Engineering Justification Paper Winkfield South East Offtake Pre-heating and Volumetric/Pressure Control system replacements - Final Version Date: ...

 
Engineering Justification Paper Winkfield South East Offtake Pre-heating and Volumetric/Pressure Control system replacements - Final Version Date: ...
Engineering Justification Paper
Winkfield South East Offtake

Pre-heating and Volumetric/Pressure Control system replacements
Final Version
Date: December 2019
Classification: Highly Confidential
Engineering Justification Paper Winkfield South East Offtake Pre-heating and Volumetric/Pressure Control system replacements - Final Version Date: ...
1. Table of Contents

2 Introduction ........................................................................................................................................ 3
3 Equipment Summary ........................................................................................................................... 5
4 Problem Statement ............................................................................................................................. 9
5 Probability of Failure ......................................................................................................................... 12
5.1 Failure rate .................................................................................................................................................12
5.2 Probability of Failure Data Assurance ........................................................................................................14
6 Consequence of Failure ..................................................................................................................... 15
7 Options Considered ........................................................................................................................... 17
7.1 Component replacement ...........................................................................................................................18
7.2 Refurbish components ...............................................................................................................................18
7.3 Replace on failure .......................................................................................................................................18
7.4 Repair on failure .........................................................................................................................................19
7.5 Do nothing ..................................................................................................................................................19
7.6 Replacement of volumetric Control Valves and gas preheating system ....................................................19
7.7 Options Cost Details ...................................................................................................................................22
7.8 Options Cost Summary Table .....................................................................................................................22
8 Business Case Outline and Discussion ................................................................................................ 23
8.1 Key Business Case Drivers Description .......................................................................................................23
8.2 Business Case Summary .............................................................................................................................25
9 Preferred Option Scope and Project Plan ........................................................................................... 26
9.1 Preferred option .........................................................................................................................................26
9.2 Asset Health Spend Profile .........................................................................................................................26
9.3 Investment Risk Discussion ........................................................................................................................26
Appendix A - Acronyms ........................................................................................................................ 29
Appendix B - References....................................................................................................................... 30

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2 Introduction

This project is one element of the Transmission Integrity programme within Southern Network for RIIO
GD2. The integrity programme is generally health driven considering the health of gas Transmission Assets -
Offtakes, Local Transmission System (LTS) Pipelines, Pressure Reduction Stations (PRS) and ancillary assets.
‘Health’ includes condition (corrosion, cracking, spalling etc.) and reliability (in-service defects etc.).
In terms of engineering justification, the Authority has proposed the following model to differentiate
between ‘major projects’ requiring justification in accordance with Appendix A guidance and ‘asset health’
projects justified in accordance with Appendix B.

                                   Guidance for engineering justification

This project is to rebuild both the heating and pressure reduction systems on Winkfield South East Offtake.
This project also includes the replacement of a remote boundary control system that controls the
maximum operating pressure to 38 BarG at a downstream valve site at Ripley in Surrey, thereby maximising
the available diurnal storage within the South East LDZ. Other systems on site are not impacted by this
proposal.

General Background
Winkfield South East Offtake supplies gas into the South East Local Distribution Zone (LDZ) from the
National Gas Transmission system (NTS).
The NTS began life around 1965 as a single pipeline and spurs transporting methane from Algeria and
imported into Canvey Island to the Leeds area. In 1966, the NTS was extended to a new terminal at
Easington, where it is understood the first natural gas was beached. In 1969 the NTS was significantly
extended with connections to the Bacton terminal and, in the South East, to Winkfield and beyond into the
South East LDZ. Records indicate that Local Transmission System pipelines (LTS) from Winkfield to Ripley
and Mogador were commissioned late in 1969. Winkfield South East Offtake was therefore one of the first
sources of gas into the LDZ and is therefore one of the oldest offtakes now at least 50 years old.
Today, the primary roles of an offtake are as follows:
    • Filter the gas to at least 10µm,
    • Meter the gas volume to meet the requirements of the UNC for custody transfer,

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    • Measure the energy value of the gas (Calorific Value) to meet the requirements of the Gas
      (Calculation of thermal energy) Regulations,
    • Pre-heat the gas prior to pressure reduction to combat the effects of the Joule-Thomson effect,
    • Control the pressure and volume of gas into the LTS, these systems typically operate in volumetric
      mode with pressure overrides to ensure pressures do not exceed the Maximum Operating Pressure
      within the downstream system.
    • Odourise the gas to meet the requirements of the Gas Safety (Management) Regulations and the
      associated Gas Transporter’s Safety Case.
Filtration, pressure control and pre-heating are typically designed in accordance with the Institution of Gas
Engineers and Managers (IGEM) recommendations, IGEM/TD/13, Pressure regulating installations for
natural gas, liquefied petroleum gas and liquefied petroleum gas / air.

Site Specific Background
The site at Winkfield has three offtakes on the site, which feed the South East LDZ, South LDZ and London
North LDZ (which is owned and operated by Cadent). These systems are dedicated to each LDZ.
The existing system feeding the South LDZ shares filtration with the system that feeds the South East LDZ.
After the common filtration system, the pipework splits into two discreet systems, each having their own
metering, odourisation, pre heating and pressure reduction systems.

