I am a multi-talented chemical engineer with many years of experience in production, separation processes and project management. I have managed projects of little financial value to projects of national financial influences. I have worked many years with high profile engineering companies in Scotland and West Africa. Upon completion of a recent major project with an organisation in Houston, Texas, I am now fully involved with a media group in England, being responsible for their branding. I have a huge wealth of education, currently topped with a master’s degree in Oil and Gas Engineering from the renowned Robert Gordon University in Aberdeen. I am now looking to pursue a Doctorate degree in the not too distant future. I enjoy writing and have had inspirational experiences from the writing of youth motivational journals to writing corporate technical papers and annual reports. I have the ability of being able to explain the most technical and complicated detail to the understanding of the lay man. I am a disciplined project manager and able to deliver my projects always on their due dates, even when working under the most stringent circumstances.

Oil and gas transportation from Russia to Japan

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1.0 INTRODUCTION
In a bid to reduce Japan’s dependency on the middle east for oil and gas supplies, this report attempts to proffer a safe, cost effective and sustainable option for sourcing oil and gas from neighbouring Russia. It brings into consideration an alternative, but similar project to the Taishet-Nakhodka pipeline. This alternative is aimed at reducing the cost of transporting oil and gas to Japan from Russia, taking into consideration the sensitive environments that will be transverse on the route to Japan and Russia’s energy policy. This option is also focused on satisfying all stakeholders.

1.1 BACKGROUND
Japan is a nation with minimal crude oil resources. Recent statistics has it that oil reserves are at 59 million barrels while gas reserves are at 1.4 trillion cubic feet. These are no commercial volumes compared to the present day consumption rate of oil in Japan, which now reads about 5.3 million barrels/day. This makes Japan the third ranking oil consumer worldwide.

In the past three years, efforts have been concentrated on constructing a dual-purpose pipeline from Taishet to Nakhodka. This pipeline is to deliver approximately 1.6 million barrels/day of crude oil. About 0.6-0.8 million barrels of this estimate is desired for the Japanese economy, but due to the sensitive environmental route through which this pipeline transverses, this project has been left crippled.  This project will require the pipeline to cross large rivers in the region like rivers Ilim, Upper Angara, Lena and Chuma [coursework material, Senga Briggs. 2007] and other numerous small rivers, some of which are hosts to special fish species. Environmentalists have constantly tried to ensure this project does not mar the environment through which it is meant to run. This lead to the re-routing of the pipeline further away from lake Baikal, which is host to indigenous aquatic life that is not found anywhere else in the world. This re-routing leaves the entire Taishet-Nakhodka pipeline project at approximately 4,130 kilometres in length. Re-routing from earthquake zones has also contributed to the huge length of this pipeline.

The Eastern Siberia in which Taishet is located holds an estimated value of 20 billion barrels of oil. Though Russia has continually changed her mind on issues related to oil and gas exploration, production and exportation, this Japan-bound route is ranked as very economically viable to all stakeholders in that it will afford Russia accessibility to open a viable energy market to the entire North-East Asia region. Following the delivery of oil from this project to Japan, she will be able to reduce her dependency [for oil] on the Middle East by 20%. This is a major step forward towards gaining reasonable independence as regards oil importation from the Middle East, nonetheless the cost of this project has now risen to such huge amounts that the Japanese loan/investment facility will readily embrace a reduced-cost alternative altogether, as long as the goal of oil delivery to Japan is still achieved within a safe and sustainable project plan.

2.0 PROJECT DEFINITION

2.1 PROJECT OBJECTIVE
This project is aimed at creating a secure means by which oil and gas can be transported to Japan from Russia under a sustainable and cost effective structure and design. This is to be achieved ensuring a reasonable cost reduction compared to the earlier proposed Taishet-Nakhodka pipeline option. The project will involve the sourcing and design of a high integrity and long life [thirty or more years] engineering facility which will be capable of delivering approximately 0.8 million b/d of oil and 2 billion SCF of gas per day to Japan. This is targeted to resume this delivery [output] in about three years time. On completion this project will open more investment/trade opportunities within Japan and internationally with Russia; it will also strengthen the existing bi-lateral relationship between the two countries.

2.2 PROJECT SCOPE
This will include the option appraisal of diverse means and ways by which oil and gas can be delivered to Japan. Considering the use of pipelines, batches, railways etc. The options will be narrowed to three in the first phase, for which feasibility studies and SWOT analysis will be done. The SWOT analysis will involve environmental, social and health impact analysis. Other considerations will include route selection based on the foregoing, financial planning/analysis and pay back period estimation will also be carried out. Using the above analysis, the best option will be chosen. A cost breakdown analysis will be done for this chosen option. The scope of this option will also include project planning and documentation, resource identification and allocation, risk matrix and analysis and EPIC [Engineering, procurement, installation and commissioning]. Possible mitigation strategies will also be investigated and proffered for the negative impacts that may arise from this chosen option.

