SAIPEM’S APPROACH TO AND PRACTICE OF BIODIVERSITY

CONSERVATION AND ENVIRONMENTAL PROTECTION

FOR A SUSTAINABLE WAY OF DOING BUSINESS

saipembiodiversity

1.0 SAIPEM’S APPROACH TO BIODIVERSITY 21.1 The importance of biodiversity protection in the oil & gas sector 21.2 Saipem’s commitment to biodiversity protection 2

2.0 THE GLNG PIPELINE PROJECT 32.1 About the project 32.2 Environmental challenges 32.3 Trenchless methodology 32.4 Measuring the socio-economic value created by ecosystem services 4

3.0 ETIHAD RAILWAY PROJECT 73.1 About the project 73.2 Environmental challenges 73.3 A biodiversity-oriented project design and implementation 73.4 Safeguarding flora and fauna during construction 8

4.0 MEDGAZ PROJECT 104.1 About the project 104.2 Environmental challenges 104.3 Environmental monitoring of water turbidity 104.4 Reinstatement 12

5.0 DOLPHIN PROJECT 135.1 About the project 135.2 Environmental challenges 135.3 Marine fauna 13

6.0 NORD STREAM PROJECT 156.1 About the project 156.2 Environmental challenges 156.3 Environmental monitoring programmes 16

7.0 SAKHALIN II PHASE 2 PROJECT 177.1 About the project 177.2 Environmental challenges 177.3 River crossing strategies 187.4 Reinstatement implementation 197.5 Biodiversity protection at work 19

8.0 KASHAGAN PROJECT 208.1 About the project 208.2 Environmental challenges 208.3 Technological innovation for biodiversity protection 21

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1.1 THE IMPORTANCE OF BIODIVERSITYPROTECTION IN THE OIL & GAS SECTORThe oil and gas industry interacts with a varietyof different natural environments, many ofwhich may be sensitive. A company operatingin the sector therefore needs to employappropriate technologies, managementsystems and operational practices that canguarantee safe and responsible operations,protect the natural environment and addressconcerns about the company’s effects on localcommunities.Biodiversity, in fact, can be defined as thevariability among living organisms, includingdiversity within species, between species andof ecosystems. Biodiversity componentscomprise, at an increasing scale of ecologicalorganisation, genes, species, habitats andecosystems. Biodiversity quality and quantity isthe basis of the integrity and effectivefunctioning of ecosystems and the servicesthey provide.Biodiversity is recognised as the foundation ofall ecosystem services which support andprotect economic activity and property.Therefore, human lives, societies andeconomies depend, directly or indirectly, onbiodiversity and its component resources.The natural diversity of the living world ispriceless, but is commonly undervalued bymodern economies, resulting in its rapid andaccelerating disappearance, mainly associated,directly or indirectly, with the production andconsumption of goods and services to meethuman needs.

1.2 SAIPEM’S COMMITMENTTO BIODIVERSITY PROTECTIONAs stated in Saipem’s Sustainability Policy, anessential component of the Company’ssustainability approach is the conservation ofbiodiversity, ecosystems and the services theyprovide, all of which requires clearconsideration and subsequent integration intothe objectives and operating practices ofprojects along their entire life cycle.As a contractor in the execution of projects,Saipem is committed to working with itsClients and stakeholders for:• the identification and evaluation of all

potential impacts on biodiversity andecosystem services (BES) deriving from itsoperations, implementing appropriatemitigation actions to minimise any adverseeffects;

• the promotion of research, development andtechnological innovation aimed at reducingthe impacts on the environment andbiodiversity;

• the implementation of initiatives, togetherwith local communities and authorities, tocreate awareness and reinforce the conceptof biodiversity and ecosystems as anopportunity for local socio-economicdevelopment.

By applying principles that are consistent withinternationally recognised guidelines andstandards on biodiversity, Saipem aims to be aleading contractor for BES management in itsactivities.

1.0SAIPEM’S APPROACHTO BIODIVERSITY

Saipem is committed to protecting biodiversity and ecosystems and to minimising impactson biodiversity in the areas where the Company operates.

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2.1 About the projectThe GLNG Pipeline Project in CentralQueensland (Australia) involves thedevelopment of gas fields in the Bowen andSurat Basins, the construction of a 420kilometre underground gas transmissionpipeline to Gladstone, and a two-train LNGprocessing facility on Curtis Island inGladstone.The Project is managed by a Joint Venture,GLNG, made up of Santos, Total, Petronas andKogas, who awarded Saipem Australia theengineering, procurement and constructioncontract for the Gas Transmission Pipeline.The scope of work includes engineering,procurement and construction of the 420 km42” gas transmission pipeline running fromFairview to Curtis Island. The last section of theGLNG pipeline runs across a wide tidal plaincalled the ‘The Narrows’ mudflat before itreaches Curtis Island using a 4.3 kmsubmarine tunnel as a conduit for the pipeline.

2.2 Environmental challengesLocated in the Great Barrier Reef Marine Park,the Narrows Marine Crossing is beingconstructed in a very sensitive environmentalarea for native flora and fauna. The mudflatintertidal zone is also characterised by thepresence of acid sulphate soil. This particularsoil, if exposed during excavation, can increasethe acidity of the surrounding environment withsevere consequences on the local ecosystem.To minimise the environmental impact ofpipeline construction activities in this intertidaland marine area, Saipem proposed to use atrenchless methodology during the bid phaseas an alternative to the open trench solution

comprised in the Tender scope. Followingfeasibility studies of different trenchlessmethodologies during the first year of theProject, a segment-lined tunnel method wasselected to connect the mainland to CurtisIsland and allow the installation of the GLNGGas Transmission Pipeline. Saipem used itstechnological know-how to surround thecoastal environment and avoid impacting themarine activities in Gladstone Harbour.

