loyds register high level master plan

Working together for a safer world

HIGH LEVEL MASTER PLAN FOR HYDROCARBON DEVELOPMENT

Report on the environmental and socio-economic impact arising from the use of the Port of Larnaca as Logistics Base for offshore exploration drilling operations

29th October 2014

Reference: MBD/ENV/1010-1500

Impact Assessment Report - Larnaca Port Offshore Support Operations

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HIGH LEVEL MASTER PLAN

ON HYDROCARBON DEVELOPMENT ON LARNACA PORTS

Panayiotis Mitrou/ Senior Client Support Manager

Contract No 461

Signature date 01/07/2014

Anastasia Kouvertari/ Senior Environmental Business Development Specialist

Rev 1.1 October 2014

Yvonni-Effrosyni Damianidou/ Business & Technical Support Specialist

Kirikos Faraklas/ LRQA-Marine Business Centre Manager

Paris Mintzaridis/ EMBS Energy Operations Manager

Prepared Controlled Approved

Lloyd's Register Group Limited, its affiliates and subsidiaries and their respective officers, employees or agents are, individually and collectively, referred to in this clause as 'Lloyd's Register'. Lloyd's Register assumes no responsibility and shall not be liable to any person for any loss, damage or expense caused by reliance on the information or advice in this document or howsoever provided, unless that person has signed a contract with the relevant Lloyd's Register entity for the provision of this information or advice and in that case any responsibility or liability is exclusively on the terms and conditions set out in that contract.


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i. Executive summary The current report has been compiled by Lloyd’s Register EMEA on behalf of the Municipality of Larnaca, on the subject of the ‘’Preparation of a High Level Master Plan regarding the Impact from Hydrocarbon Development at the port of Larnaca’’.

Present document comprises an objective and independent review of the provisions contained in the Environmental Permit issued by the Government of Cyprus, the ESHIA studies and other documentation, governing the research exploration drilling campaigns of prospective oil companies in the Cypriot EEZ.

The High Level Master Plan concentrates on the envisaged operations relating to the exploration drilling campaign of ENI Cyprus Ltd., with a particular focus on those that will take place on the Logistics Base. Activities are identified and assessed under the prism of safety, health, environmental protection and overall landscape preservation and refer -among other things- to handling of explosives, handling of radioactive materials and wastes associated with drilling operations. Control and mitigation measures proposed by the prospective oil companies, developing their presence in the port area are presented so that the context of analysis is holistically addressed.

The study has also extended its scope to investigate the societal costs and benefits to the local economy, including city master plan considerations, touching also on employment, tourism, investment, real estate and disturbance factors. This assessment entailed the impact of the Logistics Base operation as well as the prospective development of Oil & Gas operations around Larnaca area.

Apart from examining the environmental footprint of intended operations and the effects on the touristic product of Larnaca, focus has also been placed to certain activities that have caused the concern of the public. Within this context, the issue of chemical storage and the Liquid Mud Plant operation have been reviewed with respect to the HAZID (Hazardous Identification) analysis undertaken by ENI Cyprus Ltd. with a view to disclose any potential gaps in identifying potential risks that could occur during the research drilling campaign.

To facilitate the aim of the study and the understanding to the reader, additional information comprising of the research drilling regulatory framework and case studies drawn from international practice, have been attached as Appendix to the Report.

The study concludes with a number of recommendations derived on the basis of impact minimisation. These could be drawn up for further analysis and assessment, under the ownership of the Municipality of Larnaca.


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ȈȪȞȠȥȘ

Ǿ ʌĮȡȠȪıĮ ȑțșİıȘ ȑȤİȚ ıȣȞĲĮȤșİȓ Įʌȩ ĲȘ Lloyd’s Register EMEA țĮĲȩʌȚȞ İȞĲȠȜȒȢ ĲȠȣ ǻȒ�Ƞȣ ȁȐȡȞĮțĮȢ, �İ șȑ�Į ‘’ȆȡȠİĲȠȚ�ĮıȓĮ İȞȩȢ ȀȪȡȚȠȣ ȈȤİįȓȠȣ ȊȥȘȜȠȪ ǼʌȚʌȑįȠȣ ıȤİĲȚțȐ �İ ĲȚȢ ǼʌȚʌĲȫıİȚȢ Įʌȩ ĲȘȞ ǹȞȐʌĲȣȟȘ ĲȦȞ ȊįȡȠȖȠȞĮȞșȡȐțȦȞ ıĲȠ ȁȚ�ȐȞȚ ĲȘȢ ȁȐȡȞĮțĮȢ’’.

ȉȠ ʌĮȡȩȞ țİȓ�İȞȠ ĮʌȠĲİȜİȓ �ȚĮ ĮȞĲȚțİȚ�İȞȚțȒ țĮȚ ĮȞİȟȐȡĲȘĲȘ ĮȞĮıțȩʌȘıȘ ĲȘȢ ǲȖțȡȚıȘȢ ȆİȡȚȕĮȜȜȠȞĲȚțȫȞ ǵȡȦȞ ʌȠȣ ȑȤİȚ İțįȫıİȚ Ș ȀȣʌȡȚĮțȒ țȣȕȑȡȞȘıȘ, ıĲȚȢ ȂİȜȑĲİȢ ǼʌȚʌĲȫıİȦȞ ıĲȠ ȆİȡȚȕȐȜȜȠȞ, ĲȘȞ ǹıĳȐȜİȚĮ țĮȚ ĲȘȞ ȊȖİȓĮ (ǼSHIA) țĮȚ ȐȜȜĮ ȑȖȖȡĮĳĮ, ĲĮ ȠʌȠȓĮ ıȤİĲȓȗȠȞĲĮȚ �İ ĲȚȢ İȡİȣȞȘĲȚțȑȢ ȖİȦĲȡȒıİȚȢ ĲȦȞ ȣʌȠȥȒĳȚȦȞ İĲĮȚȡİȚȫȞ ʌİĲȡİȜĮȓȠȣ ıĲȘȞ ȀȣʌȡȚĮțȒ ǹʌȠțȜİȚıĲȚțȒ ȅȚțȠȞȠ�ȚțȒ ǽȫȞȘ (ǹȅǽ).

ȉȠ ȀȪȡȚȠ ȈȤȑįȚȠ ȊȥȘȜȠȪ ǼʌȚʌȑįȠȣ İʌȚțİȞĲȡȫȞİĲĮȚ ıĲȚȢ ʌȡȠȕȜİʌȩ�İȞİȢ İʌȚȤİȚȡȒıİȚȢ ʌȠȣ ıȤİĲȓȗȠȞĲĮȚ �İ ĲȘȞ İȡİȣȞȘĲȚțȒ ȖİȫĲȡȘıȘ ĲȘȢ ENI Cyprus Ltd., İıĲȚȐȗȠȞĲĮȢ ıİ ĮȣĲȑȢ, ȠȚ ȠʌȠȓİȢ șĮ ȜȐȕȠȣȞ ȤȫȡĮ ıĲȘȞ ǼĳȠįȚĮıĲȚțȒ ǺȐıȘ. ȅȚ įȡĮıĲȘȡȚȩĲȘĲİȢ İȞĲȠʌȓȗȠȞĲĮȚ țĮȚ İțĲȚ�ȫȞĲĮȚ ȣʌȩ ĲȠ ʌȡȓı�Į ĲȘȢ ĮıĳȐȜİȚĮȢ, ĲȘȢ ȣȖİȓĮȢ, ĲȘȢ ʌȡȠıĲĮıȓĮȢ ĲȠȣ ʌİȡȚȕȐȜȜȠȞĲȠȢ, țĮȚ ĲȘȢ ıȣȞȠȜȚțȒȢ ʌȡȠıĲĮıȓĮȢ ĲȠȣ ĲȠʌȓȠȣ, țĮȚ ĮȞĮĳȑȡȠȞĲĮȚ –�İĲĮȟȪ ȐȜȜȦȞ- ıĲȘȞ įȚĮȤİȓȡȚıȘ İțȡȘțĲȚțȫȞ, ȡĮįȚİȞİȡȖȫȞ ȣȜȚțȫȞ țĮȚ ĮʌȠȕȜȒĲȦȞ, ĲĮ ȠʌȠȓĮ ıȤİĲȓȗȠȞĲĮȚ �İ ĲȚȢ ȖİȦĲȡȒıİȚȢ. ȉĮ �ȑĲȡĮ İȜȑȖȤȠȣ țĮȚ �İȓȦıȘȢ ĲȦȞ İʌȚʌĲȫıİȦȞ ʌȠȣ ʌȡȠĲİȓȞȠȞĲĮȚ Įʌȩ ĲȚȢ ȣʌȠȥȒĳȚİȢ İĲĮȚȡİȓİȢ ʌİĲȡİȜĮȓȠȣ, ȠȚ ȠʌȠȓİȢ ĮȞĮʌĲȪııȠȣȞ ĲȘȞ ʌĮȡȠȣıȓĮ ĲȠȣȢ ıĲȠ ȤȫȡȠ ĲȠȣ ȜȚ�ȑȞĮ, ʌĮȡȠȣıȚȐȗȠȞĲĮȚ ȫıĲİ ĲȠ ʌȜĮȓıȚȠ ĲȘȢ ĮȞȐȜȣıȘȢ ȞĮ ĮʌȠįȠșİȓ ȠȜȚıĲȚțȐ.

Ǿ �İȜȑĲȘ ȑȤİȚ İʌȓıȘȢ İʌİțĲİȓȞİȚ ĲȘ �İșȠįȠȜȠȖȓĮ ĲȘȢ ıĲȘȞ ȑȡİȣȞĮ ĲȠȣ țȠȚȞȦȞȚțȠȪ țȩıĲȠȣȢ țĮȚ ĲȦȞ ʌȜİȠȞİțĲȘ�ȐĲȦȞ ȖȚĮ ĲȘȞ ĲȠʌȚțȒ ȠȚțȠȞȠ�ȓĮ, ʌİȡȚȜĮȝȕȐȞȠȞĲĮȢ șȑȝĮĲĮ ıȤİįȚĮıȝȠȪ ĮıĲȚțȒȢ ĮȞȐʌĲȣȟȘȢ, ĮʌĮıȤȩȜȘıȘȢ, ĲȠȣȡȚıȝȠȪ, İʌİȞįȪıİȦȞ, ĮȟȓĮȢ ȖȒȢ țĮȚ ȠȤȜȒıİȦȢ. ȆİȡĮȚĲȑȡȦ, İ�ʌİȡȚȑȤİȚ ĲȚȢ İʌȚʌĲȫıİȚȢ Įʌȩ ĲȘ ȜİȚĲȠȣȡȖȓĮ ĲȘȢ ǼĳȠįȚĮıĲȚțȒȢ ǺȐıȘȢ țĮșȫȢ țĮȚ ĲȚȢ ʌȡȠıİȤİȓȢ ȜİȚĲȠȣȡȖȚțȑȢ įȡȐıİȚȢ ıĲȠȞ ĲȠ�ȑĮ ĲȠȣ ȆİĲȡİȜĮȓȠȣ & ĭȣıȚțȠȪ ǹİȡȓȠȣ ȖȪȡȦ Įʌȩ ĲȘȞ ʌİȡȚȠȤȒ ĲȘȢ ȁȐȡȞĮțĮȢ.

ǼțĲȩȢ Įʌȩ ĲȘȞ İȟȑĲĮıȘ ĲȠȣ ʌİȡȚȕĮȜȜȠȞĲȚțȠȪ ĮʌȠĲȣʌȫ�ĮĲȠȢ ĲȦȞ ʌȡȠȕȜİʌȩ�İȞȦȞ İʌȚȤİȚȡȒıİȦȞ țĮȚ ĲȦȞ İʌȚʌĲȫıİȫȞ ĲȠȣȢ ıĲȠ ĲȠȣȡȚıĲȚțȩ ʌȡȠȧȩȞ ĲȘȢ ȁȐȡȞĮțĮȢ, ȕȐȡȠȢ ȑȤİȚ İʌȓıȘȢ įȠșİȓ ıİ ıȣȖțİțȡȚ�ȑȞİȢ įȡĮıĲȘȡȚȩĲȘĲİȢ ʌȠȣ ȑȤȠȣȞ ʌȡȠȟİȞȒıİȚ ĲȘȞ ĮȞȘıȣȤȓĮ ĲȠȣ țȠȚȞȠȪ. ǼȞĲȩȢ ĮȣĲȠȪ ĲȠȣ ʌȜĮȚıȓȠȣ, ĲȠ șȑ�Į ĲȘȢ ĮʌȠșȒțİȣıȘȢ ȤȘ�ȚțȫȞ țĮȚ ĲȘȢ ȜİȚĲȠȣȡȖȓĮȢ ĲȠȣ İȡȖȠıĲĮıȓȠȣ ʌĮȡĮȖȦȖȒȢ ȣȖȡȒȢ ȜȐıʌȘȢ (LMP) ȑȤȠȣȞ İʌĮȞİȟİĲĮıșİȓ ĮȞĮĳȠȡȚțȐ �İ ĲȘȞ ǹȞȐȜȣıȘ ȀȚȞįȪȞȦȞ (HAZID) ʌȠȣ ĮȞȑȜĮȕİ Ș ENI Cyprus Ltd.,�İ ıțȠʌȩ ȞĮ țĮĲĮįİȚȤșȠȪȞ ĲĮ ȩʌȠȚĮ ʌȚșĮȞȐ țİȞȐ ıĲȘȞ ĮȞĮȖȞȫȡȚıȘ ʌȚșĮȞȫȞ țȚȞįȪȞȦȞ ʌȠȣ șĮ �ʌȠȡȠȪıĮȞ ȞĮ ʌȡȠțȪȥȠȣȞ țĮĲȐ ĲȘ įȚȐȡțİȚĮ ĲȦȞ İȡİȣȞȘĲȚțȫȞ ȖİȦĲȡȒıİȦȞ.

ȆȡȠȢ įȚİȣțȩȜȣȞıȘ ĲȠȣ ıțȠʌȠȪ ĲȘȢ �İȜȑĲȘȢ țĮȚ ĲȘȢ țĮĲĮȞȩȘıȘȢ Įʌȩ ĲȠȞ ĮȞĮȖȞȫıĲȘ, ȑȤȠȣȞ ʌȡȠıĮȡĲȘșİȓ ıĲĮ ȆĮȡĮȡĲȒ�ĮĲĮ ʌȜȘȡȠĳȠȡȓİȢ ȩʌȦȢ ĲȠ ıȤİĲȚțȩ ȞȠ�ȠșİĲȚțȩ ʌȜĮȓıȚȠ ʌȠȣ įȚȑʌİȚ ĲȚȢ İȡİȣȞȘĲȚțȑȢ ȖİȦĲȡȒıİȚȢ țĮȚ ʌĮȡȩ�ȠȚĮ ǼȡȖȠıĲȐıȚĮ ȆĮȡĮȖȦȖȒȢ ȊȖȡȒȢ ȁȐıʌȘȢ țĮȚ ǼĳȠįȚĮıĲȚțȫȞ ǺȐıİȦȞ ĮȞȐ ĲȠȞ țȩı�Ƞ.

Ǿ �İȜȑĲȘ țĮĲĮȜȒȖİȚ �İ ȑȞĮ ĮȡȚș�ȩ Įʌȩ ıȣıĲȐıİȚȢ, ȠȚ ȠʌȠȓİȢ ĮʌȠȡȡȑȠȣȞ �İ ȕȐıȘ ĲȘȞ İȜĮȤȚıĲȠʌȠȓȘıȘ ĲȦȞ İʌȚʌĲȫıİȦȞ. ȅȚ İȞ ȜȩȖȦ ıȣıĲȐıİȚȢ șĮ �ʌȠȡȠȪıĮȞ ȞĮ ĮʌȠĲİȜȑıȠȣȞ ĮȞĲȚțİȓ�İȞȠ ʌİȡĮȚĲȑȡȦ ĮȞȐȜȣıȘȢ țĮȚ İțĲȓ�ȘıȘȢ, Įʌȩ ĲȠȞ ǻȒ�Ƞ ȁȐȡȞĮțĮȢ.


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ii. Abbreviations

Abbreviation Explanation

ADR European Agreement concerning the International Carriage of Goods by Road

CPA Cyprus Port Authority

EBS Environmental Baseline Survey

EEZ Exclusive Economic Zone

EIA Environmental Impact Assessment

EPR Emergency Response Plan

ESHIA Environmental Social Health Impact Assessment

HSE Health Safety Environment

IESC Innovating Environmental Solution Center

IMS Integrated Management Systems

LTI Lost Time Incident

NORM Naturally Occurring Radioactive Material

NOx Oxides of Nitrogen

ODS Ozone Depleting Substances

OSCP Oil Spill Contingency Plan

OSV Offshore Supply Vessel

PMs Particulate Matters

PSV` Platform Supply Vessels

SOx Oxides of Sulphur

TENORM Technologically Enhanced Naturally Occurring Radioactive Material

VOC Volatile Organic Compounds


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Contents

1. Introduction 8

2. Scope 10

3. Documentation 11

4. The Port of Larnaca 12 4.1 General description

4.2 Urban Planning Zones

5. Envisaged Operations 15 5.1 Logistics operations

5.2 Liquid mud production

6. Environmental impact 23 6.1 Impact on Air Quality

6.2 Impact on Water Quality

6.3 Impact on Soil and Subsoil Quality

6.4 Impact on Landscape

6.5 Technical Review of the Liquid Mud Plant (LMP)

6.6 The issue of application of SEVESO II Directive arising from the chemicals storage

7. Socioeconomic impact 35 7.1 Employment

7.2 Investment - Capital inflows

7.3 Real Estate - Asset Values

7.4 Traffic Disturbance

7.5 Visual impact

7.6 Tourism, Urban Planning, Master Plan

8. Comparative analysis for specific aspects related to the Logistics Base operations 42 8.1 Daily traffic increase versus the arrival of one cruise ship

8.2 Offshore operations explosives versus LPG use and hunting ammunition

8.3 Materials transportation per well versus typical port cargo flows

8.4 Radioactivity emissions comparison

9. Remarks 47

10. Recommendations 48

11. References 50


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Appedices

Appendix 1 Typical Components of Water-Based Mud

Appendix 2 Typical Components of Low Toxicity Oil-Based Mud

Appendix 3 Overview of common industrial uses of sealed Radioactive Sources

Appendix 4 ADR table of maximum quantities per transportation unit

Appendix 5 ENI documentation related to offshore drilling operations in Cyprus.

Appendix 6 List of Chemicals examined under the application of SEVESO II Directive

Appendix 7 Regulatory Framework

Appendix 8 Results from the radioactivity measurements in the mud from the drilling

operations in the Cypriot EEZ

Appendix 9 Indicative case of an Impact Benefit Agreement in the Oil & Gas sector

Appendix 10 Case studies drawn from International experience

Appendix 11 International practice – related accidents


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1. Introduction

The hydrocarbon exploration and exploitation activities in the Republic of Cyprus are governed by the Hydrocarbon Law of 2007 (No.4(I)/2007), Hydrocarbon Regulations of 2007 and 2009 (No.51/2007 and No.113/2009) and EU Directive 94/22/EC on the conditions for granting and using authorizations for the prospection, exploration and production of hydrocarbons.

The two licencing rounds have resulted in rights to oil companies to undertake their exploration drilling campaigns in the Cypriot EEZ. Exploration rights were granted for a period of three years between 01.01.2013 – 01.01.2016. The scale of prospective operations refers to a plan of approximately ten exploration drills within the next couple of years. Italian ENI is planning 4 drills and if successful 2 more appraisal wells over 12 to 18 months1, Noble Energy may drill one more exploration well at a new gas field close to Aphrodite and the French Total will be exploring two wells in the assigned blocks of the Cypriot EEZ. All drilling is expected to be completed by 2016, and before the end of the 3 year licenses given to MedServ and the others by CPA.

Table 1: Cyprus' Exclusive Economic Zone (EEZ) and assignment of exploration rights

This report has been compiled by Lloyd’s Register EMEA on behalf of the Municipality of Larnaca, under the provisions governing the Contract that arises from the tender procedure No.13/2014 and renders the ‘’Preparation of a High Level Master Plan regarding the Impact from Hydrocarbon Development at the Port of Larnaca’’.

