Proposal for cleaning pipeline 3” and 4”

Cleaning 3” x75m and 4”x100m Hose Transfer Carbon black

Petracarbon (Thailand) Co. Ltd.., Thailand.

Proposal Number: H-N-P-DPS- 2003119 Rev.01

Date: April 10th, 2020
From: Dacon Inspection Technologies Co., Ltd.

To: Petracarbon (Thailand) Co. Ltd.

39/3 Moo 4, Sai 36 Road T.Tabma A.
Muang Rayong 21000 Thailand
Tel: +66 38 680 597/8
Fax: +66 38 680 599

Attn : Khun Anan

Tel : 061-3843380

Date: 10th April 2020

Ref: H-N-P-DPS-2003119 Rev.01

Subject:
Proposal for Cleaning 3” x75m and 4”x100m Hose Transfer Carbon black

Work location: Rayong, Thailand

Dear Sir,

Dacon has received your request for Pipeline Cleaning Services. Please find enclosed our budgetary
proposal to perform pipeline cleaning services.

Please note the following assumptions used in the preparation of this proposal.

• The minimum bend radius is 1.5D

• It is assumed all valves throughout both pipelines are full bore, and there are no intrusions or
restrictions in the pipelines that may hinder the safe passage of tools.
• It is assumed that all the lines are deemed fully piggable, without any major obstruction.
• It is assumed that the customer will ensure that pumping equipment and instrumentation and
safety provisions have been tested and are fit for purpose prior to commencement of the
pigging activities.

We hope that our offer is met with your approval and look forward to the opportunity to be of service.

For any further clarifications or requirements, please do not hesitate to contact me.

Sincerely,

Nampueng Chaithat
Nampueng Chaithat
Sale Engineer

Approved by

Aparanee Arampong
Domestic Sales Department Manager

Reference: H-N-P-DPS-2003119 Rev.01 2

CONTENT
1. SCOPE OF WORK .................................................................................................................... 4
1.1 PIPELINE INSPECTION..................................................................................................... 4
1.2 CLIENT RESPONSIBILITY ................................................................................................ 4
1.3 DELIVERABLES ................................................................................................................. 4
1.4 MATERIALS AND EQUIPMENT ........................................................................................ 5
1.5 MANPOWER REQUIREMENTS ........................................................................................ 6
1.6 TIMEFRAME ....................................................................................................................... 6

2. METHOD STATEMENT ............................................................................................................ 7

2.1 METHOD FOR COMPLETING CLEANING, GAUGING AND INTELLIGENT PIGGING .. 7
2.2 OPERATING PROCEDURES ............................................................................................ 7
2.3 HEALTH, SAFETY, ENVIRONMENT AND QUALITY ........................................................ 7

3. COMMERCIAL PROPOSAL ..................................................................................................... 7

3.1 PIPELINE SPECIFICATIONS ............................................................................................ 8
3.2 COST .................................................................................................................................. 8
3.3 PRICING EXCEPTIONS..................................................................................................... 8
3.4 COMMERCIAL CONDITIONS ........................................................................................... 9
3.5 TIMEFRAME AND ADHERENCE TO SCHEDULE .......................................................... 9
3.6 CHANGES TO WORKSCOPE .......................................................................................... 9
3.7 PAYMENT MILESTONES AND VALIDITY ....................................................................... 9
3.8 TOOL REPAIR AND REPLACEMENT .............................................................................. 9
3.9 PROJECT DELAYS AND CANCELLATIONS ................................................................. 10

4. GENERAL TERMS AND CONDITIONS ................................................................................. 10

Reference: H-N-P-DPS-2003119 Rev.01 3

1. SCOPE OF WORK

1.1 PIPELINE INSPECTION

The proposed work scope to be completed by Dacon Inspection Technologies is as follows:
1. Prepare pigging tools for the specific requirements of the project.
2. Provide launcher and receiver or any equivalent equipment which require for pigging operation.
3. Mobilization and demobilization of personnel and equipment to the client specified mobilization
point.
4. Provide foam pigs and Perform pigging operation to 3”x75m and 4”x100m as agreed lines.

1.2 CLIENT RESPONSIBILITY

Client will be responsible for providing the following (but not limited to):
1. Support mechanical works and all the onsite facilities, in order to allow readiness of the line for
pigging activities.
2. Ensure all the valves are full bore and all are working properly as its functions.
3. Remove E&I equipment which can be obstruct the pig during pigging operation.
4. Provide spare parts (Gaskets, stud bolts, O-ring for launcher door etc).
5. Provide propellant media which sufficient flowrate and pressure during pigging operation.
6. Waste management and waste disposal.
7. Provide scaffolding.