                                  Overview             Security

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3 Equipment Summary
Winkfield South East Pressure reduction system regulates the gas pressure from up to 75 BarG down to
between 41 and 38 BarG and is protected by a high pressure override system that ensures the pipeline
pressure downstream of Ripley does not exceed 38 BarG.
This system is the only HP gas supply, from the west, into South East LDZ from the NTS Feeder Main 7. The
other supplies into South East LDZ (Tatsfield, Farningham ‘A’, Farningham ‘B’ and Shorne) are all supplied
from NTS Feeder Main No. 5. Winkfield South East offtake is therefore essential in providing SGN with
partial resilience against a failure of Feeder main 5 adversely affecting gas supplies into one of the largest
LDZs in the UK.

                                                  Security
Winkfield is the only supply into the 38BarG system from the west side of the network.

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Both Winkfield South and South East gas supply systems, share four ‘Swinney’ (‘SPX’ H-Type) gas filters. The
system then splits to feed the South East LDZ and South LDZ separately.

            Example of four filters within the common South / South East gas filtration system

The South East LDZ passes gas through a fiscal metering system used to accurately measure the energy
transfer into the network. Currently, this is a removable orifice plate meter and carrier.

                              ‘Daniels’ dual chamber, orifice plate and carrier

The conditioned gas then passes through one of two ‘Robert Jenkins & Co Ltd’ built water bath heaters.
These pre-heat the gas prior to pressure reduction to ensure the downstream gas and pipework is
protected from the unavoidable, ‘Joules-Thompson’ freezing effect.

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                            Typical, Winkfield water bath gas pre-heater
Stream slam-shut valves and control panels are critical to protect the downstream systems from fault
driven over pressurisation. For both the South and Southeast systems, they are actuated ball valves,
controlled by ‘Paladon’ built, pneumatic control systems. The slam-shut valves are buried, welded in line
and also provide an inlet stream isolation facility.

                      Above ground actuators on each of the buried slam shut valves

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The volumetric flow and pressure regulators are ‘Valtek Engineering NEI-APE Ltd’ ‘Tiger Tooth’ Control
Valves. These operate in series in ‘Monitor’ (stand-by) and ‘Active’(working) configuration.

                       Example: ‘Valtek’ ‘Tiger Tooth’ globe Control Valves
The Winkfield southeast system is forecast to provide 175,300 scm/h (4.2 mscm/day) of gas into the South
East LDZ, during a 1 in 20 year, peak day, severe winter.

Global population
SGN has the following number of NTS Offtakes and PRS (Pressure Reducing Stations) within Scotland and
Southern networks (as reported during the 2018/2019 RRP):

       Network          Offtakes              PRS
    Southern               12                 157
    Scotland               18                 131

Pre-heating system
The majority of these sites have gas pre-heating systems as follows:

    Type                                 Southern                      Scotland
                                   Offtakes         PRS       Offtakes            PRS
    Boilers / heat exchangers          6            133           6                44
    Water-bath heaters                 6             19          10                61
    Electrical element                 -             3            -                 4

Water-bath heaters on offtakes are typically around 1000 kwh heat output and similar in size and
construction to those currently at Winkfield. Water-bath heaters on PRS are simpler and much smaller in
size and are installed, where other types of heating systems are uneconomic to install and operate.
Of the six remaining systems of large water bath heaters on offtakes within Southern, one system of three
at Farningham will be replaced by the end of GD1, three other systems, comprising of Winkfield South,
Winkfield South East and Mappowder are planned for replacement in GD2. One system of three will remain
at Shorne offtake in Kent, which is currently a non-critical supply.

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Volumetric Control Systems
Volumetric flow control systems are typically used only on larger NTS offtakes. A number of SGNs offtakes
in Scotland are relatively small and supply isolated, sole fed networks and are therefore pressure
controlled. Downstream Transmission duty PRS’s are also pressure controlled. Control Valves are used for
volumetric flow control, as they facilitate accurate ‘Set Point Control’ (SPC) and ‘Direct Valve Control’ (DVC)
as required by SGNs Gas Control Centre, to maintain steady flowrates.

    Control Type               Southern Offtakes      Scotland Offtakes
    Volumetric Control                 11                     5
    Pressure Control                   1                      13

Similar to the ‘Valtek’ Control Valves on the Winkfied Southeast system, ‘Severn’ ‘Drag’ - Type 200 Control
Valves are the older version of the ‘Drag’ valve, now produced by ‘IMI CCI’. One system in Scotland was
replaced prior to the start of GD1. Three systems exist within the Southern network; one system of two at
Croydon PRS will be replaced before the end of GD1; a system at Braishfield ‘B’ remains and a
refurbishment during GD1 has allowed these a short life-extension. It is planned to replace these in GD3.
The third system of four is at Winkfield suppling gas into the south network.

4 Problem Statement
Why are we doing it?
Gas pre-heat prior to the pressure reduction process is currently provided by three obsolete water bath
heaters at Winkfield southeast. One of the vessels of these water bath heaters, denoted ‘A’, has previously
failed, which led to a major release of heating solution, comprising of water and antifreeze. The failure
resulted in the loss of the 1500 kwh of gas pre-heating for the duration of the incident. All of the SGN water
bath heaters at Winkfield are exhibiting high failure rates, with significant defects, including fatigue
cracking, erosion within the tanks and numerous failures of the supporting pneumatic and instrumented
control systems.
Primary protection and safe isolation of the downstream system is provided by actuated ‘Cameron’ ball
valves. The historical practice of actuating the PRS stream inlet valves as slam-shuts, in this case, large,
buried ball valves, is no longer supported by IGEM/TD13. Inspection requirements include an initial test and
then three more set point tests and corresponding timings to close. These tests are repeated every 6
months, to satisfy SGNs maintenance program and to comply with the requirements of the sites PSSR
‘Written Scheme of Examination’. This is to conform to the statutory Pressure Systems Safety Regulations
2000 (PSSR).
Natural degradation and the significant number of tests, over the 50 year life of these valves, has
undoubtedly, caused irrevocable wear and damage to the valve elastomer seats, seals and oil driven
actuation system. These valves are failing the inspection test requirements carried out in accordance with
the Pressure Systems Safety Regulations, due to excessive closure times. Previous investment in the
replacement of the on the valve actuation control systems has reduced the closure times, however they
still exceed the PSSR requirement. Failure of a slam-shut valve to close within acceptable time limits could
lead to the over-pressurisation and damage to the South East LDZ downstream, pressure system.

