Final PDF

AES 09089043-3-1, Rev 0 September 2009
OLEODUCTO DE CRUDOS PESADOS ECUADOR S.A. PIPELINE COST ANALYSIS (Final Report)
APTECH Engineering (Alberta) Ltd. (A wholly owned subsidiary of Intertek) Prepared by Ray Masrour Jim C. Towers Phillip G. Nidd
Prepared for Oleoducto de Crudos Pesados S.A. Amazonas y Naciones Unidas Edificio Banco La Previsora, Torre A - Piso 3 Quito, Ecuador Attention: Mr. Fabian Sanchez Transmitted Via Email: fsanchez@ocp-ec.com
TABLE OF CONTENTS
Section Page
INTRODUCTION ...................................................................................................................................II EXECUTIVE SUMMARY ................................................................................................................... IV SECTION 1 BACKGROUND....................................................................................................... 1-1

1.1 ASBUILTPROJECTDESCRIPTION .............................................................................................................11
SECTION 2 METHODOLOGY .................................................................................................... 2-1

2.1 STEPSTAKENINCOSTMODELING..........................................................................................................21 2.1.1 DEVELOPMENTOFBENCHMARKCOST.................................................................................................. 21 2.1.2 2009VENDORMATERIALQUOTATIONS................................................................................................ 22
SECTION 3 REFERENCE DOCUMENTS ................................................................................ 3-1 APPENDIX A RESUMES ............................................................................................................ A-1 APPENDIX B EXCEL MODEL FILES ...................................................................................... B-1
Intertek-APTECH AES 09029043-3-1, Rev 0
Oleoducto de Crudos Pesados S.A. September 2009
INTRODUCTION
APTECH Engineering (Alberta) Ltd, a wholly owned subsidiary of Intertek (Intertek-APTECH), is a full service Engineering Consulting Company specializing in Asset Integrity Management and Life Cycle Management of infrastructure, facilities, and equipment. The petrochemical group is located in Houston, Texas to provide a direct focus on Asset Integrity Management solutions to the oil and gas industries. We offer such specialized services by using advanced technology and world class expertise and providing specialists and engineering support in all areas of Asset Integrity Management including design, corrosion and metallurgy, root cause failure analysis, stress analysis, safety and mechanical integrity management solutions and risk analysis.
Furthermore our services take us into almost every field imaginable, such as textiles, electronics, building, heating, pharmaceuticals, petroleum, materials, food and cargo scanning. We operate a global network of more than 1,000 laboratories and offices and over 23,000 people in 110 countries around the world.
The petrochemical Group provides asset integrity management services to the following industries:
Offshore and Shipping Pipeline Chemical and Petrochemical Refineries and Gas Processing LNG and LPG Manufacturing
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We offer the following key services: Asset Integrity Management Services Design, Design Verification, Material Selection Inspection (Advanced Technologies) Maintenance and Inspection Strategies Risk Analysis, Risk Based Inspection Risk Based Inspection Software Process Safety and Mechanical Integrity Services Corrosion and Metallurgical Support Business and Financing Modeling Training and Audits
Additionally Intertek-APTECH helps customers to assess their products and commodities against a wide range of safety, regulatory, quality and performance standards. Our services include testing, certification, audition, safety, inspection, quality assurance, evaluation, analytical, advisory, training, outsourcing, risk management, and security services.
Our customers include some of the worlds leading brands, major global and local companies and governments, Shell, Canon, Canadian Natural Resources, Ltd., McDonalds, BP, IKEA, Nestle, ExxonMobil, LG, GAP Inc., Valero, Panasonic, Tesco, Chevron Texaco, Marks & Spencer and Levi Strauss are Intertek-APTECH customers. More than twenty governments including Bangladesh, Mozambique, and Saudi Arabia are also customers.
Intertek-APTECH adds value to the products and processes of our customers, facilitating their success in the global marketplace and providing confidence-inspiring expertise.
Resumes for Ray Masrour, Jim C. Towers, and Phillip G. Nidd are referenced in Appendix A of this report.
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EXECUTIVE SUMMARY
APTECH Engineering (Alberta) Ltd, a wholly owned subsidiary of Intertek (Intertek-APTECH) has been requested by Oleoducto de Crudos Pesados Ecuador S. A. (OCP) to prepare a proposal for development of an Engineering, Procurement and Construction (EPC) project cost estimate for the 484.6 km OCP Pipeline and related facilities, using 2009 labor and equipment costs. Intertek-APTECH reviewed material and component information that was made available by OCP, in an effort to establish a clear view of the pipeline system. The cost estimate is presented in 2009 dollars and is considered to be within 15 to 20% accuracy.
The final estimate of the Total Installed Cost (TIC) in 2009 dollars, as derived from analysis of project benchmark comparison costs, including line fill and Value Added Taxes (VAT) is $2,033,104,087. A list of vendor quoted cost of various pipeline components was also reviewed as an additional source.
Intertek-APTECH examined available design and construction benchmark data for pipeline system projects constructed in various countries around the globe over a span of 9 years from 2001 to 2009. The selected projects, which constitute the basis for this estimate, were similar to the OCP pipeline system in overall project size, pipeline length and diameter, number of associated facilities and general Right-Of-Way (ROW) terrain and environmental conditions. The degree of difficulty associated with the construction of the OCP project was taken into account by first defining the elements which impact construction activities, i.e. number of crossings, ruggedness of the terrain, type of soil, etc. and then adopting a industry acceptable cost upgrade factor to arrive at the accuracy level required for the estimate.
This report is based on many document reviews including the following:
Oil and Gas Journal. articles concerning similar pipeline projects Data marketed by Penwell Publishing Incorporated concerning Worldwide Pipeline Construction Cost between 2001 and 2009
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Publications by Gulf Publishing containing information regarding cost estimating for pipeline systems and marine facilities.
2009 vendor quotations for selected components
This estimate prepared by Intertek-APTECH meets the requirements of a Class 4 estimate as defined in the internationally recognized AACE International Recommended Practice No. 18R97 Cost Estimate Classification System As applied in Engineering, Procurement, and Construction of the Process Industries. Even though the relative broad base of data available for the study and used by Intertek-APTECH supports assigning the accuracy range of 15 to 20% to this estimate, variables and unknown circumstances such as weather, customs delays, labor shortages, material shortages, environmental or geotechnical conditions, and regulatory requirements could increase the final estimated cost beyond this accuracy range. The estimates provided in this report assume favorable market trends at the time of material purchase and construction. In addition proper engineering and design work, detailed material, equipment and construction specifications, timely equipment and material purchases and deliveries, tight construction inspection in compliance with project specs, standards, are considered as achievable projector targets. Class 4 estimates are usually used in feasibility study and feasibility analysis.
Section 1 BACKGROUND
1.1
AS BUILT PROJECT DESCRIPTION
The following information concerning the existing pipeline system was collected and analyzed in order to provide an overall basis for a 2009 dollar estimate inclusive of the design and construction elements utilized in completing the original 2001 pipeline system. The 484.6 km Pipeline System is entirely located within the country of Ecuador. The route of the pipeline initiates within the Ecuadorian Amazon region and extends through the Andes Mountains to the coastal area of Ecuador. In-Line-Inspection (ILI) tool launch and/or receiver facilities are located at each of the Pipeline System pump or reducing stations as follows: Amazonas (PS-1-KmP 0.00) Cayagama (PS-2-KmP 67.4) Sardinas (PS-3-KmP 148.2) Paramo (PS-4-KmP 188.9) Chiquilpe (PRS-1-KmP 275.0) Puerto Quito (PRS-2- KmP 327.2)
A marine off-loading terminal (Marine Terminal) is located at KmP 484.6. The pipeline consists of 4 different diameters ranging from NPS 24 to 36, 15 different wall thicknesses, and 32 associated diameter / wall thickness combinations (refer to Tables 1-1, 1-2, and 1-3). Table 1-2 specifically reflects the diameter, wall thickness and length of pipeline sections installed for the project. The pipe steel cost of $202,000,000.00 was calculated on the basis of $1922.00 per ton (present day value). This value is strictly material and manufacturing costs and does not include coating, transportation, and other related costs which form the total pipe steel cost of $469,405,754.
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Table 1-1 PIPE SECTION DIAMETER LENGTH SUMMARY SECTION NO. 1 2 3 4 5 6 Total Length SECTION PS 1-PS2 PS2-PS3 PS3-PS4 PS4-PRS1 PRS 1-PRS2 PRS2-MT PIPELINE OD (IN) 32 34 34 32 24 36 LENGTH (KM) 67.4 80.8 37.7 89.3 52.1 157.3 484.6
Table 1-2 PIPELINE SYSTEM DIAMETER/WALL THICKNESS / INVENTORY SUMMARY OD [IN] 24 WALL THICKNESS [IN] 0.312 0.375 0.500 0.562 0.625 0.688 0.750 0.812
Subtotal
32
0.344 0.375 0.438 0.469 0.500 0.562 0.625 0.750 0.812 0.875 0.938 1.062
Subtotal
INSTALLED LENGTH [M] 5,435.20 8,046.07 6,872.75 5,070.97 5,444.34 5,006.64 8,798.56 7,514.43 52,188.95 12,355.09 3,922.82 9,626.67 9,760.06 4,453.52 33,552.63 46,500.28 9,652.93 11,290.42 4,729.57 9,245.87 1,494.34 156,584.21
INVENTORY CALC. BARRELS

9,470.51 13,869.06 11,593.21 8,461.91 8,985.15 8,171.51 14,203.45 11,997.16 38,626.45 12,215.63 29,736.11 30,028.15 13,647.22 101,996.66 140,204.88 28,633.61 33,219.16 13,800.34 26,754.10 4,253.16
SHORT TONS OF PIPE

704.79 1,250.68 1,416.87 1,171.95 1,395.52 1,408.88 2,691.88 2,482.42
MILES OF PIPE
INCH MILES
32.41 1,764.03 609.76 1,743.10 1,889.85 918.13 7,754.33 11,919.22 2,953.28 3,729.84 1,679.08 3,509.20 638.69 97.24
777.82
3111.6
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OD [IN] 34
WALL THICKNESS [IN] 0.344 0.375 0.469 0.500 0.562 0.625 0.688
Subtotal
INSTALLED LENGTH [M] 12,773.68 22,519.93 24,781.73 9,108.00 30,012.15 7,236.14 12,034.23 118,465.86 LENGTH [M]
INVENTORY CALC. BARRELS

45,199.62 79,390.34 86,378.80 31,627.74 103,436.16 24,748.39 40,842.29
SHORT TONS OF PIPE

1,823.80 3,500.51 4,798.50 1,877.68 6,936.09 1,854.81 3,386.47
MILES OF PIPE
INCH MILES
73.57
2501.3
36
0.375 0.406 0.438 0.500 0.562

Subtotal
64,892.72 27,744.67 5,708.15 6,064.61 52,949.30 157,359.44 484,598.47
257,117.44 109,543.36 22,455.39 23,689.52 205,367.11 1,589,663.59
10,086.95 4,663.03 1,033.58 1,250.26 12,237.08 97.72 105,080.25 Total Inch Mile 3517.9 9908.7
Total
2009 Costs Pipe Cost Only
$1,922 $202,000,000
$/ton 2009 cost estimate for pipe only
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Table 1-3 PIPELINE SYSTEM KEY INFORMATION SUMMARY PARAMETER Year of Construction Pipe Material Design Pressure (*) MAOP (*) MOP (*) Coating type Right of Way Access Cleaning frequency Type of Cleaning Pig Product Type Wax Content Operating temperature BS&W Content Product velocity 2001-2003 X-70 3,200 psi (max) (Varies by pipe section) 3,200 psi (max) 2,900 psi (max) Fusion Bonded Epoxy (FBE) 4x4, walk Monthly Conventional cups, discs and metal brushes Heavy crude oil (19 API) Insignificant Can be controlled at no less than 110F (176F max) Less than 0.5% Can be controlled from 0.25 m/s (36 inch at minimum flow) to 4.15 m/s (24 inch at maximum flow). Slack conditions may be present at some areas 1,200,000 barrels at the Amazonas Terminal 3,750,000 barrels at the Marine Terminal DATA
Storage Facilities
The route generally follows the SOTE pipeline with adjustments and deviations to maintain the integrity of the pipeline systems and extends from the receiving facilities at Amazonas in the Oriente Region Ecuador to the OCP Marine Terminal near Esmeraldas Ecuador. The sustainable design throughput capacity is not less than 410,000 barrels daily of 180 API crude oil. There is an injection point approximately 151 kilometers downstream from the Amazonas Terminal where AGIP provided all necessary facilities to inject up to 60,000 barrels per day into the passing stream.
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Section 2 METHODOLOGY
2.1 2.1.1
STEPS TAKEN IN COST MODELING DEVELOPMENT OF BENCHMARK COST
The study employed comparison of actual historical pipeline construction costs (parametric) techniques and indexing to produce a realistic cost estimate. The preparation of the parametric cost estimate is based on publically available World Wide Pipeline Cost Data from PennWell Corporation (1421 S. Sheridan Rd., Tulsa, Okla. www.pennwell.com). This data was supplemented with information published in the Oil and Gas Journal, obtained from relevant web sites, and John S. Pages book entitled, Cost Estimating Manual for Pipeline and Marine Structures, the foremost publication on the subject of estimating. As a part of compiling the cost basis, the World Wide data was filtered to focus the parametric model on pipelines that were known to be constructed in environmental and geotechnical conditions similar to the OCP project, which included an unstable soil, remote sites, rugged terrain and other relevant factors.
These costs were validated by knowledge gained through field reconnaissance. The general field observation considered OCP facilities to be of better quality and the pipelines to traverse a more difficult terrain than the majority of the pipeline systems used as benchmarks for the parametric estimate.
The pipeline project information extracted from above sources included the countries where the projects were constructed, pipeline diameter, length, and total installed cost. The Oil and Gas Journal generated and presented for public information a breakdown of the relative costs for land, right-of-way, pipe fittings, construction, buildings, pumping equipment, tanks delivery facilities communications equipment offices and furnishings vehicles and other incidentals for ten pipeline projects. These costs were averaged and expressed in percentages of the Total Installed Cost. A comparison between these projects showed that the cost of any one activity
Intertek-APTECH AES 09029043-3-1, Rev 0 Oleoducto de Crudos Pesados S.A. September 2009
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was within a few percentiles of each other confirming that an average of such cost percentages and the application of its indexed values to this estimating task would produce results within the required accuracy of the project.
The details related to countries, year of construction, and costing details are shown in Appendix B of this report.
Some of the calculated benchmarked data were also subjected to a factored increase in order to reflect the degree of difficulty associated with the OCP project which was considered as high in construction rating due to the impact of location, environmental and geotechnical conditions. The ratings are explained in Table 2-1.
Table 2-1 PROJECT TERRAIN RATING DESCRIPTIONS

