GENERAL

CONDITIONS

“INLINE INSPECTION (ILI) OF THE SUBMARINE PIPE OF THE BALAO

TERMINAL - 36 INCH AND 42 INCH”

1. OBJECTIVE

Determine the state of the submarine metallic ducts through inline inspection
using the Magnetic Flux Leakage (MFL) technique of Ultra High Resolution
along one (1) 42-inch diameter submarine line of 7,179 meters, and one (1)
36-inch diameter submarine line of 6,182 meters, and external inspection of
the ducts and components in the Submarine PLEM.

2. SCOPE

2.1 Inspection of 2 Submarine Pipeline

The Contractor shall perform the total inspection and submit the respective
reports of the submarine lines of a distance from the Balao Beach Manifold to
the submarine PLEM, and of the pipelines and components in the PLEM to the
submarine hoses.

ITEM SECTION DIAMETER LENGTH (M)

1 Beach Manifold – Position X 42” 7179

2 Beach Manifold – Posición Y 36” 6182

3 External Inspection Submarine External inspection of the submarine

Plem Position X PLEM, including all components (loading
pipe, valves, elbows, flanges, nipples,
plug, PLEM support).
4 External Inspection Submarine External inspection of the submarine
Plem Position Y PLEM, including all components (loading
pipe, valves, elbows, flanges, nipples,
plug, PLEM support).

Note: Drawings of the pipes are included in Annex 1

For the settlement of the contract, the length of the pipeline effectively
inspected will be considered.

At the inspection of each line the Contractor shall report:

• Percentage of reliability and certainty of the inspection tool.

• Pipe manufacturing defects such as laminations and non-metallic
inclusions.
• Assembly or post start-up defects, such as circumferential
deformation (ovality), dents, crushing, wrinkles and/or folds.
 • Construction defects such as misalignment, thickness differences
and other three dimensional imperfections.
• Anomalies such as corrosion pitting, generalized corrosion,
blistering and hydrogen fractures, mechanical damage such as
gouges, grinding marks and arc welding.
• Locate and dimension special anomalies: Lean Corrosion, Narrow
Axial External Corrosion (NAEC), Scratches or gouges.
• Indicate detection level of axial (length), circular (width) and depth
dimensions.
• Factory longitudinal weld position: technical time.
• Locate and dimension the sequence of pipes and wall thicknesses,
in each section of the pipeline (Pipebook).
• Locate and dimension factory and field bends.
• Plot the plan and profile of the different pipelines inspected in UTM
coordinates, WGS 84 system, with the geographical location of the
characteristic sections of the pipeline: circumferential weld seams,
beginning and end of the factory and field bends, location of the
most representative anomalies.
• A comprehensive report on the developments will be prepared
including a daily report of the carried out work.

The inspection of the submarine pipelines shall be carried out with state-of-the-
art equipment that does not compromise the integrity of the ducts and using
adequate methods, bi-directional and umbilical, for the inspection of closed-
end submarine pipelines; that is, without installing launching traps and/or
reception of the instrumented tool in the submarine PLEM.

The Contractor will be in charge of the design, manufacture and installation of

the temporary launching equipment required for the sending and receiving
operation of the intelligent equipment, at a point on the beach valves for the
execution of the works. EP PETROECUADOR will designate the location
where the launchers must be installed.

The activities to be carried out by the Contractor shall be those indicated in its
procedures and in the work program established in the related annexes, prior
review by the Supervisor and approval of the Contract Administrator:

• Inspection equipment run (instrumented) (There shall be two (2)

complete runs for each section, being 1 inlet and 1 return).
• Measurement of remaining thicknesses in the Submarine PLEM.
• Explanation of the analysis and diagnosis of the inspection.
• Preliminary and Final Reports on Integrity Risk and
Recommendations.
• Solution alternatives for novelties found.
• Rescue procedure for the Contractor's own equipment stuck
inside the pipes

The Contractor will prepare and deliver the Reports: Preliminary, Final and
Integrity Risk and Recommendations, for each Pipeline.
For the interpretation of the reports, the Contractor will deliver the
documentation in physical and digital form. All preliminary and final reports
generated by this inspection are the exclusive property of EP
PETROECUADOR Terminal Marítimo Balao and the Integrity and Reliability
Unit. The Contractor will adapt the inspection equipment according to the
particular needs of the facilities.

The software for visualizing the results obtained by the instrumented

equipment must be able to trace the plan and profile of each pipeline,
indicating the most representative and referenced anomalies.

In the event that there is an incomplete run for reasons attributable to the
Contractor, a new complete run must be carried out.

The perimeter to be covered by the inspection of each pipe is 7,179 m from the
Balao Valves to the Submarine Plem in position X and 6,182 m from the Balao
Valves to the Submarine Plem in position Y, loading line. The Contractor with
the instrumented equipment must cover the entire internal inspection of the
pipes, ensuring a total inspection using the measurements that are necessary.

