Underground Gas Storage Benchmarking Program 2013 Benchmarking Operational Performance An Invitation to Participate Brad Wood, Juran Institute, Amsterdam, The Netherlands Source: PB Energy Storage Services

2 INTRODUCTION Benchmarking has evolved to become an essential element of the business performance improvement toolkit and is now frequently used by many companies in a wide range of different industries. Executed correctly, it can provide a powerful focus for organisations, driving home the facts and convincing the organisation of the need to embark upon improvement strategies. It is a tool that provides the foundations for the achievement of excellence. Juran has been a leading provider of benchmarking services to the oil and gas industry since We have been benchmarking gas processing plants and marine terminals (storage and loading) annually since 1995, gas transmission systems since 2005 and LNG receiving terminals since Our extensive database contains performance data from leading companies in these fields from Europe, South America, Middle East, Asia and USA. Juran has been requested to approach Underground Gas Storage operators in Europe to establish a benchmarking exercise examining the operational performance of these facilities. Several companies have already declared strong interest in participating and some of these have offered to provide testimonials to interested companies of the value they have experienced in benchmarking their gas transmission systems with Juran. BENCHMARKING SCOPE The precise scope of the benchmarking will be determined by the participating companies at project commencement but it is envisaged that the focus will be the operational efficiency and effectiveness of underground gas storage. Efficiency is determined in terms of expenditure for labour and materials, and manpower time expended. Effectiveness focuses upon the quality of the outcomes of performance including HSE, process safety, reliability, availability, customer satisfaction, integrity and maintenance management, energy consumption and utilisation. Underground Gas Storage Benchmarking Program 2013 Benchmarking System Operational Performance The benchmarking would analyse underground gas storage operational performance relating to The exact metrics to be employed will be agreed collectively by the benchmarking participants. By way of example these may include: Efficiency Costs and Manpower Time Expended for: Operations Maintenance Business Overheads Technical Support Health, Safety, Security, Environment & Quality Energy & Utilities Effectiveness Availability & Reliability Downtime & Utilisation Methanol Consumption Emissions & Waste Occupational Safety Process Safety Regulatory Compliance Employee Absenteeism Maintenance Backlog Management Training LIKE FOR LIKE COMPARISONS The challenge in any benchmarking exercise is to ensure that performance comparisons between participants is made on a like for like basis (apples to apples). In order to benchmark the performance of different underground gas storage facilities, data from participating companies must be effectively normalised. Juran successfully applies the Juran Complexity Factor © (CF) to normalise performance data in all of its oil and gas benchmarking programs. The CF accounts for differences in the technical complexity of the assets being benchmarked to provide highly effective data normalisation. In addition to the CF it is envisaged that data will be normalised by stored gas volumes, throughput and other factors, as required. For further information please contact: Aideen McCrave

3 For further information please contact: Aideen McCrave METHODOLOGY The Juran 7–Step benchmarking process © provides a tried and tested systematic approach for the benchmarking exercise. Further information can be found at and via the Juran Benchmarking LinkedIn page. Key activities include: Project Set Up A kick off meeting will be held, attended by all interested companies. The purpose, scope, methodology and schedule for 2013 will be agreed. If required, a further subsequent meeting will be organised to identify and define all KPIs to be used. Note that it is the participants who will decide which metrics are to be included in the analysis. Data Collection and Normalisation Juran will issue a data collection document for all companies to complete and return to Juran. All data will be thoroughly validated and normalised using the methods agreed at kick off. Analysis and Reporting Juran will analyse the data and prepare a detailed written report of the benchmarking findings including a performance gap analysis for each company. Reporting will be comprehensive, and is expected to include over 200 KPIs examining all aspects of underground gas storage performance. Sharing Best Practices If all companies agree then Juran can host a Best Practice Forum, exclusive to the participants of the benchmarking, whereby companies share their experiences of best working practices in underground gas storage. CONFIDENTIALITY Maintaining the strictest confidentiality is paramount to any benchmarking program. All participants and Juran will abide by the Benchmarking Code of Conduct and will sign a confidentiality agreement defining exactly what data can be shared and how it can be used. BENCHMARKING SCHEDULE The intention is to kick off this benchmarking initiative with an inaugural meeting to be held in Amsterdam on April All interested companies are invited to attend, without obligation to participate in the benchmarking. The objective will be to collect, validate and normalise benchmarking data during Q2/Q3 of 2013 with a view to completing the analysis and report production in Q3/Q NEXT STEPS Juran is currently approaching underground gas storage operators in Europe to invite them to consider participating in this benchmarking program. If you are interested in the possibility of participation, please contact Juran for further information about the kick off meeting. Following attendance at the kick of meeting companies will be in a position to make an informed decision regarding the value offered by this benchmarking program. If you would like further information about this benchmarking program, please contact Aideen McCrave Underground Gas Storage Benchmarking Program 2013 Benchmarking System Operational Performance