REMOTE MEASUREMENT OF STRESS IN FERROMAGNETIC PIPELINES Motivation Ageing global pipeline infrastructure Non-invasive, remote, pipeline integrity assessment Applicable to non-piggable pipelines No interruption to pipeline service during inspection No change to operating parameters No pipeline preparation procedures Detection of stress not geometry Analyse changes in magnetic field along the pipeline Stress Concentration Tomography Magnetic Pipeline Survey Reporting Location of abnormal stresses Metallurgical and mechanical conditions quantified in terms of stress Defect type group Clock Position Maximum allowable operating pressure (MAOP) STRICTLY PRIVATE AND CONFIDENTIAL Speir Hunter Limited

REMOTE MEASUREMENT OF STRESS IN FERROMAGNETIC PIPELINES Stress Concentration Tomography Magnetic Pipeline Survey Current Capability Location of stress concentration zones (SCZ) to +/-15mm accuracy capability Satellite navigation correction or post processing Average depth of burial calculation Stress at SCZ expressed in Mpa Input data: Pipe diameter Wall thickness Internal pressure Material SMYS Can calculate MOP at SCZs (but not using ASME B31G methodology) To follow Characterisation of defects (type, length, width, depth) Defects in welds Indication of clock position Eliminate false positives ie welds NB SCT detects all defects causing stress: metal loss, metallurgical, twisting/bending (ground movement, poor support) Speir Hunter Limited

Principle Benefits Detects stress caused by all metal defects irrespective of orientation Detects and Identifies stress corrosion Detects stress caused by ground movements, twisting and sagging Suitable for all ferromagnetic pipelines including tight turns and small diameters No issues with valves No interruption to pipeline operations No minimum or maximum operating pressure required No dependancy on flow rate of transported material NO LOST PRODUCTION REMOTE MEASUREMENT OF STRESS IN FERROMAGNETIC PIPELINES Stress Concentration Tomography Speir Hunter Limited

Limitations Max distance scanner from pipeline: 12 times pipe diameter Distance between object inspected and parallel pipe 0.4m Not adapted for subsea operations Does not detect pipeline repair materials - must provide input data. - possible impact on accuracy Does not detect pipeline operating pressure - must provide input data Vertical sections - positioning errors Inaccessible terrain eg land mines, swamps with reptiles, routed under buildings Nearby location of sources of magnetic interference Complex piping networks eg plant facilities Magnetic Memory threshold Defects close to welds may be missed REMOTE MEASUREMENT OF STRESS IN FERROMAGNETIC PIPELINES Stress Concentration Tomography Speir Hunter Limited

Case Study: USA Comparison of Piggable and Non Piggable Pipelines Based on this we assume 35% of global pipelines have not been designed for and have not been converted to enable ILI inspection REMOTE MEASUREMENT OF STRESS IN FERROMAGNETIC PIPELINES Stress Concentration Tomography Speir Hunter Limited

Case Study USA: Minimum Cost for Converting a Pipeline for ILI Assumptions: Caliper tool used to identify restrictions and bends that would need modification Modification to fit the launcher/receiver combination ranges $80k - $100k. Assume requirement is every 160km. Figures in table are average cost/km Restriction clearance assumed as minimum 1 obstruction per km with low in table referencing section replacement to clear tight bends only and high including valve replacement. NB Figures include cost of loss of throughput REMOTE MEASUREMENT OF STRESS IN FERROMAGNETIC PIPELINES Stress Concentration Tomography Speir Hunter Limited

Summary of ILI costs Natural Gas Pipelines Liquid pipelines NB 1. Throughput loss based on futures price of $6/mmBtu Historical High = $15.38/mmBtu Historical Low = $1.05/mmBtu 2. Cleaning of natural gas pipelines assumes mechanical (scraper tools) only Cleaning of liquid pipelines assumes a split of 65% mechanical and 35% chemical REMOTE MEASUREMENT OF STRESS IN FERROMAGNETIC PIPELINES Stress Concentration Tomography Speir Hunter Limited

First ILI Inspection Costs of Converted Pipelines First inspection with ILI = conversion $ + inspection $ REMOTE MEASUREMENT OF STRESS IN FERROMAGNETIC PIPELINES Stress Concentration Tomography Speir Hunter Limited