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‘Valtek’ Control Valves are similar to ‘IMI CCI’ (Severn) Drag type 200 Control Valves. These valves comprise
the primary elements of the volumetric control system and are demonstrating a loss of control on a regular
basis with numerous faults being reported. Maintenance and refurbishment of these valves by ‘IMI-CCI’ has
been attempted, but without significant improvement.
The volumetric control system operates under the governance of a ‘boundary control’ system. A ‘boundary
control’ system is used to negate the cost to increase the size of a downstream pipeline, where gas demand
has increased beyond design forecast. ‘Boundary control’ will ensure that moderate and occasional
increases in gas demand are met within the downstream network, without exceeding the Maximum
Operating Pressure of the downstream pipeline. Therefore, additional funding is proposed, for the
replacement of this essential, instrumented system, as part of the volumetric control system.
The project will be deemed successful if delivered on time, in budget, to the SGN specification and with no
impact to our customers.

Impact of ‘do nothing’ approach
Failure to carry out intervention and replace the existing water bath pre-heaters will leave the existing
system at a real and increasing risk of failure! Controlled pre-heating is essential to combat unavoidable gas
and pipework freezing following pressure reduction. This phenomenon is known as the ‘Joule-Thomson
effect’. A differential pressure reduction of up to 50 bar will result in the loss in temperature of around
250C. Gas enters the site at temperatures down to +50C during winter, meaning that gas could leave the site
at -200C, that is below the acceptable operating temperatures for the PRS equipment and downstream
steel pipelines. The consequences include embrittlement, pipeline rupture, gas escapes, ignition and
consequential fatalities. There is also the potential for a major loss of supply to customers and frost heave
along the pipeline route, across roads, bridges and other transport infrastructure.
Failure to deliver intervention to replace the slam-shut valve, overpressure cut-off devices will leave the
downstream system at a real risk for over-pressurisation. The pipeline and pressure system to Ripley has a
Safe Operating Limit (SOL) of 46.2 barg and then 41.8 barg from Ripley to Mogador, all as s defined by PSSR
2000 and IGEM/TD/13. These would be greatly exceeded by an inlet pressure of up to 75 barg. The
consequences include pipeline rupture, ignition, fatalities and potential loss of major gas supplies to both
industry and domestic customers.
Failure to deliver the intervention to replace the volumetric control system will reduce the ability of the
SGN Gas Control Centre to control flow-rates and could lead to possible over-pressurisation. This would
increase reliance on the slam-shut valves. Assuming the slam-shut valves are replaced, the outcome would
be a potential loss of supply to customers.

How do we know we have achieved the outputs
The project will be successful if delivered on time, within budget, to the SGN specification and with no
impact on customers.
Monitoring the site in real time’ through the gas control Distribution Network Control System (DNCS) -
monitoring and recording the gas outlet temperature, pressure and flow performance.
 Inspecting results of routine maintenance and pressure systems inspections and reviewing faults.

Narrative Real-Life Example of Problem
Loss of heating would lead to extremely cold gas entering the downstream steel pipeline, over a period of
time this could lead to embrittlement, frost heave and will induce additional stresses and shorten the life of

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the pipeline. This could lead to a failure of the Control Valves which could freeze in position, potentially
over pressuring the network, or the downstream High Pressure pipeline could rupture due to induced
stresses and ground movement.
The 450mm diameter slam-shut valves are inspected every 6 months. These inspections have identified
that the valves close well above the specified limits of 18 seconds. Analysis has proven that at low demand,
the downstream system will over-pressurise with the valves closing at the times recorded in the table
below.

                                          Winkfield AGI 450NS PSSR SSV Closing Times in Seconds

    SGN SSV                                2017                         2018                           2019
 IDENTIFICATION                     1st     2nd     3rd     Initial   1st     2nd    3rd   Initial   1st   2nd      3rd
     702492 SE                      72s     68s     68s      59s      58s      56s   54s    45s      43s      42s   42s
     702493 SE                      40s     42s     42s      57s      56s      54s   51s    49s      47s      47s   47s

There are currently no stream selection facilities at Winkfield, as prescribed by the industry standard
IGEM/TD/13. Some protection against loss of supply in both streams, is currently achieved by staggering
the slam-shut valve closing set-points i.e. working stream at 42.5 barg and Standby stream at 43.5 barg.
This could lead to the working stream slam-shut valve closing prematurely, should the standby stream
Control Valves fail and open!
The critical auxiliary systems connected to the ‘Valkek’ Control Valves and actuators have been in
continuous operation since 1983. Essential spares and replacement components for maintenance and
repair are no longer available. This has caused stiction, excessive venting to atmosphere and very poor
control. The following is an example of the very poor flow control:

                                                          Winkfield South East
                                    6
                                   5.5
                                    5
                 Flow (mscm/day)

