Transcript H.O. Vent Gas JIP Introduction Session

Proposal to develop and document options for:
“Utilization of Heavy Oil Vent Gases Study”
May 10 & 25, 2000
Contents
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Making a Change Happen
About New Paradigm Engineering Ltd.
Proposal Overview
Why this proposal now?
What is needed to make the project happen?
Project Schedule
Project Deliverables
Status as of June, 2000
The Target for Change
Oil & Gas Methane Emissions
Other
1%
Gas Processing
6%
Heavy Oil
Heavy Oil
Venting
Production
29%
29%
Product
Transmission
16%
Accidents and
Equipment Failures
5%
Conventional Oil
Production
8%
Ref: CAPP Pub #1999-0009
Gas Production
35%
Where Are We Now?
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$50M/yr of methane vented from heavy oil sites
• Equivalent to 5% of O&G Industry energy use
$20-$40M/yr of energy purchased for heavy oil
sites
 GHG emissions from heavy oil wells
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30% of oil & gas industry methane emissions;
• 15% of oil & gas GHG emissions
• Over 2% of Canada’s GHG emissions
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GHG, Flaring and Odour Issues affecting our
ability to develop new leases
Where Do We Want To Be?
Vent gas as a revenue stream
 Minimize purchased energy costs
 No purchased energy for wells that are venting
 Low tech  low cost operations
 Achieved with minimum of waste
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How Could We Get There?
Displace purchased energy sources
 Power from vent gases
 Compression for sale or reinjection
 Use gas and/or energy for EOR
 Convert methane to CO2
 Tank vent treatment to eliminate odours
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What Is Stopping Us?
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Venting seen as an environmental problem, not
economic opportunity
Capital budget for conversion set on a corporate
relations basis
Payouts on systems beyond fuel displacement are long
Vent volumes are variable so tough to do single well
economics or design facilities
No one has time to invest in studying potential options
How Can We Make Things Happen?
Collaborate to define the options and the prize
 Work together to make the case for casing gas
utilization
 Co-operative and collaborative efforts on the
gas side of heavy oil
 Joint Industry Project (New Paradigm) to
provide focus
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About New Paradigm Engineering
Ltd.
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Independent consulting company, Inc. 1991
Engineer “new paradigms” for industry
Bruce Peachey, P.Eng. – President
Colin Gosselin, E.I.T. – Technology Development Engineer
Focus for last two years on reducing methane emissions and
developing new technology to support conventional heavy oil
vent gas mitigation.
Previous work in collaborations:
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Downhole oil/water separation (C-FER),
Novel EOR methods (C-FER and KeyTech),
Heavy Oil Pipelining Study (C-FER, SRC)
Climate change (CSChE),
PERD study on Hydrocarbons R&D (K.R. Croasdale & Associates)
New Paradigm – Bruce Peachey,
P.Eng.
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Project Manager and Lead Engineer
Past Experience:
• Principal New Paradigm Engineering (9 yrs),
• Esso Resources (15 yrs):
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Sr. Facilities Engineer;
Technical Services Superintendent;
Project Engineering Section Head;
Project Engineer;
Technology Evaluations Engineer;
Heavy Oil Production Engineer;
Process Design (Gas Production/Compression)
Expertise – Gas Gathering systems/plant design; Heavy oil
production; Steam generation; Operations; Project
Management; R&D Prioritization; Innovation
Proposed Support for Vent Gas Utilization Study
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EMF Technical Services Inc.
Holly Miller, P.Eng.
Marlett Engineering Ltd.