2.3 PROJECT EXCLUSIONS
Design and construction of port facilities at terminus or along routes are outside the scope of this project. On completion of the project, maintenance of the facility will also be excluded from this project. Other exclusions to this project are the exploration and production processes required to produce the oil and gas to be exported from Russia. Finally marketing of the delivered produce will not be in the scope of this project.

2.4 PROJECT DELIVERABLES

2.4.1 INTERNAL DELIVERABLES
The project deliverables that will be internal are listed below:

• Detailed design [including graphs, charts, organograms, flow diagrams etc] of the pipeline engineering of the project. This will also include specifications of materials and components required for the engineering. A form of the FEED on paperwork will also be delivered.
• The project plan in a documented form. This will include scheduling of events and tasks in their dependencies and highlighting of the critical path. These will also include detailed documents of the Environmental, Social and Health impact assessments. The payback period and financial planning documents will be appendices of the project plan.
• Staff training and proper orientation for project scope and technical requirements.
• Delegation of staff team members and the sensitisation of every team member.

2.4.2 EXTERNAL DELIVERABLES
The external deliverables of this project, which are mostly the appreciated bits of the project by host communities/public or the readily visible results will include:

• Fabrication, construction and installation of a 2 x 800km pipeline from Sakhalin Island to Korsakov seaport, Japan, [preferred option] that will be capable of delivering approximately 0.8 million barrels of crude to Japan daily on completion of the project.
• An oil vessel [batch] with a minimum of 0.8 million barrels capacity. To deliver oil from Korsakov seaport to Japan’s refinery daily.
• Comprehensive and detailed documentation of the various analysis and assessments carried out. These include Environmental, Health, social and material assessments. The mitigations that are required for any negative impacts found from the above assessments will also be documented against the respective assessment.
• A substantial framework tie, which will induce regular international interactions between Japan and Russia. This should enhance good bilateral relationship between the two countries.

2.5 PROJECT CONSIDERATIONS
Through the conception, initiation and execution of this project, several success considerations were looked into, these include the prevailing Russian energy policy, which to a great extent determines and controls the viability and implementation of this project. The environmental impacts in relation to the host communities were also considered, because some forms of livelihood for these communities depend on the stability of their environment e.g the aquatic life for the fishermen. The mitigations implementation strategies for any negative environmental, health or social impacts are also considered to satisfy international environmental policies and host communities. Also taken into consideration is the security of access roads, site staff and deployed materials and equipments. This will guard against any unforeseen form of vandalisation or theft. Put under consideration also is the accommodation and well being of the site staff, since most of the route of the project will be situated far from developments and civilisation.

2.6 PROJECT ASSUMPTIONS

• Funds will be available, accessible and disbursed as at when and where required, throughout the lifetime of this project, ensuring this will result in the project being initiated and completed on time.
• Governing political laws and energy policies will be favourable and stable throughout the lifetime of the project. This will kick against project crippling and truncation or termination.
• Oil prices will remain fairly constant within a slim window, above $45 per barrel. This will help materialise the proposed financial analysis and the payback period.
• Required materials and labour [skilled and unskilled] will be delivered onsite as at when and where needed. This will ensure appropriate scheduling.
• More support and co-operation from environmental groups and the host communities. Hostility from host communities will be negligible.
• Stable inflation rates for the two countries [Japan and Russia]. Assuming about 6% for Japan, considering an average of the past few years. This will stabilise the project budget to a great extent.
• There will be no natural disasters [e.g earthquakes] during the life of the project. This will reduce or eliminate downtime periods.
• Host communities will provide non-skilled labour as and when and where required for reasonably cheap costs.

2.7 PROJECT CONSTRAINTS
The sensitivity of this environmental region poses a major constraint to this project. Thus more investigation will be required, even during the life of the project. Due to necessary protection and negative impact reduction, deviation and meandering away from initial planned path of project will be inevitable. This will ultimately reflect on the project cost. Communication with the host communities is also considered a constraint, since unskilled labour and necessary co-operation will be required from them. Since this region is undeveloped, high-level communication skills can not be expected from the communities. The climate for this region also poses a form of constraint. This would mean that the quality and productivity expected from staff might be compromised due to weather conditions, given that this is a very cold zone and noting that some permafrost zones might be traversed. Culture and belief may also pose some form of constraints, given that there are some sites that may be sacred [environmentally or religiously] to the communities’ people. The people may therefore demand that such areas be left untouched by all means.