An overarching principle running through the current report is the objective and independent review of all the documentation received, as well as the standpoints expressed by the key interested Parties regarding the proposed supporting activities to offshore drilling operations that are expected to officially commence towards the end of September 2014 at the port of Larnaca. Due to the fierce concerns raised by the local community in respect of the intended use of the port, all the views presented in the Municipality have been formally recorded and been

1 Four exploratory wells to be drilled within three Exploration Blocks, offshore Cyprus: Blocks 2, 3 and 9, namely Onasagoras, Zenon, Kinyras and Amathusa.


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accounted for. In this view, the script of all standpoints expressed by the local Community is available in the Appendices as stated in the preliminary report.

Concluding, this study will identify some areas where further analysis or assessment may be required for more sound conclusions to be drawn. In this respect, the remarks and recommendations contained herewith are neither exhaustive nor mandatory for implementation. The content of this report remains under the exclusive ownership of the Municipality of Larnaca, which is responsible for further action.


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2. Scope

The primary aim of the study that the Municipality of Larnaca has assigned to Lloyd’s Register EMEA, is to examine the consequences at the port of Larnaca, both short and long term, as well as the impact to the city of Lanraca, as a result of the operation of a logistics base for offshore exploration drilling operations in the Cypriot EEZ. This independent assessment will also take into consideration the decision of the Government of Cyprus regarding the upgrade of the port of Larnaca into a modern cruise port with increased passenger traffic, in parallel to other commercial activities that are currently taking place. The later commitment has been substantially supported through the launch of an international tendering process and the selection of ZENON Consortium to undertake the works of modernisation in the area.

The scope of the High Level Master Plan that Lloyd’s Register will draft on behalf of the Municipality of Larnaca, is to assess the risk of all activities relating to the logistics base operations supporting the hydrocarbon industry, in terms of safety, health of the local community and environmental protection. Moreover, the study will endeavour to clearly document any positive and negative impact arising from the hydrocarbon activities to the local economy.

An independent review and assessment of the anticipated environmental impact has been performed on the basis of ESHIA studies performed by the operators and the conditions raised in the Environmental Permit granted by the Cypriot Authorities. Issues relevant to the preservation of the physical environment have been analysed in addition to an overall assessment of the socioeconomic impact that the operation of the Logistics Base is projected to have in the municipality of Larnaca.


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3. Documentation

- Evidence and documentation, which has been taken into account for the compilation of this report is presented below:

- Environmental Permit in accordance with Article 11 for EIA from projects that fall within the scope of Law (No.140(I)/2005) regarding the impact to the environment for the ‘’construction and operation of chemical storage’’ and the ‘’construction and operation of Liquid Mud Plant’’ by the company ‘’Medserv Cyprus Ltd’’ at the port of Larnaca

- Replies to the Comments of the Municipality of Larnaca, regarding the Forms of the Preliminary Environmental Impact Reports for the Liquid Mud Plant and the Chemical Storage, submitted by ENI Cyprus Ltd

- The ESHIA of ENI, covering Exploratory Wells and onshore Logistic Base impact – the part relevant to onshore operations was examined

- The ESHIA provided by Noble Energy, for a Temporary Dock Facility in Stanley Harbour, Falkland Islands (2013)

- The HSE IMS (Integrated Management Systems) Manual of ENI Cyprus Ltd, containing, among other chapters, the methodology for the identification of the significant aspects and impact to the environment and the waste management procedures of the company

- The studies conducted for the logistics base, and more specifically the executive summaries and the Preliminary Environmental Impact Reports for the chemical storage and the liquid mud plant, in accordance with Article 14 of the Environmental Impact Assessment Law 140(I)/2005

- The Waste Management Plan, in accordance with Cypriot Law 185(I)/2011 and ENI standard covering the management and disposal of all waste generated by Exploratory Wells drilling – the part relevant to the Logistic Base activities was examined

- The Emergency Response Plans and the Oil Spill Contingency Plan regarding the exploration drilling campaign – the part relevant to the onshore operations was examined

- Data submitted by the Cyprus Port Authority covering the commercial and cruise activity in Larnaca, waste production at the LMP in Limassol

- Information received by the Ministry of Energy, Commerce, Industry and Tourism – meeting with personnel responsible for hydrocarbons, radioactive materials and labour inspection was held

- Feedback received by the Ministry of Agriculture, Natural Resources and the Environment – meeting with the Department of Environment held

- Feedback received from a meeting with directors of the ZENON Consortium

- Views and suggestions expressed by all interested Parties in the city of Larnaca, namely the Municipality Board, the Tourism Board, Members of the Parliament (MPs), Members of Political Parties, representatives of educational institutions and active citizens2.

2 It is to be noted that the present document does not reflect the views of the platform ‘’Larnaca REACT’’, as there was no

representation during the day the meetings were organised at the Municipality.


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4. The Port of Larnaca

4.1 General description

Larnaca has been established in its present since 1973. It is situated in proximity of 0.5 km from the Larnaca city center and is connected to the mainland through 4 lane-highways. The port is subject to the authority of the CPA.

Covering an overall area of 445,000 m2, the adjacent zones around the port are summarised as follows:

- North section: bulk storage area comprising of storage facilities and loading area for oil products of the Larnaca gulf

- West section: Residential and touristic zone

- South section: Marina with a maximum capacity of 450 yachts

- East section: Larnaca bay

Port operations comprise both passenger and commercial activity. The following tables depict port activity during the period January - July 2014.

(01/01-31/07/2014) Passenger Activity

Number of Calls Number of passengers

25 20,126

Table 4a

(01/01-31/07/2014) Commercial Port Activity

Type of Goods Number of Ships Volume of trade (tons)

Animal feed 80 250,000

Gypsum 62 186,100

Iron 10 175,582

Chipboards 4 9,943

Salt 3 6,370

Bentonite 1 1,920

Pumice Stone 1 3,000

Steel Pipes 2 1,773

Fertilizers 1 1,485

Bitumen 3 8,750

Soya & Sunflower Oil 3 5,300

Cars 7 2,756 (Units)

Table 4b


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Picture 4a – Larnaca Port

Picture 4b – Larnaca Port

Picture 4c – Typical grain unloading operation in Larnaca Port


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4.2 Urban Planning Zones

The chemical storage will be accommodated at a specially designated area, as shown in the following Plan:

Picture 4d - Larnaca Port plan depicting oil companies prospective installations


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5. Envisaged Operations

Content within this section aims to reflect in detail the envisaged port operations by oil companies (operators) intending to use Larnaca port as a logistics base for drilling exploration operations. So far one operator (ENI) has obtained Government approval and the Base installations have been constructed. Noble Energy installations are planned to cover a surface of approximately 10,000 m2 and the process of Permit issue is in process.

Picture 5a, Larnaca Port plan depicting oil companies prospective installations

The ENI Logistics Base, inside the Larnaca Port, is organized into the following main logistics areas (ENI Cyprus Ltd, 2014c and ENI E&P Div. LOGIS, 2014):

ƒ office accommodation and office equipment;

ƒ berthing and quay facilities;

ƒ liquid mud plant and bulk storage facilities;

ƒ open yard area, including a covered pipe inspection facility with cleaning bay;

ƒ existing covered warehouse;

ƒ chemical storage;

ƒ covered waste storage area;

ƒ equipment marshalling area; and

ƒ Cargo Container Unit (CCU).

All installations are situated in the main quay except for the chemical storage and the covered warehouse, which are situated in the south quay. The surface covered by the base including all installations is estimated to 36,211 m2.


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Operations within the base can be divided into two main categories. Firstly, logistics operations entailing the storage and handling of all equipment, materials intended for use onboard the drilling platforms or ships and secondly liquid mud production.

5.1 Logistics operations

5.1.1 Storage and handling of Chemical substances

The chemical storage is composed of two different facilities:

ƒ an area of about 1,000 m2, within the existing warehouse, for the storage and handling of dry chemical products in big bags;

ƒ a new shed of about 350 m2, to be located close to the existing warehouse, for the storage and handling of wet chemical products in drums, tank containers and metal barrels.

The existing warehouse is located in the southern side of Larnaca Port, along the breakwater quay. The area of the warehouse which is assigned for the storage of dry chemical products is approximately 1,000 m2. Suitable chemical protected shed, located in proximity (southward) of the existing warehouse, will be used for the storage and handling of chemical products in drums, tank containers and metal barrels.

The shed dimensions are approximately 27 m x 13 m (about 350 m2) with a minimum clearance of 5 m and a roof slope 15% for rain water. It is a metallic structure provided with an impermeable concrete basement and a corrugated covering sheet, open on all sides in order to guarantee the proper ventilation.

Picture 5.1a, Chemical Storage Shed

The space has a provision for spill containment (bunds of 15 cm) to avoid spillage to the environment. Furthermore, two sloped areas (slope 1.5%), present on each side of the shed, will be provided with gutters leading to pits (four in total), aimed at collecting any substances in case of accidental spillage. The total retention volume prior to overflowing is estimated to be in excess of 55 m3.

The foundation will be characterized by a central flat area (drive way), connecting the two ramps located at the two entry points for the forklifts. A registration system will be implemented for the management of chemicals and their data sheets will be also kept until the end of their life cycle.

5.1.2 Storage and handling of consumables, casings, drill pipe pipes and materials associated with drilling operations. Such operations will comprise:

ƒ loading and unloading of, drill collar, tools and other drilling equipment, as required,

ƒ carriage of typical oilfield goods and materials

ƒ loading of fuel oil, water for supporting drilling activities and potable water,


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ƒ transfer of liquid mud, palletized mud materials, bulk mud materials, bulk cement and other bulk material.

A small water channel is found next to the steel casings cleaning area. Provision has been made in terms of bunds to avoid drainage of the shed escaping in the channel.

5.1.3 Handling of explosives

Drilling operations require the use of small quantities of explosives. These are to be transferred from storage locations outside the port area directly for loading on the offshore support vessel with minimal time of stay within port limits. According to the Cypriot authorities each transfer of explosives will have to be approved in advance and will be undertaken under the provisions of Cypriot law and the European Agreement concerning the International Carriage of Dangerous Goods by Road (ADR).

The explosives mentioned above will not come back to the Logistics Base. This, together with the strict context for safe and secure transportation to the Base minimise the risk of accident and exposure. �

According to a first estimation the quantities of explosives to be used in the envisaged exploration drillings campaign of ENI Cyprus Ltd is less than 200kg. More specifically the estimated amount of explosives required is equal to 25 kgr per well at any one time and only for the case of emergency and they will be transported by one truck at the beginning of operations. Over the the full campaign it will remain on the rig. On the basis of this figure the envisaged explosives volume for 10-12 drillings would not exceed 300 kgr and this quantity would transit the port during a three year period.� Each transportation of the explosives is scheduled to be especially approved and convoyed by the police at all times and the trucks will be driven by specially authorized personnel (licensed ADR drivers). �

5.1.4 Handling of radioactive materials

Radioactive sources are to be used for radiography in drilling operations. Such materials will be transported directly from designated storage to the offshore supply vessel for onward transportation to the drilling ship and are not to be stored within the Larnaca port limits. It is anticipated that such sources will remain encapsulated and contained in appropriately shielded containers during the whole transportation process.

A list with an overview of common industrial uses of sealed Radioactive Sources, are presented in appendix 3. As indicated, radioactive materials are very commonly used in various sectors. The quantity and strength of such materials used in the current project are similarly of low risk.

5.1.5 Handling of wastes associated with drilling operations.

At the Logistics Base, an exclusive space of about 200 m2, segregated by a fence will be assigned in the pipe yard area, to temporary accommodate the produced waste. The area will be paved with concrete in order to avoid any kind of possible contamination to the soil, equipped with containment wall and dedicated drainage system with collection pit.

This space is intended for waste produced in the onshore base and only for their temporary storage. The waste produced in the Logistic base will be collected in appropriate containers and in reasonable quantities. Wastes will be immediately delivered to authorized operator according to the Waste Law (L185 (1)/2011).

Picture 5.1b, Containers for waste collection


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Waste will be managed by a licensed Waste Contractor specially appointed and immediately sent to treatment/disposal in authorized facilities. The waste generated in the base will be transported by the Waste Contractor to treatment/disposal as soon as the waste container is full and upon request by the Logistic Base Manager.

Waste produced offshore will be transported from the drilling ship to the shore base through PSVs. The waste will not be stored in the Base and will be collected upon call by the appointed waste Contractor (licensed for transferring and treating relevant waste types), within the minimum timeframe, and transferred to an authorized waste management facility according to the Waste Law (L185 (I)/2011).

Wastes that might contain NORM/TENORM3 or other radioactive materials shall undergo specific screeni

ng in order to assess whether or not they exceed the action limits stipulated by the applicable legislation.

Even though evidence so far and experience from the previous drilling campaign in the port of Limassol have shown that concentrations of NORM and TENORM are not probable, it is suggested that procedure to manage such kind of waste in the event of occurrence is to be in place.�This matter is further addressed in the recommendations section.�

Innovating Environmental Solutions Center (IESC) is the appointed Waste management Contractor for ENI Cyprus drilling programme. IESC is an approved Waste Management Company to arrange for the collection, transportation, storage, recycling, re-use or final treatment of the waste. IESC premise are located in Agios Sylas area, Ypsonas – Limassol (solid waste) and Vassilikos area (Ecofuel Cyprus Ltd – liquid waste). Certification of the IESC on ISO 14001 and OHSAS 18001 has been granted by IQNet.

The complete contract covers:

ƒ non-hazardous recyclable waste (metals, plastic, glass, paper etc);

ƒ non-hazardous non-recyclable industrial waste (empty packing waste, expired, unused products);

ƒ hazardous non-industrial waste (fluoresces lamps, dry cells and other wee);

ƒ hazardous industrial waste (chemicals, hazardous packing);

ƒ medical waste;

ƒ waste oil and oily waters;

ƒ oil drilling muds and cuttings.

ƒ The Waste contractor has developed specific working instructions relevant to:

ƒ decontamination of metal solid waste;

ƒ decontamination of non-metal solid waste;

ƒ lamp crushing;

ƒ handling of battery dry-cells.

The estimated total quantity of waste produced offshore (i.e. onboard the drillingship) during one well operations is.

ƒ approximately 2025 tons of hazardous waste;

ƒ approximately 135 tons of non-hazardous waste.

The estimated produced wastes onshore per well is 840 tons of which:

ƒ approximately 480 tons of hazardous waste;

ƒ approximately 360 tons of non-hazardous waste;

3 Naturally Occurring Radioactive Materials (NORM) and Technologically Enhanced Naturally Occurring Radioactive Materials (TENORM) consist of materials, usually industrial wastes or by- products enriched with radioactive elements found in the environment, such as uranium, thorium and potassium and any of their decay products, such as radium and radon. These natural radioactive elements are present in very low concentrations in earth's crust and are brought to the surface through human activities such as oil and gas exploration


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Taking into account the above values, the estimated overall quantity of waste (all typologies, onshore and offshore) produced during the operation for one well is approximately 3000 tons

Considering the drilling mode, the average fuel consumption is estimated around 35-40 m3/day. The drilling ship is fitted with a fuel oil system that serves the following areas and systems:

ƒ main generators;

ƒ auxiliary boiler;

ƒ incinerator (not used during the normal project activities);

ƒ emergency generator; and engine-driven fire pump.

Expected total quantities of the waste produced onshore for the entire drilling campaign of four firm wells (considering approximately duration of one year) are [1]:

ƒ 1,920 t hazardous waste, including mainly Liquid Mud Plant waste;

ƒ 1,450 t of non-hazardous waste, including:

(i) 150t of mixed waste, metal drums and domestic waste,

(ii) 1,300t of sanitary wastewater (as anticipated, in order to minimize the overall waste production, arrangements are being made for connecting the Logistics base to the local sewage network. However, it was assumed conservatively a production of 1.300t of sanitary wastewater).

Reconditioning operation are expected to be carried out on the drilling ship, but may be carried out in the Logistic Base at the Liquid Mud Plant at the end of each well or in specific contingent conditions.

Regarding the LTOBM cuttings, the estimated quantity for the entire duration of the drilling campaign (No. 4 wells) is 2600 tons. Waste quantities related to such waste typology are already included in the estimated 3000 tons for one well.

Furthermore, for the support activities the following consumption are foreseen:

ƒ about 10 m3/day for each PSV; and

ƒ about 0.6-0.7 m3/day for helicopters.

Considering the total duration of the activities the total consumption of fuel is estimated as reported in the following Table.

Type of vehicle Fuel consumption

(per well) (m3)

Fuel consumption

(4 wells) (m3)

Drilling Ship 3.2* 103 12.8*103

Supply Vessels (1) 3.3*102 13.2*102

Helicopters (2) 16.1 63.7

Table 5a – Fuel Consumption

5.2 Liquid mud production

According to the approved operator’s planning, a Liquid Mud Plant and bulk storage facilities will be constructed in the central part of the logistics base. The Liquid Mud Plant (LMP) (1,530 m²) is designed to provide the offshore drilling unit with the following fluids, typically used for drilling operation (“drilling mud”):

ƒ brine (salty water) typically composed of water and salt (sodium chloride and/or potassium chloride and/or calcium chloride) used for the initial riser less section of the offshore wells or as completion fluid after the drilling operations;


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ƒ Water Based Muds4 (WBMs), typically composed of fresh water, salt and/or bentonite/barite and additives;

ƒ Low Toxicity Oil Based Mud5 (LTOBM) typically composed of low-toxic and low-aromatic base oil, barite and additives.

A detailed reference on the LTOBM components is presented in Appendix 2.

The process carried out in the LMP includes:

ƒ storage of base oil, mud and bulk (powder);

ƒ mud premixing (brine, WBM and LTOBM); and

ƒ mud regeneration (LTOBM) (if needed).

Picture 5.2a: Liquid Mud Plant installation point

The LMP allows for storage capacity for the drilling operation in order to provide the drilling ship with base oil, muds and bulk products. LTOBM are treated on the drilling ship for solid removal (cuttings) and for the correction of the properties of the mud (physical properties, such as pH, rheologic properties, specific gravity etc.). Only in specific contingent conditions, LTOBM should be reconditioned onshore and sent to one of the following:

ƒ the mixing tank, in order to add chemicals (e.g. pH modifier); or

ƒ mud centrifuge that allows for barite removal (stripping), in order to decrease the specific gravity of the fluid.

Regenerated mud is stored in tanks and then pumped to the PSV for its transportation. Premixing of muds can be carried out in the LMP, in premixing tanks. The base oil and bulk are stored in storage tanks and silos respectively and are transferred to the premixing tanks by the plant piping. Other chemicals in bags, drums, etc, used for mud preparation, can be added by means of hopper or added to the premixing tanks. These chemicals are stored in the dedicated area of the Logistics Base and the quantities needed for operation are transported to the LMP area according to the daily process need (no storage is expected within the LMP area).

Mud premixing is carried out in batch and the mud is transferred to the storage tanks. The premixing procedure is continued until the final volume needed is obtained. Thus the mud is stored in tanks and can be pumped to the PSV by piping and flexible hoses and then transferred to the drilling ship.

4

Detailed reference on appendix 1

5 Detailed reference on appendix 2


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The anticipated LMP capacity is approximately 1,400 m3. The anticipated number of tanks will be 26 (No. 24 storage tanks and No. 2 premixing tanks). Each tank is connected to the premixing/pumping system and is equipped with isolation valves and by-pass lines.

The LMP includes the following equipment:

ƒ Fluid storage tanks: used for the storage of fluids produced or returned to the LMP. The LMP design includes No. 24 prefabricated modular horizontal tanks conforming to ISO standards. High cube shipping container specifications, with individual tank capacity of 54 m3. The tanks are expected to be installed in two overlapping rows;

ƒ premixing tanks: fluids can be premixed at the LMP facilities in No. 2 horizontal

ƒ premixing tanks with individual tank capacity of 40 m3;

ƒ premixing and transfer pumps: centrifugal pumps are used for premixing and

ƒ transferring fluids;

ƒ mud mix hopper: the mix hopper is an in-line platform and a conical opening for adding

ƒ products that are required in the fluids premixing;

ƒ agitators: agitators are high-efficiency mud-mixing units offered in a wide array of

ƒ custom sizes and configurations to accommodate virtually any mud tank;

ƒ mud centrifuge: used to remove barite from heavy mud (this kind of equipment is not

ƒ expected to be used very often in the normal operating conditions of the LMP);

ƒ piping.