2.3 Trenchless methodologyThe trenchless methodology used is essentialfor minimising the environmental impact ofpipeline construction activities in this intertidaland marine area. Saipem opted for a 3.5 kmtunnel with a minimum coverage of 12.5 m.The excavation was performed using a TunnelBoring Machine (TBM) with an internal diameterof 3.4 m, which lines the tunnel with precastconcrete segments. The TBM was assembledand launched inside the launch shaft at the endof April 2013 and the excavation wascompleted on February 3, 2014.Once completed, the tunnel was flooded withsea water in order to facilitate pipeline

2.0THE GLNG PIPELINE PROJECT

The GLNG Pipeline Project in Australia was particularly challenging considering the sensitivenessof the area. Saipem developed solutions to meet project requirements while ensuring biodiversitywas being effectively preserved.

WORLD’S LONGESTPIPELINE LAUNCHIN A TUNNEL WITH

A THRUSTER MACHINECutting-edge technologies providing

environmentally sound solutions

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installation by reducing the vertical load ofconcrete coated pipes and consequently thefriction on the tunnel floor. The 42” pipelinewas installed using a pipe thruster pushingmethodology.The pipeline installation was a complexsequence of interconnected activities: triplejoint lowering into the launch shaft; jointing;quality checks and pushing, were all completedin 16 days.The Narrows Marine Crossing Project is one ofthe world’s longest trenchless marinecrossings for a gas transmission pipeline.It has permitted the GLNG Gas TransmissionPipeline to cross the Narrows withoutdisturbing the marine habitat, wildlife andsurrounding coastal environment and withoutimpacting marine activities in GladstoneHarbour.The commitment to technological innovationthrough the Narrows Marine Crossing is a clearexample of Saipem’s sustainable businesssolution, which also aims to reduce theenvironmental footprint of operations in difficultand sensitive areas with a view tosafeguarding the ecosystem in which Saipemis called upon to operate.

2.4 Measuring the socio-economicvalue created by ecosystemservicesWhat value is Saipem creating and sharing asa result of the way it manages its projects or

due to its presence? And how can this valuebe quantified?Pipeline construction, and activities associatedwith the Oil & Gas industry in general, areoften linked to the disturbance and degradationof the social and environmental context.Specifically, impacts on the environment or onparticular ecosystems are nearly alwaysperceived as adverse. In reality, however,outputs of goods and services do in factgenerate benefits for the human population.To understand better the real social andenvironmental footprint of GLNG PipelineProject activities, Saipem decided to quantifythe ecosystem service value created from aspecific aspect of the Project EnvironmentalManagement Plan.The term ‘ecosystem’ refers to a dynamiccomplex of plant, animal and micro-organismcommunities and their non-living environmentall interacting as a functional unit (MA, 2005).Effectively, ecosystems are the habitats of, forexample, coral reefs, forests, grasslands,rivers, farmland and urban parks that supportvarious species. ‘Services’ refers to thefunctions and products of the ecosystem thatbenefit humans in the short or long term.They depend on the attributes of theecosystem, and include crops, fish, freshwaterand timber. They also comprise climateregulation when trees sequester carbon, andthere are cultural services, such as tourism, tosay nothing of spiritual benefits.

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The aim of the study was to understand thereal footprint by quantifying the value of theecosystem services created and associatedwith an increase in human well-being.Specifically, it examined the translocation andmanagement of an ancient species of plantknown as the Cycas Megacarpa (Cycad).Cycads, a small group of plants that can reacha height of 5-6 m, have existed for over 200million years. However, their decreasingnumbers and distribution are due to humaninduced destruction of their habitat.The ‘Cycas Megacarpa Translocation andManagement Plan’ (CTMP), developed by theClient, GLNG, aims to protect and increase theCycads population in the area crossed by theproject pipeline. Through the application of theCTMP in accordance with the AustralianGovernment’s Environment Protection andBiodiversity Conservation Act 1999, the Clienthas committed to preserving a population of3,990 Cycads over 5 years following planting

in selected sites along the pipeline route. Of3,990 Cycads, approximately 3,220 will benursery grown and 770 will come from GLNGPipeline right of way (ROW) translocationactivities.The CTMP provides specific assessment,management, monitoring and reportingmeasures on:• translocation of individual Cycads from ROW

activities;• nursery cultivation of Cycads, which not only

includes seed collection and propagation,but also monitoring, management andevaluation.

For the purpose of the study, nursery grownCycads were examined since they representadditional environmental and social value,whereas the ecosystem services value fromthe translocation of the Cycads was deemednegligible.The ecosystem services value created by theCTMP was calculated by applying the model

2014 AUSTRALIA PREMIER’S SUSTAINABILITY AWARD

In the category ‘Innovation in Sustainable Technologies’ for the constructionof the Narrows Marine Crossing

Saipem Australia, together with Santos GLNG and Thiess, was awardedthe 2014 Queensland Premier’s Innovation in Sustainable TechnologiesAward for the Narrows Crossing tunnel between Gladstone and CurtisIsland. The prize is promoted by the Queensland Government’sDepartment for the Protection of Environmental and Natural Heritage,and is supported by the Queensland University of Technology.The innovative aspect of the Narrows Marine Crossing project was aPipe Thruster Machine to insert a pipeline in a tunnel, a methodologynever adopted before in the Oil & Gas sector. The excavation of thetunnel was achieved thanks to a 3.4 metre mechanical cutter, which covered the tunnel with precast concrete.The 42-inch pipeline was installed inside the tunnel, then sealed and filled with sea water.This massive pipeline project to cross ‘The Narrows’ waterway in Gladstone offers vastly improved environmentalbenefits compared to other construction options, such as trenching.Building the tunnel eight metres below the seabed has prevented disturbance to marine habitats, wildlife andsurrounding coastal environments.The tunnel has set new standards for marine crossings in environmentally-sensitive areas and is already being adoptedby industry peers as best practice.