DIFFICULTY RATING High (H) DESCRIPTION Mountains, unstable, more than 1 river crossing per mile, congested areas, multiple road, rail, levee crossings, environmentally challenged (virgin area, senic resources, archeologically significant or indigenous traditional lands, inclement weather conditions, seasonal restrictions on construction, poor access. Rolling to flat terrain, few major crossings of roads, rivers, etc., long summer construction seasons, stable soils, farm lands or other previously disturbed areas. Parallel to existing power lines or roads with easy access and logistics, Near existing infrastructure. Flat terrain Deserts, with road access and adequate infrastructure, few or no crossings, and no significant environmental, social, or other impediments.
Medium (M)
Low (L)
2.1.2
2009 VENDOR MATERIAL QUOTATIONS
A summary of selected pipeline system component and service costs, as provided and was reviewed. These costs include construction materials, equipment i.e. pumps, tanks, valves as well as services such as land acquisition, testing, construction that are directly applicable to the OCP project. All the data used in both estimating approaches are available in an Excel File and are delivered in Appendix B of this report.
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Once the parametric estimate was compiled it was further adjusted for additional costs that had to be considered for the OCP Pipeline System, as follows:
1.
OCP had to purchase its pipeline product (line fill). Since most pipelines are simply carriers, the owners of the inventory are typically the producers of the crude and thus such costs are normally not included in the pipeline construction cost. The original line fill cost was calculated at a per barrel cost of $45.53. The cost of replacing that inventory today would be much higher. The current value is calculated assuming a cost of $88.07 per barrel (anticipating a continued rise in price through the end of 2009 to near the $100/barrel level again).
2.
OCP did not receive an exemption status from VAT taxes for this construction project. This alone increased the cost of OCP by 27 to 30% above benchmark projects constructed in other countries which normally receive tax exemptions benefit. Benchmark countries such as Russia, Kazakhstan, etc. typically exempt developed projects from VAT taxes since such projects bring new opportunities and jobs, and enable the monetization of otherwise stranded resources ripe for exploitation.
OCP also incurred additional cost in improving community infrastructure and providing educational and recreational facilities in remote and largely inaccessible areas of the country. Furthermore OPC spent substantial sums in training of a large workforce preparing them for projects difficult geographic and environmental conditions as well as the operational challenges they would encounter.
Since the Worldwide data was used as a basis for this estimating work, it is likely that these costs are already included in the base data used for these projections.
The final benchmark comparison cost estimate is summarized below in Table 2-2.
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Table 2-2 BENCHMARK COST ESTIMATE IN 2009 $ (CONSIDERED TO BE WITHIN 15-20% ACCURACY)
ITEM Land R.O.W. Line pipe Line pipe fittings Pipeline construction Buildings Pumping equipment Machine tools, machinery Other station equip. Oil tanks Delivery facilities Communications systems Office furn. and equip. Vehicles, other work equip. Other TOTAL Add Ecuador Taxes Add Line Fill GRAND TOTAL ESTIMATE FOR OCP 2009 $ $7,031,408 $36,759,467 $469,405,754 $42,140,936 $575,083,042 $39,989,068 $78,587,181 $90,687 $114,071,445 $83,344,942 $26,259,183 $6,223,127 $3,045,317 $7,000,088 $4,487,521 $1,493,519,166 $399,584,920 $140,000,000 $2,033,104,087
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Section 3 REFERENCE DOCUMENTS
1. AACE International Recommended Practice No. 18R97 Cost Estimate Classification System As applied in Engineering, Procurement, and Construction of the Process Industries, June 1998 and 2005. 2. Cheyenne Plains Gas Pipeline Docket No CP03, Cost of Facilities Exhibit K. 3. Cost Estimating Manual for Pipelines and Marine Structures, John S. Page, Gulf Publishing Company, 1977, ISBN 0-87201-157-7. 4. Product and Crude Pipeline Property (Cost) Breakdown, August 12, 1974, The Oil and Gas Journal. 5. Direct Connection Pipeline Burdekin to Southeast Queensland, Queensland Government Department of Natural Resources and Water, 2007. 6. Drawing: Sistema De Transporte De Crudos Pesados Est. Amazonas Terminal Maritimo, OCP No. Techint / OCP (OCP-DCO_PID_001). 7. 8. 9. Excel File Ref 17a.xls by Valeries, PennWell Co., August 21, 2009, Refining and Transportation, Nelson Farrar Inces 1928 to 2008. PDF file Estimated cost 1.4. Excel File Informe Final Valoraction De Activor Version Analysis De Los Heaters, (29-June-2009).
10. Historical Data Provide Low Cost Estimating Tool, Oil and Gas Journal, November 20, 2006. 11. PennWell Database, CD-ROM, E1342C World Wide Pipeline Projects Historical (1996current). 12. PennWell Database, E1342s-09 World Wide Pipeline Project Historical (2009). 13. Baku-Tbilisi-Ceyhan Pipeline data on the BTC pipeline, http://en.wikipedia.org/wiki/Baku-Tbilisi-Ceyhan_pipeline. 14. Oil and Gas Transport Strategy of Turkey, Salih Bayraktutan, Advisor the President BIL, BOTAS International Limited, 23 April 2007, Bakuu, Azerbaycan. 15. Russia, Turkey and the EU-Potential and Wishes, Elzbieth Salzmann Kaji, IMS Midstream Data Coordinator Russia & CIS, First Caspian Oil Trading and Transportation Conference 23-24 April 2007, Baku, Azerbaijan.
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16. Rockies Express Data from www.kindermorgan.com/business/gas_pipeline/rockies_express. 17. Botas Gas System Data from www.botas.gov.tr. 18. NABUCCO Pipeline Data from http://en.wikipedia.org/wiki.Nabucco_Pipeline. 19. NABUCCO Pipeline Data from www.nabucco-pipeline.com. 20. NABUCCO Pipeline Data from www.turkishweekly.net/news.php?id=44744. 21. Eurasia Transportation Forum Summit, June 20, 2006, Istanbul by CERA. 22. Oil & Gas Transportation in the CIS & Caspian Region, How much is available?, October 12, 2006, Wood MacKenzie. 23. A Trans-Caspian Gas Pipeline: Is the Time Finally Right?, CERA Insight, July 26, 2006. 24. Final Report Definitional Mission Trans Caspian Natural Gas Pipeline Kazakhstan, Azerbaijan, Georgia, Turkey, USTDA Project 2006-81023A, by S. H. Lucas & Associates, May 17, 2006. 25. Kazakhstan North Caspian Sea Oil Export New Russian Pipelines West-South Rpite (Ws) Screening Study, Transcom July 2005, ENIs Way. 26. Turkey-Greece Pipeline data, http://en.wikipedia.org/wiki/Turkey-Greece_pipeline. 27. The Turkey-Greece Gas Interconnection and Arising Prospects, by Dr. V. Tsombanopoulos, General Director of Strategic Planning, DEPA (Greece). 28. PM Confers with Development Minister on Underwater Natural Gas Pipeline http://greekembassy.org/Embassy/content/en/Article.aspx?office=1&folder=19&aft..829/ 2007. 29. Italy, Greece, Turkey Signs Gas Transit Deal; Pipelines to Start by 2012- Edison, 7/26/07, http://www.forbes.com/business/feeds/afx/2007/07/26/afx3955664.html, 8/29/07. 30. Successfully Developing New Infrastructures, Pipe and LNG, To Enhance Competitiveness and Diversification, www.Edison.com. 31. South Caucasus Pipeline data, http://ep.wikipedia.org/wiki/South_Caucasus_Pipeline, 8/29/07. 32. South Caucasus Pipeline data, http://www.bp.com/genericarticle.do?categoryID =990667&contented=7014371. 33. Iran Turkey Pipeline data, http://ep.wikipedia.org/wiki/Itan-Turkey_pipeline. 34. Azerbaijans Shah Deniz Field on Stream, 12/15/2006, Georgia/Turkey Border connection with South Caucasus Pipeline by Botas via Erzurum. 35. West East Gas Project (Pipeline), Wood MacKenzie, South East Asia Upstream Service. 36. West East Gas Project Pipeline Map, http://210.78.134.66/english.xwhgg.englishnews/images.xqds.jpg.
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37. Gas Pipeline Runs over 4,000 km Across China Peoples Daily Online, July 11, 2002. 38. NW China Province to Start Laying Gas Pipeline, http://english.peopledaily.com.cn/200302/26/eng20030226_112306.shtml. 39. West-East pipeline starts commercial operation, http://engish.peopledaily.com.cn/200401/19/eng20040119_132958.shtml. 40. PetroChina finalizes second West-East gas pipeline route http://www.pipelineandgastechnology.com/pgtnews/091007/story1.html. 41. Chemical Engineering Cost Estimating, Robert S. Aries, McGraw Hill Book Company, New York, 1955, Library of Congress Number 55-6851.
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Appendix A RESUMES
A-1
RIAZ (RAY) MASROUR, P.E. Sr. Pipeline Engineer/Project Engineer
SPECIALIZED PROFESSIONAL COMPETENCE Mr. Masrour has more than 30 years experience related to engineering design, project engineering, and management of gas and liquid pipeline projects, gas gathering and reinjection systems, crude treatment facilities, midstream gas pipeline pump and compressor station facilities, and LNG projects. He has been involved in engineering design of a number of pipeline and related facilities projects, both FEED studies and detailed design work, based on DOT 192 and 195, ASME B31.8, B31.4, B31.3 and API 5L. His project engineering and management activities have included coordination and direction of design teams in Houston and overseas offices, generation of man-hour estimates and work schedules, preparation of project execution documents, status reports, etc. His gas pipeline compressor station facility and LNG experience includes close association with environmental companies for the production of various resource reports related to permitting and regulatory compliance.
EDUCATION AND PROFESSIONAL BACKGROUND Texas Tech University, B.S., Petroleum Engineering Tarleton State University, B.S. Mathematics Short Courses: Project Management Seminar; Project Engineering Seminar; Integrity Management Seminar; Project Management Seminar Special Fields of Knowledge: Pipeline Integrity Management and Federal Permitting Process Languages: English and Farsi, and some French Registrations: Registered Professional Engineer Texas P.E. License 57647 Affiliations: Member, American Petroleum Institute
EXPERIENCE Lead Piping/Pipeline Engineer: Responsible for engineering design of facility piping at well sites, compressor stations, water disposal piping, and gathering pipelines delivering methane gas through a pipeline network consisting of some 300 miles of 3-inch to 24inch pipelines to compressor stations and after pressurization to sales pipeline. Offsite Project Engineer: Managed off-site activities relative to the FEED design of oil, water, and condensate gathering systems and all associated facilities i.e., well pads, field gathering, distribution stations and pigging and slug catching provisions at the inlet to the Central Processing Facilities. Also managed production and issuance of off-site environmental deliverables, including the EIA report and design and routing of two 220 kV overhead cables from existing power stations in the north to the CPF and Base de Vie substations.
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Ray Masrour
Lead Pipeline Engineer: Prepared necessary technical documentations for CRE (Mexican Federal Permitting Agency) to acquire the necessary permits to build a 26-mile, 30-inch send-out pipeline and facilities. The pipeline was designed to carry 750 MMSCFD of natural gas from an LNG Terminal near Tijuana, Mexico to the US border. The work included generation of a digital elevation map of the area showing the pipeline route and PFD drawing showing the pipeline and related controls and equipment i.e., sectionalizing valves, overpressure protection system, leak detection system, custody transfer metering, Cathodic protection etc. Studies included hydraulic analysis, overpressure protection and safety report, geophysical status of pipeline route, routing review, and SCADA report. Pipeline Technical Coordinator: Prepared engineering information and documentation for two environmental companies in order to produce the 12 Resource Reports required as application for FERC approval; studied the feasibility of send-out pipelines for 3 LNG Terminal sites, one in the State of Alabama and two in Texas. Participated in preparation of FEED and EPC Bid Documents for the Sabine Pass and Corpus Christi gas pipelines; in each case the engineering work included the preliminary engineering design of a 36-inch pipeline to convey some 1 BSCFD of LNG vaporized gas to market through connection to various currently operating pipelines. Senior Pipeline Engineer: Work included detailed engineering design of 77 Kms of 56-inch pipeline transporting 3.8 BCFD natural gas from Beachfield to existing LNG facilities at Point Fortrin. Three mainline 56-inch horizontal drilling were proposed, as well as a number of open cut and bored road crossings. Also participated in preparation of EPC bid documents. Off-site Project Engineer: Responsible for engineering design of an above-ground gathering system by collecting and delivering the production from 4 wells through individual 10-inch flow lines to the Central Processing Facilities in the HBNS field. The project also included the design of a 10-inch gas reinjection pipeline and a short 24-inch export line delivering the crude to an existing cross-country pipeline. The work comprised design of the gathering and injection networks, optimization, and selection of pipe for a variety of production flow lines, trunk lines, and gas reinjection lines. Hydraulic, surge, overpressure protection, and stress analyses were performed for all lines. Specifications were prepared for all materials and construction. Pipeline Consultant/Project Coordinator: Responsible for review of the engineering design, by Pemex, for the laying of a 36-inch submarine pipeline and the necessary modification to the topside piping to accommodate the additional pipeline; generated requisitions, and established requirements for the purchase of 41 kilometers of high grade 36-inch pipe as well as a number of 36-inch and 30-inch Cooper Cameron ball valves and a range of other piping materials and appurtenances as well as all required instrumentation for the submarine pipeline project for Pemex; provided technical support for review of specifications, vendor bids, purchase orders, and vendor drawings. Senior Pipeline Engineer: Provided technical input for preparation of two EPC contracts for Well pads and flow lines. Work included constant review and study of the contract and preparation of technical write-ups to describe or clarify the scope of engineering design and material supply and construction; evaluated bid proposals from a host of international contractors and prepared the final report for the client.
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Ray Masrour
Senior Principal Engineer: Participated in the design of a 30 megawatt power plant, consisting of six 5-megawatt Wartsila diesel generators providing power to the central production facilities, manifold areas, and through transmission lines to individual well sites. Responsibilities included preparation of P&IDs and piping layouts for diesel engines cooling system (via air coolers), Loss Control Systems (water, foam and CO2), Fuel Oil System, Lube Oil System, Raw and Potable Water Systems, and Utility and Instrument Air systems. Additional duties included preparation of O&M Manuals for the Gensets, generation of purchase specification, and inspection of purchased equipment at the factory.
ADDITIONAL INFORMATION For more information regarding Intertek-APTECH's personnel and services, please contact our office in Sunnyvale, California (USA) at 408/745-7000 or visit our website (www.aptecheng.com).
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JAMES C. TOWERS Pipeline Consultant