                                   4.5
                                    4
                                   3.5
                                    3
                                   2.5
                                    2
                                         00:27
                                         00:54
                                         01:21
                                         01:48
                                         02:14
                                         02:41
                                         03:08
                                         03:35
                                         04:02
                                         04:29
                                         04:55
                                         05:22
                                         05:49
                                         06:16
                                         06:43
                                         07:10
                                         07:36
                                         08:03
                                         08:30
                                         08:57
                                         09:24
                                         09:51
                                         10:17
                                         10:44
                                         11:11
                                         11:38
                                         12:05

                                                                       Time

Offtakes are designed to operate in volumetric control in either Set Point Control (SPC) or Direct Valve
Control (DVC), the former involves the inputting of a set flowrate by the Gas Control Centre (GCC) and the
site controlling at that set point. DVC involves the inputting of a valve position with the site stabilising at

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that set point. The graph above shows the actual flowrate when GCC had requested a specific value of SPC,
whereas the valves are unstable at the set point and are exhibiting drift and slow control.

Spend Boundaries
The spend of this project on the Winkfield South East LDZ Offtake is to replace both the PRS heating system
and the pressure control system including the two stream slam-shut valves. It is not possible to refurbish
either the slam-shut valves or the rotating vane, oil driven actuators; the soft seated ball valves are buried
and have fully welded bodies that are also welded to the 75 barg inlet pipework. It is also not possible to
refurbish the current 37 year old ‘Valtek’ Control Valves. There is insufficient space between the existing
inlet and outlet stream isolation valves to install new slam-shut valves, Control Valves, heat exchangers and
stream discrimination check valves.

5 Probability of Failure
Background
The failure rate and deterioration applied to calculate the CBA is consistent with the NARMs methodology.
The key principle adopted in the methodology to facilitate the assessment of risk are:
     • Asset health equates to the probability that the asset fails to fulfil its intended purpose and thus
       gives rise to consequence for the network.
     • The consequences can be assessed in monetary terms
     • The risk is determined from the product of the number of failures and the consequence of those
       failures

     5.1 Failure rate
In the NARM framework ‘failure rate’ is used to calculate the Probability of Failure. The failure rate gives
the rate of occurrence (frequency) of failures at a given point in time and may also include an age/time
variable, known as asset deterioration, which estimates how this rate changes over time. The failure rate
can be approximated by fitting various parametric models to observed data to predict failures now and in
the future. Therefore, data that contributes towards monetised risk value has been thoroughly reviewed
for each system under this investment.

Failure modes
In the NARMs methodology the failures are categorised into different Failure Modes. Below is list of all
failure modes considered in the methodology and any data modification made to the model.

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Pressure control and filter
   • Release of Gas - relating to the failure of a pressure containing component on site leading to an
      unconstrained release of gas within and possibly off the site
     • High Outlet Pressure - failure of the Pressure Control system to control the pressure at least to within
       the Safe Operating Limit of the downstream system. This would typically require the concurrent
       failure of both regulators and the slamshut (failure to operate) within one Pressure Control stream.
     • Low Outlet Pressure - relates to the failure of the Filter and Pressure Control system to supply gas at
       adequate pressure leading to partial or total loss of downstream supplies
     • Capacity - where the system has insufficient capacity to meet a forecast 1:20 peak day downstream
       demand
     • General failure - relating to other failures not leading to either a safety, environmental or gas supply
       related consequence.
       Pressure Control

 Asset Attributes               Modification                        Reason
 CONDITION_SCORE                Changed from 3 to 4                 The current score is listed as 2, ‘near
                                                                    new’ but the SE site is approaching 40
                                                                    years old. Some of the Control Valves
                                                                    were overhauled in 2010 and this gave
                                                                    little improvement in performance.
                                                                    There have been a number of occasions
                                                                    that the control system has lost control
                                                                    of the outlet pressure.
 KIOSK_CONDITION                Changed from 0.5 to 1               The SE pressure control equipment is
                                                                    not protected by a kiosk at Winkfield,
                                                                    therefore the kiosk condition was
                                                                    changed to 1 to make this node neutral.
 HIGH_OUTLET_PRESSURE           0 to 2                              The primary protective devices on both
                                                                    streams are unable to protect the
                                                                    downstream network. The slam-shut
                                                                    valves have failed tests 3 years in row
                                                                    and currently have two ‘PSSR’ A2 faults
                                                                    recorded, based on the time taken to
                                                                    close the valves. Network analysis has
                                                                    shown that the excessive timings to
                                                                    close, could over-pressurise the
                                                                    downstream network.
 PC_RELEASE_OF_GAS_PRI 0 to 2                                       The faults specified above could also
                                                                    lead to complete failure of downstream
                                                                    asset and therefore, it also has an
                                                                    impact on RELEASE_OF_GAS node

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Preheating
   • Release of Gas - relating to the failure of a pressure containing component on site leading to an
     unconstrained release of gas within and possibly off the site
     • High Outlet Temperature - relating to the failure of the preheating system to provide the correct heat
       input for that associated site gas flow rate resulting in high outlet temperatures
     • Low Outlet Pressure - relates to the failure of the preheating system to provide the correct heat input
       for that associated site gas flow rate resulting in low outlet temperatures
     • Capacity - where the system has insufficient capacity to meet a forecast 1:20 peak day downstream
       demand
     • General failure - relates to other failures not leading to release of gas, low/high outlet temperature
       or capacity failures.

