1. SC5 Liaison Report to SC18 SC5 Work Item 1065 – Audit Effectiveness 1

2. Work Item 1065 Charge has been completed A document package will be created for submission to Monogram Program Board/SC18 Basic approach will be defined and example shown 2

3. Example: OCTG Product Realization Heat-treated seamless casing 3

4. Steel-making Pipe rolling Heat treatment Inspection and Testing Threading Marking Buck-on Straightening This is a typical process flow. Subsequent slides describe each of the basic steps and equipment that will likely be used. The steps are typically in this order, with some exceptions (for example, some inspection is done after threading; also, intermediate marking is used for process traceability). An asterisk next to the expected equipment implies that calibration of the equipment is expected. 4

5. Description: Steel is melted and cast (continuously, or in ingots). Output: Steel billet Key objectives: Adjust the amount of alloying elements to achieve chemical composition Remove impurities Achieve billet or round structure References in 5CT: Fine-grain practice (6.1) Chemical composition (7.1) Heat analyses (10.3.1) Expected facility equipment: Electric-arc furnace or Basic oxygen furnace Chemical analysis instrument* Ladle metallurgy capability to control sulfur, phosphorous, carbon, etc Vacuum or inert atmosphere degassing of ladle Continuous billet or round casting Inventory of scrap and/or ore Steel-making Pipe rolling Heat treatment Inspection and Testing Threading Marking Buck-on Straightening 5

6. Description: Steel billet is reheated and formed into a seamless tube. Output: Plain-end tubular joint Key objectives: Create a uniform geometry References in 5CT: Size (8.3) Mass (8.5)/wall thickness (8.4) Length (8.6) Expected facility equipment: Rotary hearth or walking beam furnace Piercer – press or cross rolling Plug, mandrel, pilger, or Assel mill or push bench Stands of mills for sizing: pipe mandrel, reducing Inventory of rolls and mill tooling Steel-making Pipe rolling Heat treatment Inspection and Testing Threading Marking Buck-on Straightening 6

7. Description: Tubular joint is reheated and cooled. Output: Tubular joint with final grain structure Key objectives: Obtain strength, ductility, and corrosion resistance References in 5CT: Heat treatment (6.2) Tensile properties (7.2) Toughness (7.3) Hardness (7.7) Hardenability (martensite) (7.10) Grain size (7.11) Expected facility equipment: Austenitizing furnace* (or normalizing furnace) Quench tank or array or sprayers Tempering furnace* Cooling racks and/or beds Steel-making Pipe rolling Heat treatment Inspection and Testing Threading Marking Buck-on Straightening 7

8. Description: Tubular joint is bent. Output: Straight plain-end tubular joint Key objectives: Remove deviation from straight References in 5CT: Straightness (8.9) Drift (8.10) Expected facility equipment: Rotary straightener (hot or cold) or gag press Steel-making Pipe rolling Heat treatment Inspection and Testing Threading Marking Buck-on Straightening 8

9. Description: Tubular properties are measured. Tubular is inspected for defects and flaws. Output: Assurance of quality of plain-end tubular joint Key objectives: Confirm that tubular properties meet requirements Identify and remove small flaws Reject tubulars with unacceptable flaws or defects References in 5CT: Material requirements (7) Defects (8.13) Inspection and testing (10) Expected facility equipment: Hydrostatic test station Scale* for weighing joints (may be at marking stage) Ultrasonic wall thickness and flaw transducer array* Electromagnetic flux leakage* Eddy current inspection unit* Magnetic particle inspection (wet or fluorescent) Qualified inspectors Material analyzer*; microscope (for grain size) Tensile* and Charpy impact* test equipment Hardness tester* Sulfide stress cracking test lab Steel-making Pipe rolling Heat treatment Inspection and Testing Threading Marking Buck-on Straightening 9

10. Description: Tubes are externally threaded at each end. Coupling material is cut into blanks and internally threaded on each end. Output: Threaded tubular joint or coupling Key objectives: Create thread that facilitates assembly Protect thread from handling damage References in 5CT: Threads conform to Spec 5B Couplings (9) Thread protectors (12.2) Expected facility equipment: Computer Numeric Controlled (CNC) lathes Variety of thread element gauges* (see 5B for elements) Ring gauge* (pins) or plug gauge* (couplings) Thread protectors and thread and/or storage compound Cleaning and plating tanks (couplings) Steel-making Pipe rolling Heat treatment Inspection and Testing Threading Marking Buck-on Straightening 10

11. Description: A coupling is installed power tight on one end of the tubular joint. Output: Tubular joint ready to run into a well Key objectives: Create thread that facilitates assembly References in 5CT: Threads conform to Spec 5B (1.5 excludes threads from 5CT) Coupling make-up (8.14) Expected facility equipment: Thread compound Horizontal bucking unit with torque gauge* Thread protectors and storage compound Steel-making Pipe rolling Heat treatment Inspection and Testing Threading Marking Buck-on Straightening 11

12. Description: Tubular joints are marked along their length. Output: Marked tubular joint Key objectives: Label joints for identification, information, traceability References in 5CT: Marking (11) Coating (12) Expected facility equipment: Stencil or stamp marking equipment Scale* and length measurement* equipment Method for applying paint bands Equipment to apply external coating Steel-making Pipe rolling Heat treatment Inspection and Testing Threading Marking Buck-on Straightening 12

13. Destructive tests: Chemical composition (10.3) Tensile (10.4) Hardness (10.6) Impact (10.7) Hardenability (10.9) Sulfide stress cracking (10.10) Non-destructive tests: Hydrostatic (10.12.2) Drift (10.13.5) Measurements: Diameter (10.13.2) Mechanical wall thickness (10.13.4) Length (10.13.6) Weight (10.13.7) Straightness (10.13.8) [For EW: Flattening (10.5) ] Steel-making Pipe rolling Heat treatment Inspection and Testing Threading Marking Buck-on Straightening Non-destructive Inspection: Visual (10.14) Wall thickness (10.15) Ultrasonic (10.15) Flux leakage (10.15) Eddy current (10.15) Magnetic particle (10.15) List of specific inspections and tests referenced in API 5CT 13

14. Steel-making Pipe rolling Heat treatment Inspection and Testing Threading Marking Buck-on Straightening Proposed hierarchy of API 5CT Grades: The typical process flow described in this package is most applicable for seamless pipe in the grades next to the red bar. Different acceptance standards typically apply for the higher grades (not just strength, but also inspections) Slightly revised from teleconference list 14

15. Steel-making Pipe rolling Heat treatment Inspection and Testing Threading Marking Buck-on Straightening Candidates for product sub-categories: Seamless, heat-treated tube ERW tube Couplings Threading (more details of process?) Accessories Tubing Chrome products (steel-making challenge) The typical process flow described in this package is most applicable for products next to the red bars. 15

16. 16 Just ask Jim Powers