pipeline Block Valve Station P&ID (592 - 962.2 km)

KCPB01-E-PR-DW-0002-011

No. 11 Pig Trap Station P&ID

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HAZOP REPORT 5.0 FINDINGS The HAZOP addressed the basic engineering design of the Pump Stations 8, 10, 11 and Kazakhstan-China Pipeline as well as associated facilities. The results of the HAZOP are detailed in the HAZOP worksheets detailed in Appendix II, which contain a complete list of recommendations. Some of the recommendations contain solutions that were discussed by the HAZOP team members. However, these solutions are included for information only - there may be other solutions that will adequately address the recommendations. Based on the HAZOP team discussions and experience, the SCS team members made a qualitative assessment of the level of risk to the Pipeline Operation for each of the identified hazards. Three levels of risk were used: high risk where there could be a major adverse impact on Pipeline Operation, medium risk where there could be a significant impact on Pipeline Operation and low risk where the impact on Pipeline Operation was not considered to be of major significant due to the small likelihood of the situation occurring and the consequences not being substantial The hazards listed in this report are not in order of priority. There were no hazards identified that were considered to be of sufficiently high level of risk to result in substantial delay to project completion.

5.1

High Risk Actions The following items are considered to have a high risk with a high possibility of them occurring and having severe consequences. These items should be addressed and actions implemented to minimise the risk associated with the hazard. • Operation, Maintenance and Control Philosophy Document Currently there is not an approved Process Control, Shutdown, ESD, Start-up or Restart Philosophy. There is a requirement for these philosophies to be written to provide a basis of design for detailed engineering to proceed. The Philosophies must incorporate all aspects of Operation including loss of services such as Communications. The risks associated with not having an approved Philosophy in place are high because there could be a loss of integrity in the detailed design. The design must follow a set of requirements that is agreed and approved and must address the protection of people, equipment, production and the environment. If any of these is compromised then a hazardous situation could result, there could loss of production and there could be an impact on the reputation of the Operating Company. • Meter Precision It is critical for custody transfer meter and prover systems as present at Pump Stations 8,10, 11, Atasu and Alashankou, that there are no possible leak paths between the meter and the prover outlet so that all oil passing through the meter also passes through the meter and through the prover will lead to an invalid meter factor. As result of this, the subsequent metered volumes will be incorrect by possibly a relatively large amount.
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HAZOP REPORT On the basic design P&IDs there are a number of potential leak paths that need to be eliminated or designed such that any leak can be easily detected. Possible means of detecting a leak could be by the use of tundishes, or by using double block and bleed valves. The leak paths identified include lines to the closed drain system, the prover RV discharge line, lines to and from the calibration and flushing connections and the valve in the main oil flow line downstream of the meter. • Pipeline Plugging The problem of pipeline plugging must be studied and recommendations made to minimise it and a method to clear a plugged line developed. The temperature of the oil could fall below the pour point resulting in wax formation with the possibility of complete line blockage. If the line becomes blocked then there will be a significant loss of production. It is probable that plugging of the pipeline will occur and a method of clearing the blockage should be designed to minimise the time that the plug exists. A method of clearing a plugged line that is commonly used is to have standpipes either side of the pipeline block valves to permit the clearing of a short section using a portable high pressure piston pump. • Drainage of Impressed Current of the Pipeline Cathodic Protection System There is a potential for the CP impressed current to drain through the valve stem and motor operator of the pipeline block valves. If this occurs then the corrosion rate along the pipeline will be increased resulting in possible pipeline failure, loss of containment of crude oil and loss of production. The valve extension, the valve shaft and the instrumentation adjacent to the valve must be electrically isolated from the pipeline at every pipeline block valve and an isolating joint should be installed immediately downstream of the barred tee at Atasu. • Internal Corrosion The anticipated internal rate of corrosion should be established to determine the design pipeline corrosion allowance to ensure that the wall thickness at the end of the life of the pipeline meets code requirements. Failure to establish the internal rate of corrosion could result in pipeline failure with the consequent loss of crude oil containment and loss of production over an extended period.

• Overpressure of piping and valves At Pump Station 8, 10, 11 and Alashankou there are sections of piping that are not designed to withstand the pressures that could be generated by the system. Also at Pump Station 8, 10 and 11 there are two valves, XV09114 and XV09117, upstream of the surge relief valves that are underrated. These sections of piping and valves must be identified and uprated or protected against overpressure. The risk of overpressure is high and the potential consequences resulting from a valve failure or pipe rupture are unacceptable.

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HAZOP REPORT • System of smoothing pressure waves During the operation process of pipeline there can be an unauthorized shutdown of pumps, additionally they are stopped and start dueto change of an operating mode of the pipeline. In such cases there is a sharp change of speed of oil that leads to pressure increase in the pipeline. In this cases the wave of a high pressure reaches sound speed. The hydroblow from such wave is capable to lead to destruction of shutoff valves and the pipeline and the most weak spots, for example at Pump Station exit where working pressure sometimes reaches a limit of a bearing capability. In order to avoid such risks it is necessary to provide system of smoothing pressure waves as well as to supply with nitric drives not only SSVD valves but also all valves of the pipeline which will provide stable pressure in case of planned or unauthorized shutdown of pumps.

5.2

Medium risk Actions The following items are considered to have a medium risk with a high possibility of occurring or having severe consequences should they occur. A means of mitigating the risks should be implemented where possible. • Stored Energy in traps During normal operation of the pipeline the pig traps would normally be depressured, drained and shut in when not being used for pigging. However, there are leakage paths for crude oil to enter the traps either by passing through the closed main line valve or through the kicker or bridle line valves. If the drain or vent on the trap is blocked with wax then there is a possibility that the trap pressure could rise because of leakage and not be detected. Opening of the closure under these circumstances would cause a release of the stored energy with potentially catastrophic results. Some industry standards require double block and bleed valve arrangement on the main inlet and outlet trap lines because fatalities have occurred. The design of the traps should have either a double block and bleed valve arrangement or they should be designed with alternative protection against accidental release of stored energy. The alternative protection must have an equivalent level of integrity as a double block and bleed valve arrangement. • Tank vents No vents are shown on the surge relief tanks at Pump Station 9 and Alashankou. These tanks are critical to the surge relief path and Project must ensure that the tanks are correctly vented to prevent rupture or collapse. • Crude oil entering thermal oil heater There is a possibility of crude oil entering the thermal oil circuit should there be a tube rupture within any of the crude oil/thermal oil shell and tube heat exchangers. In this circumstance thermal degradation of the crude oil in the heater could occur leading to failure of the heater and subsequent loss of production. The design should minimise the risk of this occurrence.