                                                 Preheating

 Asset Attributes        Modification                           Reason
 CONDITION_SCORE Score updated from 2 to 3                      The current score is listed as 2, ‘as new’
                                                                but the Winkfield South East pre-heating
                                                                system is nearly 40 years old and not had
                                                                any significant integrity work. The
                                                                auxiliary pressure breakdown and control
                                                                equipment has reached the end of
                                                                operational life.
 KIOSK_CONDITION         Changed from 0.5 to 1                  Current score set to 0.5 however there is
                                                                no kiosk on site therefore,
                                                                KIOSK_CONDITION changed to 1 to make
                                                                this node neutral
 NO_EFFECT_PRI           Changed from 0 to 3                    15 failures has been recorded over the
                                                                last 6 years for this system. This equates
                                                                to 2.5 faults per year.

     5.2 Probability of Failure Data Assurance
Below are the failure rates derived from the model for each failure mode:
 Preheating
      Failure Mode              2021        2022          2023         2024        2025         2026
 Release of Gas                 0.033       0.039        0.046         0.054       0.063        0.074
 General Failure                0.605       0.711        0.834         0.979       1.148        1.348
 High Outlet Temp               0.006       0.006        0.008         0.009       0.010        0.012
 Low Outlet Temp                0.394       0.463        0.543         0.637       0.748        0.877
                                           Failure Rate – Preheating

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 Pressure Control
      Failure Mode                2021          2022         2023        2024              2025          2026
 High Outlet Pressure             0.408        0.408         0.444       0.496             0.554         0.618
 Low Outlet Pressure              0.208        0.208         0.227       0.253             0.282         0.315
 Release of Gas                   0.433        0.433         0.472       0.527             0.588         0.656
 General failure                  0.105        0.105         0.114       0.127             0.142         0.159
                                          Failure rate – Pressure Reduction

     6 Consequence of Failure
The below Matrix plots the credible failure modes against how severely it will affect each of the
consequences. These are colour coded to give a visual representation of the likely impact:
                                                                    Failure Consequence
                                                                                                    Environmental
                Failure Mode                 Security of Supply            Safety Impact
                                                                                                        Impact
                                          Security of Supply
                                          would be lost for a
     Pressure Regulating Equipment
                                          significant quantity of   No direct effect               No direct effect
     (Both Slamshuts Closed)
                                          customers with both
                                          slamshuts closed
                                                                     Safety impact is elevated
                                          If overpressurisation
                                                                     compared to escape            Carbon emissions
                                          causes a significant
     Pressure Regulating Equipment                                   within the site, as this      proportionate to
                                          escape, security of
     (Overpressurisation of Outlet)                                  could affect pipework         the volume of the
                                          supply could be
                                                                     within proximity to the       escape
                                          affected
                                                                     general public
                                                                     Safety impact is elevated
                                                                     compared to escape
                                          If brittle fracture causes within the site, as this      Carbon emissions
     Preheating Equipment (Failure at
                                          a significant esacpe,      could affect pipework         proportionate to
     winter, brittle fracture due to cold
                                          security of supply could within proximity to the         the volume of the
     temperatures)
                                          be affected                general public (although      escape
                                                                     chilling will be most
                                                                     severe closer to the site).

In the NARM methodology Consequence of Failure is analysed for each failure mode and every
Consequence of Failure has an assigned Probability of Consequence (PoC). This is determined through
consequence analysis techniques such as:
      • Statistical analysis of associated failure data
      • HAZOP techniques (Risk assessment)
     • Historic incident data
     • GIS (Geographic Information System) analysis
     • Network modelling analysis
Each Consequence of Failure in the model have an associated financial cost (Cost of Consequence), based
upon the type and scale of impact, representing a monetary risk value. These Consequence of Failure are
split into the following categories:
     • Customer Risk – Loss of supply
     • Health and Safety Risk – Death, injuries, property damage, etc.

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     • Environmental risk
     • Other financial Risk – Repair, Maintenance, etc.

Consequences

Pressure Control and Filter
The following consequence measures were identified for Filter and Pressure Control assets:
     • DS Gas Escapes – an Increase in gas escapes in the downstream network due to low outlet
       temperatures
     • Loss of Gas – a loss of gas arising from the Filters & Pressure Control asset itself or the downstream
       network
     • Explosion – an explosion, either at the Filters & Pressure Control asset itself or in the downstream
       network
     • PRS Site Failure – a site failure resulting in loss of supply to downstream domestic, commercial or
       industrial consumers
Figure below outlines the event tree diagram for Pressure control and Filter

Preheating
The following consequence measures were identified for Pre-heating assets:
     • DS Gas Escapes – an Increase in gas escapes in the downstream network due to low outlet
       temperatures
     • Loss of Gas – a loss of gas arising from the Pre-heating asset itself or the downstream network
     • Explosion – an explosion, either at the Pre-Heating asset itself or in the downstream network
     • Ground Heave – Events resulting in damage to structures, roads and other assets due to low outlet
       temperatures
     • PRS Site Failure – a site failure resulting in loss of supply to downstream domestic, commercial or
       industrial consumers

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Figure below outlines the event tree diagram for Pressure control and Filter

     7 Options Considered
Within this Engineering Justification Paper for there are 4 options which have been considered and
discussed to address the pre heating and pressure control at Winkfield South East Offtake. The 4 core
options being considered are as follows:
•    Replace on Failure
•    Repair on Failure
•    Pre-Emptively Replace
•    Pre-Emptively Repair
When considering this intervention, we have done so following our 4R strategy. This strategy is designed to
maximise the asset life and minimise the capital expenditure of intervention and in doing so sets out an
order of preference for the intervention type. This order is key in delivering customer value and focuses on
the lighter intervention options of repairing and refurbishing the asset before considering more severe
interventions such as full replacements of the existing assets. See below for an illustration of our 4r

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strategy:

     Diagram of 4R Strategy. Repair and Refurbish options at the top are considered before resorting to
         Replace or Rebuild at the bottom

Following this strategy, the options of a reactive repair or proactive refurbishment are typically considered
ahead of proactively rebuilding the site or carrying out a replacement reactively.

