1. PROVENEFFECTIVESTRATEGY NACE MR0175/ISO 15156-01 AND MR 0103 MATERIALS REQUIREMENTS FOR SOUR SERVICES Prepared by Daniel Daraban November 2013

2. CNQ PREMIUM VALUE | DEFINED GROWTH | INDEPENDENT Slide 2 NACE MR0175/ISO 15156-01 and MR 0103 Materials Requirements for Sour Services The consequences of sudden failures of metallic oil and gas field components,associated with their exposure to H 2 S-containing production fluids lead to the preparation of the first edition of NACE MR0175 which was published in 1975 by the National Association of Corrosion Engineers. In 2003,NACE MR0175 merged with ISO 15156 and it supersedes all previous version of MR0175.

3. CNQ PREMIUM VALUE | DEFINED GROWTH | INDEPENDENT Slide 3 NACE MR0175/ISO 15156-01 and MR 0103 Materials Requirements for Sour Services The NACE Standard MR-0103 establishes material requirement for resistance to sulfide stress cracking (SSC) in sour refinery process environments. The NACE Standards MR-0175/ISO-15156 establishes materials for use in H2S-containing environments in oil and gas production. High concentration of CO 2 and Chloride are present in this environments as well.

4. CNQ PREMIUM VALUE | DEFINED GROWTH | INDEPENDENT Slide 4 NACE MR0175/ISO 15156-01 and MR 0103 Materials Requirements for Sour Services NACE MR-0175/ISO-15156 Standard is comprised on the following three parts:  Part 1: General Principles for Selection of Cracking-Resistant Materials.  Part 2: Cracking Resistant Carbon and Low –Alloy Steels, and the Use of Cast Irons  Part 3: Cracking-Resistance CRAs(Corrosion-Resistance Alloys) and Others Alloys.

5. CNQ PREMIUM VALUE | DEFINED GROWTH | INDEPENDENT Slide 5 Part 1: General Principles for Selection of Cracking-Resistant Materials. Part 1 describes general principles and gives requirements and recommendation for the selection of materials for service in equipment used in oil and gas production in H 2 S –containing environments,where the failure could pose a risk to the health and safety of the public and personnel.

6. CNQ PREMIUM VALUE | DEFINED GROWTH | INDEPENDENT Slide 6 Part 1: General Principles for Selection of Cracking-Resistant Materials. Part 1 addresses seven mechanisms of cracking that can occur in oil and gas production environments containing H 2 S: 1.Sulfide Stress Cracking (SSC) 2.Stress Corrosion Cracking (SCC) 3.Hydrogen-induced Cracking (HIC) 4.Stepwise Cracking (SWC) 5.Stress-Orientated Hydrogen Induced Cracking (SOHIC) 6.Soft Zone Cracking (SZC) 7.Galvanically Induced Hydrogen Stress Cracking (GIHSC)

7. CNQ PREMIUM VALUE | DEFINED GROWTH | INDEPENDENT Slide 7 Part 1: General Principles for Selection of Cracking-Resistant Materials. WARNING Metallic materials selected using NACE MR0175/ISO15156 are resistant to cracking in defined H 2 S-containing environments in oil and gas production,but NOT NECESSARILY IMMUNE to cracking under all service condition. It is the equipment user’s responsibility to select materials suitable for the intended service! Therefore, before selecting or qualifying materials, the user of the equipment shall defined,evaluate and document the service condition to which materials can be exposed.

8. CNQ PREMIUM VALUE | DEFINED GROWTH | INDEPENDENT Slide 8 Part 1: General Principles for Selection of Cracking-Resistant Materials. Evaluation and Service Condition: Factors, others than material properties,known to affect susceptibility of materials to cracking in H 2 S service include:  H 2 S partial pressure  In situ pH  Presence of elemental sulfur or other oxidant  Temperature  Galvanic effect  Mechanical stress  Time to exposure to contact with a liquid water phase.

9. CNQ PREMIUM VALUE | DEFINED GROWTH | INDEPENDENT Slide 9 Part 2: Cracking Resistant Carbon and Low- Alloy Steel, and the use of Cast Irons This part addresses the resistance of these steels to damage that can be caused by: 1.Sulfide Stress Cracking (SSC) 2.Stress-Orientated Hydrogen Induced Cracking (SOHIC) 3.Soft Zone Cracking (SZC) 4.Hydrogen-induced Cracking (HIC) 5.Stepwise Cracking (SWC) This part is concerned only with cracking. Localized corrosion is not addressed.