SPECIALIZED PROFESSIONAL COMPETENCE Thirty-three years experience in the development, construction, operational, maintenance and failure analysis of pipeline transportation systems onshore and offshore in the U.S.A., Azerbaijan, Canada, Central America, Russia, and Kazakstan. Provides consulting services on pipeline projects in the United States, Canada, the Russian Federation, and various Former Soviet Union States.
EDUCATION AND PROFESSIONAL BACKGROUND B.S. General Engineering from Texas A&I University in 1970, (now Texas A&M) Gosgortechnadzor Regulatory Compliance (Russian Pipeline Operating License) 1996 Strategies for Clean Air Act Compliance 1991 Texas A&M Oil Spill Control Workshop 1991 Federal Environmental Laws and Regulations (Rice University) 1988
EXPERIENCE Permitting Manager and Manager of the Russian TEOC (Technical and Economic Construction Feasibility Study) covering the crude oil export terminal, onshore pipeline and offshore pipelines for the Sakhalin I project in Far East Russia. Route optimization of AGPPT system. The focus of this work was on cost reduction by improved routing through unstable terrain in Northwest Alberta and Southeast British Columbia, Canada. On the Alaska Gas Producers Pipeline Team responsible for the preparation of technical documentation necessary to support FERC and NEB filings for a 52-inch, 4.5 billion cubic feet per day pipeline connecting the Alaska North Slope gas fields with markets in Canada and the Lower 48 states. Specialized in technical issues related to the route alternative following the existing road systems in Alaska and Canada sometimes referred to as The Highway Route. Worked on converting the Trans Alaska Pipeline from commingled mode to batching mode to support the proposed gas to liquids project at Prudhoe Bay.
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JAMES C. TOWERS
Responsible for developing the conceptual design of an onshore crude oil pipeline originating on Sakhalin Island and crude oil tanker loading terminal at the Port of De Kastri, Russia. Also managed subcontracts for geotechnical support, GIS database development and cold-regions construction expert consultation on the feasibility of constructing a 954 kilometer gas pipeline connecting Sakhalin Island to existing facilities in China. Included field work in Far East Russia covering over 2,600 kilometers of route alternatives. Developed cost models to predict the approximate cost of constructing the crude oil and gas pipelines. The cost models were used to select the most cost effective route alternative. Responsible for developing the conceptual execution plan and the cost estimating model for rehabilitation of 485 kilometers of existing Soviet era pipelines between Baku, Azerbaijan and Sukhumi, Georgia. Worked for the Alaska North Slope (ANS) Gas Commercialization Project managing contracts with Bechtel, SNC Lavalin and H. C. Price and other smaller firms for studies of onshore pipeline alternatives across permafrost and offshore pipelines in the ice infested Chukchi and Beaufort Seas. Responsible for developing technical position on existing asset preservation and rehabilitation. Optimized ongoing operating costs for existing assets and identified capital cost reduction opportunities. Responsible for Regulatory Compliance, Computer Communications, Procurement, Cost Engineering, Safety and Emergency Response. Participated in oil a major oil spill drill for the CPC crude oil pipeline, which involved the RF Civil Defense, and the Red Army on the Volga River. Responsible for crude oil facilities in Texas, Louisiana, and Mississippi. Negotiated contracts for facilities maintenance, smart pig services repairs and construction projects. Coordinated management of EPCs interest in the Trans Alaska Pipeline System and provide support in the litigation resulting form the Exxon Valdez oil spill. Responsible for stewardship of annual operating expenses, capital expenditures. Developed business strategies to improve EPCs net income and operating performance. Managed the preparation of the Environmental Impact Statement and obtained the Federal and State right of way grants and permits for a shale oil pipeline from Colorado to Wyoming. Negotiated agreements with Federal and State agencies, contractors and shippers. Developed the long-range transportation plan for all LPG, heavy fuel oil and specialty products in the United States. Negotiated transportation agreements with various corporations.
Page 2
Rev. 2
JAMES C. TOWERS
Managed the start-up at a Trans Alaska Pipeline remote location for nearly two years. The facilities included 8 gas turbines and complete life support facilities. Responsible for storage well work-overs at a salt dome storage facility. This required logging the extent of corrosion damage, identifying leakage locations in the product casings and repairing product casing leaks. Responsible for the reconstruction of facilities damaged by fire in December 1975. Responsible for upgrading emergency shutdown facilities, flare facilities, brine handling facilities, fresh water make up and corrosion mitigation systems, and control equipment. Developed a preventative maintenance program and material specification criteria to prevent re-occurrence of the accident. Also responsible for the drilling and completion of a brine disposal well and installation of butal rubber liner in two above ground, three million barrel brine storage reservoirs that were in near failure mode because earthen levies had developed fissures that were leaking saturated brine salt dome storage wells. Designed product and brine handling manifolds, metering and control systems, dehydration, and treating facilities for salt dome storage wells in Louisiana and Texas. These facilities were used for the transportation and stored storage of sour iso-butane, ethylene and chemical grade propylene. Also, operations support and accident investigation following a fire at the Texas Storage Well facility. Responsible for identifying the root cause of failure.
SELECTED REPORTS, PUBLICATIONS, AND INVITED LECTURES Investigation of Natural Gas Leaks from Dow Well No. 13, with G. Egan and E. Sullivan, APTECH Report AES 04025297-3-1 (August 2005).
ADDITIONAL INFORMATION For more information regarding APTECH's personnel and services, please contact our Corporate Headquarters in Sunnyvale, California (USA) at 408/745-7000 or visit our website (www.aptecheng.com).
Rev. 2
Page 3
PHILLIP NIDD Pipeline Integrity Management Specialist

SPECIALIZED PROFESSIONAL COMPETENCE Mr. Nidd has over 30 years of technical and management experience in the asset integrity business, having served in the position of Manager of Pipeline Integrity within a pipeline operating company, Vice President of Operations within an international Engineering Consulting firm, and as an independent Pipeline Integrity Consultant during this time period. In his present position as Director of Pipeline Integrity and Litigation Services for APTECH, Mr. Nidd oversees the Houston office Pipeline Technical Services, including pipeline fitness-for-service assessment programs, pipeline rehabilitation management, pipeline integrity management plan development and is also responsible for managing all Houston based litigation support projects. In addition, Mr. Nidd provides mentoring to young APTECH engineers in the area of Pipeline Integrity and Project Management and has directed the development of the APTECH iT and APTECH Document Management systems. During his employment as Manager of Pipeline Integrity with Canadian based, Alberta Energy Company, LTD., (now EnCana), Mr. Nidd managed: Development and implementation of the Companys USA and Canadian system pipeline integrity management program, which included over 2500 miles of in line inspection and over 3500 specific pipeline integrity excavations along with related defect assessment and repair. Development and implementation of the Companys Stress Corrosion Cracking and corrosion susceptibility and risk assessment models. Development of the Companys Stress Corrosion Cracking Research Program and implementation of pipeline integrity data management systems. The undertaking of field failure investigations and management of corrosion and coating analysis programs as conducted by metallurgical firms. Development and implementation of the Companys defect assessment criterion and repair methodology for Stress Corrosion Cracking and corrosion and provided representation on several technical committees, including the Canadian Energy Pipeline Association (CEPA) commission on stress corrosion cracking (SCC). Development of the Companys procedures for all pipeline integrity activities, including Nondestructive Examination, clock spring applications, defect assessment, defect repair methodologies, coating selection, in line inspection applications / data auditing, and the development and approval of specifications for construction and operation related issues.
Page 1
Rev. 4
PHILLIP NIDD
As Vice President of Operations for a United States based business unit of AMEC (a large multi-national engineering and construction corporation), Mr. Nidd was responsible for leading a diverse technical team providing a complete turn-key pipeline integrity management service, including all aspects of pipeline integrity assessment, regulatory compliance, in-line inspection, pipeline rehabilitation and repair, rehabilitation program management, and related engineering support. As a recognized expert in the field of asset integrity management, Mr. Nidd has traveled extensively for technical meetings and has performed project consulting in Argentina, Brazil, Canada, Ecuador, Russia, Egypt, and the USA, acting as the pipeline integrity consultant on the following selected major projects: 20 Alberta Oil Sands Pipeline rehabilitation program (Canada)- 1991-1996 20 Platte pipeline rehabilitation program (USA) - 1996- 2002. Olympic Pipeline rehabilitation program (USA) 2001- 2004) OCP construction quality assessment program (Ecuador) - 2003) OCP pipeline performance testing program (Ecuador) - 2004
Most recently Mr. Nidd: Is leading a multi-disciplined litigation engineering support team offering technical support regarding pipeline failure litigation proceedings leading to trial in 2009. Acted as a manager of several multi-disciplined litigation engineering support teams that provided engineering support during pipeline failure litigation proceedings leading to settlements in 2007 and 2008. Co-authored a major two-part magazine article, along with engineering associates and attorneys, published in June and September, 2007 relating to Litigation Consequences of Pipeline Integrity Management Choices. Acted as a Senior Pipeline Integrity Consultant to the Oleoducto De Crudos Pesados (OCP Ecuador) pipeline integrity team, assisting in the areas of contract development, contract award, writing of critical procedures, development of excavation and repair criteria, development of integrity management plans, and general technical support. Facilitated the offering of a three-day training course in South Africa entitled; Program on Pipeline Management And Integrity attended by oil industry management and technical personnel. Facilitated a one-day Pipeline Integrity Training seminar at the Africa/Middle East Oil & Gas Flow Assurance Summit held in Cairo, Egypt, May 6-8, 2008.
Rev. 4
Page 2
PHILLIP NIDD
EDUCATION AND PROFESSIONAL BACKGROUND Attended Engineering College in Canada- 1971-1974 NACE Corrosion Course Training 1975/1976 ASM Metallurgical Course Training - 1976/1977 National Association of Corrosion Engineers (NACE) Member - 186766-00 American Society for Metals (ASM) Member 564087 American Society of Certified Engineering Technicians (ASCET)- Member 01876Y American Welding Society- Member American Society Of Non Destructive Testing- Member American Society For Quality- Member 63869437 Defense Research Institute (DRI)- Member
SELECTED REPORTS, PUBLICATIONS, AND INVITED LECTURES Back and Forth: A Tug-of-War Between Governments and Oil Thieves - Middle East Oil and Gas Flow Assurance Summit held in Cairo, Egypt, (May 6-8), 2008. Control of Black Dust; Presentation of Case Studies- Middle East Oil and Gas Flow Assurance Summit held in Cairo, Egypt, (May 6-8), 2008 OCP in Line Inspection Program: Technical Challenges and Unique Contractual Approaches - Rio Pipeline Conference, (2007). Practical Considerations for Formation of an Integrity Management Plan, Gas Association Meetings, (September 2003). Innovative Solution to Hydrostatic Testing IPC Conference-Calgary (Co-Author 2001) / Platte Inspection Program Supports Alternative to Hydrostatic Testing, Oil and Gas Journal, (Co-author - 2001). Evaluation of Pipeline Integrity Using Instrumented Pigging Tools, Pipeline Integrity Conference, Calgary, (1999). Clock Spring Repair Sleeves and Pipeline Rehabilitation, Banff Pipeline Conference, (1998). ADDITIONAL INFORMATION For more information regarding APTECHs personnel and services, please contact our Corporate Headquarters in Sunnyvale, California (USA) at 408/745-7000 or visit our website (www.aptecheng.com).
Rev. 4
Page 3
Appendix B EXCEL MODEL FILES
B-1
HP PERCENTAGE - COST VERIFICATION Completed Station Cost From Oil and Gas Journal Aug 12, 1974
Horsepower Land Structures Equipment Including Labor Including Labor $ $ $ $ $ $ $ $ $ $ $ $ $ 255,167 208,826 135,232 233,596 56,078 80,187 121,694 113,555 11,308 43,513 10,251 115,380 1,384,787 4.984% 4 984% $ $ $ $ $ $ $ $ $ $ $ $ $ 1,903,516 2,720,661 2,179,216 3,764,330 903,677 1,292,186 1,490,675 1,829,904 703,788 701,206 2,966,952 1,859,321 22,315,432 80.310% 80 310% $ $ $ $ $ $ $ $ $ $ $ $ $ Other cost Total Cost Per Horsepower 509 282 278 287 317 526 494 304 272 141 362 178 301 1 540 96 1,540.96 1972 $ 2009 $
5400 12000 10000 16000 3500 3165 3600 7500 3000 5600 10000 12500 Totals Percent 92,265
$ $ $ $ $ $ $
220,012 34,787 4,068 16,073 42,935 38,846 9,548
$ $
1,111 367,380 1.322% 1 322%
370,053 418,544 463,337 593,836 132,334 250,456 125,546 327,895 101,897 45,693 639,630 249,664 3,718,885 13.384% 13 384%
$ $ $ $ $ $ $ $ $ $ $ $ $
2,748,748 3,382,818 2,777,785 4,595,830 1,108,162 1,665,764 1,776,761 2,280,902 816,993 790,412 3,616,833 2,225,476 27,786,484 100.000% 100 000%
Page 1 of 3
HP PERCENTAGE - COST VERIFICATION This analysis compares the cost of Stations Estimated Using the Parametric data from OGJ 8-12-74 (Indexed to 2009) with the EPC Contract Cost of the same stations indexed to 2009
Pump Stations (one spare pump at each) PS 1 4+1 Pumps and Drivers 4,505 HP ea. PS 2 4+1 Pumps and Drivers 4,608 HP ea. PS 3 5+1 Pumps and Drivers 3,117 HP ea. PS 4 5+1 Pumps and Drivers 4,526 HP ea. Totals Total HP 22525 23040 18702 27156 91423 Est Cost based Techint EPC on above Indexed to 2009 $ $ $ $ 34,710,159 35,503,754 28,819,063 41,846,352 $ $ $ $ $ 46,674,687 11,291,086 13,126,427 12,672,347 83,764,547
$ 140,879,327
Observation is that Paramet predicts higher cost than indexing the Techint EPC
Page 2 of 3
HP PERCENTAGE - COST VERIFICATION Percentage of Total of Structure and