     7.1 Component replacement
It is not possible to replace or refurbish the existing slam-shut valves, these are fully welded, in-line,
actuated and buried ball valves. It is also not possible to refurbish the Control Valves as, there is insufficient
room to install new Control Valves and stream selection check valves, between the existing stream isolation
valves.

     7.2 Refurbish components
Refurbishment of components could derive a short-term extension of the life of the asset. However,
refurbishment has already been attempted to both the pre-heating and volumetric Control Valve systems
with limited or no success.

     7.3 Replace on failure
With the time necessary to source and replace this critical equipment (Control Valves and slam-shut valves)
being at least 50 weeks, should the equipment fail, the system would not be available for an unacceptable
period and potentially two winters. This would render the downstream network at a high risk for failure of
gas supply.
The replacement of the water bath heating system would take approximately eighteen months to
complete, therefore this is not a viable option.

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     7.4 Repair on failure
With very long lead times for replacement Control Valves, this option has been discarded. Dismantling and
repairing the heating system, could typically take a minimum of twelve to twenty weeks, therefore this is
not a viable option, as the SE Offtake would not have any standby heating capacity, should a second water
bath heater fail.

     7.5 Do nothing
The system is not compliant with IGEM/TD/13 and if one of the existing water bath heaters fails, there will
be no stand-by facility within the heating system. The poor performance of the slam-shut valves could lead
to an over pressurisation of the downstream network. Therefore, this option has been discarded.

     7.6 Replacement of volumetric Control Valves and gas preheating system
Replace the gas preheating system and the flow/pressure control systems. This will include the installation
of heat exchangers, supporting boiler house and pressure reduction unit, to supply LP gas to the boilers.
The pressure control system will include the installation of new Control Valves, that will be volumetrically
controlled to accurately deliver the required daily flow rate, with protective pressure overrides. New slam-
shut valves to protect the downstream system from over-pressure, that will also have a stream
discrimination facility to protect the stand by stream from prematurely closing. This system will also have a
‘boundary control’ system to ensure the pressure at the remote point (Ripley in Surrey) will not exceed a
pressure of 38 BarG.
Other options, such as full rebuild of all systems on site, have not been considered as they represent
unnecessary expenditure to replace currently functioning or ‘fit for purpose’ assets.
The technical detail of the option i.e. capacity, system rating, availability etc.
The proposed new PRS streams at Winkfield, System 1, South East, will be designed to meet the predicted
load growth for the next ten years, i.e. 10 mcmd (416.67 kscmh) and meet a pre-heat requirement of 3,014
kwh. The PRS will be twin stream with 100% stand-by facility for the second stream, in accordance with
IGEM TD/13. Each stream will contain a fast-acting Slam-shut valve, ‘Monitor’ Control Valve, ‘Active’
Control Valve and a stream discrimination facility (non-return valve), to ensure that each stream operates
independently. The system will also be rated for an inlet pressure range from 75 BarG down to 40 BarG and
outlet pressure range between 42 BarG down to 21 BarG. The ‘Boundary Control’ system at Winkfield will
limit the pipeline operating pressure to 38 BarG at Ripley.

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                Winkfield site schematic              Security

                            Plan           Security

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The basis for the cost estimate/unit cost
Following an initial costed design by Rush Construction, in report “SGN GD2 Mechanical & Civil Budget
Analysis” SGN Trans - 002Wink1 - EJP Dec19_SupportingCosts.pdf the costings were reviewed by SGN
Major Projects using experience from GD1. These costs are indicated in the table below:

             WINKFIELD S.E.

                                    Investment summary Commercial Confidentiality
The perceived benefits of the option
Removal of immediate risk to customers, for both security of supply following a failure of the regulators,
with the associated long lead time on key pieces of equipment and risk of exposing the outlet to extremely

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cold gas with the potential creating gas leaks, frost heave or poor control of the regulators. Also reduces
the risk of a standby stream failure being able to shut of gas supplies through both streams of regulators.

Delivery timescales
2021 - Design
2023 - Procurement
2024/5 - Main Works Contractor, including decommissioning and removal of redundant system

Key assumptions made
Major projects identified additional costs from the desk top exercise, removal of the existing large water
bath heaters. With the cost of the main works contractors increasing significantly, based on experience of
current projects.

Any other items that differentiate the option from the others considered
A number of interventions have been considered. However, the benefits of all but one are considered
inadequate in mitigating the current issues.
Only the intervention to replace relevant components – pre-heating and volumetric / pressure control
system is deemed adequate in resolving the outstanding issues.

     7.7 Options Cost Details
Table – Options Technical Summary

         Option            First Year of   Final Year of     Volume of     Equipment /     Total Cost
                              Spend           Spend        Interventions    Investment
                                                                            Design Life

 1. System replacement
 (Full heating and              2021          2025              1            45 years           £8.23m
 Pressure control
 Systems)

     7.8 Options Cost Summary Table
Table – Cost Summary

             Option                          Cost Breakdown                   Total Cost (£m)

 1. System replacement (Full       Commercial Confidentiality                      £8.23
 heating and Pressure control
 Systems)

Projects costing have been achieved through the following process and includes contingency numbers,
efficiencies and overheads to give the total gross cost:

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• Initial scoping of works including design parameters,
• Desk-top feasibility study using design consultants with full awareness of GD1 projects,
• Contact with manufacturers.
• Additional assessment by Project Managers to take into account local site conditions, constraints and
  costing information based on recent projects. Including increasing significantly the cost for the main
  works contractors.
• Review by Asset Manager.

