How to Reduce Fuel Gas How to Reduce Fuel Gas ConsumptionConsumption

Paul NelsonPaul NelsonManager, Commercial OperationsManager, Commercial Operations

AltaGas Ltd.AltaGas Ltd.May 9, 2008May 9, 2008

BackgroundBackground Natural gas is an essential fuel used in oil Natural gas is an essential fuel used in oil

and gas productionand gas production Fuel usage in oil and gas production and Fuel usage in oil and gas production and

processing accounts for approx. 9% of all raw processing accounts for approx. 9% of all raw gas produced (44,000 e3m3/d, or 1.6 Bcf/d)gas produced (44,000 e3m3/d, or 1.6 Bcf/d)

Initial site specific studies shows potential for Initial site specific studies shows potential for reductionreduction

10% reduction in fuel gas consumption would 10% reduction in fuel gas consumption would mean addition sales of 4.4 e6m3/d or 160 mean addition sales of 4.4 e6m3/d or 160 MMcf/dMMcf/d

Economic benefit (potentially $500 Economic benefit (potentially $500 million more sales, at $9/GJ)million more sales, at $9/GJ)

Greenhouse gas reductions (3 million Greenhouse gas reductions (3 million tonnes CO2e per year)tonnes CO2e per year)

Extended life of facilities Extended life of facilities Energy efficient operations are often Energy efficient operations are often

more cost-effective operationsmore cost-effective operations

Benefits of Energy EfficiencyBenefits of Energy Efficiency

Total Fuel Use in the Upstream SectorTotal Fuel Use in the Upstream Sector(incl. straddle, bitumen and injection)(incl. straddle, bitumen and injection)

Source: ERCB

Total Fuel Use in the Upstream SectorTotal Fuel Use in the Upstream Sector(excl. straddle, bitumen and injection)(excl. straddle, bitumen and injection)

Source: ERCB

Gas Plant Fuel UsageGas Plant Fuel Usage

Source: ERCB

Gathering System Fuel Gathering System Fuel UsageUsage

Source: ERCB

Gas Battery Fuel UsageGas Battery Fuel Usage

Source: ERCB

Fuel Gas Efficiency Fuel Gas Efficiency CommitteeCommittee Formal Government/industry Formal Government/industry

committee established May 2006, committee established May 2006, chaired by Alberta Energychaired by Alberta Energy

Mission statement:Mission statement: To set direction and provide leadership To set direction and provide leadership

to improve the upstream industry’s to improve the upstream industry’s petroleum energy efficiency per unit of petroleum energy efficiency per unit of production and reduction of fuel gas use production and reduction of fuel gas use in oil and gas production, pipeline and in oil and gas production, pipeline and gas processing facilities regulated by gas processing facilities regulated by the ERCBthe ERCB

Members:Members: Alberta Department of Energy (chair)Alberta Department of Energy (chair) Gas Processing Association CanadaGas Processing Association Canada ERCBERCB CAPPCAPP SEPACSEPAC Natural Resources CanadaNatural Resources Canada Individual Producers and MidstreamersIndividual Producers and Midstreamers

Fuel Gas Efficiency Fuel Gas Efficiency CommitteeCommittee

Result:Result:Best Management PracticesBest Management Practices

Consultant has completed a series of Consultant has completed a series of documents for maximizing fuel gas documents for maximizing fuel gas efficiency in oil and gas production efficiency in oil and gas production and processing operationsand processing operations

Funding shared between government Funding shared between government and industry and industry

Final product is 17 BMP documentsFinal product is 17 BMP documents BMP’s will be publicly accessibleBMP’s will be publicly accessible

Where Fuel Gas is UsedWhere Fuel Gas is Used

Source: ERCB

Gas Plant Fuel UsageGas Plant Fuel Usage

Source: ERCB

List of BMP’sList of BMP’s

Gas Gathering Systems Dessicant DehydratorsPumpjacks Fuel Gas Measurement

Pneumatic Instruments FractionationFlaring Refrigeration

Chemical Injection Pumps AmineFired Heaters Sulphur Recovery

Engines Tail Gas IncinerationCompression Acid Gas Injection

Glycol Dehydrators

Sample: Glycol DehydratorsSample: Glycol Dehydrators

Sample: Glycol DehydratorsSample: Glycol DehydratorsContentsContents

Table of Contents

1. Applicability and Objectives ..........................................1 2. Basic Improvement Strategies.......................................2 2.1 Technology and Equipment 2.2 Efficiency Assessment 2.3 Improving Efficiency 3. Inspection, Monitoring and Record Keeping................3 4. Efficiency Assessment and Adjustments .....................4 4.1 Types of Dehydrators and Uses 4.2 Fuel Gas Consumption 4.3 Operational Optimization 5. Technical Checks and Evaluation ...............................10 5.1 Performance Evaluation 5.2 Performance Specification and Assessment Process 6. Appendices

Appendix A Glycol Dehydration Turndown Considerations Appendix B Design Considerations for Optimization Appendix C Example Calculations for Optimization Appendix D Water Content of Hydrocarbon Gas Appendix E Water Removal vs. TEG Circulation Rate Appendix F References

Tables Table 1 Operating Targets for Glycol Dehydrator

Components Table 2 Glycol Dehydrator Fuel Gas Use Table 3 Turndown Liquid Rate Reduction