255,167 208826 2,158,683 2,929,487 2,314,448 3,997,926 959,755 1,372,373 121694 11308 10251 Total 607,246 1,612,369 1,943,459 715,096 744,719 2,977,203 1,974,701 10,392,838 0.058429276
Factor for use where data not avail =
Page 3 of 3
OCP COST ALLOCATION

Total including mitigation and taxes Total excluding mitigation and taxes $ 2,033,104,087 $ 1,493,519,166
Item
Land R.O.W. Line pipe Line pipe fittings Pipeline construction Buildings Pumping equipment Machine tools, machinery Other station equip. Oil tanks Delivery facilities Communications systems Office furn. and equip. Vehicles, other work equip. Other Total Add Ecuador Taxes Add Line Fill Grand Total Estimate for OCP $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 9,571,745 50,040,083 638,994,651 57,365,792 782,851,475 54,436,487 106,979,490 123,451 155,283,659 113,456,155 35,746,212 8,471,445 4,145,542 9,529,109 6,108,792 2,033,104,087 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $
2009 $
7,031,408 36,759,467 469,405,754 42,140,936 575,083,042 39,989,068 78,587,181 90,687 114,071,445 83,344,942 26,259,183 6,223,127 3,045,317 7,000,088 4,487,521 1,493,519,166 399,584,920.79 140,000,000.00 2 033 104 087 2,033,104,087
$ $
Page 1 of 1
ESTIMATED ALLOCATION BASIS

Product Pipeline Relative Cost Figures 1974 $ Item
Land R.O.W. Line pipe Line pipe fittings Pipeline Construction Buildings Pumping equipment Machine tools, machinery Other station equip. Oil tanks Delivery facilities Communication systems Office furn. And equip. Vehicles, other work equip. Other Total $ $ $ $ $ $ $ $ $ $ $ $ $
A
4,207,540 10,975,692 150,062,839 29,319,435 220,882,466 14,173,997 21,577,996 37,986,697 39,821,647 302,169 3,506,503 1,891,412 534,708,393 $ $ $ $ $ $ $ $ $ $ $ $ $
B
1,751,841 9,971,668 67,314,427 7,661,792 98,363,051 2,370,356 2,391,126 11,263,090 11,189,527 158,800 274,307 898,051 213,608,036 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $
C
365,497 5,588,824 48,039,453 3,485,811 67,484,556 1,354,876 5,517,999 11,370,595 5,927,916 9,078,336 286,705 437,377 2,556,301 9,054,343 170,548,589 $ $ $ $ $ $ $ $ $ $ $ $ $ $
D
779,030 7,687,791 81,353,981 1,446,977 84,975,382 8,316,890 20,439,020 15,417,695 12,106,996 7,271,120 1,198,019 378,554 737,755 242,109,210 $ $ $ $ $ $ $ $ $ $ $ $ $ $
E
1,972,630 6,154,527 98,252,194 7,931,594 111,649,118 13,990,787 15,913,892 136,360 39,753,989 25,889,601 27,842,589 281,537 313,571 350,082,389
Total
$ 9,076,538 $ 40,378,502 $ 445,022,894 $ 49,845,609 $ 583,354,573 $ 40,206,906 $ 65,840,033 $ 136,360 $ 115,792,066 $ 94,935,687 $ 44,192,045 $ 1,945,693 $ 4,878,278 $ 6,397,090 $ 9,054,343 $ 1,511,056,617
Percent
0.60% 2.67% 29.45% 3.30% 38.61% 2.66% 4.36% 0.01% 7.66% 6.28% 2.92% 0.13% 0.32% 0.42% 0.60% 100.00%
Crude Oil Pipeline Relative Cost Figures 1974 $ Item

Land R.0.W. Line pipe Line pipe fittings Pipeline construction Buildings Pumping equipment Machine tools, machinery Other station equip. Oil tanks Delivery facilities Communications systems Office furn. and equip. Vehicles, other work equip. Other Total $ $ $ $ $ $ $ $ $
A
1,266,035 10,006,306 121,492,386 3,992,015 159,796,508 9,680,893 22,308,929 43,261,821 11,787,773 $ $ $ $ $ $ $ $ $ $ $ $ $ $
B
294,872 1,094,227 27,428,004 531,943 28,074,493 3,395,966 4,508,291 8,996,394 3,728,462 175,752 1,663,081 94,370 701,634 80,687,489 $ $ $ $ $ $ $ $ $ $ $ $ $ $
C
382,995 316,272 12,833,222 1,835,467 17,106,732 2,052,550 2,593,503 3,744,461 5,644,760 5,095,772 14,458 102,672 300,240 52,023,104 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $
D
607,744 6,029,553 57,402,816 8,058,593 79,596,278 6,899,196 9,913,940 10,619,763 11,449,098 381,369 4,566,978 146,762 1,221,749 16,966 196,910,805 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $
E
798,556 4,667,852 109,146,763 8,621,124 92,833,420 4,447,249 21,274,606 30,660 8,186,800 15,327,966 163,166 679,537 355,467 60,783 266,593,949 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $
Total
3,350,202 22,114,210 328,303,191 23,039,142 377,407,431 26,475,854 60,599,269 30,660 74,809,239 47,938,059 5,816,059 6,924,054 834,964 5,051,556 16,966 982,710,856
Percent Percent Percent

0.34% 2.25% 33.41% 2.34% 38.40% 2.69% 6.17% 0.00% 7.61% 4.88% 0.59% 0.70% 0.08% 0.51% 0.00% 100.00% 0.60% 2.67% 29.45% 3.30% 38.61% 2.66% 4.36% 0.01% 7.66% 6.28% 2.92% 0.13% 0.32% 0.42% 0.60% 100.00% 0.47% 2.46% 31.43% 2.82% 38.51% 2.68% 5.26% 0.01% 7.64% 5.58% 1.76% 0.42% 0.20% 0.47% 0.30% 100.00%
$ $ $
135,693 2,767,150 386,495,509
Page 1 of 1
OCP COST CALCULATIONS

2007 USD Miles
1000 143 260 744 1980 1750 292 1300 1713 744 754 1040
2009 USD $/in mi

$ $ $ $ $ $ $ $ $ $ $ $ 163,724 131,030 131,189 125,748 171,156 118,802 124,600 133,333 149,227 115,207 135,389 130,495
Estimated 2009 USD inch/ miles

28,000 5,148 12,480 41,664 71,280 73,500 10,512 39,000 82,224 41,664 36,192 58,240 $ $ $ $ $ $ $ $ $ $ $ $
Dia
28 36 48 56 36 42 36 30 48 56 48 56
$ Million
$ $ $ $ $ $ $ $ $ $ 4,200 618 1,500 4,800 12,200 8,000 1,200 5,200 12,270 4,800
Loc.
Iran Netherlands Abu Dhabi Russia No.Eu.Gas Alberta CA to TX CA -Foothills AK Gas CA British Columbia CA-US RF-Nakhodha (Crude) N. European Gas Nabucco Pipeline Turkey to Austria Greece-Italy Pipeline Central Asia - China Pipeline $ $ $ $ na $ $ na na
$/in mi
1.091493 150,000 120,047 120,192 115,207 108,844 114,155
Equivalent
4,584,270,600 674,542,674 1,637,239,500 5,239,166,400 12,200,000,000 8,731,944,000 1,309,791,600 5,200,000,000 12,270,000,000 4,800,000,000 4,900,000,000 7,600,000,000 Indexed and terrain adjusted from this year to 2009 2008
1100 2,100
51.4 56
932
40
143
36
1,615 1,700 1,750 2,500 725
26 56 46 40 42
Russia - Transneft New York's lower Hudson Valley and Southern Tier Baku-Tbilisi-Ceyhan y 36" Pipeline - Turkey Gas South Caucasus Pipeline (BTE Pipeline) Caspian Sea to Turkey 26" gas Xinjiang - Shanghai , China Angarsk, Russia Beijing, China Texas-Arizona United States Mobile, Ala. - Manatee County, Fla. Defiance County, Ohio - Leidy, Pennsylvania, United States
$ $
129,112 170,920
56,540 117,600
$ $
7,300,000,000 20,100,140,220
143,062
37,280
5,333,333,333
11/1/2008
198,783
5,148
1,023,333,333
2006
$ $ $ $ $
134,953 171,959 185,607 152,854 172,873
41,990 95,200 80,500 100,000 30,450
$ $ $ $ $
5,666,666,667 16,370,544,090 14,941,369,606 15,285,410,882 5,263,991,816
2006 2005 2005 2005 2002
400
36
153,189
14,414 Total-inch-miles 1079026.4
$ $
2,208,121,606 162,639,866,327 150,728
2001
Weighted $ per inch-mile $
1 of 6

2007 USD 2009 USD $/in mi Mean ($/inc 121,408 Weighted ($/inch-mile) 14,627 One standa plus one st 136,035 plus two std 150,662 plus 3 std d 165,289 $/in mi 147,419 150,728 23,210 170,628 193,838 217,047 OCP Inch-Miles OCP Cost Projectio 1,460,724,612 1,493,519,166 Grand Total Add Ecuador Add Line Fill Estimate for OCP Taxes $ 390,810,873 $ 140,000,000.00 $ 1,991,535,485 $ 399,584,921 $ 140,000,000.00 $ 2,033,104,087
9908.681341 $ $
$ $ $
1,690,700,882 1,920,677,151 2,150,653,421
$ $ $
452,340,079 513,869,286 575,398,493
140,000,000 140,000,000 140,000,000
$ $ $
2,283,040,961 2,574,546,438 2,866,051,914
100% 50% 32% 5% 1%
$ $ $ $
0 1,991,535,485 2,283,040,961 2,574,546,438 2,866,051,914
$ $
1,818,082,024 P 50 parametric value 2,026,424,545 P 50 (assumed) actural value 1.114594676
Estimated Cost vs. Probablilty of Exceedence 3.5E+09 3E+09 Estimated OPC Cost 2.5E+09 2E+09 1.5E+09 1E+09 500000000 0 0% 20% 40% 60% 80% 100% 120% Probabliity cost will exceed Y value y = -2E+09x 2E 09 2 - 5E 5E+08x 08 + 3E+09 3E 09
Miles
Dia
$ Million
Loc.
2009 USD $/in mi
Dia 2 of 6
2009 USD $/in mi