1.3 DELIVERABLES
Dacon Inspection Services will be responsible to deliver the following reports:
1. Dacon will submit a daily site report which contains at least the following:
• Summary of work accomplished over the past 24 hours
• Works scheduled for the next 24 hours
• External factors which affect progress of the work
• Results of pipeline preparatory works such as cleaning of the pipeline

Reference: H-N-P-DPS-2003119 Rev.01 4

1.4 MATERIALS AND EQUIPMENT
The following gives an overview of the supply of materials and equipment.

Description Dacon The Company

Preparatory Site visit ✓ ✓
Preparation pigging procedures handbook ✓
Mob to and from sites ✓
Work visas, security passes and work permit ✓
Pipeline Isolation, Blind installation ✓
Pipeline Modification ✓
Foam Pigs ✓
Spares, Consumables ✓
Provide Pumping system, if any requires ✓
Air compressor (if any require) ✓
Power Generator (if any require) ✓
Storage tanks to collect the residue oil during receiving the pig ✓
Lighting system, incase work at night ✓
Equipment for pig handling, launching and receiving ✓
Site logistics and radio communications ✓ ✓
Cleaning and decontamination of pigs ✓ ✓
Wastes Management, transport and disposal ✓
Pig launching and receiving ✓
Pig propulsion/medium ✓
Operating of pipeline valves ✓
Excavations if necessary ✓
Repair any damage/leak along the pipe ✓
Mechanical works and preparation of working area ✓
Scaffolding work ✓
Work permit ✓ ✓
Pipeline data, route maps, isometric drawings, P&ID ✓

Reference: H-N-P-DPS-2003119 Rev.01 5

1.5 MANPOWER REQUIREMENTS

The following manpower will be required:

Manpower Number Comment

English speaking pipeline field engineer with more than 3

Field Engineer 1
years onshore or offshore experience in pipeline pigging.

Technical 2

All personnel are provided with Personnel Safety Book, Valid Medical Certification and BOISET training.
Dacon’s personnel will remain on site for a maximum of 21 consecutive days after which they will be
replaced by another crew against the crew mobilization costs.

1.6 TIMEFRAME
The following timelines are expected (work starts upon receipt of written order):

Description Timeline Comment

Mobilization, site induction, preparation and Mobilize Personnel and Equipment Preparation,
3 Day
site rigging, cleaning and demonstration etc.

Total Days Required 3 Day The project is based on adherence to above time
schedule. Deviations may impact the final cost

Initial tool preparation and testing 2 Weeks

Reference: H-N-P-DPS-2003119 Rev.01 6

2. METHOD STATEMENT

2.1 METHOD FOR COMPLETING CLEANING, GAUGING AND INTELLIGENT PIGGING

Pipeline Cleaning
Pipeline cleaning is completed using progressive pigging methodology to ensure there are no blockages
in the line prior to starting the full cleaning program. Progressive pigging starts with soft foam pigs being
launched into the line. These are pigs that will tear if they encounter damage in the pipeline or valves
that are not fully open and therefore do not pose a threat of blockage in the pipe. If a soft foam pig
comes out in the receiver end damaged, additional soft foam pig runs are needed until the condition of
the pipe becomes clearer. Once the soft foam pig comes through without damage and without pushing
too much loose debris in front of it, then progressively harder foam pigs (medium and high density) pigs
can be launched to complete the cleaning process. The line will be considered clean and ready for
inspection based on the judgement of the Project Manager and will generally be considered clean when
minimal debris is present and no wax lumps greater than 50mm are found.

Note
The final inspection method may differ from the method described above. Job specific method
statements will be issued for each job allowing for the specific circumstances.

2.2 OPERATING PROCEDURES

Dacon will insert, launch and retrieve the inspection tools from the pipeline. Dacon will retrieve data from
the UT pig upon completion of the UT pig run in order to provide an initial report and data acceptance
prior to demobilization of the inspection tool. Deficiencies in the inspection data or inspection report due
to technical failure or error shall be remedied by Dacon by either a re-analysis of the data or by conducting
a re-run.
• Unless specified otherwise, the temperature of the pipeline medium shall be between 0 C and 65 C.
• Unless specified otherwise, the pressure in the pipeline during pigging shall be maintained between
0 and 50 bars.
• A constant velocity shall be maintained.

2.3 HEALTH, SAFETY, ENVIRONMENT AND QUALITY

A Job safety analysis will be prepared in conjunction with the customer, for comments and approval.
Potential harms and hazards are identified and rated and a risk analysis matrix with risk reducing
measures, safety precautions are worked out.

The contractor will ensure that all personnel attend the site safety induction prior to commencing any
operations. Toolbox meetings shall be held with all the relevant personnel. Barriers and warning signs will
be erected where necessary and no unauthorized personnel are allowed within that area. All personnel
will wear protective clothing at all times, in accordance with the substances handled. Dacon is an ISO
9001: 2015 and OHSAS 18001: 2007 certified company.

