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It gives me great pleasure to welcome you to our Sustainability Executive

Summary. After four years of paper-based reporting, we will now report


on our performance electronically. In addition to the detailed information
you will nd on the online platform, this downloadable Executive
Summary provides a quick overview of who we are and how we have
performed especially against our strategic aspirations.

There were a number of compelling reasons to move to online reporting,


one of the most important ones being our desire to shift towards a more
dynamic way of communicating to and engaging with our stakeholders.

As always, we are keen to receive your feedback - both on the platform


itself and, of course, our sustainability program and performance. Giving
feedback is now easier than ever you can use the feedback function
directly on the platform homepage.

Moving on from how we report to how we are performing, you will nd


my reections on the opposite page.

Yours sincerely,

Abdul Aziz A. Al Ameri


Chief Executive Ofcer

1
BUILDING ON THE PAST - LOOKING TO THE FUTURE

GASCO has experienced a


remarkable evolution over the past
years. From our modest beginnings
in the 1980s, we have grown into
one of the largest gas processing
companies in the world, now
operating ve mega plants with a
designed processing capacity to
reach 8 Billion Standard Cubic Feet In order to respond to the
of gas per day during 2014 that is ever-increasing demand for energy
nearly the equivalent of half of the and the growing interest in Natural
entire UAEs oil production. Gas as an economically attractive
and environmentally benign fuel,
we have invested over US$ 10
Billion in projects, expanded our
processing capacity by a quarter
and doubled our workforce.

To stay on track with our objectives,


rst and foremost, we need to
sustain our current operations by
an unfailing attention on asset
integrity and constant focus on
ensuring service reliability, To ensure that we are all moving
production effectiveness and towards the same direction, we
optimized costs. On top of this, we revisited our vision, mission and
need to successfully integrate our business imperatives and continued
new capacity with our existing to embed our revitalised values.
operations. In turn, new capacity The Leadership Team is deeply
means that we need more highly committed to championing the new
skilled people hence our GASCO Way, making sure that our
determined focus on attracting and vision matches our new realities
retaining top talent and aligning all and that everyone knows what is
our human capability towards our expected of them.
common goals. Finally, and very
importantly, all this needs to be
done in line with our commitment
to act sustainably as a trustee for
current and future generations.

I am proud of our achievements,


especially with the backdrop of the None of our achievements
tremendous growth and would have been possible
unprecedented level of activity, we without the deep dedication
managed to improve our and commitment of our GASCO
performance against all our Family: our employees,
strategic health, safety and shareholders, business partners
environmental targets. However, it and many others. To them, I
saddens me that we did not meet wish to extend my deepest
our zero fatalities target due to two gratitude and look forward to
very regrettable accidents. continuing this journey with you.

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GASCO was first born out of the late Sheikh Network Gas, Ethane, Propane, Butane, Paraffinic
Zayed Bin Sultan Al Nahyans vision for the Naphtha, Condensate and granulated Sulphur.
utilization of the UAEs vast gas resources. We
were incorporated in 1978 as a joint venture GASCO plays a strategic role in the hydrocarbon
between ADNOC, Shell, Total and Partex. Our chain in the UAE, and is a vital enabler of
first plant became fully operational in 1981. industrial and economic progress. Other
GASCO is an ADNOC Operating Company industries in this highly integrated chain include
engaged in the extraction of Natural Gas Liquids on and offshore oil production, petrochemicals,
(NGL) from associated and non-associated gas. refining, fertilizers, water and electricity agencies
Our industrial complex is composed of four gas and infrastructure industries such as steel, cement
processing plants, one fractionation plant and and aluminium smelting. As we deliver on our
a pipeline network which together process and responsibility as the key supplier of gas and
deliver a range of products to both local and related products, we literally keep the wheels of
international markets. Our key products include the economy going.