Table 4 Case Study: Fuel Gas Savings from Using a Flash Tank Separator Table 5 Case Study: Potential Savings from Using an Electric Pump vs. Pneumatic Pump

Figures Figure 1 Glycol Dehydration Schematic Figure 2 Typical Fuel Gas Usage for Glycol Dehydrators Figure 3 TEG Operating Graph

Sample: Glycol DehydratorsSample: Glycol DehydratorsLogic Diagrams and GraphsLogic Diagrams and Graphs

4.4 Operational Adjustments Logic Diagram

Make changes to circulation rateslowly to m atch the optim um ratio

and dry gas dewpoint. Adjust reboilerduty according to the glycol

circulation rate in the TEG operatinggraph pg 11.

Does the current TEG/waterratio m atch the optim um TEG/waterratio as identified in the perform ance

optim ization?

No

Yes

The optim um TEG/water ratio and them axim um inlet water flow have beenspecified in perform ance optim ization

section 5.1

Based on inlet gaswater content and flow, can theglycol circulation rate be safely

reduced?

Ensure pum p isset to the

operating pressurerequired

Adjust c irculation ratesand reboiler duty

according to the TEGoperating graph usinginlet water flow, andthe optim um TEG/

water ratio(See pg 11)

No

Yes

G lycol dehydration systemis optim ized

TEG Operating Graph

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Circulation Rate (16 L TEG/Kg H2O) Circulation Rate (25 L TEG/Kg H2O) Circulation Rate (33 L TEG/Kg H2O)

Reboiler Duty (16) Reboiler Duty (25) Reboiler Duty (33)

16 L TEG/Kg H2O 25 L TEG/Kg H2O 33 L TEG/Kg H2O

16

25

33

Sample: Glycol DehydratorsSample: Glycol DehydratorsCase StudiesCase Studies

Appendix C Case Study Calculations for Glycol Dehydrator Optimization

A TEG dehydration system is processing gas coming straight from an amine absorber. The TEG contactor has 10 bubble cap trays (2.5 theoretical stages). Gas conditions: flow is 1675 e3m3/d: Temperature = 30?C Pressure = 5000 kPa Benzene = 200 ppm A gas at 30?C and 5000 kPa has a water content of 780 mg H2O/m3. 780 mg/m3 x 1675 e3m3/d = 1306 kg of water/day The plant has a treated gas specification of 64 mg H2O/m3 of gas. Water removal efficiency needed = (W in –Wout)/Win = (780 – 64)/780 = 91.8% From the “water removal vs. TEG circulation rate” graph (See Appendix E), this efficiency can be achieved with a 98.6% strength TEG circulating at 25 L TEG/kg H2O. No stripping gas is needed in this unit:

TEG Operating Graph

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Circulation Rate (16 L TEG/Kg H2O) Circulation Rate (25 L TEG/Kg H2O) Circulation Rate (33 L TEG/Kg H2O)

Reboiler Duty (16) Reboiler Duty (25) Reboiler Duty (33)

16 L TEG/Kg H2O 25 L TEG/Kg H2O 33 L TEG/Kg H2O

1625

33

To meet the dehydration requirements, the system must circulate the glycol at 23 LPM, and run with a reboiler duty of 112 kW.

Operation Optimization Case Study

The above plant was found to be circulating at 30 LPM.

TEG Operating Graph

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Circulation Rate (16 L TEG/Kg H2O) Circulation Rate (25 L TEG/Kg H2O) Circulation Rate (33 L TEG/Kg H2O)

Reboiler Duty (16) Reboiler Duty (25) Reboiler Duty (33)

16 L TEG/Kg H2O 25 L TEG/Kg H2O 33 L TEG/Kg H2O

1625 33

Over circulation of the glycol results in a 31.6% increase in reboiler duty, from 112 kW to 147.5 kW. The plant reduces the glycol circulation rate down to 22 LPM and can then lower the reboiler duty correspondingly. Fuel Gas Savings Reboiler Savings: Fuel gas value: $5.25/GJ Fuel gas heating value: 40 GJ/e3m3

1 kW*s = 1 kJ 1 kW*h = 0.0036 GJ

therefore, 147.5 kW*h = 0.531 GJ 0.531 GJ = $66.91/d and 318.6 m3/d of fuel gas

= $24,420.69/yr and 116,289 m3/yr of fuel gas After optimization:

112 kW*h = 0.4032 GJ

0.4032 GJ = $50.80/d and 241.9 m3/d of fuel gas = 18,543.17/yr and 88,301 m3/yr of fuel gas

Economic savings = $5,877.52/yr (24% reduction) Fuel gas volume saved = 28 e3m3/yr

How to Reduce Fuel Gas How to Reduce Fuel Gas Consumption?Consumption?

Use Best Management Practices!Use Best Management Practices!

Next Steps Next Steps

BMP’s to reside on CAPP website, BMP’s to reside on CAPP website, available for downloading available for downloading

BMP material to be incorporated into BMP material to be incorporated into industry training coursesindustry training courses

Industry and government to monitor Industry and government to monitor usage and to quantify impact of usage and to quantify impact of adoption of the BMP’s adoption of the BMP’s