3. COMMERCIAL PROPOSAL

Reference: H-N-P-DPS-2003119 Rev.01 7

 To complete the above work scope Dacon proposes the following rates:

3.1 PIPELINE SPECIFICATIONS

Name Diameter Length Schedule Service Medium

3” 3” 75m Air

4” 4” 100m Air

3.2 COST
Unit Price
Item Q’Ty Cost (THB)
(THB)

Mobilisation of Equipment and Personnel 10,000.00 1 20,000.00

Cleaning of 3”x75m
90,000.00 1 80,000.00
(Limited of 10 pigs run per line)
4”x100m line
100,000.00 1 100,000.00
(Limited of 10 pigs run per line)

Total Cost 200,000.00

Note:
1.The cleanliness shall be met, if no particle or debris received with pig greater than 1 kg.
2.The limited of cleaning run for each line, shall be limit at 10 runs, if there is any additional
cleaning run should be applied as extra cost.

3.3 PRICING EXCEPTIONS

Item Cost (THB) Comment

Should the operation face delays for any
Standby Rates reason and should the time schedule as per
Personnel and equipment per 20,000 section 1.6 not be met, the following rates
day. shall be applicable for extra working or
standby days.

Additional Pig run

10,000
(Cost per run)

Should re-mobilization be required for any

100% of
Cost of Remobilization reason not attributable to the contractor, the
Mobilization
of equipment and personnel following rates will be applicable.
cost

Reference: H-N-P-DPS-2003119 Rev.01 8

3.4 COMMERCIAL CONDITIONS
1. The above price includes provision of personnel, provision of inspection tools and related
equipment, inspection, and final reporting.
2. Any costs encountered during the operation not known to date, will be reimbursed by the customer
with a 15% surcharge for order handling and administration.
3. 5% processing fee will be charged if invoicing is processed through Dacon Norway office.
4. Dacon keep record of the completion of the work in the daily site reports and the on-site report
which the customer is requested to approve and sign. Should the customer not sign the daily
reports then Dacon cannot accept any responsibility of non-fulfillment of contract once the crew
and equipment have left the site.
5. All cost / figures mentioned in this quotation are “Net” figures payable by the Customer. Any
Governmental taxes, withholding taxes, levies, custom clearance, duties, bonds, payment etc. in
and out each country are for the responsibility of the Customer and payable by them.

3.5 TIMEFRAME AND ADHERENCE TO SCHEDULE

1. The time estimated to complete this project has been provided in the quotation above. If the
project runs over the time schedule due to reasons beyond Dacon’s control then Dacon reserves
the right to charge the client additional day rate fees for every day of delay at the rate of $2,000
per day.
2. The time schedule and number of days allocated for the work outlined above begins from the day
that the personnel and equipment arrive on site.
3. All time and cost estimates are based on the client providing engineering support to provide access
to the pipeline, in addition to mechanical and general labour assistance, as and when required.

3.6 CHANGES TO WORKSCOPE

1. The above price is based on the information that Dacon has been provided with to date. Any change
in specifications, scope of work may lead to variation in the above-mentioned price.
2. Changes to the workscope will be discussed between the client and Dacon and a change order
issued with relevant commercial details.

3.7 PAYMENT MILESTONES AND VALIDITY

The following payment milestones will be applicable:
• 100% Upon completion of field work
The offer is valid for a period of 90 days

3.8 TOOL REPAIR AND REPLACEMENT

1. Any costs for repair or replacement of the inspection tool, as a result of damage of the tool inside
the customers’ pipeline, which is determined to be not a lack of workmanship by Dacon, shall be
reimbursed by the customer.
2. If replacement tools are required to be sent to complete the job due to fault of Dacon then
mobilisation fees will be charged.

Reference: H-N-P-DPS-2003119 Rev.01 9

3.9 PROJECT DELAYS AND CANCELLATIONS
1. If the inspection is cancelled by client within 2 weeks of agreed mobilization then Mobilization
and Tool Preparation and Design costs will be charged to the client.
2. If the inspection is cancelled by client within 2 weeks of agreed mobilization then Mobilization
and Tool Preparation and Design costs will be charged to the client.
3. If cancellation occurs after arrival at site, but prior work initiation then 25% of the inspection
amounts for each pipeline cancelled in addition to mobilization costs will be charged.
4. If cancellation occurs after work initiation then full project fees will be charged excluding reporting
charges.
5. Daily charge for any equipment shipping delays beyond 10 days in transit per mobilization
direction (for example due to customs) will be charged at $700 per day.