AT THE HEART OF THE UAE HYDROCARBON VALUE CHAIN

ADCO Takreer

Associated Gas Non-Associated Gas Condensate


Gas dissolved in crude oil, Produced from a reservoir Ethane
which is released when the which produces no oil.
oil is brought to the surface The gas is trapped within Propane
through extraction from an porous rock, surrounded
oil reservoir. by impermeable rock. Butane

Takreer Borouge

Propane Ethane
Butane

ADGAS/ADMA Export

Associated Gas Propane


Gas dissolved in crude oil, Butane
which is released when the
oil is brought to the surface Parafnic Naphta
through extraction from an
oil reservoir.
Network Gas Granulated Sulphur

ADNOC ADCO TAKREER EMIRATES STEEL INDUSTRIES


EMAL BOROUGE
DUSUP FERTIL NATURURAL GAS VEHICLES (NGV) ADWEC

3
4
Demand for energy in the UAE is significant. On
average, energy demand in the UAE has grown 9%
per annum over the last ten years and this trend is
predicted to continue for the foreseeable future. At To meet the growing demand for energy, our
the same time, the UAE is steadfastly committed to strategic focus is essentially three pronged: firstly,
sustainable exploitation of Abu Dhabis oil and gas efficiently managing our current processing
reserves, following its long standing sustainable capacity; secondly, successfully integrating our newly
extraction policy, which is perhaps one of the expanded capacity with our existing one; and, thirdly,
most sustainable reserve management policies aligning all our processes and human capability so
internationally. that the first two objectives can be achieved.

SIA
L AY
A E MA INA N 625
US ANC CH IWA DUSUP
FR TA
N
PA
N JA REA
ME Y KO
YE RKE PROPANE 250
TU ADWEC
BUTANE Taweelah
PARAFFINIC
NAPHTHA

ARABIAN ICAD 875

GULF 25

50
GASCO
Pipeline / Maqta
AL AIN
ADWEC INDUSTRIAL
Shuweihat 120 250
TAKREER FERTIL BOROUGE GASCO 600
RUWAIS 500
ESI EMAL
PLANT 1100 1320

TOTAL IN HABSHAN TOTAL OUT


40,000 4220 AND BAB 4220
COMPLEX

UNITED
4000

300
HABSHAN AND BAB
PLANT

ARAB
BU HASA PLANT 1800

200
ADCO
ADCO

120
EMIRATES
Line thickness indicates gas volume in MMSCFD
5 Dotted line represents NGL line & tonnes/day ASAB PLANT
Natural Gas The White Gold
Once simply flared off as an unusable by-
product of oil production, natural gas now fuels
the growth of the UAE. Only in the last few
decades has the value of natural gas been fully
appreciated, and for much of that time, GASCO ensure continued oil production. For this, gas is
has been successfully exploiting Abu Dhabis compressed and re-injected into the reservoirs.
reserves, making a significant contribution to the Our gas feed is classified into associated and non-
UAE economy. GASCO plays a leading role in gas associated, or natural, gas. Both forms of feed
processing, its production counting for about 60% gases are delivered to GASCO by ADCO and
of natural gas products produced in the UAE and ADMA / ADGAS. The production of associated
approximately 10% within the Middle East. gas involves first the separation of the gas from
Beyond gas processing itself, our operations are the crude oil, then the extraction of Natural Gas
a vital enabler of oil production. The pressure Liquids (NGL), which are then transported to
levels inside oil and condensate reservoirs our Ruwais Fractionation Plant as feedstock. The
need to be maintained within specified limits to residual dry, or lean, gas is then compressed
and fed into the Pipeline Network for use by our
industrial customers.
NATURAL GAS - A CLEANER
ALTERNATIVE

OUR PRODUCTS

NETWORK GAS ETHANE (C2) PROPANE (C3)


(OR METHANE)

CH4 C2H6 C3H8


Used as fuel for power Used as feedstock by Exported to be used as
generation by water and BOROUGE, one of fuel for energy generation.
electricity producers such as the largest plastics
Abu Dhabi Water & Electricity manufacturers in the world.
Authority and Dubai Supply
Authority. BUTANE (C4) PARAFFINIC NAPHTHA (C5+)

C4H10 C5H12
Used as fuel by industries
such as aluminium, cement
and steel. Smaller consumers
such as glass plants in the
Industrial City of Abu Dhabi Exported to be used as
and Abu Dhabi hotels. Exported to world markets
fuel for energy generation as feedstock for other
and cooking. chemicals.
Used for injection into the
reservoirs to enable oil and CONDENSATE (C6+)
condensate production.