1000 1300 143 1980 292 1750 260 1713 744 744 28 30 36 36 36 42 48 48 56 56 $ $ $ $ $ $ $ $ $ $ 4,200 5,200 618 12,200 1,200 8,000 1,500 12,270 4,800 4,800 Iran CA-US Netherlands Alberta CA to TX CA British Columbia CA -Foothills AK Gas Abu Dhabi RF-Nakhodha (Crude) Russia No.Eu.Gas N. European Gas $ $ $ $ $ $ $ $ $ $ 163,724 133,333 131,030 171,156 124,600 118,802 131,189 149,227 125,748 115,207 28 30 36 36 36 42 48 48 56 56 High 163724 171156 149227 133333 124600 131030 131189 125748 118802 115207 Mid 115207 118802 124600 125748 131030 131189 133333 149227 163724 171156 Low 56 42
Mean
28 36 48 30 36 36 36 56 42 56
161369
180000 170000 160000 Inch Mile Cost 150000 140000 130000 120000 110000 100000 0 10 20 30 Pipeline OD - Inches 40 50 60
High Cost Group Mid Cost Group Low Cost Group Log. (High Cost Group) Log. (Mid Cost Group) Log. (Low Cost Group)
3 of 6
36 56 36 36 30 48 28 36 OCP Cost on this mean Special Calcualtion to Evaluate Cost base on Highest Cost Group Grand Total Add Ecuador Taxes Add Line Fill Estimate for OCP 427,793,098 $ 1,598,952,208 $ 140,000,000.00 $ 2,166,745,306
6 of 6
OLEODUCTO DE CRUDOS PESADOS COSTO ACTUAL DE CONSTRUCCION AO 2009 Mean (50%) $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 21,306,744 49,567,774 22,490,452 501,892,202 239,109,021 16,666,609 47,348,321 153,882,043 260,415,765 47,348,321 29,592,701 165,719,123 4,734,832 5,918,540 5,918,540 27,225,285 29,592,701 29,592,701 2,367,416 33,735,679 53,266,861 82,859,562 29,592,701 137,310,131
RUBRO ESTUDIOS ADQUISICION DE TIERRAS MOVILIZACION DESMOVILIZACION COSTO DE EQUIPOS COSTO DE TUBERIA COSTO FIBRA OPTICA/SCADA/TELECOMUNICACIONES COSTO MATERIALES PARA OBRAS CIVILES COSTO TRABAJOS OBRAS CIVILES ESTACIONES COSTO TRABAJOS OBRAS CIVILES DDV FACILIDADES COSTA AFUERA TRABAJOS INSTALACION FACILIDADES COSTA AFUERA CRUDO PARA LLENADO DE LA LINEA CONTROL DE CALIDAD PRUEBA IDROSTATICA RECONFORMACION DE LA TIERRA OFICINAS QUITO/ENTRENAMIENTO CAMPAMENTOS Y OTROS PROYECTOS COMISIONADO COSTOS IMPREVISTOS GERENCIAMIENTO TERCERA PARTE ADMINISTRACION OBRAS DE COMPENZACION SOCIAL INTERESES CAPITALIZADOS TOTAL NOTA:
VALOR $18,000,000 $41,875,000 $19,000,000 $424,000,000 $202,000,000 $14,080,000 $40,000,000 $130,000,000 $220,000,000 $40,000,000 $25,000,000 $140,000,000 $4,000,000 $5,000,000 $5,00 0,000 $23,000,000 $25,000,000 $25,000,000 $2,000,000 $28,500,000 $45,000,000 $70,000,000 $25,000,000 $116,000,000 $1,682,455,000
Cost Category Studies Land Acquisition Mob and Demob Equipment Costs Pipe Costs Fiber Optic, SCADA and Communications Costs Civil Material Costs Civil Construction for Stations Civil Construction for DDV?????? Offsite facilities costs Construction of offsite facilities Line fill Quaity Control Hydrostatic Test Restoration Quito training office Camps and other facilities Commissioning Unexpected cost Third Party Management Costs Administration Social compensation works Interest during construction Total Cost Estimate Based on Estimate of Major Category Costs To be used for reference only Quito training office
plus one std dev plus two std dev plus 3 std dev (68%) (95%) (99%) $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 24,425,460 56,823,119 25,782,430 575,355,280 274,107,940 19,106,138 54,278,800 176,406,100 298,533,400 54,278,800 33,924,250 189,975,800 5,427,880 6,784,850 6,784,850 31,210,310 33,924,250 33,924,250 2,713,940 38,673,645 61,063,650 94,987,900 33,924,250 157,408,520 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 27,544,176 64,078,464 29,074,408 648,818,357 309,106,859 21,545,666 61,209,279 198,930,157 336,651,035 61,209,279 38,255,799 214,232,477 6,120,928 7,651,160 35,195,335 38,255,799 38,255,799 3,060,464 43,611,611 68,860,439 107,116,238 38,255,799 177,506,909 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 30,662,891 71,333,809 32,366,385 722,281,435 344,105,778 23,985,195 68,139,758 221,454,214 374,768,669 68,139,758 42,587,349 238,489,153 6,813,976 8,517,470 39,180,361 42,587,349 42,587,349 3,406,988 48,549,578 76,657,228 119,244,577 42,587,349 197,605,298 1.07% 2.49% 1.13% 25.20% 12.01% 0.84% 2.38% 7.73% 13.08% 2.38% 1.49% 8.32% 0.24% 0.30% 1.37% 1.49% 1.49% 0.12% 1.69% 2.67% 4.16% 1.49% 6.89%
$ 1,991,535,485
$ 2,283,040,961
$ 2,574,546,438
$ 2,866,051,914
BASADO EN UNA GRUESA ESTIMACIN DE COSTOS UNICAMENTE PARA USO REFERENCIAL
1.49%
Of Total Cost Estimate
Page 1 of 1
INVENTORY CALCULATIONS
Wall OD [in] thickness [in] 24 0.312 0.375 0.5 0.562 0.625 0.688 0.75 0.812 Subtotal 0.344 0.375 0.438 0.469 0.5 0.562 0.625 0.75 0.812 0.875 0.938 1.062 Subtotal 0.344 0.375 0.469 0.5 0.562 0.625 0.688 Subtotal 0.375 0.406 0.438 0.5 0.562 Subtotal Total Installed length [m] 5,435.20 8,046.07 6,872.75 5,070.97 5,444.34 5,006.64 8,798.56 7,514.43 52,188.95 12,355.09 3,922.82 9,626.67 9,760.06 4,453.52 33,552.63 46,500.28 9,652.93 11,290.42 4,729.57 9,245.87 1,494.34 156,584.21 12,773.68 22,519.93 24,781.73 9,108.00 30,012.15 7,236.14 12,034.23 118,465.86 64,892.72 27,744.67 5,708.15 6,064.61 52,949.30 157,359.44 484,598.47 Inventory Calc. Barrels 9,470.51 13,869.06 11,593.21 8,461.91 8,985.15 8,171.51 14,203.45 11,997.16 38,626.45 12,215.63 29,736.11 30,028.15 13,647.22 101,996.66 140,204.88 28,633.61 33,219.16 13,800.34 26,754.10 4,253.16 45,199.62 79,390.34 86,378.80 31,627.74 103,436.16 24,748.39 40,842.29 257,117.44 109,543.36 22,455.39 23,689.52 205,367.11 1,589,663.59 Short Tons of Pipe 704.79 1,250.68 1,416.87 1,171.95 1,395.52 1,408.88 2,691.88 2,482.42 32.41 777.8 1,764.03 609.76 1,743.10 1,889.85 918.13 7,754.33 11,919.22 2,953.28 3,729.84 1,679.08 3,509.20 638.69 97.24 1,823.80 3,500.51 4,798.50 1,877.68 6,936.09 1,854.81 3,386.47 73.57 10,086.95 4,663.03 1,033.58 1,250.26 12,237.08 105,080.25 97.72 Total in.mi. 3518 9909 2501 3112 Miles of Inch Pipe Miles
32
34
36
1,922.34 $/ton Pipe Cost Only $ 202,000,000 2009 cost estimate
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NELSON-FARRAR COST INDEXES

Refinery Construction (1946 Basis) (Explained on P. 145 of the Dec 30, 1985 issue)
1962 Pumps, Comressors, etc. 222.5 Electrical Machinery 189.5 Internal-comb. Engines 183.4 Instruments 214.8 Heat Exchanges 183.6 Misc.Equip. Average 196.8 Materiels Component 205.9 Labor Component 258.8 Refinery (Inflation) Index 237.6
1972
1980 7773 394.7 512.6 5873 618.7
1999 1,433.5 545.2 901.1 1,006.0 715.8 920.3 883.5 1,906.3 1,497.2
2000 1,456.4 539.6 905.4 1,025.3 662.2 917.8 896.1 1,973.7 1,542.7
2001 1,487.0 532.6 907.3 1,042.9 726.9 939.3 877.7 2,047.7 1,579.7
2002 1,522.0 529.3 911.2 1,061.4 732.7 951.3 899.7 2,137.2 1,642.2
2003 1,540.2 522.0 911.7 1,076.8 732.7 956.7 933.8 2,228.1 1,710.4
2004 1,581.5 516.9 919.4 1,087.6 863.8 993.8 1,112.7 2,314.2 1,833.6
2005 1,685.50 513.6 931.1 1,108.00 1,072.30 1,062.10 1,179.80 2,411.60 1,918.80
2006 1758.2 520.2 959.7 1,166.00 1,162.70 1,113.30 1,273.50 2,497.80 2,008.10
2007 1,844.40 5173 974.6 1,267.90 1,342.20 1,189.30 1,364.80 2,601.40 2,106.70
Nov 2007 1,862.60 511.9 977.7 1,281.40 1,374.70 12,016 1,356.90 2,661.30 2,139.50
Oct 2008 1989.2 516.2 993.5 1,362.80 1,374.70 1,247.70 1,566.50 2,768.00 22,874
Nov 2008 2,003.40 516.4 1007.3 1,365.00 1,253.80 1,229.20 1,436.70 2,781.70 2,243.70
278 277.8 545.6 438.5
578.1 629.2 951.9 822.8
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NELSON-FARRAR COST INDEXES