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HAZOP REPORT • ESDVs During an emergency shutdown there is the possibility of continued flow through Atasu, Pump Station 9 and Alashankou. ESDVs are required to be fitted at these sites to provide tight shut off. The ESDVs should not be able to be bypassed and should not be motor operated. • Pipeline transients The main line block valve closure times should be reviewed to ensure that transients are not generated by the closure of one of these valves resulting in potential damage to the pipeline. • Piping Overpressure The protection against overpressure of the piping downstream of the pumps at Pump Stations 8, 10 and 11 is dependant upon the third pump not starting when two pumps are in operation. The Project should ensure that SCADA inhibits the starting of the third pump. • SCADA interlocks SCADA interlocks are required on the pig traps so that misoperation of the trap valves cannot take place allowing the trap closure to be opened with mainline, kicker or bridle valves opened or a valve to be accidentally opened while the trap closure is open. • Insulating joint An insulating joint between Atasu and the outgoing pipeline is required to electrically isolate the CP pipeline from the station piping and prevent drainage of impressed current. Failure to do this could result in increased corrosion rates on the pipeline which could lead to pipeline failure and subsequent loss of production. • Back Pressure Control for Meter Runs Back pressure control of the Atasu and Alashankou meter runs is required to ensure that the flow is above the minimum flow and that the pressure is sufficient to prevent bubble formation. Both of these events will lead to inaccurate meter readings. • Buried piping Corrosion Protection There is no means of protecting station buried piping from external corrosion. Buried piping needs to be protected from corrosion by applying an adequate coating material and installing a sacrificial or impressed current CP system to mitigate corrosion. • Alashankou Additional filter An additional filter at Alashankou is recommended so that a blocked or failed filter does not result in a pipeline shutdown. • Pipeline Maximum Allowable Operating Pressure Confirmation is required that the MAOP of the Pipeline is sufficient to withstand pressures resulting from the highest possible pressure at Atasu and
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HAZOP REPORT pump stations 8, 10 and 11 with all pumps operating (including standby pumps). If the MAOP is exceeded then operation would be outside the SNiP design code.  NTD of welded seams After accomplishment of welded connections it is necessary to execute NDT of welded seams by methods of a X-ray, ultrasound and magnetic powder for the purpose of prevention of gaps and leakages in the pipeline, drainage reservoirs, reservoirs, etc. • Reconstruction of existing Pump Stations The pipeline construction establishes increase in capacity in 20 million tons per year. Initial designing was conducted taking into account in 10 million tons per year, therefore it is necessary to review handling capacity of all earlier constructed Pump Stations, nodes and locking fittings about handling capacity.

5.3

Low risk Actions A complete listing of all identified hazards, including those considered to have a low risk to the Pipeline Operation, is given in the HAZOP worksheets in Appendix II. Operating Procedure Documents must be written to cover all possible operations for the Atasu to Alashankou Pipeline for each mode operation, viz. normal operation, start-up, re-start, normal shutdown and emergency shutdowns. The procedures should be written when the detailed engineering design has been completed. In addition,

Maintenance Procedures should be written. Actions in the HAZOP worksheets referring to Operating Procedures are for the specific operations raised by the HAZOP team members. The actions are not a comprehensive list of all the possible operations that could take place for the Pipeline Operation. The actions are for specific operations that the HAZOP team members identified as being necessary for inclusion in the Operating Procedure Documents. Other low risk actions which were identified include requirements for thermal relief of blocked-in above ground piping; leak detection at drains tanks and drawing drafting errors which already have been addressed in the detailed design but the detail design should be checked to ensure that these items have been incorporated where appropriate. The PEtlDs for Atasu were found to be confusing to follow. It is recommended that the Atasu P&IDs are re-drawn to give clarity and precision. There is a possibility that mistakes could be made when using the existing set of Atasu P&IDs.

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HAZOP REPORT APPENDIX I HAZOP GUIDEWORDS Parameter FLOW or VELOCITY More Less No Reverse / Cycling Misdirected TEMPERATURE Higher Lower Fluctuating PRESSURE Higher Lower Fluctuating Higher Lower Other than Part of Different OPERATIONS Modes of operation Commissioning / Start-up Normal shut down Emergency shutdown Preparation for Execution Re-instatement after OTHER Reliability Failure of material Utility failure Pollution Fire & explosion Design documentation CORROSION (internal/extern al) DRAWING Guideword Deviation may be caused by Reduced backpressure, surging, suction pressurised, controller failure, valve stuck open, leak, incorrect Leak, partial blockage, sediment, instrument reading cavitation, low suction head, process Blockage, pump failure, closed / stuck turndown. valve, leak, suction vessel empty, vapour lock, control failure. Check valve failure or wrongly inserted, poor isolation, wrong routing, control failure, delivery over pressurised, back siphoning, pump reversed, slugging. Incorrect valve selection, valve leakage External fire, heat tracing , sun, flare Expansion, heat loss, vaporisation, rain. Seasonal or day/night variation Blockage, gas release, reaction, thermal expansion, explosion, elevation change. Siphoning, gravity draining, vacuum Surge, slugging Flooding, pressure surge, carryover Leakage, controller/valve failure Presence of impurities (e.g. air, water, acids, salts, lube oil), formation of wax, hydrates, scale. Different number of phases, foaming. Solids, equipment leaks. Change in viscosity, density, Change in proportions, water or conductivity solvent, more/less additive. Bypass, turndown, recycle, parallel steps Strainers, overrides, utilities, cleaning Stagnant corrosion, trapped pressure Valve/actuator/limit switch failure Isolation, draining, venting, gas-freeing Access, lifting, space Inspection & test, de-isolation Voting, redundancy, testing Erosion, corrosion, cycling fatigue, acoustic vibration, cold embrittlement. Instrument air, water, hydraulics, power. Valve failure position Leakage, bunds, oil spill response Ignition sources, F&G detection, fire protection, leakage Errors, spec breaks, line gradient, tag nos.

LEVEL (vessels ) COMPOSITION

MAINTENANCE

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HAZOP REPORT

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HAZOP REPORT

SCS-HAZOP-001-KCP

APPENDIX II HAZOP WORKSHEETS HAZOP WORKSHEET PROJECT: Kazakhstan - China Pipeline Project Atasu - Alashankou Crude Oil Pipeline Pipeline section: Node 1a - Station 11 - Pig Receiver Suction to Pig Launcher Discharge Design intent: To bypass pig traps at Station 11, normal operating route. DEVIATION CAUSE Shut Valve No Flow Blockage of line Pig stuck in line More Flow Less Flow See Node 6a "More Flow" Outage of intermediate pump station Partial blockage Loss of production None 2. Operating procedures to include outage of intermediate pump at Pump Stations. CONSEQUENCE Loss of production SAFEGUARDS None Date: 21/12/12 P&iD number: No. 11 Pig Trap Station KCPB01-E-PR-DW-0002-01-1 Rev 1 08/06/05 ACTION 1. Operating procedures to be written for Station 11.

Reverse Flow Upstream pipeline rupture depending on topology See Node 6a "More Flow" Misdirected Flow Open bypass

Loss of production

None

3. Line walk and air inspection to be formalized for the whole pipeline.

NAH

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HAZOP REPORT

SCS-HAZOP-001-KCP

DEVIATION

CAUSE CONSEQUENCE Open trap Spillage valves, traps not ready e.g. Drain valves open

SAFEGUARDS None

ACTION 4. Operating procedures to include management of traps at Station 11. 5. SCADA interlock to prevent misoperation of valves at Station 11. 6. Provide physical containment of oil spills at Station 11. 7. Consider requirement for thermal relief at Station 11.

Higher Temperature

Thermal expansion between closed valves in above ground piping Weather Sudden valve closure at metering Sudden pipeline block valve closure Slow closure of downstream valve Increased viscosity due to cold weather

Leakage

None (assume piping above ground)

Low Temperature Higher Pressure

Wax build up Transient pressure Transient pressure

None Transient relief valve at the downstream metering station None

8. Consider installing means of mitigating wax build up and plugging at Station 11.

9. Review main line block valve closure times throughout pipeline.

Increase pressure

Pumps shutdown by SCADA

Lower Pressure

Reduced flowrate Pipeline plugging

Pressure Transmitter

10. Hydraulic analysis of pipeline to review viscosity concerns.

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HAZOP REPORT

SCS-HAZOP-001-KCP

Pipeline Potential slack line shutdown and cold weather Composition Operation Internal Corrosion DEVIATION External Corrosion NAH NAH Addressed in Node 6a "Internal Corrosion" CAUSE Addressed in Node 6a External Corrosion

None

11. Operating procedures to be written to ensure that minimum line pack is maintained at all times, including shutdown.

CONSEQUENCE

SAFEGUARDS

ACTION

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HAZOP REPORT

SCS-HAZOP-001-KCP

HAZOP WORKSHEET PROJECT: Kazakhstan - China Pipeline Project Atasu - Alashankou Crude Oil Pipeline Pipeline section: Node 1b - Station 11 - Pig Receiver Operation Design intent: Pig management DEVIATION CAUSE No Flow NAH Wax in Less Flow bridle/drain lines Misdirected Flow Routed to drain/vent Through trap closure CONSEQUENCE Inability receive pig Spillage on opening pig receiver Loss of containment through drain/vent Overfilling of drain tank Spillage Injury None One block valve on vent None SAFEGUARDS

Date: 22/12/12 P&ID number: No. 11 Pig Trap Station KCPB01-E-PR-DW-0002-01-1 Rev 1 08/06/05 ACTION 12. Operating and maintenance procedures to be written for Station 11 receiver operation. 13. Provide second block valve on pig receiver vent at Station 11 or other means of integrity of isolation. 14. Ensure that there is a fail safe interlock system on Station 11 receiver main valve, bridle line and closure, so that closure can only be opened when valves are closed e.g. Key lock system. 15. Operating procedure to include requirement for receiver to be depressured and drained during normal operations at Station 11.

