In practical terms, our community support frequently involves using the Company’s plant and machinery – as well as manpower – to provide much-needed assistance.
Working with the local authorities, we deployed available vehicles including our fire engines, personnel and safety equipment on a number of occasions during the year (see table below).
In addition we have assisted communities local to our operations in Ukraine by providing the use of our cranes, trucks, excavators and road clearing equipment to assist in a number of small isolated tasks that benefit the local community.
In addition Charity projects that are local to our operations and that we have supported during 2012 were:
- making repairs to various nurseries, schools, hospitals, community centres in different villages of Novi Sanzhary District
- provision of transport assistance to a school in Novi Sanzhary
- provision of fuel tickets for the Andriivka boarding school
- provided special machinery to strengthen river banks to prevent flooding of local properties
- extinguishing a tree line fire preventing a corn field fire
- improvement to the pavements at Chekhrack Comprehensive Secondary School
- construction of a pavilion for rituals and rites at the cemetery in Khachemzy village
- aid for Syrian refugees arriving into Adygea
- aid for the underprivileged on the occasion of Harvest Festival in Koshekhablskoye
At Koshekhablskoye, some 1,500km south of Moscow, we constructed a gas plant which had major implications for our four CSR pillars: health and safety, employment, community and the environment. A top priority for us is to deliver the project to its full potential – while also ensuring that it provides benefits to the local people and their community.
The nearest town, Maikop, is the capital of the Adygea Republic and is recognised as one of the most attractive cities in the Northern Caucasus. However, it is also an area of above average unemployment. The local people need jobs – but they also need them to be good, long-term and well-paid jobs provided within an effective HSECQ framework.
Our goal was to be a net contributor to the local community and to build a reputation as an important and positive influence. We can help drive social and economic development in local communities through the use of our resources and through our supply chain network. We used extensive consultation, which included hosting a public meeting, to gather opinions and provide the community with information on the project. In particular, we explained how we can contribute to initiatives and events which support local companies and employment, develop skills and encourage entrepreneurship.
We also carried out an Environmental Impact Assessment (EIA) with the Volgograd Design Institute. Our activities will result in higher-risk environmental challenges, particularly in terms of water use and waste management. To address this, we have implemented systems to ensure minimal water use, minimal waste generation and that we have a clear baseline against which to measure our performance. An Oil Spill Contingency Plan (OSCP) is in place to ensure rapid and appropriate action in the event of a spill.
Construction at Koshekhablskoye continued at pace, with first commercial gas production commencing in April 2012. YGE, our operating company, currently employs over 250 people.
Their health and safety at work is very important to us. The Koshekhablskoye project posed a number of HSECQ challenges, notably through the presence of Hydrogen Sulphide (H2S), an extremely dangerous substance which can cause fatalities if not addressed correctly. Although H2S controls were already in place to meet legal requirements, the JKX Technical Director and the YGE Managing Director demanded greater protection for the workforce. We have now carried out a full review and introduced enhanced precautions covering such issues as training, additional H2S monitoring, enhanced drills and evacuation plans, and emergency response plans.
We will never compromise the safety of our people. The project posed significant challenges to our workforce, including the presence of Hydrogen Sulphide (H2S). We enhanced the level of protection from H2S during 2010 and during 2010, 2011 and 2012 had zero Lost Time Injuries.
Waste management is a challenge in an area that has limited infrastructure for safe waste disposal. In addition to introducing a ‘reduce, reuse, recycle’ scheme at the project, we utilised temporary options such as storage and worked with local industry to create a permanent solution to the issue of waste.
We are bringing valuable jobs to the region and currently employ in excess of 250 people at YGE. The project has also generated employment for contractors and supply chain vendors: the number varied but was up to 600 support as well as associated personnel.
We are keen to be good neighbours and to play our part in the local community whenever possible. In 2010, we were pleased to provide financial and practical support to the town of Maikop’s Harvest Festival celebration, which is an important event in the lives of the community.