Refinery operating (1956 Basis)
(Explained on P. 145 of the Dec 30, 1985 issue) Nov. 1962 Fuel cost 100.9 Labor cost 93.9 Wages 123.9 Productivity 131.8 Invest., maim., etc. 121.7 Chemical costs 96.7 Operating indexes Refinery 103.7 Process units 103.6 'Add Add separate indemres) for chemicals, if any are used See current Ouarterly Costimating, first issue, months of January, April, 457.5 787.2 870.7 872.6 922.1 870.4 777.1 312.7 542.1 579 596 5 620.6 642.8 607.8 229.2 310.5 365.4 385.9 415.1 496.1 455.7 324.8 716 743.7 7774 789.5 844.1 827.9 226.3 501.1 497.5 483.4 440.3 453.3 457.9 439.9 1,007.4 1,015.40 1,042.80 1,106.90 1,182.00 1,168 200.5 201.9 204.2 215.8 230.5 260.7 255 810.5 1,360.20 1,569.00 1,530.70 16,475 1,419.30 1,173.90 1980 2005 2006 2007 2007 Oct. 2008 Nov. 2008
These indexes are pubhshed in the first issue of each month. month They are compiled by Gary Farrar. Farrar Journal Contributing Editor
Indexes of selected inahislual items of equipment and materials are also published on the Costimating page in the first issue of the months of January,
2 of 6
Calcuated Calcuated Calcuated Calcuated Calcuated Calcuated Calcuated Calcuated Calcuated Index Index Index Index Index Index Index Index Index Factor Factor Factor Factor Factor Factor Factor Factor Factor From From From From From From From From From 2008 to 2007 to 2006 to 2005 to 2004 to 2003 to 2002 to 2001 to 1972 to 2009 2009 2009 2009 2009 2009 2009 2009 2009
Pumps, Comressors, etc. 1.347276 Electrical Machinery 0.969583 Internal-comb. Engines 1.110217 Instruments 1.30885 Heat Exchanges 1.724859 Misc.Equip. Average 4.421583 Materiels Component 5.171706 Labor Component 5.098424 Refinery (Inflation) Index 5.116762 1.420333 1.366277 1.311798 1.223658 1.169325 1.117325 1.065031 1.048703 1.358451 1.301563 1.248463 1.202014 1.153467 1.11366 1.069309 1.045241 1.636892 1.596866 1.538552 1.291184 1.217749 1.128151 1.052682 1.058811 1.308634 1.292127 1.284833 1.236869 1.15733 1.104105 1.033549 0.102297 1.711205 1.711205 1.451493 1.169262 1.078352 0.934138 0.912054 1.286037 1.267645 1.255057 1.231949 1.170669 1.076583 1.065241 1.105465 1.104859 1.095606 1.081839 1.049599 1.033552 1.030275 0.975628 0.989272 0.999033 1.005452 0.992695 0.099826 1.008791 1.316294 1.30074 1.266772 1.188609 1.139461 1.086207 1.075593
3 of 6
NELSON INFLATION INDEX Use in Calculatio ns for 2001 to 2009
STRUCTURAL
Inflation Factor
Estimated over all factor 2001 to 2009
2001 Pumps, Comressors, etc. 1579.7 Electrical Machinery
2005 1941.7 1.229157435 1.347276 0.969583 1.110217 1.30885 1.724859 1.62789937 1.17153677 1.34146324 1.58146956 2.0841283 1.58120829 1.9778386 1.64140146 1.71617284
CHEM PLANT Internal-comb. Engines 394.3 Instruments Average Heat Exchanges Misc.Equip. Average 1.20828909 468.2 1.187420746
1.308634 Materiels Component 1.636892 Labor Component 1.358451 Refinery (Inflation) Index 1.420333
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STRUCTURAL
Inflation Factor
Use in Calculatio ns for 2001 to 2009
Estimated over all factor 2001 to 2009
2001 Fuel cost 0.863035 Labor cost 1.263001 Wages 1.159023 Productivity 0.91379 Invest., maim., etc. 1.156285 Chemical costs 1.467633 Operating indexes Refinery 1.121195 Process units 0.98717
2005
1.042796 1.526071 1.400435 1.104122 1.397126 1.773325
1.354728 1.192786
6 of 6
WORLD PIPELINES
Dat File Number 2001 1 2002 2 2003 Blue Stream Pipeline - Russia to Turkey 3 42 1,099 $ 3,900,000,000 $ 5,116,013,798 $ 84,492 $ 110,837 H - Earthquake engineered, Offshore, Extremely deep water, acid environment on bottom, connects Russia and Turkey across Black Sea. Crude http://en.wikipedia.org/wiki/Baku%E2%80%93T bilisi%E2%80%93Ceyhan_pipeline Year in Oper Country # Pumps / Comp Stations 3 Horsepower # Pressure Reducing Stations Material costs Diameter Length (Miles) Total Costs Indexed to 2009 Terminal Cost As Built $/Inch-Mile $ $ 47,029 91,954 $ $ Est 2009 $/In.-Mi. 66,797 125,635 Relative Terrain Adj Factor 2.29 1.38 Adj 09 $/IM Difficulty Crude / Gas Reference
Defiance County, Ohio - Leidy, Pennsylvania, United States Mobile, Ala. - Manatee County, Fla.
60,000
36 42
400.4 725
$ $
677,900,000 $ 2,800,000,000 $
962,843,723 3,825,575,448
$ $
153,189 Rivers and Slippery Rock 172,873
Gas Gas
http://www.epa.gov/EPAIMPACT/1998/March/Day-13/i6524.htm http://en.wikipedia.org/wiki/Langeled_pipeline
1 2004 Nyhamna, Norway -Sleipner Riser platform Easington, United Kingdom 36 744 $ 1,600,000,000 $ 1,957,853,403 $ 59,737 $ 73,098
1 2004 West-East Gas Pipeline, Millennium Pipeline Company, Across Southern Teir of New York, JCTI did the route selection on this project 30 182 $ 1,000,000,000 $ 1,223,658,377 $ 183,150 $ 224,113 1.00 $ 224,113 http://www.reuters.com/article/pressRelease/idU S210618+27-May-2008+PRN20080527
5 6
1 1
Jun-04 2005
Mobil Bay, Ala. - NC United States Offshore Heimdal field - Bacton terminal, Suffolk, Eng. United Kingdom
36
2,100 750
$ 2,000,000,000 $
2,338,649,156
$ $
74,074
86,617
H - Mountains Subsea Route
Gas Gas
http://en.wikipedia.org/wiki/Persian_Pipeline http://www.sierraclub.ca/atlantic/programs/energ y/gaspipeline/index.htm
7 8 9 10 11 12 13
1 2005 2005 1 1 1 2005 2005 2005 1/1/2005 Dec-05 Angarsk, Russia - Beijing, China Texas-Arizona United States Arab Gas Pipeline Zhongxian-Wuhan Pipeline - China Shaan-Jing Pipeline - China Xinjiang - Shanghai , China Shelburne County, Nova Scotia to New Jersey Brazil - Petroleos Brasileiro SA 1 3 42/48 40 36/42 42 36 56 40 40 1750 2500 600 357 500 1,700 581 1553 $ $ $ 8,000,000,000 $ 5,700,000,000 $ $ $ $ 14,000,000,000 $ $ 1,600,000,000 $ 9,354,596,623 6,665,150,094 16,370,544,090 1,787,719,735 $ $ 95,238 57,000 $ $ 111,364 66,652 1.67 2.29 $ $ 185,607 152,854 Gas Gas http://en.wikipedia.org/wiki/West%E2%80%93E ast_Gas_Pipeline http://www.gulfcrossing.com/ProjectGC.aspx $ $ $ 147,059 25,757 $ 28,778 $ 171,959 1.00 $ 171,959 Gas Gas http://en.wikipedia.org/wiki/Altai_gas_pipeline http://en.wikipedia.org/wiki/Shaan%E2%80%93J ing_pipeline
14
1 2006
15
1 2006 Netherlands - Gasunie NV 36 800 $ 1,000,000,000 $ 1,117,324,834 $ 34,722 $ 38,796
16 17
1 2006 1 5/28/2006 Baku-Tbilisi-Ceyhan Pipeline - Turkey 8 1 28 300 $ 300,000,000 $ 300,000,000 $ 35,714 $ 35,714 Gas PennWell Canada - El Paso Corp - Blue Atlantic Pipeline $ -
18 19 20
1 5/28/2006 12/15/2006 2007 Baku-Tbilisi-Ceyhan Pipeline - Turkey South Caucasus Pipeline (BTE Pipeline) Caspian Sea to Turkey Prudhoe Bay - Gordondale, Alta. Canada Turkey-Greece Pipeline 8 1 36 40/26 143 1,615 $ $ 614,000,000 $ 3,400,000,000 $ $ 42 430 $ 3,600,000,000 $ 614,000,000 3,400,000,000 3,834,110,220 $ 199,336 $ 212,298 Gas http://en.wikipedia.org/wiki/South_Caucasus_Pi peline http://en.wikipedia.org/wiki/Baku%E2%80%93T bilisi%E2%80%93Ceyhan_pipeline http://en.wikipedia.org/wiki/TransAdriatic_Pipeline PennWell http://en.wikipedia.org/wiki/Nabucco_pipeline http://en.wikipedia.org/wiki/Turkey%E2%80%93 Greece_pipeline PennWell $ $ 119,270 80,972 $ $ 119,270 80,972 1.67 1.67 $ $ 198,783 134,953 Gas Gas PennWell PennWell
21
1 2007
22 23 24 25 26 27
1 2007 1 2007 1 Nov-08 2008 2008 1 Feb-09 Sherman, Texas - Perryville, Louisiana 38 198 $ 200,000,000 $ 200,000,000 $ 26,582 $ 26,582 Gas New York's lower Hudson Valley and Southern Tier Russia - Transneft Russia - Transneft 15,000 40 56 36 932 2,100 184 $ $ 1,600,000,000 $ 11,500,000,000 $ $ 1,600,000,000 12,060,084,132 $ $ $ 42,918 97,789 $ $ $ 42,918 102,552 3.33 1.67 $ $ 143,062 L - easy terrain, favorable Crude conditions 170,920 M Gas Gas Papau New Guinea - Petronas and Australian Gas Light Co. Yemen - Yemen LNG Co. 42 1,099 320 $ $ 3,900,000,000 $ 1,500,000,000 $ 4,153,619,405 1,597,545,925 $ 73,931 $ 89,987 H - Earthquake engineered Crude Gas
#DIV/0!
#DIV/0!
28 29 30 31
1 2009 1 2009 2009 2009 Nabucco Pipeline - Turkey to Austria Greece-Italy Pipeline Central Asia - China Pipeline Sakhalin-Khabarovsk-Vladivostok Pipeline Russia Altai Gas Pipeline - Russia to China Trans-Afghanistan Pipeline Persian Pipeline - Iran to Persian Gulf 6 17 36 28 47 / 55 56 51.4 754 1,040 1,100 1,140 $ $ $ $ 4,900,000,000 $ 7,600,000,000 $ 7,300,000,000 $ 24,000,000,000 $ 4,900,000,000 7,600,000,000 7,300,000,000 24,000,000,000 $ $ $ 135,389 130,495 129,112 $ $ $ $ 135,389 130,495 129,112 438,596 H - Offshore section Gas Gas Gas Gas http://en.wikipedia.org/wiki/Blue_Stream http://en.wikipedia.org/wiki/TransAfghanistan_Pipeline http://en.wikipedia.org/wiki/Central_Asia%E2%8 0%93China_gas_pipeline http://en.wikipedia.org/wiki/Sakhalin%E2%80%9 3Khabarovsk%E2%80%93Vladivostok_pipeline http://en.wikipedia.org/wiki/Arab_Gas_Pipeline Gas http://en.wikipedia.org/wiki/Zhongxian%E2%80 %93Wuhan_Pipeline http://en.wikipedia.org/wiki/West%E2%80%93E ast_Gas_Pipeline PennWell PennWell Trans Adriatic Pipeline - Middle East 501 $ 1,600,000,000 $ 1,600,000,000 #DIV/0! #DIV/0! H - Offshore section Gas http://en.wikipedia.org/wiki/Greece-Italy_pipeline
32 2011 33 34 35 36 37 38 1 2011 1 2014 1 2014 1 750 4130 $ $ 1,600,000,000 $ 11,000,000,000 $ 1,600,000,000 11,000,000,000 $ $ 59,259 55,488 H - Sea Floor Gas Gas 1 1 2,500 $ 5,700,000,000 $ 5,700,000,000 #DIV/0! #DIV/0! 470 $ 732,137,295 $ 732,137,295 $ 55,634 $ 55,634 750 $ 1,200,000,000 $ 1,200,000,000 #DIV/0! #DIV/0! #DIV/0!
48
1 of 4
WORLD PIPELINES
Dat File Number Year in Oper Country # Pumps / Comp Stations Horsepower # Pressure Reducing Stations Material costs Diameter Length (Miles) Total Costs Indexed to 2009 Terminal Cost As Built $/Inch-Mile Est 2009 $/In.-Mi. Relative Terrain Adj Factor Adj 09 $/IM Difficulty Crude / Gas Reference
26
Total number for files rejected for various reasons as documented at the right
68% rejection rate = wasted time
2 of 4
Elimination Reason
This is a very unusial Offshore Pipeline Constructed across the Black Sea in Very deep waters that are acidic
This is an offshore facility. Lay barge rates cannot be compared with land base pipeline construction spreads There is something seriously wrong with this data. It is not reasonable that a pipeline only 182 miles long would cost $100 billion. This pipeline is too shot to be a comperable.
No diameter or cost data This is an offshore facility. Lay barge rates cannot be compared with land base pipeline construction spreads
No Cost Data No Cost Data No Cost Data
No cost data This is unreasonable data. No pipelines are being constructed at such low cost elsewhere in the world.
This is unreasonable data. No pipelines are being constructed at such low cost elsewhere in the world.
No Cost Data or diameter data Offshore Not qualified Mega Project. Outside initial definition of data needed.
No Cost Data No Diameter or Length data Wrong Web site, Superseeded by 2009 update This is Nabucco route Incorrect web site. No Diameter data
No Cost Data Not a Mega Project, Inconsistent with directions given to team. No Diameter Data Not an onshore pipeline Wrong Web site Wrong Web Site - not in Afganistan
No Diameter
No Diameter Does not meet mega project level in year No Diameter Unusable because year not provided.
3 of 4
Elimination Reason
4 of 4
WORLD PIPELINES
Dat File Number Year in Oper Country # Pumps / Comp Stations Horsepower # Pressure Reducing Stations Material Costs Diameter Length (Miles) Total Costs Indexed to 2009 Terminal Cost As Built $/Inch-Mile Est 2009 $/ In.-Mi. Relative Terrain Adj Factor Elimination Reason Adj 09 $/IM Difficulty Crude / Gas Reference
1 2
2001 2002
Defiance County, Ohio - Leidy, Pennsylvania, United States Mobile, Ala. - Manatee County, Fla.
60,000
36 42
400.4 725
677,900,000 $
962,843,723
$ $
47,029 91,954
$ $
66,797 125,635
2.29 1.38
$ $
153,189 172,873
Rivers and Slippery Rock
Gas Gas
http://www.epa.gov/EPAIMPACT/1998/March/Day-13/i6524.htm http://en.wikipedia.org/wiki/Langeled_pipeline
$ 2,800,000,000 $ 3,825,575,448
2003
Blue Stream Pipeline - Russia to Turkey
42
1,099
$ 3,900,000,000 $ 5,116,013,798
84,492
110,837
H - Earthquake engineered, Offshore, Extremely deep water, acid environment on bottom, connects Russia and Turkey across Black Sea.
Crude
This is a very unusial Offshore Pipeline Constructed http://en.wikipedia.org/wiki/Baku%E2%80%93T across the Black Sea in Very deep waters that are bilisi%E2%80%93Ceyhan_pipeline acidic
2004
Nyhamna, Norway -Sleipner Riser platform - Easington, United Kingdom West-East Gas Pipeline, Millennium Pipeline Company, Across Southern Teir of New York, JCTI did the route selection on this project Mobil Bay, Ala. - NC United States Offshore Heimdal field - Bacton terminal, Suffolk, Eng. United Kingdom Angarsk, Russia - Beijing, China Texas-Arizona United States Arab Gas Pipeline Zhongxian-Wuhan Pipeline - China Shaan-Jing Pipeline - China 3 1
36
744
$ 1,600,000,000 $ 1,957,853,403
59,737
73,098
This is an offshore facility. Lay barge rates cannot be compared with land base pipeline construction spreads There is something seriously wrong with this data. It is http://www.reuters.com/article/pressRelease/idU not reasonable that a pipeline only 182 miles long S210618+27-May-2008+PRN20080527 would cost $100 billion. This pipeline is too shot to be a comperable.
2004
30
182
$ 1,000,000,000 $ 1,223,658,377
183,150
224,113
1.00
224,113
6 7 8 9 10 11 12 13 14
1 1
Jun-04 2005 2005 2005
2,100 36 42/48 40 36/42 42 36 56 40 750 1750 2500 600 357 500 1,700 581
$ $ $ $
74,074 95,238 57,000 $ $ $ 86,617 111,364 66,652 1.67 2.29 $ $ 185,607 152,854
H - Mountains Subsea Route
Gas Gas Gas Gas
http://en.wikipedia.org/wiki/Persian_Pipeline
No diameter or cost data
$ 2,000,000,000 $ 2,338,649,156 $ 8,000,000,000 $ 9,354,596,623 $ 5,700,000,000 $ 6,665,150,094 $ $ $ -
This is an offshore facility. Lay barge rates cannot be http://www.sierraclub.ca/atlantic/programs/energ compared with land base pipeline construction y/gaspipeline/index.htm spreads http://en.wikipedia.org/wiki/West%E2%80%93E ast_Gas_Pipeline No Cost Data http://www.gulfcrossing.com/ProjectGC.aspx No Cost Data No Cost Data
1 1 1
2005 2005 2005
1/1/2005 Xinjiang - Shanghai , China 1 Dec-05 Shelburne County, Nova Scotia to New Jersey Brazil - Petroleos Brasileiro SA
$ 14,000,000,000 $ 16,370,544,090 $ -
$ $
147,059 -
171,959
1.00
171,959
Gas Gas
http://en.wikipedia.org/wiki/Altai_gas_pipeline http://en.wikipedia.org/wiki/Shaan%E2%80%93J No cost data ing_pipeline This is unreasonable data. No pipelines are being constructed at such low cost elsewhere in the world.
15
2006
40
1553
$ 1,600,000,000 $ 1,787,719,735
25,757
28,778
16
2006
Netherlands - Gasunie NV
36
800
$ 1,000,000,000 $ 1,117,324,834
34,722
38,796
This is unreasonable data. No pipelines are being constructed at such low cost elsewhere in the world. No Cost Data or diameter data Offshore Not qualified Mega Project. Outside initial definition of data needed.
17 18 19 20 21 22 23 24
1 1
1 1 1 1
Canada - El Paso Corp - Blue Atlantic Pipeline Baku-Tbilisi-Ceyhan Pipeline Turkey Baku-Tbilisi-Ceyhan Pipeline 5/28/2006 Turkey South Caucasus Pipeline (BTE ######## Pipeline) Caspian Sea to Turkey Prudhoe Bay - Gordondale, Alta. 2007 Canada 2006 5/28/2006 2007 2007 2007 Turkey-Greece Pipeline Papau New Guinea - Petronas and Australian Gas Light Co. Yemen - Yemen LNG Co. New York's lower Hudson Valley and Southern Tier Russia - Transneft Russia - Transneft Sherman, Texas - Perryville, Louisiana Trans Adriatic Pipeline - Middle East Nabucco Pipeline - Turkey to Austria Greece-Italy Pipeline Central Asia - China Pipeline Sakhalin-Khabarovsk-Vladivostok Pipeline - Russia Altai Gas Pipeline - Russia to China
$ 8 8 1 1 28 36 40/26 300 143 1,615 $ $ 300,000,000 $ 614,000,000 $
300,000,000 614,000,000 $ $ $ 35,714 119,270 80,972 $ $ $ 35,714 119,270 80,972 1.67 1.67 $ $ 198,783 134,953 Gas Gas Gas PennWell PennWell PennWell
$ 3,400,000,000 $ 3,400,000,000 $ -
42 42
430 1,099 320
$ 3,600,000,000 $ 3,834,110,220 $ 3,900,000,000 $ 4,153,619,405 $ 1,500,000,000 $ 1,597,545,925
$ $
199,336 73,931
$ $
212,298 89,987 H - Earthquake engineered
Gas Crude Gas L - easy terrain, 143,062 favorable conditions 170,920 M
No Cost Data No Diameter or Length data Wrong Web site, http://en.wikipedia.org/wiki/South_Caucasus_Pi Superseeded by 2009 update peline This is Nabucco route http://en.wikipedia.org/wiki/Baku%E2%80%93T Incorrect web site. bilisi%E2%80%93Ceyhan_pipeline http://en.wikipedia.org/wiki/TransAdriatic_Pipeline PennWell No Diameter data
#DIV/0!
#DIV/0!
25
Nov-08
15,000
40
932
$ 1,600,000,000 $ 1,600,000,000
42,918
42,918
3.33
Crude
26 27 28 29 30 31 32 33 34 1 1 1 1 1
2008 2008 Feb-09 2009 2009 2009 2009 2011 2011
56 36 38
2,100 184 198 501
$ 11,500,000,000 $ 12,060,084,132 $ $ 200,000,000 $ 200,000,000
$ $ $ #DIV/0! $ $ $
97,789 26,582
$ $ $
102,552 26,582
1.67
Gas Gas Gas
http://en.wikipedia.org/wiki/Nabucco_pipeline http://en.wikipedia.org/wiki/Turkey%E2%80%93 No Cost Data Greece_pipeline Not a Mega Project, Inconsistent with directions given PennWell to team. No Diameter Data http://en.wikipedia.org/wiki/Greece-Italy_pipeline Not an onshore pipeline http://en.wikipedia.org/wiki/Blue_Stream Wrong Web site
$ 1,600,000,000 $ 1,600,000,000 $ 4,900,000,000 $ 4,900,000,000 $ 7,600,000,000 $ 7,600,000,000 $ 7,300,000,000 $ 7,300,000,000 $ 24,000,000,000 $ 24,000,000,000 $ 1,200,000,000 $ 1,200,000,000
#DIV/0! $ $ $ $ 135,389 130,495 129,112 438,596
47 / 55 56 51.4
754 1,040 1,100 1,140 750
135,389 130,495 129,112
H - Offshore section H - Offshore section
Gas Gas Gas Gas Gas
http://en.wikipedia.org/wiki/TransWrong Web Site - not in Afganistan Afghanistan_Pipeline http://en.wikipedia.org/wiki/Central_Asia%E2%8 0%93China_gas_pipeline http://en.wikipedia.org/wiki/Sakhalin%E2%80%9 No Diameter 3Khabarovsk%E2%80%93Vladivostok_pipeline http://en.wikipedia.org/wiki/Arab_Gas_Pipeline No Diameter
#DIV/0! #DIV/0!
#DIV/0!
1 of 2
WORLD PIPELINES
Dat File Number 35 36 37 38 1 1 1 1 26 Total number for files rejected for various reasons as documented at the right 68% rejection rate = wasted time Year in Oper Country # Pumps / Comp Stations 6 17 36 48 Horsepower # Pressure Reducing Stations Material Costs Diameter Length (Miles) Total Costs Indexed to 2009 Terminal Cost As Built $/Inch-Mile Est 2009 $/ In.-Mi. Relative Terrain Adj Factor Elimination Reason Adj 09 $/IM Difficulty Crude / Gas Reference
2014 2014
Trans-Afghanistan Pipeline Persian Pipeline - Iran to Persian Gulf
28
470 2,500 750 4130
732,137,295 $
732,137,295
$ #DIV/0! $ $
55,634
$ #DIV/0!
55,634
Gas
$ 5,700,000,000 $ 5,700,000,000 $ 1,600,000,000 $ 1,600,000,000 $ 11,000,000,000 $ 11,000,000,000
59,259 55,488
H - Sea Floor
Gas Gas
http://en.wikipedia.org/wiki/Zhongxian%E2%80 Does not meet mega project level in year %93Wuhan_Pipeline http://en.wikipedia.org/wiki/West%E2%80%93E No Diameter ast_Gas_Pipeline PennWell Unusable because year not provided. PennWell
2 of 2
PIPELINE HISTORICAL 1996 - 2007