Used as feedstock by FERTIL,


a fertilizer manufacturer.

Supplied as gas for Natural


C6H14
Gas Vehicles in Abu Dhabi. Used by TAKREER as a
feedstock for rening into
Naphtha, Kerosene and
Diesel components, and
exported to world
markets.

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NATURAL GAS - A CLEANER ALTERNATIVE

Gas is now widely recognized as a safer, cleaner, more environmentally sensible fuel compared to
other hydrocarbon alternatives. In a carbon constrained world, interest in its use is growing rapidly
by all categories of users whether residential, commercial or industrial.
Composed primarily of methane, natural gas produces carbon dioxide and water vapor when
combusted - the same compounds we exhale when we breathe. In fact, the combustion of natural
gas produces 25% less Carbon Dioxide (CO2) than the combustion of petrol and 35% less CO2
than the combustion of diesel.
When compared with petrol, the use of natural gas reduces the emissions of Carbon Monoxide
by 90%, Hydrocarbon emissions by 80% and Nitrogen Oxides by 30%. Natural gas contains
extremely low levels of Sulphur, particulate matter and heavy metals which are all associated with
the combustion of diesel.
Compared to the emissions from coal-fired power stations, natural gas power stations produce half
as much Carbon Dioxide, less than a third Nitrogen Oxides, and only 1% as much Sulphur Oxides.

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Our Leadership Team initiated a review of
GASCOs vision and mission in 2013 as it had
been ten years since this had been done last.
Back then we had around 2,000 employees and
our processing capacity was a fraction of what
it is now. At that time we were at the beginning
of our journey and far from our current status
as a world class operator in a complex web of
interconnected hydrocarbon players.

The four key components of this new


statement are:

Our Identity - who we are and what we do


Our Aspiration - where we want to go
Our Strategy - business imperatives that define
how we intend to realize our aspiration.
Our Cultural Attributes The GASCO Way

THE
GASCO WAY

CULTUR
ATTRIBU
CULT
ATTRIB
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We have placed sustainability at the top of positive and inspiring work culture and supporting
our leadership agenda. To us sustainability our communities. To us sustainability is part and
intermingles with all our strategic objectives and parcel of how we engage with our stakeholders
brings both challenges and opportunities to the and, importantly, how we measure and improve
table. Challenges such as climate change and our performance and hold ourselves accountable.
access to energy are now a reality and will grow in Our Corporate Identity captures the centrality
importance in the short term. Opportunities come of sustainability for us. This directs our everyday
from the increasing interest in gas as a cleaner work and frames our targets and action plans for
and economically sensible source of energy. For the future. In turn, our strategic scorecard or our
us sustainable business practices go hand in hand Performance Management Contract defines our
with efficient business practices. specific targets that we strive for on a day-to-day
For us, sustainability goes beyond cost basis. Our performance against our 2013 targets
considerations. It is as much about how we and our new targets for 2014 are highlighted on
minimize our environmental footprint and provide the following pages.
cleaner energy solutions as it is about ensuring a