5.2.1. Bulk (Powder) Storage Facilities

The barite and bentonite for mud preparation is provided by Bulk Powder Facility capable to store bulk material needed for the operations, in particular barite and bentonite. Barite and bentonite will be provided by trucks in big bags (1-1.5 t) and will be stored in the existing warehouse (dry chemicals storage area) near the LMP and transferred to the LMP/Bulk facility as needed; in the plant the big bags will be cut through hoppers and stored in the silos; It is anticipated that any cutting of the bags will be undertaken in semi enclosed box leaving only one side exposed and will be fitted with vacuum pump to minimise dispersal of dust in the atmosphere.

Empty big bags will be sent for disposal in accordance to local regulations. The bulk facility has a capacity of approximately 640 t of bulk materials and is equipped with lines and fittings to load supply vessels and receive bulk material from supply vessels as well. The bulk plant is also equipped to cut big bags and has pressure vessels (silos) loading rate of 20 metric t/hours. The silos are equipped with weight sensor in order to determine the exact weight of barite/bentonite transfer and can be operative up to 24/24 hours, on request.

The bulk facilities include the following equipment:

ƒ bulk storage tanks: planned bulk storage area will include No. 7 vertical silos, with a height of approximately 10 m (No. 3 for barite/bentonite with capacity of 62.3 m3 each and No. 4 for cement with capacity of 38 m3);

ƒ air compressor;

ƒ dust collector;

ƒ cutting bottle.

Concerning loading and unloading operations, the piping system of the bulk plant, jetty and mud plant is capable to conduct, without interference, simultaneous operations of:

ƒ Loading/unloading vessel;

ƒ Loading silos; and

ƒ Delivery of barite/bentonite to liquid mud plant.

The LMP is also provided with transfer lines, consisting of flexible hoses aimed at pumping the mud and bulk materials to the PSV without interference with LMP operations. The distance from the mud plant to the PSVs berthing area is approximately 100 meters.


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According to the operator’s procedures the piping shall be regularly inspected and loading/offloading operation of the supply vessels manned in order to avoid undetected spill. Dedicated equipment will be available at the Logistic base for a prompt response in case of any release to the marine environment and the Base personnel trained to its use.


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6. Environmental impact

The potential impact on the environment from the activities on the Logistics Base can be categorized as follows [2]i:

ƒ Direct (or primary): impact that result from a direct interaction between a planned project activity and receiving natural and human environment;

ƒ Indirect: impact that follow on from the primary interactions between the Project and its natural and human environment as a result of subsequent interactions;

ƒ Cumulative: impact that act together with other impact (including those from concurrent or planned future third party activities) to affect the same resources and/or receptors as the Project;

ƒ Perceived: changes that may be unconnected to, but blamed on, the Company. These are identified and assessed through stakeholder engagement and consultation.

In the current section, all the impact is reviewed through all phases that concern the project; the construction of the site, the operation of the project and the decommissioning phase.

The Table below presents the main components comprising the physical environment and further summarizes the aspects and possible impact in a generic manner. This has also been the subject of the EIAs. An analysis of the aspects-impacts in relation to the onshore activities on the Logistics Base is also offered.

Component Environmental Aspect Environmental Impact

Air

Emissions to atmosphere (Nox, SOx, PMs, VOC)

ƒ atmospheric pollution

ƒ release of toxic fumes

Use of Ozone Depleting Substances (ODS) like halon etc.

ƒ local impact to climate

Dust ƒ atmospheric pollution from dust

Water

Releases to the sea and/or surface waters of drilling cuttings, sewage, chemical products

ƒ marine pollution

ƒ surface water contamination

ƒ changes in physical/ chemical characteristics of water (temperature, salinity etc.)

Subsoil / Soil

Releases to the soil, subsoil ƒ soil and subsoil pollution

Geological and hydro-geomorphological situation

ƒ changes in surface hydrology and drainage patterns

ƒ pollution of water tables

Landscape

Generation of Noise ƒ acoustic pollution

ƒ problems with local communities

Generation of Odours ƒ problems with local communities

Waste management (hazardous & non-hazardous)

ƒ soil/ subsoil contamination

Generation of traffic ƒ generation of atmospheric pollution, fine dust

Physical presence on site ƒ Visual impact/ modification of landscape

Table 6a. Significant Environmental Aspects and Impacts


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6.1 Impact on Air Quality

During the customary operation of the Logistic Base, the energy requirements will be provided by local grid (320 kW anticipated). Also two generators will be available (capacity 545 kW each) to cover any additional power requirements, in particular for the Liquid Mud Plant operation.

In this case, the main air emissions due to onshore support activities will be represented by these generators. Common combustion pollutants will be emitted due to these generators (CO, NOx, PM, SOx, VOCs) and is additionally expected dust emission from bulk product loading. The pollutants are expected to be rapidly diluted and dispersed in the atmosphere, depending on weather conditions.

In the Logistic Base area, various operations such as receipt, storage, handling and transportation to/from the offshore drilling unit of materials, equipment and goods are expected to be carried out. Moreover, emissions due to trucks, forklifts and vehicles for materials provision/handling will be emitted, but these are of lower significance.

Additionally, regarding the operation of the shore base in Larnaca, due to nature and limited influence area of air emissions, the impact associated to the related fallout may be considered of low and limited. Similarly, air emissions and dust dispersion are also equally anticipated by the additional port activities, which is something that needs to be carefully taken into consideration in the environmental equilibrium.

Due to the nature of the project, the Logistic Base in the port of Larnaca will be in place temporarily and then depending on the results of the drilling campaign this could be dismantled or the decommissioning date postponed. Eventually, decommissioning operations need to be also assessed. The later phase could generate two types of air pollutants:

ƒ combustion emissions generated from the dismantling by equipment and yard vehicles;

ƒ any dust generated by dismantling and vehicles movement.

Subject activity is considered of low impact since it is characterised by temporary duration and limited extension, i.e. taking place only on a small part of the Logistic Base.

6.1.1. Control mechanisms

As far as dust is concerned a 24hrs Air Quality Monitoring Station could be used; the present one, 2km from the port at Larnaca Academy, is deemed too far away. The Labour Department. assessed that the station suffices to monitor the level of the dust and the quality of the atmosphere during the research drilling campaign.

6.1.2. Mitigation measures

In response to the local community’s concerns about allergies and respiratory problems arising from inhaling dust from the Liquid Mud Plant, ENI has put in place certain actions to minimise adverse effects.

ƒ In order to avoid the dispersion of dust, the bulk cutting bottle will be provided with containment closed-wall cabinet system and a dust remover system will be installed at the bulk facilities achieving the minimization of the dust dispersion from bulk powder materials handling. The warehouse where these actions will take place is an enclosed space where the dust will be transported in big bags and cut inside and transferred through a funnel leaving minimum possibilities for material escape.

ƒ vessels stationing in the port will depart at partial power, achieving full power only after leaving the port area and avoiding or limiting the pollutants emissions while in port or during unfavorable atmospheric conditions;

ƒ exhaust systems and engines will be operated and maintained, in accordance with the manufacturer’s specifications;

ƒ preventative maintenance, leak detection and repair programs will be employed;


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6.2 Impact on Water Quality

Sewage or process discharges will not be originated by the activities performed on the Logistic Base.


The only discharge into the sea possible is stormwater from paved areas that are not expected to be polluted. The chemical storage area and the LMP area will be paved and confined by containment walls, the drained rainwater from the external paved areas will not be contaminated.

All liquid wastes from LMP will be collected in adequate containers in the Logistic Base and managed by the Waste Management Contractor appointed for the waste management of the Logistics Base, holder of the required permits, in accordance with a dedicated waste management Plan submitted to Authorities, and sent for treatment/disposal in an authorized facility.

Sanitary wastewater (e.g. shower, toilets) due to the presence of the personnel will be supported by the Logistics Base, collected in a dedicated leakproof underground tank and periodically sent to treatment in an authorized facility. Arrangements are being made for connecting the Logistics base to the local sewage network, in order to minimize the overall waste production and the need of transportation of such waste.

Hence the impact on water and sea water within the port and its vicinity, by activities carried out on the Logistic Base should be considered not significant. This is the case, even when considering the impact of untreated sewage that could possibly be discharged into the marina area from yachts entering the port or being at berth.

6.3 Impact on Soil and Subsoil Quality

The location of part of the Logistic Base is in the western part of the Port of Larnaca, on reclaimed land, previously used for outdoor storage and technical/engineering applications and including existing asphalted areas, road and port structures.


By assessing the workplace, the materials used and that could potentially cause spills and therefore contaminate the ground will be stored in covered places and on well non-permeable floor. All stored material will be registered and the storage areas kept clean and tidy. This area will be paved and equipped with adequate containment system and dedicated drainage system, in order to avoid any release to the environment.

The onshore waste management will be carried out, in accordance with applicable regulation, by a licensed Waste management Contractor, in accordance with a dedicated Waste Management Plan submitted to Authorities. Domestic waste will be managed by the Cyprus Port Authority. Appointed licensed Contractor will manage the wastewater that is expected to be collected in a leakproof underground tank and sent to treatment in authorized facilities. Arrangements have been made for connecting the Logistics base to the local sanitary network, in order to minimize the overall waste production and the need of transportation of such waste.

Taking into consideration the above and after the onsite review of the workplace, impact on onshore soils by support activities carried out on the Logistic Base are not expected to have significant impact.

Regarding the decommissioning phase, the onshore Base will be in place temporarily, and is expected to be dismantled after the completion of the frilling campaign. The main decommissioning activities involve:

ƒ removal of all the mechanical equipment/installation and piping; and

ƒ dismantling of all installations specifically built for the project (LMP and bulk facilities).

Potential interactions during decommissioning activities on soil are attributable to production of waste. The concrete base of the LMP will be either left in site or broken up and removed from


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site, depending on the requirements of the next user of the land. A waste typology will be produced and a licensed Waste Management Contractor will manage the produced waste during the dismantling activities after their collection in appropriate container.

The impact on onshore soils by decommissioning of the Logistic Base are expected to be low.


To prevent even the potential impact, the suggested mitigation measures presented below shall be implemented:

ƒ all areas dedicated to activities with potential presence and release of pollutants will be paved and safely contained (containments wall and internal drainage system with collecting point and sump) in order to avoid release of oil to the environment;

ƒ all materials that may contaminate the ground in case of spill will be stored in covered places and on well non-permeable floor;

ƒ any chemical storage tanks will be designed to meet applicable regulatory requirements as well as best industry practices and manufactured according to the latest relevant industry standard;

ƒ handling of oil derivates for refueling will be performed with maximum care;

ƒ equipment and vehicles will operate within the designated work areas and roads.

The overall assessment and measures taken are considered adequate enough for ensuring the appropriate management of the impact on the soil quality.

6.4 Impact on Landscape

The area that the project will take place, highly urbanized, is already influenced by many anthropogenic noise sources. An influence in noise emissions is however expected, mainly by vehicles and trucks, the diesel generators and the LMP equipment, namely pumps, centrifuges system and compressors, for a period of about 320 days6.


The subject of noise, which is of critical concern due to the proximity of the base to residential areas, special conditions were imposed from the Department of Environment with 4 points of noise measurements and 3 points in time (reference point measurements – during construction – during operation). The first oil company to begin its drilling campaign has already signed a contract with a specialised company to monitor noise levels and analyse the readings.

Furthermore, there is a breakdown noise thruster for monitoring the noise and although more activities in the port area are happening simultaneously, the noise impact due to the Logistic Base will be kept at a minimum level.

It has also been noted that sound attenuation for generator is provided by a weatherproof acoustically insulated enclosure.


Sound breaker screens can be installed around the LMP, should measurements indicate that these are needed, in order to reduce the noise level to the offices and minimize noise nuisance to the existing buildings close to the residential areas out of the Port.

For logistic support purposes, together with the Larnaca Port, the Helicopter Terminal and the International Larnaca Airport have been identified and the activities noisier during helicopter landing will be done in appropriate airport areas.

Regarding the onshore support activities, due to the anthropized nature of the areas involved and the limited influence area of noise emissions, the impact associated may be considered of low entity and circumscribed.

6 These 320 days correspond to an estimate of 80 days per each well drilling operation to be conducted by Eni (Cyprus) Ltd in Block No.9


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As previously mentioned, the decommissioning activities of the Logistic Base are expected to have limited duration and will mainly produce noise emissions by:

ƒ dismantling activities;

ƒ power generators, equipment and vehicles.

The noise impact is at local scale and temporary and may be considered low.

On another angle, waste management of hazardous and non-hazardous materials, also comes under the impacts on the landscape. Discussions here revolve around NORM/ TENORM that may be present during storage and transportation of drilling cuttings that pass through the Logistics Base for delivery to the waste management contractor (IESC).

Storage and transportation of drilling cuttings will take place in specially designed containers, suitable for the transportation of combustible liquids, equipped with hinged and casketed lids and secured with forged flange nuts and swing bolts. Containers can contain up to 12 tones mud cuttings and are specially designed for offshore dynamic lifting, in accordance with international standards.

As regards to the quantities involved in the drilling campaign. It is anticipated an average number of 8 trucks per week, among which a number of 4 to 6 truck are dedicated to the transportation of the LTOBM drilling cuttings.

Picture 6a: Example cuttings box container

Insignificant amounts of naturally occurring radioactivity is present virtually everywhere in the physical world. Regarding the scope of operations to be supported from the Logistics Base in Larnaca, concerns arise, only upon detection of radioactive ores in the drilling cuttings.

Findings from the drillings in Israel and the previous wells in Cyprus have shown that there are no concerns. As previously stated, the radioactive density of naturally occurring radioactive ores is particularly low and it constitutes a natural phenomenon.

Within the scope of ENI’s drilling campaign, cuttings are stored on the drilling ship in specially designed skips equipped with sealed closure and certified release. Then the skips are transferred to the onshore base where they are collected by a licensed waste contractor (IESC).

Radioactivity levels should be measured continuously during the drilling operations and in case of high levels of radioactivity, measures should be taken for the handling of the cuttings in accordance to the company’s group procedures and international practice.

Operators claim that loading/offloading waste operations should take place twice per week. Considering that the duration for the overall drilling campaign is 48 weeks, this corresponds to approximately 96 passages from and to the Logistics Base and total produced waste of approximately 8.700 tones.

Electronic devices used for radiography and transported through the logistics base to the well sites, contain small amounts of radioisotopes that are encapsulated, isolated and pose no threat. At this point it would be useful for the reader to note that there are numerous uses of radiation emitting sources for high technology purposes, even in hospitals neighboring residential areas.

In the particular case of Larnaca Logistics Base, the Radioactive Isotopes will be managed by a certified supplier. Isotopes are kept in a secure area in Vasiliko and when requested to leave the


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storage area they are loaded for calibration and then on trucks. Transportation shall take place in securely closed containers with an average time period spent at port of 30 minutes. Indicatively of the low risk entailed is the fact that Personal protective equipment (PPE) is not required for the transportation of the sealed capsules containing radioactive isotopes. According to ENI, the approximate quantity of radioisotopes to be transported through the logistics base is 25 g in the overall drilling campaign at maximum.

6.5 Technical Review of the Liquid Mud Plant (LMP)

The design and operation of a Liquid Mud Plant inside the port area has received heightened attention from the people in Larnaca. This part of the report has considered all environmental and health impacts arising from the above activities/ areas in the Logistics Base, with a view to minimise significantly the potential for the most dangerous identified possible accidents, which are defined as:

ƒ Process releases and pollution (risk of inhalation, absorption, injection or ingestion);

ƒ spill/leakage (release of toxic and harmful substances in the environment);

ƒ fire/explosion;

ƒ operator error and chemicals release during chemicals handling;

ƒ falling of store materials on the shelves, liquid drums, and chemical pallets.

This specific part of the report has reviewed the Preliminary Environmental impact Reports for chemical storage and Liquid Mud Plant and has also examined the content of HAZID referring only to the onshore activity of the drilling campaign.

Findings are presented in the form of a Table, together with the recommendations from Lloyd’s Register and the comments of the first Operator to commence their research drilling campaign at the port of Larnaca, namely ENI Cyprus Ltd.


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Table 1: HAZID review-LMP

No. Area LR Comments & Recommendations Input by ENI Cyprus ltd.

1 Overall

For a majority of the guide words the recommendation of "Training and qualification of management control" is given. A more concrete recommendation is preferable for each guide word in order to prove that the risk is reduced from Medium to Low. For instance, give references to all documentations regarding working procedures etc.

Detailed information about procedures, training and management plans has been provided to the Authorities by ENI Cyprus Ltd. The training given to the workers includes:

ƒ Waste Management Plan workshop (by the waste management contractor- IESC);

ƒ 20 rules of Contract Responsibilities (by the LMP contractor – Halliburton);

ƒ MEDSERV Company's Policies;

ƒ Practical training on banking the crane from a trailer;

ƒ Initial induction;

ƒ Defensive drive;

ƒ Basic First Aid;

ƒ Site Health and Safety induction & Site induction;

ƒ Safety observation Program;

ƒ Permit to Work, HSE Meeting, Toolbox Talk training and onshore terms license;

ƒ Incident investifation;

ƒ Oil Spill Kit Handling Familiarization (in house and onsite) and drills;

ƒ Working at height and harnesses;

ƒ Basic Fire Fighting awareness, Fire Extinguishers-Manual and Handling-Observation Cards Training;

ƒ ADR: Simi Lifejacket Familiarization and use;

ƒ Familiarization on Fork Trucks including charging of the electric fork truck;

ƒ Foreklift Truck Training;

ƒ Crane Operations, Banks Man and Rigger Training;

ƒ Training in classroom (Webbing slings, Signals for banking the crane, Shackles, Containers, Riser pipes and other tubulars, Deck Plans for vessels, Staying safe when loading, Use of radios);

ƒ Control of Substances Hazardous to Health (COSHH).


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Regarding the Chemical handling and the LMP operations, the Halliburton University (HAL-U) online is a system used to manage the training assignment and to register the training session results. Furthermore, the Hal-U system is used to ensure the suitability of the workforce to the assigned tasks.

2

Fire & explosion

Only flammable release of hydrocarbons is mentioned to give fire/explosion hazards. No information presented regarding what type of hydrocarbons, quantities and potential ignition sources.

Fire Risk Assessment has been conducted for the Logistics Base in cooperation with the Fire Brigade of Larnaca.

The fire risk assessments (including the Chemical Storage warehouse, the shed and offices) was completed to complement the application to the Larnaca Fire Authority and has been conducted considering the following steps:

ƒ identification of hazards;

ƒ identification of people at risk;

ƒ evaluation the risks of fire and assessment of existing fire safety measures;

ƒ record significant findings, assess and plan periodic review.

It has to be underlined that the fire risk assessments include, in particular, a list of possible stored chemicals and flammability classes.

Other combustible material is not mentioned; diesel fuelled forklifts, electrical installation material, electrical forklifts and its chargers, attending trucks, diesel storage packing material etc.

The review of safety data sheets for chemicals to be stored within the base indicated several potential fire/explosion hazard events that might threaten the closely located urban environment.

ƒ Mainly, in case of warehouse fire, toxic decompositions of the chemical will develop a toxic plume that might expose the area around the port of Larnaca.

ƒ Several hydrocarbon based chemicals are identified that needs extra concern in a risk analysis. Exposure of chemical drums to heat, might lead to a potential explosion risk

A number of issues are recommended for further investigation:

ƒ Toxicity/ composition of fuel gas from fires

ƒ Dispersion of the flue toxic gas and possible consequences to surrounding areas (eg.use of consequence modelling in Phast or similar is recommended)


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Handling of runoff water from fire-fighting is not mentioned in the Pre-EI (or HAZID-RA).(Ref. the Sandoz accident in 1986 where a warehouse fire caused large environmental damage.) Operators to investigate how runoff water from a fire is handled in order to minimize risk of contamination to sea or soil.