Why LPG? Liquefied petroleum gas (LPG) is a flammable mixture of hydrocarbon gases used as a fuel in vehicles and heating appliances. When specifically used as a vehicle fuel it is often referred to as autogas. It is much cheaper to buy than either petrol or diesel. Far less tax is added to the pump price because it creates less pollution. European governments encourage the use of LPG to help meet environmental targets.
Liquefied Petroleum Gas (LPG) production commenced at our Poltava plant on 4 July 2011 and the first commercial cargoes were dispatched on 5 July.
Dr Paul Davies, JKX’s Chief Executive said, “The facilities came in on schedule and on budget and we achieved pay-back on the incremental investment in approximately six months. The added value of this product stream has enhanced the economic performance of our Ukraine operation and effectively increased gas realisations by approximately 10%.”
Oilfield projects are always a challenge, particularly in areas of the world with limited infrastructure and experience in completing such projects.
The PPC LPG Project from concept to first production was completed with an excellent safety and environmental record, on budget, ahead of schedule, exceeded its goals for national training and content and has been able to produce as planned.
On the first major project that PPC completed in 1997 we engaged a Ukraine design institute and it became obvious that if PPC were to actually make any progress we needed to be in control of engineering and construction activities.
PPC were awarded Ukraine licenses for engineering and construction activities in 1998/9 which have been vital to the speed at which we can complete projects at the PPC Production Site. The licences mean we are self sufficient and avoid the necessity of utilising Ukraine institutes or contractors and therefore can control schedules and costs.
What worked well
By most project standards, milestones were met in a very short time. Such speed in development can be attributed to the following fundamentals:
- Ukraine licenses (1998/9) to perform most engineering and construction activities
- highly motivated team made up mostly of Ukrainian nationals
- project team was led by PPC in-house staff with minimum involvement from contractors
- experienced Project Leaders were used who regularly work in Ukraine
- PPC management’s foresight and willingness to place a high priority on the project
- atmosphere of trust amongst the project team and project management to deliver
- stakeholders were aligned
- the project was self-financed through PPC’s operating cash flow
- ample feed gas supply was already available on site from existing wells
- we had significant prior experience of highly technical projects in the oil and gas industry.
Experienced local employees
Wherever possible the project was staffed by existing PPC Ukrainian employees. For ongoing production and commercial operations, additional local staff were recruited early in the project and were able to gain experience on the existing operations before LPG start-up. Experienced Project Managers were used who had completed many previous projects on this location. In addition a number of group departments collaborated throughout to ensure the successful project delivery including: Health Environmental and Safety, Operations, Maintenance, Engineering, Construction, Purchasing, Finance, Human Resources, Commercial, Government Relations, Community Relations, Logistics and IT.
Why was it successful?
There were a number of reasons why our LPG project was successfully merged into our existing operations on time and with minimum interruption. These included:
- Significant LPG market analysis took place for many months before a business plan was developed
- A detailed annual Business Plan was developed in advance to organize and focus its commercial activities
- The preparation of a high quality engineering design at the conceptual design stage
|Health and safety
- The project was executed with an HSEC Plan which was agreed with senior management and implemented rigorously at site – a very strong site safety culture was embedded within the team
- We used proven technology – the process plant was purchased as a packaged unit from an existing vendor who has already supplied many similar units to many customers throughout the world
- Proven suppliers – the chosen supplier had intimate knowledge of our existing plant from previous work completed enabling the very best performance from interface with the existing process
- Deviations from the suppliers standard design were kept to an absolute minimum
- The LPG Project Management Team resided in the field at the job site
- No Lost Time Incidents Environment
- The planning process included a detailed Environmental Impact Assessment
- The project team approved an Environmental Management Plan which was adhered to throughout construction
- We worked hard on community relations which ensured local communities were well informed
- We focused on purchasing from local and national Ukrainian companies where possible
- Proven local sub-contractors were used, who brought with them lessons learned from previous projects
Rigorous control of cost and schedule was exercised throughout the duration of the LPG project with project schedule and cost reports updated weekly. Communication throughout the project was frequent, rapid and clear.
The LPG Project is another benchmark of what is possible within PPC when talented and motivated people work together towards common goals of safety, quality, cost, national content and schedule.