Country Company New (*) Type Project Miles Diameter (Inches) Location (from) Cost Data Implied Inch Mile (Millions) Cost Destination (to) Status Expected Completion Contractor Additional Contractor Notes
1996 Data Brazil Petroleos Brasileiro SA Brazil Brazil Brazil Brazil Brazil Brazil Brazil Brazil Ecuador 1997 Data Brazil Petroleos Brasileiro SA Brazil Petroleos Brasileiro SA * Brazil Brazil Brazil Brazil Brazil Petroleos Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA
P C G G G P P P G C
513.0 204.0 STOR 290.0 202.0 590.0 354.0 246.0 2,122.0 112.0
10/12 36
10 8/10 12/20 6/8/10 6/8 16/32
Goiania Campos Eliseos, Rio de Janeiro Sao Sebastiao, Sao Paulo Duque de Caxias Guamara Paulinia, Sao Paulo Araucaria Araucaria Santa Cruz, Bolivia Villano
Cuiaba Sao Jose dos Campos
Planned Engineering Engineering Under study Under constr. Under constr. Under study Under study Planned Planned July 1998 1998 June 1997 Oct. 1996 Techint
New. New. New. 7MMcf. New. New. New. New. New. 1998 New.
Campos/Vitoria Fortaleza Brasilia Foz do Iguacu Maringa Sao Paulo and Branches Baeza
P P G
354.2 245.4 324.4
6/8/10 6/8 32
Araucaria Araucaria Corumba
Foz do Iguacu Londrina Campo Grande
Planning Planning
Dec. 1998 Dec. 1998 Jan. 1999
Segen/Petrobras Segen/Petrobras
New. New. Constructos E New. Part of Bolivia Comercio Camargo to Brazil project. Correa SA New. 74,000 b/d capacity.
Planning P * G C G 506.4 13.7 206.9 STOR 10/12 6 24 Goiania Ilha D'Agua Rio de Janieiro Sao Sebastiao, Sao Paulo Oriente jungle region Cuiaba Sao Goncalo Sao Jose dos Campos Planning Under constr. Planning Planning Dec. 2000 Mar. 1998 Dec. 1999 Apr. 1999
BRM
Segen/Petrobras Segen/Petrobras Segen/Petrobras New. New.
C Ecuador 1998 Data Brazil Brazil Brazil Brazil Brazil Brazil Government
319.4
8/24/28 $ 500
Balao terminal Planning
Techint/Odebrecht/ Willbros/Enron
246,000 b/cd capacity. $500MM.
Petroleos Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA
P P G P C G
354.2 245.4 324.4 506.4 206.9 STOR
6/8/10 6/8 32 10/12 24
Araucaria Araucaria Corumba Goiania Rio de Janieiro Sao Sebastiao, Sao Paulo
Foz do Iguacu Londrina Campo Grande Cuiaba Sao Jose dos Campos
Planning Planning Under constr. Planning Planning Planning
2005 2004 1998 2005 2002 2003
Segen/Petrobras Segen/Petrobras BRM
Page 1 of 4