Jamieson Engineering
Heavy Oil and Gas Producers
Vendors (New and existing technologies)
Extensive contact networks (PTAC, PTRC,
Universities, ARC/C-FER/PRI, CIM, SPE, CSChE)
EMF Technical Services Inc. Calgary
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Electrical Power Generation and Distribution
Cogeneration facilities (proposals and economics)
Electrical and control systems design
Engineering design and construction
Oil and gas pipelines, compressor stations, pump
stations and processing
Motivated and creative solutions
Holly Miller, P.Eng. - Edmonton
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Contract Engineer – Project Development and Design
Past Experience:
• Sr. Engineer with Polytubes (West) Inc. 4 yrs,
• Esso Resources/Petroleum/Chemical (14 yrs):
» Sr. Operations Engineer,
» Sr. Process Engineer,
» Development Engineer
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Expertise – Refinery energy conservation, heavy oil upgrader
studies, Cold Lake Phases 1-6 Debottleneck, gas
conservation plant operations and facilities upgrades,
managed implementation of new reactive extrusion pipe
manufacturing process
Marlett Engineering Ltd. –
Edmonton
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Principal – Fred Marlett, M.Eng., MBA, P.Eng. FCSME
Specializing in combustion and gas fired equipment
Past Experience:
• Enbridge Pipelines Inc. (1 yr)
• Northwestern Utilities Limited (24 yrs)
» Senior Engineer, Utilization and Research
» Assistant Utilization Engineer
» Assistant Transmission Engineer
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Key roles:
• APEGGA Rep – Gas Technical Council of the Alberta Safety
Codes Council (1997-Present)
• Secretary, City of Edmonton Gas Approvals Board (1974-1978)
Jamieson Engineering - Edmonton
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Principal – Marnie Jamieson, P.Eng.
Process Control, Materials, Process &
Environmental Engineering
Past experience:
• AT Plastics (2 yrs),
• Syncrude Canada (8 yrs),
• Work terms Dow Chemical (Research), Esso
Resources (Operator), Environment Canada
(Engineering Asst.)
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Roles – Plant Engineer, Environmental Engineer,
Applications Engineer, Corrosion/Materials
Engineer.
Proposal Overview - Objectives
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Evaluate options to utilize casing gas
Assess criteria for successful application
Pro’s and Con’s of the Options
• Technical,
• Financial,
• Operational, and,
• Implementation hurdles
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Overall – Facilitate Decision-making; leading to
rapid and economic implementation of systems to
reduce methane venting from Heavy Oil sites.
Work Scope – Focus Areas
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Displace purchased fuel use – 20%
Power generation and sales – 25%
Gas collection and sales – 30%
Use to Increase Oil Recovery - 10%
Convert methane to CO2 – 10%
Mitigation of tank odours - 5%
Why this proposal now?
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Expansion of operations generates resistance from
public
Pressure mounting to show voluntary progress
Producers no longer in “survival” mode
Options appear to be available and economic
Producers are busy with producing Oil, not Gas
Vendors with viable options frustrated
Appears to be opportunity and interest in
collaboration
Benefits to Participants
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Focused effort to quickly identify low cost, economic
and safe options for use of vent gases
Reduces workload on in-house staff
Provides leverage instead of everyone redoing the
same work
Allows vendors to easily communicate information
on the options they can provide
Helps define what can be achieved now and what
requires new technology
What is needed to make the project happen?
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Funding to do the Work
Support from Producers  Operating Information
Support from Vendors  Product Information
Others
• Regulators  Drive to change
Funding
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Open to any organization on same terms
• Reports to participants only
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Current basis $15,000 per participant (at least 4
preferred)
• Can proceed with more or less but depth of analysis
varies
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After study 60% complete, new participants pay a
premium (20%)
• Funding used to monitor developments
Funding Basis
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Base of $60k at start
• Study as proposed.
• Moderate detail
• Main focus technology assessment
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Plan for two increments of $30k each
• Increment 1 – Enhanced Detail – Issues and
Implementation
• Increment 2 – Manage Collaborative Piloting
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Separate Thermal Venting Project
• Begin planning in Fall 2000; Report March, 2001
Key Issues for Heavy Oil Venting
Options
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Technology Issues (Base)
• Many options exist now but are not widely used.
• New ones may be developed where needed
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Producer Management Issues (Enhanced)
• Economic Solutions - Why Not Implementing?