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Our focus is on expanding our production
capacity, developing our people and embedding
sustainability and excellence throughout our
business practices. To ensure that all this happens
within the boundary of our Corporate Identity, Our overall performance in each quadrant for the
we set ourselves annual strategic targets, agreed last five years is shown below. We are pleased
jointly with our shareholders. The fact that our to report that our overall performance in 2013
shareholders are leading international players continued to be solid and that we achieved an
in our sector means that their performance overall score of 108 points. Year-end performance
expectations of us are benchmarked against was unfortunately overshadowed by two
international best practice in our industry. occupational fatality incidents. However, as a
Our strategic targets are set under four quadrants trend, GASCO has performed well above the
Health & Safety and Environment, Operations, baseline target of 100 points for the last four years.
Projects, and People, each quadrant defining our Our favourable performance for 2013 was
Key Performance Indicators (KPIs) and related attributed to several outperforming metrics;
contract and stretch targets. Performance namely Gas Flaring, Emissions, Energy, Reliability
against targets is monitored on a monthly basis and Availability, Impact on ADCO, Asset Integrity
and reported to shareholders and our Extended and Critical Resignations. Our overall performance
Leadership Team on a monthly and annual basis. was offset by the Total Reportable Incident Rate
Importantly, our key sustainability focused targets score due to the two unfortunate fatalities, higher
are fully integrated within our scorecard and are High Potential incident rate, progress slippage on
therefore managed as part of our day-to-day some project milestones, and failure to meet our
work. All targets are cascaded throughout the 70% target of filling critical vacancies.
company via action planning and target setting
for divisions and departments.

OVERALL SCORECARD PERFORMANCE

2009 2010 2011 2012 2013

Overall score 94 111 120 117 108

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The following provides a summary of our performance. In this summary, we focus on those targets and KPIs
that we feel are most closely related to our sustainability performance. You can find information on all our
targets in the online version.

HEALTH & SAFETY


AND ENVIRONMENT

Gas processing is a highly complex and


potentially hazardous business with high
impact potential if things are not done to
the highest professional standards. With the Gas flaring performance continued to meet its
exceptions of fatalities and the HIPO KPI, all stretch target, especially benefiting from the
other HSE KPIs achieved their stretch targets. commissioning of Habshan Flare Gas Recovery
We met the HIPO follow up action plan stretch facilities, which led to notable flaring reductions.
target. The injury rate, or TRIR, performance Our total flared volume is now equivalent to
was excellent throughout the past four years. 0.26% of our total processing capacity. Similarly
However, the score was cut off by 75% due to air emissions and our own energy consumption
the aforementioned fatalities. Overall this KPI (Energy KPI) indexes have progressively improved,
continues to perform well within best in class meeting their stretch targets.
compared to peers in our industry, being over
ten times lower than the average rate based on
a recent industry study.

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HEALTH AND SAFETY

LOOKING BACK LOOKING FORWARD

2012 2013 2014


Targets Commentary
Actual Actual Target
Zero fatalities will always remain our target.
Unfortunately, we did not achieve it last year
Zero Fatalities 1 2 0 due to two very unfortunate work-related
accidents.

Regardless of our continued excellent


Total Reportable performance, our target remains somewhat
conservative mostly due to the fact that we
Injury Rate (TRIR) (per 0.10 0.15 0.25 work with vast numbers of contractors on our
million man hours) sites and we do not have direct managerial
control over their performance.

HSE High Potential This is a relatively new target and we missed


the maximum threshold target of 12 during
Incidents (HIPO) 8 13 10 2013. Our new target underlines our goal to
(number) move towards proactive and process safety
based monitoring.

Implementation of This target supports the above, applying to


action items approved following above HIPO
Approved HIPO 89 92 80 incidents. We closed out 92% of the identified
actions.
Action Plans (%)

Process safety targets have been set for 2014.


However, monitoring processes were initiated
during 2013. PSER basically monitors what was
previously measured as loss of containment or
Process Safety Event n/a 0.99 1.20 leaks. The PSER ratio is calculated as the
Rate (PSER) number of events at different levels of severity
per man hours worked. Our results for 2013
indicate that there were an average of one Tier
1 or 2 process safety incident per every million
man hours worked. This falls well within widely
accepted performance.

This is a lead KPI supporting the above PSER,


RAP Implementation n/a 92 80 monitoring follow up actions taken after PSER
(%) incidents.