ECONOMIC VALUE

Estimated value created over a 20-year timeframe 20 mln AUD

Estimated value created over a 200-year timeframe 72 mln AUD

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developed by the World Business Council forSustainable Development (WBCSD) and theInternational Institute for SustainableDevelopment (IISD). It is calculated using twocomponents. The first is the indirect use valuegiven by the social cost of carbon storage andsequestration, whereas the second is the

optional value of future direct and indirect usesof Cycads seeds and plants.The study shows that over a 20 yeartimeframe, the project investment forimplementation of the CTMP will create asocio-economic value for local stakeholders ofapproximately 20 million AUD (net presentvalue), with a social return on the investmentof about 300%. Considering a broadertimeframe, in 200 years the value created canbe estimated at about 72 million AUD with asocial return on investment of about 833%.The study outcomes are an importantconfirmation that management of projectoperations through a sustainable approach is akey way to create value for local stakeholdersand that proper communication of the sharedvalue created is essential for fostering a moresupportive environment from within which toconduct operations.

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3.1 About the projectOn September 22, 2013, the first train ofEtihad Rails ran on the Infrastructure built bySaipem. Etihad Rail (the Client) and the localpopulation cheered with enthusiasm for thesuccess achieved.The line consists of 290 km of freight railwaylines between the new Gas facilities in the AbuDhabi desert in Shah and Habshan, to the portfacility of Ruwais: it is a core part of the UAERailway Network that will link the principalpopulation and industrial centres of the GCC,(Gulf Cooperation Council).

3.2 Environmental challengesThe line crosses Baynounah Forest, a 592 km2

Protected Area (also known as the HoubaraProtected Area) located approximately 15 kmeast of Ruwais along the Al Gharbia Mainline ofthe railway. The Baynounah Forest is aProtected Area for the conservation of theMacqueens Houbara Bustard, a bird which islisted as vulnerable on the International Unionfor the Conservation of Nature and Natural

Resources, IUCN Red List. This species is bredin captivity here.The area was also recorded as importantbecause of the several animal and plantspecies and habitat types, including jebels,saline coastal plains, sand sheets, low dunesand alluvial gravel plains.

3.3 A biodiversity-oriented projectdesign and implementationThe project received approval from theEnvironment Agency of Abu Dhabi (EAD) and aTerrestrial Ecological Management Plan and aConstruction Environmental Management Planwere prepared in the early phase of projectexecution. These Plans required severalmitigation measures in order to safeguardhabitat, flora and fauna and to minimiseenvironmental impacts.To address the stringent licensing procedure,Saipem appointed a Project EnvironmentalManager and a dedicated team to regularlysupervise site activities, report toenvironmental authorities and manage the

3.0ETIHAD RAILWAY PROJECT

Biodiversity protection in a railway construction project located in a desert environment.

environmental challenges

Railway line segment in a conservation areaBaynounah Forest Protected Area is home to Macqueens Houbara Bustard,a bird holding symbolic importance for local heritage and culture 49 km

Protected animal crossingTo allow camels, gazelles and reptiles to passfrom one side to the other 110 tunnels

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several audits received from environmentalagencies and third parties.The environmental project requirements wereimplemented in the design from the very firststage in close coordination with theEngineering Team. A series of workshops wereorganised in order to agree on mitigationmeasures and fulfil the expectations of thestakeholders both during railway design andconstruction.One of the requirements of the EnvironmentalImpact Assessment and of the TerrestrialEcology Management Plan was to carry out apre-construction survey. The habitat and faunasurvey was conducted to identify reptiles,mammals and birds living in the constructioncorridor and minimise the risks for their survivalin the area. Following that, during the finaldesign, Saipem proposed adjustments to therailway route in order to optimise the distancefrom particularly sensitive and valuableenvironments, or areas where shy animals likeSpiny-tailed Lizard burrows were identifiedduring the preliminary ecological survey.

Another design optimisation proposed was thereduction of the cross section of the railwaylocated inside the forestry area, resulting inapproximately 6,500 trees being saved.The largest impact associated with the railwaywas the creation of a permanent ecologicalbarrier which risked fragmenting habitats anddividing fauna populations. Culverts weretherefore designed at intervals of 1 to 5 km,which reduced the impact of the ecologicalbarrier, allowing the free passage of gazelles,as well as smaller mammals and reptiles.

3.4 Safeguarding flora and faunaduring constructionThe Baynounah Forest Protected Area has thegreatest habitat diversity recorded anywherealong the project route, with several speciesbeing of high value. Saipem specialistenvironmental professionals performed veryspecific activities within the area, such as treetagging and transplantation, and relocation ofseveral species of reptile living in theconstruction area. A high proportion of the areawithin the project corridor was irrigated andnative trees and shrubs were planted.One of the main actions provided for in theTerrestrial Ecological Management Plan wasthe removal from the construction corridor of ahigh valued reptile species known as theSpiny-tailed Lizard. A reptile proof fence wasinstalled around the construction corridor,where appropriate, in order to capture thereptiles prior to commencement ofconstruction. After capture, reptiles were

APPROPRIATEDCONSTRUCTION

TECHNIQUESTo minimise impacts

on the ecosystem

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brought to a translocation area to acclimatisebefore release into suitable habitats.Moreover, environmental induction training wasdelivered to all personnel before they enteredthe Baynounah Forest to illustrate thepeculiarities of the area and the preventivemeasures to be adopted in order to avoiddisturbing local flora and fauna.A project ‘Snake Response’ procedure wasdeveloped to safeguard site personnel andensure survival of the animals recovered.A dedicated training course was delivered toset up a team of qualified snake handlerscapable of intervening promptly and effectivelyin order to remove reptiles. The courseexamined all types of dangerous animals in theUAE, and in particular taught attendees how tominimise interactions with snakes and how tointervene in the event of a snake bite. It alsogave instructions in snake-catching techniquesusing appropriate handling tools. A monthlysnake response drill was organised to verifythe responsiveness of security personnel,snake handlers and first aiders.Other mitigation measures included:• construction works did not take place during

the breeding bird season between Februaryand May;