Reverse Flow NAH Weather, locked Higher Temperature in system Low Temperature Higher Pressure NAH High pressure through leaking valve when trap not in use

Higher pressure Potential leak

PSV-11101

Potential injury when trap is being put into use

None

16. Recommend double block valves on inlet to Station 11 receiver or another alternative system that has equivalent isolation integrity to a system with double block valves. See action 17.
t

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HAZOP REPORT

SCS-HAZOP-001-KCP

DEVIATION CAUSE CONSEQUENCE Lower NAH Pressure Deterioration of valve leading None Higher Flow Pressure differential across to passing valve bridle valve when pressuring pig trap Levels Operation NAH No valves on individual bridle lines on trap Poor control of receiving pig. Potential damage to pig or closure

SAFEGUARDS

ACTION 17. Recommend addition of small bore pressurising line incorporating globe valve and block valve (bypassing bridle valves) at pig receiver at Station 11. 18. Recommend provision of additional valve on each bridle line on the Station 11 receiver or removal of the second bridle line on the Station 11 receiver. The remaining bridle line is to have an additional valve to give double block capability or other means of positive isolation.

None

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HAZOP REPORT

SCS-HAZOP-001-KCP

HAZOP WORKSHEET PROJECT: Kazakhstan - China Pipeline Project Atasu - Alashankou Crude Oil Pipeline Pipeline section: Node 1c - Station 11 - Pig Launcher Operation Design intent: Pig management DEVIATION CAUSE CONSEQUENCE SAFEGUARDS

Date: 21/12/12 PEtID number: No. 11 Pig Trap Station KCPB01-E-PR-DW-0002-01-1 Rev 1 08/06/05 ACTION 19. Operating and maintenance procedures to be written for Station 11 launcher operation. 20. Provide second block valve on launcher vent at Station 11 or other measures of ensuring integrity of isolation. 21. Ensure that there is a fail safe interlock system on Station 11 launcher main valve, kicker valve and closure, so that closure can only be opened when valves are closed e.g. Key lock system.

No Flow Misdirected Flow

NAH Routed to drain/vent

Loss of containment through One block valve on vent drain/vent Overfilling of drain tank Spillage Injury None

Through trap closure

Reverse Flow NAH Weather, locked Higher Temperature in system

Higher pressure Potential leak

PSV-11102

22. Operating procedure to include requirement for launcher to be depressured and drained during normal operations at Station11.

Low NAH Temperature

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HAZOP REPORT

SCS-HAZOP-001-KCP

DEVIATION CAUSE Higher High pressure through leaking Pressure valve when trap not in use

CONSEQUENCE Potential injury when trap is None to be put into use

SAFEGUARDS

ACTION 23. Recommend double block valves on outlet and kicker line on Station 11 launcher or another alternative system that has equivalent isolation integrity to a system with double block valves.

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HAZOP REPORT

SCS-HAZOP-001-KCP

HAZOP WORKSHEET PROJECT: Kazakhstan - China Pipeline Project Atasu - Alashankou Crude Oil Pipeline Pipeline section: Node 1d - Pig Station 11 - Trap Drainage System Design intent: Management of pig traps DEVIATION No Flow CAUSE Wax blockage in drain line CONSEQUENCE Traps cannot be drained SAFEGUARDS None

Date: 21/12/12 P&ID number: No. 11 Pig Trap Station KCPB01-E-PR-DW-0002-01-1 Rev 1 08/06/05 ACTION 24. Operating procedures to be prepared for drainage system and to include the event of wax blockage in Station 11 drain line.

Less Flow More Flow Misdirected Flow Temperature Low High Temperature High Pressure Low Pressure Level High

NAH NAH From one trap to other Weather NAH NAH NAH Pump Failure Level Transmitter Failure

Liquid in other trap Inability to empty tank, viscosity is too high (wax)

Isolation valve None See action 24.

Overfilling

None

25. Recommend that the LIT on Station 11 drain tank transmits to SCADA. 26. Recommend that LSHH is installed on Station 11 drain tank. 27. Drawing to show local or remote operation of pump at Station 11 drain tank.

Low Level

NAH

Page 25 of 91

HAZOP REPORT

SCS-HAZOP-001-KCP

■■....' "■ ■ ...........■■ ■-■ "■ ■■

DEVIATION Corrosion

CAUSE

CONSEQUENCE Tank leakage, no indication None

SAFEGUARDS

ACTION 28. Confirm leak detection provided in the pit around the Station 11 drain tank. 29. Recommend tank corrosion protection system, including sacrificial anodes for Station 11 drain tank.

Page 26 of 91

HAZOP REPORT

SCS-HAZOP-001-KCP

HAZOP WORKSHEET PROJECT: Kazakhstan - China Pipeline Project Atasu - Alashankou Crude Oil Pipeline Pipeline section: Node 2a - Station 8 - Pig Receiver Suction to Pig Launcher Discharge Design intent: To bypass pig traps at Station 8, normal operating route. DEVIATION CAUSE Shut Valve No Flow Blockage of line Pig stuck in line More Flow Less Flow See Node 6a "More Flow" Outage of intermediate pump station Partial blockage Loss of production None CONSEQUENCE Loss of production SAFEGUARDS None

Date: 21/12/12 P&iD number: No. 8 Pig Trap Station KCPB01-E-PR-DW-0002-01-1 Rev 1 08/06/05 ACTION 30. Operating procedures to be written for Station 8.

31. Operating procedures to include outage of intermediate pump at Pump Stations.

Reverse Flow Upstream pipeline rupture depending on topology See Node 6a "More Flow" Misdirected Flow Open bypass

Loss of production

None

32. Line walk and air inspection to be formalised for the whole pipeline.

NAH

Page 27 of 91

HAZOP REPORT

SCS-HAZOP-001-KCP

DEVIATION

CAUSE CONSEQUENCE Open trap Spillage valves, traps not ready e.g. Drain valves open Thermal expansion between closed valves in above Weather Sudden valve closure at metering Sudden pipeline block valve closure Slow closure of downstream Increased viscosity due to cold weather Pipeline shutdown and cold weather NAH NAH Addressed in Node 6a "Internal Corrosion" Leakage

SAFEGUARDS None

Higher Temperature

None (assume piping above ground)

ACTION 33. Operating procedures to include management of traps at Station 8. 34. SCADA interlock to prevent misoperation of valves at Station 8. 35. Provide physical containment of oil spills at Station 8. 36. Consider requirement for thermal relief at Station 8.

Low Temperature Higher Pressure

Wax build up Transient pressure Transient pressure Increase pressure Reduced flowrate Pipeline plugging Potential slack line

None Transient relief valve at the downstream metering station None Pumps shutdown by SCADA Pressure Transmitter None

37. Consider installing means of mitigating wax build up and plugging at Station 8.

38. Review main line block valve closure times throughout pipeline.

Lower Pressure

39. Hydraulic analysis of pipeline to review viscosity concerns. 40. Operating procedures to be written to ensure that minimum line pack is maintained at all times, including shutdown.