Regarding the handling of potential water from fire-fighting, it has to be noticed that the chemicals are stored in dedicated areas, with impermeable pavement and dedicated containment drainage system and bund.

A more detailed presentation of fire-fighting measures is lacking.

Regarding firefighting system, it has to be underlined that the Logistics Base is provided with appropriate equipment and the Base personnel trained to their use. The escape route, as well as the safety and firefighting system are clearly marked and signalled and their position identified on the Logistics Base emergency plans. �

3 Draining

Several of the chemicals are found through review of their safety data sheets to be very harmful to the environment when released. Therefore, it shall be prevented from entering sewers, waterways, or low areas. Following actions are recommended:

ƒ Include draining capabilities at areas where loading/offloading of chemicals are carried out (if such operations are carried out outside the storage area)

ƒ Clarify if the drain system can handle larger amounts of water in case of fire accidents, regularly cleaning or heavy rains.

Regarding potential draining of pollutant, it has to be highlighted that no liquid discharge is expected during the operation of the Logistics Base, including the Chemical Storage and the LMP. Furthermore, as reported in the Pre EIs, the following shall be highlighted:

ƒ chemicals are stored in dedicated areas (with impermeable pavement, dedicated containment drainage system and bund) in appropriate containers placed on ground and metal structures, appropriately spaced so as to ensure the separation between the various types of products also basing on their quantities, characteristics, physical state and behavior and after taking into account the relevant information found in their Safety Data Sheets;

ƒ any water within the contained area is collected at a low point, in a dedicated tank equipped with a sump pump;

ƒ the piping is regularly inspected and loading/offloading operation of the supply vessels manned in order to avoid undetected spill;

ƒ dedicated oil spill response equipment are available at the Logistic base for a prompt response in case of any release to the marine environment and the Base personnel trained to its use.

4 Chemical handling

The risk within the warehouse has been covered in the Pre-EI (HAZID-RA). However, accidental scenarios mentioning transfer operations and internal traffic are not considered (or documented) in the HAZID-RA. Spill/leaks from trucks and transfer operations (forklift transfer and crane transfer) are not well described. Collisions within the chemical storage area (e.g. between trucks and forklifts) could pose a risk for spill/leakage. These releases could be outside the containment arrangements of the storage areas and pose a risk of contamination of sea or soil.

A Transport Management Plan is established for the all Logistics Base and personnel assigned to chemicals handling is properly trained.

Furthermore, oil spill kits are available in the Logistics Base for any intervention in case of spill/leakage.

Potential dangerous accidents are identified for the Chemical Storage in the Pre EI taking into consideration the HAZID. HAZID includes chemical handling and any operator error and chemical release as associated hazard/scenario.


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For the OSCP and ERP the risk of accidental spills from all transfer operations and possible internal traffic collision should be assessed.

The Oil Spill Contingency Plan (OSCP) and Emergency Response Plan (ERP) cover the possible emergency scenarios due to e.g. oil and chemical pollution, fire/explosion and serious road accidents.

5 Liquid Mud & Bulk Plant, overall comment

A HAZOP (or corresponding process hazard assessment) is recommended to be carried for the LMP. A HAZOP would cover both the process and operations (human error etc.) For instance:

ƒ Environmentally dangerous substances?

ƒ Any process releases that could pose a fire/explosion risk?

ƒ Hazards related to drop of heavy objects as containers, bags with chemicals etc.

The HAZID–RA has been carried out for the Logistics Base of Larnaca, for the drilling ship and supply/supporting vessel and helicopter activities.

ENI Cyprus will evaluate the opportunity, at the proper stage of the project, to conduct the HAZOP.


6.5.1. The issue of Radioactivity levels in the Mud

Regarding the concerns raised by part of the population on the levels of radioactivity in the Mud produced, the results from measurements in the respective Logistics Base operating in Limassol have returned no significant figures.

More specifically, the Ministry of Labour, Welfare and Social Insurance holds the responsibility for the implementation of the regulatory framework governing all relevant aspects to ionizing radiation in Cyprus (including use, introduction, transportation, discharge etc). Within the context of the above merit, continuous monitoring of the quality of air, water, soil and food chain takes place, in respect of the levels of radioactivity, with a view to protect the human health and the environment.

Results from analysis of mud samples in December 2013 at the port of Limassol –during the research drilling campaign of Noble Cyprus Ltd.- have shown that the levels of radioactivity arising from the drilling mud are far less than the acceptable levels of exemption or release defined by the relevant Legislation and numbers were within the acceptable limits of radioenergy in the physical environment of Cyprus; hence the mud was not considered to be a radioactive material.

The official Letter of the Cypriot Ministry of Labour, Welfare and Social Insurance, dated 26th August 2014, has been attached herewith as Appendix No.8 for further reference.


The application of SEVESO II Directive (Directive 96/82/EC) in respect to the existing oil storage facilities lies with the local authorities. Land use planning on the other hand depends among other on the risk and safety profile of other previously existing SEVESO II facilities in the area (i.e. Oil Storage installations). It is also noted that as far as quantitative and qualitative acceptance criteria are concerned not all countries apply the same methodology.

On the question whether the logistics base qualifies for a SEVESO II installation we have carried out a review on the basis of envisaged chemicals quantities to be stored and the conclusion has been that the chemicals storage facility does not qualify under the SEVESO II thresholds.

The methodology applied is presented herewith by the following straightforward steps. All substances of interest for the Seveso II Directive have been identified and then grouped in categories of dangerous substances (toxic, flammable, etc.).

The maximum expected stored quantities have been then compared with the limits (“qualifying quantities”) set by the Seveso II Directive.

The following table summarizes for each categories of dangerous substances the overall maximum expected stored quantities and relevant “qualifying quantities” of the Seveso II Directive. A full presentation of substances involve in the assessment exercise is available in Appendix No.67

7 It needs to be noted at this point that the expected stored quantities of hazardous chemicals, have been conservatively estimated.

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6.5.1. The issue of Radioactivity levels in the Mud

Regarding the concerns raised by part of the population on the levels of radioactivity in the Mud produced, the results from measurements in the respective Logistics Base operating in Limassol have returned no significant figures.

More specifically, the Ministry of Labour, Welfare and Social Insurance holds the responsibility for the implementation of the regulatory framework governing all relevant aspects to ionizing radiation in Cyprus (including use, introduction, transportation, discharge etc). Within the context of the above merit, continuous monitoring of the quality of air, water, soil and food chain takes place, in respect of the levels of radioactivity, with a view to protect the human health and the environment.

Results from analysis of mud samples in December 2013 at the port of Limassol –during the research drilling campaign of Noble Cyprus Ltd.- have shown that the levels of radioactivity arising from the drilling mud are far less than the acceptable levels of exemption or release defined by the relevant Legislation and numbers were within the acceptable limits of radioenergy in the physical environment of Cyprus; hence the mud was not considered to be a radioactive material.

The official Letter of the Cypriot Ministry of Labour, Welfare and Social Insurance, dated 26th August 2014, has been attached herewith as Appendix No.8 for further reference.


The application of SEVESO II Directive (Directive 96/82/EC) in respect to the existing oil storage facilities lies with the local authorities. Land use planning on the other hand depends among other on the risk and safety profile of other previously existing SEVESO II facilities in the area (i.e. Oil Storage installations). It is also noted that as far as quantitative and qualitative acceptance criteria are concerned not all countries apply the same methodology.

On the question whether the logistics base qualifies for a SEVESO II installation we have carried out a review on the basis of envisaged chemicals quantities to be stored and the conclusion has been that the chemicals storage facility does not qualify under the SEVESO II thresholds.

The methodology applied is presented herewith by the following straightforward steps. All substances of interest for the Seveso II Directive have been identified and then grouped in categories of dangerous substances (toxic, flammable, etc.).

The maximum expected stored quantities have been then compared with the limits (“qualifying quantities”) set by the Seveso II Directive.

The following table summarizes for each categories of dangerous substances the overall maximum expected stored quantities and relevant “qualifying quantities” of the Seveso II Directive. A full presentation of substances involve in the assessment exercise is available in Appendix No.61

1 It needs to be noted at this point that the expected stored quantities of hazardous chemicals, have been conservatively estimated.

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Categories of dangerous substances

(Column 1 of table in Part 2 of Annex I to the Seveso II Directive)

Overall maximum expected

stored quantity [t]

Qualifying quantities

(Column 2 of table in Part 2 of Annex I to the Seveso

II Directive) [t]

Summation rule

1- Very Toxic 1,4 5 1,4 t / 5 t

2- Toxic 5,4 50 5,4 t / 50 t

3- Oxidising 2,0 50 2,0 t / 50 t

6- Flammable 10,8 5000 10,8 t / 5000 t

7b- Highly Flammable Liquids 5,3 5000 5,3 t / 5000 t

8. Extremely Flammable 2,1 10 2,1 t / 10 t

9i- Very Toxic To Aquatic Organisms

10,2 100 10,2 t / 100 t

9-ii Toxic to Aquatic Organisms 5,5 200 5,5 t / 200 t

Ȉ = 0,77

According to the Seveso II Directive summation rule to the table above, the total is 0,77. A number lower < 1 means that the Seveso II Directive would not apply.

Further to the available information and the methodology applied, it has been verified that the chemicals of potential interest for the Seveso II Directive do not exceed:

ƒ the qualifying quantities for named substances (Column 2 of table in Part 1 of Annex I to the Seveso II Directive);

ƒ the qualifying quantities with regard to the categories of dangerous substances (Column 2 of table in Part 2 of Annex I to the Seveso II Directive);

ƒ the overall hazard associated with toxicity, flammability and eco-toxicity that have been assessed according to Note No. 4 of table in Part 2 of Annex I to the Seveso II Directive.

On the question how the settlement of the logistics base in the port could be affected by the previous Oil Storage installation in the area, the following applies.

With reference to the guidelines [3] entailed in the document which has also been referred during the public consultation the location of logistics base within the port present an ISO Risk contour of 10-9, this translates into risk zone classification of R3. Under this risk contour and the tables used for land use it appears that simple acceptance or acceptance under conditions would in any case apply for the logistics base in port.

As far as prospective cumulative effects of an incident occurring in the oil storage installation are concerned the following is noted. The ISO risk contour profile may provide an indication but if required to assess such a prospect in detail, analysis of all safety documents associated with the Oil Storage installations would be required. In such case a quantitative risk analysis would seem of greater essence. Also refer to the recommendations section.

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7. Socioeconomic impact

It is anticipated that the use of Larnaca port as a supporting station to the offshore exploration drilling operations in the Cypriot EEZ may impact either directly or indirectly a number of aspects of social and economic life in the city. The scope of the socioeconomic impact assessment is to assess the envisaged economic influence in various sectors like tourism and other factors that could affect the growth of Larnaca.

The objective is to clearly essay any positive and negative impact arising from the hydrocarbon activities to the local community taking into consideration any potential developments as dictated in the current state and prospective development projects. This analysis aims to compare the current no-change scenario against the use of Larnaca port as a Logistic Base to the offshore drilling explorations taking also into consideration the probability of developing a hydrocarbon cluster in the city.�

7.1 Employment

The offshore oil and natural gas industry can have a significant contribution to employment, commensurate to the magnitude of operations the availability of skillful labor force in the area.l Numerous examples from other cities demonstrate the beneficiary effects that hosting an Oil & Gas cluster has on the development of the economy and at the employment rates of the city.

More precisely in the Larnaca’s case, at the first stage of the explorations, there will be four wells that will be explored. According to the operators of the existing logistics base, the personnel that will be occupied within the base will be approximately a hundred people directly employed in the logistics base, however more than two hundred people have already been working for various activities in the project so far.

It is anticipated that there will be a significant multiplier factor of indirectly connected people that will be employed during the operation of the Logistic Base.

One of the primary potential benefits, i.e. the deployment of the logistics base could be the development of an offshore oil cluster for the workforce in Larnaca with important considerations for the future of the city. It should be noted though that such advancement is likely to happen in the apparent case that the exploration will be resourceful.

Offshore oil & gas production consistently stimulates onshore economies globally, regardless of the former status and structure of their local economy. Indicative examples are Canada and Norway, but also numerous emerging economies.

Another important example of economic change from the Oil & Gas offshore industry that can be associated with the case of Larnaca is Aberdeen [4].This is the only large city in the UK to grow its economy even during the financial crisis between 2008 and 2009. According to the Oil & Gas UK’s Economic report (2012), the multiplier effect indicates that for every direct job, seven and a half (ratio 1 : 7.5) new ones are created indirectly which account for 75,000 jobs in Aberdeen areas which are supported by industry.

In consequence, the advantages of hosting an Oil & Gas cluster are noticeable. Aberdeen, being an Oil & Gas capital in Europe with the potential of becoming a significant world energy city, has certainly spearheaded the UK’s successful exploitation of Oil & Gas over forty years and helped make a massive contribution to the UK economy on balance of payments and employment.

The social stability of Cyprus and Larnaca, in particular could prove of importance in the effort of operators and oil companies in seeking lower or higher caliber labor. It is advised however that besides the current level of employment absorbed by the base and if the exploratory phase concludes successfully the opportunities for further employment will significant increase rendering this sector as a strong contributor to the city economic life. It is suggested that at this second phase detailed planning and working closely with oil companies will be needed to ensure this effort will have the maximum positive impact to employment for the local community.

It is noted that apart from positive such growth could also have negative effects. Economic losses have been observed in several cases and are mentioned in the bibliography, such may

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include increased growth of the transient population with contribution to increased criminal activities in the project area (e.g., robberies, drugs) or recreationists (e.g. fishing) avoiding the area. It is envisaged however that in progressed societies like Cyprus both the social profile as well as any control measures exerted can control and minimise the impact of such factors.

7.2 Investment - Capital inflows

In order to estimate the potential capital revenues that the Logistic Base could have through the operational support of the drilling activities, an estimation of the potential reserves of the overall exploration is prudent. Although the risk of not having a successful operation is always probable, this estimation should not be considered at this stage as there are various factors that could affect this probability.

Nevertheless, in the fortunate scenario where the exploration proves to be effective, there is a high prospective that a significant revenue from the total capital will be absorbed within the community of Larnaca. According to corporate data, the investment in Larnaca (local subcontractors etc.) already reaches the amount of five and a half million dollars and it is expected to grow as long as the operations in the logistic base continue to be active.

Moreover, the reputation upgrade could position Larnaca in the global list of cities associated with the O&G offshore industry and this could produce very advantageous effects for the tourism promotion of the city. Moreover, the municipality could benefit from increased health, education, welfare, and social services from the presence of foreign high-caliber O&G professionals.

Overall international bibliography analysis shows significant estimates on both the immediate and the total economic effects associated with increased Oil & Gas production, by using the investment multipliers.

At this stage, it is not possible to replicate this methodology for Larnaca, for a series of reasons:

ƒ The Oil & Gas reserves of Cyprus cannot be estimated before the completion of the offshore drillings.

ƒ The oil companies must complete exploratory drillings before compiling their natural gas production plans for the coming decades. The same applies for the plans of the central government of Cyprus

ƒ The volatility of energy prices in conjunction with difficulties in the estimation of gas extracting cost in the Cypriot EEZ

However the envisaged hosting of the offshore support base in Larnaca signifies the placement of the city Oil & Gas map and signifies interest in attracting Oil & Gas related investment and O&G related personnel to the city.

In the case of Cyprus deepwater offshore Oil & Gas drilling well cost may lie in a range of 100-150 mil USD per well. From this investment approximately thirty (30) million USD are estimated to be associated with offshore logistics costs while 4 to 6 million USD (3 - 4.5mil Euro) are expected to reach the local community per well. Such costs may vary, for instance, in the case of Australia, in 2003 there were sixty offshore wells drilled at a total cost of five hundred million (Aus.). In 2013, nineteen wells were drilled for a total cost of two and one half billion (Aus.) [5]. Such fluctuations apply even for the same country, therefore, cost per offshore oil well in Australia ranged from ten to a hundred and twenty million dollars during the period 2003-2013.

Approximately, 10-15% of the offshore logistics costs are expected to directly benefit the local community. In the case of Larnaca, up to ten wells have been scheduled, which could mean an amount 40-60 million USD within a two year period directed toward the local communities, just from the drilling-exploratory phase. This could be viewed as a significant contribution. In comparison within the first half of 2014 Larnaca port has served around 20,000 passengers which could have approximately contributed two (2) million Euro over this period.

There has been vast experience around the world of regions economically advanced by the development of the hydrocarbon industry. It is anticipated that in more developed countries benefits are augmented with risks better managed. Projected cash inflows will be considerable,

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especially if Larnaca is to lead on a future full exploitation phase, and planning should be present prior to the commission of the exploitation phase. Such planning is needed as there have been cases where hydrocarbon wages inequalities have exerted pressure to lower income citizens through demand growth and inflation.

7.3 Real Estate – Asset Values

Inevitably the association of the Larnaca area with the Oil & Gas sector could have significant impact on real estate values. This impact will vary on the basis of a number of factors as presented below.

ƒ The projected capital inflows and direct investment that will derive from oil & gas exploration, this being directly associated with the resources under exploitation and the magnitude of operations.

ƒ The attraction of high caliber oil & Gas employees in the Larnaca area

ƒ Market expectations which could derive from both comparison with other examples of oil cluster cities but also speculative activity

ƒ Attracting of financing based on the potential of Oil & gas activity

Evidently any positive drives cannot be free of risks. Such risks are mainly associated with the booming effect experienced in other parts of the world. It is not uncommon high expectation Oil & Gas exploration to lead to a real estate bubble. In the case of more developed economies however, such risk seems to be fairly limited with the need for careful planning and monitoring of the market required in order to maximise benefits and manage risks. Figures illustrated below indicate this unexpected increase in real estate prices in less developed cities like Luanda, Angola and N’Djammena, Chad.

Figure 7.1 i: Comparative indicative costs of renting apartments in well known cities [6]

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Such planning could foresee the establishment of Larnaca as an Oil & Gas cluster. By definition, clusters are defined as ‘groups of companies and institutions co-located in a specific geographic region and linked by interdependencies in providing a related group of products and/or services’. They are a natural indicator of the specialized knowledge, skills, infrastructure and supporting industries in enhancing productivity as the key determinant of sustaining high levels of prosperity in a location [7].

Such an initiative will off course depend on the success and the timeline for the oil & gas exploitation phase but should be initiated as early as possible. The airport as well as the proximity of other Cyprus main cities could constitute the main arguments of Larnaca in such an effort while on the other hand the establishment of Limassol as a marine and other business center as well as the presence in Nicosia of the Cyprus administration are potential drawbacks.

As Larnaca is already a developed town, this clustering effect will be an advancement of the city as clusters can create economic and touristic benefits. Clustering enables higher productivity, close interaction with customers, other companies, and knowledge-intensive service providers. This could create a very prosper environment for the development of Larnaca both in an economic but also in an educational level.

7.4 Traffic Disturbance

Traffic disturbance due to the operation of the logistic base is an issue that could potentially affect the standard mobility within the town of Larnaca. This could affect tourism and other activities especially in the summer months. After a detailed review of projected logistics in flows and out flows form the port the following figures have been indicated.

No of passages /week No of trucks / passage No of trucks / week

2 5� 102�

Comparatively and in an accumulative manner, the overall impact of the transportation activities due to the Logistics base does not cause significant concern and this may also apply if this operations is magnified by a factor of two or even three. It is noted however that if operations are to be planned for the full exploration phase then a more detailed study taking into account any lessons learned from exploration should be performed.

2 It is expected that the no of trucks per week will not exceed 10 trucks.

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Additionally, with the presence of Larnaca’s airport closely to the port, the offshore personnel will be transported with helicopters to and from the drilling ship. Unlike the case in Limassol, this will be of great convenience as it limits the overall transportation time of the staff in an effective way and with no significance supplementary traffic disturbance while there will be no need for a designated helicopter landing area within the city limits.