• night time construction was avoided in thisarea as it could have affected the feedinghabits of nocturnal mammals and birds;

• excavations were checked in case animalsfell into them and ramps were placed atregular intervals to allow animals to get out;

• project vehicles could not be driven and

personnel could not walk outside the fencedconstruction area or designated accessroads as this could have caused indirectadverse impacts on the habitats, flora andfauna;

• there was a strict ‘no approach’ policyenforced onsite for wildlife: personnel wasnot allowed to handle or touch wildlife andwildlife was not removed from the ProtectedArea.

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4.0MEDGAZ PROJECT

Caring for the biodiversity of the Mediterranean Sea in an ultra-deep water pipeline project ofstrategic importance for Europe’s energy sourcing.

4.1 About the projectThe Medgaz Project consisted in building anAlgerian-European gas pipeline via Spain.The subsea gas pipeline goes from Beni Saf onthe Algerian coast up to the landfall on theSpanish coast of Almeria. The Project alsoincluded the construction of the compressorstation in Beni-Saf and the receiving terminalin Almeria.The single 24-inch pipeline, approximately210-km long, reaches a maximum water depthof approximately 2,160 m.The gas pipeline has a capacity of 8 billionm3/year.Saipem was awarded the contract forengineering, procurement, supply, constructionand pre-commissioning of the marine pipelinefrom Algeria to Spain, as a strategic project forthe transportation of natural gas from Algeriato Europe across the Mediterranean.

4.2 Environmental challengesAn Environmental Impact Assessment wasconducted, covering the entire pipeline route,

and in particular the receiving terminal atRambla Morales in Spain, and the compressorstation at Beni Saf.In the shore approach sectors where dredgingtook place, the route crossed sea grass areasin the Cabo de Gata-Nijar Marine Reserve(Spain) and, to a lesser extent, also on theAlgerian side.In particular, two species of sea grass,Posidonia oceanica and Cymodocea nodosa,included in the European Habitats Directive,were present along or in the vicinity of thepipeline route.The importance of conserving sea grasses liesin the fact that they are an important marinecommunity, and these particular species areonly found in the Mediterranean basin.The Posidonia sea grasses are important ashatcheries for a variety of fish. They also retainsediments, as well as oxygenate the seawater.The Cymodocea sea grass has a highre-colonisation capacity, and thereforefunctions as a pioneer habitat.

4.3 Environmental monitoringof water turbiditySaipem carried out an underwater monitoringprogramme to assess the impact on themarine ecosystem of building a gas pipelinefrom North Africa to Europe.

SEA PRAIRIESPosidonia has a vital role

in Mediterranean coastal marineecosystems

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Following the project Environmental ImpactAssessment (EIA), Saipem undertook aprogramme of surveillance trial activities (STA)to understand the effects of dredging on thesediment in the Spanish shore approach area.Dredging was carried out using the BackhoeDredger (BHD) and the Trailer Suction HopperDredger (TSHD). The specific objective of theSTA was to assess if the silt screens wereneeded as a form of mitigation, particularly toreduce the impact on the sea grasses ofCymodocea nodosa and Posidonia oceanica.The sea grass meadows Cymodocea nodosaand Posidonia oceanica are biologicalindicators, as they are sensitive tocontaminants of different origin. Like other seagrasses, Cymodocea nodosa and Posidoniaoceanica act as water transparencyregulators.Each survey consisted of 8.5 hours ofcontinuous measurements, carried out at 8points placed along 2 cross-sections.The following parameters were measured inorder to evaluate the main chemical andphysical parameters of the water column:• depth of siltation (sediment suspended);• turbidity - or cloudiness;• the size of suspended solids and grains;• currents;

• correlation between turbidity and siltingthickness.

The activities showed several interestingresults and the two main outputs can besummarised as follow:• all the siltation measures were measured as

being in compliance with the limit of 2.5 cmset out in the EIA;

• the highest value of measured turbidityduring dredging carried out with theBackhoe Dredger was 32 NTU, which iscomparable to the maximum naturalturbidity of 30.13 NTU generated by roughsea conditions, as recorded during thebaseline survey; while during dredgingcarried out with the Trailer Suction HopperDredger, all values of measured turbiditywere one order of magnitude lower than thenatural turbidity during rough sea conditions.

The Suspended Solids Concentration (SSC)analysis revealed higher values inside thepipeline trench. However at 10 metres fromthe trench the values were comparable to thenatural background levels. In particular, thecorrelation between turbidity and siltationdemonstrated that, for future similar activities,monitoring turbidity will suffice to predict thesiltation induced by backhoe dredging atdistances of 5 and 10 metres from the edge of

A CLEANER DREDGING

Maximum turbidity measured during dredging operationA value comparable to natural turbidity 32 NTU

the trench. Benthos identification analysis wascarried out before the start of dredging andafter backfilling activities. Even if thepercentages of the detected species wereslightly different, the ratio between the groupswas unchanged. This result proves that noimpacts on benthic communities occurred inthe project area.

4.4 ReinstatementThe Algerian onshore route extends fromlandfall to inland mainly through agriculturalland, not crossing environmentally sensitiveareas other than a river crossing and a shortslope section which required special attentionduring reinstatement.No specific plants requiring special protectionwere identified during the pre-constructionsurveys along the pipeline route.However, restoration was carried out with twoobjectives:• in the shorter term, to reinstate the land

contours, establish drainage patterns,stabilise the soils by installing permanent

erosion control and redistribute the topsoil toallow vegetation to grow;

• in the longer term, to establish sufficientvegetation cover to reinstate the local plantspecies and ecology.