1999 Data Brazil Petroleos Brasileiro SA Brazil Petroleos Brasileiro SA Brazil Brazil Brazil Petroleos Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA * Brazil Petroleos Brasileiro SA * Brazil Brazil 2000 Data Brazil Brazil Brazil Brazil Brazil Brazil Brazil Brazil Brazil 2001 Data Brazil Brazil Brazil Brazil Brazil Brazil Brazil Brazil Brazil Petroleos Brasileiro SA Transportadora Sulbrasileira de Gas *
P P P C G G
354.2 245.4 506.4 206.9 STOR 155.0
6/8/10 6/8 10/12 24
Araucaria Araucaria Goiania Rio de Janieiro Sao Sebastiao, Sao Paulo
Foz do Iguacu Londrina Cuiaba Sao Jose dos Campos
Planning Planning Planning Planning Planning
2005 2004 2005 2002 2003 Dec. 1999
New. New. New. 74,000 b/d capacity. New. New. Section XIII of Bolivia to Brazil line. $40 million. Section IX of Bolivia to Brazil line. $40 million. New $265 million line.
16
Criciuma
Porto Alegre Under constr.
TENENGE Dec. 1999
G G
156.0 380.0
24 NA
Campinas Uruguaiana
Ribeirao Branco Under constr. Porto Alegre
TENENGE 2000
265
Petroleos Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA Transportadora Sulbrasileira de Gas
* *
P P G G P C G
354.2 245.4 203.0 262.0 506.4 206.9 STOR 343.0 380 380.0 0
6/8/10 6/8 18 20 10/12 24
Araucaria Araucaria Cabriunas Coari Goiania Rio de Janieiro Sao Sebastiao, Sao Paulo Urucu $ 265 Uruguaiana U ugua a a
Foz do Iguacu Londrina Vitoria Manaus Cuiaba Sao Jose dos Campos
Planning Planning Planning Planning Planning Planning Planning Planning Planning
2005 2004 2002 2002 2005 2002 2003 2003 2002 00
Segen/Petrobras Segen/Petrobras Segen Segen
New. New.
New. 74,000 b/d capacity. Segen/Petrobras Segen/Petrobras Segen New. New. New $265 million li line.
G G
12 24
Porto Velha Porto o to Alegre eg e
Petroleos Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA Transportadora Sulbrasileira de Gas Oleoducto de Crudos Pesados SA (OCP)
P P G G P C G G G
354.2 245.4 203.0 262.0 506.4 206.9 STOR 343.0 380.0
6/8/10 6/8 18 20 10/12 24
Araucaria Araucaria Cabriunas Coari Goiania Rio de Janieiro Sao Sebastiao, Sao Paulo Urucu $ 265 Uruguaiana
Planning Planning Planning Planning Planning Planning Planning Planning Planning
2005 2004 2002 2002 2005 2002 2003 2003 2002
New. New.
New. 74,000 b/d capacity. Segen/Petrobras Segen/Petrobras Segen New. New. New $265 million line. New. $1.2 billion.
12 24
Porto Velha Porto Alegre
Ecuador
312.0
22/36
1,200
Lago Agrio
Esmeraldas
Planning
June 2003
Technit SA
Page 2 of 4

2002 Data Brazil Brazil Brazil Brazil Brazil Brazil Brazil Brazil Brazil 2003 Data
Petroleos Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA Transportadora Sulbrasileira de Gas
P P G G P C G G G
354 245 203 262 506 207 STOR 343 380 $ 265
6/8/10 6/8 18 20 10/12 24
Araucaria Araucaria Cabriunas Coari Goiania Rio de Janieiro Sao Sebastiao, Sao Paulo Urucu Uruguaiana
Planning Planning Planning Planning Planning Planning Planning
2005 2004 2002 2002 2005 2002 2003 2003 2002
New. New.
New. 74,000 b/d capacity. Segen/Petrobras Segen/Petrobras Segen New $265 million. New. New.
12 24
Porto Velha Porto Alegre
Planning Planning
P Brazil Brazil Brazil Brazil Brazil Brazil Brazil Brazil Brazil 2004 Data G Brazil Brazil Brazil Brazil Brazil Brazil Brazil Brazil Brazil Brazil Brazil PBGas Petroleos Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA P C G G G P G G G G Petrobras Transpetro Petroleos Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA Petrobras Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA * * P P G P G C G G
20 354 245 283 506 273 207 STOR 343
18 6/8/10 6/8 28 10/12 12/14/16 24
Offshore Guanabara Bay marine terminal Araucaria Araucaria Campinas Goiania Guamare Rio de Janieiro Sao Sebastiao, Sao Paulo Urucu
Duque de Caxais refinery Foz do Iguacu Londrina Rio de Janeiro Cuiaba Fortalesa Sao Jose dos Campos
2004 Planning Planning Planning Under constr. Planning Under constr. Planning Planning Planning 2005 2004 2005 2005 2005 2002 2003 2003 Toyo Engineering Corp. Segen/Petrobras Segen/Petrobras Segen Geral-Dumulakis Segen/Petrobras Segen/Petrobras Toyo Engineering Corp.
New. PE3. New. New. New. New. 74,000 b/d capacity. New. New. New.
12
Porto Velha
75 354 207 300 311 249 506 273 373 . 497
. 6/8/10 24 28 26/14 10/12 12/14/16 . . .
Campina Grandeas, Paraiba Araucaria Cacimbas Campinas, Sao Paulo Catu Coari Goiania Guamare Uruguaiana Vitoria Vitoria Foz do Iguacu Vitoria Japeri, Rio de Janeiro Pilar Manaus Cuiaba Fortalesa Porto Alegre Cabiunas Salvador
2005 Planning Planning Planning Under constr. Engineering Planning Planning Under constr. Planning Planning Planning 2005 2005 2007 Sept. 2006 2006 2005 June 2005 2006 2006 2006 Toyo Engineering Corp. Segen/Petrobras Toyo Engineering Corp. Toyo Engineering Corp.
Page 3 of 4

2005 Data
Brazil
Gasmig
G G
187 75 354 207 300 311 249 506 273 403 373 . 497
18 . 6/8/10 24 28 26/14 10/12 12/14/16 . . . .
Vale Campina Grandeas, Paraiba Araucaria Cacimbas Campinas, Sao Paulo Catu Coari Goiania Guamare Urucu Uruguaiana Vitoria Vitoria
Aco, Minas Gerais
Under constr.
2005 2005
Brazil Brazil Brazil Brazil Brazil Brazil Brazil Brazil Brazil Brazil Brazil Brazil 2006 Data Brazil Brazil Brazil Brazil Brazil Brazil Brazil Brazil Brazil
PBGas Petroleos Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA
P C G G G P G * G G G G
Foz do Iguacu Vitoria Japeri, Rio de Janeiro Pilar Manaus Cuiaba Fortalesa Manaus Porto Alegre Cabiunas Salvador
Planning Planning Planning Under constr. Under constr. Under constr. Planning Under constr. Planning Planning Planning Planning
2005 2005 2006 Sept. 2006 2006 2005 2006 2007 2006 2006 2006
Segen/Petrobras Toyo Engineering Corp. Toyo Engineering Corp.
Toyo Engineering Corp.
Petroleos Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA Petroleos Brasileiro SA
G G G G G G G G P
300 311 249 273 403 373 . 497 606
28 26/14 . 12/14/16 . . . . .
Campinas, Sao Paulo Catu Coari Guamare Urucu Uruguaiana Vitoria Vitoria Goias
Japeri, Rio de Janeiro Pilar Manaus Fortalesa Manaus Porto Alegre Cabiunas Salvador Paulinia
Under constr. Under constr. Under constr. Under constr. Planning Planning Planning Planning Planning
2006 Sept. 2006 2006 2006 2007 2006 2006 2006
Toyo Engineering Corp. Toyo Engineering Corp. Toyo Engineering Corp.
2007 Data Brazil Petroleos Brasileiro SA Brazil Petroleos Brasileiro SA
P G G
606 403 116
` ` 20
226 1,200
Goias Urucu Anama
Paulinia Manaus Manaus
Planning Planning
` 2007 2008
Brazil
Transportadora Urucu-Manaus
206
Planning
` ` Gasoduto Amazonia Consortium
New. $226 million. New. $1.2 billion. New. $206 million.
26 27 28
Page 4 of 4
DETAIL OF FACILITIES
Parameter
Year of Construction Pipe Material Design Pressure (*) MAOP (*) MOP (*) Coating type Right of Way Access Cleaning frequency Type of Cleaning Pig brushes Product Type Wax Content Operating temperature (176 F max) BS&W Content Product velocity at minimum flow) to 4.15 m/s (24" at maximum flow). Slack conditions may be present at some areas Storage Facilities 1,200,000 barrels at the Amazonas Terminal 3,750,000 barrels at the Marine Terminal Amazonas Terminal 4-300.000 barrel tanks Inlet metering for six streams from shippers Meter prover Instrumentation and SCADA controls Pig launcher Marine Terminal Facilities Living Quarters Control Room, Receipt metering 4-850,000 barrel tanks 2-56-inch onshore transfer lines to seashore 2-36 inch offshore pipeline of 8.5 km 2-Pipeline Ending Manifolds (PLEMs) 2 Catenary Anchor Leg Moorings (CALMs) for 130,000 DWT vessels and 250,000 DWT vessels; 1 ea. Controls and Computer Systems Security surveillance systems SCADA Access Road Diesel Fuel Storage Tank Lube Oil Storage Tank Fire and gas detection and Suppression Diesel fueled power generation Potable water system Sewage treatment system Sludge collection and disposal equipment
Data
2001-2003 X-70 3,200 psi (max) (Varies by pipe section) 3,200 psi (max) 2,900 psi (max) Fusion Bonded Epoxy (FBE) 4x4, walk Monthly Conventional cups, discs and metal Heavy crude oil (19 API) Insignificant Can be controlled at no less than 110F Less than 0.5% Can be controlled from 0.25 m/s (36"
1 of 2
DETAIL OF FACILITIES
Parameter
Pipeline State of the Art Controls (PLC's) Control Panels at 4 Pump Stations and Control Centers SCADA Fiber Optics throughout Leak Detection Telecommunications Metering and prover systems Operation and Maintenance facilities Impressed current cathodic protection Pump Stations (one spare pump at each) PS 1 4+1 Pumps and Drivers 4,505 HP ea. PS 2 4+1 Pumps and Drivers 4,608 HP ea. PS 3 5+1 Pumps and Drivers 3,117 HP ea. PS 4 5+1 Pumps and Drivers 4,526 HP ea. All stations are equipped as follows: Inlet strainers Control Building Main Pump Building Generator and Compressor Building Living quarters, mess hall, laundry accommodations Guard house Fuel purification building Water treatment building Crude oil heater systems Closed drain system with sump tank and reinjection pump Pressure Reducing Stations PRS 1 5 control valves + manifolds PRS 2 5 control valves + manifolds All have Electrical Generation equipment Control building Guard house Living Quarters
Data
2 of 2

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AES 09089043-3-1, Rev 0 September 2009

SECTION 2 METHODOLOGY .................................................................................................... 2-1

Intertek-APTECH AES 09029043-3-1, Rev 0

Oleoducto de Crudos Pesados S.A. September 2009

Intertek-APTECH AES 09029043-3-1, Rev 0

Oleoducto de Crudos Pesados S.A. September 2009

Intertek-APTECH AES 09029043-3-1, Rev 0

Oleoducto de Crudos Pesados S.A. September 2009

This report is based on many document reviews including the following:

Intertek-APTECH AES 09029043-3-1, Rev 0

Oleoducto de Crudos Pesados S.A. September 2009

2009 vendor quotations for selected components

Intertek-APTECH AES 09029043-3-1, Rev 0

Oleoducto de Crudos Pesados S.A. September 2009

AS BUILT PROJECT DESCRIPTION

Intertek-APTECH AES 09029043-3-1, Rev 0

Oleoducto de Crudos Pesados S.A. September 2009

INVENTORY CALC. BARRELS

SHORT TONS OF PIPE

Intertek-APTECH AES 09029043-3-1, Rev 0

Oleoducto de Crudos Pesados S.A. September 2009

INVENTORY CALC. BARRELS

SHORT TONS OF PIPE

0.375 0.406 0.438 0.500 0.562

64,892.72 27,744.67 5,708.15 6,064.61 52,949.30 157,359.44 484,598.47

257,117.44 109,543.36 22,455.39 23,689.52 205,367.11 1,589,663.59

2009 Costs Pipe Cost Only

$/ton 2009 cost estimate for pipe only

Intertek-APTECH AES 09029043-3-1, Rev 0

Oleoducto de Crudos Pesados S.A. September 2009

Intertek-APTECH AES 09029043-3-1, Rev 0

Oleoducto de Crudos Pesados S.A. September 2009

STEPS TAKEN IN COST MODELING DEVELOPMENT OF BENCHMARK COST

Table 2-1 PROJECT TERRAIN RATING DESCRIPTIONS

2009 VENDOR MATERIAL QUOTATIONS

Intertek-APTECH AES 09029043-3-1, Rev 0

Oleoducto de Crudos Pesados S.A. September 2009

Intertek-APTECH AES 09029043-3-1, Rev 0

Oleoducto de Crudos Pesados S.A. September 2009

Intertek-APTECH AES 09029043-3-1, Rev 0

Oleoducto de Crudos Pesados S.A. September 2009

Section 3 REFERENCE DOCUMENTS

Intertek-APTECH AES 09029043-3-1, Rev 0

Oleoducto de Crudos Pesados S.A. September 2009

Intertek-APTECH AES 09029043-3-1, Rev 0

Oleoducto de Crudos Pesados S.A. September 2009

Intertek-APTECH AES 09029043-3-1, Rev 0

Oleoducto de Crudos Pesados S.A. September 2009

RIAZ (RAY) MASROUR, P.E. Sr. Pipeline Engineer/Project Engineer

JAMES C. TOWERS Pipeline Consultant

PHILLIP NIDD Pipeline Integrity Management Specialist

Appendix B EXCEL MODEL FILES

Intertek-APTECH AES 09029043-3-1, Rev 0

Oleoducto de Crudos Pesados S.A. September 2009

220,012 34,787 4,068 16,073 42,935 38,846 9,548

1,111 367,380 1.322% 1 322%

HP PERCENTAGE - COST VERIFICATION Percentage of Total of Structure and

Factor for use where data not avail =

OCP COST ALLOCATION

ESTIMATED ALLOCATION BASIS

Crude Oil Pipeline Relative Cost Figures 1974 $ Item

Percent Percent Percent

135,693 2,767,150 386,495,509