Composition Operation Internal Corrosion

Page 28 of 91

HAZOP REPORT

SCS-HAZOP-001-KCP

DEVIATION External Corrosion

CAUSE Addressed in Node 6a External Corrosion

CONSEQUENCE

SAFEGUARDS

ACTION

Page 29 of 91

HAZOP REPORT

SCS-HAZOP-001-KCP

HAZOP WORKSHEET PROJECT: Kazakhstan - China Pipeline Project Atasu - Alashankou Crude Oil Pipeline Pipeline section: Node 2b - Station 8 - Pig Receiver Operation Design intent: Pig management DEVIATION CAUSE No Flow NAH Wax in Less Flow bridle/drain lines Misdirected Flow Routed to drain/vent Through trap closure CONSEQUENCE Inability receive pig Spillage on opening pig receiver Loss of containment through drain/vent Overfilling of drain tank Spillage Injury None One block valve on vent None SAFEGUARDS

Date: 21/12/12 P&ID number: No. 11 Pig Trap Station KCPB01-E-PR-DW-0002-01-1 Rev 1 08/06/05 ACTION 41. Operating and maintenance procedures to be written for Station 8 receiver operation. 42. Provide second block valve on pig receiver vent at Station 8 or other means of integrity of isolation. 43. Ensure that there is a fail safe interlock system on Station 8 receiver main valve, bridle line and closure, so that closure can only be opened when valves are closed e.g. Key lock system. 44. Operating procedure to include requirement for receiver to be depressured and drained during normal operations at Station 8.

Reverse Flow NAH Weather, locked Higher Temperature in system Low Temperature Higher Pressure NAH High pressure through leaking valve when trap not in use

Higher pressure Potential leak

PSV-11101

Potential injury when trap is being put into use

None

45. Recommend double block valves on inlet to Station 8 receiver or another alternative system that has equivalent isolation integrity to a system with double block valves. See action 17.
t

Page 30 of 91

HAZOP REPORT

SCS-HAZOP-001-KCP

DEVIATION CAUSE CONSEQUENCE Lower NAH Pressure Deterioration of valve leading None Higher Flow Pressure differential across to passing valve bridle valve when pressuring pig trap Levels Operation NAH No valves on individual bridle lines on trap Poor control of receiving pig. Potential damage to pig or closure

SAFEGUARDS

ACTION 46. Recommend addition of small bore pressurising line incorporating globe valve and block valve (bypassing bridle valves) at pig receiver at Station 8. 47. Recommend provision of additional valve on each bridle line on the Station 8 receiver or removal of the second bridle line on the Station 8 receiver. The remaining bridle line is to have an additional valve to give double block capability or other means of positive isolation.

None

Page 31 of 91

HAZOP REPORT

SCS-HAZOP-001-KCP

HAZOP WORKSHEET PROJECT: Kazakhstan - China Pipeline Project Atasu - Alashankou Crude Oil Pipeline Pipeline section: Node 2c - Station 8 - Pig Launcher Operation Design intent: Pig management DEVIATION CAUSE CONSEQUENCE SAFEGUARDS

Date: 21/12/12 PEtID number: No. 8 Pig Trap Station KCPB01-E-PR-DW-0002-01-1 Rev 1 08/06/05 ACTION 48. Operating and maintenance procedures to be written for Station 8 launcher operation. 49. Provide second block valve on launcher vent at Station 8 or other measures of ensuring integrity of isolation. 50. Ensure that there is a fail safe interlock system on Station 8 launcher main valve, kicker valve and closure, so that closure can only be opened when valves are closed e.g. Key lock system.

No Flow Misdirected Flow

NAH Routed to drain/vent

Loss of containment through One block valve on vent drain/vent Overfilling of drain tank Spillage Injury None

Through trap closure

Reverse Flow NAH Weather, locked Higher Temperature in system

Higher pressure Potential leak

PSV-11102

51. Operating procedure to include requirement for launcher to be depressured and drained during normal operations at Station8.

Low NAH Temperature
Page 32 of 91

HAZOP REPORT

SCS-HAZOP-001-KCP

DEVIATION CAUSE Higher High pressure through leaking Pressure valve when trap not in use

CONSEQUENCE Potential injury when trap is None to be put into use

SAFEGUARDS

ACTION 52. Recommend double block valves on outlet and kicker line on Station 8 launcher or another alternative system that has equivalent isolation integrity to a system with double block valves.

Page 33 of 91

HAZOP REPORT

SCS-HAZOP-001-KCP

HAZOP WORKSHEET PROJECT: Kazakhstan - China Pipeline Project Atasu - Alashankou Crude Oil Pipeline Pipeline section: Node 2d - Pig Station 8 - Trap Drainage System Design intent: Management of pig traps DEVIATION No Flow CAUSE Wax blockage in drain line CONSEQUENCE Traps cannot be drained SAFEGUARDS None

Date: 21/12/12 P&ID number: No. 8 Pig Trap Station KCPB01-E-PR-DW-0002-01-1 Rev 1 08/06/05 ACTION 53. Operating procedures to be prepared for drainage system and to include the event of wax blockage in Station 8 drain line.

Less Flow More Flow Misdirected Flow Temperature Low High Temperature High Pressure Low Pressure Level High

NAH NAH From one trap to other Weather NAH NAH NAH Pump Failure Level Transmitter Failure

Liquid in other trap Inability to empty tank, viscosity is too high (wax)

Isolation valve None See action 24.

Overfilling

None

54. Recommend that the LIT on Station 8 drain tank transmits to SCADA. 55. Recommend that LSHH is installed on Station 8 drain tank. 56. Drawing to show local or remote operation of pump at Station 8 drain tank.

Low Level

NAH

Page 34 of 91

HAZOP REPORT

SCS-HAZOP-001-KCP

■■....' "■ ■ ...........■■ ■-■ "■ ■■

DEVIATION Corrosion

CAUSE

CONSEQUENCE Tank leakage, no indication None

SAFEGUARDS

ACTION 57. Confirm leak detection provided in the pit around the Station 8 drain tank. 58. Recommend tank corrosion protection system, including sacrificial anodes for Station 8 drain tank.

Page 35 of 91

HAZOP REPORT

SCS-HAZOP-001-KCP

HAZOP WORKSHEET PROJECT: Kazakhstan - China Pipeline Project Atasu - Alashankou Crude Oil Pipeline Pipeline section: Node 3a - Station 10 - Pig Receiver Suction to Pig Launcher Discharge Design intent: To bypass pig traps at Station 10, normal operating route. DEVIATION CAUSE Shut Valve No Flow Blockage of line Pig stuck in line More Flow Less Flow See Node 6a "More Flow" Outage of intermediate pump station Partial blockage Loss of production None CONSEQUENCE Loss of production SAFEGUARDS None

Date: 21/12/12 P&iD number: No. 10 Pig Trap Station KCPB01-E-PR-DW-0002-01-1 Rev 1 08/06/05 ACTION 59. Operating procedures to be written for Station 10.

60. Operating procedures to include outage of intermediate pump at Pump Stations.

Reverse Flow Upstream pipeline rupture depending on topology See Node 6a "More Flow" Misdirected Flow Open bypass

Loss of production

None

61. Line walk and air inspection to be formalised for the whole pipeline.

NAH

Page 36 of 91

HAZOP REPORT

SCS-HAZOP-001-KCP

DEVIATION

CAUSE CONSEQUENCE Open trap Spillage valves, traps not ready e.g. Drain valves open Thermal expansion between closed valves in above ground piping Weather Sudden valve closure at metering station Sudden pipeline block valve closure Slow closure of downstream valve Increased viscosity due to cold weather Leakage

SAFEGUARDS None

Higher Temperature

None (assume piping above ground)

ACTION 62. Operating procedures to include management of traps at Station 10. 63. SCADA interlock to prevent misoperation of valves at Station 10. 64. Provide physical containment of oil spills at Station 10. 65. Consider requirement for thermal relief at Station 10.