7.5 Visual impact

During the operation of the Logistics Base in the port of Larnaca, certain infrastructure will be developed to accommodate and ensure the safety of the planned procedures. The chemical storage as well as the liquid mud plant will be in the form of warehouses thus the visual impact will not vary significantly in comparison to the visual impact currently in port. Silos that will be used for storage of mud or mud components reach 10 m in height and can be visible from areas around the port. This has a significant negative visual impact as it offers an industrialised sense of the area in proximity of the touristic center of Larnaca. It is noted however that such impact is limited in comparison with the Oil storage area in proximity of the port of edible oil tanks just outside the port limits and in close proximity of the liquid mud plant.

In order to minimise the impact on the visual perception of the port it is suggested that liquid mud plants within this area to be limited to the minimum required which translates to one or two mudplants maximum, kindly also refer to recommendations.

Moreover, related activities from the O&G at the port of Larnaca such as the berthing of the supply boats and handling operations from ships with the exploration equipment is not considered to be an unsettling factor as it falls within the customary operations of a commercial port.

Other mitigation measures for the visual impact could comprise height limitations in installations or visual covering with natural or architectural structures, noting that this has to a certain extent being applied in the current base.

7.6 Tourism – Urban Planning, Master Plan

Despite recent years downturn mainly attributed to the financial crisis the tourism growth potential for Larnaca area remains strong for a number of reasons. In this context analysing how the Larnaca tourism profile could be affected by the oil & gas exploration activities seems essential.

The current size of the tourism sector at 150,000 thousand of hotel arrivals, the geographical location of Larnaca, the extrovert nature of tourism as a financial sector along with the projections for real estate development and planning in the Port through the initiative of ZENON consortium constitute strong points for years to come. Given however the current state of touristic infrastructure and apart from any public investment, additional private investment in the area seems critical in achieving sustainable growth and this should not necessarily be limited to the ZENON consortium initiative.

In this sense attracting Oil & Gas activity in terms of exploration and exploitation and above all establishing Larnaca as an oil & gas cluster could result in a number of benefits for the tourism sector in the region. In order to achieve this however it is essential that oil and gas operations remain as distinct as possible and alleviate any impact to the touristic operations in the city and the area. If this prerequisite is attained then a number of synergies could be developed between the two sectors.

It is noted that distinction between touristic areas and the logistics base operations will not be a straightforward process since a number of touristic and recreational areas are situated in proximity of the port, city center including main attractions like Saint Lazaros church, Foinikoudes beach, marina and the night life center.

The points referring to the minimization of any oil and gas exploration have been covered in previous sections but are once again mentioned here to provide a holistic concept.

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ƒ Traffic, Visual impact, noise and other disturbances. Envisaged operations in conjunction with mitigation measures already applied and proposed in this this study seem sufficient in alleviating this factor to an acceptable level.

ƒ Air, water, soil quality and pollution Envisaged operations in conjunction with mitigation measures already applied and proposed in this this study seem sufficient. Attention is especially drawn on control and monitoring measures to ensure that no deviation will ever occur.

ƒ Safety aspects Envisaged operations in conjunction with mitigation measures already applied and proposed in this this study seem sufficient. In the case of a quantitative risk analysis is undertaken the touristic areas in proximity should be especially accounted.

ƒ Distance from the offshore operations. All fields associated with this exploratory phase are situated at such a distance that will not affect the perception of Larnaca as a touristic destination. Platforms and drillships are expected not to be visible under all conditions

ƒ Cumulative impact and further development of Oil & Gas operations. It is anticipated that when the parameters for oil & gas exploration are clarified detailed planning will be undertaken in order to estimate accurately the impact of full scale operations. In any case it is advisable that full scale operations will be considered on the basis of the future use of the port of Vasilikos and installations in its proximity.

ƒ Other port and cruise operations. It is anticipated that the volume of port operations will not affect other port activities like cruise. In any case close cooperation with the port authorities is advised to further minimise any prospective disturbance.

ƒ ZENON initiative. During the public consultation process the views and planning of the ZENON consortium has been made apparent. It seems that projected works could be affected by the use of the port in two main manners. Visual and other disturbance in the port area. Physical obstruction of building works due to the presence of the present logistics base in the South quay. As far as disturbance is concerned mitigation measures as aforementioned could alleviate any impact noting that the visual impact of the oil storage installations in proximity seems much more significant.

As far as building obstruction is concerned a solution could be worked out on a timeline agreement. Current operators’ exploration campaign is due for completion on the verge of any projection for the beginning of building works. In this sense an agreement for decommissioning relocation of subject base prior to the initiation of the second, exploitation phase could be considered.

From a strictly touristic view, concentration of all oil & gas offshore support operations in the North quay would seem more appropriate and can attain the consensus of the ZENON Consortium according to discussion that took place with ZENON Consortium representatives. Such a prospect however should be considered in conjunction with all other parameters as health and safety, environmental impact etc.

In case as mentioned, disturbance factors are mitigated then a number of opportunities could be exploited due to the presence of the Oil & Gas industry in the city. Such could be

ƒ Increase in arrivals and better occupancy rates throughout the year through companies executives , subcontractors, tenderers and other indirectly related personnel to the specific sector

ƒ Inclusion of Larnaca in the map of oil & gas industry with immediate positive results in terms of exposure and branding of the city

ƒ Easing of financing on the basis of the area and the city potential driven by Oil & Gas exploration

ƒ Tourism associated with conferences and forums. It is estimated that Larnaca if identified as an oil & gas cluster city could attract conference tourism within the Eastern Mediterranean basin. Political stability, the presence of the airport and the emerging Oil & gas sector in the area are strongpoints but close cooperation with the oil companies will be required in this case.

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ƒ Attraction of additional private investment directly or indirectly related to oil & Gas exploration

ƒ Enhancement of the services sector induced by the presence of the Oil & Gas cluster.

As far as tour operators’ views are concerned it is anticipated that a change in the perception on Larnaca may cause concerns but negative results will mainly occur if disturbance is tangibly associated with Oil & Gas operations. As far as this is kept to minimum, positive factors could even enhance the perception of Larnaca.

It is important to note herewith that projections on the city development and disturbance prior to the finalization of the exploration phase seems uncertain. An accurate assessment of these factors will require knowledge about the exploitation phase magnitude as well as a detailed view on the oil companies investment timelines. The critical parameters for the methodology of such a study would be volume and frequency of operations.

It is underlined that there have been a number of examples where the Oil & gas industry yielded successfully with the tourism sector, experience shows that developed economies managed to exercice the necessary controls and benefit from synergies. Similar precedent success stories include Malta, Haifa, Port Fouchon Louisiana, Abu Dhabi, Aberdeen and constitute evidence of this argument.

Area Larnaca Malta Haifa Aberdeen Abu-Dhabi

Tourist arrivals

2013 155.000 1.582.000 75.000 1.620.000 2.800.00

Refers to 2011figures for Aberdeenshire www.visitscotland.org

Sources

http://www.cbs.gov.il/reader/hotel/hot_nosim_new_eng.htmll

http://gulfbusiness.com/2014/01/abu-dhabi-hotels-report-record-2013

Malta Tourism Authority

Table7.6a: Tourist arrivals

42

8. Comparative analysis for specific aspects related to the Logistics Base operations

8.1 Daily traffic increase versus the arrival of one cruise ships

For comparison purposes the case of a typical cruise ship arriving in the port of Larnaca has been examined. Assumingly, there will be about three and a half thousands visitors of whom more than half will be using buses (50 passengers on average per bus) and one third will use taxis (2 passengers on average per taxi) for their transportation, which is roughly translated to 50 bus departures and 550 taxi departures.

Additionally, during normal operation of the port, taking into consideration that on average the volume of imported animal feed on a daily basis is approximately 1180 tons and the capacity of a truck to carry animal feed is 20 tons per truck, the equivalent traffic due to this activity equals to 58 trucks.

Daily traffic increase versus the traffic generated from the arrival of one cruise ship Number of trucks

Logistics base 2

Transportation of animal feed 58

One cruise ship (4 taxi vehicles converted to 1 truck equivalent) 300

Table 8.1a: Comparison of daily trucks transportation during port operations

8.2 Offshore operations explosives versus LPG use and hunting ammunition

It is noted that the company envisages the use of twenty-five (25kg) kilos of explosives per well, only for the case of emergency (i.e. it can be used for the next wells if not utilized), which will be transported by one truck at the beginning of operations. During the full campaign it will remain on the drillship.

Comparatively, the chemical energy of the following typical items that are commonly used domestically or in urban transportation operations is:

Liquefied Petroleum Gas (LPG- Butane or Propane)

Threat Description LPG Mass/Volume3 Fireball

Diameter4

Safe

Distance5

Small LPG Tank 9 kg/ 19 l 12m 48m

Large LPG Tank 45 kg/ 95 l 21m 84m

Commercial/Residential LPG Tank

907 kg/ 1,893 l 56m 224m

3 Based on the maximum amount of material that could reasonably fit into a container or vehicle. Variations possible. 4 Assuming efficient mixing of the flammable gas with ambient air. 5 Determined by U.S. firefighting practices wherein safe distances are approximately 4 times the flame height. Note that an LPG tank filled with high explosives would require a significantly greater standoff distance than if it were filled with LPG.

43

Small LPG Truck 3,630 kg/

7,570 l

89m 356m

Semitanker LPG

18,144 kg/ 37,850 l 152m 608m

Table 8.2 a: Equivalent quantities of LPG tanks commonly used

Comparative components Energy in MJ6

Typical LPG cylinder (50L) 1.300

1 bullet .303 British SP (Hunting ammo) 3.5 x 10-3

Table 8.2b: Comparison of typical LPG bottle with hunting ammo�[8]

The acceptable amounts of quantities that can be transported are clearly stated in the European Agreement concerning the International Carriage of dangerous goods by road (ADR). In Appendix No.4 an indicative table of maximum total quantity per transportation unit is presented in relevance to the classification of the materials used. Further reference needed, the ADR agreement is publically available for additional details [16].

It should be noted that the transportation of the explosives is scheduled to be escorted by the police at all times and the trucks will be driven by specially authorized personnel (licensed ADR drivers). Additionally, in view of the above it should be noted that:

ƒ adherence to internationally established processes is ensured,

ƒ coordination with the various government entities – Mines, CPA/Airport, Customs, police is planned for constant surveillance of the transportation process

ƒ the overall amount of time explosives will spend in-transit through Larnaca and at the port is minimal

ƒ there will be use of purpose-built explosives that are transported with detonators isolated from secondary high explosives. They are transported unassembled which means they are not in a position to be initiated.

8.3 Materials transportation per well versus typical port cargo flows

The below quantities are shown per well. Materials arrive to the base by commercial vessels and leave to the rig via PSV’s (Platform Supply Vessels). Most of the materials either remain in the well or are recycled in succeeding wells.

Mud components per well (tot. 3500 tons)

Barite: 1,200 tons

Bentonite: 55 tons

CaCl2: 1185 tons

Salt (sodium chloride): 350 tons

Base oil: 693 m3

6 The "kg of TNT" is a unit of energy equal to 4184 Megajoules, which is approximately the amount of energy released in the detonation of a kg of TNT, While energy density per volume unit of LPG (1 atm.) amounts to 26 MJ/L.

44

Cement components per well (Tot. 515 tons)

Barite: 55 tons

Cement: 435 tons

Salt, brines: 10 tons

Other products for various purposes: 40 tons

Piping , per well in m :

36” : 100 m (8 joints)

20” : 900 m (75 joints)

13 5/8” : 1,812 m (150 joints)

11 ¾” : 640 m (55 joints)

9 7/8” : 1,590 m (135 joints)

Barite34%

Bentonite2%

CaCl234%

Salt�(sodium�chloride)10%

Base�oil20%

Mud components per well (total 3500 tons)

45

Comparison of cement quantities In tons

Typical 200 m2 building (3 levels)7 150

One well 550

Table 8.3a: Comparison of cement quantities

All these materials will be transported packaged inside containers. Materials arrive to the base by commercial vessels and leave to the rig via PSV’s. Truckloads are only required for the waste (cuttings and conventional waste) transportation from the logistic base to the waste management facilities situated outside Limassol (Agios Sylas, Ypsonas). Expected number of trucks is on average 8 trucks per week.

On average two to three trucks per week and twice a week at a maximum will be the typical exposure of the area to the drilling cuttings. Approximate quantities of drilling cuttings to be transported through the logistics base, are estimated to be around 2600 tons.

According to the managing oil company, it is estimated that under the assumption of loading/offloading of waste twice per week, in an overall drilling campaign of 48 weeks, 96 passages will be realized and total produced waste will reach about the amount of 8.700 tonnes.

In comparison, Larnaca port had 585 arrivals of ships and in 2013, and it handled 713,952 tons in cargo[9].

* Range addressing the possibility of more than one companies being active (in drillings) in the year.

�

7 Including two 100m2 per level slabs, 2 shear walls, 6 columns, 1 foundation slab

46

8.4 Radioactivity emissions comparison

In the case of the supply base, the radioactive isotopes – with an average time spent at port of thirty minutes according to the documented procedures are undertaken by certified suppliers and in securely closed and adequately insulated containers. No particular personal protective equipment (PPE) is required for the transportation of these radioactive sources.

A table of comparative dose limits used in daily oil & gas operations aims at demonstrating that even the daily exposure on the drilling vessel is limited, which means that strict requirements apply even when NORM/TENORM management is required. At a worst case scenario in onshore operations those limits for public would not exceed relevant doses of typical X-RAY medical exams.

Procedure Approximate effective radiation dose

Radiography (X-ray)-Spine[10] 1.5 mSv

Radiography-Chest [10] 0.1 mSv

Mammography [10] 0.4 mSv

Table 8.4a: Radiation levels during medical examinations

�� Type of limit Occupational Public �

�� Effective dose 20 mSv per year, averaged over five consecutive years; 1 mSv in a year ൈ �

�� 50 mSv in any single year �� Equivalent dose �

�� Eye lens 150 mSv in a year 15 mSv in a year �

�� Skin 500 mSv in a year 50 mSv in a year �

�� Hands and feet 500 mSv in a year - ��

��

ൈ In special circumstances, an effective dose of 5 mSv, provided that the average dose over five consecutive years does not exceed 1 mSv per year. �

��

Table 8.4b: Dose limits in planned exposure situations [11]8

8 The scientific unit of measurement for radiation dose, commonly referred to as effective dose, is the millisievert (mSv) (one thousandth of a Sievert). Sievert (Sv) (see-vert) is the unit for measuring ionizing radiation effective dose, which accounts for relative sensitivities of different tissues and organs exposed to radiation. The radiation quantity measured by the sievert is called effective dose.

47

9. Remarks

The following comments have been identified during this study. Parts of these comments are not directly related to the scope of this study but they could merit further consideration by the interested parties.

ƒ It is common for countries entering the hydrocarbon exploration and production operations not to be equipped with a mature regulatory framework governing such operations. It is suggested that a more specific regulatory framework would prove beneficial. The expertise of countries established in the Oil & Gas exploration field could assist in this context.

ƒ After the exploration phase concludes, it is suggested that an Impact Benefit Agreement (IBA) is set which will among others aim to magnify the benefit to the community. Briefing and consultation with the local community should be part of every major exploration project so that the development of the local city and its society will be warranted.

ƒ The Aarhus convention, establishes the three pillars of the citizens participation, through access to information, participation in the decision-making process and the right to challenge decisions. These principles are to be applied in such activities in order to ensure an effective and legitimate collaboration between the local community, the authorities and the operators in the prospective city.

ƒ Similar to the scope of this report, an independent review of all documentation is critical to ensure that holistic assessment of the project is impartial and all the potential areas of concern are correctly identified and addressed in time.

48

10. Recommendations

The following recommendations are presented to issue some key suggested points that value consideration and which are subsequent to the assessment of the existing documentation within the scope of this study.

ƒ It is suggested that more concrete control mechanisms should be in place. It is noted that regarding air pollution monitoring around the area of the logistics base, an air pollution monitoring station situated two kilometres away from the port, in the city centre, is in place. It is recommended that equipment to continuously monitor the air quality within the port area would be more suitable. Additionally water monitor sensors to measure the level of pollution in the water adjacent to the logistics base could be placed. The installation of sensors for measuring the noise levels in the atmosphere and sensors for monitoring the pollution would also be advisable at this phase.

ƒ According to studies so far and the experience of the operators, taking also into account the initial exploratory phase (Noble, Limassol – Appendix No.8 the probability for the potential of finding NORM/ TENORM materials during the explorations seems unlikely. Furthermore, operators advise that a corporate procedure for the handling of such materials is in place to cover all the areas in the case of such event. In the unlikely event where NORM or TENORM will need to be managed, it is to be ensured that the employed contractor will be certified for the management of this specified type of waste.

ƒ The involved parties should ensure that the local community is constantly informed of all the potential employment opportunities that will be available through the realization of the project. Furthermore, the tendering procedures should be publically available so that local enterprises would benefit from this process. Moreover, promotional activities such as forums, conferences etc. are considered useful for the exposure of Larnaca.

ƒ Awareness Campaign. Engagement of the key stakeholders and the local community is critical in terms of adoption and support of the scope of the supporting activities for the exploration of oil and gas prospects in the Cypriot EEZ. It is thus suggested that apart from public consultation, press releases and awareness incentives form part of the exploration drilling campaign that is proposed to commence at the port of Larnaca and any other port in the future. Local community needs to stay informed of the monitoring data and measurements during the period of the support operations and after the decommissioning phase.

ƒ Should the explorations prove to be prosperous and the operations escalate, in the prospect that a full exploitation phase is planned depending on scale, it would be beneficial to concentrate all the operations in a greater industrial area to facilitate the overall procedures. Further assessment on the given facts and planning would be required. The assessment on the given facts of the socioeconomic and environmental impact commensurate to the magnitude of operations, and should the scale of operations demand it, could entail resettling of the Logistics Base in an industrial area and the port of Vassilikos, in accordance with the development plans in that area.

ƒ Feedback Mechanism. Due to the sensitive nature of the proposed activities and the proximity to densely populated areas around the port of Larnaca, it is recommended to set up a feedback mechanism so that access is open to all key stakeholders in the city, officially registering queries and concerns. The Municipality could have a coordinating role in managing the queries and forwarding them accordingly to the interested parties.

ƒ Education activities addressing the need for skilled personnel to participate in oil and gas activities may also be considered; they could entail an Education / Community Development Fund, opportunities for experts to take up short-term placements at Cypriot institutes to facilitate knowledge transfer, overseas teaching exchanges for Cypriot instructors to build training capacity in the oil and gas sector, and overseas specialized training in oil and gas sector for qualified and interested Cypriot students.

49

ƒ As far as any issues regarding the Larnaca port and the cruise shipping and yacht activity are concerned, close collaboration of the oil companies with port authorities may help to identify where congestion (especially vehicle-related) issues arise and how they can be addressed.

ƒ Mud-Plants in the Logistics Base should be restricted to the minimum potential for effective space management. In this respect one or two at a maximum� Mud-Plants should be constructed to serve all the prospective operators. This can be achieved with synergies between the oil companies that are already accommodated in the port and the Logistics Base. Operators should exhaust the synergies potential in the port in order to minimize any impact and disturbance factors.

ƒ There should be control mechanisms to warrant that the subcontractors that are involved in the project follow all the eligible procedures in accordance with the existing regulatory framework as well as the specific restrictions that are imposed by the contracting oil company.

ƒ A Quantitative Risk Assessment (QRA) for the Chemical storage and the Mud Plant together with a HAZOP (hazard and operability) analysis should be considered to deplete all the potential means for risk assessment of the project. In this sense, specific quantitative acceptance criteria set by the authorities of the port that will undertake the project are to be taken into account.