4. GENERAL TERMS AND CONDITIONS

1. Force Majeure - Dacon shall not be responsible for and shall have no liability in respect of
failure or of delay in performance hereunder if such failure or delay is due to any causes which
are not reasonably within the control of Dacon, including in particular but without limitation
strikes, lock-outs, wars, earthquakes, storms, fires, floods, explosions, hurricanes, civil
disturbance, terrorism, governmental infringement.
2. Liability - Dacon shall not be liable or responsible for any costs, claims of any nature,
compensation, losses, or any consequential damages directly or indirectly resulting from the
use of Dacon equipment or services. These costs, claims, expenses and losses do include (but
are not limited to) downtime, damages, or injuries to the Customer or any other third party
personnel, equipment, assets or property, unless such damage is the result of willful or gross
misconduct. Dacon does not take any liability of any kind with respect to the pipeline.
3. Any costs which arise to circumstances involved in this work and which were not known till
date, and which affect expedition of the work, will be charged to the customer. Any costs or
charges incurred by Dacon on behalf of the Customer for reimbursement by the Customer will
be subject to a 15% surcharge for handling and administration.
4. No modification of any terms mentioned in this document shall be effective unless by an
express written agreement between the parties. The signing of Dacon of any of the Customers
documentation shall not imply any modification of these terms.
5. Without prejudice to any liquidated damages or other compensation, none of the parties shall
be liable or responsible to the other party to the other party for indirect or consequential loss or
damaged suffered by such other party.
6. Dacon reserves the right to terminate its services and remove its equipment and personnel
from the work site at any time if in its opinion such action is advisable because of conditions
affecting the services or surrounding circumstances.
7. Warranties; reports, records, evaluations and recommendations made by Dacon shall not be
construed as warranty or guarantee of the structural condition of the pipeline or any other
condition of the pipeline. The customer hereby waives the right to any claim against Dacon
related to the foregoing.
8. In the unlikely event of equipment becoming lodged in the pipeline, Dacon shall notify the
Company on the shortest possible term and as accurate as possible the location of the lodged
tool. The Company shall be responsible for the associated costs for equipment removal. Should

Reference: H-N-P-DPS-2003119 Rev.01 10

 the lodgment be determined to be the fault of Dacon, then it will conduct a re-run without
additional costs. Should the lodgment not the fault of Dacon, the customer shall reimburse
Dacon for all associated costs for repair or replacement of the tool and pay the established rate
for re-run. Dacon accepts no liability for any damage or costs incurred in such an event, except
those liabilities accepted as outlined in Section 7.2.
9. Payment of all invoices shall be provided within 30 days from the date of invoice. Interest on
all sums due after 30 days from the date of the invoice shall run at the rate of 1.0% per month
or part thereof until payment is received.
10. Other than whilst under the full control of Dacon risk of loss or destruction or damage to
equipment supplied to the Customer on rental is the Customer’s responsibility and shall be
charged for at repair or replacement cost as appropriate.
11. Equipment on rental shall remain the property of Dacon and the Customer shall not sell,
mortgage, pledge, assign, sublet, hire, charge, encumber or part possession of such equipment
except as may be agreed between the parties in writing.
12. Equipment on sale to the Customer shall become the Customers’ responsibility on delivery.
Notwithstanding the foregoing, property in such equipment shall remain with Dacon until full
payment of all monies owed to it by the Customer for such equipment has been received.
13. The Customer warrants that prior to commencement of the Services the Customer will provide
Dacon with all data, information and records relating to the pipeline and/or work site and
otherwise which may be relevant to enable Dacon’s safe and efficient provision of services.
14. All information and results obtained by Dacon in the course of supplying the services to the
Customer shall be treated by Dacon as strictly confidential. Any technical, scientific or
commercial information proprietary to Dacon which is obtained by the Customer in the course
of this contract shall be treated by the Customer as strictly confidential. The confidential
information of either party shall not be divulged to any person or company, without prior written
consent of the party to which it belongs.
15. Both parties shall make known such obligations to their contractors or subcontractors and their
respective officers, employees and agents and shall bind them to act in such a manner as to
ensure that neither party is in breach of such obligation.
16. Notwithstanding any other provisions herein to the contract, all rights to the intellectual property
relating to the services shall at all times remain vested in Dacon.
17. The parties shall uphold the highest standards of business ethics in the performance of the
contract. Neither of the parties shall directly or indirectly receive, give, offer to give anything of
material value from or to any employee, director or agent of the other party or its contractors,
subcontractors, suppliers, agents, government officials or any other persons which could be
regarded as an improper inducement to any other party.
18. The contract of which these terms form a part shall be governed by and interpreted in
accordance with Singapore law and all parties shall submit to the non-exclusive jurisdiction of
by international arbitrary but Dacon may enforce the agreement in any court of competent
jurisdiction.

Reference: H-N-P-DPS-2003119 Rev.01 11

Reference: H-N-P-DPS-2003119 Rev.01 12