Low Temperature Higher Pressure

Wax build up Transient pressure

None Transient relief valve at the downstream metering station None Pumps shutdown by SCADA

66. Consider installing means of mitigating wax build up and plugging at Station 10.

Transient pressure Increase pressure

67. Review main line block valve closure times throughout pipeline.

Lower Pressure

Reduced flowrate Pipeline plugging

Pressure Transmitter

68. Hydraulic analysis of pipeline to review viscosity concerns.

Page 37 of 91

HAZOP REPORT

SCS-HAZOP-001-KCP

Pipeline Potential slack line shutdown and cold weather Composition Operation Internal Corrosion DEVIATION External Corrosion NAH NAH Addressed in Node 6a "Internal Corrosion" CAUSE Addressed in Node 6a External Corrosion

None

69. Operating procedures to be written to ensure that minimum line pack is maintained at all times, including shutdown.

CONSEQUENCE

SAFEGUARDS

ACTION

Page 38 of 91

HAZOP REPORT

SCS-HAZOP-001-KCP

HAZOP WORKSHEET PROJECT: Kazakhstan - China Pipeline Project Atasu - Alashankou Crude Oil Pipeline Pipeline section: Node 3b - Station 10 - Pig Receiver Operation Design intent: Pig management DEVIATION CAUSE No Flow NAH Wax in Less Flow bridle/drain lines Misdirected Flow Routed to drain/vent Through trap closure CONSEQUENCE Inability receive pig Spillage on opening pig receiver Loss of containment through drain/vent Overfilling of drain tank Spillage Injury None One block valve on vent None SAFEGUARDS

Date: 21/12/12 P&ID number: No. 10 Pig Trap Station KCPB01-E-PR-DW-0002-01-1 Rev 1 08/06/05 ACTION 70. Operating and maintenance procedures to be written for Station 10 receiver operation. 71. Provide second block valve on pig receiver vent at Station 10 or other means of integrity of isolation. 72. Ensure that there is a fail safe interlock system on Station 10 receiver main valve, bridle line and closure, so that closure can only be opened when valves are closed e.g. Key lock system. 73. Operating procedure to include requirement for receiver to be depressured and drained during normal operations at Station 10.

Reverse Flow NAH Weather, locked Higher Temperature in system Low Temperature Higher Pressure NAH High pressure through leaking valve when trap not in use

Higher pressure Potential leak

PSV-11101

Potential injury when trap is being put into use

None

74. Recommend double block valves on inlet to Station 11 receiver or another alternative system that has equivalent isolation integrity to a system with double block valves. See action 17.
T

Page 39 of 91

HAZOP REPORT

SCS-HAZOP-001-KCP

DEVIATION CAUSE CONSEQUENCE Lower NAH Pressure Deterioration of valve leading None Higher Flow Pressure differential across to passing valve bridle valve when pressuring pig trap Levels Operation NAH No valves on individual bridle lines on trap Poor control of receiving pig. Potential damage to pig or closure

SAFEGUARDS

ACTION 75. Recommend addition of small bore pressurising line incorporating globe valve and block valve (bypassing bridle valves) at pig receiver at Station 10. 76. Recommend provision of additional valve on each bridle line on the Station 10 receiver or removal of the second bridle line on the Station 10 receiver. The remaining bridle line is to have an additional valve to give double block capability or other means of positive isolation.

None

Page 40 of 91

HAZOP REPORT

SCS-HAZOP-001-KCP

HAZOP WORKSHEET PROJECT: Kazakhstan - China Pipeline Project Atasu - Alashankou Crude Oil Pipeline Pipeline section: Node 3c - Station 10 - Pig Launcher Operation Design intent: Pig management DEVIATION CAUSE CONSEQUENCE SAFEGUARDS

Date: 21/12/12 PEtID number: No. 10 Pig Trap Station KCPB01-E-PR-DW-0002-01-1 Rev 1 08/06/05 ACTION 77. Operating and maintenance procedures to be written for Station 10 launcher operation. 78. Provide second block valve on launcher vent at Station 10 or other measures of ensuring integrity of isolation. 79. Ensure that there is a fail safe interlock system on Station 10 launcher main valve, kicker valve and closure, so that closure can only be opened when valves are closed e.g. Key lock system.

No Flow Misdirected Flow

NAH Routed to drain/vent

Loss of containment through One block valve on vent drain/vent Overfilling of drain tank Spillage Injury None

Through trap closure

Reverse Flow NAH Weather, locked Higher Temperature in system

Higher pressure Potential leak

PSV-11102

80. Operating procedure to include requirement for launcher to be depressured and drained during normal operations at Station10.

Low NAH Temperature
Page 41 of 91

HAZOP REPORT

SCS-HAZOP-001-KCP

DEVIATION CAUSE Higher High pressure through leaking Pressure valve when trap not in use

CONSEQUENCE Potential injury when trap is None to be put into use

SAFEGUARDS

ACTION 81. Recommend double block valves on outlet and kicker line on Station 10 launcher or another alternative system that has equivalent isolation integrity to a system with double block valves.

Page 42 of 91

HAZOP REPORT

SCS-HAZOP-001-KCP

HAZOP WORKSHEET PROJECT: Kazakhstan - China Pipeline Project Atasu - Alashankou Crude Oil Pipeline Pipeline section: Node 3d - Pig Station 10 - Trap Drainage System Design intent: Management of pig traps DEVIATION No Flow CAUSE Wax blockage in drain line CONSEQUENCE Traps cannot be drained SAFEGUARDS None

Date: 21/12/12 P&ID number: No. 10 Pig Trap Station KCPB01-E-PR-DW-0002-01-1 Rev 1 08/06/05 ACTION 82. Operating procedures to be prepared for drainage system and to include the event of wax blockage in Station 10 drain line.

Less Flow More Flow Misdirected Flow Temperature Low High Temperature High Pressure Low Pressure Level High

NAH NAH From one trap to other Weather NAH NAH NAH Pump Failure Level Transmitter Failure

Liquid in other trap Inability to empty tank, viscosity is too high (wax)

Isolation valve None See action 24.

Overfilling

None

83. Recommend that the LIT on Station 11 drain tank transmits to SCADA. 84. Recommend that LSHH is installed on Station 11 drain tank. 85. Drawing to show local or remote operation of pump at Station 10 drain tank.

Low Level

NAH

Page 43 of 91

HAZOP REPORT

SCS-HAZOP-001-KCP

■■....' "■ ■ ...........■■ ■-■ "■ ■■

DEVIATION Corrosion

CAUSE

CONSEQUENCE Tank leakage, no indication None

SAFEGUARDS

ACTION 86. Confirm leak detection provided in the pit around the Station 10 drain tank. 87. Recommend tank corrosion protection system, including sacrificial anodes for Station 10 drain tank.

Page 44 of 91

HAZOP REPORT

SCS-HAZOP-001-KCP

PROJECT: Kazakhstan - China Pipeline Project Atasu - Alashankou Crude Oil Pipeline Pipeline section: Node 4a - Alashankou - Drain system (ST-12101) Design intent: To drain Alashankou equipment DEVIATION CAUSE Wax blockage in No Flow drain line Less Flow More Flow Misdirected Flow Lower Temperature Higher Temperature Higher Pressure Lower Pressure Level High Low Level Corrosion NAH NAH NAH Weather Inability to empty tank, viscosity is too high (wax) None CONSEQUENCE Trap cannot be drained SAFEGUARDS None

HAZOP WORKSHEET Date: 21/12/12 P&ID number: Alashankou Metering Station KCPP-06-E-IN-DW0011 Rev 0 28/01/05 ACTION 88. Operating procedures to be written for drainage system and to include the event of wax blockage in the Alashankou drain line.