50

11. References

[1] Environmental, Social and Health Impact Assessment document, ENI Cyprus, May 2014

[2] ENI ESHIA standard (Doc. No 1.3.1.47 – 2010

[3] ȀĮĲİȣșȣȞĲȒȡȚİȢ ȅįȘȖȓİȢ (2013) ȖȚĮ ĲȘ ȤȦȡȠșȑĲȘıȘ ĮȞĮʌĲȪȟİȦȞ țȠȞĲȐ ıİ ȣĳȚıĲȐȝİȞİȢ İȖțĮĲĮıĲȐıİȚȢ Ȓ ȞȑȦȞ İȖțĮĲĮıĲȐıİȦȞ ʌȠȣ țĮȜȪʌĲȠȞĲĮȚ Įʌȩ ĲȚȢ ʌİȡȓ ǹȞĲȚȝİĲȫʌȚıȘȢ ĲȦȞ ȀȚȞįȪȞȦȞ ĮĲȣȤȘȝȐĲȦȞ ȂİȖȐȜȘȢ ȀȜȓȝĮțĮȢ ȈȤİĲȚȗȠȝȑȞȦȞ ȝİ İʌȚțȓȞįȣȞİȢ ȠȣıȓİȢ țĮȞȠȞȚıȝȠȪȢ ĲȠȣ 2001 țĮȚ 2006

[4] http://www.heraldscotland.com/business/markets-economy/aberdeenoil-and-gas-sector-effect.21078711)

[5] http://www.ogj.com/articles/2014/05/australian-offshore-exploration-drilling-down-costs-up.html)

[6] http://www.zerohedge.com/news/2014-07-11/worlds-two-most-expensive-cities-expats-are-located-surprising-continent

[7] From clusters to cluster-based economic development, Olga Memedovic, Christian H.M. Ketels, Int. J. Technological Learning, Innovation and Development, Vol. 1, No. 3, 2008 375 ,

[8] http://www.unece.org/trans/danger/publi/adr/adr2013/13contentse.html

[9] http://www.cpa.gov.cy/CPA/page.php?pageID=26&mpath=/11

[10] http://www.radiologyinfo.org/en/safety/?pg=sfty_xray

[11] IAEA - Radiation Protection and the Management of Radioactive Waste in the Oil and Gas Industry, Vienna 2010, Training Course Series 40

[12] http://www.un.org/depts/los/index.htm

[13] http://www.unepmap.org/index.php?module=content2&catid=001001004

[14] http://www.imo.org/About/Conventions/ListOfConventions/Pages/International-Convention-for-the-Prevention-of-Pollution-from-Ships-(MARPOL).aspx

[15] http://www.basel.int/

[16] http://www.unece.org/fileadmin/DAM/trans/danger/publi/adr/ADRagree_e.pdf

[17] http://www.imo.org/About/Conventions/ListOfConventions/Pages/International-Convention-on-Oil-Pollution-Preparedness,-Response-and-Co-operation-(OPRC).aspx

[18] http://www.cms.int/en/legalinstrument/cms

[19] http://conventions.coe.int/Treaty/en/Treaties/Html/104.htm

[20] http://www.accobams.org/index.php?option=com_content&view=category&layout=blog&id=68&Itemid=1

[21] http://www.ramsar.org/cda/en/ramsar-home/main/ramsar/1_4000_0__

[22] http://ec.europa.eu/environment/aarhus/

[23] http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32001L0042

[24] http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2012:026:0001:0021:EN:PDF

[25] http://www.ecolex.org/ecolex/ledge/view/RecordDetails;jsessionid=AD92E8862A101BDEA33B620F592C5A4E?id=LEX-FAOC039808&index=documents



[28] http://ec.europa.eu/environment/waste/framework/


51

[30] http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32000D0532

[31] http://europa.eu/legislation_summaries/other/l28026_en.htm



[34] http://ec.europa.eu/environment/water/water-framework/index_en.html


Appendix 2 Typical Components of Low Toxicity Oil-Based Mud

Product Name Function Component Concentration (kg/m3)

base oil (lamix 30) base fluid 0.55

BAROMUL emulsifier 22.5 - 30

lime alkalinity 5

GELTONE II viscosifier 25 – 30

SUSPENTONE viscosifier 5 – 10

water base fluid 0.3

CaCL2 inhibition 80

ADAPTA filtration control 1 – 5

LIQUITONE filtration control 1 – 5

RM - 63 viscosifier 1 – 6

BARACARB 5/50 bridging agent 50 – 100

Barite weighting agent 100 – 300

DRILTREAT wetting agent 0.5 – 1.5

OMC-3 mud conditioner 0.5 – 1.0


Appendix 3 Overview of common industrial uses of sealed radioactive sources

The table below provides an overview of the major industrial applications for radioactive materials. (Information sources: Uranium Information Center (UIC, 2001); US Nuclear Regulatory Commission (NRC, 2002)

Industry: Products/Services

Use Types of Sources

Manufacturing:

x numerous

Measure: x thickness of metal components x thickness of coatings x moisture content in

manufactured products

Gamma emitters such as: x barium-133 x cobalt-60 x cesium-134 x cesium-137 x antimony-124 x seleniIum-75 x strontium-90 x thulium-170

Chemical Processing: x various

Measure process characteristics, such as: x density x thickness of coatings x specific gravity x level

Measure equipment parameters such as: x pipe thickness x corrosion x wear

x Gamma emitters x neutron sources (for level

measurement)

Construction: x buildings, geophysical

structures

Measure: x moisture content x location of reinforcing bar

(rebar)

Gamma emitters; neutron sources such as:

x Americium/Beryllium x Plutonium/Beryllium x Californium-252

Mineral Processing: x measuring mineral levels

in process streams

x density gauges x spectroscopy

Gamma emitters, such as: x americium-241 x cobalt-57 x cesium-137

Coastal Engineering: x measuring environmental

parameters

Measure: x levels of sediments in rivers

and estuaries x mobilization of sediment

Gamma emitters, such as: x americium-241 x cobalt-57 x cesium-137


Non Destructive Examination: x radiography

Measure: x weld and weld overlays x castings x forgings x valves and components x machined parts x pressure vessels x structural steel x aircraft structures

x cobalt-60 x cesium-137 x iridium-192

Oil Refining: x refinery products

x column scanning x level measurement Gamma emitters (column scanning);

neutron sources (level measurement) especially americium-241/beryllium-

Coal Fired Boilers: x electricity generation

Measure: x ash and moisture content of

coal

Gamma sources such as cesium-137 with americium-241 (for ash content)

Drilling / Borehole Logging: x geophysical

investigations

Measure: x hydrogen content

Gamma emitters, especially Cobalt-60, and neutron sources americium-241/beryllium

Agriculture: x various crops

Measure: x soil moisture measurements

Neutron sources such as: x americium/beryllium x plutonium/berylium x californium-252

Hydrology: x environmental

assessments

Measure: x soil moisture

neutron sources such as: x americium/Berylium x plutonium/Berylium x californium-252

Consumer Products: x smoke detectors

Produce an ionization current that is affected by the presence of smoke

Alpha emitter typically americium-241

Materials Processing: x blown film x cast film and sheet x rubber x vinyl x coatings & laminations x nonwovens x textiles x composites x paper x plastic pipe x film thickness x electroplating

Measure: x thickness or weight x basis weight x consistency x moisture content

Gamma emitters, such as: x americium-241

Beta emitters such as: x praseodymium-147 x prypton-85 x strontium-90


Various: x remote weather stations x weather balloons x navigation beacons and

buoys

Power sources for applications requiring small amounts of portable energy

Recording Industry: x dust and static control

Product Labelling: x dust and static control


Appendix 4 ADR table of max quantities per transportation unit

In the above table, “maximum total quantity per transport unit ”means”:


For articles, gross mass in kilograms( for articles of Class 1, net mass in kilograms of the explosive substance; for dangerous goods in machinery and equipment specified in this Annex, the total quantity of dangerous goods contained therein in kilograms or litre as appropriate);

- For solids, liquefied gases, refrigerated liquefied gases and dissolved gases, net mass in kilograms;’

- For liquids and compressed gases, nominal capacity of receptacles (see definition in 1.2.1) in litres.


Appendix 5 ENI documentation related to offshore drilling operations in Cyprus


Appendix 6 List of chemicals examined under the application of SEVESO II Directive

Categories of dangerous substances

Name of Substance Quantities

[t]

1. Very Toxic LIQUIDEWT 0.37

N_05_1_001 (Hydrogen sulfide) < 1

2. Toxic

Amerzine Corrosion inhibitor 0.055

LIQUIDEWT 0.37

Barium chloride dihydrate < 1

Hydrogen chloride (All) < 1

Sulphur dioxide < 1

Sodium sulfide < 1

Bromoform 250 ml (l) < 1

3. Oxidizing Nitric acid < 1

Silver Nitrate 25 g (Argento Nitrato) < 1

6. Flammable

PAINT FERRUM 0.96

Penguard Topcoat Comp A 1.13

Jotamastic 87 - Comp. A 1.35

Pilot II 0.74

Hardtop XP Comp A 0.56

Penguard Comp B 0.23

Pilot QD Primer 0.78


Everlast 4 Grease 0.36

Super Agytene 141 0.016

StranCore 0.38

Wirelock 0.0069

Snokote CL 0.20

Cyclohexane oxide (1 2 epoxycyclohexane) < 1

Phenolphtaline hydroalc. Sol 1% 250 ml < 1

Thinner/White Spirit/Methylated spirits/Alcool/stoddard solvent/ mineral i / i b i

< 1

Negative resist Thinner < 1

7 b. Highly Flammable liquids

MEK 0.30

Phenolphthalein Indicator 0.002

DETTOL 0.012

Acetone < 1

Cyclo-Hexane anhydrous (Cyclohexane) < 1

Ethanol (Ethyl Alcohol) < 1

Isopropyl alcohol (Propanol) < 1

Methylene Blue < 1


8. Extremely Flammable

Fly Killer 0.09


N_CH_7_F_001 (Hydrocarbon gas mixture High range - flammable) < 1

9i. Very Toxic To Aquatic Organisms


HADEX 0.80

Z50 0.9

Liquid Bleach 0.42

Benzalkonium Chloride 100g < 1

Cyclo-Hexane anhydrous (Cyclohexane) < 1

Dichlorophene 50g < 1


Sodium sulfide < 1

BIS ( 5- Chloro-2- Hydroxypheny) Methan (s) < 1

Silver Nitrate 25 g (Argento Nitrato) < 1

Copper sulfate < 1

9ii. Toxic To Aquatic Organisms

Pilot II 0.74

AGK-100 0.36

DREWCLEAN 3000 0.28

Fly Killer 0.09

Thinner/White Spirit/Methylated spirits/Alcool/stoddard solvent/ mineral < 1

Bromoform 250 ml (l) < 1

Panacide (2chlorophenol), Bactiricide biocide, Eau de biocide < 1

Silicagel < 1


Appendix 7 Regulatory Framework

1. INTERNATIONAL CONVENTIONS AND AGREEMENTS

1.1 UNITED NATIONS CONVENTION ON THE LAW OF THE SEA (UNCLOS)

The 1982 United Nations Convention on the Law of the Sea (UNCLOS), which came into force on November 16, 1994, is an International Treaty that provides a regulatory framework for the use of the world’s seas and oceans, inter alia, to ensure the conservation and equitable usage of resources and the marine environment and to ensure the protection and preservation of the living resources of the sea. UNCLOS also addresses such other matters as sovereignty, rights of usage in maritime zones, navigational rights and settlement of disputes between the Contracting Parties of the Convention [12].

1.2 BARCELONA CONVENTION

The 1976 Barcelona Convention for Protection against Pollution in the Mediterranean Sea is a Regional Convention to prevent and abate pollution from ships, aircraft and land based sources in the Mediterranean Sea. This includes, but is not limited to, dumping, run-off and discharges. Signatories agreed to cooperate and assist in dealing with pollution emergencies, monitoring and scientific research. The Convention was last amended in 1995.

The key goal of this Framework Convention is to reduce pollution in the Mediterranean Sea, protect and improve the marine environment in the area, thereby contributing to its sustainable development [13].

1.3 MARPOL 73/78 CONVENTION

The International Convention for the Prevention of Pollution from Ships (MARPOL) is the main international convention covering prevention of pollution of the marine environment by ships from operational or accidental causes.

The Convention includes regulations aimed at preventing and minimizing pollution from ships - both accidental pollution and that from routine operations - and currently includes six technical Annexes [14].

1.4 BASEL CONVENTION

The Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal was adopted on 22 March 1989 by the Conference of Pleni potentiaries in Basel, Switzerland.

The overarching objective of the Basel Convention is to protect human health and the environment against the adverse effects of hazardous wastes. Its scope of application covers a wide range of wastes defined as “hazardous wastes” based on their origin and/or composition and their characteristics, as well as two types of wastes defined as “other wastes” – household waste and incinerator ash [15].

1.5 EUROPEAN AGREEMENT CONCERNING THE INTERNATIONAL CARRIAGE OF DANGEROUS GOODS BY ROAD (ADR)

ADR is a 1957 United Nations treaty that governs transnational transport of hazardous materials.

The agreement itself is brief and simple, and its most important article is article 2. This article states that with the exception of certain exceptionally dangerous materials, hazardous materials may in general be transported internationally in wheeled vehicles, provided that two sets of conditions are met:

x Annex A regulates the merchandise involved, notably their packaging and labels.

x Annex B regulates the construction, equipment and use of vehicles for the transport of hazardous materials [16].


1.6 OIL POLLUTION RESPONSE: OPRC CONVENTION AND TRILATERAL AGREEMENT

OPRC is an international maritime convention establishing measures for dealing with marine oil pollution incidents nationally and in co-operation with other countries.

OPRC Convention was drafted within the framework of the IMO and adopted in 1990 entering into force in 1995. In 2000 a Protocol to the Convention relating to hazardous and noxious substances was adopted.

In accordance with this Convention and its Annex, States-Parties to the 1990 Convention undertake, individually or jointly, to take all appropriate measures to prepare for and respond to oil pollution incidents [17].

1.7 CONVENTION OF THE CONSERVATION OF MIGRATORY SPECIES (CMS CONVENTION)

The Convention on the Conservation of Migratory Species of Wild Animals (also known as CMS or the Bonn Convention) aims to conserve terrestrial, marine and avian migratory species throughout their range. It is an intergovernmental treaty, concluded under the aegis of the United Nations Environment Program, concerned with the conservation of wildlife and habitats on a global scale. Since the Convention's entry into force, its membership has grown steadily to include over 100 Parties from Africa, Central and South America, Asia, Europe and Oceania. The Convention was signed in 1979 in Bonn and entered into force in 1983. The depositary is the government of the Federal Republic of Germany [18].

1.8 CONVENTION ON THE CONSERVATION OF EUROPEAN WILDLIFE AND NATURAL HABITATS

The Bern Convention on the Conservation of European Wildlife and Natural Habitats (or Bern Convention), is a binding international legal instrument in the field of Nature Conservation, it covers the natural heritage in Europe, as well as in some African countries. The Convention was open for signature on 19 September 1979 and came into force on 1 June 1982. It is particularly concerned about protecting natural habitats and endangered species, including migratory species.

The convention has three main aims:

x to conserve wild flora and fauna and their natural habitats

x to promote cooperation between states

x to give particular attention to endangered and vulnerable species including endangered and vulnerable migratory species [19].

1.9 AGREEMENT OF THE CONSERVATION OF CETACEANS IN THE BLACK SEA MEDITERRANEAN SEA AND CONTIGUOUS ATLANTIC AREA (ACCOBAMS)

ACCOBAMS, the Agreement on the Conservation of Cetaceans in the Black Sea, Mediterranean Sea and contiguous Atlantic area is a cooperative tool for the conservation of marine biodiversity in the Mediterranean and Black Seas.

ACCOBAMS aims to reduce threats to cetaceans in Mediterranean and Black Sea waters and improve knowledge of these animals, and is the first Agreement binding the countries in the two sub-regions, enabling them to work together on a matter of general interest [20].

1.10 RAMSAR CONVENTION

The Convention on Wetlands of International Importance, called the Ramsar Convention, is an intergovernmental treaty that provides the framework for national action and international cooperation for the conservation and wise use of wetlands and their resources.

The Convention’s mission is the conservation and wise use of all wetlands through local and national actions and international cooperation, as a contribution towards achieving sustainable development throughout the world [21].


1.11 AARHUS CONVENTION

The Aarhus Convention was adopted on 25 June 1998 at the Fourth Ministerial Conference as part of the "Environment for Europe" process. It entered into force on 30 October 2001. The Aarhus Convention establishes a number of rights of the public (individuals and their associations) with regard to the environment�and provides for:

x access to environmental information

x public participation in environmental decision-making

x access to justice with the right to review procedures to challenge public decisions [22].

2. EUROPEAN DIRECTIVES

2.1 DIRECTIVE 2001/42/EC ON THE ASSESSMENT OF THE EFFECTS OF CERTAIN PLANS AND PROGRAMMES ON THE ENVIRONMENT

The objective of this Directive is to provide for a high level of protection of the environment and to contribute to the integration of environmental considerations into the preparation and adoption of plans and programs with a view to promoting sustainable development, by ensuring that, in accordance with this Directive, an environmental assessment is carried out of certain plans and programs which are likely to have significant effects on the environment [23].

2.2 DIRECTIVE 2011/92/EU ON THE ASSESSMENT OF THE EFFECTS OF CERTAIN PUBLIC AND PRIVATE PROJECTS ON THE ENVIRONMENT

Directive 2011/92/EU of the European Parliament and of the Council has harmonised the principles for the environmental impact assessment of projects by introducing minimum requirements, with regard to the type of projects subject to assessment, the main obligations of developers, the content of the assessment and the participation of the competent authorities and the public, and it contributes to a high level of protection of the environment and human health. Member States are free to lay down more stringent protective measures in accordance with the Treaty on the Functioning of the European Union (TFEU) [24].

2.3 DIRECTIVE 94/22/EC ON THE CONDITIONS FOR GRANTING AND USING AUTHORIZATIONS FOR THE PROSPECTION, EXPLORATION AND PRODUCTION OF HYDROCARBONS

Member States retain the right to determine the areas within their respective territories to be made available for the exercise of the activities of prospecting, exploring for and producing hydrocarbons. On the other hand, Member States shall ensure that authorizations to carry out the activities above-mentioned are granted following a procedure in which all interested entities may submit applications (principle of non-discrimination). Further provisions regard to the overall conditions under which the authorizations shall be granted [25].

2.4 DIRECTIVE 2013/30/EU ON SAFETY OF OFFSHORE OIL AND GAS OPERATIONS AND AMENDING DIRECTIVE 2004/35/EC

This Directive establishes minimum requirements for preventing major accidents in offshore oil and gas operations and limiting the consequences of such accidents. It lays down general principles of risk management in offshore oil and gas operations as well as safety and environmental considerations relating to licences. The Directive stipulates that Member States shall ensure that the licence is financially liable for the prevention and remediation of environmental damage [26].

2.5 DIRECTIVE 2009/123/EC AMENDING DIRECTIVE 2005/35/EC ON SHIP-SOURCE POLLUTION AND ON THE INTRODUCTION OF PENALTIES FOR INFRINGEMENTS

These provisions lay down amendments and addenda to Directive 2005/35/EC, firstly by widening its scope, which hereinafter includes also penalties for criminal offences. Such penalties cover offences committed by natural persons and legal persons.

The purpose of the Directive 2005/35/EC is to incorporate international standards for ship-source pollution into Community law, in order to ensure that persons responsible for discharges are subject to adequate penalties. The aim pursued is the improvement of maritime safety and the


enhancement of the protection of the marine environment from pollution caused by ships. Members are required to ensure that ship-source discharges of polluting substances are regarded as infringements if committed with intent, recklessly or by serious negligence [27].

2.6 DIRECTIVE 2008/98/EC ON WASTE (WASTE FRAMEWORK DIRECTIVE)

Directive 2008/98/EC sets the basic concepts and definitions related to waste management, such as definitions waste, recycling, recovery. It explains when waste ceases to be waste and becomes a secondary raw material (so called end-of-waste criteria), and how to distinguish between waste and by-products. The Directive lays down some basic waste management principles: it requires that waste be managed without endangering human health and harming the environment, and in particular without risk to water, air, soil, plants or animals, without causing a nuisance through noise or odours, and without adversely affecting the countryside or places of special interest [28].

2.7 DIRECTIVE 2000/59/EC ON PORT RECEPTION FACILITIES FOR SHIP-GENERATED WASTE AND CARGO RESIDUES

The purpose of this Directive is to reduce the discharges of ship-generated waste and cargo residues into the sea, especially illegal discharges, from ships using ports in the Community, by improving the availability and use of port reception facilities for ship-generated waste and cargo residues, thereby enhancing the protection of the marine environment. An appropriate waste reception and handling plan shall be developed and implemented for each port following consultations with the relevant parties. The master of a ship calling at a Community port shall, before leaving the port, deliver all ship-generated waste to a port reception facility [29].