After the pipeline was buried and backfilled,reinstatement took place in three phases.Phase 1: clean up, soil profiling/contouring andstabilisation.Phase 2: technical reinstatement-erosioncontrol measures (e.g. sack breakers in thetrench across slopes, rock rip rap at rivercrossings) and distribution of topsoil over thefull width of the ‘right of way’.Phase 3: biological reinstatement (includingrevegetation around the river crossing by directseeding), to provide long-term protection ofsoils against surface erosion. Establishment ofvegetation also provides additional stability toerosion control structures such as slopebreakers, drainage channels, as well aspromoting a return of natural soil processes.Finally, good vegetation cover reduced thevisual impact of the project.

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5.0DOLPHIN PROJECT

Saipem solutions to address biodiversity protection issues in a complex gas development projectinvolving both marine and terrestrial environments.

5.1 About the projectThe Dolphin Project is a gas developmentproject undertaken by Dolphin Energy Limited(DEL) of Abu Dhabi, UAE. The project consistsof a strategic energy initiative designed toproduce, process, transport and supplysubstantial quantities of natural gas fromoffshore Qatar to the United Arab Emirates(UAE). The exploitation area is located in theArabian Gulf, north-east of Ras Laffan. Gas isextracted from Qatar’s ‘North Field’ in order todeliver export sales gas to the UAE. Thereservoir fluid is produced from two offshorewellhead platforms located at approximately 70and 85 km from Ras Laffan. The well fluids aretransported to shore by two multiphasesealines. The onshore production plant at RasLaffan processes all reservoir fluids andexports sales quality gas to Taweelah, in theUAE, through the 48” export pipeline which isapproximately 361 km in length.Saipem’s scope of work in the context of theDolphin Project was as follows:• detailed Design and Construction of two 36’’

submarine gas pipelines for thetransportation of wellhead fluids to the shoreof Ras Laffan Industrial City (Qatar);

• detailed Design and Construction of a 48’’submarine export gas pipeline and receivingfacilities in UAE;

• detailed Design and Construction of theonshore sections of the pipelines from theshore approach to Ras Laffan Industrial City(Qatar);

• detailed Design and Construction of theonshore section of the export pipeline fromthe shore approach in Taweelah to thereceiving facilities in the UAE.

5.2 Environmental challengesTaking as its reference the EnvironmentalImpact Assessments and EnvironmentalBaseline Reports, Saipem developed severalEnvironmental Plans and Proceduresdescribing the interactions between theactivities and environment, evaluating themutual impacts between these, and providingmitigation measures to reduce any potentialadverse impacts to within acceptable limits.Whenever feasible, the principles of BestAvailable Technologies Not Entailing ExcessiveCost (BATNEEC) and Best PracticalEnvironmental Options (BPEO) were applied.Once the interactions between the activitiesand environment were assessed, the processled to the identification and evaluation of thesignificant environmental aspects and theconsequent environmental impacts resultingfrom planned or unplanned project activities.

5.3 Marine faunaThe marine mammals and reptiles listed asendangered species that might be potentiallyaffected by human presence duringconstruction works were:• dougongs and dolphins, which might

potentially lose their habitat due to thepipeline crossing their main feeding grounds- the seagrass areas;

• marine turtle species, which have theirprime distribution area in the UAE coastalzones south of Abu Dhabi, but which wereknown to be nesting on the beaches at theprojected pipeline landings.

Marine mammal and reptile observers werelocated onboard the key vessels (dredgers andlay barges), while a biologist was appointed to

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monitor the beach at Ras Laffan Industrial City(RLIC) during the turtle nesting and hatchingperiod, as per the Supreme Council for theEnvironment of Natural Reserves (SCENR)Clearance. In RLIC, Saipem monitored 1,250 mof coastline, which included the Right of Way(ROW), about 450 m north-west of the ROWand about 650 m south-east of the ROW.After the observation of the last hatchingemergence, in daytime a broader area wasmonitored (up to 1.5 km from the ROW) torecord the hatch success of nests that werenot in close proximity to the ROW.Daily inspections were performed within 650 mfrom the ROW, prior to the start of works.The position of nests and turtle tracks wasrecorded using a GPS and loaded in a GIS. If anest was detected within the 75 m of ROW, theRLC Relocation Protocol (which Saipem worked

on jointly with the Authorities) was applied andany eggs found were moved to the RelocationArea designated by the RLC authorities.All nests within 150 m from the ROW werefenced with high visibility tape, to preventtrampling and access to the nest byunauthorised people.Between the period of inspections, 12 nestattempts were recorded. All turtle tracksobserved were identified as the tracks of thehawksbill turtle Eretmochelys imbricata.During the hatching period, the shoreline 650m from the ROW was patrolled 4-5 times pernight to record the emergence of hatchingsand to prevent external disturbance.Moreover, after the observation of the lasthatching emergence, a broader area wasmonitored in daytime (up to 1.5 km from theROW), to record the hatch success of neststhat were not in close proximity to the ROW.The mitigation measures adopted to avoid theinteractions between works and hatchings(such as reduction of light emission, strictmonitoring of nests in proximity to the ROW,protection of nests and induction ofconstruction personnel and personnel onboardvessels) were successful.Moreover, the lower mortality and predationrates in the nests close to the ROW suggestthat the continuous monitoring was successfulin increasing the hatch rate of hawksbill turtlesin this area.

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6.0NORD STREAM PROJECT

Saipem achieves a milestone in Europe’s energy sourcing strategy and accomplishes asuccessful project execution in terms of biodiversity conservation.

