Emergency prevention and response

DMA, CPI 2.3, G4-EN24

Management approach DMA

The health and safety system places a special focus on oil spill prevention and quick-response to spills occurring during the course of the Company’s operations. The health and safety program features annual activities that are designed to enhance the reliability of pipeline systems and to reduce the number of accidents affecting the environment. The accidents occurring over the reporting period include 28 accidents in 2016, and 29 in 2015. The major causes of the accidents are for the most part A pipeline failure is an operational disruption caused by a full or partial shutdown of a pipeline due to loss of containment of the pipeline itself or its shut-off or control valves, or due to pipeline plugging. pipeline failures brought about by corrosion and illegal tieins. The Company has adopted procedures to effectively respond to incidents, and investigates each specific case to improve its HSE performance. CPI 2.3

In 2016 No major spills occurred in 2015., accidents affecting the environment resulted in 0.26 thousand tons The spills were on soil. of spilled oil, over 20% of which resulted from an unauthorized tiein into the Company’s West Siberian pipeline, while the rest was due to a pipeline rupture caused by a pressure surge in the Komi Republic. Most spills were on soil. The initial consequences of the spills were dealt with as soon as possible and, at the present time, biological remediation (planting of grass) is entering its final phase. G4-EN24

In 2016, the specific number of pipeline failures The number of pipeline failures is calculated as the number of pipeline failures divided by the overall length of pipeline, per annum. across Russian entities of the LUKOIL Group fell by 10%, as compared to 2015, as a result of major overhauls, replacement, upgrading, and inhibitor protection of pipelines.

Between 2015 and 2016, the Company replaced 2,133 km of pipeline, with almost a quarter having anticorrosive coating.

LUKOIL is taking measures to increase the reliability of its pipeline systems and reduce the rate of accidents, and is investigating the use of state-of-the-art technologies that may be used to this end. Every year, entities within the “Oil and Gas Production in Russia” business sector, carry out targeted measures to enhance the reliability of pipeline transportation. Every oil and gas producing company within the LUKOIL Group implements its annual targeted program, with the enforcement of such programs and review of their efficiency being the responsibility of PJSC LUKOIL.

The key pipeline system reliability measures include:

  • replacement of pipelines that are older than 20 years;
  • diagnostics and overhaul of pipelines and the application of inhibitor protection coating;
  • introduction of seamless pipes or those made of new steel grades;
  • more stringent in-process control of the safety of pipeline operations;
  • control of process operations conducted by contractors at well sites.

“Worn out” pipelines are replaced with non-metal pipes, steel pipes with a protective coating, or high durability pipes made from modified steel grades; As of now, there are roughly 1,200 km of fiberglass and about 2,000 km of polythene pipes in operation.

The Company set up the network team, “Improving the Reliability of Field Pipes and Production Tubing”, whose primary goal is to search for and introduce new types of equipment and technologies. The specialists on the team include oil production department (service) heads and experts. In 2015–2016, team members visited a number of seamless pipe manufacturers both in and outside of Russia to review their products.

The introduction of new pipeline products is a promising way of enhancing the reliability of pipelines. Following tests of new generation 05KHGB steel pipes, independent experts confirmed a 1.5-2 times reliability improvement without additional anticorrosive measures. OOO LUKOIL-Komi will carry out industrial testing of a 4.4 km pipeline made from new materials.

The 2017 pipeline reliability enhancement plans for the Komi Republic include:

  • bring the length of protected pipelines up to 2,282 km (increasing the overall pipeline length by 196.5 km) or 30% of the total pipeline system length;
  • increase the length of pipeline replacements to 309.8 km (9.4% of the oil pipeline length);
  • expand the scope of technical and in-line inspections to 1,882.3 km of pipelines.

The Reliability Increase of Pipelines in the Republic of Komi

When the asset in the Komi Republic was acquired in 1999, LUKOIL assumed the responsibility to improve the environmental situation that existed as a result of operation of the asset by its previous owner.

In 1999, the pipeline stock was about 3,000 km, with most of it having a high percentage of wear. In the last 16 years, LUKOIL has replaced over 2,500 km of pipeline (i.e. over 80%).

The investments brought the percentage of pipeline older than 15 years down from 63% in 2000 to 37% in 2016, and the failure rate of field pipelines has been halved. In recent years, there has been a substantial growth in pipeline replacement, i.e. from 47 km (1.3% of the total length) in 1997 to 240 km (4.2%) in 2016. The company has the Group’s highest percentage of protected pipelines relative to total pipeline length: in 2016, this percentage was 31% in the Komi Republic, compared to 9.9% companywide.

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