Economic Options for Economic Options for Utilizing Vent GasUtilizing Vent Gas

Lloydminster CIM, April 18Lloydminster CIM, April 18thth, 2001, 2001

by Bruce Peachey, P.Eng.by Bruce Peachey, P.Eng.President, New Paradigm Engineering Ltd.President, New Paradigm Engineering Ltd.

Edmonton, AlbertaEdmonton, Alberta

About New Paradigm Engineering Ltd.

Independent consulting company, Inc. 1991 Engineer “new paradigms” for industry 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: • 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)

Methane Options Sub-consultants:• EMF Technical Services Inc, Jamieson Engineering, Holly Miller, P.Eng.

Gas Processing6%

Other1%

Conventional Oil Production

8%

Product Transmission

16%

Accidents and Equipment Failures

5%

Heavy Oil Production

29%

Gas Production35%

The Target for Change

Oil & Gas Methane Emissions

Ref: CAPP Pub #1999-0009

NB. AEUB 2000 data indicates heavy oil venting Is now 79% of total gas not conserved

Where Are We Now?

Over $100-$200M/yr of methane vented from heavy oil sites ($3-$6/GJ)

• Equivalent to over 5% of O&G Industry energy use

Over $40-$80M/yr of energy purchased for heavy oil sites ($4-$8/GJ)

GHG emissions from heavy oil wells• 30% of oil & gas industry methane emissions;

• 15% of oil & gas GHG emissions

• Over 2% of Canada’s GHG emissions

GHG, Flaring and Odour Issues affecting ability to develop new leases

Heavy Oil Vents – Major Challenges

Highly variable vent flows (years, months and hours) Vent volumes of low value per lease

• Large total volume but widely distributed over 12,000+ wells

Highly variable development strategies used by producers

Operations in two provinces Highly variable commodity values Options range from very simple to very complex Must be simple and low cost

Case Study Assessment

Initial task for producers assessing their options. What gas is venting from where and How Much? What is the overall energy balance for the operating

area? Energy purchased or supplied vs. energy in vent gas What is the individual lease balance?

• Little or no casing gas vented• Some casing gas but not large surplus – Usual condition• Significant amounts of excess casing gas

What are the best options?

Case Study Assessment Process

Evaluate Current Site Balances in

an Area

A. Case Study Tool

Assess & Implement Energy

DisplacementOptions

B. Fuel/Energy Displacement Options Tool

Assess LocationFactors vs. Surplus

EnergyAvailable andPotential Uses

C. Managed Options Case

Study Tool

Assess Managed EquipmentOptions:

Power, EOR orCompression

D. Managed Options

Tool

Conversion &Odour Options

Production Data for Case Study

Well Fluid Oil Water Tank VentProd (m3/d) Prod (m3/d) Prod (m3/d) Casing Vent (m3/d) (m3/d)

1 4.0 3.0 1.0 375.0 1.42 3.5 2.8 0.7 54.0 9.03 15.0 11.3 3.7 561.0 0.14 7.0 6.0 1.0 348.0 6.25 48.0 44.2 3.8 1047.0 95.16 19.0 9.5 9.5 987.0 29.27 9.0 8.1 0.9 330.0 4.48 6.0 4.0 2.0 734.0 6.79 13.0 11.8 1.2 1384.0 7.7

10 45.0 40.5 4.5 1403.0 9.212 24.0 17.5 6.5 203.0 0.613 23.0 20.7 2.3 389.0 5.314 47.0 37.6 9.4 1018.0 5.915 21.0 12.6 8.4 716.0 23.111 27.0 21.6 5.4 6557.0 5.4

AVG 20.8 16.7 4.0 1073.7 14.0

Purchased Energy Displacement

Key Drivers: Supply/Demand Balance, Best where supply and demand for energy are high

Pro’s:• Economic prize is known from existing energy costs• Generally supply/demand is proportional to production• Generally lowest capital cost options• Quickest payout with no little or no third party involvement

Con’s:• Must be implemented at most producing sites• Solutions need to be simple and easy to retrofit• Short well life requires high portability

Payout vs. Site Fuel Use(Line Gas @ $3/GJ)

0

5

10

15

20

25

0 200 400 600 800 1000Site Fuel Use (m3/d)

Payout (mos)

SummerWinterOverallPower (Winter)Power (Overall)Power (Summer)

Case Study – Area Fuel Displacement Summary

Case Study of a group of 15 venting wells: Potential fuel cost savings of over $200k/yr ($3/GJ)

• Cost of less than $5k per site to implement for year round operation.