See action 36.

NAH NAH NAH Pump Failure NAH Tank leakage, no indication None Overfilling LIT 89. Recommend a method of containment in the event of a leak and a method of leak detection for the Alashankou ST-12101 drain tank. 90. Recommend tank corrosion protection system, including sacrificial

Page 45 of 91

HAZOP REPORT

SCS-HAZOP-001-KCP

DEVIATION Operation

CAUSE Inability to drain trap

CONSEQUENCE Spillage none

SAFEGUARDS

ACTION 91. confirm that oil drained from Alshonkou slabs under the traps is contained and disposed of appropriately

Page 46 of 91

HAZOP REPORT

SCS-HAZOP-001-KCP

HAZOP WORKSHEET PROJECT: Kazakhstan - China Pipeline Project Atasu - Alashankou Crude Oil Pipeline Pipeline section: Node 5a - Atasu - Kumkol to RV to Filter to Heat Exchanger Inlet Design intent: Introduction of Kumkol fluids to Atasu Date: 21/12/12 P&iD number: MPS Atasu Reconstruction KCPP-06-E-INDW-0002 RevO 28/01/05 KCPP06-E-IN-DW-0006 Rev 0 28/01/05 ACTION 92. Operating procedures to be written for Atasu.

DEVIATION CAUSE Shut valve No Flow downstream Blockage of line Shut valve upstream Stuck pig Less Flow More Flow NAH Line rupture

CONSEQUENCE Loss of production High pour point fluid, potential plugging of piping

SAFEGUARDS None

Loss of production Environmental impacts

Leak detection based on pressure/flow volume Visual inspection above ground None

See action 154. 93. The problem of pressure balance should be reviewed and resolved between Kumkol and West Siberia fluids. 94. Operating procedures to include the pressure balancing between Kumkol and West Siberia fluids. 95. Recommend non-return valve between barred tee and connection to XV6.

Reverse Flow From West Siberia Loss of production from fluids From heat Kumkol pipeline or West exchanger area Siberia pipeline

Page 47 of 91

HAZOP REPORT

SCS-HAZOP-001-KCP

DEVIATION Misdirected Flow

CAUSE To pig receiver when receiver is not in operation

CONSEQUENCE Potential spillage

SAFEGUARDS None

ACTION 96. Operating procedures to include management of Kumkol receiver. 97. Confirm SCADA interlock system exists to prevent misoperation of the valves on the Kumkol receiver. 98. Provide physical containment of oil spills from the Kumkol receiver. 99. To be addressed in operating procedures for Atasu.

To West Siberia Operational difficulties receiving facilities Thermal Higher Leakage Temperature expansion between closed valves Lower Cold weather Temperature Higher Pressure Waxing and gelling

None Buried piping within Atasu.

KING stated that the Kumkol pipeline is not operated in winter. Relief valves None

100. Consider installing means of mitigating wax build up and plugging at Atasu. e.g. one option is heat tracing. 101. Confirm pressure rating of Atasu piping and record this data on P&ID. 102. The potential for pressure transients at Atasu should be reviewed.

Shut valve

Rupture

Transient pressure Rupture Lower Pressure Composition External Corrosion Internal Corrosion See above See above Buried piping at Atasu Process fluids Leaks Spillage Leaks

None None

104. Recommend corrosion protection on buried piping at Atasu. 105. Assessment should be made of the condition of existing piping at Atasu.

Maintenance NAH
Page 48 of 91

HAZOP REPORT

SCS-HAZOP-001-KCP

HAZOP WORKSHEET PROJECT: Kazakhstan - China Pipeline Project Atasu - Alashankou Crude Oil Pipeline Pipeline section: Node 5b - Atasu - West Siberia to Filter to RV to Heat Exchanger Design intent: Introduction of West Siberia fluids at Atasu

Date: 21/12/12 P&iD number: MPS Atasu Reconstruction KCPP-06-E-INDW-0002 Rev 0 28/01/05 KCPP-06-E-IN-DW-0006 Rev 0 28/01/05 ACTION See action 110.

DEVIATION CAUSE Shut valve No Flow downstream Blockage of line Shut valve upstream Stuck pig Less Flow More Flow As "No Flow" Line rupture

CONSEQUENCE Loss of production

SAFEGUARDS None

Reverse Flow From Kumkol fluids From heat exchanger area Misdirected Flow To pig receiver when receiver is not in operation

Loss of production Environmental impacts Loss of production from West Siberia pipeline or Kumkol pipeline Potential spillage

Leak detection based on See action 154. pressure/flow volume Visual inspection above ground See Node 6a "Reverse Flow" action no. None 118. 106. Recommend non-return valve between barred tee and connection to XV5. 107. Operating procedures to include None
management of West Siberia receiver. 108. Confirm SCADA interlock system exists to prevent misoperation of the valves on the West Siberia receiver. 109. Provide physical containment of oil spills from the West Siberia receiver.

Page 49 of 91

HAZOP REPORT

SCS-HAZOP-001-KCP

CAUSE CONSEQUENCE To Kumkol Operational difficulties receiving facilities Higher Thermal Leakage Temperature expansion between closed valves Lower NAH Temperature Higher Shut valve Rupture Pressure Transient pressure Rupture Lower See above Pressure Composition See above Buried piping at Leaks External Atasu Spillage Corrosion Internal Process fluids Leaks Corrosion Maintenance NAH

DEVIATION

SAFEGUARDS None Piping predominantly buried within Atasu.

ACTION 110. To be addressed in Atasu operating procedures.

Relief valves None

See actions 110. See actions 110.

None None

See actions 110. See actions 110.

Page 50 of 91

HAZOP REPORT

SCS-HAZOP-001-KCP

HAZOP WORKSHEET PROJECT: Kazakhstan - China Pipeline Project Atasu - Alashankou Crude Oil Pipeline Pipeline section: Node 5c - Atasu - Heat Exchanger Inlet to Outlet Design intent: To heat process fluids at Atasu. There are two of shell and tube heat exchangers: crude oil on shell side/crude oil on tube side and crude oil on shell/thermal oil on tube side. DEVIATION No Flow CAUSE CONSEQUENCE SAFEGUARDS Thermal oil heat Over heating, over pressure, Not yet determined exchanger shut in deterioration of crude oil on crude side Burst tube Possibility of crude oil transferring to thermal oil circuit Not yet determined Date: 21/12/12 P&ID number: MPS Atasu Reconstruction KCPP-06-E-INDW-0006 Rev 0 28/01/05 ACTION 111. Confirm specification of heat exchangers at Atasu and the protection against overpressure 112. Design to ensure that the risk of crude oil entering the thermal oil system is minimized at Atasu.

Misdirected Flow

Page 51 of 91

HAZOP REPORT

SCS-HAZOP-001-KCP

HAZOP WORKSHEET PROJECT: Kazakhstan - China Pipeline Project Atasu - Alashankou Crude Oil Pipeline Pipeline section: Node 5d - Atasu - Tanks (new build) Design intent: To store and mix crude oil. DEVIATION Drawing CAUSE CONSEQUENCE SAFEGUARDS Date: 25/06/05 P&ID number: MPS Atasu Reconstruction KCPP-06-E-INDW-0004 Rev 0 28/01/05 ACTION 113. P&IDs to show internal floating pontoon tank design. 114. Confirm internal floating pontoon has pressure/vapour release device and anti-static earthing cable. 115. Confirm that the tank roofs have adequately sized air vents with flame arresters.

No Flow NAH Higher Level Excess flow entering the tank Lower Level Excess flow exiting the tank

Overflow

LAHH and LSHH LALL and LSLL 116. Show tank drain lines on P&IDs and disposal routes.