6.1 About the projectNord Stream is the largest subsea pipelineproject carried out to date. It brings natural gassupplies to Europe directly from Siberia.Its ambitious objective is an overall transportcapacity of 55 billion cubic metres of gas peryear. Years of study brought Nord Stream tothe conclusion that the offshore pipelineproject represents one of the safest, mosteconomical and most environmentally friendlyways to increase gas supplies to Europe.It consists of two parallel pipelines, for a totallength of 2,448 km. These link Vyborg inRussia to Greifswald in Germany, passingthrough the Baltic Sea. It is a strategicinfrastructure for Europe’s energy sourcing.

The project was commissioned and developedunder the supervision of Nord Stream AG, aninternational joint venture composed ofGazprom (51%), Wintershall - a BASFsubsidiary (15.5%), E.ON Ruhrgas (15.5%),N.V. Nederlandse Gasunie (9%) and GDF Suez(9%). Nord Stream AG chose Saipem onaccount of its experience and reputation forinnovation, cutting edge methods, schedulesand technical approach. It commissioned theCompany to lay the two sections of pipelines in

their entirety. Saipem met the challenge byassigning a Task Force and two of its prizedvessels, the Castoro Sei and Castoro 10,suitably refitted and modernised, along withthe subcontracted Allseas DP vessel Solitaireand an overall fleet of more than 40 supportvessels.

6.2 Environmental challengesThe Baltic Sea is considered a fragileecosystem, with limited exchange of water withthe North Sea and very low oxygen levels indeeper waters. Fish and marine plants areunder threat and concerns over the potentialrisk of environmental damage during projectexecution were high. No dumping of any kindof waste at sea was permitted. All pipelayingoperations were carried out with specificprocedures aimed at safeguarding the uniquenatural habitat of the Baltic Sea.A detailed and rigorous programme ofenvironmental and social controls was drawnup before and after installation of lines andextending to 2016. In short, a project within aproject, with operations to restore flora andfauna individually tailored to specific areas andprotected species.

STRINGENT PROJECTEXECUTION

TECHNIQUESUsing Saipem’s cutting-edge technology

and assets

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6.3 Environmental monitoringprogrammesAs set out in the national permits granted byRussia, Finland, Sweden, Denmark, andGermany, Nord Stream developed five nationalenvironmental monitoring programmes. Eachdocuments the environmental impacts fromconstruction and pipelines operations in the

respective jurisdictions, following a schemecontaining all the key tasks. Saipem wasinvolved in the following monitoring operations:• recovery of historical remains from the

seabed, with the removal of tonnes ofmunitions that have remained on the seabed(mostly from World War II);

• the mammal population, with monitoring ofbenthic or aquatic fauna to oversee itsrecovery when dredging or trenchingdisturbed the seabed;

• air emissions and their reduction, light andnoise levels, testing in landfall areas whereconstruction took place close to residentialzones;

• quality of water and water movementsaround the pipelines to ensure that naturalcurrents were not disturbed or changed bythe facility.

During these activities, Saipem also observedbird and fish populations to assess whetherthey had been affected by increased seawaterturbidity or project operations. Finally, Saipemundertook visual inspections of objects ofcultural value along the route both before andafter pipelaying. The programme scrupulouslyfollowed the strictest regulations onenvironmental protection and used innovativetools such as underwater vehicles (ROV),controlled from the support vessels that enablebetter results with a minimum impact on theseabed; and passive acoustic system, tomonitor mammals and prevent them fromapproaching operational zones.

Subject Russia Finland Sweden Denmark Germany

+ + + - +

Physical and chemical environment

Water quality

- + + + -Seabed sediment

+ + + + +Hydrography and seabed topography

+ - - - -Onshore soil

+ - - - +Landscape and topography

+ - - - -Air quality

+ + + - +Noise and pressure waves

+ +1 + + -Fish

+ +1 +1 - +Birds

+ +1 +1 - +Marine mammals

+ + + + -Benthic flora and fauna

+ - - - -Terrestrial flora and fauna

- - + - -Fisheries

+ + + + +Cultural heritage

+ + + - +Conventional munitions objects

- - - + -Chemical munitions objects

+: monitored in 2010 at selected/relevant locations

-: not monitored in 2010

1: observations during munitions clearance only

Socio-economic environment

Munitions objects

Biological environment

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7.0SAKHALIN II PHASE 2PROJECT

Saipem accomplished a challenging project in one of the most sensitive environments andharshest climates on the planet.

7.1 About the projectLocated in the Russian Far East, just 40kilometres from the northern tip of HokkaidoIsland (Japan), Sakhalin Island extends almost1,000 kilometres from north to south coveringan area of 90,000 km2.Sakhalin II Phase 2, sanctioned in 2003, is oneof the largest integrated oil and gas projects inthe world and its onshore pipelines among themost complex. Onshore pipelaying extendedover more than 800 kilometres in theenvironment of Sakhalin Island, a remoteregion with hardly any infrastructures and in aharsh sub-arctic environment.The cooling effect of the Siberian continentalmonsoon system during the winter, and of thecold waters of the Okhotsk Sea in the summer,make the local climate cooler and harsher thanother locations at the same latitude.The pipelines were laid in temperatures as lowas -40° on a common Right of Way (ROW)covering approximately 285 km of wetlands,110 km of mountainous routes, more than

1,000 watercourses, 19 seismic faultcrossings, 40 km of landslide areas, 18 railcrossings and 36 main road crossings. Severalnatural reserves and archeological areas werealso crossed by the ROW.Logistics were one of the main challenges onthe project. Many areas are difficult to access,especially in the extreme weather conditionsthat are quite common in the region.