10. CNQ PREMIUM VALUE | DEFINED GROWTH | INDEPENDENT Slide 10 Part 2: Cracking Resistant Carbon and Low- Alloy Steel, and the use of Cast Irons The behavior of carbon and low-alloy steel in H 2 S environments are affected by:  Chemical composition,strength,hardness, product form.  Grain size  H 2 S partial pressure  Acidity (pH) of the water phase  Exposure temperature  Exposure time  Tensile stress  Presence of elemental sulphur

11. CNQ PREMIUM VALUE | DEFINED GROWTH | INDEPENDENT Slide 11 Part 2: Cracking Resistant Carbon and Low- Alloy Steel, and the use of Cast Irons There are three main ways to qualify and selecting carbon and low- alloy steels with resistance to SSC 1.Qualification by “pre-qualified” materials 2.Qualification by laboratory testing 3.Qualification by 2 years of documented field experience Within the “pre-qualified” materials choice,there are two options: Option 1: For partial pressure H 2 S below 0.3KPa no special precaution are required For partial pressure H 2 S equal to or greater 0.3KPa the material shall be heat-treated and maximum hardness 22HRC. Option 2: Using diagrams based upon partial pressure of H 2 S and the pH of the process.

12. CNQ PREMIUM VALUE | DEFINED GROWTH | INDEPENDENT Slide 12 Part 2: Cracking Resistant Carbon and Low- Alloy Steel, and the use of Cast Irons Hardness Testing Requirements for Welds The qualification of welding procedures for sour services shall include hardness testing using the Vickers HV10 or HV5 method in accordance with ASME E92 or Rockwell 15 N scale in accordance with ASME E18 Figure 1 shown below the butt weld survey method for Vickers hardness measurement. Hardness acceptance criteria for carbon steel and low-alloy steel welds are specified in Part 2.

13. CNQ PREMIUM VALUE | DEFINED GROWTH | INDEPENDENT Slide 13 Survey method for Vickers hardness measurement Hardness impressions within heat affected zones should be located as close as possible to the fusion boundary.

14. CNQ PREMIUM VALUE | DEFINED GROWTH | INDEPENDENT Slide 14 Heat –Affected Zones

15. CNQ PREMIUM VALUE | DEFINED GROWTH | INDEPENDENT Slide 15 Part 3 Cracking-resistant CRAs (corrosion- resistant alloys) and others alloys This part gives requirements and recommendation for the selection and qualification of CRAs(corrosion-resistant alloys) and other alloys for service in equipment used in H 2 S containing environment. Part 3 address the resistance of these materials to damages that can be caused by:  Sulfide Stress Cracking(SSC)  Stress Corrosion Cracking(SCC)  Galvanically Induced Hydrogen Cracking This part is concerned only with cracking. Localized corrosion is not address.

16. CNQ PREMIUM VALUE | DEFINED GROWTH | INDEPENDENT Slide 16 Part 3 Cracking-resistant CRAs (corrosion- resistant alloys) and others alloys Cracking-resistance CRAs and others alloys could be selected:  Using “pre-qualified “ material Annex A  Following qualification by successful laboratory testing in accordance to Annex B  Based on satisfactory 2 years of documented field experience. Hardness Testing Requirements for welds are the same as on Part 2

17. CNQ PREMIUM VALUE | DEFINED GROWTH | INDEPENDENT Slide 17 Scope: This standard establishes material requirements for resistance to Sulfide Stress Cracking (SSC) in sour petroleum refining and related processing environment containing H 2 S either as a gas or dissolved in liquid water with or without presence of hydrocarbon. Applicability: This standard applies to all components of equipment exposed to sour refinery environments where failure by SSC would compromise the integrity of the pressure system. NACE MR 0103 Materials Resistant to Sulfide Stress Cracking in Corrosive Petroleum Refining Environments

18. CNQ PREMIUM VALUE | DEFINED GROWTH | INDEPENDENT Slide 18 NACE MR 0103 Materials Resistant to Sulfide Stress Cracking in Corrosive Petroleum Refining Environments SSC is defined as cracking of a metal under the combined action of tensile stress and corrosion in the presence of water and H 2 S. SSC is a form of hydrogen stress cracking resulting from absorption of atomic hydrogen that is produced by the sulfide corrosion reaction. The atoms remain dissolved in the matrix and are highly mobile. SSC is observed in the welds or heat affected zones where high- strength/low-ductility microstructure may be present and can be identified by high hardness.