• Environmental Solutions – Define Priorities and
Resources
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Government/Regulatory Issues (Enhanced)
• Rules to Level/Define Playing Field
• Barriers to implementation
Overall Schedule
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Start Planning – May 2000
Initial Funding Committed – May 25
Data Collection June-July
Displace Purchased Energy Report – August
Flowchart Options & Prioritize Focus – August
Sub-contractors carry out independent analysis – Sept/Oct
Pull analysis together, address interface issues – Nov
Prepare Draft Report and Presentation – Dec
Hold Workshop with Participants – Dec
Final Deliverables - Jan
Proposed Deliverables
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Interim Report on Options to Displace Purchased
Energy
• Analysis; Powerpoint Summary; One Page option
sheets
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Draft Report
• Powerpoint format and workshop to review
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Main Report
• Full Document (2 copies)
• Powerpoint format (paper and electronic)
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Options (cost recovery basis)
• Field presentations, extra reports
Data Collection
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New Paradigm
• Input from sub-contractors on info needs
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Design and Plan Survey of Producers
Design and Plan Survey of Vendors
Interview other stakeholders
• Regulators, power companies, gas suppliers
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Obtain source documents
• Maps (power systems, land plats, gas systems,
pools)
• Reports (CAPP, SEM, AEUB, others)
Producers Survey Contents
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Main Operations Dimensions
» # single wells vs. pad wells
» Oil, water, gas production averages and range by area
» Standard lease layouts
» Costs for pressurized natural gas/propane
» Pumper issues
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Regulatory/business Issues
» Current plans/philosophy/motivation
» Main regulatory issues/concerns
» Main impediments to implementation
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What has been tried already
» Details on where, who, results, photos, reports
Vendor Survey Contents
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Main Technology Features
» Capacity ranges
» Costs
» Utilities
» Operational Factors
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Business Issues
» Equipment buy/lease or sub-contract options
» Support in area
» Synergies
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Where has technology been used
» Details on where, who, results, photos, reports
Displace Purchased Energy Options
Winterization
Tracing; Dryers;
Anti-freeze; Fuel Heaters
Low Pressure Fuel
Mini-compressors;
Low Pressure Burners
Increase Efficiency
Improve Tank Heating:
Combustion; Heat Transfer
Co-gen (heat & power)
Displace Purchased Energy Report
(20%)
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One Page Descriptions of Options(New Paradigm)
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Typical Site Layout,
Costs vs. Capacity,
Energy Efficiency or Other Benefits
Utilities or Maintenance Support,
Pumper Issues,
Environmental impacts,
Implementation/Regulatory Issues
Potential synergies
Generic Economics for Fuel Displacement
• Cost to Buy, Install, Operate vs. Savings
» Propane
» Pressurized Natural Gas
Power from Vent Gas
Easy Sites
Pads with lots of gas;
Near power lines
Small Sites
Single, high GOR wells;
Near Power lines
Remote Sites
Small local loads;
Lights, Remote Control
Power from Vent Gas (25%)
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Subcontractor – EMF Technologies
Technical
• Micro-turbines, gas engines, other
• Characteristics, costs vs. size, fuel efficiency, potential for cogeneration of heat and power
• Operations issue
• Potential for Mercury Electric Pilot
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Business and Regulatory
• Economics vs. Size and cost to tie-in
• Regulatory constraints (generation, distribution or sales)
• Business Structuring Options
» Utility vs. industry/company operated systems
» Key Agreement terms (access, revenue/cost sharing)
Gas Collection and Sales
Fuel for New Wells
Similar to Winterization:
Temporary flowlines?
Local Sales
Mini-compressors;
Mini-dryers; Tie-in to
Existing lines
Sales to Pipeline
Low pressure collection;
Central treating and
Compression facility
Gas Collection and Sales (30%)
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Subcontractor – Marlett & NPEL
Technical
• Collection/distribution methods
• Dehydration or freeze protection
• Compression
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Business and Regulatory
• Economics vs. Size and cost to tie-in
• Regulatory constraints (distribution or sales)
• Business Structuring Options
» Gas utility vs. industry/company operated systems
» Key Agreement terms (access, revenue/cost sharing)
Increase Oil Recovery
Pressure Support
One well per pad takes
Compressed Gas
Mini-EOR
Small steam generators;
Methane cycling
Large Scale EOR
Collect gas for use in other
Areas (Royalty Free)
Increase Oil Recovery (10%)
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Subcontractor – Miller & NPEL
Technical
• Listing of Options
• Pro’s & con’s
• Potential facilities options
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Business and Regulatory
• Economics vs. Size
• Reservoir Factors
• Contacts for further assessment
Methane Conversion
Flares
Low cost, low liquid
Low visibility flares
Catalytic Oxidation
Portable, low visibility,
Potential for use of energy
GHG Credits
Requires auditable
Measurement of conversion
Methane Conversion (10%)