Missed contract target Met stretch target ENVIRONMENT


Met contract target New KPI, no target for 2013

LOOKING BACK LOOKING FORWARD

2012 2013 2014


Targets Commentary
Actual Actual Target
The full commissioning of Habshan Flare Gas
Gas Flaring Recovery has yielded a notable reduction in our
flaring volumes. However, future targets have
(MMSCFD) 18.8 17.7 23.1 been set with some caution bearing in mind
that additional flaring sources will be included
going forward.
Our good performance continues here.
Air Emissions: C02 However, some caution has been exercised
(Tons / KT production) 146 152 167 here as well due to stabilisation of new plants
leading to some additional fuel consumption
especially in Ruwais.
Targets were revised to reflect our current
Air Emissions: good performance mainly at Habshan, which
Non-C02 (Tons / KT 2.31 2.19 2.46 counts for 83% of the total non-C02 emissions,
predominantly SOx resulting from acid gas
production) conversion.
This target measures our own energy efficiency in
production processes. We achieved a remarkable
3.79% performance in 2013 - the best ever since
the target was introduced in 2009.
Energy KPI (%) 3.96 3.79 4.07 We have taken a conservative approach to
future target setting mostly due to our new
facilities not yet having been included in the
target calculations. However, we expect that
our solid performance here will continue.

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On a day-to-day basis, delivery of gas to our
customers is determined by their demand, the
pattern of which can vary from day-to-day and
month-to-month. As there is no intermediate
storage facility available for gas, the production,
distribution, and consumption of gas must be
synchronized with both down and upstream priorities is to produce the best quality products
operations. This is managed by close coordination to meet customer requirements in terms of
with all players in the chain, importantly including volume and pattern of demand at optimum
our end users. Hence, one of our strategic price. In financial terms, the success of our
business boils down to operational efficiency and
management of costs.
Beyond operational efficiency, managing and
extending the effective operating life of our plants
and equipment is of utmost importance. This
involves, for instance, carefully planning maintenance
shutdowns and asset replacement needs.

13
Reliability and Availability are perhaps two of our
most business critical indicators they reflect
how well we fulfil our responsibility to deliver our
products and maintain our assets. Plant Reliability
is a measure of unscheduled outages. Plant
Availability, in turn, measures the time the plant to the very best in the industry. This is a clear
was available. Due to the highly integrated nature manifestation of seamless operations, forward
of the hydrocarbon chain, our efficiency and planning, optimization of shutdowns and
effectiveness are crucial in order to prevent any continuous coordination between GASCO and
critical knock-on impacts on either upstream or ADCO and other downstream operating units.
downstream operating units in the chain. Our performance relating to Asset Integrity
Another crucial operational performance continues to be strong with 96% of total planned
dimension is Asset Integrity. This can be best preventive and corrective maintenance programs
described as a management framework that aims duly implemented. Likewise, nearly 100% of total
to ensure all assets fulfil their function reliably, major overhaul activities were completed. This year
effectively, efficiently and safely. there was a minor slip in completing our inspections
Our performance against Availability and schedule for HSE critical equipment and systems
Reliability targets is consistently comparable due to testing overruns at Asab and Habshan.

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OPERATIONS

LOOKING BACK LOOKING FORWARD

2012 2013 2014


Targets Commentary
Actual Actual Target

RELIABILITY
(time-based %)

- Associated Gas Our Availability and Reliability performance


99.6 99.8 99.3 continues to be solid and targets remain as or
Facilities even more demanding than before.

- Non-associated Gas 99.2 99.2 99.3


Facilities

- Fractionation 99.2 99.7 99.5

AVAILABILITY
(time-based %)

- Associated Gas
95.6 97.5 95.5
Facilities

- Non-Associated Gas
97.0 97.6 95.7
Facilities

- Fractionation 98.2 95.7 95.6

ASSET INTEGRITY
Conceptually, MCF monitors the execution
progress of the Preventive and Corrective
- Maintenance 4.80 4.80 4.60 Maintenance programs and therefore
addresses both asset integrity and reliability
Compliance Factor objectives. Although the target was revised
upward for 2013 for 4.50 to 4.60, we closed in
(MCF) on the new stretch target of 4.85.

This measures the planned vs actual implemen-


tation of:
- Obsolescence studies
- Remnant Life and 4.93 4.90 4.50 - Risk Based Inspection Studies
- Major overhauling
Remedial Strategy - Long Term Asset Replacement Plans
Our performance continues to be strong,
outperforming the base target by a good margin.