Payouts Ranging from 1-18 months. Best Sites – High fuel demand; Propane make-up GHG Emissions Reduction potential was 23,000

tonnes/yr CO2(eq) by displacing fuel. Over $100k/yr ($3/GJ) worth of vent gas remaining

for managed options.

Case Study – Single Well

For methanol injection – Well Prod: Oil 44m3/d; Water 3.8 m3/d; Vent GOR = 22; Other assumptions.

Total Capital = $3,013 (pipe, insulation, MeOH pump) Op cost Increment = $3,059/yr (time and chemicals) Weighted Risked Cost = $5,624/yr (some downtime) Fuel Cost Savings = $37,910/yr (@$3/GJ) Value of GHG Credits (@$0.50/t) = $2,523/yr Payout = 1.1 months Year 1 Net Cash Flow = $28,737/yr Year 2+ Net Cash Flow = $31,750/yr

Real Life Examples – Fuel displacement

Husky using vent gas for engines and tanks at many leases in the summer. Tried catalytic winterization heaters, payout in one season. Now using pump drive engine heat to trace above ground lines.

Anderson Exploration reported that they used basic water separators and methanol injection on 82 wells and saved $1.6 million/yr and over 145,000 t CO2(eq)/yr in GHG emissions. Cost $3000/well & $230/mo.

Others have used small compressors, CaCl dryers, electric tracing off drive engine to increase gas pressure and winterize sites.

Options Covered

Stabilize vent gas flows Displace purchased gas or power Distributed power generation Vent gas collection and compression for sales Enhanced oil recovery or production enhancement Conversion of uneconomic vent gas to CO2 (GHG

credits) Odour mitigation methods Some Examples

Heavy Oil – Stabilization Options

Increase Backpressure on Wells Foamy Flow Options Trapped Gas Options Insulating Lines on the Lease Dewatering Lines Engine Fuel Treatment and Make-up Gas Electric Direct Drive Options Electric/Hydraulic Drive Options

Daily Casing Gas Flow Variability – Typical Circular Chart Traces

Normal GOR Flow Foamy Flow? “Trap” Flow?

Should be expected for most wells which

have constant oil rates

Theory: Indicates some

gasgoing to tank as

foam. Exits through tank vent

Theory: Indicates gas

building up behindcasing.

Periodicallyflows into well.

Foam Volume vs. Absolute Pressure

020

40

6080

100

120

140160

5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90

Pressure (psia)

Volume (m3/m3 oil)

Foam VolumeGOR=50

Foam VolumeGOR=10

Atmospheric Pressure

At Some Foam Volume the Foam BecomesUnstable and Breaks Down into Gas and Oil

Foamy Flow - Solution

T=65-80C

Foamy WellT = 20-30 deg CAnnulus Pressure = X (kPa(g))

Check-Valve

h (m)

Small TubingString Down Annulus

Small Tubing String Length (h) = X / 10So pressure due to fluid column = X + head in tank

Hot Water down annulus willhelp suppress foam in well and allow increase in vent gas pressure.Well

Storage Tank

Hot Produced Water

Daily Casing Gas Flow VariabilityNormal GOR Flow “Trap” Flow?

Should be expected for most wells which

have constant oil rates

Theory: Indicates gas

building up behindcasing.

Periodicallyflows into well.

Foam BreakdownIn Formation

Casing VentWith PeriodicFlow

Production toTank

Gas Pocket

Heavy Oil – Production Heating Options

Fire Tube Heaters (Base Case) Enhanced Fire-tube Controls Thermosyphon systems Catalytic Line Heaters Catalytic Tank Heaters Fired Line Heater Co-generation Heating Use of Propane as Heater Make-up Fuel

Reduce Purchased Fuel Required

Winterization and Gas Drying Options

Manipulate Conditions Winterization Heaters Electric Tracing Engine Coolant Tracing Methanol Injection: Anderson 82 sites ($1.6M/yr saving) Glycol Injection Calcium Chloride Dryers Pressure Swing Adsorption Dryers Glycol Dehydrators

Engine Coolant for Heat Tracing

Return Line to Water Pump

Outlet off Intake Manifold

Coolant Hoses Run Outside Shack to Heat Trace Tubing

 

 

Engine Coolant for Heat Tracing

Heat Trace Tubing

Production Flow Line

Gas Compression Options

Rotary Vane Compressors Beam Mounted Gas Compressors Liquid Eductors Multi-phase Pumps Screw Compressors Reciprocating Compressors