3.0 DEVELOPMENT APPROACH AND STRATEGY
Choices and alternatives that abound in businesses are always weighed against appropriate measures necessary for the safe, timely and economical completion of any given project. Looking at three different options by which crude oil can be transported to Japan from Russia, a SWOT analysis will be used as an elimination criteria. This will involve options appraisals against environmental, economical, energy policies/standards etc.

3.1 OPTIONS APPRAISAL
Below are three extensively appraised options for this project, summaries of which are hereby given:

• OPTION ONE: Pipeline Transportation of Oil & Gas from Sakhalin Island to Korsakov seaport 

This is the preferred option, as will be shown later. Since this is a transportation project, distance is of great importance. Sakhalin Island is closer to Japan than Taishet, therefore this option considers appropriate measures to handle the challenges that may arise in trying to source oil and gas from this location, and hence propose a transportation means, route and procedures for conveying this commodity.

SWOT analysis:  Option One.

STRENGTHS	WEAKNESSES	OPPORTUNITIES	THREATS
This option guarantees the shortest distance between Japan and the oil and gas source, [1650km]. The implication of this is that construction cost will be cheapest here, all other parameters being equal.	Environmentalists and socials have consistently raised concerns on the sensitivity of this region. Many rivers will be traversed in the cause of this route many of which are hosts to special aquatic life.	This project will bring an open access to and for the communities in the Sakhalin island. This will bring economic empowerment on the long run.	Special internationally cherished aquatic life in this region are threatened with extinction should there be an oil spillage in the course of operation of this project.
This option cuts through a route that excludes any access or probable future spur to China.	The indigenes of this island have been demonstrating against unfair treatment of their environment social rip off. Re-occurrence of this demonstration cannot be assumed away.	Unskilled labour will be sought from the youths of this island in the course of construction. This will bring a measurable financial empowerment for the youths.	The Russian government is currently oriented towards exporting oil and gas to Japan from Taishet, to bring a whole new location may introduce some political hitches.
This island has both high estimated and proven reserves of oil and gas.		This project will open up this region to improved technology as this region is currently dominated with old technology as regards pipeline construction.
There are currently success stories of exploration and production; an example is Shell in Sakhalin II.
Pipelines have been constructed in this region before now. And big oil companies have been involved in this area. This implies a low learning curve for this project as needed information should be readily available.
Maximum required man hours for this project are the least compared to others. This beats down on hiring cost and safety issues for staffing.
This project will easily combine crude and gas pipelines, since the distance is maneuverable and short.
Sakhalin island is presently hosting some foreign oil companies. This implies a community of a common goal.

• OPTION TWO: Pipeline Transportation of Eastern Siberian Crude Oil from Taishet to Nakhodka [50Km from Lake Baikal]

Due to the sensitivity and environmental importance of Lake Baikal, environmentalists have repeatedly protested against either constructing pipelines through or near the lake. This lake is home to some of the world’s special aquatic life. Therefore this option has chosen a path that is a hundred kilometer deviated away from the lake.

SWOT analysis: Option Two.

STRENGHTS	WEAKNESSES	OPPURTUNITIES	THREATS
Has an approximate construction length of about 2979Km, which is a reduction in length compared to the initial case study. This will imply a reduction in pipeline construction cost.	This path will have to cross through many rivers to be achieved, many of which are controversial. Protestors against this river crossings range from indigenes to international environmentalists.	This option will open up Eastern Siberia for economic development. This will be possible since access roads and other by constructions due to this project will be standing after the project. This will initiate immigration and subsequent developments	Since many rivers will be traversed by this option, in the event of an oil spillage, the consequences may be rather too huge. Bearing in mind that most of these rivers are currently in remote areas therefore human intervention may be delayed, in the event of a spillage.
The whole of eastern Siberia of which Taishet is a part, has high estimated volumes of oil and gas.	This path crosses through earthquake proven zones.	Because this route cuts across some settlements, it will open up accesses for trade and investments both nationally for Russia and internationally with Japan.	Since this route crosses through earthquake zones, pipeline rupture through earthquake, is a major threat.
There have been ongoing exploration and production activities in eastern Siberia, this therefore further increases probability of getting oil from Taishet.	Though the distance between this route and Lake Baikal seem wide but wild and repeated oil spillages will pose a fear of destruction to this special lake.		Bearing in mind  that Russia has often changed her mind on these energy issues, this route’s close proximity to China may in future bring up an unfavorable spur to China.
Some pipelines exist in these areas, which imply a low learning curve for this project. That is similar construction works have been done in this zone.			Owning to the peculiarity of this zone, much wildlife will be endangered, since deforestation is inevitable on this route.