2.8 COMMISSION DECISION 2000/532/EC

The List of Waste is meant to be a reference nomenclature providing a common terminology throughout the Community with the purpose to improve the efficiency of waste management activities. The List of Waste (LoW) serves as a common encoding of waste characteristics in a broad variety of purposes like classification of hazardous wastes. Assignment of waste codes has a major impact on the transport of waste, installation permits (which are usually granted for the processing of specific waste codes), decisions about recyclability of the waste or as a basis for waste statistics.

According to Decision 2000/532/EG, the LoW should be revised regularly on the basis of new knowledge and, in particular, of research results. The Thematic Strategy on Prevention and Recycling has called for a revision of the system of waste nomenclature with the purpose of simplifying and modernising waste legislation [30].

2.9 REGULATION NO. 2008/50/EC CONCERNING “CLEAN AIR FOR EUROPE”

The Directive 2008/50/EC of the European Parliament and of the Council of 21 May 2008 on ambient air quality and cleaner air for Europe entered into force on 11 June 2008.

This Directive includes the following key elements:

x The merging of most of existing legislation into a single directive (except for the fourth daughter directive) with no change to existing air quality objectives;

x New air quality objectives for PM2.5 (fine particles) including the limit value and exposure related objectives –exposure concentration obligation and exposure reduction target;

x The possibility to discount natural sources of pollution when assessing compliance against limit values;

x The possibility for time extensions of three years (PM10) or up to five years (NO2, benzene) for complying with limit values, based on conditions and the assessment by the European Commission [31].

2.10 DIRECTIVE 2008/56/EC ESTABLISHING A FRAMEWORK FOR COMMUNITY ACTION IN THE FIELD OF MARINE ENVIRONMENTAL POLICY

This Directive sets out a framework within which Member States must take the necessary measures to achieve or maintain good environmental status in the marine environment by the year 2020 at the latest. Member States are required to implement strategies aimed at (a) the protection and preservation of the marine environment, the preservation of its deterioration or, where applicable, the restoration of marine ecosystems in areas where they have been adversely affected; (b) the preservation and reduction of inputs in the marine environment, in order to ensure that there are


no significant impacts on or risks to marine biodiversity, marine ecosystems, human health or legitimate uses of the sea [32].

2.11 DIRECTIVE 2009/147/EC ON THE CONSERVATION OF WILD BIRDS AND DIRECTIVE 92/43/EEC ON THE CONSERVATION OF NATURAL HABITATS AND OF WILD FAUNA AND FLORA

The Directive 2009/147/EC recognises that habitat loss and degradation are the most serious threats to the conservation of wild birds. It therefore places great emphasis on the protection of habitats for endangered as well as migratory species, especially through the establishment of a coherent network of Special Protection Areas (SPAs) comprising all the most suitable territories for these species.

The main aim of Directive 92/43/EEC is to promote the maintenance of biodiversity by requiring Member States to take measures to maintain or restore natural habitats and wild species listed on the Annexes to the Directive at a favourable conservation status, introducing robust protection for those habitats and species of European importance. In applying these measures Member States are required to take account of economic, social and cultural requirements, as well as regional and local characteristics [33].

2.12 DIRECTIVE 2000/60/EC ESTABLISHING A FRAMEWORK FOR COMMUNITY ACTION IN THE FIELD OF WATER POLICY

The purpose of this Directive is to establish a framework for the protection of inland surface waters, transitional waters, coastal waters and groundwater which: (a) prevents further deterioration and protects and enhances the status of aquatic ecosystems, (b) promotes sustainable water use based on a long-term protection of available water resources, (c) aims at enhanced protection and improvement of the aquatic environment, (d) ensures the progressive reduction of pollution of groundwater and prevents its further pollution, and (e) contributes to mitigating the effects of floods and droughts [34].


Appendix 8 Results from the radioactivity measurements in the mud from the drilling operations in the Cypriot EEZ


Appendix 9 Indicative case of an Impact Benefit Agreement in the Oil & Gas sector

In the case of Greenland’s hydrocarbon venture, Cairn entered into an Impact Benefit Agreement (IBA) for both the 2010 and 2011 drilling programmes with the Mineral Licence and Safety Authority (MLSA), formerly the Bureau of Minerals and Petroleum (BMP), and the municipalities in each project area. These Impact Benefit Agreements detail Cairn’s action plan for reducing social impacts of the projects and increasing the benefits to local communities, particularly in terms of promoting local employment and human resources development.

The 2011 IBA covered five areas:

x Employment Practices – including targets for increasing Greenlandic involvement in Cairn’s project workforce

x Human Resources Development - including funding projects to increase Greenlanders’ access to education so they can gain the expertise required to participate in the oil and gas industry

x Business Development – including actions to promote opportunities for Greenlandic companies in the Greenlandic oil and gas industry; and to promote mentorship and joint ventures between local and international businesses. This encourages contractors to maximise local employment opportunities, where practical.

x Social Wellbeing -including measures to prevent strain on local services such as health care

x Cultural Wellbeing - including funding of local community development initiatives

There were various tangible results from this agreement. Indicative examples are:

x ~10% Greenlandic workforce was achieved by the 2011 exploration project

x trainee positions created

x a US $500,000 fund was established to improve technical skills within Greenland and encourage greater participation of Greenlanders in the oil and gas industry.

x Established an Education Fund to consider providing opportunities for experts to take up short-term placements at Greenland institutes to facilitate knowledge transfer; facilitating overseas teaching exchanges for Greenlandic instructors to build training capacity in the oil and gas sector; assisting overseas specialised training in oil and gas sector for a number of qualified and interested Greenlandic students.

x Cairn provided a short course in exploration drilling to students and members of the Mineral Licence and Safety Authority

x Over 100 Greenlandic organisations were involved in the supply of goods and services to Capricorn's activities in Greenland

x Capricorn spent 38 million with Greenlandic companies

x The Social Impact Assessment programme encouraged project vessels to source meat and fish products from local brættet (local hunter and fishermen markets).

x Prevented a disruptive influx of transient workers into local communities while promoting economic benefits by using a local supply.

x Capricorn’s contractors recorded purchases in Greenland valuing £2 million.

x Greenlandic health resources were used after 17 incidents involving illness/ injury to individuals.


x Cairn and its contractors recorded ~ £22,000 of supplies purchased by Capricorn and its contractors from the Braettets (local hunter and fishermen markets) of Aasiaat and Nuuk during the 2011 exploration drilling programme

x In 2011, a US $75,000 fund was set up to help projects supporting cultural activities and the development of young people through sport

x In early 2012, the board was preparing to award funding to 10 individual projects. These grants will fund equipment such as trainers and facilities to host sporting and cultural activities within Greenland. The total number of individual beneficiaries and the effectiveness of each project will be assessed during 2012.


Appendix 10 Case studies drawn from international experience

Case studies that present the effective co-operation of ports in industrial, offshore and non-industrial industries and Marine Supply Bases within city limits are presented below: 1. PORT FOURCHON – LOUISIANA

Port Fourchon is Louisiana’s southernmost port, located on the southern tip of Lafourche Parish, Louisiana, on the Gulf of Mexico. It is a sea port, with significant petroleum industry traffic from offshore Gulf oil platforms and drilling rigs as well as the Louisiana Offshore Oil Port pipeline. Fourchon's primary service markets are domestic deepwater oil and gas exploration, drilling, and production in the Gulf of Mexico. Port Fourchon currently services over 90% of the Gulf of Mexico's deepwater oil production. There are over 600 oil platforms within a 40-mile radius of Port Fourchon. This area furnishes 16 to 18% of the US oil supply.

Port Fourchon was developed as a multi-use facility. It has historically been a land base for offshore oil support services as well as a land base for the Louisiana Offshore Oil Port (LOOP). In addition, Port Fourchon has served as a commercial and recreational fishing centre, foreign cargo shipping terminal, and a unique area for recreation and tourism.

The overwhelming majority (over 95%) of tonnage handled at the Port is oil and gas related. It moves through container, bulk, breakbulk. Approximately 30% of total tonnage travels to and from the port by inland barge before being transferred to or from an offshore supply vessel, and 70% travels to and from the port by vehicle before being transferred to or from an offshore supply vessel or helicopter.

Studies like the 1994 USACE Port Fourchon Environmental Impact Statement include economic analyses which project that the majority of all drilling rig activity off the Louisiana, Mississippi, and Alabama coasts will be in the Port Fourchon service area for the foreseeable future. Port Fourchon alone currently services 90% of deepwater structures in the Gulf of Mexico. MMS projections show 50% of pending deepwater structures will have Port Fourchon as their service base. These figures clearly show that Port Fourchon is the major service base for deepwater Gulf production.

Port Fourchon’s tenants are equipped to accommodate a comprehensive range of offshore support services, including offshore supply and support, anchor handling, towing, offshore construction, sales, and barging of fuel, water, mud, completion fluids, barites and methanol, riser inspection and repair, logistics, vessel repairs, rig inspection and repair, pipe storage, repair and bucking, complete dockside and in-slip loading, helicopter base operations, heavy-lift capabilities, and trucking.


Major port tenants with operations based at the facility include companies that provide logistics support, drilling fluids, food services, rig repair and construction, helicopter transportation, offshore support and construction, etc.

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2. PORT OF HAIFA – ISRAEL

The Port of Haifa is the largest of Israel's three major international seaports, which include the Port of Ashdod, and the Port of Eilat. It has a natural deep waterharbor which operates all year long, and serves both passenger and merchant ships. It is one of the largest ports in the eastern Mediterranean in terms of freight volume and handles about 24 million tons of cargo each year. The port employs over 1,000 people, with the number rising to 5,000 when cruise ships dock in Haifa. The Port of Haifa lies to the north of Haifa's downtown quarter on the Mediterranean, and stretches to some 3 kilometres along the city's central shore with activities ranging from military, industrial and commercial next to a nowadays-smaller passenger cruising facility.

The Port of Haifa contains many cargo terminals, and is capable of servicing many ships at once. A railroad freight terminal is located inside the port and is used for transporting goods across the country. The port also features a passenger terminal, fishing wharf, yacht club, sports marina, and chemical terminal. The port contains a modern passenger terminal serving cruise and ferry passengers. The terminal offers a waiting area, duty-free shop, souvenir shop, cafeteria, VAT reimbursement counter, currency exchange, free wireless internet, parking, as well as other services to travellers.

DALLAS and CAESAREA, Israel, (GLOBE NEWSWIRE) — Zion Oil & Gas, Inc. (Nasdaq:ZN) announced that on June 13, 2011, the Company submitted an application to the Israeli Petroleum Commissioner’s Office, requesting the grant of a new petroleum exploration permit area adjacent to Zion’s Joseph License area. The new permit application has been named by Zion, the “Asher-Joseph Permit Application”. The Asher-Joseph Permit Application area covers approximately 80,000 acres of land and is to the west and south of Zion’s Joseph License area. It is onshore Israel and traverses a section of land, adjacent to the coastline, between Haifa and Tel Aviv. The grant of a permit would allow the conduct, on an exclusive basis through a specified period, preliminary investigations to ascertain the prospects for discovering petroleum in the area covered by the permit. The drilling rig arrived by ship at the Israeli Port of Haifa during the evening of April 18, 2009.


3. MALTA FREEPORT

Malta Freeport is an international port on the island of Malta with a trade volume of 2.56 million TEUs in 2012. It is one of busiest ports in Europe.

Since operations began in 1988, Malta Freeport has established itself as a major maritime transhipment logistic centre in the Mediterranean presently ranking with the key players in the region. Malta Freeport Terminals Limited amalgamates the activities of container handling and industrial storage and is renowned for its business culture. The Freeport now offers a total operational quay length of 2 km, a total area for container storage of 650,000 square metres and a total of 14,040 container ground slots.

Malta is a profitable location from where to carry out regional business, primarily due to its excellent geographical location, its modern infrastructure and its status as an EU member. This is particularly true for the activities related to the Oil and Gas Industry, an area in which the island has garnered considerable experience over the years. Malta is located at the centre of the Mediterranean, in the midst of all offshore oil and gas activity in the region. This makes for short sailing distances to the major offshore platforms in the area, and to the main ports in Algeria, Tunisia, Libya and Egypt. Malta has served as a base for the major oil operators, drilling contractors and pipe laying contractors in and offshore North Africa, particularly Libya. It has extensive berthing, key and storage facilities.

Oiltanking Malta Limited is a subsidiary of Oiltanking Gmbh, one of the world's biggest petroleum-product tank storage providers. In Malta Freeport, Oiltanking Malta has four tank farms with total capacity for 535 thousand cubic meters (over 3.3 million US barrels. Oiltanking Malta operates four jetties in Malta Freeport with capacity for vessels to 120 thousand DWT and maximum draft of 16 meters (52.5 feet). Oiltanking Malta handles crude and fuel oil, feedstocks, gas oil, gasoline, jet fuel, and components at Malta Freeport's Oil Terminal. It also offers services that include tank-to-tank and ship-to-ship transfers, blending, butanizing, and injecting additives.

Oil/Liquid product terminals


Medserv PLC, a Malta-based logistics and support company, serves the world's most important oil and gas exploration companies. As a Malta Freeport licensed operator, Medserv occupies a five-hectare site that contains offices and covered warehouses covering 5500 square meters (59.2 thousand square feet). Medserv has exclusive use of a 200-meter (656.2-foot) deep-water quay with five thousand square meters (over 53.8 thousand square feet) of working area and a secondary quay. Medserv services supply and specialist ships moving to/from exploration rigs and platforms in Malta Freeport. The Medserv quay is equipped with a 500-ton Manitowc crane that gives the company the ability to handle heavy-lift cargoes that are standard in the oil and gas exploration industry.

Furthermore, Medserv operates fully equipped Mud bulk plant facilities for the cutting of and storage of cement, barite and bentonite. Medserv has provided Mud mixing services since 1998. In 2009, the company upgraded its Mud plant facility at its Malta base to be able to cater for heavy weight muds in addition to the normal weight water and oil based muds required by rigs operating offshore. Today, this Mud Plant facility is the only mud plant in the Mediterranean to date that is able to cater for high volumes and high mud densities.

All Plants are operated by experienced personnel, who are responsible for the whole phase of the operation from cutting of bags to mixing and loading onto supply vessels.

x 2 completely independent mud plant units - capacity mixing and storage 400m³/unit -oil based or water based and more recently for environmental reasons, synthetic oil based.

x An Oil base storage facility of 300m³ is also available.

x Our tanks are thoroughly cleaned after each operation and can be accessed for inspection.

x Additional Bulk Storage can also be provided upon request. Mud storage facility - 1200m

Malta is a popular tourist destination with its warm climate, numerous recreational areas, and architectural and historical monuments, including nine UNESCO World Heritage Sites.

Tourist population is three times than the regular residents. Tourism infrastructure has increased dramatically over the years and a number of good-quality hotels are present on the island. In recent years, Malta has advertised itself as a medical tourism destination, and a number of health tourism providers are developing the industry. The modern island nation is a leading destination and an important freight transhipment hub due to its strategic position near the North African coast and along trade routes to Asia. As a top tourism destination, Malta enjoys a glowing reputation among international visitors, many of which now own real estate, such as villas and apartments.

4. Port of Aberdeen – United Kingdom

Aberdeen is the third largest city in Scotland welcoming large numbers of ferries to Aberdeen. �

The petroleum industry in Aberdeen began with the discovery of significant oil deposits in the North Sea during the mid-20th century. Aberdeen became the centre of Europe's petroleum industry. With the largest heliport in the world and an important service ship harbour port serving offshore oil rigs, Aberdeen is often called the "Oil Capital of Europe". The number of jobs created by the energy industry in and around Aberdeen has been estimated at half a million.

Today, reserves are still flowing fast, but it has been estimated that the North Sea is nearing or has even surpassed its peak production rate. As a result, Aberdeen is expected to have to redevelop itself as a research and development hub, rather than a base for offshore drilling, in order to remain home to the multi-national companies that drive its economy. There have been local political attempts to turn Aberdeen's reputation as the "Oil Capital of Europe" into the "Energy Capital of Europe".

As of 2013, despite declining North Sea reserves, Aberdeen remained a major world centre for undersea petroleum technology. Aberdeen Harbour is a world class port annually handling around 8,000 vessel


arrivals and around five million tonnes of cargo, valued at approximately £1.5 billion, for a wide range of industries.

With versatile facilities, competitive charges and diversity of traffic, it serves Scotland's third city and an extensive hinterland. Centre of activity for the offshore oil and gas industry's marine support operations in North-west Europe, it is also:

x Principal commercial port in Northern Scotland

x An energy industry hub

x An international port for general cargo, roll-on/roll-off and container traffic

x Principal mainland port for freight, passenger, vehicle and livestock services to Orkney and Shetland

x A centre for forest product exports

x A gateway for agricultural products and supplies

x A marshalling point for exports of oilfield equipment

x Experienced in handling equipment for renewable energy projects

x A port of call for cruise ships

x One of the busiest Trust Ports in the UK

It is noted that Aberdeen supply base, which is directly adjacent to a residential area, does not work vessels between midnight and 6am.

Customer Base:

x ADTI x Marathon

x Apache x Nexen

x Aquatic x Talisman

x Cairn x Senergy

x Dana x Subsea 7

x Enquest

Tenants:

x Baker Hughes

x Baroid

x MI Swaco (On site tenants providing baroid, bentonite, brine, base oil and water based mud)

x Halliburton- (Providers of cement for drilling operations)


Aberdeen Operations – Core Activities:

x Supply Base Management

x Warehousing and Materials Management

x Marine Operations

x Quayside Services

x Pipe Yard Services

x Transport

x Cargo Carrying Units (CCU’s)

x Fuel and Lubricants

x Freight Management

x Waste and Tank Cleaning Services

Key Statistics:

x 180 personnel onsite

x 12 available berths

x Includes 8 one stop shop berths

x Capacity – 80 vessels per week

x Utilisation currently in the medium to high 60’s

x Anticipate handling:

-600,000 deck tonnes

-300,000 water tonnes

-230,000 marine gas oil tonnes

-350,000 bulk product tonnes

It is noted that Aberdeen’s economy exhibits various positive traits:

x The average gross weekly wage in Aberdeen was £716.70 with the lowest 20% receiving £383.40 and the highest 20% getting £945.80.

x The equivalent in Scotland was an average of £584.90, the lowest 20% at £331.60 and the higher earners on £740.70. Meanwhile, across the UK, the average was £609.30, with the lowest 20% receiving £335.40 and the highest 20% taking in £780.80.

With more than 1000 energy related businesses, agencies, government bodies and research institutes – including a rising number in the burgeoning renewable sector – the ripple effect covers the whole city and is partially responsible for lower unemployment and a growing population.

The industry supports Aberdeen’s technology, education and legal and accountancy sectors, as well as demand for food to ship offshore and for taxis to take people to the heliport in Dyce.

Alongside the thousands of students who have selected Aberdeen each year, there are around two million tourists who come to the city, spending in excess of £360 million annually. The cultural life of the city includes a number of music festivals, the Word literature festival plus a diet of exhibitions and touring performance across various venues, museums and galleries including the near 200 year-old Music Hall. The sporting attractions mainly center on golf and football although a new Olympic standard aquatics center for the city is scheduled to open.

The development of a golf course has enjoyed favourable reviews with early indications suggesting it will be a popular draw for golfers from around the world. The retail offering in Aberdeen has been enhanced by the Union Square shopping centre.

Other malls in the city have upped their game with a number of revamps and improved offerings and the city is placed at number 27 in the UK, according to data from CACI, with retail generating £680m annually.


5. PORT OF MARSEILLE

Marseille Fos port is the main French trade seaport and in 2011 the port had an overall traffic of 88 million tons.

The Port of Marseille's liquid bulk terminal for oil and chemicals was opened in 1992 to handle edible oils, chemical oils, and some chemicals. Its quay contains four stations with maximum authorized draft of 10.5 meters. In 2007, the Port of Marseille handled 122 thousand tons of liquid bulk cargoes.