19. CNQ PREMIUM VALUE | DEFINED GROWTH | INDEPENDENT Slide 19 NACE MR 0103 Materials Resistant to Sulfide Stress Cracking in Corrosive Petroleum Refining Environments Factors contributing to SSC:  Chemical composition  Strength (as indicated by hardness)  Heat treatment  Microstructure of the material  The hydrogen flux in the material  Temperature  Time

20. CNQ PREMIUM VALUE | DEFINED GROWTH | INDEPENDENT Slide 20 NACE MR 0103 Materials Resistant to Sulfide Stress Cracking in Corrosive Petroleum Refining Environments Environmental condition known to cause SSC are those containing an aqueous phase and:  >50 ppmw total sulfide content, OR  ≥1 ppmw total sulfide content and PH<4, OR  ≥ 1ppmw total sulfide contents and ≥ 20 ppmw free cyanide and PH>7.6, OR  >0.3 kPa absolute partial pressure H 2 S in the gas phase associated with the aqueous phase of a process.

21. CNQ PREMIUM VALUE | DEFINED GROWTH | INDEPENDENT Slide 21 CNRL Standard 00-STD-MW-0034 CNRL Standard 00-STD-MW-0034 identify three levels of “Wet H 2 S Service :  Category 1-Mildly corrosive  H 2 S concentration is 50 to 2,000 ppmw  PH range is 4.5 to 7.  Category 2-Moderately corrosive  H 2 S concentration is 2,000 to 2,500 ppmw  PH range is 4.5 to 7.6  Category 3-Severaly corrosive  H 2 S concentration is greater than 2,500 ppmw  PH is below 4.5

22. CNQ PREMIUM VALUE | DEFINED GROWTH | INDEPENDENT Slide 22 NACE MR 0103 Materials Resistant to Sulfide Stress Cracking in Corrosive Petroleum Refining Environments Hardness is related to tensile strength, a primary factor in SSC susceptibility.As such, a maximum allowable hardness is specified as a primary requirement for materials.

23. CNQ PREMIUM VALUE | DEFINED GROWTH | INDEPENDENT Slide 23 NACE MR 0103 Materials Resistant to Sulfide Stress Cracking in Corrosive Petroleum Refining Environments g Alloy steel included under the ASME Sec. IX P-No shall not exceed maximum hardness level: Other alloy steels shall have a maximum harness of 22HRC(237HBW) Alloy SteelAlloy SteelMaximum Hardness P-No. 3P-No. 3225 HBW P-No. 4P-No. 4 P-No. 5AP-No. 5A235 HBW P-No. 5BP-No. 5B P-No. 5CP-No. 5C P-No. 6P-No. 6 P-No. 7P-No. 7 P-No. 10A225 HBW P-No. 10B225 HBW P-No. 10C225 HBW P-No. 10F225 HBW P-No. 11P-No. 11 P-No. 15E248 HBW

24. CNQ PREMIUM VALUE | DEFINED GROWTH | INDEPENDENT Slide 24 Hydrogen Bake out Temperature and Time 35 1.400 30 1.200 25 1.000 20 0 2 4 6 8 10 12 14 16 18 20 Bakeout Time (Hours) 0.800

25. CNQ PREMIUM VALUE | DEFINED GROWTH | INDEPENDENT Slide 25 NACE MR 0103 Materials Resistant to Sulfide Stress Cracking in Corrosive Petroleum Refining Environments Conclusions:  NACE MR0103 standard establishes material requirements for resistance to Sulfide Stress Cracking (SSC) in sour petroleum refining and is applicable to us.  The selection of materials for service in equipment used in oil and gas production in H 2 S –containing environments is very important because the failure could pose a risk to the health and safety of the public and personnel.  Metallic materials selected using MR0103 are resistant to cracking in defined H 2 S-containing environments,but NOT NECESARILY IMMUNE to cracking under all service condition.  It is the equipment user’s responsibility to select materials suitable for the intended service!!!