7.2 Environmental challengesDuring construction of the Project, Saipemfaced a number of environmental challenges,mainly related to the peculiar environmentwhere construction was developed.The main challenges related to the fact thatthe pipelines crossed more than 1,000 riversand streams, many of which were classified ashighly sensitive; moreover, 3 wildlifesanctuaries and 4 natural parks of regionalsignificance were located in the areapotentially affected by pipeline and plantconstruction.

A UNIQUE WORKING ENVIRONMENT

Pipeline laying weather condition: temperatureSakhalin Island is exposed to cold continental air currents from the Arctic -40 °C

Length of the pipelineCrossed over 1,000 watercourses, 110 km of mountain ranges,40 km of landslide areas, 19 seismic faults, 18 railways,285 km of wetlands over 800 km

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Particular protection programmes weredeveloped to mitigate disturbance and protectrare species of flora and fauna, such as theSteller’s Sea Eagle and the Wild PacificSalmon. However, the main focus was onpreserving archeological sites.After the conclusion of construction activities,technical and biological reinstatement wascompleted to return impacted areas to apre-agreed condition, as per regulatory andlandowner requirements.

7.3 River crossing strategiesThe pipeline route crossed more than 1,000perennial and temporary watercourses, 480 ofprimary fishery importance. The EnvironmentalImpact Assessment (EIA) demonstrated that anumber of watercourses were important forsalmon fisheries and provided habitat for awide range of species, including severalprotected aquatic species. The commercialsalmon fishery on Sakhalin Island issocio-economically important.From an ecological perspective (e.g. the effectof increased suspended solids concentrationand turbidity on migrating salmonids), impactscan be mitigated or avoided by timingin-stream construction activity to coincide withperiods of reduced sensitivity and by choosingthe best suited construction method.For this reason, 190 river crossings wereperformed during wintertime, thus avoiding thespawning period and the period wheneggs/embryos are present in stream gravels.Construction methods (wet cut, dry cut, HDDcrossing, etc.) were determined according toEIA conclusions.Trenching was the main approach for pipelinecrossing. Only 7 highly sensitive rivers werecrossed by Horizontal Directional Drilling (HDD).Crossing had to be finished before the end of

the work shift, including temporary river bankprotection activities. Moreover, in eachsensitive stream both pipelines were laidsimultaneously so as to ensure a short impacton the aquatic environment (in terms ofphysical disturbance to habitats and salmonspawning grounds) and only a singletemporary increase in suspended sediments.Monitoring (river morphology, hydrochemistry,suspended sediment sampling and turbidity,ichthyofauna and benthos, fisherycharacteristics, etc.) before, during and aftercrossing was performed to assess negativeimpacts on the rivers and to intervene promptlyif remediation was needed.Monitoring was an important part of the overallimplementation of a successful project andwas crucial in determining the scale andmagnitude of effects during construction,relating these to predicted and observedimpacts and ensuring that mitigation measureswere successful in either reducing or avoidingthem.Proper construction techniques for furtherstream crossings, passing from a wet to a drycut method, were selected to mitigate anincrease in sediment suspended in certaincategories of stream.Due to the high sensitivities of Sakhalinwatercourses, the bank protections wereinstalled as soon as reasonably practicableafter the crossing. The methods used were

AWARD WINNINGSaipem won the ‘Best Environmental

Project 2008’ from the Russian Ministryof Ecology and Natural Resources

for the Sakhalin II Project

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recultivation (mainly grass seeding), stonepitching, Reno Mattresses and Gabionaccording to hydrology studies and engineeringdesign.

7.4 Reinstatement implementationThe soil types found on Sakhalin Island aregenerally considered to be moderately to highlyerosive due to a lack of cohesion and organicmatter. This has been exacerbated by therelatively thin topsoil layer. Even on relativelyshallow slopes, the sand and silt soils that arefound on the ROW can be highly mobile,requiring additional efforts to prevent erosion.Considerable precipitation in summer and hugerun-off contribution during the spring thawmake reinstatement challenging.For this reason, the reinstatement phase wasconsidered an important point of the overallproject environmental performance and was amajor challenge for Saipem. It was divided intotechnical and biological reinstatement.The main focus of technical reinstatement wasto restore the ROW to its original condition(or as near as practicable in the context ofpipeline integrity) according to legalrequirements. This phase involved topsoilstripping and storage, the removal ofconstruction debris, pipeline right of wayclean-up, levelling and re-contouring topre-construction contours where possible,installation of permanent erosion controlmeasures, return of fertile topsoil to thereinstated area, soil preparation and seeding.Technical reinstatement also includedstabilisation of watercourses, cut slopes andlandslides.The main purpose of biological reinstatement,on the other hand, was to provide long-termprotection of soils against surface erosion.Establishment of vegetation on the ROW also

provided additional stability to erosion controlstructures such as slope breakers, drainagechannels, energy dissipaters, terracing, rip rapand erosion matting protection, as well aspromoting a return of natural soil processes.Finally, good vegetation cover reduced thevisual impact of the project.

7.5 Biodiversity protection at workThree wildlife sanctuaries and four naturalparks of regional significance are present inthe area affected by pipeline and plantconstruction activities.Makarovski sanctuary, for example, wasestablished for the protection and reproductionof rare and disappearing species of plant,animal and bird and also of economicallyvaluable animal species, safeguarding thebiotopes of mountain forests of the southernpart of Sakhalin Island.Particular attention was paid to the Steller’sSea Eagle, found especially in the dynamicand productive coastal ecosystem on thenorth-east of the Island. Steller’s Sea Eaglesare found only in Russia, Japan and theAleutian Islands and are one of the world’slargest birds.Since 2003, Russian ornithologists have beeninvolved in extensive studies of the eagle innorth-east Sakhalin. An EIA was developed forthe project based on these studies. Specialprogrammes were then developed to mitigateimpacts on this rare species. These includedhuman activities, such as noise frommachinery and equipment and otherdisturbances, which could have led to nestabandonment. Damage to the aquatic habitatalso needed to be avoided, since it could havecaused a reduction in prey and consequentfeeding irregularities, all of which could havecompromised success in rearing the young.