8 Business Case Outline and Discussion
Winkfield South East offtake is an important feed into the South East LDZ of Southern Network. The current
LDZ peak 1 in 20 demand is 43.205mscm/d, of which 4.207mscm/d is provided by Winkfield South East
offtake. As a result of the degree of resilience in offtake capacity, the loss of this offtake would not
immediately affect customers, although, as this site is the only feed into the west of the system, diurnal
storage capacity would be curtailed for the South East LDZ comprising around 2.3m customers.

    Offtake Name               Capacity (mscm/d)        Current Winter            Failure - No. of
                                                          (mscm/d)                Customers Lost
         Winkfield SE                 10.000                 4.207                       -

At other times, the loss of Winkfield South East will significantly reduce the gas supply resilience. The
current anticipated probabilities of failure for the pre-heating system are 0.394 failures per annum (low
outlet temperature) and 0.605 (general failures). The probabilities of failure of the volumetric / pressure
control system is 0.408 (high outlet pressure) and 0.433 (release of gas). All of these probabilities are high
for a critical asset.
Only one option is deemed adequate to reduce the probability of failure of the pre-heating and volumetric
/ pressure control systems and to mitigate the consequences of failure at Winkfield South East offtake.

        8.1 Key Business Case Drivers Description

Table – Summary of Key Value Drivers
    Option          Desc. of Option                               Key Value Driver
        No.
    Baseline   Repair on Failure           Potential, long term loss of supply to customers, safety and
                                           environmental impact due to cold fracturing
    1          Preheating and pressure     The main drivers for this project are safety and licence
               control systems             condition.
               replacement
                                           Failure to replace the pressure reduction system could lead
                                           to an over pressurisation incident on the South East LDZ Local
                                           Transmission System. With a potential for a failure /rupture
                                           of part of the downstream system.
                                           Failure to replace the heating system at Winkfield South East
                                           LDZ, there is potential for SGN to have to supply gas that is

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                                          not heated, this could lead to ground movement, frost heave
                                          and failure of the regulators to control.
                                          The boundary control system does not meet current safety
                                          standards and needs to be replaced with a Safety
                                          Instrumented System.

Table – Summary of CBA Results

                                NPVs based on Payback Periods (absolute, £m)

 Option      Desc. of Option       Preferred   Total Forecast
                                                                Total
  No.                               Option      Expenditure              2030    2035    2040     2050
                                                                NPV
                                     (Y/N)         (£m)

 Baseline   Repair on Failure         N            -0.36        -29.91   -3.64   -6.53   -10.13   -18.62

            Option 1 Absolute
 1                                    Y            -8.58        -10.80   -7.33   -8.27   -9.01    -9.93
                  NPV

               Option 1 NPV
 1                                    Y            -8.58        -10.80   -3.69   -1.74   1.12     8.70
            relative to Baseline

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     8.2 Business Case Summary

                                       Table 05 - Business Case Matrix

                                                                                System
                                                                              Replacement
                      Capex (£m)                                                       8.23
                      Number of Interventions                                          1.00
                      Carbon Savings ktCO2e (GD2)                                   6884.21
                      Carbon Savings ktCO2e /yr                                     1376.84
                      Carbon Emission Savings (30yr PV, £m)                            2.85
                      Other Environmental Savings (30yr PV, £m)                        0.00
                      Safety Benefits (30yr PV, £m)                                   17.46
                      Other Benefits (30yr PV, £m)                                     0.52
                      Direct Costs (30yr PV, £m)                                      -7.98
                      NPV (30yr PV, £m)                                               12.85
                      High Carbon Scenario
                      Carbon Emission Savings (30yr PV, £m)                            4.27
                      High Carbon NPV (30yr PV, £m)                                   14.27

                                    SE - Winkfield Offtake - System 2
              -
                  0         10             20                 30              40        50    60
         (5.00)

        (10.00)

        (15.00)

        (20.00)

        (25.00)

        (30.00)

        (35.00)

                                                   Baseline        Option 1

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9 Preferred Option Scope and Project Plan
     9.1 Preferred option
The preferred option is to rebuild both the heating system and pressure reduction systems. This would
ensure the risks associated with equipment on site is efficiently managed and the risk to gas supply system
is reduced.

     9.2 Asset Health Spend Profile
The anticipated asset spend profile is as follows:

 Asset Health Spend Profile (£m)
                                          2021/22      2022/23     2023/24    2024/25   2025/26    Post GD2
 System Replacement                            0.33         1.82      4.91       1.17      0.00           0

  GD/2 Yr 1 (22/23)                    GD/2 Yr 3 (24)                     GD/2 Yr 4
  •Detailed Design                     •Materials Procurement             (25)
                                                                          •Construction
                                                                          •Commissioning

         9.3 Investment Risk Discussion
Sensitivities have been applied to the Transmission Integrity CBAs as follows:
     •    Variations in Capex project cost have been applied for the range -10% to +20%. These are considered
          realistic ranges based on our experience in GD1 and the likely pressures on cost in relation to the
          procurement of materials and main contracts.
     •    Variations in methane levels (and therefore environmental impact) have been considered to take
          account of the anticipated introduction of hydrogen. SGN have committed to a ‘net zero’ carbon
          network by 2045. In practice that means no methane by that date. Also, while the use of hydrogen
          in distribution is being actively investigated and hydrogen is currently being introduced into a
          network for the first time since the conversion to natural gas, it is considered very unlikely that
          hydrogen will be injected on a wider scale until RIIO-GD3. For these reasons, methane levels have
          been considered in three ranges: aggressive early transition, mid-case and late transition.

