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Benefits of Modularization, Engineered Solutions, and Vendor Partnerships

Presented by: Jeremy Olson (DNOW) and Dan Norris (Hess)

CASPER, WY | GREEN RIVER, WY | SALT LAKE CITY, UT | DENVER, CO | BILLINGS, MT | DICKINSON, ND | SAN ANTONIO, TX | TULSA, OK
Agenda

• Introduction: Power Service/Hess


• Collaboration: Strategic Partnerships
• Design Work and Changes
• Benefits of the Work
• Questions

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Introduction

 65 years in the oil and gas business


– Vertically integrated company
 Engineering
 Drafting
 Design
 Procurement
 Fabrication
 Electrical and Automation
 QAQC
 Trucking
 Service
– Fabricator and distributor combined: a complete solutions provider

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Hess Ohio Facts

• Prime acreage is in the heart of the wet


gas window

• Implementation of Lean manufacturing


principles have been key to advancing
Hess’  operations  in the Utica

• Goals: reduce waste, bolster efficiency,


and eliminate defects at a fast pace

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Optimized Modular Facilities
Process

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Collaboration: Strategic Supplier
Relationships

 Collaboration between the two teams


– Combining technical knowledge
– Implementing improvements
– Creating feedback loops for continued improvement
 Results in Optimized Modularization

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Collaboration: Strategic Supplier
Relationships

Power
Service
Review
Review Implement
Benefits with
Processes Changes
Field and Eng
Hess
Feedback
Loop

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Collaboration: Strategic Supplier
Relationships

 Production schedule sharing (both parties)


– Greater visibility with both Fabrication and on site needs
– Just-in-Time delivery on site reduces costs and storage

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Collaboration: Strategic Supplier
Relationships

Share and Adjust Lean


Just in Time
Review Schedules to Processes and
Deliveries
Schedules Match No Surprises

Track
Find Areas for
Schedule
Improvement
Accuracy

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Collaboration: Strategic Supplier
Relationships
• Value engineering: Opening design books for review together
– Harvesting cost savings and lead time saving options
– Also allows all parties to sit together and work through problems
(Operations, Engineering, Fabricators, etc.)

Power Service

Operations Review
Review Implement
Benefits with
Processes Changes
Field and Eng
Engineering

Safety/Supply
Chain

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Original Facilities Design

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Design Work: PSI and Hess

 Teams collaborate to modularize design


– GPU: stack line heater and separator
– Optimize size of vessels for increased efficiencies
– PLC, MCC, generator, and air compressor to one skid
– Consolidate Electrical Components, reduce field installation costs
 Additional improvements
– VRU/FGC combined to one skid
– Reduced SIMOPS during facility construction
– Optimized storage tank design

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Modularization

Integration of:

• Separator

• Line Heater

• Generation

• Facility
Electrical and
Control
Measurement of each Phase
All Electrical Completed and • Instrument and
Controlled via Remote I/O Utility Air

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Well Site Process Simulations and
Optimization
By taking a detailed look at actual well conditions, the benefit of Modular Packaging is
further enhanced by optimizing component design.

• Smaller Vessels
• Optimized Process
• Reduction in Components
• Reduced Heat Input Wellhead Separation Control Valves
• Smaller Footprint
• Component Cost Reductions

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Facilities Design with Optimized
Modularization

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Original Design Modularized Design

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Benefits of the Work

 Reduced on site construction time


– Better quality control
– Optimized crane use, less trenching, reduced welding, and
electrical
 Standardization
– Increased installation and operation efficiencies
– Decreased lead time
– Created purchasing efficiencies
 More efficient design
– Increased availability and reliability
 Reduced footprint

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Hess Facility Costs

• Cost Savings
– After initial switch: 13% savings total installed cost per well (first 3 pads)
– After 5 more pads: 29% savings from initial total installed cost per well
– Installation time reduction: 24 days on average

Table 1: Breakdown of % Savings


After Initial Switch

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How can this process
be used elsewhere?

• Vette suppliers and find strategic partners


• Review current equipment and processes together
• Seek out solutions to field problems as well as optimizations
• Implement changes on future units
• Use a planned feedback loop to continue improvement

Find and Review


Review Implement
Vette Benefits with
Processes Changes
Suppliers Field and Eng

Feedback
Loop

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Questions?