Maintenance NAH

Page 52 of 91

HAZOP REPORT

SCS-HAZOP-001-KCP

HAZOP WORKSHEET PROJECT: Kazakhstan - China Pipeline Project Atasu - Alashankou Crude Oil Pipeline Pipeline section: Node 5e - Atasu - Metering to pipeline Design intent: Metering of oil from tanks to pipeline. Date: 21/12/12 P&iD number: MPS Atasu Reconstruction KCPP-06-EIN-DW-0005 Rev 0 28/01/05 SAFEGUARDS None Two operating and one standby metering runs ACTION 117. Operating procedures to be written for the Atasu metering operation.

DEVIATION No Flow Less Flow

CAUSE CONSEQUENCE Block valve closed Loss of production Blocked Filter Partial closure of valve or blockage of downstream line Partial closure of valve or blockage of downstream line To pig launcher NAH NAH See "No Flow" See "Less Flow" See "Less Flow" Loss of production

Flow rate outside meter linearity range Spillage

None

Misdirected Flow Higher Temperature Lower Temperature Higher Pressure Lower Pressure Operation

None

118. Review need for back pressure control valve downstream of meter runs at Atasu to.ensure flow is above minimum. See action 96.

Page 53 of 91

HAZOP REPORT

SCS-HAZOP-001-KCP

DEVIATION Corrosion

CAUSE

CONSEQUENCE Leakage

SAFEGUARDS None

ACTION 119. Insulating joint required between Atasu installation and outgoing pipeline. 120. Confirm that both metering stations have equivalent output and temperature and pressure compensation.

Operation

Difference between Alashankou metering and Atasu metering Emergency shutdown

Difference in metered flow Loss of integrity

None

Continued flow

None

121. Recommend installation of an ESD valve between metering station and pig launcher. 122. ESD valve must not be motor operated and not have a bypass.

Page 54 of 91

HAZOP REPORT

SCS-HAZOP-001-KCP

PROJECT: Kazakhstan - China Pipeline Project Atasu - Alashankou Crude Oil Pipeline Pipeline section: Node 5f - Atasu - Metering prover loop Design intent: Custody transfer.

HAZOP WORKSHEET Date: 21/12/12 P&iD number: MPS Atasu Reconstruction KCPP-06-EIN-DW-0005 Rev 0 28/01/05 SAFEGUARDS ACTION

DEVIATION No Flow Less Flow More Flow Reverse Flow Misdirected Flow

CAUSE NAH NAH NAH NAH To drain system from inlet or outlet lines of prover loop. Prover loop drains system. Relief valve passing.

CONSEQUENCE

Volume of oil passing through None meter differs from volume of oil passing through prover resulting in invalid meter factor and consequential large inaccuracy in metered volume.

To prover loop As above flushing/calibratio n equipment Through main oil line of the meter run Higher NAH Temperature As above

None

None

123. Closed drains on piping between meter and prover at Atasu should have a break to give visual indication of aleak. (e.g. via tundishes) all drain valves must be plugged. 124. All relief valves between meter and prover outlet at Atasu to be routed via tundish to drain to allow inspection for passing during meter proving. 125. Spectacle blinds required for positive isolation of diesel flushing system and water calibration system on Atasu prover take-off points. 126. High integrity shut off valves with double block and bleed configuration required on each Atasu meter run downstream of prover connection.

Page 55 of 91

HAZOP REPORT

SCS-HAZOP-001-KCP

DEVIATION Lower Temperature Higher Pressure Lower Pressure Operation Corrosion

CAUSE NAH NAH NAH Lack of operating procedures NAH

CONSEQUENCE

SAFEGUARDS

ACTION

Misoperation

None

127. Operating procedures to be written for Atasu prover loop operation.

Page 56 of 91

HAZOP REPORT

SCS-HAZOP-001-KCP

HAZOP WORKSHEET PROJECT: Kazakhstan - China Pipeline Project Atasu - Alashankou Crude Oil Pipeline Pipeline section: Node 5g - Atasu - Pipeline Pig Launcher Design intent: To launch pigs.

Date: 21/12/12 P&iD number: MPS Atasu Reconstruction KCPP-06-EIN-DW-0003 Rev 0 28/01/05 ACTION 128. Operating and maintenance procedures to be written for the Atasu launcher operation. 129. Ensure that there is a fail safe interlock system on the Atasu launcher main valve, kicker line and closure, so that closure can only be opened when valves are closed e.g. Key lock system. 130. Confirm that there is a drain and vent line on the Atasu launcher with two block valves on each line and show this information on the P&IDs. 131. Confirm disposal route of vent line, drain line and thermal relief valve on the Atasu launcher.

DEVIATION

CAUSE

CONSEQUENCE

SAFEGUARDS

No Flow Misdirected Flow

NAH Through trap closure

Spillage

None

Drawing

No drain or vent line on PEtlD

Reverse Flow NAH Higher Weather, locked Temperature in system Low NAH Temperature

Higher pressure Potential leak

PSV

132. Operating procedure must include the launcher to be depressured and drained during normal operations at Atasu.

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DEVIATION CAUSE Higher High pressure through leaking Pressure valve when trap not in use

CONSEQUENCE Potential injury when trap is None being put into use

SAFEGUARDS

ACTION 133. Recommend double block valves on outlet of trap and kicker line on Atasu launcher or another alternative system that has equivalent isolation integrity to a system with double block valves.

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HAZOP REPORT

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HAZOP WORKSHEET PROJECT: Kazakhstan - China Pipeline Project Atasu - Alashankou Crude Oil Pipeline Pipeline section: Node 5h - Atasu - Pump set P-07405/6/7 vertical Design intent: Oil loading pumps. This is an existing system impact of new facilities will not increase hazard. HAZOP comment: Existing system. NAH from Project.

Date: 21/12/12 P&iD number: MPS Atasu Reconstruction KCPP-06-EIN-DW-0004 Rev 0 28/01/05 KCPP-06-E-IN-DW-0005 Rev 0 28/01/05

DEVIATION Drawing

CAUSE

CONSEQUENCE

SAFEGUARDS

ACTION 134. Confirm accuracy of PaiDs KCPP06-E-IN-DW-0004 Rev 0 and KCPP-06E-IN-DW-0005 Rev 0.

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PROJECT: Kazakhstan - China Pipeline Project Atasu - Alashankou Crude Oil Pipeline Pipeline section: Node 5j - Atasu - Drain Tank Design intent: To drain Kumkol and West Siberia filters. HAZOP comment: Existing system. NAH from Project. DEVIATION Drawing CAUSE

HAZOP WORKSHEET

Date: 21/12/12 P&iD number: MPS Atasu Reconstruction KCPP-06-EIN-DW-0002 Rev 0 28/01/05

CONSEQUENCE

SAFEGUARDS

ACTION 135. Confirm venting arrangements on the drains tank and show on P&ID KCPP-06-E-IN-DW-0002 Rev 0.

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PROJECT: Kazakhstan - China Pipeline Project Atasu - Alashankou Crude Oil Pipeline Pipeline section: Node 5k - Atasu - Drain Tank Design intent: To drain P-07409H/10H. HAZOP comment: Existing system. NAH from project. DEVIATION Drawing CAUSE CONSEQUENCE

HAZOP WORKSHEET

Date: 21/12/12 P&iD number: MPS Atasu Reconstruction KCPP-06-EIN-DW-0006 Rev 0 28/01/05

SAFEGUARDS

ACTION 136. Confirm venting arrangements on the drains tank and show on P&ID KCPP-06-E-IN-DW-0006 Rev 0. 137. Clarify the vent symbol on the tank fill line.