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 Figure 1:      Methane / hydrogen transition – sensitivities

The current version of the CBA template, version 4, already acknowledges that methane is estimated to be
28 times more damaging than CO2. This figure is taken from the IPCC Fifth Assessment Report published in
2014. Since this figure is derived from the latest science, it is not considered prudent to test for sensitivity
in this area.
Sensitivity in the value / cost of carbon is already included within the CBA template with base-case and
high-case scenarios mapped out. These sensitivities are considered sufficient in our CBA.

                                                             Low                 Mid             High

      Capex (£m)                                                    7.41               8.23           9.88
      Number of Interventions                                          1                  1              1

      Carbon Savings ktCO2e (GD2)
                                                                   6,884             6,884          6,884
      Carbon Savings ktCO2e /yr                                    1377              1377           1377
      Carbon Emission Savings (30yr PV, £m)                          2.8                2.8            2.8
      Other Environmental Savings (30yr PV, £m)                        0                  0              0
      Safety Benefits (30yr PV, £m)                                 17.5               17.5           17.5
      Other Benefits (30yr PV, £m)                                   0.5                0.5            0.5
      Direct Costs (30yr PV, £m)                                    -7.2               -8.0           -9.6
      NPV (30yr PV, £m)                                             13.7               12.9           11.2

Project payback has not been carried out as part of this analysis due to the effect of the Spackman
approach. For a cash-flow traditional project payback period please see scenario 4 of our Capitalisation
Sensitivity table.

Consumers fund our Totex in two ways – opex is charged immediately though bills (fast money – no
capitalisation) and capex / repex is funded by bills over 45 years (slow money – 100% capitalisation). The
amount deferred over 45 years represents the capitalisation rate. Traditionally in ‘project’ CBA’s the
cashflows are shown as they are incurred (with the investment up front which essentially is a zero
capitalisation rate). Therefore, we have developed scenarios that reflect both ways of looking at the
investment – from a consumer and a ‘project’.

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The scenarios are summarised as follows:
    • Scenario 1 - we have used the blended average of 65%, used in previous iterations of this analysis.
    • Scenario 2 - we have represented the Capex and Opex blend for the two networks, as per guidance.
    • Scenario 3 - addresses our concerns on capitalisation rates whereby Repex and Capex spend is
       deferred (100% capitalisation rate) and Opex is paid for upfront (0% capitalisation rate).
    • Scenario 4 - this reflects the payback period in ‘project’ / cash-flow terms and provides a project
       payback.

We have taken a view of the NPV in each of the scenarios, with the exception of scenario 4, at the 20, 35
and 45 Year points, to demonstrate the effect of Capitalisation Rate on this value.

           Scenario                        1                2             3              4
           Capex (%)                             65               38           100              0
           Opex (%)                              65               38             0              0
           Repex (%)                            100              100           100              0
           Output
           NPV (20yr PV, £m)                    2.20          1.83          3.20
           NPV (35yr PV, £m)                   12.87         12.85         13.31
           NPV (45yr PV, £m)                   19.08         19.10         19.36
           Payback                             16.00            17.00         11.00          18.00

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Appendix A - Acronyms

        Acronym                                      Description
 BarG                Measurement of pressure above atmospheric pressure (gauge) in units of
                     Bar
 CBA                 Cost Benefit Analysis
 CGS                 City Gate Station – A pressure reduction system supplied from the
                     intermediate pressure system and feeding either low or medium pressure
                     systems
 DS                  Downstream
 GD1                 Gas Distribution – Price Control for 2013 to 2021
 GD2                 Gas Distribution – Price Control for 2021 to 2026
 HAZOP               Hazard and Operability Study
 HI4                 Health Index – Asset condition approaching or at end of serviceable life,
                     intervention required
 HP                  High Pressure (Natural Gas above 7 barg)
 IGEM                Institution of Gas Engineers and Managers
 IP                  Intermediate Pressure (Natural gas 2 BarG to 7 barg)
 KPI                 Key Performance Indicator
 LTS                 Local Transmission System
 Kscm                Thousand cubic meters per hour
 LP                  Low Pressure (Natural gas less than 75 m barg)
 MP                  Medium Pressure (Natural Gas 75 mbarg up to 2 barg)
 NARM                Network Asset Risk Measure
 Mcmd                Million cubic meters day rate
 PE                  Polyethylene
 PoC                 Probability of Consequence
 PRI                 Pressure Reducing Installation
 PRS                 Pressure Reduction Station
 PSSR                Pressure Systems Safety Regulations 2000
 RIIO                Revenue = Incentives + Innovation + Outputs
 Scm/h               Standard cubic metres per hour (Flow)
 TD/13               IGEM/TD/13, Pressure regulating installations for natural gas, liquefied
                     petroleum gas and liquefied petroleum gas/air
 µm                  Micron, Micrometre = one-millionth of a meter
 WBH                 Water Bath Heater

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Appendix B - References
     1. Author: Rush Construction. Report SGN GD2 Mechanical & Civil Budget Analysis. Report reference:
        SGN Trans - 002Wink1 - EJP Dec19_SupportingCosts.pdf

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