In 2005, liquefied natural gas (LNG) imports rose to 3.9 million tons in the Port of Marseille. The liquid bulk terminals are located in the western basins of the Port of Marseille-Fos. Gaz de France has a dedicated quay for LNG imports that can accommodate methane tankers carrying 65 thousand cubic meters of cargo. The terminal for methane tankers has storage capacity for 35 cubic meters in two tanks and a reserve for 65 cubic meters. This Port of Marseille terminal has maximum capacity to store and distribute up to four million tons per year. Gaz de France established a second methane tanker terminal in the Fos industrial park. The new terminal will have capacity for 160 thousand cubic meters and will have capacity to treat 13.2 million tons per year.

The oil terminal in the western basins of the Port of Marseille-Fos began operations in 1967 with capacity for tankers of over 80 thousand DWT. The terminal has three stations specializing in importing crude oil which have been expanded to accommodate vessels to 300 thousand DWT with a draught of 22 meters. The oil terminal helps move products from the ESSO, Shell, Total, and BP refineries as well as the refineries located in inland areas near Lyon, Switzerland, and Germany.

The Port of Marseille-Fos western basins handle refined products as well. In 2005, almost 12 million tons of refined petroleum products passed through the Port of Marseille-Fos. The oil terminals of Lavera and the Fos industrial park can accommodate tankers up to 40 thousand DWT.

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The Lavera industrial park in the Port of Marseille's western basins has stored liquefied petroleum gas (LPG) in underground facilities since 1972. Geogaz has capacity for 300 thousand cubic meters, and Primagaz has capacity for 100 thousand cubic meters. These companies treat imports and exports of propane, commercial butane, and chemical butane. In 2005, the Lavera terminal handled almost two million tons of cargo. The Port of Marseille-Fos' Lavera terminal also handles chemical liquid bulk cargoes. In 2005, it handled some three million tons of chemical liquid bulk. The terminal has capacity to handle such chemicals as styrene, propylene, ethylene, methanol, soda, MtBE, and many others.

The Port of Marseille is a popular destination for cruise passengers, and over 20 major cruise lines visit the city each year. In 2006, 380 thousand passengers travelled through the Port of Marseille on 51 cruise stopovers. A cruise gateway to Provence, the Port of Marseille provides easy access to historic cities like Avignon, St. Paul de Vence, Aix, and Les Baux. The Port of Marseille handles "regular line" passengers traveling in to/from Mediterranean and North Africa. The reception facilities are modern and comfortable and include play areas for children and other amenities.

The Port of Marseille has six cruise terminals. The Joliette terminal station is located in the city centre near one of the oldest basilicas in Marseille. Cruise passengers can walk from the port to downtown in as little as 10 minutes. The Port of Marseille can accommodate the largest cruise vessels on traveling the seas. The Marseilles Provence Cruise Centre is a six thousand square meter facility that opened in 2003.

6. PORT OF RAVENNA – ITALY

The Port of Ravenna is an Italian seaport on the North Adriatic Sea in Ravenna, Italy. It is one of the top twenty Italian ports and top forty European ports. The docks are mainly on a canal that connects the town centre of Ravenna (which is inland) to the sea which is 12 km away. The offshore breakwaters are in the little towns of Porto Corsini and Marina di Ravenna. It hosts shipyards, multipurpose terminals, bulk cargo terminals and a containerized cargo terminal. There are also a big passenger and cruise lines terminal and the biggest marinas of the Adriatic Sea.

There are regular ferry lines to Catania, Brindisi and Igoumenitsa. Ravenna has a strategic position as bridge between North and South. The development of an important oil & gas district starting from 1960 have secured the city with an international reputation as the centre of the Mediterranean oil and gas industry. As well as being one of the most important oil and gas cities in the Mediterranean, Ravenna is rich of monuments and mosaics from its glorious imperial past.

Today, Ravenna it’s Italy’s largest base for the offshore oil and gas industry. AGIP (now ENI) began offshore hydrocarbon exploration from Ravenna in the 1950s, using a seismometer spread taken by the Western on its return from the Persian Gulf. AGIP’s first offshore platform, Ravenna Mare 1, entered production in 1960. This was soon followed by others, marking the beginning of a new industry in a city which until then had lived off agriculture, tourism and some activity as a minor commercial port. By the 1970s, AGIP was producing approximately 25 billion cubic metres of methane per year: one third of Italy’s requirements. It was during this period that various multinationals opened offices in Ravenna, while local companies diversified their activities at the service of AGIP and new companies were founded.


By now, Ravenna was Italy’s offshore exploration capital. The next step was for three leading industrialists from the offshore sector, Franco Fiore, Franco Nanni and Giuliano Resca, to join forces with Pietro Baccarini, a lawyer and chairman of the chamber of commerce of Ravenna, to organize an exhibition dedicated to the offshore industry.

7. STANLEY HARBOUR - FALKLAND ISLANDS

An oil company equipment yard in the Falkland Islands.

Noble Energy Falklands Limited is proposing to construct and operate (in partnership with Premier Oil) a Temporary Dock Facility (TDF) in Stanley Harbour, Falkland Islands. The TDF will provide logistics support to offshore exploration drilling activities in the Falkland Islands. The exploration drilling activities are scheduled to commence in Q1 2015.

The TDF will have a design life of 10 years. However, Noble proposes a temporary facility which will be operational for 3 years from the date of commissioning. The Falkland Islands Government (FIG) will be offered ‘right of first refusal’ on the TDF at the end of the 3 year operational period. In the event that FIG declines to take over the TDF, Noble will remove the TDF from Stanley Harbour.

The clear light and range of subjects make the Falkland Islands an appealing destination for photographers, while anglers will find challenging sea trout and Falklands’ “mullet” fishing set in amongst the peaceful and majestic scenery.

The main tourist season is from October to early April. Over the last 5 years, the tourism industry has grown rapidly, with large numbers of passengers arriving in Stanley each year from cruise ships. Over the period from 2012 to 2013, there were over 7,500 land-based tourist arrivals in the Falkland Islands and overall, tourist arrivals grew by 17.2% in 2012 compared to the previous year.

8. Tananger

Located just 1,5 nautical miles from the mouth of the North Sea, NorSea Tananger base is an ideal place for supplying offshore operations, as well as for offshore assembly projects. NorSea AS is the operating company at both the Tananger and Dusavik supply bases and is a wholly owned subsidiary of the NorSea Group. Both bases were established in 1965 and have supported the oil activity in the southern part of the North Sea for more than 45 years.

The bases in Tananger and Dusavik have become major centres in the Stavanger area with more than 100 companies located at these facilities, providing more than 5.000 jobs. The NorSea Tananger base is situated in the North East corner of Risavika, sheltered from the prevailing weather conditions. The base is


located 5 km from Stavanger International Airport and support logistics services for several major partners in the offshore industry.

BASE FACTS x Offshore Support Base x Regulated for industrial activities x Proximity with residential areas x 24 Hours service, 365 days per year x 34 International Service Companies x Bulk Facilities for offshore purpose x 800 metres of deepwater quay structure x 13000 m2 Terminal & Warehouse facilities x Modern cargo handling equipment

Further investments will be made in infrastructure to support a one-stop shop operation – including the new Marine Gas Oil facility of 7,000 cubic metres and an existing modern environmental bulk plant. A treatment plant for drill cuttings, developed by Halliburton and the establishment of a new 2,000 square metre bulk plant for drilling fluids are in progress. This will be supported by additional pipelines aimed at increasing capacity to supply bulks direct to 2 berths.

New facilities and an overview of planned new expansion of areas in Tananger/Risavika Havn:

Potable Water

ASCO has the following facilities for vessels’ potable water supply: Berth 20 with 2 ea outlets, Berths 21 and 22 with 1 ea outlet, and Berth 23 with 2 ea outlets Each outlet has a capacity of 70 m3 per hour. In addition berth 23 has an outlet from an 850 m3 tank which gives approximately 240 m3 per hour. Furthermore, pipes from the water tank will be extended to berths 24 and 25. Marine Gas Oil / Liquid Natural Gas

To offer the most competitive rates available in Tananger, ASCO agreed with Statoil Fuel & Retail to set up a diesel (MGO) facility with total capacity of 7000 m3. The plant stared operations in Q2 2014. The support of MGO is done from quay 23 and quay 24. ASCO is operating the plant. ASCO can arrange for supply of LNG to Vessels by using trucks. Industrial Waste Management

ASCO currently has its own Safety Advisor who, together with the Return Department, evaluates waste flow and dangerous goods. ASCO has long experience in receipt of waste from offshore. The waste process management is performed in close cooperation with sub-contractor SAR AS. SAR AS has long experience in handling of industrial waste and has all the necessary Authority approvals. See information about SAR AS under paragraph T.5.


Supply Base Security

ASCO’s supply base operations at Tananger are carried out within ISPS and OLF approved areas. ASCO is an OLF-approved member and follows an established security plan together with the Stavanger Port Authorities, who are responsible for the quaysides within Risavika Harbour. There is a main gate into the harbour which is operated by Stavanger Port Authorities during daytime, ensuring only authorised vehicles are allowed into the controlled area. After normal working hours, ASCO personnel are responsible for all traffic in their own area. The quayside area in Tananger is thus secured in accordance with ISPS regulations. The harbour area is guarded by video surveillance at all times, 24 hours a day. Only controlled and approved goods are allowed inside this area. In addition, the harbour is controlled by CCTV 24 hours a day and has specialist fitted lighting according to OLF 091. ASCO has established an inspection office within the ISPS area. Area Emergency Response Plan (ERP)

ASCO has an established Emergency Response Plan in place for Tananger base. ASCO HSEQ reviews the ERP regularly and makes changes if necessary to ensure the most effective ERP is in place. ASCO is also establishing an industrial defence system according to NSO (“Næringslivets Sikkerhetorganisasjon”). Traffic Management on Site

We have implemented one-way traffic in/out of the base area. The base has white lane markings and arrows to identify roads and direction of traffic, ensuring that vehicles move safely and efficiently on the base. This will also give us better flexibility and enhanced traffic flow on the base.

Base: Tananger Item Description Specification Min. Delivery rates (tons per hour)

1 Potable water Water on all quays Water tank: 240 tons per hour Public lines: 70 tons/hour

2 Gas oil and marine fuel Fuel from Shell depot: 500 ppm

Fuel from ASCO quays from 2nd quarter 2014: 500 ppm

Shell depot: 160 m3/hour

ASCO quays: 220 m3/hour

3 Liquid bulks Base oil, OBM, WBM, Brine; all available at quays Nos. 23 and 24.

Base oil: 180-220 m3/hour

OBM/WBM: 40-120 m3/hour

Brine: 120-180 m3/hour

4 Dry bulks Cement, Barite, Bentonite; all available at quays Nos. 23 and 24.

40-90 m3/hour

5 General bulks n/a n/a


Below is an overview of Tananger Base:

Overview Tananger and Risavika Havn:

Bulk Facilities

The bulk plant consists of mud, base oil, slop and brine storage and mixing tanks. The liquid plant has the size and capacity to serve several service companies at the same time with focus on high quality and HSE. Currently the facilities are supplying bulk products over two quays. Today the ASCO bulk plant consists of 2900 m2 bulk area for liquid tanks and 350 m2 concrete areas for dry bulk tanks.

Bulk suppliers


Baker Hughes Drilling Fluids

Fluids: Baker moved into the new fluid plant facilities at ASCO Norge’s base in Tananger in 2010. They have a special focus on the fact that base facilities should meet future HSE requirements in addition to their storage capacity and has therefore a new indoor mixing facility with focus on HSE&Q and production efficiency. The indoor mixing facilities of 600m2 are equipped with automatic feeding lines to two mixing lines/hoppers which are both situated at floor level.

1200m2 indoor new storage facilities and 2000m2 outdoor at ASCO’s base including 80m2 warehouse offices are also being constructed.

In Tananger, Baker Hughes Drilling Fluids has mixing capabilities for both OBM and WBM. Both mixing tanks are 60m3 and have mechanical blenders and pumps for circulations and transfer to boat or storage tanks.

Office facilities at ASCO base are primarily set up for base personnel handling the daily operations. These offices contain in addition to the regular work stations; wardrobe, shower facilities and a dining area. With regard to meeting and conference rooms, base personnel will use Baker head quarters.

MI Swaco/Schlumberger

MI Swaco moved into ASCO mud plant facilities in 2008. In Tananger, MI Swaco has mixing capabilities for both OBM and WBM. Both mixing tanks are 40 m3 and have mechanical blenders and pumps for circulations and transfer to boat or storage tanks. Office facilities at ASCO base are primarily set up for base personnel handling the daily operations. These offices contain in addition to the regular work stations; wardrobe, shower facilities and a dining area. MI Swaco also plans for set up a small lab.

Tetra Technologies: Today Tetra is delivering all completion fluids and connected services to NCS 5 CONSORTIUM.

The ASCO bulk plant in Risavika is used for this purpose. This includes brine, filtration services, clean up tools and chemicals.

Chemicals include: x Clean up chemicals x Inhibitors x Oxygen scavengers x Biocides

Halliburton Norge:

Halliburton today delivers cement from the bulk plant. They have built a new liquid plant on 1800 m2 with major capacity. This plant was finalized end 2013. In addition it is planned an increase on cement, barite and bentonite. Halliburton also operates a waste treatment plant for drill cuttings and cleaning water. The capacity of drill cuttings is about 20.000 tonnes.

Franzefoss Gjenvinning:

Franzefoss has built a hub for receiving and temporary storage of waste oil and sloop water. This will reduce the need for transport of waste and increase the control of the product. Total capacity is 1000 m3.


9. MTWARA PORT AND SUPPLY BASE ASCO Baku - No 1 (Azerbaijan)

The Old Base, New Base and Quayside is located 20km away from the capital city Baku. Traditionally it is a industrial area where construction and fabrication of current BP offshore rigs and jackets were completed. Also there are number of BP vendors having their facilities and warehouses to support offshore and onshore activities.

However construction of mega infrastructure project of Khazar Islands will make the area more attractive for residential use. The project commenced already and will comprise of commercial facilities, such as stores, warehouses, shopping malls, entertainment and business centres, tennis courts, golf clubs, and property in 70-story luxury hotel complex, as well as residential space including houses, penthouses, villas and cottages.

General Information:

x 27Ha of total operational areas

x 14,000sqm of Warehousing across four warehouses

x Over 5,000sqm of Pipe Yard

x About 38,500 ea pipes stored at pipe yards

x About 53,000 line items are stored in inventory

x About 4,600cm of stored diesel fuel

x 1,441 of various types of CCUs being managed and maintained to cover offshore & onshore locations needs

x About 80,000cm of diesel being processed and sent to offshore and onshore locations

Supply Base in Azerbaijan consists of Old Base, New Base and Quayside as shown below.

`

Activities at Supply Base are:

x Forklift operations

x Crane lifting operations

x DTF (Diesel Tank Farm) operations


x Facilities, CCU, plant and equipment and DTF maintenance operations

x AFF bulk mixing operations

x Bulk Shearing operations (up to 250 barrs pressure)

x PIF (pipe inspection facility) operations

x Cherry picker operations (maintenance)

x Diesel processing operations

x Mud cleaning centrifuge operations


Appendix 11 International Practice – Related Accidents

Literature review has not revealed cases with particular resemblance to the Larnaca offshore logistics base envisaged operations. In this section however accident cases referring to radiation sources and drilling mud are mentioned for the reader’s reference. Such may not be exhaustive but are representative examples of what could go wrong in similar operations.

Accidents related to radiation sources

In 2006, a radioactive canister imported by Schlumberger was recovered in the Western Australian outback desert. The canister had been lost in November 2005 by the company's transport partner, when the improperly secured container fell off the trailer on which it was being transported. [35], [36]

In 2010, the Aberdeen Sheriff court fined Schlumberger Oilfield UK £300,000 for losing a radioactive source on the rig floor on the Ensco 101 mobile drilling rig in the North Sea for 4 hours.

In 2009, the Pennsylvania Department of Environmental Protection fined Chesapeake Appalachia LLC and Schlumberger Technology Corp. more than $15,500 each for a hydrochloric acid spill in February 2009 at Chesapeake's Chancellor natural gas well site in Asylum Township, Bradford County, Pennsylvania. Officials said the leak did not contaminate groundwater. [37]

Accidents related to drilling mud

It is noted that the case below refers to onshore well case studies, where wells may be located in proximity of residential areas and can lead to soil contamination.

Accidents regarding drilling mud plants have not been reported, and the term should not be confused with past incidents that had to do with so-called red mud accidents regarding alumina production, or fracking accidents.

Drilling mud accidents within offshore wells have occurred in the past, but this has not resemblance to the Larnaca case. There have, however, been road accident cases with drilling mud being transported e.g. in Texas, Alaska, where there are many onshore wells spread within these regions. [38], [39]

Any risk, particularly low, concern the well location, only. “The abnormally high pressure is most often encountered during exploratory drilling in new fields. The probability of such extreme situations is relatively low. Some oil experts estimate it at 1 incident for 10,000 wells [Sakhalin-1, 1994]. The need to drill lean holes emerges, on average, in 3% of accidental episodes.” [40]

Accidents related to drilling mud storage

It is noted the below case refers to the storage of used drilling mud. It is anticipated that such operation will not be undertaken in the Larnaca offshore logistics base.

As far as risks, originating from used drilling mud from oil platforms that have been transported to onshore facilities for further processing, are concerned, Trygve Skjold & Kees van Wingerden analyze the accident involving an explosion that took place on 27 May 2006 in a 1600 m3 storage tank at an onshore processing facility for slop:

x The 1600 m3 tank contained about 1460 m3 slop, leaving a free volume of less than 10 %.

x Two operators had to open a manhole on top of a tank.

x The bolts holding the were severely rusted, and attempts at loosening them with spanners failed.

x The operators proceeded to cut the bolts with a conventional angle grinder equipped with a cutting disc.

x While cutting the second bolt, a flammable mixture inside the tank ignited

x The explosion ruptured parts of the tank top, one operator was killed and the other injured.

x A survey 1 week after the accident found the following:

x Entire liquid surface covered with small bubbles trapped in the oil film

x Sound of bubbles braking

x Gas released in the liquid column


x Chemical reactions was highly unlikely: stable components (long-chained hydrocarbons) and pH in the range 7.0-7.5

x Displacements in chemical equilibria highly unlikely:

x stable components (long-chained hydrocarbons) and pH in the range 7.0-7.5

x Corrosion processes highly unlikely: high release rate, construction steel, pH in the range 7.0- 7.5

x Biological hydrogen production was the source of the acccident

x Extremely high biological activity: 108 bacteria per millilitre!

x Direct counting by epifluorescence microscopy

x Quantification of DNA sequences by quantitative polymerase chain reaction (Q-PCR)

x Only 0.1 % methane producing bacteria!

x Gas chromatography-mass spectroscopy (GC-MS): primarily straight chained n-alkanes, 11-16 carbon atoms

x Anaerobic fermentation of alkanes is generally a slow process; glucose or similar more likely candidates

x The growth substrate may have been consumed, or not detectable by GC-MS. As far as previous accidents are concerned, the investigation revealed no previous accidents involving slop tanks,but several similar accidents have been reported in the pulp and paper industry:

Similarities:

x Bacterial hydrogen production!

x Bacteria are omnipresent

x Bacteria adapt to their environment (5-15 … 50-60 oC)!

x Spores: airborne and difficult to kill (120 oC for 1 hour!)

x Stagnant anaerobic conditions in liquid phase!

x Limited ventilation of atmosphere above liquid!

x Start-up, shut-down, reconstruction, etc.

x Ignition by hot work

Preventive measures:

x Sufficient natural ventilation (inherently safe)

x Open top floating roof tank (inherently safe)

x Forced ventilation (active, potential ignition source)

x Aeration (active)

x Blanketing with inert gas (active, expensive, potential suffocation hazard, promotes anaerobic conditions)

x Control ignition sources: flame arresters, hot work procedures, grounding, etc. (problem = hydrogen)

x Long-term dedication to safety management! [41]

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