This monitors the testing and inspection of HSE


critical equipment and systems such as relief
- Safety Critical 4.96 4.86 4.90 valves and safeguarding instrumentation.
Historically, our track record with this KPI has
Equipment and been consistently strong, however, this year
Systems there was a minor performance slip due to an
overdue testing exercise at Asab.

- Asset Integrity and 3 4 3 All planned actions completed.


Reliability Management
Actions (AIRMS)

Missed contract target Met stretch target


Met contract target New KPI, no target for 2013

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Our employee numbers have been growing
significantly over the past years - between The People Development KPI measures our
2005 and 2015 our numbers will have grown by success with our development program aimed
tenfold. To serve the needs of our newly built mostly at UAE National graduates via our
and upcoming processing capacity, we will need Competency Assurance Management System. We
to continue to focus on further recruitment and met our target only partially here and will refocus
everything that follows, such as orientation, our efforts in this area as discussed further in the
development, integration, etc. Employee section.
Our recruitment challenge continues to be a Filling our critical vacancies remains a concern.
daunting one considering the fierce competition over Out of 382 critical vacancies to be filled only 218
talent in our sector and in the region. This coupled were successfully filled via recruitment, Developee
with our ambitious targets to employ and develop integration and promotions. Our below par
UAE Nationals, means that our efforts to retain, performance was mainly caused by slow pace
attract and develop our talent continue to be crucial recruitment and higher attrition in the senior
to realizing our business objectives. With concerted technical employee category.
efforts, we exceeded our year-end Emiratization We are proud of our retention and attraction efforts
target closing on 33%. This represents a growing to date, but we cannot rest on our laurels. Hence, we
pool of over 2,000 UAE Nationals. However, fulfilling will reinforce our efforts in employee and leadership
the ADNOC wide target of 75% by the end of 2017, development, communication and engagement. We
equals to nearly 5,000 Nationals, which remains a are determined to be an employer of first choice
highly challenging target. anything else is not an option.

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PEOPLE

LOOKING BACK LOOKING FORWARD

2012 2013 2014


Targets Commentary
Actual Actual Target
Until the end of 2012, the Emiratization
percentage was calculated as a proportion of
those positions that had been defined as
Emiratizable based on ADNOC guidance. From
2013, the percentage will be calculated based
on all established positions. Hence, although
the target appears lower, the target in reality
presents a significant challenge going forward.
Emiratization (%) 50.3 33.0 39 The number of actual recruits required to meet
the target is almost doubling.
As per ADNOC guidelines, our stretch target
for 2017 is a highly challenging 75%. To reach
this target, we have allocated an annual target
increase; this allocation translates to a 40.5%
stretch target for 2014.

This measures our success with our develop-


ment program aimed at UAE Nationals via our
People Development Competency Assurance Management System.
The score is based on quarterly performance
(based on quarterly 5.95 6.19 11 against four development metrics.
reporting) Similarly to above targets, expectations
regarding performance here were raised by
ADNOC, and we will need to double our
efforts to meet them.

The Organization Capability KPI was restruc-


tured for future targets. It now comprises of
ORGANIZATIONAL three slightly redefined components, namely:

CAPABILITY 1. Filling Critical Vacancies


(instead of general recruitment target),
2. Resignations in Critical Positions, and
- Filling Critical 40 70 3. Long-term Manpower Capability

Vacancies The third new target focuses on succession


planning, again driven by new ADNOC
guidelines, but also supporting one of our new
- Resignations in Critical 2.3 3.5 business imperatives that calls us to secure the
quality of our future leadership. The KPI is
Positions defined as every Critical Position needing two
potential successors who are capable of taking
on the position within three years. At this
- Succession Planning 80 stage, given our current organizational
structure and business requirements, we have
(%) based our target on one identified successor.

Missed contract target Met stretch target


Met contract target New KPI, no target for 2013

On-line you can find further information on how our scorecard targets are set and how we monitor and
report on our performance internally.

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Abu Dhabi Gas Industries Ltd.
P.O. Box 665
Abu Dhabi,
United Arab Emirates.

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