• OPTION THREE: Pipeline Transportation of Eastern Siberia Oil from Taishet to Nakhodka (400km from Lake Baikal)

To mitigate the close proximity of the previous option to Lake Baikal, this option suggests a huge deviation from the lake. This deviation introduces some other challenges to the project, one of which is increase in total distance to be covered. Below is the detailed appraisal.

SWOT analysis: Option Three.

STRENGTHS	WEAKNESSES	OPPORTUNITIES	THREATS
Lake Baikal is properly secured with this route, given that the option’s path is a 400km deviation from it.	This route will give the longest distance of 4130km. The implications of this are overall increase in the cost of project, longer time for project completion, more labour and expertise.	This option will open up this region of eastern Siberia to economic development and social empowerment.	In the course of this route, Perezovannia will be crossed which is quite close to China, this may initiate a divided attention from Russia. That is not fully favouring Japan anymore.
The earthquake zones that are in this region have now been by passed due to this 400km deviation.	This option will require the longest pipeline so far. The implication of this is high project cost and longer time for project completion.	Access routes and paths that will be created in the course of this route will in the future mean avenue for trade and investments.	Due to the expected high cost of construction, this project may in the future become unprofitable at low oil prices.
The route of this option crosses the fewest rivers so far compared to the other options.	The Kremlin has expressed uncertainty and doubt concerning reserves in Taishet being sufficient for the demand of this project. And current research on exploration has not shown proven volumes of oil and gas.
The Kremlin is currently inclined to this option this implies easy support for this route from the political and energy policies in Russia.	Since the construction cost is high, the payback time for this project will be lengthened.

THE PREFERRED OPTION: [Pipeline Transportation of Oil & Gas from Sakhalin Island to Korsakov seaport] 

This unique option seeks to deliver oil and gas to Japan from a known island, Sakhalin. It will be a combined structure [dual pipeline] to deliver oil and gas to the port of Korsakov, which is along the sea of Okhotsk. The commodities can then be transported via sea vessels to Japan. Being that this island is relatively close to Japan, future intervention or attention as may be called by Russia the ultimate owner of this project, may be promptly attended to by Japan. This close proximity also raises hope of good energy security for Japan, more so that the reserves here are reasonably high. The oil reserve is estimated at 14 billion Barrels and 102 trillion cubic feet for gas. This project will be cost effective as will be shown in the analysis later and given that this will deliver a dual functionality for both the crude and gas needed by Japan. In the long run this will produce greater confidence in investors due to its feasibilities and low learning curve.

3.2 IMMEDIATE DRAWBACKS

• Environmental:
  This preferred option would cross through permafrost zones. This means earth areas that are mostly ice through the year. This environmental situation will slow down construction and human functionality. This region also has some areas prone to flooding and erosion. This potentially will also slow down or hinder construction on some paths, which will lead to minor deviations. Deforestation and the many rivers that must be traversed are also drawbacks that require immediate attention on the line of this project.
• Social:
  The people of Sakhalin Island have been demonstrating, showing that there have been negatively impacted areas on the island. They are calling out for remedial activities. This will mean that this project must find a way of repairing and conserving this environment.

3.3 MITIGATION STRATEGY
The Environmental Renewal and Development Strategy [ERDS] will be adopted. Under this will be the following;

• Special design techniques for pipeline crossing major rivers. Overheads in some areas and seabed buried at some other points.
• Pipeline to be constructed with earthquake resistant technology (Snaking pipeline).
• Restoration and Enhancement of all Past Impacted Areas (PIA’S).
• Pipeline to follow existing routes.
• Establishment of Sakhalin region accelerated development Programme. To found Schools, hospitals, roads, etc.
• Sand bags and flexible erosion barriers to be used for erosion control.
• Dialogue and consultations with community leaders to proffer solutions to their immediate requests on environmental and communal issues.

REFERENCES
CANADA, 2004.Project Management Processes. http://www.tbs-sct.gc.ca/emf-cag/pmg-ggp/pm-gp-process/pm-gp-process_e.asp (Accessed April 2007)

http://www.focusprojects.co.uk/index.php

HIRA, A. et al. 1994. Project Management: Techniques in Planning and Controlling Construction Projects. New York, John Wiley and Sons Inc.

KENDRICK, T. 2004. The Project Management Tool Kit: 100 Tips and Techniques for Getting the Job Done Right. New York, American Management Association

MARTIN, P. & KAREN, T. 2001. Getting Started in Project Management. New York, John Wiley and Sons Inc.

THE ROBERT GORDON UNIVERSITY. 2007. Project Management Course Notes.