Reciprocating Compressors

Gas Transportation Options

Steel Pipelines HDPE Plastic Pipelines Modular Compressed Natural Gas Transport

Gas Collection, Sharing and Sales

Low Pressure< 50 psig

Freeze protect

To/from County

To/from HP Supply/Sales

Local Sales System 150-200 psig

No liquid water

High Pressure>1000 psig

<4# Water/mmscf

Net Demand Sites

Truck

Power Generation & Cogeneration

Thermoelectric Generation Microturbines Reciprocating Engine Gensets Gas Turbine Gensets Fuel Cells Cogeneration Options for all of the above

Power Generation

Low PressureGas Gathering

< 50 psigFreeze protect

To/from Local Grid

Local Sales System 25 kV powerlines

Net Demand Sites

Central Power Generation

Electrified Sites. Gensets toBack out energy

Approx 10 m3/kwh for most systems

Enhanced Oil Recovery Options

Methane Reinjection Hot/Warm Water Injection Conventional Steam Injection Flue Gas Steam Generator CO2/Nitrogen Injection Gas Pressure Cycling Combinations of Methods

Enhanced Oil Recovery – Hot Water

T=65-80C

Lease ProducedWater Storage

Surface PCP

Watered out Well

Line HeaterT= 150-200CP= 400-1400 kPa

1 mmbtu/hr = 1000 m3/d gas @ 70% effCan heat 100 m3/d of water by 100 deg CHow many m3 oil would this add to production?

Casing Vent Gas Avoids ProducedWater Trucking to Disposal $3+/m3

Example – “Why Not” (WOR = 0.24)

High Level Comparison of Option Areas

$(2,000,000)

$(1,000,000)

$-

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

1 2 3 4 5 6 7

Years

Cumulative Cash Flow

Fuel Displacement

Power Generation

Gas Compression & Sales

EOR - ReinjectionEOR - Steam

EOR - Hot Water

EOR - CO2/N2

Methane Conversion

Example – “What If” (WOR = 2)High Level Comparison of Option Areas

WOR = 2.0

$(2,000,000)

$-

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

1 2 3 4 5 6 7

Years

Cumulative Cash Flow

Fuel DisplacementPower GenerationGas Compression & SalesEOR - ReinjectionEOR - SteamEOR - Hot WaterEOR - CO2/N2Methane Conversion

Methane Conversion

Increase Use of Surplus Gas Flare Stacks Enclosed Flare Stacks Catalytic Converters

Catalytic Methane Conversion

Production to Tank

Air

CO2 + Heat

Add or remove modules as required:

•Units start-up and shutdown based on the amount of vent gas available.•Mounted near wellhead but out of the way of well operations and workovers.•Patents pending

Vent Gas

Odour Mitigation Options

Vapour Recovery Tank Vent condenser Incinerate in Firetube Catalytic Conversion Dispersion Liquid contacting Activated Carbon Adsorption

Fire tube

Tank Vapors

Tank Vent

Tank Burner

Heavy OilStorage Tank

Vent Upstream Of Air Eductor

Flame Arrestor

Fuel GasVent Gas Line

(Insulate to Tank)

Air

Tank Vent Gas

Tank Vent – Incineration in Firetube

Technology Transfer Plan Basic Technology Transfer Workshops

• First Session was March 22, 2001 – Calgary

• Next Session May 3, 2001 – Lloydminster• Future Sessions – Lloyd, Calgary and Edmonton based on demand

Spreadsheet Tools & Workshops• Likely start in May/June for Participants• Non-participant sessions September/October

Participation Fees for Producers based on vent volumes

Report Sales to Other Stakeholders New Project Proposals; Implementation Support;

Migrate Information to Internet

Summary for Vent Options Projects

Vent streams can be used to generate positive economics

Were there are no opportunities to use the energy, the methane/hydrocarbons can be converted to CO2

New Paradigm is working to develop low cost systems to convert methane from small and fugitive sources.

More work is needed to address:• Royalty and Regulatory Issues

• Improve experience with some systems

• Try other systems.

• Transfer the Technology to Practice

Acknowledgements

Current Participants for Conventional Heavy Oil – AEC, Anderson, Husky, CNRL, Nexen, Exxon-Mobil, EnerMark Group, CAPP, AERI

Current Participants for Thermal Heavy Oil – Nexen, Husky, CAPP

Current Participants for Conventional Oil and Gas – BP Energy, Husky, CAPP

Sub-Consultants – EMF Technical Services; Holly Miller, P.Eng.; Jamieson Engineering Ltd.; SGS Services

Support from PTAC staff

Contact Information

New Paradigm Engineering Ltd.

C/o Advanced Technology Centre

9650-20 Avenue

Edmonton, Alberta

Canada T6N 1G1

tel: 780.448.9195

fax: 780.462.7297

email: bruce@newparadigm.ab.ca

web: www.newparadigm.ab.ca