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Subcontractors – Marlett, Jamieson & NPEL
Technical
• Flare designs for variable rates
• Catalytic oxidation methods
• GHG credit measurement and tracking
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Business and Regulatory
• Economics vs. Size
• Potential for Credits and their value
• Business Structuring Options
» Add on to power/gas options
» Key Agreement terms (access, revenue/cost sharing)
» Bulletin Board test with residents
Mitigation of Tank Odours
Micro-incineration
Use casing gas;
Incinerate tank vents
Catalytic Oxidation
Low cost, low maintenance
Other Options
Absorption; Adsorption;
Active Dispersion
Mitigation of Tank Odours (5%)
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Subcontractor – Marlett, Jamieson & NPEL
Technical
• Factors resulting in odours
• Sampling and neighbour issues
• Assessment of low cost options
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Business and Regulatory
• Costs vs. Size
• Safety and Operability Issues
• Business Issues
» Odour emissions philosophy
› Proactive or reactive
Flowchart Options
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New Paradigm and sub-contractors
Lay-out options in a flowchart(s)
Show:
• Interactions
• Synergies
• Relative Value (starting assumptions on payout)
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Application Based
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Lease types – single, multi-well
Back-up energy type – gas, propane, power, other
Pumping equipment
Energy Demand Ranges
Casing Gas Ranges
Sub-charts by technology issues
Technical Option Summary Sheets
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Standard format summaries for each option
One Page Descriptions of Options(NPEL)
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Typical Site Layout,
Costs vs. Capacity,
Energy Efficiency or Other Benefits
Utilities or Maintenance Support,
Pumper Issues,
Environmental impacts,
Implementation/Regulatory Issues
Potential synergies
List of Vendors
Technology Assessment Tools
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Flow Charts, Decision Trees and Scoping
Economics
Inputs:
• Site characteristics – layout, volumes, proximity to
power lines, pipelines, residences, other factors
• Budget Constraints
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Outputs:
• Technically viable options
• Economic Indicators
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Option: Potential to build a spreadsheet tool
(Enhanced)
Contract Deliverables
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Interim Report on Options to Displace Purchased Energy
• Analysis; Powerpoint Summary; One Page option sheets
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Draft Report
• Powerpoint format and workshop to review
• Draft Option Assessment Tools
• Draft Option summary sheets
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Main Report
• Full Document (2 copies)
• Powerpoint format (paper and electronic)
• Tools (paper minimum)
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Options (cost recovery basis)
• Field presentations, extra reports
Interim Reporting
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All contractors will progress invoice New Paradigm
and report progress
One page status reports will be e-mailed to
participant contacts on a monthly basis, including:
• Progress Status
• Project Cost Status
• Decision items for participants
Funding Proposed
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Open to any organization on similar terms
• Reports to participants only
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Current basis $15,000 + GST per participant
• Can proceed with more or less but depth of analysis
varies
• Need to decide on piloting
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After study 60% complete, new participants pay a
premium (20%)
• Funding used to monitor developments or pilots
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Option for pilot management
Option to expand to thermal heavy oil venting
Agreement Terms
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Purchase/service order basis
New Paradigm invoice for fee plus GST. Options:
• One invoice for $15,000 (June)
• Progress Invoicing
» June 1 - $5,000; August 1 - $8,500; Final Report Issue - $1,500
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One page statement of deliverables and Memorandum of
Understanding (MOU), principles:
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No confidential information to be communicated
Participants will only distribute reports internally
Participants to respond to surveys or requests for information
NPEL to ensure work is completed on a timely basis
Arbitration for dispute resolution
Optional Items
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Piloting
• Separate Agreements/MOU’s for vendors
contributing in kind
• Review plans and budgets with participants
• Site Selection from Participant Wells
• Separate deliverables
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Thermal Venting
• Separate Agreements/MOU’s
• Discount for participants in both
» To be determined
Summary as of June 20, 2000
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Project has been launched
Agreements in Place:
• Ranger Oil
• Husky Oil
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Obtaining Approvals:
• Mobil Oil
• CanOxy/Wascana
• AEC Oil and Gas
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Open to more participants. Prefer decision as soon as
possible to assist with project planning.
Obtain copy of one page agreement from New Paradigm.
Contact Information
Advanced Technology Centre
9650-20 Avenue
Edmonton, Alberta
Canada T6N 1G1
tel: 780.450.3613
fax: 780.462.7297
email: [email protected]
web: www.newparadigm.ab.ca