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HAZOP WORKSHEET PROJECT: Kazakhstan - China Pipeline Project Atasu - Alashankou Crude Oil Pipeline Pipeline section: Node 5l - Atasu - Drain Tank Design intent: Drainings from tanks N1/N2. HAZOP comment: Existing system. NAH from Project. DEVIATION Drawing CAUSE CONSEQUENCE SAFEGUARDS Date: 21/12/12 P&iD number: MPS Atasu Reconstruction KCPP-06-EIN-DW-0004 Rev 0 28/01/05

ACTION 138. Confirm venting arrangements on the drains tank and show on P&ID KCPP-06-E-IN-DW-0004 Rev 0. 139. Clarify the vent symbol on the tank fill line.

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HAZOP WORKSHEET PROJECT: Kazakhstan - China Pipeline Project Atasu - Alashankou Crude Oil Pipeline Pipeline section: Node 5m - Atasu - Firewater Design intent: To provide firewater for fire fighting and deluge

Date: 21/12/12 P&ID number: MPS Atasu Reconstruction KCPP-06-EIN-DW-0007 Rev 0 28/01/05

DEVIATION CAUSE No Flow (of Empty firewater Fire Water) tank Block valve shut

CONSEQUENCE No firewater available Unable to produce foam

SAFEGUARDS None

ACTION 140. Confirm control system on makeup water supply to firewater tanks. 141. Confirm venting arrangement on the Atasu firewater tanks.

Pump outage Control system failure Operation Higher Temperature Lower Temperature Higher Pressure Lower Pressure NAH NAH NAH NAH

Insufficient firewater /foam Insufficient/no firewater

Two pumps initiated, one pump standby, for both firewater and foam pump sets. Local hand switch Manual panel mounted switch

142. Operating and maintenance procedures to be written for the firewater system at Atasu.

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PROJECT: Kazakhstan - China Pipeline Project Atasu - Alashankou Crude Oil Pipeline Pipeline section: Node 6a - Total System Design intent: General DEVIATION CAUSE More Flow Line rupture Operation

HAZOP WORKSHEET

Date: 21/12/12 PaiD number: N/A

CONSEQUENCE Loss of production Environmental impacts

Vapour emissions Explosion from PV vents and lightning strikes in the vicinity causing explosion Static discharge Fire

SAFEGUARDS Leak detection based on pressure/flow volume Visual inspection above ground None

ACTION 143. Line walk and air inspection to be formalised for the whole pipeline. 144. Investigate need for lightning rod (dependant upon the frequency of lightning strikes) 145. Wherever a PV vent is instalted on equipment a flame arrester should be included on the atmospheric side of the vent. 146. Ensure that all piping instrument tappings are not located on the underside of the piping. 147. Confirm projected rate of corrosion, requirements and corrosion allowance. 148. Maintenance and testing requirements to be written. Confirm that CP requirements are in place. 149. Confirm all above ground station piping is earthed.

None

No Flow Internal Corrosion External Corrosion

Blockage of impulse lines Process fluids

Inaccurate reading of instrument Pipe leak

None None Maintenance and CP testing

Damage of coating Increased rate of corrosion and potential leak Influence of Increased rate of induced current in corrosion and potential the pipeline leak

Isolation joints upstream and downstream of station

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DEVIATION

CAUSE General corrosion of above ground piping Corrosion of underground piping

CONSEQUENCE Increased rate of corrosion and potential leak Increased rate of corrosion and potential leak

SAFEGUARDS None

ACTION 150. Check requirements for painting of above ground piping. 151. Confirm that underground piping has adequate corrosion protection.

None

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PROJECT: Kazakhstan - China Pipeline Project Atasu - Alashankou Crude Oil Pipeline Pipeline section: Node 6b - Total System Design intent: Normal Operation of Pipeline DEVIATION Operation Less Flow CAUSE

HAZOP WORKSHEET Date: 21/12/12 P&ID number: N/A

CONSEQUENCE

SAFEGUARDS

ACTION 152. Operating philosophy for the total pipeline system to be written. 153. Operating philosophy to address these consequences of a change in flowrate caused by a reduction in incoming flow and or a restriction in the downstream system.

Reduction of incoming flow Reduction of flow caused by restriction in downstream system Change in composition (higher viscosity)

Loss of production Drop in level in Atasu tanks Loss of suction to pumps at pump Stations Maladjustment of Alashankou pressure control valve Change of hydraulic profile

Turndown

Lack of control Slack line Loss of production

None

154. Investigate the method to be used for reducing the flowrate and ensure flowrate is not less than minimum. See action 3.

Reverse Flow Rupture of pipeline Misdirected Flow NAH

Leak detection system

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DEVIATION CAUSE Increase of More Flow incoming flow Increase of flow into downstream system Change in composition (lower viscosity) See Node 6b "Less Flow"

CONSEQUENCE Overloading of pump None electric motors. Increase in friction loss resulting in low pressure at downstream end of pipeline sections.

SAFEGUARDS

ACTION 155. Recommend SCADA to continuously monitor the pressure readings either side of the high point prior to Alashankou and compute and alarm the minimum pressures at these high points. 156. Recommend SCADA to continuously monitor the pressure readings either side of the high point prior to Pump Station 9 and compute and alarm the minimum pressures at these high points. 157. Confirm maximum allowable pressure of pipeline is adequate to contain the pressures resulting from the maximum possible pressure that can be generated at Atasu and Pump Stations.

Higher Temperature Lower Temperature Higher Pressure Lower Pressure

NAH NAH NAH NAH

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HAZOP WORKSHEET PROJECT: Kazakhstan - China Pipeline Project Atasu - Alashankou Crude Oil Pipeline Pipeline section: Node 6c - Total System Design intent: Controlled Shutdown of Pipeline DEVIATION Operation Operation Inappropriate method of shutdown Transients Loss of line pack/re-start problems None CAUSE CONSEQUENCE SAFEGUARDS Date: 21/12/12 P&iD number: N/A

ACTION 158. Operating procedures to include controlled shutdown of the pipeline. 159. Undertake dynamic analysis of pipeline shutdown and determine operation shutdown/sequencing.

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HAZOP WORKSHEET PROJECT: Kazakhstan - China Pipeline Project Atasu - Alashankou Crude Oil Pipeline Pipeline section: Node 6d - Total System Design intent: Emergency Shutdown of Pipeline Date: 21/12/12 P&iD number: N/A

DEVIATION Operation

CAUSE Emergency shutdown

CONSEQUENCE Continued operation during None emergency

SAFEGUARDS

ACTION 160. ESD philosophy to be written to include total pipeline shutdown, pump Pump Stations shutdown and local emergency shutdowns at Atasu.

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HAZOP WORKSHEET PROJECT: Kazakhstan - China Pipeline Project Atasu - Alashankou Crude Oil Pipeline Pipeline section: Node 6e - Total System Design intent: Restart of Pipeline DEVIATION CAUSE Operation Plugged Line CONSEQUENCE Inability to restart pipeline SAFEGUARDS None. Date: 21/12/12 P&iD number: N/A

ACTION 161. Restart operating philosophy to be written. 162. Dynamic analysis of restart to be undertaken for both above pour point and below pour point scenarios.

Temperature of the NAH Lower Temperature oil is above pour point Temperature of the Inability to restart oil is below pour point Operation Air ingress after repair or cut-out Explosion None 163. Means of moving a blockage in the pipeline needs to be determined along with any additional facilities required. 164. Procedures to be written to cover restart following repair cutouts and methods to minimise air ingress.

None

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CONCLUSION This expert analysis of operational risk Hazop on the project "The second queue of the second phase of the Kazakhstan-China oil pipeline project. Atasu – Alashankou section. Construction and reconstruction of PS-11, PS-9 and Alashankou oil metering station" contains all necessary information characterizing reliability of safe functioning and operation, ensuring control of technical parameters and observance of security measures and environment. In summary it should be noted that the project doesn't worsen safety of operation Atasu – Alashankou section of the Kazakhstan-China oil pipeline. However, for decrease an influence of a human factor on safety operation of the pipeline it is recommended to develop and implement the regulating document regarding philosophy of safe operation of this oil pipeline.

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