3. WORK METHODOLOGY

Through the use of its intelligent instrumented equipment, with state-of-the-art

technology, with Ultra High Resolution MFL measurement, the Contractor
shall:

• To perform the internal inspection, the Contractor shall design, supply

and install the temporary launcher/receiver for the internal inspection
instrument on each pipeline. The Contractor shall supply all fittings
required for the installation of the launcher/receiver trap on each pipe.
• Consider that the 2 pipelines of the terminal are closed-ended, so the
intelligent inspection tools must enter and exit through the same place
of origin (Launcher in an onshore zone). The tool must be capable of
inspecting the pipelines, by means of a propulsion system independent
of the terminal facilities, since displacement from the tanks will not be
allowed, nor will pumping from ships in the offshore zone.
• The tool must be able to enter and exit by its own means, self-
propelled, because the pipelines are closed-ended so they must enter
and exit through the same place of origin.
• Carry out the internal inspection of the route (7,179 and 6,182 meters)
of the pipelines up to the submarine Plem of each of the lines.
• The inspection shall be carried out with the lines filled with the product
detailed in numeral 3.1 above.
• Submit the corresponding preliminary, executive and final reports.
Characteristics of the Pipe and its location:

The services object of the contract will be carried out in the submarine
pipelines of the Balao Maritime Terminal, City and Province of Esmeraldas,
Ecuador; Transportation Management, EP PETROECUADOR. The loading
lines are built with pipes with the following characteristics:

Route: Beach Manifold - Submarine Plem

Pipe material: ASTM A-106-Grade B
External Coating: 10 cm. of concrete approx.
Elevation/depth: +12 m / - 42 m

Note: All pipes are carbon steel with a thickness of 15.4 mm to 17.2 mm

4. PRODUCTS AND/OR SERVICES EXPECTED

The Contractor shall fully inspect and report on two (2) submarine lines at a
distance of 7,179 meters and 6,182 meters respectively from the Beach
manifold to the submarine Plem.
The order of inspection of the pipelines shall be determined by the operational
needs of the contractor, and the Contractor must follow the schedule.
In order to meet the objective of the procurement, consideration should be
given to, but not limited to, that specified in API Standards 570.

From each inspection route, it is expected to obtain in the report of each line:

• Consecutive registration number.

• Position of factory longitudinal weld: technical time
• Consecutive number of each transversal weld and its distance to the origin,
• Position of dents and deformations
• Position of Anomalies such as corrosion pitting, generalized corrosion, blisters and
fractures caused by hydrogen, mechanical damage such as tears, emery marks and
arc welding.
• Position of Special Anomalies
• The sequence of tubes in each section.
• Position of envelopes for repairs and changes in thickness.
• Misalignment of joints.
• Thicknesses in each pipe segment.
• Maximum operating pressure according to the minimum remaining thickness
measured in the section.
• Georeferencing in UTM system coordinates WGS 84
 For each anomaly found, the following must be reported

• Consecutive number of the record

• If it is internal or external
• Axial length (length), circumferential length (width) and depth.
• Orientation: technical time
• Distance relative to each circumferential weld upstream and downstream.
• Distance from the origin of the section (launch trap).
• Type of anomaly: metal loss, manufacturing defects.
• Percentage of metal loss.
• Maximum operating pressure (MAOP recalculated) based on the remaining
thickness measured at the failure.
• General information of the pipe before and the pipe after with respect to an anomaly.

Graphs of internal and external anomalies detected:

• Location in progressive and classification by depth of metal loss.

• Classified by diagnostic pressure.

Summary of anomalies classifying them according to the percentage of depth

in relation to the thickness of the wall.

• From 10.1% to 20.0%.

• From 20.1% to 40.0%
• From 40.1% to 60.0%
• From 60.1% to 80.0%
• Greater than or equal to 80.1%.
Include in the software, the database that contains all the anomalies that allow
the information to be filtered to produce distribution graphs and "Maximum
Allowable Operating Pressure" MAOP. Likewise, it must be integrated with a
geographic information system that displays the layout and profile of the pipes
within the station, as well as anomalies referenced to the geographic
coordinate system.

Integrity risk report and recommendations:

The contractor must submit the Integrity Risk Report and Recommendations
that will contain the analysis of the "Maximum Allowable Operating Pressure"
(MAOP) at the different points with corrosion damage, in accordance with the
latest version of ANSI B31-G, with the recommendations referring to the
pertinent repair, as well as a criterion of the general state of the pipe.

For the most serious anomalies determined with the ANSI B31-G latest version
standard for each inspected pipe, the interpretation of the results must be
made and delivered.

The conditions and/or restrictions to perform the work are detailed in Section 3:
Scope.
 Calibration of Instrumented Measurement Equipment:

The Contractor must have calibrated equipment to carry out the inspection of
the submarine pipelines.

The Contractor must present the Updated Calibration Certificates, validated by

an International or National organization (ILAC International Laboratory
Accreditation or Ecuadorian Accreditation Service SAE).

5. CHARACTERISTICS OF THE QUOTE

• The service must include in its bids the following:

• Benefits of the technology applied for the internal inspection of the
three pipelines.
• Detailed explanation and brochures of the inspection tools.
• Unit price per linear meter of inspection on each pipeline inspected.
• Proformas, brochures and other technological features must be in
Spanish.

6. QUANTITY AND COST TABLE

“INLINE INSPECTION (ILI) OF THE SUBMARINE PIPE OF THE BALAO TERMINAL - 36 INCH
AND 42 INCH”
UNITS PRICES
ITEM DESCRIPTION UNIT QUANTITY COST UNIT TOTAL COST
INSPECTION OF
PIPELINE No. 1,
1 DIAMETER 42", METERS 7179
CRUDE OIL
PETROLEUM
PRODUCT
2 INSPECTION OF
PIPELINE No. 2,
DIAMETER 36", METERS 6182
CRUDE OIL
PETROLEUM
PRODUCT
TOTAL VALUE (Tax not included)