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8.1 About the projectThe Kashagan field, located in the NorthCaspian Sea, is one of the largest oil finds inthe past three decades. The development ofthis complex project was a major challengedue to the need to operate in very shallowwaters, from 4 m in Kashagan East to 0 mnear the shore. The ultra-shallow water depth,combined with extreme environmentalconditions (temperatures ranging from -40 °Cto +40 °C), led Saipem to develop uniqueinnovative solutions. In particular, Saipem builta fleet of dedicated vessels for pipelaying andpost-trenching. These included the pipelaybarges Castoro 12 and Castoro Sei, thetrenching barge Saipem TRB and the ancillaryTRB Tenders. The EPCI contract for the pipelinesystem was carried out in an isolated area,characterised by freezing temperatures andmajor concern for the environment. In additionto the Trunkline project, Saipem was awardedother projects, including hook-up andcommissioning of Complex ‘D’ and Island ‘A’Offshore Facilities. The trunklines and

production flowlines project mainly consisted inlaying 3 offshore trunklines about 70-km long,in addition to onshore pipelines about 30-kmlong. Flowlines, umbilicals, power and fibreoptic cables were also laid. With this project,Saipem established an industry record for thelongest pipeline shore pull, involving two linesof 28” and one line of 18”.

8.2 Environmental challengesThe Caspian Sea is the largest inland body ofwater in the world, with a level of salinity inexcess of 13.7‰. The change in the sea levelover time, the presence of shallow areassurrounded by large marshlands as transitionzones to the mainland, all combined with theenormous semi-arid steppe surrounding it,constitute a potential danger for biodiversity,particularly for the area’s many endemicspecies. The biodiversity found in the CaspianSea and on its coasts makes the region one ofthe most precious ecosystems in the world,with a very high degree of biologicalendemism. A large number of the world’s

8.0KASHAGAN PROJECT

Saipem worked in harsh conditions, including sea ice during the winter, with temperaturesvarying from -35 to 40 °C, extremely shallow water for one of the most challenging oilmegaprojects ever – with a biodiversity protection approach.

SAIPEM ADAPTED TO AN EXCEPTIONAL ENVIRONMENT

Extreme weather condition: temperatureIn the Caspian Area temperatures rage from -40 °C to +40 °C -40 °C

Operational water depth for Saipem Mondine pipelaying shipSome project areas in the Caspian Sea located in very shallow waterare home to ecosystems very rich in biodiversity 0.5 m

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major phyla and a broad range of differenthabitats (from large river systems to wetlands)make the region home to a wide variety offlora and fauna. The most important fauna inthe Caspian Sea is the sturgeon, whichconstitutes 85% of the standing stock of theworld’s sturgeon population.The sensitivity of the area constitutes atechnological challenge for Saipem to minimisethe ecological footprint of its activities. Formarine operations, the main factor to beconsidered is the zero-discharge policy, appliedto the entire Caspian Sea, along with therestrictions and limitation on the types ofmaterials that are to be used. On the transitionzone, i.e. the area formed mostly ofmarshlands and swamps, the ecologicallimitations come mostly from the sensitivity oflocations that are nesting areas for migratoryand local avian species and also for the localbiota. Because of this sensitivity the designand construction of safe vessels andtechnologies with a low environmental impacthave become a primary objective for the entireKashagan project.

8.3 Technological innovationfor biodiversity protectionWithin the Trunkline project, Saipem hasdeveloped a system of small boats called‘Mondine’ (rice weeders) that can lay piping inshallow depths of about 50 cm, where noother craft can operate.The system enables excavation of a trench ofthe desired depth while at the same time usingthe material removed during excavation tobackfill the pipe without contaminating thesurrounding environment.

Furthermore a dedicated vessel ‘Storione’ wasused to lay the pipes in shallow water.The pipes, previously laid by the Castoro 12and positioned at the minimum depth, weretowed afloat into the transition zone by thesame vessel equipped with a winch tensionerused to keep the pipe string under traction andthen winch it towards itself at each 12 metrelaunch.In total, a pipe string of almost 10 kilometresin length was launched. Once the floats wereremoved and the pipe laid on the sea bed, thepipe was buried in a covering of at least 1metre to minimise environmental impact,leaving the seabed as flat as possible followingoperations.This new system meant that the dredging of awide canal to enable access for ‘standard’vessels (which would have required theexcavation of huge amounts of soil withserious physical and biological effects,especially on the seabed sediments and thebenthic community) was avoided.In addition to the Mondine, the extremeconditions made it necessary to develop anumber of other pieces of equipmentspecifically for the project. These included theGerris excavator, submersible floats inrotationally moulded polyethylene, a machinecalled Derive used to control the lateralmovement of the pipe string and to maintaintrajectory during launching, gantry cranes forlifting and two floating platforms for performingthe tie-in.The technological and operational solutionsadopted enabled the laying of 5.5 kilometres of18" piping at a minimum depth of 1 metreunder the ground, fully exploiting the time

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window available for operations(September-October) before the beginning ofwinter and the onset of ice formation.

Furthermore, in order to minimise theenvironmental impact in the event of anaccidental oil spill, which in such sensitiveareas could cause huge environmentaldamage, Saipem chose to adopt a 100%biodegradable fluid on its trenching andshallow water post trenching spread vesselsworking in the area. The product does notcontain substances at concentrationsconsidered hazardous to health and its long-and short-term toxicity is negligible. In theevent of leakage, the product is fullydecomposed naturally by soil or watermicroorganisms within a few hours, withoutaffecting the environment and leaving nodeposits.

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